Bulwark Takes: Elon and Trump's Goldfinger Plot For Fort Knox
Release Date: February 24, 2025
In this episode of Bulwark Takes, hosted by Ben Parker from The Bulwark, the discussion centers around the recent news that Elon Musk and Donald Trump are planning a visit to Fort Knox to verify the presence of gold reserves. Joined by AEI economist Stan Voyger, Parker delves into the historical significance of Fort Knox's gold, the implications of its potential use in modern economic strategies, and critiques the proposals put forward by Musk and Trump.
1. The Role of Gold in Fort Knox
Ben Parker opens the conversation by highlighting the uncommon move of high-profile figures like Musk and Trump visiting Fort Knox. He questions the relevance of gold reserves in today's economy.
Stan Voyger provides historical context, explaining that the gold in Fort Knox was primarily a relic of the gold standard, where the value of the dollar was explicitly tied to gold. He states:
“It is there because the value of the dollar used to be explicitly linked to gold... It just kind of sits there as a symbol of our might and power.” (01:47)
Voyger notes that since the early 1970s, after President Nixon ended the gold convertibility of the dollar, the gold has served little practical purpose beyond symbolism.
2. Viability of Reinstating the Gold Standard
Parker raises concerns about the sufficiency of Fort Knox's gold reserves in supporting a modern economy, pointing out that the current value of gold at approximately $400 to $500 billion is insufficient to back all existing dollars.
Voyger concurs, explaining:
“We ended the system because we didn't have enough gold to fully cover the value of the dollar... It’s just a symbol.” (02:36)
He further discusses the impracticality of selling the gold as a means to reduce national debt, emphasizing that the impact would be minimal compared to the vast $30 trillion national debt:
“But that’s something we could do a little more... It wouldn’t make us richer because our debt would be lower.” (04:00)
3. Strategic Cryptocurrency Reserve Proposal
One of the more controversial proposals discussed is Trump's idea of establishing a strategic cryptocurrency reserve, akin to the Strategic Petroleum Reserve. Parker questions the practicality of such a reserve, especially with volatile assets like Bitcoin.
Voyger critically analyzes the proposal:
“The people who currently own bitcoin would benefit if we bought a bunch... It's speculation. The whole use case for bitcoin is speculation.” (09:54)
He points out the speculative nature of cryptocurrencies and dismisses the notion of using Bitcoin as a hedge in economic downturns or as a fallback in case of societal collapse, arguing:
“It’s all nonsense. The idea is to keep pumping up the price of their assets.” (11:04)
4. Establishing a Sovereign Wealth Fund
Trump’s executive order to create a sovereign wealth fund is another focal point. Parker seeks Voyger's insights on the feasibility and sense behind this initiative for the United States.
Voyger explains that sovereign wealth funds are typically established by countries with large budget surpluses or significant natural resource revenues, such as Norway or the UAE. He underscores that the U.S. does not have the necessary budget surpluses to justify such a fund:
“The US does not have these year over year large surpluses that we need something to do with.” (13:23)
He also draws parallels with pension funds, cautioning against aggressive investment strategies due to the increased risk of losses:
“The only reason to make that kind of shift is if you think that the people who will be doing the investing for the federal government are better at assessing that risk return trade off...” (15:00)
Voyger highlights potential downsides, including the risk of government overreach and corruption:
“Once you start using, say, the Social Security trust fund to invest in private companies... It could lead to corrupt ways of using the money.” (15:45)
5. Economic Implications and Final Thoughts
The conversation concludes with a summary of the discussed points. Parker and Voyger agree that the gold at Fort Knox serves little practical purpose today and that Musk and Trump's proposals lack substantial economic rationale.
Voyger adds a final critique:
“It is not a meaningful offset for the debt... It doesn’t matter.” (06:26)
Parker encapsulates their stance:
“So it sounds like the gold in Fort Knox doesn't serve a purpose. The strategic Bitcoin reserve doesn't serve any useful purpose. And the federal sovereign wealth fund also doesn't really make a lot of sense for a country like the United States that runs massive budget deficits.” (17:19)
Notable Quotes
- Stan Voyger: “It just kind of sits there as a symbol of our might and power.” (01:47)
- Stan Voyger: “It is all nonsense... It’s to keep pumping up the price of their assets.” (11:04)
- Ben Parker: “So it sounds like the gold in Fort Knox doesn't serve a purpose...” (17:19)
Conclusion
In this episode, Bulwark Takes provides a critical examination of the motivations and economic sense behind Musk and Trump's interest in Fort Knox's gold reserves. Through insightful analysis, Stan Voyger underscores the outdated utility of gold in modern financial systems and questions the practicality of proposed initiatives like a strategic cryptocurrency reserve and a sovereign wealth fund. The discussion ultimately portrays these moves as symbolic gestures with minimal tangible benefits, emphasizing the need for more grounded economic strategies.
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