Americans are most afraid their First Amendment rights could be taken away, according to a new poll by Harris Poll/Purple Project, which surveyed 2,002 people nationwide from November 18-20, 2019. Overall, Statista’s Maria Vultaggio notes that 92 percent were concerned their rights were being jeopardized, USA Today wrote, citing the poll. Americans also fear their right to bear arms and their right to equal justice are in danger.
The poll comes one week after it was revealed by the Foundation for Individual Rights in Education (FIRE) that at least 6.4 million students at nearly 500 campuses in the U.S. have experienced their freedom of speech being restricted. FIRE discovered this through analyzing the written policies of the schools and coding them with a grade of red, yellow or green. Nearly a quarter of schools received a red rating, meaning speech was most restricted at these schools.
The finding was worrying for Laura Beltz, the lead author of the study.
“Colleges should serve as centers of intellectual debate and inquiry, but if you have policies telling you can’t protest unless you submit a request two weeks in advance, or you can’t use words that other people find offensive, that ends up being impossible,” she told The Epoch Times.
Everything You Wanted To Know About Impeachment (But Were Afraid To Ask On Twitter)
Impeachment can be confusing…
But The Babylon Bee is here with an explainer so you will know how the process works and what it takes for Dems to snap their fingers together and make Trump disappear in a cloud of dust.
What is impeachment?
It’s the official, constitutional method for screaming at the sky because Trump is president.
Why is Trump being impeached?
Trump has committed some very serious offenses, from not being a Democrat to being a Republican. He also won the 2016 election, which rises to the level of high crimes and misdemeanors. He also restored the celebration of Christmas after eight years of winter with no Christmas under Obama. This drove Dems up a wall so they drummed up some charges against him.
Why didn’t Democrats include any criminal offenses in the articles of impeachment?
There were just so many of them, it was hard to pick one. So, instead of laying out actually impeachable offenses, the Democrats summarized it all with two main articles of impeachment: 1.) Trump is president. 2.) TRUMP IS PRESIDENT.
What does it take to remove the president from office?
Faith, trust, and pixie dust.
Will Trump be removed from office?
Lol.
If we believe in ourselves and try hard, and Trump is removed, Hillary Clinton becomes president, right?
Actually, Mike Pence would become president, basically making the United States into a Handmaid’s Tale-style dystopia.
What happens if Trump is impeached in the House but acquitted in the Senate?
Democrats don’t get the big prize, but they each get a complimentary copy of Impeachment: The Board Game.
Once the House votes to officially impeach President Trump, what happens next?
VIX Options-Whale ’50 Cent’ Re-Emerges As New Short-Vol ETF Appears
The last few years of constant vol suppression by central banks worldwide has been greeted by the emergence of a veritable bestiary of options whales, characterized by their respective trading patterns…
Perhaps the most infamous of them all is “50-cent” – so called for the price at which he is willing to buy VIX calls as VIX itself collapsed (as we have detailed here, here, and here)…
And, as Bloomberg reports, today saw his huge footprint re-appear as someone snapped up roughly 130,000 January $22 calls on the index for about 50 cents each.
Source: Bloomberg
“50 Cent” first came to the market’s attention by buying huge amounts of VIX calls during the market turmoil through 2017 and early 2018. The trading pattern reappeared last August as the S&P 500 was locked in a trading range with implied volatility trading around its highest levels of the year.
The familiar price point for buying VIX calls “will certainly lead to investors believing ‘50 Cent’ is back,” Chris Murphy, the co-head of derivatives strategy at Susquehanna Susquehanna Financial Group, said in a research note.
With the options maturing on January 22nd, there are still plenty of catalysts to trigger a spike in vol and a big payout for ’50-cent’ – including this week’s op-ex, the partial trade-deal falling apart, year-end repo/liquidity issues, and potentially bad news from the World Economic Forum in Davos early next year.
But, as 50-cent buys vol cheap in anticipation of a spike, another financial start-up appears to have gone full Einsteinian madness.
Bloomberg reports that Volatility Shares LLC has applied to Cboe Global Markets Inc. to register an exchange-traded fund that would give investors the ability to short futures on the Cboe Volatility Index, according to a new filing.
This is nothing less than a replacement for the XIV product that created volmageddon in February 2018 as vol spiked and the short-vol-ETN crashed and died…
Source: Bloomberg
Bloomberg reports that the new ETF’s design changes some of the attributes that may have contributed to the flame out of XIV.
“What happened on Feb. 5 was kind of a problem that I think the original architects of those products hadn’t foreseen,” said Barton.
“That left a gap in the markets, and we were asking people to provide a solution. Nobody stepped up, so we did the research and leg work and hope to bring that solution to market.”
SVIX would track the Short VIX Futures Index, whose backtest suggests a loss of just 30% on Feb. 5, compared to the 96% retreat in the indicative value of XIV.
However, this all has the smell of yet another penny-picking trade that will go well… until it doesn’t.
