Beneath the Surface

I went to High School on the Nevada side of Lake Tahoe, and the largest employer in our town was the local casino.  Having legal gambling in your community probably seems quite strange to most people, but frankly it was pretty tame and ordinary where I grew up- basically like having a few big hotels in your town.  I had lots of friends whose parents worked in what we called the ‘tourist industry’, from food services to accounting to dealers, and it was all very commonplace.  We used to make fun of the tourists who showed up thinking that it was all going to be like the Godfather, asking if they could see the part of the lake where Fredo got whacked (as if it actually happened).  Oh, we all knew that back in the day there was some kind of organized crime involvement in the gambling industry, but that was decades in the past. Now it was all multinational corporations and balance sheets, just a boring but respectable tourist business. 

Or was it? 

A guy I knew was a respected coach at the local high school, and made extra money during the summer running the boat rentals for the biggest casino in town.  When I was in my early twenties I ran into him again, and during the course of an evening’s conversation, he related the following story in a very matter of fact way.

One morning he showed up to the casino (we called it “the hotel”) before dawn as he normally did to unlock the dock, prepare the boats, and get things ready for the tourist rentals.  As he walked to the shore, he was shocked to see the gate unlocked and open, and one of the casino’s rental boats motoring at a leisurely pace back to the dock.  His first thought was that some drunken tourists had broken in and somehow hotwired the boat (the keys were kept in a locked cabinet) during the night, and were just coming back in as the sun was starting to rise.  My friend charged out to find out what the hell was going on.

The boat pulled up and it was no drunken party of tourists.  In fact, there was only one person on board and he was impeccably dressed in an expensive suit and matching shoes.  He calmly pulled up to the dock, jumped out and walked straight up my friend, who was suddenly quite uncertain about what was going on.  The guy reached into his jacket (giving my friend a heart attack), calmly pulled out a roll of bills and peeled-off five crisp hundreds. “I need you to clean that boat thoroughly.  Is that going to be a problem?” as he pressed the bills into my friend’s hand.  His quiet tone suggested that there better not be a problem.  At that moment, my friend realized the guy had to have had a casino-issued key to unlock the dock, and another one to unlock the cabinet where the boat keys were kept.  That, and the guy’s demeanor, told my friend that he better say “No problem.  I’ll clean the boat”.  So that’s what he did.  The man calmly walked past him and back towards hotel parking lot, and he never saw him again.

The kicker of the story is that when my friend got to the boat, he found that the floor had blood all over it.  Given the amount, it certainly wasn’t from the guy in the suit-  you know, the guy who returned to the dock completely alone.  So… yeah. 

The story made me think a great deal about appearance vs. reality.  What were all of the signs and public gestures of community engagement and local involvement really about?  Did I wear the name of that casino on my little league jersey for three years because they were a kindly local business doing their part for their town by sponsoring youth sports, or did they have a different agenda, one involving normalizing themselves and planting the message that they were no different than “Jim’s Tire and Auto”?  What about the yearly scholarships to UNLV for local kids to study Hotel Restaurant and Tourism Management?  Or all of the generous “community engagement” activities, from supporting local charities to loaning out their banquet room to the local chamber of commerce free of charge?  Viewed benignly, all of these things were just a responsible business doing its part to support and nurture its community.   Viewed differently, these might all be considered necessary cover to establish the veneer of propriety, and the uglier the underlying truth the more crucial such cover becomes.  But it doesn’t take much to shatter that appearance of respectability. 

What does all this have to do with gold and silver?  Well read on and you can judge for yourself. 

.      .      .

I’d like to introduce you to Mrs. Louise Boyer, a very decent lady and a highly competent secretary.  So competent, in fact, that she spent nearly three decades working as the personal secretary of one of the most powerful men in America, Governor Nelson Rockefeller.  From rubbing elbows with the high society of the world, to arranging his personal meetings with national and international leaders, coordinating his political events, or seeing to the details of his extensive travels, this was obviously an intelligent, capable, and steady lady. 

