"China is worried, buying Gold and Energy" - Mark Kirk (R-IL) (4min.)

[LargoWinch]

The interview took place on June 9, 2009 (see article at the bottom).

Mr. Kirk is stunningly honest about the situation. I am assuming here that it is obviously easier for him to be, since he is not part of the FED or the Treasury.

Is there really only $40B worth of gold in Fort Knox? I have to look this one up! (yes I know it has not been audited for ages, but based on the latest and/or best estimate: no conspiracies theory stuff please).

Note that Mr. Kirk says that the Chinese are planning to buy $80B worth of gold i.e. they have not done so yet. Seems like a drop in the bucket to me when you own $1T+ of USD, but anyway.

"Both parties don't want to create a panic" - Kirk

"the US may borrow even more than $1.8T...that is ...unsustainable" - Kirk

"they [Chinese] expect quite a bit of inflation next year" - Kirk

"they [Chinese] funded a second petroleum strategic reserve" - Kirk

"they plan to buy $80B worth of gold" - Kirk


Runtime: 5min.*

Rep. Mark Kirk on China Losing Faith in the Dollar
By On the Record
June 9, 2009

GRETA VAN SUSTEREN, FOX NEWS HOST: Congressman Mark Kirk just returned from China, and he says the Chinese told him they are worried about the U.S. economy. But that's not exactly what our Treasury secretary, Tim Geithner, says after his recent trip to China. Secretary Geithner says the Chinese expressed to him justifiable confidence in our economy. So which is it? Are the Chinese flipped out about our exploding debt or not?

...

Full Article here.

*The title shows "4min." but the clip above is 5min. See "Reason for Editing"

[ThePythonicCow]

Re: "China is worried, buying Gold and Energy" - Mark Kirk (R-IL) (4min.)

The interview took place on June 9, 2009 (see article summary at the bottom).

Mr. Kirk is stunningly honest about the situation. I am assuming here that it is obviously easier for him to be, since he is not part of the FED or the Treasury.

Is there really only $40B worth of gold in Fort Knox? I have to look this one up! (yes I know it has not been audited for ages, but based on the latest and/or best estimate: no conspiracies theories stuff please).

Kirk said of the Chinese "they plan to buy $80B worth of gold -- that's two Fort Knox's". Yup -- that would imply Mr. Kirk thinks there are $40B worth of gold in Fort Knox. Though he said it quickly enough that I can't tell if he meant to imply exactly that, if he had done his arithmetic properly, at which price, $42.22 or $900+ per ounce, he was valuing the gold, and how sound was his information on what's in Fort Knox. For example, if priced at $271 per ounce, then the 147.3 million ounces of gold that the U.S. Mint claims to be in Fort Knox would be worth $40B. Perhaps Mr. Kirk is carrying around an old $40B figure in his head, originally computed when gold was at $271/oz.

In any case, the site of the U.S.Mint http://www.usmint.gov/about_the_mint...on=fun_facts13 states:

• Amount of present gold holdings: 147.3 million ounces.
• The only gold removed has been very small quantities used to test the purity of gold during regularly scheduled audits. Except for these samples, no gold has been transferred to or from the Depository for many years.
• The gold is held as an asset of the United States at book value of $42.22 per ounce.
• The Depository opened in 1937; the first gold was moved to the depository in January that year.
• Highest gold holdings this century: 649.6 million ounces (December 31, 1941).
• Size of a standard gold bar: 7 inches x 3 and 5/8 inches x 1 and 3/4 inches.
• Weight of a standard gold bar: approximately 400 ounces or 27.5 pounds.
• Construction of the depository:
  • Building materials used included 16,000 cubic feet of granite, 4,200 cubic yards of concrete, 750 tons of reinforcing steel, and 670 tons of structural steel.
  • The cost of construction was $560,000 and the building was completed in December 1936.
  
  
• In the past, the Depository has stored the Declaration of Independence, the U.S. Constitution, the Articles of Confederation, Lincoln's Gettysburg address, three volumes of the Gutenberg Bible, and Lincoln's second inaugural address.
• In addition to gold bullion, the Mint has stored valuable items for other government agencies. The Magna Carta was once stored there. The crown, sword, scepter, orb, and cape of St. Stephen, King of Hungary also were stored at the Depository, before being returned to the government of Hungary in 1978.
• The Depository is a classified facility. No visitors are permitted, and no exceptions are made.

In any case, this Cynical Cow doubts that either Mr. Kirk or the U.S.Mints website provide any reliable information regarding the current gold holdings at Fort Knox.

Note also that even fully valued at say $1000/oz, the claimed 147.3 million ounces in Fort Knox is only worth $147.3 Billion dollars (2009 dollars). That doesn't sound like much compared to the numbers we've been hearing lately.

[LargoWinch]

Re: "China is worried, buying Gold and Energy" - Mark Kirk (R-IL) (4min.)

Kirk said of the Chinese "they plan to buy $80B worth of gold -- that's two Fort Knox's". Yup -- that would imply Mr. Kirk thinks there are $40B worth of gold in Fort Knox. Though he said it quickly enough that I can't tell if he meant to imply exactly that, if he had done his arithmetic properly, at which price, $42.22 or $900+ per ounce, he was valuing the gold, and how sound was his information on what's in Fort Knox. For example, if priced at $271 per ounce, then the 147.3 million ounces of gold that the U.S. Mint claims to be in Fort Knox would be worth $40B. Perhaps Mr. Kirk is carrying around an old $40B figure in his head, originally computed when gold was at $271/oz.

In any case, the site of the U.S.Mint http://www.usmint.gov/about_the_mint...on=fun_facts13 states:

• Amount of present gold holdings: 147.3 million ounces.
• The only gold removed has been very small quantities used to test the purity of gold during regularly scheduled audits. Except for these samples, no gold has been transferred to or from the Depository for many years.
• The gold is held as an asset of the United States at book value of $42.22 per ounce.
• The Depository opened in 1937; the first gold was moved to the depository in January that year.
• Highest gold holdings this century: 649.6 million ounces (December 31, 1941).
• Size of a standard gold bar: 7 inches x 3 and 5/8 inches x 1 and 3/4 inches.
• Weight of a standard gold bar: approximately 400 ounces or 27.5 pounds.
• Construction of the depository:
  • Building materials used included 16,000 cubic feet of granite, 4,200 cubic yards of concrete, 750 tons of reinforcing steel, and 670 tons of structural steel.
  • The cost of construction was $560,000 and the building was completed in December 1936.
  
  
• In the past, the Depository has stored the Declaration of Independence, the U.S. Constitution, the Articles of Confederation, Lincoln's Gettysburg address, three volumes of the Gutenberg Bible, and Lincoln's second inaugural address.
• In addition to gold bullion, the Mint has stored valuable items for other government agencies. The Magna Carta was once stored there. The crown, sword, scepter, orb, and cape of St. Stephen, King of Hungary also were stored at the Depository, before being returned to the government of Hungary in 1978.
• The Depository is a classified facility. No visitors are permitted, and no exceptions are made.

In any case, this Cynical Cow doubts that either Mr. Kirk's or the U.S.Mints website provide any reliable information regarding the current gold holdings at Fort Knox.

Note also that even fully valued at say $1000/oz, the claimed 147.3 million ounces in Fort Knox is only worth $147.3 Billion dollars (2009 dollars). That doesn't sound like much compared to the numbers we've been hearing lately.

Thanks TPC! You saved me quite a bit of time there.

So all the gold in Fort Knox does not even covers AIG's bailout at current prices. This begs the question: deflation anyone? (sorry but I had to say that :p)