After XIV’s implosion, Devesh Shah, who helped invent the VIX index, said he didn’t know why these products existed — while predicting that a successor would soon emerge.
“And what’s going to happen as a result of this? Nothing, other than in a few months’ time someone’s going to come up with a new XIV, and everyone’s going to start putting money into that,” he said back in February 2018.
“That’s OK, that’s how the world goes.”
He was right, and simply put, if at first you don’t succeed in blowing up the world with leveraged short vol bets, try, try again…
Competition is the name of the game, but what constitutes fair rivalry? With today’s progressives trying to change everything, including how genders should be addressed, who is in the right when it comes to females in sports and transgenders competing against them? As Liberty Nation’s Onar Am said,
“Just as you need different weight classes in boxing or wrestling to make the competition fair, you also need a separate category for women so that they have a chance to compete on equal biological terms.”
Thankfully, at least one politician is aiming to correct this matter: Rep. Bill Klippert. The Republican has filed in the Washington state legislature House Bill 2201, which would prevent biological males who identify as females from competing in some women’s sports.
According to the bill, however, this exclusion would not necessarily apply to all female sports. It is designed to target those activities intended only for female students, and it must be an individual competition such as track.
“I’m running this in support of female athletes,” Klippert said, “so they can compete against each other and not have to compete against male athletes who have different hormones flowing through their veins, which gives them much more muscle capacity.”
What’s surprising is that this legislation has been proposed in liberal state such as Washington. What’s not surprising is the backlash it’s receiving from LGBTQ activist groups. One such, PFLAG, claimed the bill is “at its core an attempt to invalidate transgender and gender non-binary identity.”
Klippert’s bill is meant to protect natural-born female rights, not dehumanize transgender people as PFLAG implies. Using that logic, allowing transgenders to compete against females would be an “attempt to invalidate” the latter. PFLAG continued its argument, saying there is no evidence that transgender athletes cause any “serious danger” to the sports in which they participate. That would depend on how “danger” is defined and interpreted. Physical? Emotional? Extinction to female competitive sports?
Without enumerating the biological differences between males and females, the trend of born-males winning titles in women’s sports should be proof enough that the odds are stacked in their favor when competing against natural-born females. The separation of sports by gender was done so that women could compete on a level playing field.
PFLAG insisted transgender people deserve their constitutional rights, but what about those of natural-born females? “Transgender people are people, non-binary people are people, they are entitled to a recognition of who they are and to have their civil rights and basic dignity honored,” the organization asserted. The question is, do their rights supersede others’?
Save Women’s Sports produced an article on its website entitled “Male Athletes Are Taking Over Women’s Cycling.” In the piece, Mary Verrandeaux, a member of the 1985 U.S. National Team, said:
“It is without a doubt that allowing men, who identify as women, to continue to compete in women’s categories is the end of women’s sports. Women’s opportunities, records, scholarships, and championships are now being awarded to biological men. This has already destroyed the sanctified intent of women competing against other women – not women competing against biological men who ‘identify as women.’”
Recognizing and respecting people for who they are – biologically or emotionally — does not mean trouncing other individuals’ rights. Here’s a little food for thought. If transgenders who identify as females can’t understand the ‘danger’ they pose to the world of women’s sports, then how can they truly claim to be female? If they cannot identify with the challenges facing natural-born females as they usurp their titles and trophies, how can they claim womanhood?
Save Women’s Sports summarized the issue:
“This is the beginning of the end for women’s sports. We cannot allow this abuse of female athletes and mockery of women’s sports to continue. It is not bigotry to defend biology, and it is not hate speech to defend your rights.”
Although House Bill 2201 has been only pre-filed, it is at least a step in the right direction. It is hoped more Washington state lawmakers will join in its support. It must be introduced in the House before it can move to a committee.
Supreme Court Lets Lower Court Ruling Stand Allowing Homeless To Sleep On Sidewalk
The Supreme Court on Monday rejected to hear a major case concerning homelessness, thus allowing a lower court’s ruling to stand allowing homeless people to sleep on sidewalks or in public parks if there are no other options for shelter.
The highest court in the land gave no explanation for their decision to deny the appeal, which is standard practice. It’s possible they may have considered the dispute moot, according to the Los Angeles Times.
Mike Westfall stands next to his tent and his bike. Santa Rosa, CA
The 9th circuit federal court of appeals agreed with lawyers for the homeless, who argued in a case out of Boise, Idaho that prosecuting vagrants for sleeping on sidewalks violates the 8th Amendment’s ban on cruel and unusual punishment in cases where the city has failed to provide adequate shelter, reports the Times.
Lawyers for the homeless noted that in 2014, Boise announced a “shall not enforce” policy regarding misdemeanor violations against camping or sleeping in public when no shelter has been provided. While the city thought that would end the litigation, the 9th Circuit proceeded to issue a broad ruling last year.
