EXPERT INTERVIEW: Is America’s Gold Still There… Or Rehypothecated?

Mike Maharrey: Greetings. I'm Mike Maharrey, a reporter and analyst here at Money Metals, and I'm here today with Journalist Jan Nieuwenhuijs. He has been doing in-depth gold market research for well over a decade and is internationally recognized in as an expert in the Chinese and Turkish gold markets. The comics features market, the London Bullion market, and much, much more, and he's been providing a lot of great original investigative research reporting over at Money Metals, and I'm excited to talk to you today. John, how are you doing?

Jan Nieuwenhuijs: I'm good, Mike. Thanks for inviting me.

Mike Maharrey: Well, absolutely. As we were just talking about before we went on air, there's so much going on right now. It's hard to keep up with everything that's happening in the gold markets and with the Trump administration, and it seems like every 45 seconds or so there's some new thing that's kind of grabbing your attention. I wanted to start off and talk a little bit today about something that you've been writing about, and I've seen it a little bit reported in the mainstream, but I don't know that people kind of have a real grasp on really what's going on, and this is this whole idea of gold revaluation and folks listening might have heard that term, they might've seen some headlines, but what exactly is this whole gold revaluation thing? What are they actually talking about or at least floating the idea of doing?

Jan Nieuwenhuijs: Yeah. Gold revaluation accounts is actually a very simple accounting item on a central bank balance sheet. We are talking about central bank balance sheet because you and I can have a gold revaluation account as well if we make a balance sheet of our private situation or a company can do it or a bank. But the thing is with when a central bank has a gold valuation account, it can turn that unrealized gain into money. So if you visualize a central bank balance sheet, you have assets on the left side, you have liabilities on the right side, as we all know, on the asset side, there are government bonds, discount loans, there's gold, and on the liability side there is the capital position, equity, what else or currency, the monetary based treasury general accounts, things like that. Now we have a system that is called double book entry accounting.

So, if you mark to market the gold on the balance sheet, so that's the gold on the asset side. If the price rises as it does in the long run because it's much more scarce than the denominator of the balance sheet, which is fiat money, then the asset side of the balance sheet grows now in double book entry accounting. If something on the left side grows, then something on the right side on the liability side have to grow as well. And what grows on the liability side is the gold revaluation accounts. So for example, if you bought gold for a ton of gold for $100, then so many years later, if it's a 29, you have a $2,900, you have a large revaluation account. Now, normally with central banks, the thing is that they own the gold so they can use that revaluation accounts to turn into anything.

So, they own the gold on the asset side. On the liability side, they now have this revaluation account, which is just numbers. It's just numbers on a central bank balance sheet, it's on the liability side and on the liability side, there are also different things. Right? There is a treasury general account, so that is deposit from the government, there is capital, et cetera. And because it's just numbers, the central bank can turn these numbers from the gold revaluation accounts or can move these numbers from one section to another. So, they can move the numbers from the gold revaluation account to, for example, the Treasury General account or to their capital position and just turns it into money. The only thing that happens to the gold revaluation account then shrinks which results in a higher cost price for the gold. Now that's how it works with most central banks in the US it works a little bit different.

Jan Nieuwenhuijs: The US, the Federal Reserve doesn't own any gold, so it only owns gold certificates. In 1934, the Federal Reserve handed over all their gold to the US Treasury and in return got gold certificates. These certificates are still valued at $42 an ounce, so that's very low, and if you would revalue that statutory value or revalue that price, then also on the liability side of the Fed's balance sheet, something else would grow. And because the Fed doesn't own any gold, what grows on the liability side of the Fed is the treasury general account. Because the treasury is the owner of the gold of the physical gold, the Fed only has the certificates. So if they would go ahead and revalue the gold at current prices, the Treasury general account would be increased by let's say $700 billion, and they could just spend that money into the economy and it would increase whenever the Treasury general account is not really part of the monetary base, but if they spend that money, then the money supply the monetary base as well as the broke money supply M two, it's increased by the same amount because they spend it and well, let's not go into monetary plumbing, but the money supply increases.

