Tag Archives: U.S. Government

The Student Loan Conspiracy?

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As I write this, protestors are gathered around the United States as part of the Occupy Wall Street movement. While they appear to lack a common platform, one of their primary concerns seems to be the enormous and growing debt load incurred by many students while attending college. Why is that load so enormous in the first place? Is there a Student Loan Conspiracy at work?

What is the Student Loan Conspiracy?

In 2009, the average college graduate had student loans totaling $24,000, up 6% from 2008. For postgraduate students, this figure rises substantially. Coupled with the challenging economic environment and the difficult job market, this has created a generation of heavily indebted students with few means to pay back their loans. Political circles have erupted with discussions of a “student loan crisis.” Heck, even professors are questioning the situation.

“Thirty years ago, college was a wise, modest investment. Now, it’s a lifetime lock-in, an albatross you can’t escape.” ~ Professor Fabio Rojas, Indiana University

All of this might be forgivable if students were getting good value for their money. However, the facts say otherwise. According to Richard Arum’s and Josipa Roksa’s book Academically Adrift: Limited Learning on College Campuses, 45% of U.S. college students show “no significant gains in learning” after two years in college. 36% of students show no such gains after four years of college. That might be because today’s students spend “50% less time studying compared with students a few decades ago.” And the things that are learned aren’t necessarily helpful. There tends to be a gigantic mismatch between the skills acquired in college and the skills that students need and use after college.

How did we get into this situation? Why are high school graduates spending money they don’t have in order to obtain a college degree that in all likelihood, involves little to no self-improvement?

The Origins of the Student Loan Conspiracy?

The origins of the Student Loan Conspiracy can be traced back to 1944. Prior to World War II, higher education was a small, private, and rather expensive industry. Its services were of little value to most individuals and thus, were only utilized by about 10% of high school graduates. This all changed in 1944 when Congress passed the Servicemen’s Readjustment Act. This Act, more commonly known as the G.I. Bill, gave educational subsidies to former veterans. More importantly, it marked the beginning of a “crony capitalism” relationship between college universities and the U.S. government.

With a precedent in place, it was only a matter of time before the U.S. government expanded its intervention in college education. In 1965, President Lyndon Baines Johnson signed the Higher Education Act of 1965 into law. It established several student loan and grant programs intended to make college more affordable. The increase of subsidies were a boon to the education industry and lifted enrollments. Unfortunately, this also had an unintended consequence. As subsidies increased, colleges realized they could raise tuition prices in response. And as they continued to raise prices, the government continued to increase subsidies, leading to an as-of-yet endless spiraling of education costs. As a result, since 1978, “the price of tuition at U.S. colleges has increased over 900 percent, 650 points above inflation.” Unfortunately, I was unable to find figures going back to 1965 but I imagine that the numbers would show a similar trend.

The Second Piece of the Student Loan Conspiracy Puzzle?

But that merely explains the origin of student debt in America. It doesn’t explain why so many people are willing to incur it. After all, its not like higher education is a necessity for most people.

“…the United States has become the most rigidly credentialized society in the world. A B.A. is required for jobs that by no stretch of the imagination need two years of full-time training, let alone four.” ~ James Engell & Anthony Dangerfield, Saving Higher Education in the Age of Money

This second piece of the puzzle can be traced to a 1971 Supreme Court case known as Griggs v. Duke Power. Up until that time, many companies used aptitude tests as a tool to screen potential employees. However, the Supreme Court, led by Chief Justice Warren Burger (pictured above), changed that when it issued its opinion on Griggs.

“…in 1971 the U.S. Supreme Court issued a ruling (Griggs v. Duke Power) saying that if companies use aptitude testing to screen potential employees, they must be prepared to show that their tests are precisely calibrated to the needs of the job. Otherwise, they will be guilty of employment discrimination if their tests screen out minority workers who might have been able to do the work. Rather than face discrimination suits by the federal government, most employers started using a less precise but legally safe method of screening applicants—college degrees.” ~ George C. Leef, Why on Earth Do We Have a Student Loan Crisis?

So, the Supreme Court basically forced companies to stop using aptitude tests for screening purposes. However, that didn’t end the need for screening. Firms still needed a way to whittle down ever-growing pools of applicants. Thus, companies started to make the “possession of a college degree a requirement for applicants – even for jobs that could easily be learned by anyone with a decent high school education.” And just like that, the cheap, quick, and focused aptitude tests were replaced by ultra-expensive, ultra time-consuming, and ultra-unfocused college degrees.

Guerrilla Explorer’s Analysis

In 1940, just 10% of high school graduates went to college. By 1970, that number was at 40%. And by the 1990s, it had risen to 70%. That’s because a college degree has become little more than a “signaling game.” By attending college, students “signal” to potential employers that they’re smart, hard-working, and easily trained. The ability to send that signal to employers, which was once accomplished via aptitude tests, is the sole reason that most students attend college in the first place.

The Student Loan Conspiracy isn’t a deliberate one. I don’t think any of the politicians or judges who created the current situation ever envisioned the full impact of their decisions. But unintended consequences can be harsh. The result is that many students who wish to work at regular jobs have no other choice but to waste four years of their lives at college. They end up studying subjects with little relevance to their futures and accumulating tens of thousands of dollars of debt for the privilege.

If politicians are serious about reducing student loan burdens (and this seems doubtful at best), they might consider removing themselves from the educational process. By re-legalizing aptitude tests, they can give employers a far cheaper and less time-consuming way of screening for employees. And if they remove themselves from the student loan business, colleges will be forced to slow tuition growth. Only then will the Student Loan Conspiracy finally, at long last, come to an end.

The Last Secrets of World War I?

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On April 19, 2011, the Central Intelligence Agency declassified six secret documents from 1917 and 1918. These were America’s oldest classified documents and believed to be the last of their kind from World War I. So, what great secrets could possibly require nearly a century of security? Political intrigue? Government conspiracy? Something even worse?

Secret Documents…from World War I?

Not in the least bit. According to the official press release, the secret documents, which you can find here, “describe secret writing techniques.” Or, to put it more plainly, they describe how to create invisible ink as well as “a method for opening sealed letters without detection.”

Have you ever wanted to secretly open an envelope, World War I-style? Well, here’s your opportunity.

“Mix 5 drams copper acetol arsenate. 3 ounces acetone and add 1 pint amyl alcohol (fusil-oil). Heat in water bath — steam rising will dissolve the sealing material of its mucilage, wax or oil.”

Oh, but don’t forget this part.

“Do not inhale fumes.”

Why all the Secrecy over Outdated Secret Documents?

I have to admit that the secret documents provide some interesting insights into the national security concerns of the time. One paper exposes Germany’s secret formula for invisible ink. Another one provides 50 ways for U.S. postal inspectors to detect invisible ink.

“The rule is to suspect or examine every possible thing. The war between the spy or forger and the expert is continually bringing out new methods.” ~ Theodore Kytka, Handwriting Expert

Still, I can’t help but wonder why the CIA chose to keep this material classified for nearly a hundred years. Recipes for invisible ink are easy to find and anyways, would any spy dare to use such an outdated technique?

According to the CIA, the answer is apparently yes. In 1999, “the agency rejected a Freedom of Information Act request to release the six documents, asserting that doing so ‘could be expected to damage the national security.'” A similar request was rejected in 2002.So, what changed? Well, a CIA spokeswoman claimed that “in recent years, the chemistry of making secret ink and the lighting used to detect it has greatly improved.”

“These documents remained classified for nearly a century until recent advancements in technology made it possible to release them. When historical information is no longer sensitive, we take seriously our responsibility to share it with the American people.” ~ Leon E. Panetta, CIA Director

Guerrilla Explorer’s Analysis

One of the secret documents revealed that America knew the secret to creating Germany’s invisible ink. I guess the German Empire will have to switch recipes going forward. Anyways, the CIA has long been considered one of the world’s most secretive organizations. From where I stand, the delayed release of these extremely outdated documents does nothing to change that reputation.

“Invisible ink was rendered obsolete by digital encryption long ago, not in the last few years. Director Panetta is attempting to rationalize the CIA’s irrational information policies, but there is no known basis for his claim.” ~ Steve Aftergood, The Federation for American Scientists

Well, I suppose we can be happy that these secret documents have finally been released. Now, we can move on to the next batch. What’s next on the list of oldest still-classified documents? Anyone?

President Lincoln’s Greatest Nemesis?

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If you were to ask the typical American about President Abraham Lincoln’s greatest enemy, he or she would most likely answer with Jefferson Davis, the President of the Confederate States of America. But recent scholarship suggests that Lincoln faced a far more hated enemy much closer to home…Judge Roger Taney, the Chief Justice of the United States Supreme Court. In 1861, Lincoln’s hatred of Taney nearly exploded into a Constitutional crisis of epic proportions.

Judge Roger Taney versus President Lincoln?

On May 25, 1861, a Confederate sympathizer named John Merryman was arrested and charged with treason. He petitioned the U.S. Supreme Court for a writ of habeas corpus, a judicial order forcing the Union Army to appear before a judge and justify his imprisonment. Judge Roger Taney granted the writ.

But General George Cadwalader refused, stating that he was under no obligation to do so since President Lincoln had ordered the suspension of habeas corpus. This led to the famous Ex parte Merryman ruling, in which Judge Taney stated that only Congress had the power to suspend habeas corpus.

“And if the President of the United States may suspend the writ, then the Constitution of the United States has conferred upon him more regal and absolute power over the liberty of the citizen than the people of England have thought it safe to entrust to the Crown–a power which the Queen of England cannot exercise at this day, and which could not have been lawfully exercised by the sovereign even in the reign of Charles the First.” ~ Judge Taney, Ex parte Merryman

President Lincoln orders Roger Taney’s Arrest?

The judgment was an embarrassing repudiation to President Lincoln and Confederate sympathizers seized upon it as an example of Lincoln’s tyranny. In either May or June 1861, President Lincoln’s anger inspired him to call for the arrest of Judge Roger Taney.

“After due consideration the administration determined upon the arrest of the Chief Justice. A warrant or order was issued for his arrest. Then arose the question of service. Who should make the arrest and where should the imprisonment be? This was done by the President with instructions to use his own discretion about making the arrest unless he should receive further orders from him.” ~ Ward Hill Lamon

According to his own words, Ward Hill Lamon, who was a friend and bodyguard to President Lincoln as well as a United States Marshall, was given the warrant and ordered to arrest Roger Taney. Strangely though, the warrant was never served.

Guerrilla Explorer’s Analysis

Nobody knows for sure why Lamon never followed through with the arrest. President Lincoln certainly wasn’t above arresting his political opponents, as the cases of Clement Vallandigham and Judge Merrick have shown. But we do know that the two men continued their bitter feud over Lincoln’s efforts to curtail civil liberties for several additional years.

I should point out that Lamon is the sole primary source for this story. Interestingly enough, most current Lincoln scholars consider it ridiculous. They dismiss Lamon as an alcoholic and point to the fact that he didn’t include the story in any of his published books (which, by the way, are highly treasured by these same scholars). Still, there is some corroborating evidence. Records indicate that Roger Taney himself as well as a colleague named Judge Curtis were aware of the near-imprisonment.

We may never know for certain how close President Lincoln came to arresting Judge Roger Taney. But we can all be thankful that he didn’t follow through on it. The ramifications might have been disastrous.

“It would have destroyed the separation of powers; destroyed the place of the Supreme Court in the Constitutional scheme of government. It would have made the executive power supreme, over all others, and put the President, the military, and the executive branch of government, in total control of American society. The Constitution would have been at an end.” ~ Charles Adams

The Guatemala Syphilis Scandal

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In 2005, Professor Susan Reverby made a shocking discovery. Between 1946 and 1948, the U.S. Public Health Service, with the blessing of Guatemalan officials, deliberately exposed 1,300 Guatemalans to syphilis and other sexually transmitted diseases. 83 people may have died as a result. How did the Guatemala Syphilis Scandal happen? And why does new evidence indicate that the experiments were “more shocking than was previously known?”

Dr. John Cutler & the Guatemala Syphilis Experiment?

Dr. John Cutler was a surgeon and acting chief of the U.S. Public Health Service’s venereal disease program. At one time, he was viewed as a respectable doctor and even rose to the rank of Assistant Surgeon General under President Eisenhower. Now, after being tied to the Tuskegee syphilis experiment as well as the Guatemala syphilis experiment, he is considered a monster.

Starting in 1946, Dr. Cutler and his researchers oversaw the deliberate infection of 1,300 Guatemalans with syphilis, gonorrhea, and chancroid. This was accomplished by paying prostitutes to sleep with prisoners as well as through direct inoculations. The goal, while somewhat unclear, seems to have been to determine the efficacy of penicillin in dealing with the various venereal diseases. While some Guatemalan officials knowingly participated in the conspiracy, they were not always privy to the experiment’s details. The so-called Guatemala syphilis experiments ended in 1948, due to increasing gossip about the study as well as difficulties in obtaining adequate amounts of penicillin.

News on the Guatemala Syphilis Scandal?

Recently, the Presidential Commission for the Study of Bioethical Issues, which had been tasked to investigate the experiments, announced its findings. Out of the 1,300 infected people, only 700 received treatment. It is unknown how many people died thanks to the experiment but at least 83 were deceased by 1953.

The Commission, which has yet to release its full report, also announced some particularly disturbing details. None of the victims gave their informed consent to participate in the project. Also, some of the subjects were treated in horrific fashion, including one terminally-ill woman who was “infected…with gonorrhea in her eyes and elsewhere.”

Guerrilla Explorer’s Analysis

Five years after Professor Reverby began to unearth the decades-old conspiracy, it became national news. President Obama called Guatemalan President Alvaro Colom to apologize and ordered the Commission to begin reviewing the study. Guatemala is conducting its own investigation. Reparations are possible and I believe that surviving victims of the study are preparing a lawsuit against the U.S. government.

Unfortunately, there is no turning back the clock. Dr. Cutler’s experiments, which came in the wake of the horrific Nazi experiments, are a permanent part of American history, one that all of us wish we could forget.

The Double Eagle Scandal

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In May 1933, the U.S. Mint printed the very last Saint-Gaudens double eagle. These $20 gold coins were never officially released to the public. A few managed to avoid destruction and the U.S. government has spent more than 60 years and untold millions of dollars tracking them down. Why is the 1933 double eagle the most controversial coin in history?

President Roosevelt Seizes America’s Gold

On April 5, 1933, President Franklin Delano Roosevelt issued Executive Order 6102 which, in effect, forced American citizens to turn in “all gold coin, gold bullion, and gold certificates” to the Federal Reserve. On January 30, 1934, Congress followed up that Order with the United States Gold Reserve Act, which allowed the President to seize the Federal Reserve’s newly-acquired gold supply. The federal government built Fort Knox in 1936 in order to store its newfound treasure.

The U.S. Government Declares War on the 1933 Double Eagles

Suddenly, gold coins became a thing of the past. The director of the Philadelphia Mint ordered the recently pressed 1933 double eagles to be melted down into gold bars and sent off to Fort Knox, a task which would take several years to complete. Only two of the coins were slated to survive. They were sent to the Smithsonian for safekeeping.

But, double eagles began to pop up. One coin made its way into the hands of Egypt’s King Farouk. Another one was offered via auction. The Secret Service quickly decided that someone had stolen the double eagles from the Philadelphia Mint. They actually debated the “advisability of trying to get [the] coin back from King Farouk.” However, since World War II was in progress and Egypt was an important American ally, they decided not to risk infuriating him. However, they did seize the other coin, an act which launched a decades-long war against private ownership of the 1933 double eagles.

“The government has been fanatical about seizing and destroying these coins. They’re famous because the government has been seizing them since the 1940s.” ~ Robert W. Hoge, American Numismatic Society

The 1933 Double Eagle becomes the Most Expensive Coin in History

The Secret Service traced the coins to a Philadelphia-based jeweler named Israel Switt. Switt claimed that he didn’t have any records pertaining to the eagles. However, he did state that they weren’t purchased from a Mint employee. The Justice Department disagreed but was unable to press charges due to the statute of limitations.

For the moment, the investigation was at an impasse. But after King Farouk was overthrown, his double eagle found its way into the hands of a coin dealer named Stephen Fenton. Fenton attempted to sell the coin in 1996 but the end buyer betrayed him. Secret Service agents rushed the room and seized the double eagle.

Incredibly, Fenton was charged with “conspiring to convert to his own use and attempt to sell property of the United States.” No one seemed to care that FDR’s ridiculous and unconstitutional Executive Order had been repealed in 1974 by President Ford. And the fact that there was no proof the coins were stolen in the first place didn’t seem to strike anyone as strange.

Fortunately, the charges were quickly dropped. And eventually, Fenton and the Justice Department agreed to auction off the coin and split the proceeds. After an extended publicity campaign, it sold for a grand total of $7.6 million, making it the most expensive coin in history until the 2010 sale of a 1794 silver dollar. The anonymous buyer lent it to the American Numismatic Society, which in turn lent it to the Federal Reserve Bank of New York.

The Double Eagle Double-Cross?

The story of the 1933 double eagle should’ve ended with that auction. But there was still another chapter to come. In 2004, Israel Switt’s only child Joan Langbord along with her son Roy discovered ten 1933 double eagles in a safety deposit box. She took the coins to the U.S. Mint for authentication. The Mint agreed but ended up pulling a fast one. It refused to return the property and instead told the media that it had “recovered” ten additional coins.

The Langbord family sued. Assistant U.S. Attorney Jacqueline Romero claimed that any 1933 double eagles that left the Mint did so illegally. The Langbord family argued that most of the Philadelphia Mint records, which were ill-kept, had been destroyed in 1978. Also, no surviving witnesses remained. Finally, they identified a “window of opportunity” where Israel Switt could’ve obtained the coins in a legal manner.Shockingly, the jury sided with the government. While the Langbord’s are expected to appeal the verdict, the story has come to an end, at least for now. And government representatives are quite pleased with their success.

“People of the United States of America have been vindicated.” ~ Jacqueline Romero, Assistant U.S. Attorney

Guerrilla Explorer’s Analysis

The government spent more than six decades vigorously pursuing these coins. They confiscated private property. They treated citizens very differently, allowing Fenton to profit from his coin while not giving the same courtesy to the Langbords. And they paid untold millions of tax dollars throughout the investigation as well as during the court case. That leaves me with one question…Do you feel vindicated?

Did the U.S. test a nuke…on its own citizens?

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On July 17, 1944, the Port Chicago Pier exploded into a tremendous fireball. Hundreds died instantly, hundreds more were injured by the blast. Over sixty years later, it remains one of the deadliest disasters in U.S. history. The official explanation is that it was caused by an accidental munition detonation. However, not everyone is convinced. Some point to a far darker conclusion…that the blast was caused by an atomic bomb.

The Port Chicago Pier Explosion?

In 1944, Port Chicago Naval Magazine, now known as the Concord Naval Weapons Station, was a munitions depot in California. It was used to transport bombs, shells, torpedoes, and other explosives to units fighting against Japan. On July 13, the SS E.A. Bryan docked at Port Chicago’s lone pier. After four days of hard work, 40% of the ships’s holds were filled with 4,600 tons of explosives. Then, at 10:18 p.m., all hell broke loose.

An unusual noise described as a metallic sound and rending timbers, such as made by a falling boom, was heard coming from the direction of the pier immediately before the first flash.

A few seconds later, the SS E. A. Bryan exploded into a fireball that measured three miles in diameter. Seismographs determined that this second explosion was equivalent to a 3.4 earthquake on the Richter scale. Three hundred and twenty people died instantly.  Three hundred and ninety others suffered blast-related injuries. The majority of these deaths and injuries occurred to African-Americans. A month later, survivors led a work stoppage, which is now known as the so-called Port Chicago Mutiny.

Did an Atomic Bomb cause the Port Chicago Pier Explosion?

At the time, the explosion was determined to have similar effects to that of a small atomic bomb. But for several decades, no one questioned the official story. Thirty-four years later however, that changed.