The outcome was a significant victory for homeless activists and a setback for city officials in California and other Western states who argued the ruling from the 9th U.S. Circuit Court of Appealsundercut their authority to regulate encampments on the sidewalks. The 9th Circuit had agreed with lawyers for the homeless who argued that prosecuting people for sleeping on the sidewalks violated the 8th Amendment’s ban on cruel and unusual punishment if a city failed to provide adequate shelter.
A city ordinance “violates the 8th Amendment insofar as it imposes criminal sanctions against homeless individuals for sleeping outdoors on public property, when no alternative shelter is available to them,” said the ruling by the 9th Circuit, which has jurisdiction over California and eight other Western states. –Los Angeles Times
Officials in Los Angeles say the court’s decision leaves the law unclear about what actions local officials can take. They joined with the city of Boise to ask the Supreme Court to hear the case, which was “never an attempt to criminalize the homeless; rather, it was a pursuit of a legal framework that is clear — in comparison to a status quo that is ambiguous and confusing,” according to LA County Supervisor Mark Ridley-Thomas.
California’s growing homeless emergency. Figures as of August 2019 (via the Daily Mail)
“Letting the current law stand handicaps cities and counties from acting nimbly to aid those perishing on the streets, exacerbating unsafe and unhealthy conditions that negatively affect our most vulnerable residents,” he added.
According to LA Mayor Eric Garcetti, “homelessness won’t be solved by moving people from one street to another. Our focus will remain on providing services to save lives, keeping our neighborhoods clean and healthy, opening shelters to help get people indoors more quickly, and building permanent units to keep them under a roof for good.”
Several West Coast cities, including Los Angeles, urged the Supreme Court to take up the appeal of Boise vs. Martin, with lawyers for Boise writing that the “creation of a de facto constitutional right to live on sidewalks and in parks will cripple the ability of more than 1,600 municipalities in the 9th Circuit to maintain the health and safety of their communities.”
There are approximately 130,000 homeless people across California.
“Nothing in the Constitution … requires cities to surrender their streets, sidewalks, parks, riverbeds and other public areas to vast encampments,” argued the lawyers. The Times notes that the appeal was filed by Ted Olson and Theane Evangelis, partners at LA-based Gibson Dunn.
A right to sleep on the sidewalk is not new for Los Angeles or city officials. In 2006, the 9th Circuit handed down a similar ruling that said the city may not enforce laws against sleeping in public places. Rather than appeal, the city negotiated a settlement with lawyers for homeless people in which it agreed to not enforce such laws from 9 p.m. to 6 a.m.
The Supreme Court has previously relied on the 8th Amendment to limit the punishment for some crimes, but it is rare for judges to strike down a criminal law itself as cruel and unusual punishment. The 9th Circuit cited a 1962 decision in Robinson vs. California, which struck down part of a state law that “made the status of narcotic addiction a criminal offense.”
Judge Marsha Berzon said this principle extends to homelessness. “Just as the state may not criminalize the state of being homeless in public places,” she wrote, “the state may not criminalize conduct that is an unavoidable consequence of being homeless — namely sitting, lying or sleeping on the streets.” –Los Angeles Times
LA City Attorney Mike Feuer urged the court to review the 9th Circuit’s opinion, writing “The lack of clarity of the Boise decision, combined with its sweeping rationale, makes more difficult the efforts of Los Angeles to balance the needs of its homeless residents with the needs of everyone who uses our public spaces.”
Feuer wanted to know whether the city needs to make shelters available for all 36,000 homeless residents “before taking enforcement action against a single unsheltered individual who refuses an available shelter bed in one of the city’s regional shelters, just because shelters at the opposite end of the city are full.”
Meanwhile, the California city of Santa Rosa is about to unveil emergency proposals to shelter homeless people at local fairgrounds. The proposal will allow some of those currently living in a mile-long camp along the Joe Rodota Trail – as well as the rest of Sonoma County’s 3,000 or so homeless to move into the fairgrounds, according to The Press Democrat.
Is socialism the enemy of the civilized order? It depends on what kind of socialism we are discussing.
There are several varieties, not only one. If it is the version calling for government ownership and control of all the means of production, the complete nationalization of all industries, then yes, socialism is the work of the devil. All we need do to demonstrate this is to mention economic basket cases like Venezuela, East Germany, Maoist China and the U.S.S.R. They produced dire poverty and the deaths of millions of innocent people.
There is a second, just as historically accurate a definition of socialism as the first. It is predicated on the Marxian nostrum: “From each according to his ability, to each according to his need.” If this goal is attained on a coercive basis, then, yet again, this compulsory egalitarianism is surely uncivilized. It amounts to stealing from the innocent rich. But suppose people agree to live under this principle? Ayn Rand might not like this too much, but, if it is truly voluntary, then instead of being incompatible with civilized principles, it is a paradigmatic case of them. That is, the rich agree to be “expropriated” in favor of the poor.