Mike Maharrey: So, basically what they can do is print money. I mean, to use the colloquial term, there's no actual printing press or anything, but they can actually create money simply by doing an accounting maneuver, but the result is an actual real increase in the money supply. And then the government could spend that basically on whatever I wanted to. Right?

Jan Nieuwenhuijs: Exactly. Yeah, there was one thing, because I'm not a lawyer, maybe the Fed has some control over what happens. I looked in the rule books of the accounting rules of the Federal Reserve. As far as I know. If the gold certificates are revalued debt revaluation, the surplus goes to the treasury general account. Maybe there is some kind of loophole that the Fed can block this endeavor and use it for something else, but I don't think so. But it's like you said, it's just printing money.

Mike Maharrey: So, really if you look at the impact as far as, well, I mean it'd be great for the government, they could spend more money, and we all know the government loves to spend money, but from kind a broader economic standpoint, this is really just would be a very inflationary move. Am I wrong?

Jan Nieuwenhuijs: Correct, correct. Also, because with normal QE, when for example, the Federal Reserve buys government bonds from banks only the monetary base increases not the broad money supply, but in this case also what happened in 2020, the broad money supply and two was increased. So that's very inflationary. We got inflation after that, and the same would happen with district. And that also happened because in 1934, the statutory price of gold in US was set at $35. And in 1972 and 1973, that was raised to 38 and $42, and that also increased the money supply maybe that helped in or boosted inflation. And we all know what happened in the 1970s. There were two massive waves of inflation and maybe this was a part of that.

Mike Maharrey: So, do you think this is something that is actually really being considered or was this something that maybe he just got thrown out as a, I mean, I'm asking you to here obviously, but I mean is this a realistic thing that they might do?

Jan Nieuwenhuijs: Yeah, I think so because we have these rumors about a strategic bitcoin reserve, and then it came out that they're going to through an executive order. Trump is going to make a sovereign wealth fund now going to buy, I don't know, but I don't think they're going raise taxes for this sovereign wealth fund. I think they're going to buy this or do a gold revaluation and fund the sovereign wealth fund through debt.

Mike Magarrey: It is just wild to think about that you can do an accounting trick and all of a sudden there's all of this new money. I mean, I guess if you're a government person, it's great, but for me standing here, I'm kind of a little bit disturbed by the possibilities of this.

Jan Nieuwenhuijs: Yeah, I can imagine. And if Trump, for example, would say, well, 700 billion is not enough for me. He could, if he also takes over the Fed, he could print money to buy gold and increase it would be a bit illogical and then increase the gold valuation account even more, which would give him more money. Then he has whatever, 2 trillion to spend. So anything is possible. When I started writing about the subject was in 2022, and the first thing I thought about was on this balance sheet of central banks, you also have government bonds and the world is just draining in debt. And all the debt, if there's a crisis that the government bills out the private sector and then central bank bills out the government and all these government bonds are on the balance sheet and the debt is too high. And now especially with interest rates above zero, that's just not sustainable. So my logic, let's say thought was that they would write off some government bonds from the revaluation accounts,

And that's not money printing, it's just canceling some bonds and reducing the gold revaluation account. That will be a better option. But yeah, it's, see what happens. I mean, it's also crazy if you think about it, if you would buy Bitcoin with it, that's just pure speculation because you don't really know if Bitcoin will be around in 10 years because it's manmade. It can be destroyed by mankind. I'm not going to go into the technical stuff about Bitcoin, but it's very speculative. And at the same time, you are reaping, let's say, profits from the gold valuation accounts, which already has shown in the last 5,000 years to increase in value denominated in fiat currency. So why not keep it to the gold and keep it like that?

Mike Maharrey: From a practical standpoint, it's really no difference than the Romans clipping gold off their coins. Is it? I mean, it's the same principle. It's just using computers and high tech as opposed to the old school way of debasing the money.

