I saw this syndicated piece of news on my local newspaper site with the actual headline being “U.S. Mint buys drug cartel gold and sells it as ‘American’” and noticed the original source was the New York Times (since it eventually gets paywalled on my local newspaper site, this is the Seattle Times resyndication of that NYT article as a backup); the original NYT article is paywalled.
Why is this a big deal? Because the U.S. Mint has long claimed to be a symbol of the founding principles of the United States along with guaranteeing that all of its gold product is 100% American (in the U.S.A. sense and not the continents of North and South America). Like so many things, it’s another lie because the Mint’s gold program represented the amalgamation of several illicit sources by serving as the final laundering point for foreign powers and cartels (before the precious metal is clean and ready for sale on the international market).
For buyers of U.S. Mint gold bullions, this represents straight up false advertising where that bullion was purchased under false pretenses (for at least the past two decades) by collectors and investors. That premise (of this gold being sourced cleanly) allowed the Mint to charge a higher premium over the spot price (compared to some of its other peer nations) because of this guarantee. The Mint sustains the ability to create precious metal pieces like this via that premium. The Mint deserves to suffer some consumer backlash for this deceitful practice.
And what resource will buyers have (for acquiring these gold products that was based on lies)? Probably nothing (I doubt the Federal Trade Commission will sue another Federal government body for fraud). It’s actually become easier to see why the rich/powerful have a relatively easy time fleecing this country (much of it takes advantage of good old American propaganda to pull off the heist).
But let’s be clear, this isn’t exactly new news. Where were these folks at the NYT back in 2024 when Kitco (the Canadian company that buys and sells physical precious metals) reported on how the U.S. Treasury Department’s Office of Inspector General (OIG), finally having released a report (PDF) in May 2024 that highlighted issues with the U.S. Mint’s procurement practices for gold, dating back at least two decades where they had been acquiring non-American gold from sources that were found to have illicit ties to money laundering and trafficking.
I wrote about that briefly back in August 2024 as well after seeing that detailed Kitco article myself. Even prior to that article, I had personally stopped purchasing gold bullion from most countries mints (the sole exception being the Japan Mint), though I had pretty much stopped purchasing gold over the last decade except for a few rare instances (again, mainly Japan Mint commemorative issues).
After learning about this finding in 2024, any consideration I might have had for purchasing gold bullion from the U.S. Mint, went straight down the drain because their reputation went into the gutter with their straight up deception (this highlights how little our own government gives a damn about the truth regardless of which party is in power). I guess the NYT might have gone through actually tracing the route (which they detailed). Anyway, now is a better time than any for those who didn’t know earlier, to do their research on this (and to seriously consider boycott buying ANY product from the U.S. Mint).
What gold eagle bullions I had at the time (the exception being the 2009 Ultra High Relief Double Eagle) that were purchased in the late 90’s (when the spot price of gold was under $300 an ounce), I ended up liquidating and bought certified slabs of pre-1933 U.S. gold coins that were minted as actual currency). The spot price of 1 ounce of gold in 2024 was around $2,300 (it’s now around $4,600-$4,700 ounce).
And now that I’ve resumed purchasing gold again (primarily as a hedge against the potential devaluing and decoupling of the USD), it’s been mainly that same pre-1933 U.S. gold coin in certified slabs, but I’ll eventually add gold bullion bars (with assay) from places like the Perth Mint just to have some exposure to inventory that has certified higher purity (as early minted gold coins aren’t up to modern technical standards when it come to purity and weight).
Following is some of that certified slabbed collection (I also have uncertified gold coinage that I have in regular holders that I need to certify):
Backing up a bit, the U.S. Congress prohibited the Mint from making bullion out of foreign gold in 1985. This was done to insulate the process from human rights abuses (related to apartheid in South Africa at the time) but has also been in addition to sources that may be engaged in money laundering, human trafficking, and the drug trade.
The above mentioned OIG report detailed all of this where warnings were ignored through multiple administrations and regardless of the parties in Congress. Because the guardrails have all but collapsed, criminal organizations are keen to take advantage of the lack of safeguards because with the spot price of gold trading at these current levels of $4,500-$5,000 an ounce, that provides an incentive structure for criminal enterprises to mine gold ore in wasteful, destructive and risky ways.
As always for postings like this, the disclaimer applies.