Are there any such institutions that actually flourish? Here are a few: the convent, monastery, kibbutz, commune, syndicalist association, cooperative. I teach at a Jesuit school, and all members of this order subscribe to the “from each, to each” philosophy. True, kibbutzim were initially subsidized by the state of Israel and are now a shadow of their former selves, and Robert Owen’s commune in New Harmony, Ind., is no longer in operation. But neither does every business last forever. Then there is the average American family. It, too, lives according to this Marxian doctrine. The 3-year-old girl eats, gets toys and is clothed not in accordance with her ability to earn income, but based on her needs.
Capitalism is likewise divided into several varieties. If it is free-market capitalism we are contemplating, or as near to that system as we can approach in this vale of tears, then this—along with voluntary socialism—is the very foundation of the civilized order. All boats rise on a tide of profit maximization and untrammeled entrepreneurship, as long as personal and property rights are respected. The experiences of places with expansive economic freedom, such as the U.S., Switzerland, Hong Kong, Singapore—and yes, Bernie, Scandinavia too—give ample testimony to this claim.
Yet under the veneer of economic freedom, markets have their dark side, too: crony capitalism. Uber is brutalized by the taxi industry in the name of protecting the public; young women who braid hair are hassled by licensed beauticians; domestic manufacturers lust after protective tariffs; farm states tried to outlaw dyeing margarine yellow; labor unions champion minimum-wage laws to price their unskilled competitors out of the market. As Adam Smith wisely said, under this type of capitalism, “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
No, not all versions of socialism are the enemy of humanity and decency, nor are all types of capitalism their friend. It all depends on which variety of each we are discussing.
First Made-In-China Aircraft Carrier Enters Active Service
China’s second aircraft carrier, the first domestically built one, called the Shandong, was delivered and commissioned by President Xi Jinping, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, at a commissioning ceremony in Shandong, an eastern Chinese province on the Yellow Sea, on Tuesday, reported China News Service.
China’s PLAN commissions it’s 2nd (1st locally built) aircraft carrier into service at near Sanya in Hainan island. Pennant no. 17 is named Shandong (山东) and looks like it will be assigned to the South Sea Fleet pic.twitter.com/W5ebvRRdEZ
The commissioning of the new aircraft carrier was a significant milestone for China as it expands its efforts to become a dominant superpower in the Indo-Pacific region.
China has now entered an elite circle of superpowers that operate multiple carriers, including the US, the UK, and Italy.
China’s 2nd aircraft carrier officially commissioned. Named Shandong after the province. If every Chinese province gets an aircraft carrier named after, it will be 34 aircraft carrier 😬 pic.twitter.com/UrAHjQxG41
Before Shandong, the People’s Liberation Army Navy (PLAN) operated one aircraft carrier called the Liaoning, which was built on a Soviet-era vessel, refitted as an aircraft carrier and launched into service back in 2012.
Construction of Shandong began in 2013 and was launch at the Dalian Shipyard in 2017. By 2018, the vessel started several sea trials, and it wasn’t until late 2019 that the ship completed eight tests, including transiting the Taiwan Strait and the South China Sea.
Shandong has a displacement of 40,000-60,000 tons with a ski-jump flight deck similar to Liaoning. Significant improvements in layout design allow the new aircraft carrier to carry 36 J-15 fighter jets, compared to the Liaoning’s 24.
China is the first Asian country since World War II to operate a domestically built aircraft carrier.
Military expert Song Zhongping told the South China Morning Post that Shandong will be stationed Sanya, a port city located on the southern end of China’s Hainan Island.
Zhongping said: “The South China Sea offers ample scope for Chinese aircraft carriers to show their capabilities. It is also the area where the PLA needs to prepare for military struggles.”
He added that Shandong “might be placed under the Southern Theatre Command for joint operations in the event of war in the South China Sea.”
China’s rapid modernization effort of its military in the last decade has caused concern among its neighbors, some of which are strategic allies of the US.
Japanese Defence Minister Taro Kono, on Monday, criticized China for its attempt to reconfiguring the balance of powers in the East and South China seas.
Kono warned that Japan was “also concerned about China’s rapid enhancement of its military power without transparency, including its nuclear and missile capabilities.”
China’s ascension to become a global superpower could be realized by 2030. The economic war waged by the US on China has been an attempt to limit the rise of China, but if that fails, it seems that a trade war could transform into a shooting war somewhere in the South China Sea.
In my previous post, from March 2018, on the audits of US official gold reserves, I have exposed that during the audit procedures of the US official gold reserves from 1974 through 2008, repeatedly audit staff deviated from the auditing protocol, while internal control meant to prevent this was failing. Many audits and assay reports have been destroyed. For decades a significant share of the metal was excluded from verifications for no apparent reason. And, the US government went to great lengths in withholding information and spreading false information about the audits, among other findings in documents obtained through Freedom of Information Act (FOIA) requests. All in all, these findings made me question the integrity of the auditor.
