$39 trillion of U.S. debt is backed by someone else’s gold – investigation

GOLD, THE DOLLAR, AND THE GLOBAL MONETARY SYSTEM: A HISTORY OF BREACHES, THE ILLEGITIMACY OF ASSETS, AND FUTURE SCENARIOS

Disclaimer:

This material is a research essay prepared by the editorial board of the journals Kafedra and Sfornews as part of a series of analytical investigations. The work is based on a methodology of systemic diagnostics, involving the analysis of events not only through the lens of simple human logic or ethics, but also using all documents, artifacts, and alternative legal constructs available to the editorial board. Our research encompasses materials that may not have wide public recognition, but which nevertheless help clarify the situation and provide a coherent explanation for what we observe—so that what we see does not appear absurd, but rather acquires internal logic and coherence. We do not claim that the interpretation offered is the only correct or officially recognized one. We invite readers to join our research and independently assess the arguments presented. This material is not a political statement, investment recommendation, or call to action. All conclusions are probabilistic in nature and reflect the editorial board’s authorial position.

INTRODUCTION

Gold and the US dollar are at the center of a global financial confrontation that has reached a critical point by 2026. On one side stands the dollar, which has existed without gold backing since 1971, relying solely on trust in the American economy. On the other side stands gold, which for millennia has remained the only neutral asset, having no issuer and being independent of political jurisdiction.

Yet behind these obvious facts lies a deeper legal problem: the majority of the world’s gold and all dollar reserves may lack legal title of ownership. This investigation traces the history of the dollar system’s formation, identifies key breaches of international treaties, and analyzes who actually owns gold and the dollar. In conclusion, we will examine scenarios for future developments and their consequences for the global economy.

PART I. THE BRETTON WOODS SYSTEM (1944–1971): BIRTH AND FALL OF DOLLAR HEGEMONY

1.1. How the System Was Created

In July 1944, while World War II was still ongoing, a conference was held in the resort town of Bretton Woods (New Hampshire, USA) with the participation of 44 countries. Its goal was to create a new international monetary system that would prevent the chaos of the interwar period and ensure stability for the postwar global economy [1].

Key parameters of the Bretton Woods system:

American political and economic dominance made the dollar the center of this system. The US possessed a colossal advantage — nearly 70% of the world’s gold reserves were at its disposal [1].

1.2. The Built-In Contradiction: The Triffin Paradox

The system had a fundamental flaw, known as the Triffin Paradox [2]: to supply the global economy with dollars, the US had to continuously expand their issuance, but to maintain confidence in the dollar, its gold backing had to be preserved. These two goals were mutually exclusive.

The US “pyramided” dollars on top of gold: paper money and bank deposits were created on the basis of the gold reserve, but dollars could be exchanged for gold upon demand by foreign governments. This created colossal leverage: a small gold reserve supported a many times larger volume of dollar supply.

1.3. The USSR and Bretton Woods: Refusal and the Alternative Path

The Soviet Union participated in the conference but refused to ratify the Bretton Woods agreements [1]. The USSR saw the system as a tool of American domination and preferred to conduct international settlements in gold. In response to the creation of the dollar system, the USSR took steps to form an alternative monetary architecture:

After Stalin’s death, this strategic project was abandoned. However, the very fact of the USSR’s refusal to ratify Bretton Woods has colossal legal significance: the USSR never recognized the dollar as a global reserve currency on a contractual basis.

PART II. THE COLLAPSE OF THE BRETTON WOODS SYSTEM (1971): A UNILATERAL BREACH

2.1. The Nixon Shock: The End of the Gold Standard

By the late 1960s, the system began to crack. The chronic US trade deficit was depleting American gold reserves. Inflation was rising, making gold too cheap in real terms. In 1961, the London Gold Pool was created — eight countries pooled their gold reserves to keep the price of gold at $35 per ounce. This worked for a while, but tensions continued to mount [4].

In 1968, a two-tier gold market was introduced: a private market with a floating price and official transactions at a fixed parity. The system proved unsustainable [4].

On August 15, 1971, President Richard Nixon announced the “temporary” suspension of dollar convertibility into gold for foreign central banks [5]. This was a unilateral withdrawal from a key obligation the US had assumed in 1944.

2.2. What Did This Mean?

Formally — a violation of an international treaty. In practice — rescuing the US from bankruptcy. By that time, foreign central banks, especially France and West Germany, had accumulated huge dollar reserves and were presenting them en masse for exchange into gold. The US gold reserve was rapidly depleting. The suspension of convertibility saved the situation but transformed the dollar from an asset backed by gold into a debt obligation, backed only by trust in the American economy [5].

From that moment on, the dollar ceased to be a “hard currency” and became fiat currency — money backed by nothing but a promise to pay. The Bretton Woods system ceased to exist.

2.3. Legal and Financial Consequences of the Abandonment

The abandonment of gold backing had far-reaching consequences:

PART III. THE ERA OF UNCONTROLLED ISSUANCE (1971–2026)

3.1. The Printing Press Ran at Full Capacity

Since 1971, dollar issuance has no longer been constrained by gold reserves. The result was predictable.