At least, she was.  Until she decided in the summer of 1974 to contact a New York newspaper and tell them that she was privy to explosive information regarding the Rockefeller family arranging with the Fed for large amounts of US gold to be sold and shipped to buyers in Europe, reportedly at the official price of $42.22/oz, while gold on the open market was selling for somewhere around $175/oz.  The story was published under the rather catchy headline “NO GOLD LEFT IN FORT KNOX!  Federal Reserve System Charged With Secret Sale of U.S. Gold Supplies Overseas”.  In the aftermath of the revelations regarding the London Gold Pool (it never having been explained just where the US obtained all the gold for these price suppression sales), this was an interesting headline to say the least!  Whether these buyers in Europe were just front-men for the Rockefellers as some rumors had it, or if the family would simply be given a cut of the spoils for arranging the deal, or whether the deal was being done for other reasons, was unclear. 

What was not unclear was that three days after the publication of the article, Ms. Boyer was found dead, having “apparently” thrown herself through the windows of her tenth-story New York apartment and plunging to her death.  I use the word “apparently” because that is the way the police worded it-  an apparent suicide (they seem to have left themselves some wiggle room because strangely, there was no suicide note found, and friends who had just met with her reported her to be in fine spirits immediately prior to her, uh, unfortunate event).  The author of the explosive article was a former legal counsel for both the American Gold Association, and the U.S. Export-Import Bank, Dr. Peter David Beter, and after Ms. Boyer’s untimely death, he came forward and confirmed that Louise Boyer had indeed been the key anonymous source behind the article. 

Suddenly, public attention was being drawn to the question of whether the great United States gold hoard was intact.  The story was picked up by a large Dallas radio station, people started contacting their congressmen, and within weeks the necessity of holding a formal audit of US gold reserves was being discussed openly on the floor of the House of Representatives.  The honesty and legitimacy of the Fed/Treasury complex was being publicly questioned.  The cat, it seems, was very nearly out of the bag.  Obviously, it had to be put back in. 

.          .          .

What followed is surely one of the strangest “dog and pony shows” of all time, a simulation of government accountability and pretended openness so threadbare that it raised more questions than it answered, and was such an embarrassment that its’ like has never again been attempted.  Later that same year in the fall of 1974, a tour of Fort Knox was arranged for a few elected representatives, all to be dutifully recorded by the press.  The tour was not an audit of any kind, nor would the entire facility be open to the Congressmen and the press.  Instead, the outing was nothing more than a bizarre PR event, carefully limited to the viewing of a single chamber which was said to be just one of thirteen such vaults on the premises.   

Gold was shown, people posed with bars, and the photographs were presented in newspapers across the country, ostensibly to dispel the ‘irresponsible rumors’ occasioned by the original article and by Mrs. Boyer’s untimely death.

Amazingly, I found that the Associated Press actually has, buried within their digitized online archives, two minutes of raw stock footage of this 1974 “inspection”.  I will provide you the link through which to view it at the end, but I have screen-captured some stills from the footage to illustrate a few points (and in case the original source video is pulled for some reason).   Below is a newspaper photograph, likely of the very AP photographer recording the film footage we are going to watch:

A carnival-like atmosphere surrounded the proceedings, with people joking and milling around excitedly, as if sensing this was not a serious inquiry on behalf of the citizenry so much as a vaudeville act, so they might as well enjoy the show!  Six representatives and one Senator were joined by small entourages and invited members of the press.

It was explained that only one of the vaults would be opened for their viewing on that day because “the vaults are sealed”, suggesting that it would be amazingly difficult to unseal all of them.  One might imagine that “sealed” meant something rather substantial, like huge doors welded shut or even entire openings bricked-up to enclose and protect the precious contents within.  One would be mistaken.

Take a look at the photograph below.  This is one of the “sealed” vaults-  it is nothing more than “US MINT OFFICIAL TAPE”  strung across the entrance.  Observers reported that for the single vault which was unsealed for the tour, “unsealing the vault” consisted of nothing more than US Mint Director Mary Brooks taking some scissors and cutting the tape!  Holy cow, it is no wonder that only one vault was opened for viewing, given the herculean task that unsealing all thirteen would have represented.