After my last publication, I have obtained more documents from the US Treasury through FOIA requests, which expose another falsehood that puts the auditor in an even more peculiar position. In conflict with the audit protocol, the permanent seals of the vault compartments have been broken, time and again. In addition, the auditor has lied about these events, and when confronted, it’s unable to explain its actions. By now, I have lost faith in the auditor fully.
Prologue
It’s been a very long investigative journey that has led me to make bold statements, such as the ones above, about the auditor of the world’s largest gold holding. I wouldn’t claim anything of this magnitude if I didn’t thoroughly do my homework and research every single possibility that could have caused the auditor to have accidentally spread inaccurate material, including asking the auditor for an explanation.
If any of their statements appeared to be false, surely, they would be able to explain what I was missing. The head auditor said during a congressional hearing in 2011 (source video 42:50):
Transparency is our business.
Who would disagree? The US official gold reserves, weighing over 8,000 metric tonnes, deserve nothing less than an accurate audit.
My journey started in 2014, when I first discovered—in contrast to what I was accustomed to reading on blogs and in newspapers—that the US official gold reserves are audited every year. I published an article on my discoveries, titled A First Glance At US Official Gold Reserves Audits, which was basically a summary of all publicly available documents about the audits. Logically, these documents present a narrative that looks to be credible at the surface, but I found some questions left unanswered, and wrote in my article “this post will be part one of a series.” (Little did I know what I got myself into.) Given the importance of the subject, I intended to submit FOIA requests at the US government, in an open-minded attempt to have my concerns removed.
Since 2014 I have been prosecuting the US government. I have emailed staff of all related institutions—the US Treasury, The Office of Inspector General of the Treasury, the US Mint, and National Archives—that were initially replied, but as I got closer to the details, ceased altogether. I have submitted several dozen FOIA requests to all related institutions, some of which were honored, some not. In search of answers, I repeatedly called the Inspector General. In one of those calls, my contact simply hung up while I was talking. This incident is emblematic of this whole investigation.
On one occasion, the Mint wrote me a specific FOIA request would cost $3,145 “based on an estimate of 1,200 pages of responsive documentation and the duplication costs associated with the requested documents. This estimate also includes 40 hours of estimated search time and 8 hours of estimated review time…” The costs seemed outrages to me, but I got financed through a crowdfunding campaign and paid the Mint. A few months late(r), I received 223 redacted pages that contained 68 pages of reports I didn’t ask for and 21 pages that were copied twice. Effectively, I got 134 pages for $3,145. After some pressure on the Mint, they agreed the costs had been estimated too high, and I got the full amount refunded. (And I ordered my crowdfunding platform to refund all my donors.) The barrier of the costs was used to keep me at bay. To no avail, instead, I got some essential pages in my possession.
In total, I have written nine articles to inform my audience about the developments (I, II, III, IV, V, VI, VII, VIII, IX). After the last one, which was a comprehensive overview of every piece of information I had found (published on March 28, 2018, at the BullionStar website), a reply to another FOIA request came into my mailbox. I received a document that irrefutable reveals a lie by the auditor.
Today’s article is about this falsehood, and numerous other false statements by the auditor, that all have one thing in common: they hide the fact that most vault compartments have been re-opened multiple times after being put under permanent seals, which were meant to prevent re-opening of the doors. Upon request, the auditor provided me one argument for these actions—the “re-opening” of compartments. Alas the argument is in conflict with another statement by them, made under oath, so the auditor still stands as unable to answer a critical question.
Unfortunately, and contrary to how it could have been done, the entire audit process from 1974 until 2008 is extremely complicated. The account below is simplified—I can’t discuss every detail in every article—but for the ones that want to know the details I have added external sources (in parentheses with hyperlinks), which can be used to cross-check my statements. (Also, you can read my previous posts, and if anything is still unclear, I invite anyone to ask me to expand on my conclusions in the comment section below this article. I’m willing to substantiate any findings—as one should when making bold claims.)
Let’s start with some background information, and then we will discuss the heart of the matter.
Introduction
The US official gold reserves are the largest globally at 8,134 metric tonnes (owned by the US Treasury). Although this gold does not back the US dollar at a fixed parity as it did before 1971, it does provide essential support as a final backstop to the dollar and thus credibility to the present world reserve currency.
The majority of the gold is located at the US Mint depository at Fort Knox. Smaller amounts are stored at US Mint depositories in Denver and West Point. Aggregated this metal is referred to as Deep Storage gold and is captured within 42 sealed vault compartments. The remainder is at the Federal Reserve Bank of New York.
When the audits commenced in 1974, the protocol designed was simple (page 534). The following excerpt is from the first auditing committee:
In performing the audit, the gold bars are physically moved from one vault compartment to another. During this operations [sic], the melt numbers and the number of bars in each melt are verified with an inventory listing, and one in fifty melts is randomly selected for weighing and test assay.
One melt averages about twenty bars cast from one crucible of molten gold.
Since the stated purpose of joint sealing was to avoid the need of “re-audits,” all the gold could (after 1984) be verified by simply checking if the seals were unimpaired. Great intentions, but this is not what happened.
