Money Metals Midweek Memo host Mike Maharrey opened this week’s episode with an old-fashioned banking analogy: Imagine somebody repeatedly claiming to have $100,000 in the bank but refusing to produce a statement or even balance the checkbook. The money might be there, but without verification, skepticism would be reasonable.
That, Maharrey argued, is essentially the situation with America’s gold reserves. He suspects the gold at Fort Knox probably is there. But “probably” isn’t the same as an independent, comprehensive audit.
That question framed one half of the episode. The other centered on an issue Maharrey believes could have much broader economic consequences. That is, recent U.S. intervention to support the Japanese yen and what the unusual mechanics of that intervention may reveal about the deteriorating position of the U.S. dollar.
The Dollar’s Reserve-Currency Advantage Is Under Pressure
The United States recently intervened in currency markets to support the Japanese yen. Such interventions aren’t extraordinary by themselves, but Maharrey argued that the way Washington went about it was revealing.
Dollar reserve status is enormously important to the U.S. monetary and fiscal system. Global demand for dollars absorbs some of the currency created by the Federal Reserve, while international demand for U.S. Treasuries helps finance federal borrowing.
Maharrey stressed that the dollar isn’t likely to suddenly lose reserve-currency status overnight. In his words, it remains the “cleanest dirty shirt in the laundry hamper.” But he argued that persistent borrowing, spending, debt accumulation, and money creation are gradually making the monetary system more fragile.
Normally, if the United States wants to strengthen the yen, it can sell dollars and use the proceeds to buy yen. Increased demand for yen strengthens the Japanese currency, but selling dollars can simultaneously put downward pressure on the greenback.
This time, the Treasury reportedly did something different.
Instead of buying yen with dollars, the U.S. used euros from its reserves. That allowed Washington to support the yen without directly selling dollars. According to the Financial Times, the operation “blindsided” the European Central Bank, which reportedly wasn’t informed until after the intervention.
Why Washington Didn't Want to Sell Dollars
UC Berkeley economist Barry Eichengreen argued in the Financial Times that the unusual transaction pointed toward a deeper concern - Treasury Secretary Scott Bessent and other U.S. officials may have worried that selling dollar securities to support the yen would put additional pressure on the long end of the Treasury market.
That matters because weakening demand for Treasury securities means lower bond prices and higher yields. Higher yields, in turn, translate into higher borrowing costs for Washington.
Maharrey illustrated the problem with a simple example. If the yield on the 10-year Treasury is 3.5 percent instead of 2.5 percent, the federal government must pay more to borrow. That is especially problematic when the government is already spending more than $1 trillion per year on interest alone.
Japan's situation makes the dilemma even clearer.
When Japan needs to strengthen the yen, it can sell U.S. Treasury securities, receive dollars, and use those dollars to buy yen. Japan has apparently been doing exactly that. Its foreign currency reserves fell by $75.6 billion in May, an amount Bloomberg reported broadly matched the scale of yen intervention that month. Federal Reserve custody data also showed a decline in Japanese Treasury holdings consistent with liquidation.
But Japanese Treasury sales create a headache for Washington. More Treasuries hitting the market can push prices lower and yields higher precisely when the U.S. government needs to borrow enormous sums.
By stepping in to buy yen itself, Washington could therefore accomplish two things at once: support Japan’s currency and reduce Japan’s need to dump Treasuries.
Japan Can Get Dollars Without Dumping Treasuries
There is another piece to the puzzle.
Japanese officials have indicated they will use the Federal Reserve’s Foreign and International Monetary Authorities, or FIMA, Repo Facility for future currency-support operations.
The Fed created the facility in March 2020 after foreign institutions needing dollars began selling Treasuries during the pandemic, contributing to severe volatility and dysfunction in the Treasury market.
FIMA gives eligible foreign monetary authorities another option. Rather than outright selling Treasuries, they can pledge those securities as collateral and obtain dollars from the Federal Reserve. The loans have a maximum maturity of seven days but can be rolled over.
For Japan, that creates a way to obtain dollars to support the yen without dumping Treasury securities onto the open market. For Washington, it potentially removes another source of selling pressure from the bond market.
Why Hold Reserves You Can't Freely Use?
For Maharrey, this is where the story becomes a de-dollarization story.
Eichengreen argued that the developments suggest the dollar’s status as a reserve currency “is not what it used to be.” Central banks traditionally hold dollar reserves partly because the Treasury market is deep and liquid, allowing those assets to be bought, sold, and deployed in currency interventions.
But what happens if foreign central banks face pressure not to sell their Treasury holdings because Washington is worried about the effect on its own bond market?
Why hold reserves, Maharrey asked, if you can’t freely use them when you need them?