US National Debt (in trillions of dollars) [6]:

Year	US National Debt
1980	~0.9
1990	~3.2
2000	~5.6
2010	~13.5
2020	~27.7
2026 (June)	~39.2

As of June 3, 2026, the total US national debt reached $39.20 trillion** [6]. Over the past year, it has grown by **$2.99 trillion — an average of $8.19 billion per day** [6]. At current growth rates, **$40 trillion will be reached around September 23, 2026 [7].

Debt held by the public stands at $31.6 trillion [6], roughly the size of the entire US economy. By 2036, it is projected to reach 123% of GDP [8].

Interest payments on the debt reached $272.89 billion over the past 12 months [7]. Net interest expenses, according to CBO projections, will account for 13.95% of all budget expenditures in fiscal year 2026 [8].

3.2. Budget Deficit

The US federal budget deficit for fiscal year 2026 is projected at $2.05 trillion**, approximately **6.5% of GDP** [9]. According to other estimates, for the first eight months of fiscal 2026, the deficit has already reached **$1.2 trillion [9].

3.3. The Key Breach: Debt as the Basis for Monetary Issuance

The main breach is that the dollar was turned into a tool for financing unlimited debt. Dollar issuance is no longer tied to the production of real value or gold reserves. It has become a tool for covering deficits, which has led to:

Furthermore, from a legal standpoint, dollar issuance without gold backing, following the unilateral abandonment of commitments in 1971, has no legal basis. The US cannot invoke the Bretton Woods treaty, which it itself violated, and no new international agreement on the dollar’s status has been concluded.

PART IV. DE-DOLLARIZATION: A STRUCTURAL SHIFT

4.1. Decline of the Dollar’s Share in Global Reserves

The dollar’s share in global foreign exchange reserves is steadily declining [10]:

However, these figures require careful interpretation. A significant portion of the dollar’s decline is due to the weakening of the dollar itself (the DXY index fell more than 10% in the first half of 2026), rather than active central bank selling of dollar assets [12]. Excluding currency effects, the dollar would have lost only a marginal share — down to 57.67% [12]. Nevertheless, the long-term trend remains downward.

74% of central banks expect the dollar’s share in global reserves to continue declining over the next five years [13]. 90% of central banks stated they would increase their gold reserves in the next 12 months [13].

4.2. The Freezing of Russian Reserves — A Turning Point

In 2022, Western countries froze approximately $300 billion of Russian foreign exchange reserves [14]. This event was a turning point for the entire world. It demonstrated clearly that dollar assets held abroad can be frozen or confiscated at any moment for political reasons.

This “woke up” central banks around the world. Gold held in domestic vaults cannot be frozen or confiscated via SWIFT. Since then, central bank gold purchases have risen from ~500 tons per year to over 1,000 tons annually [15].

4.3. Alternative Payment Systems

Alongside de-dollarization, alternative payment systems are developing:

PART V. THE CENTRAL BANK GOLD RUSH

5.1. Record Purchases

In 2022, 2023, and 2024, global central banks purchased more than 1,000 tons of gold annually — the longest continuous buying spree in modern history [15]. In 2025, purchases amounted to 863 tons [15].

In the first quarter of 2026, central banks acquired 244 tons of gold — above the five-year average [17]. The World Gold Council forecasts that purchases will reach 850 tons for the year [17]. Other estimates suggest 750–850 tons in 2026 — approximately 20% of annual global gold production [18].

84% of surveyed central banks expect their gold reserves to grow further over the next five years [13]. 83% believe that the share of gold in their reserves will be higher in five years than it is now [13].

5.2. China: The Leading Buyer

China has been increasing its gold reserves for 19 consecutive months [19]:

5.3. BRICS+ — A New Gold Power

BRICS+ countries (including new member states) now control over 6,000 tons of gold — 17.4% of global central bank gold reserves, up from 11.2% in 2019 [21].

Largest holders among BRICS+ [21]:

From 2020 to 2024, BRICS+ central banks purchased more than 50% of all gold acquired by sovereign states worldwide [21]. In the first half of 2025, they added another 663 tons [22]. Even Brazil returned to the market in September 2025, buying 16 tons — its first purchase since 2021 [22].

5.4. Why Are They Doing This? Three Main Drivers

5.5. Gold Repatriation

Central banks are not only buying gold but also bringing it home [24]. 9% of central banks reported increasing domestic gold storage over the past 12 months, while 10% diversified their overseas storage locations [24]. Nevertheless, the Bank of England remains the most popular storage location [24].

PART VI. FORT KNOX: WHERE IS AMERICA’S GOLD?

6.1. What Is Stored There

According to US Treasury data as of April 30, 2026, Fort Knox holds 147,341,858 troy ounces of gold — approximately 4,580 metric tons [25]. This is about 59% of all US gold reserves [25].