The current auditor of the US monetary gold is the Department of the Treasury’s Office of Inspector General (OIG). Representing the OIG, Eric M. Thorson attended the congressional hearing for the Gold Transparency Act (not enacted) that was initiated by Ron Paul in 2011. Mr. Thorson’s testimony at the hearing serves as the official statement by the government on the audits. Having weighed his words carefully, Thorson spoke under oath:
… 100 percent of the U.S. Government’s gold reserves in the custody of the Mint has been inventoried and audited. … I can say that without any hesitation, because I have observed the gold and the security of the gold reserves myself.
… the Committee for Continuing Audit of the U.S. Government-owned Gold [The Committee that started the audits] performed annual audits of Treasury’s gold reserves from 1974[*] to 1986. … by 1986, 97 percent of the Government-owned gold held by the Mint had been audited and placed under joint seal. So once you have done that, and that seal remains unbroken, then I am not sure what other benefit there would be to going back into it at that point. …
Since 1993, when we [OIG] assumed responsibility for the audit, my office has continued to directly observe the inventory and test the gold. In fact, my auditors signed the official joint seals … placed on those compartments, inventoried and tested in their presence. At the end of Fiscal Year of 2008, all 42 compartments had been audited by … the Committee for Continuing Audit of the U.S. Government-owned Gold, or my office, and placed under official joint seals.
Thus, in summary:
From 1974 until 1986, 97 percent of the gold at the Mint had been verified by the Committee for Continuing Audit.
In 1993 the OIG became responsible for the audits, and by 2008 all compartments had been verified and sealed.
The conclusions we derive from Thorson’s testimony:
From 1987 until 1992, there were no audits.
From 1993 until 2008, the remaining 3 percent of the gold was verified.
Thorson doesn’t mention anything about vault compartments having been re-opened.
The Problem
First of all, the OIG did not assume responsibility for the audits since 1993, but since 1982 as disclosed in one of the few documents that survived the 1980s (page 2).
Effective October 1, 1982, the Internal Audit Staffs of BGFO and the United States Mint [Committee for Continuing Audit] were reorganized under the Department of the Treasury, Office of the Inspector General [OIG].
Ever since the OIG became part of the audits in 1982, exactly what was not supposed to happen, did happen: vault compartments that had been physically verified and sealed were re-opened. Read with me, from the 1986 audit report regarding the Fort Knox (page 8) and Denver (page 9) depositories:
For some reason, starting in 1983, “re-audits” were performed over 1,929 tonnes “in accordance with the plan approved by the Treasurer.” However, in 1983, both depositories had already been fully audited, while West Point had not. Why were these compartments re-opened when the protocol stated that, “these actions” (physical verification) “having once been performed … will not have to be repeated as long as the assets verified remain under an unimpaired joint seal”? The OIG can’t explain this to me, and neither can it explain to me what “the plan approved by the Treasurer” was.
What Thorson carefully refrained from mentioning under oath, he mentions in a written statement for the Gold Transparency Act. At the surface, his official testimony seems identical to his written statement, but when I compared both word for word, the latter crosses a topic that’s excluded in the former. Thorson never spoke about this in the congressional hearing (page 45):
From 1987[**] to 1992, the Mint continued to perform an annual inventory and verification of the gold reserves in accordance with its own policies over those compartments that had not been placed under Official Joint Seal…
Note that from the quote above, we learn that the US Mint—mind you, the custodian of the gold—audited the US monetary gold “in accordance with its own policies” from 1987 through 1992. This is arguably like a bank opening its customers’ safety deposit boxes. According to universal auditing principles, a custodian is not authorized to audit its client’s assets. An independent entity should audit custodial gold. This might explain why Thorson failed to mention this in the congressional hearing.
Note also that Thorson writes that the Mint exclusively opened “those compartments that had not been placed under Official Joint Seal.” This is false, and I can prove it.
I have obtained copies of the seals that were placed by the Mint on 5 Deep Storage compartments (together containing 795 tonnes of gold) between 1987 and 1992 (download here). Thorson’s written statement is false, as these compartments had, for a fact, already been verified and sealed, because they were all at Fort Knox and Denver, which were fully audited by 1982. Let’s have a look at one of the seal copies.
We can see the “date sealed” at the top, “July 25, 1990,” and the depository is “Fort Knox, Kentucky.” Thus, Thorson lied to us when he said that the Mint was only verifying “those compartments that had not been placed under Official Joint Seal,” because we know Fort Knox was fully audited, and thus all of its compartments put under Official Joint Seal, by 1982.
We can also see on the seal when this compartment was “sealed previously.” It was in 1976 (underlined in red). Confirming it was a “re-audit.” If it was the first audit, the “sealed previously” date had to be prior to 1974, before any audits were performed.