Eichengreen warned that the dollar is becoming less attractive as a reserve currency and predicted that other countries could intensify their search for alternatives. In other words, reserve diversification – another form of de-dollarization – could accelerate.
Gold Stands to Benefit
Gold is one obvious alternative.
Capital Economics economist Kieran Tompkins argued that concerns about central banks conducting foreign-exchange operations without upsetting U.S. officials over Treasury-market consequences could provide fresh impetus for central bank gold demand.
That matters because central bank buying has been one of the major pillars supporting the gold bull market in recent years.
Maharrey argued that this demand has helped gold hold around the $4,000 level despite significant interest-rate headwinds and relatively subdued enthusiasm among Western investors. Asian investors, meanwhile, have been aggressively buying the recent dip.
With expectations for a Federal Reserve rate hike fading and gold showing signs of breaking out of its range-bound trading pattern, Maharrey sees numerous indicators pointing toward a continuing gold bull market.
Rand Paul Goes to Fort Knox
The second half of the episode shifted from international currency markets to America’s most famous gold vault.
A few weeks earlier, Treasury Secretary Scott Bessent had insisted that all of the gold at Fort Knox was present and accounted for, despite acknowledging that he had not personally visited the facility.
Then Sen. Rand Paul went to Fort Knox.
After spending roughly one or two hours inside the U.S. Bullion Depository, Paul emerged and declared that the gold was there – approximately 147 million ounces.
Maharrey wasn’t persuaded.
Based on the amount of gold the government says Fort Knox contains, there should be more than 300,000 gold bars inside. Many aren’t even standard modern bullion bars because some Fort Knox holdings originated with coins melted down following the gold policies of the 1930s. Those bars can have irregular weights and insufficient purity to qualify for international settlement.
In Maharrey’s view, there is simply no way somebody can verify more than 300,000 bars during a brief guided visit.
A Tour Isn't an Audit
Money Metals CEO Stefan Gleason sharply criticized the episode, arguing that Paul had effectively been “rolled” after being given the opportunity to tour the mysterious facility.
Gleason also noted that Money Metals operates a precious-metals depository twice the physical size of Fort Knox. He argued that a brief visit cannot establish that America’s gold is fully accounted for, much less answer questions about whether any of it is encumbered.
Another issue is purity. Gleason said 83 percent of the gold is unacceptable on global markets due to insufficient purity.
The episode is especially striking because Paul co-sponsored the Gold Reserve Transparency Act of 2025 with prime sponsor Sen. Mike Lee. That legislation would have provided for a comprehensive audit of U.S. gold reserves.
Sound Money Defense League director Jp Cortez questioned why Paul would back a bill calling for a genuine accounting and then seemingly substitute a Fort Knox “field trip” and assurances that everything was there.
What a Real Fort Knox Audit Would Require
Maharrey emphasized that a legitimate audit involves much more than walking through a vault.
A proper independent examination would require every bar to be counted and inspected. Serial numbers would need to be reconciled with official records. Gold would need to be assayed to verify weight and purity. The resulting documentation would then need to be published for public examination.
An audit would also address chain of custody and potential encumbrances.
Has any Fort Knox gold been loaned to another entity? Has it been pledged, leased, swapped, or mobilized in currency operations? Does anybody else hold full or partial claims against metal sitting inside the vault?
Without a comprehensive published audit, Maharrey argued, the public simply cannot know.
The $6 Billion Question
That leads to what Maharrey called the “$6 billion question”: Why not simply audit the gold?
He pointed back to 1974, when officials opened the Fort Knox vaults to outsiders. Maharrey characterized that episode as another publicity event rather than the type of rigorous accounting needed to settle the issue.
The continuing resistance to an independent audit only breeds suspicion, he argued. If a private company refused to audit its books and became hostile whenever somebody suggested doing so, that behavior would hardly inspire confidence.
Money Metals has firsthand experience with what a real bullion audit entails. The Money Metals Depository is larger than the U.S. Bullion Depository and undergoes both internal and external auditing.
For Maharrey, that should be the standard…verification rather than assurances.
Don't Rely on Washington to Protect Your Money
The two seemingly different topics of the episode ultimately came together around the same theme.
The dollar’s international position is showing signs of strain as the U.S. struggles to preserve demand for Treasury securities. Meanwhile, Washington continues asking Americans to accept assurances about the nation’s gold holdings without the kind of comprehensive public audit that would settle the question.
Maharrey also pointed to the long-running erosion of purchasing power, saying government policy is effectively designed to devalue money by more than 10 percent every five years.
His conclusion was that individuals shouldn’t depend on policymakers to preserve their wealth. Instead, he argued that saving in sound money such as physical gold and silver can provide a way to protect purchasing power from monetary debasement.
The dollar may remain the world’s dominant reserve currency for some time. But as Maharrey put it at the end of the episode, “the dollar is not what it used to be.”
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