Jan Nieuwenhuijs: Well, yeah, yeah. In terms of inflation, it is. And the only thing is that, the funny thing is that in my mind, how I think of the monetary system is that the gold price will always rise. And this is true if you take a currency like the pound sterling, for example, which has been around for centuries, you see, not every year because there were gold standards, but after so many years, the price always increases because supply of gold, the growth of the above ground gold supply isn't enough for many kinds need for liquidity, whether it's a pandemic or a war or whatever happens, humans always need more money and they create more money than there is gold, and the price of gold has to go up. Now, that's unfortunate if you save in field money, but if you stick with the gold, you are untouchable.

Mike Maharrey: Right? Yeah. Stick with real money, right? Yeah. Well, okay, so let's look at another thing that is being discussed out there, and I think this has gotten more mainstream attention than the gold revaluation, and that's the possibility of them auditing the treasury's gold and finding out if the gold is actually in Fort Knox. Is this something that you think is realistic, or is this more political noise?

Jan Nieuwenhuijs: I hope it's realistic because I started writing about when I became a gold analyst. It was in 2014, probably professionally, there were so many stories always about Fort Knox being empty. And the US by the way, all the vaults were empty, and it's like a continuous story, but Fort Knox was empty and also the other vaults, and the Fed doesn't have any gold and whatever, and I can't go into that vault and have a look at it myself, even if it was an auditor, which I'm not. So for me, the only way to check this, to analyze it was to study the audits, which started in 1974. There was also rumors of Fort Knox being empty, and then a few vault compartments went open and the press was invited. It was a whole spectacle.

And after that, what they did is they launched the continuous audits. So there was a program to audit 10% of the gold every year. And when compartments were audited, they closed them, they put a permanent seal on it, and it went on. And then every year they only had to inspect if the seals were not broken and move on to the next vault compartment and so forth. Now, that was a good idea, but it was never really finished. So in 2011, there was a congressional hearing, I think Ron Paul led it, and a lot of people, the auditor of the gold, the OIG Office of Inspector General, I had to testify and all this information came out and I collected it all. I studied it all. I submitted countless of freedom of information requests at the OIG, at the treasury, at the Fed, at the National Archives at the US Mint, which is the main custodian of the gold. And what I found was that the auditing procedures have been so as if the audits were done by amateurs, so many mistakes. I mean, they use the wrong skills and assay samples were missing and they had to close, or they had to open some compartments again because they forgot to put the assay parts back in. The list is endless, but really struck me is that the plan initially was to open vault compartments once, and if they were audited, they should have been closed and not opened ever again.

And most of the vault compartments have been opened 1, 2, 3 times again.

So, a really strange situation, we can think what would possibly have caused this maybe auditing standards around the world changed and they shifted to a new protocol, whatever. But looking back on it, and they even lied, they even lied under oath about this because some of these things, the auditor, which did a testimony in 2011 with Ron Paul knew about all these reopening of vault compartments, but he didn't mention it. He totally voided the subject. So there is something, I can't prove that the gold isn't there, but it's definitely worth, I mean, these audits are just so weak. And also the fact that still I spent some time on Twitter or X. Now maybe I shouldn't because there's a lot of noise there. And most people are still unaware of these audits. They all say, well, the last audit was in 1974 or 53, or it has never been audited. You can just find the audit reports on the website of the OIG. There are two audit reports, the gold stored at the Mint and at the Federal Reserve. And so if the audits were done correctly and properly and it was all fine and dandy, why wouldn't the US government Treasury flaunt with the results? They, they rather not tell about these audits because if people investigate them, they would find all these issues.

Mike Maharrey: And when you have smoke in the room, it just makes people more and more suspicious, especially when the explanations for the smoke don't line up with the reality that you're seeing with your own two eyes. What would be the ramifications if they did, let's say, open it all up, do a thorough audit, and they find out, let's not even say all of the gold, but let's say half of the gold is missing. What would be the ramifications of that?

Jan Nieuwenhuijs: That is so hard to predict. I think the gold price would rise because basically it would mean there is less gold in the system or it's somewhere else in the system anyway, there's less gold backing, or not backing, but supporting the US dollar because every reserve currency in the world has gained this reserve currency status because there was always a lot of gold behind it. And of course the military, but just like the dollar and the Euro, et cetera. And the Chinese are trying to do the same now. And if there's less gold, that would be less trust in the dollar, so the dollar would go down relative to gold. I think that would happen.

Mike Maharrey: Yeah, it's interesting. And who knows what the political ramifications would be on something like that. There's so much stock put in, how do they put it, the full faith and trust of the US government, and if that is undermined, who knows what that would do to the bond market or what kind of, I dunno, trickle down or ripple effects that that would have on the financial system as a whole, which kind of makes me think that they will somehow manage to avoid doing it if at all possible.

Jan Nieuwenhuijs: Also, not only, I mean they can do it and then the conclusion could be, okay, only half of the gold is here, but then the next conclusion would be, okay, who the hell took it?

Mike Maharrey: Where'd it go?

Jan Nieuwenhuijs: Yeah, and what is the conspiracy here and what on earth has happened and how could it have happened? That will be the biggest scandal ever. Of course we have, sorry, world reserve currency and half of the gold supporting it and giving it some credibility is missing.

Mike Maharrey: Yeah, it's interesting. Well, I've been posting on X, we've had a couple of articles written about auditing the gold. I've been tagging DOGE and Elon and President Trump, so maybe we can badger them into doing it, but it would definitely be interesting to see that happen.

The other big thing that's kind of been going on in the gold market, and this is another one of those things that seems to be moving really fast, is this movement of gold out of London to New York. And we've also seen some gold moving out of the Asian markets, moving to New York. And of course ostensibly the reason for this is worry about tariffs and has created this kind of arbitrage effect that has pushed the future's price in the US much higher and created this opportunity. What's kind of been going on with that over the last couple of weeks? Are we still seeing this movement of gold and are we still hearing about shortages in London and even in Asia?

Jan Nieuwenhuijs: To tell you, it's basically, like you said, it's a fear of it's a tariff threat. So, people in America anticipate a higher gold price because of tariffs. So, they either buy it now and also hedge it on the Comex or they borrow it or whatever. Also, speculators jump on it because if the gold price would rise because of it, you go long and you just ride a wave, then it becomes this big circus also on X. And I guess that also helps making it into a hype. There's a lot of misinformation about it. Some people think it's connected to the audits of Fort Knox because they're going to audit it and then it's probably empty. And so they have to import a lot of gold. And so the US government would be taking delivery on the COMEX of the gold, which is of course very nonsensical because central banks only keep 400 ounce bars roughly weighing 400 ounce, and on the COMEX, the contract is 100 ounce.

So, it would make no sense to take delivery of those contracts and that they don't even need to go through the comics. I mean the treasury, if they need gold, can just buy in London or elsewhere from a refinery in Switzerland, 400 ounce bars, and they can ship it to the United States, and they can also choose to do the shipping themselves. And then it would be exempt from being reported in customs statistics. So if central banks buy gold abroad and they say, well, okay, HSBC, can you take care of shipping and insurance and bringing it home, then HSBC has to go through customs and we can see it in customs data, but if central banks do it themselves and they can, then we don't even see it in customs data. So everything we see is just mostly normal market practice, people anticipating the higher price to get an arbitrage opportunity, which is a difference between the price in London and the price in New York futures. And then it's very easy to buy in one place and sell in another. But we also need to take into account that not only the arbitrage are making delivery, there are also a lot of people that are taking delivery. So there is real demands of a lot of gold, physical gold in the US now, and that can also be explained by the tariff threat. But yeah, it is worth noting and it definitely has been supporting the gold price this year.

Mike Maharrey: So, do you think realistically that precious metals would be included in any kind of broad-based tariffs? It seems to me that because gold and silver are primarily monetary instruments that that would be excluded. But what's kind of your view on that? And again, we're just speculating here, but is that something you think is realistic?

Jan Nieuwenhuijs: I agree with you. I mean, Trump is, we hear him talk about Bitcoin these days. Maybe he did so also to get some votes, but we also know he likes gold. He's been talking about gold all his life and he knows it's a monetary medal and it's not a commodity. And there's no, for example, a jewelry manufacturing industry in the United States that's very big that he wants to protect. It's a monetary metal, it's a currency. It's the second world currency now behind the dollar. So, it would be very strange to put a tariff on that. So yeah, it wouldn't make sense to me. But yeah, that's the short answer.

Mike Maharrey: It's interesting because I think this is a phenomenon that we're going to have to get used to as we move into the Trump era is that he does things kind of by the seat of his pants sometimes. And you get these, you wake up one morning and there's just all of a sudden this order or this tweet that kind of sends everything a buzz. And then I think a lot of times he does it for effect. He'll say something and then he'll back off of it the whole thing. We're going to own Gaza. I honestly think that that was probably a kind of a bargaining move. And he does this a lot, but it's hard to parse out what he actually is going to do in terms of concrete policy and what is noise and negotiation tactics. And that makes it really difficult from an analyst perspective to kind of get a good handle on what's going to happen moving forward because there's always these question marks out there. Do you kind of feel that too?

Jan Nieuwenhuijs: Yeah, exactly. I mean, it was brilliant what he did. For example, with Mexico and Canada, I recall that he first was barking about tariffs and then he wanted to negotiate and he just got what he wants. And it just also really strange that others are falling for it and they give away something just because of the threat. On the other hand, he just uses its leverage. You can only make these deals or you can make these threats if you have leverage if you're in significant country. I mean, Peru could say all this, but they wouldn't gain anything from it. And we also see on the other end that he is doing things, he is now excluding Europe and he is talking to Russia in Saudi Arabia about, and that is some really hardcore geopolitical changes. Right.

Mike Maharrey: Well, yeah, there's just so much stuff going on. It's going to be interesting to parse it all out as we move forward. I guess from an investor standpoint, just be vigilant and make sure you've got real money. I think what you said earlier is really a poignant point. If you have gold and silver, you're going to be shielded from a lot of the craziness that's going on, especially with the upheaval that we could see with the dollar and other fiat currencies work. Where can folks follow what you're doing? I know we're publishing you over at Money Metals, and I believe you're active on the X, which I can't quit calling Twitter, but where can folks follow what you're doing?

Jan Nieuwenhuijs: Yeah, I'm on Twitter (X). My handle is @JanGold_. I'm there every day because it's paramount to what I do to my job, but we just said it's kind of a circus there, so you could follow me there or just subscribe to the Money Medals newsletter and get my articles there.

Mike Maharrey: Yeah. Well, you're doing great work and really appreciate having you on the team and really happy to have your insights, especially on the goal revaluation thing because I'll be honest, that's something that we were talking about. It's hard to keep up with everything and there's certain things that I'm kind of keyed into, but then you have all this other stuff going on. It's like you almost feel like a squirrel. So it's really good to have another set of eyes and expertise out there. So we really appreciate what you're doing

Jan Nieuwenhuijs: For the Gold Revaluation account. When I started investigating it, and I found that in 2021, the central bank of a very small island, it is pretty close to where I live now, but in the Caribbean used its gold revaluation accounts to increase its capital position. And I thought, Hey, how can it be? And I know some people in the gold industry. And then eventually I got in contact with a consultant, he's a former IMF economist, and he consults central banks. So this is one of the best brains out there when it comes to central bank accounting. And I think I had five zoom meetings with him. And in the end I found out, not because he told me, but because I was thinking outside of the box and he was inside of all the accounting rules or whatever, and I was like, those are just rules. It's just numbers. They can do whatever they want. And now, yeah, the whole world is talking about it, it's crazy, but we are at the end of a debt cycle and you need this kind of tricks. So to lower the debt or to increase spending or whatever, to get votes, whatever. And I think it will be very inflationary also with global trade, all the tariffs that's going to create inflation, but that's what they want maybe to lower the debt to GDP levels and gold will benefit.

Mike Maharrey: Yeah, yeah, that's the bottom line. And as we've discussed, it's always real money and it's the one thing that they can't print it. They can't create it out of thin air. They can manipulate the books maybe, but it is what it is. It is a real tangible thing and I think that's important to remember. So well, thank you so much for taking a little bit of time out of your day. I really appreciate it, and we'll definitely talk to you again soon.

Jan Nieuwenhuijs: Thanks, Mike. Have a nice day.

Mike Maharrey: You too.