Last but not least, at the very bottom of the seal, we see a date, “February 16, 1993” (in the red oval), which is when this seal was removed by the OIG (presumably for yet another “re-audit”). More evidence that the OIG must have known what happened to these compartments in between 1987 and 1992. As, removing the seal in 1993 by the OIG, clearly would have shown the history of this compartment. Attentive readers might see a pattern emerging.
From 1993 until 2008, additional compartments were “re-audited.” Thorson, again, did not mention these “re-audits” under oath, but in this specific period, more than 2,000 tonnes*** of gold saw the light of day again. I know through an excel sheet (download here) the OIG sent me in response to a FOIA request. When I asked the OIG for confirmation on how much they audited since 1993 they replied (source):
[Since 1993]…we observed the counting of 246,203 bars, which equates to 81,638,569 FTOs (or 2,539 tonnes).
When I asked my contact at the OIG why thousands of tonnes had been “re-audited” in periods from 1983 until 2008, he replied:
Unfortunately, the OIG stopped responding to my emails by late 2016. Everything had to be submitted through FOIA requests, I was told, which made my investigations take a few years extra.
Notice that the OIG doesn’t mention “the plan approved by the Treasurer,” which at least could have explained the “re-audits” from 1983 until 1986.
An explanation of why so many compartments had been “re-verified (in some cases) was because occasionally vault contents would have to be moved.” However, this argument makes no sense. It is true that since 1974, when the audits started, gold has been moved. Roughly 1,900 tonnes were moved from the New York Assay Office to West Point. But this movement occurred in 1982 before any “re-audits” began. There have been no other substantial movements of gold (read the chapter “Problem 11”).
Additional evidence indicating there hasn’t been any movement of Deep Storage gold comes, ironically, from Thorson. Let’s go back to the congressional hearing with Paul and Thorson in 2011. After Thorson’s testimony, a Q&A follows wherein Paul asks Thorson about the audits from 1974 until 1986, and if it would be “worthwhile to inventory and assay [audit] this portion of the gold” again. Thorson replies that would be unnecessary because (39:00):
. . . there is no movement. Those doors aren’t opened. There is nothing there that can happen. Because once those doors are sealed … it’s very obvious if those seals are ever broken. … There is no movement. Those doors are not opened.
A strange thing to say, for Thorson, as this is exactly what he was continuously doing: re-opening the compartment doors. With this statement, Thorson confirms that any compartment should never have been re-opened. Not only is this what happened time and time again, but it also started precisely from the moment Thorson’s department (OIG) became involved with the audits in 1983.
In trying to think of any legitimate reason why compartments have been re-opened, ever, I decided to submit a FOIA request for the audit protocols that prevailed after 1992. Maybe the audit approach had changed? If the OIG can’t explain it to me, maybe I can find the answers in some documents? What if I’m still missing something?
Eventually, I received the Mint’s 2005 audit directive that shows us whenever a compartment has been “verified. . . the annual verification [i.e., audit] will be limited to inspection of the Seals.” Put differently: once physically verified the doors remain closed (from page 11):
Makes sense as this auditing approach matches the one from the 1970s. Like Thorson said during the congressional hearing in 2011: “So once you have done that [physical verification], and that seal remains unbroken, then I am not sure what other benefit there would be to going back into it at that point. . . . There is no movement. Those doors are not opened.” (Note in the quote above that “An OIG Representative must be present for any subsequent opening.” The issue isn’t whether it’s possible to re-open a compartment. Gold inside a compartment that can never be opened again has no value. You might as well put it in a rocket a blast it into the sun. The point is that barring legitimate reasons to re-open a compartment (e.g., selling the metal inside), they should remain closed.)
Conclusion
Altogether, the vast majority of Deep Storage vault compartments have been re-opened for dubious reasons. (For exact data on “re-audits,” see my article “Audits Of US Monetary Gold Severely Lack Credibility.”)
After years of prosecuting, these are the facts as they lay in front of us:
Under oath, the auditor, Thorson, carefully avoided the subject of “re-opening” compartments.
In another written statement, the same auditor lied about the subject of “re-opening” compartments.
When this auditor was asked for an explanation regarding the “re-opening” of compartments, it could only muster an unfitting one.
I find it astonishing that all falsehoods the auditor (OIG) has spread have in common that they hide the fact compartments have been “re-opened.”
My investigation concerns the audits, which appear to have been executed with an inadequate degree of integrity. Accordingly, there should be a new audit authorized by Congress, which, incidentally, is also the opinion of former US Mint Director Edmund C. Moy (see tweet below).
@NotoriousCLO@HereTizz@KoosJansen Not much but wouldn’t satisfy him. IMO there should be a comprehensive audit authorized by Congress.
Naturally, if the OIG or Treasury wants to respond to my findings, that would be more than welcome, and I would be happy to engage with them.
Notes
*: The original documents states “1975” but for the sake of simplicity I have changed it into “1974”. Officially, the Committee for Continuing Audit of the U.S. Government-owned Gold started in 1975, but because they accepted the audit performed in 1974 in their program effectively their program started in 1974.