At current market prices (~$4,500 per ounce), this gold is worth approximately **$662–667 billion** [26]. However, at book value, fixed at $42.22 per ounce** since 1973, these assets are officially valued at just **$6.22 billion [25].

6.2. The Audit Problem: The Last Full Audit Was in 1953

The last independent and complete physical audit of Fort Knox was conducted in 1953 (under President Eisenhower) [27]. A partial inspection involving Congress and journalists took place in September 1974, but it covered only about 21% of the bars [27]. Since then, no complete count or independent weighing of the entire reserve has been published.

6.3. The Scandal and Audit Demands

In late May 2026, the FBI seized 303 gold bars (worth approximately $40 million), $2 million in foreign currency, and 35 luxury watches from the home of David Rush, a former high-ranking CIA officer [28]. He is accused of falsifying documents and receiving gold through the agency without traceable justification [28].

This incident gave President Trump a political argument: he once again demanded a physical audit of Fort Knox [28]. As early as May 2026, Trump stated in an interview that he wanted to “knock on Fort Knox’s door” and personally verify that the gold was there [28]. In 2025, he and Elon Musk (then heading DOGE) announced an inspection, but it never took place [28].

Bill HR 3795 “Gold Reserve Transparency Act,” introduced by Congressman Thomas Massie in June 2025, remains blocked in Congress [29].

6.4. What Does This Mean?

Demands for a Fort Knox audit are not merely political theater. They reflect deep distrust of official data on US gold reserves. If an audit reveals discrepancies, it could become the largest financial scandal in history and undermine the last remnants of confidence in the dollar.

PART VII. GOLD PRICE FORECASTS

7.1. Current Situation

As of mid-2026, gold is trading in the range of $4,400–4,700 per ounce** [30]. In April 2026, futures touched an all-time high of **$5,318 per ounce before correcting on the back of a temporary dollar strengthening following a partial resolution of the Iran conflict [30].

Gold trading volume on the Moscow Exchange in May 2026 amounted to 26.5 tons worth 284.5 billion rubles — 1.9 times higher in physical terms and 2.3 times higher in monetary terms than a year earlier [31].

7.2. Leading Bank Forecasts

Source	Gold Forecast	Timeline
Deutsche Bank	$8,000 per ounce	5 years [32]
JPMorgan	**$5,243** per ounce (lowered from $5,708)	Q4 2026 [33]
Goldman Sachs	**$4,900** per ounce (lowered from $5,400)	End of 2026 [34]
HSBC	$5,000 per ounce	Q2 2026 [35]
Commerzbank	**$4,800** per ounce (lowered from $5,000)	End of 2026 [36]
State Street (SSGA)	$5,500 per ounce (base case)	End of 2026 [37]

HSBC released a forecast in January 2026 projecting gold would reach $5,000 per ounce in the second quarter of 2026 [35]. The bank’s analysts cited as drivers an “unstable cocktail” of unprecedented fiscal deficits, systemic currency devaluation, and a fundamental shift in global confidence [35].

Deutsche Bank modeled a scenario in which gold’s share of global central bank reserves reaches 40% (up from the current 30%), driving gold prices to $8,000 per ounce within five years [32].

WisdomTree projects a base case of exceeding $4,500 per ounce** by Q3 2026, with a bullish scenario of **$5,000 [38].

7.3. Factors Affecting the Price

Growth Drivers:

Headwinds:

PART VIII. GLOBAL DEBT: THE FUNDAMENTAL PROBLEM

8.1. Global Debt Reached a Record

At the end of the first quarter of 2026, global debt reached a record $353 trillion — more than 3 times global GDP [39]. The share of public debt in this total also reached a record 31% [39]. The elevated debt burden is causing investor concern over the declining purchasing power of fiat currencies.

8.2. Comparison: Gold in Reserves vs. Treasury Bills

In early 2026, the value of gold in reserves exceeded the value of US Treasury securities for the first time [40]. This is a symbolic milestone: central banks now value physical metal higher than US debt obligations.

8.3. The Debt Pyramid and Its Vulnerability

The global debt system is built on the principle of continuously increasing debt to service previous debt. This is a pyramid that will collapse when confidence in the issuers of reserve currencies runs out. Gold is the only asset that is not someone’s obligation.

PART IX. THE LEGAL ILLEGITIMACY OF ASSET OWNERSHIP

9.1. Bretton Woods and the USSR’s Refusal: A Foundational Legal Fact

The Soviet Union did not ratify the Bretton Woods agreements of 1944 [1]. This means that for the USSR and its successors, this system was never binding. Moreover, after the US unilateral abandonment of gold backing in 1971 [5], the entire system lost even formal justification: the dollar ceased to be “backed” by anything other than the US promise to pay its debts.

From a legal standpoint, the unilateral cancellation of dollar convertibility into gold is a violation of the obligation the US undertook before the international community in 1944. This means that all dollar assets accumulated since 1971 can be challenged as lacking legal backing.

9.2. