The Real Reason Trump and Musk are Planning to Visit Fort Knox

That's where the "money" is.

I had a bit of fun with yesterday’s post. I don’t actually think President Trump and Elon Musk are planning to take hundreds of millions of viewers on a livestream journey into the heavily fortified vault within the United States Bullion Depository at Fort Knox, in order “to make sure the gold is still there,” as Trump put it. They know it’s there.

Someone on Bluesky asked me if I thought the real reason for the stunt has something to do with a desire to bring back the gold standard. I don’t think that’s it, but I do think there’s a reason the president wants this made-for-TV-moment.

And it’s related to something I wrote about a couple of weeks ago.

Here’s what I think is actually going on.

President Trump wants the American people (in particular) to see that big beautiful stockpile of glistening gold because he wants to revalue it. By showing off “our incredible riches,” the president will explain that we have vastly undervalued its worth. “Can you believe it?” Trump will ask. “We’re valuing all of this gold at $42.22 an ounce. How crazy is that? I can tell you it’s worth a lot more, and we’re going to value it appropriately.”

That will help the Trump administration justify an accounting maneuver that essentially uses gold instead of platinum to invent “cash” for the Treasury.

The Real Reason for the Visit

By pledging to “monetize the asset side” of the federal balance sheet, Treasury Secretary Scott Bessent has already signaled that something like this is coming.

As Gillian Tett recently reported in the Financial Times, one of the assets that might be slated for the monetization scheme is gold. The idea is that the U.S. Treasury could revalue America’s gold stocks, which are currently valued at $42.22 per troy ounce in national accounts. If they were accounted for at current market values—around $2,800 an ounce—Tett reports that “it could inject $800bn into the Treasury General Account (TGA), via a repurchase agreement.”

In terms of the accounting benefits, the maneuver comes pretty darn close to minting a trillion-dollar platinum coin, doesn’t it? It may sound crazy, but it wouldn’t be the first time the Treasury turned to Fort Knox to “find” money.

Here’s a bit of history, courtesy of my friend Nathan Tankus.

As the New York Times reported in 1953 (my emphasis):

When the United States went off the gold standard in 1933, the metal was priced at $20.67 a fine ounce, and the nation owned about $4,000,000,000 worth at that price. After its revaluation at $35 an ounce in 1934, however, the same quantity of gold was worth nearly $7,000,000,000, since each ounce was priced $14.33 higher.

By devaluing the US dollar (revaluing gold) in this way, President Franklin D. Roosevelt, “found” the cash equivalent of $2,819,000,000 in the form of gold. As the Times noted, it was “merely a book-keeping item,” but part of the “free” gold was “used to meet the nation’s subscription to the World Bank and the International Monetary Fund.” The remaining balance, $1,000,000,000, was “carried on the Treasury’s books” until Monday, November 9, 1953, when half of it was “monetized” to avert the nation’s first debt ceiling crisis. For more on that fascinating history, read Kenneth Garbade’s staff report from the Federal Reserve Bank of New York. Here’s an excerpt:

The solution to the debt ceiling crisis…involved a stock of almost $1 billion of “free” gold—that is, gold coin and bullion in Treasury vaults on which gold certificates had not yet been issued. The free gold was what remained of $2 billion that had been allocated (by the Gold Reserve Act of January 30, 1934) to the Exchange Stabilization Fund (“ESF”) out of the $2.8 billion derived from the revaluation of 194 million fine ounces of Treasury gold (from $20.67 per ounce to $35 per ounce) in 1934.

On Monday, November 9, the Treasury announced that it had monetized $500 million of its free gold by issuing gold certificates against the gold and depositing the certificates with the Federal Reserve, and that it had used the resulting credits to repurchase directly from the System Open Market Account $500 million of Treasury notes maturing in December. The action did not affect monetary policy—it merely replaced one asset (the Treasury notes) with another (the gold certificates) on the Fed’s books.

Once the Treasury bought back $500,000,000 in outstanding debt, the securities were canceled and hence no longer subject to the debt ceiling limit. Many legal scholars have long argued that a trillion-dollar platinum coin could be used to accomplish the same thing today.

If I’m right about President Trump’s motivations, I don’t think he’s planning to use “free gold” the way past presidents have done. Rather, I suspect that the Fort Knox visit is really about parlaying the gains from a revaluation of the nation’s gold stock into some new scheme—a Sovereign Wealth Fund, a strategic Bitcoin reserve, or both—that will have nothing to do with Making America Great Again.