**: The original documents states “1986” but to improve the readability of this post I have changed it into “1987.”
***: An overview of the “re-audits”:
– From 1983 until 1986, 1,929 tonnes were “re-audited.”
– From 1987 until 1992, 796 tonnes were “re-audited.”
– From 1993 until 2008, 2,296 tonnes were “re-audited.” (By 1986 only 243 tonnes at West Point were not audited. According to the OIG, from 1993 until 2008, 2,539 tonnes were audited. 2,539 minus 243 is 2,296, which is the amount “re-audited” from 1993 until 2008.)
Altogether from 1983 until 2008, 5,021 tonnes have been “re-audited” for unclear reasons.
Senate Sends Mammoth $738BN Defense Bill To Trump’s Desk, Creating Space Force
The U.S. Senate has joined the House of Representatives in passing the National Defense Authorization Act (NDAA) for Fiscal Year 2020, and it will now go to the White House where President Trump is expected to sign it into law.
The Senate passed the massive $738 billion defense spending bill on Tuesday, which as we previously noted when it cleared the House last week, also officially establishes the president’s much sought after ‘Space Force’ as a sixth branch of the military.
A second package of bills is expected to also go speedily through both bodies of Congress before the Senate leaves for the holiday, with the White House indicating Trump will sign them both into law.
File image of the NDAA 2018 signing ceremony, via the AP.
The Senate vote was 86-8 in favor of the mammoth NDAA, which passed after a significant compromise, as The Hillsummarizes:
The $738 billion bill — which authorizes spending and lays out policy guidelines for the Pentagon — includes a high-profile deal that grants federal employees 12 weeks of paid parental leave in exchange for creating Trump’s “Space Force.”
The bloated budget did receive backlash from senate fiscal conservatives, however. The Hill continues:
But the trade off for paid parental leave — and the large tab — earned the defense policy bill backlash from fiscal conservatives in the Senate.
Sen. Rand Paul (R-Ky.) argued that the bill included “bad compromises” that had “nothing to do with the national defense.”
Though the DoD initially requested $72 million for the Space Force in 2020, and the NDAA authorized that, the spending bill actually only allocates $40 million.
The administration previously said it expects the newly established Space Force to cost $8 billion over the next 5 years, so clearly the NDAA funding appears severely “limited” in that regard.
It’s part of a broader $1.4 trillion spending plan approved by the House also on Tuesday that appropriates approximately the same $738 billion spending for defense.
Last week Trump let it be known he plans to sign the legislation “immediately” upon it coming across his desk.
The president has also tweeted last week: “Wow! All of our priorities have made it into the final NDAA: Pay Raise for our Troops, Rebuilding our Military, Paid Parental Leave, Border Security, and Space Force! Congress – don’t delay this anymore!”
Last week, the Office of the Inspector General for the Department of Justice found that the FBI omitted relevant information and made a number of mistakes on its warrants submitted to the Foreign Intelligence Surveillance Court (FISC) to wiretap a former aide to Donald Trump. Now the judges of the court are demanding some answers.
In an order filed today and signed by FISC Presiding Judge Rosemary M. Collyer, the court lays out a brief explanation about why it’s so bad that the FBI left important details out of its warrant request as it sought a wiretap to get more information about Page’s communications with Russian officials to determine whether Trump’s presidential campaign had been somehow been compromised. In short, there are many rules to get permission to use FISC warrants to secretly snoop on Americans on American soil, and each of the 17 problems Inspector General Michael Horowitz found with the warrants represents a breakdown in the system at several points.
“When it is the FBI that seeks to conduct … surveillance, the Federal officer who makes the application is an FBI agent, who swears to the facts in the application,” the report notes. “The FISC judge makes the required probably cause determination ‘on the basis of the facts submitted by the applicant.'”
In short, the FISC has to trust that the FBI is including all relevant information in its warrant request and is not leaving out any important details that might factor into the decision. That’s because FISC essentially serves as the only form of oversight over the FBI when it comes to secretly snooping on Americans. Its role is to make sure that the targeted Americans’ rights are protected and that wiretaps aren’t based solely on activities protected by the First Amendment (this is partly why the court was made) and to protect the Fourth Amendment rights of targets. The court depends on the “candor” (a term used several times in the order) of FBI officials in deciding whether to permit surveillance of Americans.
In Page’s case, the report says, “The FBI’s handling of the Carter Page applications, as portrayed in the OIG report, was antithetical to the heightened duty of candor described above.”
The court is therefore ordering the federal government, by January 10, to provide a sworn written submission of what it has done and what it plans to do to make sure FBI warrant applications to FISC “accurately and completely reflects information possessed by the FBI that is material to any issue presented by the application.”
The court is also ordering a declassification review of an order FISC put out on December 5 demanding more information about the FBI attorney who is accused of altering a document to conceal that Page had a previous relationship as a source with another federal agency regarding contacts with Russian officials. This would be very relevant to the court when considering a request to wiretap him over conversations with these very Russians.