The sign below was stationed above the single vault that was opened for viewing, and the statistics there show an average bar weight of 326.6 ounces per bar, meaning that the gold they were shown was not in 400oz good delivery condition.  Additionally, several observers from numismatic and gold circles noted that a large percentage of the gold was actually quite copper hued, indicating that it was coin-melt gold made in the wake of Roosevelt’s 1933 gold confiscation, and therefore containing as much as 10% copper.  Again, this is not good-delivery standard. 

Nonetheless, the elected representatives of the people posed with bars and mugged for the cameras, strangely happy to erroneously proclaim “It’s all here!”  for the press, thus proving conclusively to all the world nothing more than that a single room containing 368 metric tons of gold (just 1/22nd of the total purported gold holdings of the US) did, in fact, exist.  Un-assayed, and in non-good delivery form based on weight and composition. 

This, it seems, was reckoned good enough to put all those irresponsible speculations about gold sales to rest.  Problem solved, bitchez!

Finally, here is the raw footage from the AP piece-  the Fort Knox tour footage starts at roughly 40 seconds in, and runs for the next two minutes.  As you watch it, please remember that all of this was the official “answer” to the US Congress regarding questions surrounding the state of the gold reserves of the United States, occasioned by the publication of the Rockefeller/Fed gold sales article and by the death of its anonymous source, Ms. Louise Boyer. 


Story No: w009831

Date:  12/04/1974

So where does all of this leave us?  Well, the truth is that nobody knows.  Those who claim the US has sold off part or all of its gold reserves over the years have no definitive proof to back up their claim, though the circumstantial evidence (from the London Gold Pool to the statements of various Fed chairs about selling gold to the Washington Agreement) is suggestive, to say the least.  Those who say all this is conspiracy theory hogwash ALSO have no definitive proof to back up their claim, as no formal audit has taken place for more than sixty years now.  The ridiculous performance noted above created more questions than answers, and unsurprisingly, such a stunt has not been repeated since.  Despite multiple requests from congress over the years, despite multiple bills submitted to the House for a formal audit of the gold reserves of the United States, all such requests have been met with resistance, stony refusal, or outright ridicule.

And so the official figure of 8,133 metric tons is still dutifully reported as truth in all discussions of US gold holdings, and the legitimacy of the Fed and the financial system is psychologically reinforced every single day by respectable people in suits saying respectable things on television, and maybe all of it is legit.

And hey, maybe that guy in the boat just cut himself shaving.  At night.  In the middle of a lake.

Keep stacking. 


Hammer's picture


Yup. It all makes perfect sense to me.........

Urban Roman's picture

Annnd, it's gone.

Tungsten, btchz!

Hammer's picture

Fun fun fun til the daddy etc

Fun fun fun til the daddy etc etc etc. Not a done deal but the fact it is even broached is interesting.......lots of politicking going here methinks.........

(Reuters) - Germany's Bundesbank said on Monday that countries about to go bankrupt should draw on the private wealth of their citizens through a one-off capital levy before asking other states for help.

treefrog's picture


...of forth

Keg's picture

Why can no one see it?

What is the purpose of not allowing anyone to view the gold?  The only logical explanation is that it is not there.  There are ways to overcome any security issues.   

Igiveup2's picture

Thanks Turd

Just to let you know.  On Friday you made a comment about riding the bull on DGAZ (inverse natural gas).  I thought I'd hop on for a short ride.  This morning I backed it up with a trailing stop to guarantee myself a win.  Right now I'm up 8.5% on a total of about 3 hours of market time.  Sweet!

Metals are what this site is about but the little musings of potential opportunities you post are worth the price of admission.

Mantis's picture


Don't pay attention to the man behind the curtain

silver66's picture

things that make you go hmmm

nothing to see here, move along now.The  gold is us

Thanks for the article


Gold Dog's picture

Thanks Pining but I think the whole thing,

is a piffle!