In 1980, Peter Vogel discovered some old documents at a rummage sale. They had been stolen from the Los Alamos Laboratories by Paul Masters, a photo technician. Some of the papers discussed the predictions for Trinity, which would end up being the first recorded test of a nuclear weapon in history. These documents predicted a “ball of fire mushroom out at 18,000 (feet) in typical Port Chicago fashion.” Intrigued by the possibility that the Port Chicago disaster was caused by an atomic bomb, Vogel began to gather some of the evidence listed below.

  1. Size of Blast: The blast seemed greater than what could’ve been caused by the official story.
  2. Bright Lights: Descriptions of the explosion refer to “an enormous blinding incandescent” and a “brilliant white.”  Conventional explosives generally do not give off a white color unless mixed with magnesium (which apparently weren’t present at the Pier).
  3. A Strange Cloud: A Wilson condensation cloud appeared after the disaster, similar to an atomic bomb detonated in a vapor-filled atmosphere.
  4. Speed of the Explosion: The seismograph records indicated a rapid explosion that seemed similar in nature to that of an atomic bomb.

Why would the U.S. Government Drop an Atomic Bomb on American Soil?

But why would the U.S. government test a nuclear weapon on its own people? Vogel and others like him believed that the Port Chicago disaster was perpetrated to allow scientists to study the effects of a nuclear explosion on people. In this case, those people included primarily low-ranking, African-American military personnel.

Guerrilla Explorer’s Analysis

Obviously, this is an explosive charge, so to speak.  So, was Vogel right?  Did a small atomic bomb cause the Port Chicago disaster? Supporting evidence is skimpy at best. Most damning, there are no records of radiation-based injuries amongst the survivors or clean-up crew. That being said, the size and reach of the explosion is somewhat difficult to explain.

Overall, it seems highly unlikely that an atomic bomb caused this explosion. If one hopes to prove otherwise, they will need substantial, hard evidence…far more substantial than that accumulated by Vogel. After all, if he was correct, Port Chicago wasn’t just the site of an atomic bomb test…it was also the site of mass murder.

The Federal Reserve Conspiracy

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On November 22, 1910, seven men secretly boarded a private railcar in New Jersey. Between them, they represented more than 25% of the entire world’s wealth. Under the cover of darkness, they stole away to Jekyll Island, Georgia where they proceeded to lay the groundwork for the mysterious entity known today as the Federal Reserve. What exactly is the Federal Reserve? And why is it, perhaps, the most incredible conspiracy of all time?

The Federal Reserve Conspiracy?

The Federal Reserve, or the Fed, is a bonafide, wide-open conspiracy. It was hatched in 1910 by bankers in order to increase profits at the public’s expense. In the following years, representatives of those same bankers sold it to the public as a way to protect people from the banks. It was unconstitutional at the time of its passing and it remains unconstitutional to this day.

Its actions have exaggerated the boom-bust cycle, leading to nearly twenty recessions and/or depressions (including the current one). It enabled the creation of America’s massive debt, stole money from the poor, and along the way, wiped out 96% of the public’s purchasing power. Wow!  How can such an institution still exist? The answer lies in the details. The Fed doesn’t hide its existence. But it is an incredibly complicated beast. Few know about it. Even fewer understand it.

It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning – Henry Ford

How does the Federal Reserve Work?

The Fed is America’s central bank. It is a monopoly, having complete control over the setting of interest rates and the printing of money. The Fed and its member banks generate profits by printing money, loaning this money to others, and then collecting interest on it. This is possible because U.S. dollars are inherently worthless. They do not represent claims on gold or silver or anything else. They are just pieces of paper. The only reason they have any value is because the U.S. government requires citizens to use them.

Paper money eventually returns to its intrinsic value…zero – Voltaire

The Federal Reserve Conspiracy: Winners & Losers?

So, the Fed is able to create as much money as it wants and profits handsomely from this practice. But printing money does not create value for the public. Instead, it dilutes the worth of existing money, causing prices to rise (this is often called inflation). This is a “hidden tax.” And like all taxes, there are winners and losers. Some of the winners include:

  • Bankers: As I already mentioned, banks make enormous profits by creating money out of thin air and charging people, businesses, and governments to borrow it.
  • Politicians: By printing money, the Fed allows politicians to spend money without raising actual tax rates.
  • The Well-Connected: Government employees and well-connected individuals and businesses are the first ones to receive newly-printed money. They are able to spend it before it loses purchasing power.

The losers include everyone else, most tragically savers, poor people, and those on fixed incomes. These individuals suffer from the hidden tax of inflation and thus, lose purchasing power that they can’t afford.

Government spending is always a “tax” burden on the American people and is never equally or fairly distributed. The poor and low-middle income workers always suffer the most from the deceitful tax of inflation and borrowing – Congressman Ron Paul

Some might forgive all of this if the Fed managed to provide a financially stable, growing economy over the long haul. However, since its inception, America has suffered eighteen recessions or depressions.

Guerrilla Explorer’s Analysis

For nearly one hundred years, the Fed has wreaked havoc on the American economy. It has stolen wealth from ordinary Americans and redistributed it to bankers and those with connections. It has lent endless amounts of money to politicians, leading to the creation of a massive public debt. And yet, it has failed to stabilize the economy.

The Federal Reserve is a genuine, ongoing conspiracy. And remarkably, it exists in plain sight, protected by a shroud of secrecy and poor understanding amongst the general public. However, all of that is starting to change. For the first time in decades, the Fed is under real pressure, led by the efforts of Ron Paul and others. Will it survive the onslaught? Or will someone finally find a way to end the Fed?

Is Fort Knox Empty?

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A few weeks ago, CNBC announced that Ron Paul, the esteemed congressman from Texas, hoped to audit the supply and purity of the thousands of tons of gold stored in Fort Knox.  Of course, Paul’s wish makes one minor assumption…that there’s actually still gold in Fort Knox.

The Origin of Fort Knox?

The strange tale of Fort Knox, also known as the United States Bullion Depository, begins in 1933.  On April 5 of that year, President Franklin Delano Roosevelt issued Executive Order 6102 which, in effect, forced American citizens to turn in “all gold coin, gold bullion, and gold certificates” to the Federal Reserve.  The federal government built Fort Knox in 1936 in order to store its newfound treasure.

Citizens received $20.67 for each troy ounce of gold they turned over to the government.  Subsequently, President Roosevelt offered other nations the opportunity to buy or sell gold at $35.00 per ounce, an inflationary measure designed to end the rising Great Depression.  It didn’t work.  However, with most other assets undergoing deflation, the higher gold price attracted massive amounts of sellers from around the world.  As such, by 1949 Fort Knox held nearly 70% of the entire world’s known gold supply.

The End of the Gold Standard?

During the 1950’s, the tide began to swing the other way.  The U.S. continued to transact gold at $35 per ounce.  However, due to the declining value of the U.S. dollar, other nations were now buyers rather than sellers.  The sell-off lasted until August 15, 1971 when President Richard Nixon “closed the gold window.”  By ending the last remaining links between the U.S. dollar and gold, he also ended the need for a bullion depository.  Thus, Fort Knox became little more than a glorified, high-security warehouse.

Guerrilla Explorer’s Analysis

So, that brings us to the main question.  What, if anything, is still in the facility?  According to official records, Fort Knox holds 4,578 metric tons of gold bullion, or roughly 2.5% of the entire world’s known gold supply.  At the present spot price, that works out to $225 billion dollars.

However, that amount comes with an asterisk.  You see, no visitors have actually been inside the facility since September 1974.  And an official audit has not been performed since January 1953.  Even worse, that audit was flawed in numerous ways.  It lasted only seven days and tested just a small fraction of the gold.  With so much wealth and secrecy rolled into one location, it’s not surprising that Fort Knox has given rise to a flood of conspiracy theories.  The most popular theory is that the vault is empty or perhaps, filled with fake gold bars.

Personally, I doubt that Paul’s efforts will prove successful, at least in the near-term.  But one can always hope.  If he does manage to crack the facility’s cloak of secrecy, we will finally know the answer to one of the greatest mysteries of American history.  Does Fort Knox truly hold 4,578 metric tons of gold?  More?  Less?  Or is it just an empty warehouse?  And if it’s empty, more questions arise.  Questions that could prove just as difficult to answer.  Questions such as…

Who took the gold?  And what did they do with it?