Conspiracy theorists have long had a field day with gold, but Global Bullion is here to break down those myths that need some serious debunking.
After all, the truth about gold conspiracy theories shall set you free of silly ideas that do nothing but fog up investing reason and logic.
Gold Conspiracy Theories: Has the gold in Fort Knox gone AWOL?
Long-revered among gold conspiracy theories is that Fort Knox contains half of the U.S. government's gold, and that no one has been able to verify it. Could it be true that the feds' are lying to us because there actually is no gold there? Huzzah!
The claim goes that the gold in Fort Knox has been whisked off somewhere more than 50 years ago. Some particularly frenzied foil-hat-wearers believe gold bars have been replaced with fakes filled with super-dense tungsten.
The truth is that more than one of the U.S. Mint's spokespeople have said all the gold is accounted for.
Thanks to annual audits of the gold in Ft. Knox. You'll just have to take the government's word for it. Unfortunately, this is something conspiracy theorists rarely do. And who knows, maybe they're right not to? Expect to see this idea float in and out of public opinion often.
Gold Conspiracy Theory: Nazis turned sand into gold
Unlike some gold conspiracy theories, this one isn't too far off. With one important distinction; it never happened. But Nazi scientists did reportedly try to turn sand into gold. Helmut Werner's book Hilter's Alchemists – The Secret Attempts to Manufacture Gold in Dachau is revealing. Werner describes how alchemist Karl Malchus aimed to "spellbound Himmler with tales of turning base metal into riches." Malchus' plan was one big swindle, though, and he was incarcerated in Dachau. After Malchus was released, he was told that if he attempted to tell anyone about his alchemy con, the Nazis would kill him.
Gold Conspiracy Theories: The U.S. government raided safe-deposit boxes to confiscate gold during the 1930s
President Franklin Delano Roosevelt's Executive Order 6102 prohibited the "hoarding" of gold bullion. Although Roosevelt ordered citizens to surrender their gold bullion in exchange for cash, this 1933 directive needed voluntary compliance. No American was forced to give up their gold.
Some safe-deposit boxes may have indeed been seized as a result of bank failures, but gold conspiracy theories about confiscation don't seem validated beyond a very small scale.
Sidebar: The U.S. government claims the authority to expropriate any private asset in a time of national emergency. Yet, the likelihood of another administration demanding citizens' private gold seems unlikely. One reason being that the dollar is not on a gold standard anymore... so the restraint of gold backing no longer limits the issuance of more dollars.
Gold Conspiracy Theories: Gold has no utility beyond its value
Wrong. Gold has been used in electronics quite effectively, as we illustrated in this post.
Also, gold particles have been found to assistprototype cancer therapies, and gold nanoparticles can be coatedand used to track blood flow. This has advanced to use in the smallest blood vessels in the body.
And last year we learnedthat a gold-based compound can help clean toxic metals released by China's vast polyvinyl chloride industry.
It might not be enjoying the multi-use hype of a material like graphene but gold is still turning heads. Both the tech hardware and nano-science communities continue to debunk this and other gold conspiracy theories.
Gold Conspiracy Theories: There's a plot behind every instance when banks and Feds tell us to drop gold.
This might be the most common gold conspiracy theory: a scheme by the Federal Reserve, other central banks, and major investment banks to cause panic-selling. The idea is to get the general public out of the market.
But the truth is far unsexier. As explained by the Globe & Mailseveral years ago:
The exchange value of the dollar is threatened, and if that collapses the Fed loses control over interest rates. Then the bond market blows up, the stock market blows up, and the banks that are too big to fail, fail. So it's an act of desperation. They've got to establish in people's minds that the dollar is the only safe place. That it is the only safe haven, not gold, not silver, and not other currencies.
The next time you hear some wild ideas around gold, be sure to come back to this list of gold-myths debunked so you can set the record straight.
In an interview with one of the leading experts on silver shorts, GBS talks to Chris Marcus to learn more about the many angles of the silver story everyone has been talking about for several weeks.