Why Trump and Musk want to audit gold reserves at Fort Knox

Amna Nawaz:

President Trump and Elon Musk have cast doubt on whether the U.S. gold reserves stored at Fort Knox still exist. Trump's Treasury secretary insists that the gold is safe.

But the conversation led our digital anchor, Deema Zein, to dig a little deeper with economics correspondent Paul Solman.

Deema Zein:

Paul, there's been a lot of suspicion about Fort Knox, as we have seen in President Trump and Elon Musk's comments.

Paul Solman:

Yes.

Deema Zein:

Why do you think they want to audit the gold?

Paul Solman:

People start a rumor. A rumor becomes a conspiracy theory. There must be something. And, I mean, anybody who's ever played the game telephone, by the time you get to the end of the circle, it's different than when it started, right?

That's got to be the explanation here. Certainly, no one has come forth with evidence that somebody, hey, Uncle Harry has a gold bar in his freezer and it says Fort Knox on it. Now, you ask, why now? What's the reason they're going in?

Well, one possibility is they're trying to satisfy the conspiracy theorists. So it might be just that, hey, don't worry. It's all there. President Trump or Elon Musk might say, here we are worried about the debt ceiling and how we don't have enough money to pay our debts unless Congress raises the debt ceiling. But we have enough money. And so we don't have to worry about the debt ceiling.

And that then could be prelude to some maneuvers by what's called monetizing the gold, which is to say claiming it for ourselves at its true value, which is what's called mark to market. You mark it up to the current market price.

Deema Zein:

And has that ever happened before?

Paul Solman:

Franklin Roosevelt did it. He did it in order to lower the value of the dollar in order to stimulate the economy by putting more money into the economy and The New Deal, Social Security and all the things that were introduced under the Roosevelt administration in the 1930s to get us out of the Great Depression.

It wasn't anything at this sort of magnitude. It was not for the purpose of avoiding the debt ceiling.

Deema Zein:

So some commentators online are asking, if the gold were to disappear, not be at Fort Knox, would that impact our economy?

Paul Solman:

The United States has a lot more assets, the U.S. government, than gold. We have a fantastic amount of assets. If we actually wanted to try to monetize the assets of the United States government, it's way more.

But symbolically, oh, my God, Fort Knox, the gold isn't there? What else isn't there? What else are we missing? What — who stole what? I mean, so I can imagine the psychological effect would be — might be substantial, enormous. People are scared enough as it is, scared of what's happening in the world, scared of what's happening politically in the United States, whatever.

Deema Zein:

If the gold wasn't there, would it undermine the U.S. dollar, or would the U.S. dollar lose its value?

Paul Solman:

Well, it's all psychological, right? All repositories of value are only as valuable as people think they are. It's because enough people believe in it as a repository of value.

And the same thing is true of the U.S. dollar. It's just what we all agree. And if you go back in history, cows were currency, cigarettes have been currency, cowrie shells have been currency. This was currency in somewhere in Africa, just a piece of twisted metal.

So it's all a question of just what you agree to believe and how many people believe it and how much they believe it. And that determines the price. I think every one of the bars is there. For somebody to be blowing the whistle on that, that seems like that would be awfully hard to pull off. That's all.