Check my math;

8,133 MT X 2,200 pounds = 17,892,600 US Pounds

17,892 X 14.58 (Number of Troy ounces in a US pound) = 260,874,108 ounces

260,874,108 X $2,000/oz = $521,748,216,000
Hell, we could sell the drilling rights on 50 square miles of ANWR for more than that.

Just one mans view.

Your friend,


AlienEyes's picture

Great work once again, Pining !

Excellent and very interesting as well.  yes

ag1969's picture

Cue the Godfather Videos

Casinos can be a dirty business.  Just look at Comex!

Pining 4 the Fjords's picture

Wrong math, Dog!

You're doing it wrong!  Divide the 17 trillion national debt by the number of ounces in eight thousand tons and you'll get somewhere in the neighborhood of 50,000 $ per oz-  this is the math you should be doing!  Of course if we only have 2,000 tons left, that might be 200k per ounce... But I digress.

Urban Roman's picture


I'll see your BOTEC and raise you a POMO.

Ben Yellen can print that much in an afternoon.

And, Pining, thanks for the great story!


tyberious's picture


Should we not consider the total amount of currency produced or total $ money supply M1 plus debt? M1= 2.8 T+ 17 T= 20 T

Then lets consider a 10-20% backing.

Gold Dog's picture

Pining my friend,

when the whole enchilada collapses I will grant you that all "old math" will be extinct.

Means of food production and energy will mean that paupers who own them will "fart through silk and piss on ice"!



Mantis's picture

Why can no-one see it?

Keg I think the reason no-one can see it was covered in Pinings excellent blog post. The vaults have been sealed with tape. It would be very difficult to unseal it.

dgstage's picture

Why Sould You Care

Sneed Hearn's picture

Formal audit?

Actually, I don't think there has ever been a real audit of whatever lurks in Ft. Knox. Hoffa's remains are more likely than 8000 tonnes or so of actual gold. The "audit" during the 50s was actually much less than a real audit if my recollection is accurate. There was no sampling of what was stated to be Au and by itself that means the report was meaningless. If your "audit" involves counting something with the external color of gold and that's it then it is obvious that nothing at all was done that was meaningful. To quote Lily Tomlin: "No matter how cynical you become, it is never enough to keep up." And then there's Will Rogers: ""If stupidity got us into this mess, then why can't it get us out?"

bullion only's picture

As Santa says

It dosen't matter if the gold exists.

As long as we are the world reserve currency and as long as we have the military to maintain that status the the world will be forced(by gun point) to believe what we say and we say we have 8,000 plus tons of gold; end of discussion.

Now the operative word is "as long"


Kerbouchard's picture

Am I the only one...

...who can't access Pining's link to the video?

This is what I get:

Server Error in '/' Application.

Object reference not set to an instance of an object.

Description: An unhandled exception occurred during the execution of the current web request. Please review the stack trace for more information about the error and where it originated in the code.

Exception Details: System.NullReferenceException: Object reference not set to an instance of an object.

Source Error:

An unhandled exception was generated during the execution of the current
web request. Information regarding the origin and location of the
exception can be identified using the exception stack trace below.

Pining 4 the Fjords's picture


I just clicked and the link worked for me.

Try putting this into your browser :

Then in the search box type "gold 1974 knox" and see what comes up.  You could also try "roving report gold 1974"

Kerbouchard's picture

Got it!

Thanks, Pining.

Scooter's picture

Not long ago

Reminds me of one we all just seen not to long ago with the queen, and I'm not sure anyone would dare question her about it being true? Although she did say she wished it was all England's bars.....................

Gold Dog's picture

What Great Gold Porn!

I have figured out my storage problems.

I am just going to take some mint tape off of a master box and tie it across my closet door......not even Congress will be able to get to it then!


Pining 4 the Fjords's picture

Epsilon Theory is a really interesting site

For an interesting weekly read (and a great archive of fascinating articles) I recommend Epsilon Theory, where the author (a money manager for Salient Partners) describes aspects of his rather contrarian approach to investing.  Essentially, the guy combines insights from game theory with evolutionary biology and tries to apply them to investing by attempting to figure out where the herd is going before it goes there.  This quote from his latest is a good example:

Over the weekend and on Monday you had at least three Fed Governors come out with similar statements, that there was no confusion or complication imposed by the jobs report. Nothing to see here folks, move along. None of these Powers That Be are taking issue with whether or not the Friday jobs report was bad news … the only thing that matters is how this news impacts the common knowledge structure that generates their power to control market outcomes. That’s the threat that must be squelched. This is what Bernanke meant when he talked about using communications as a policy tool, and this is what Yellen (and Draghi and Abe and everyone else in the club) will continue to do … use public statements to play the Common Knowledge Game and drive market outcomes by proxy

To horribly dumb-down his thesis, the market is what the participants believe it is... so you should pay attention to the public signals given by TPTB, and ride the wave of "common knowledge" and not fight it.  Pay attention to the headlines and realize first that we are ALL being played, but then note where the markets will go if everyone believes those headlines. 

With that in mind, I thought the Yahoo Finance page was particularly interesting today:  tons of articles and open speculation on whether we have seen a top, how low this correction in price could go, articles titled "Here's what terrifies me" and "Inflation is back from the dead" and "Next down-leg for stocks", "Welcome to our highly-subsidized economy" "Will stocks recover from last week's thrashing"...   amazing.  I thought I had logged-on to Zerohedge. 

When the Yahoo front-page starts looking strangely like the comments section at TFMR - then there is something very significant going on within the Financial/Media/Entertainment Industry.  Marching orders have been given regarding the molding of public opinion, it seems...  very interesting

JY896's picture

Outstanding post, BUT

I find it slightly disturbing that you should insinuate anything other than the officially spoken version of events might have transpired.

"And hey, maybe that guy in the boat just cut himself shaving.  At night.  In the middle of a lake."

Well, it's tough to skillfully operate a straight-razor under those circumstances. The gentleman in question was actually lucky to have avoided a more serious incident.

Speaking of which, here's an indirect piece of speculation I had mentioned a while back (can't find the post now, but either Turd's post or one of the comments had a large picture of the wall of gold at the NYFRB.)

The FRB used to periodically publish a brochure called 'The Key to the Gold Vault', giving a virtual tour of the insides. The most recent one came out a couple of years ago (2011? 2012?). It is no longer on the Fed's website, but you can search online, a copy is here. There are two things of note: in the most recent brochure, the pictures seem to be from 80's-90's based on attire, hair and photo quality. No more recent glamour shots, huh?

Also, compare the composition and subjects of those photos in the brochure with an earlier edition, sourced from this site:

Now, granted there are only so many ways you can photograph a vault. But EXACTLY the same camera angles, exactly the same composition of subjects, down to which and how many are of what skin color? Could there perhaps be a script for this that is followed for more reasons than simply convenience?

Also related, this Cryptome page contains the floorplans of that famed vault (whose tunnel was made ever-memorable by Pining).

padme's picture

Nice Writing Pining!

I love Lake Tahoe, like to visit again soon.

Motley Fool's picture


fwiw, the two gold rooms are obviously different in dimension.

ag1969's picture


Pining 4 the Fjords's picture

Wow JY! I think we have it solved!

Everything we need to know is in those pictures!   In the "circa 1985" picture you posted, check out the thickness of the bar-list in the guy's hands...  pretty hefty list, right?  That is a good 200 pages of bar serial numbers, so let's guess 200 bars listed per page, each bar at 400 oz (well, theoretically) and that gives us a total gold holding of 16 million ounces circa 1985!

Now check the "circa 1995" picture... the bar list in that lady's hand has shrunken to just a mere folder.  Maybe more like a pamphlet... at best it is 15 or 20 pages, so that would suggest only 1.6 million ounces left ten years later around 1995.  The gold hoard has been slashed by another 90%!

Then they quit publishing it entirely in 2011 or 2012...   OBVIOUSLY that means they sold the last of it and just ran out! 

See, that was easy.  Mystery solved! (kidding, obviously). 

(P.S.-   GREAT post, that stuff is fascinating and I had never seen it before-  thank you!)

Syndicate contentComments for "Beneath the Surface"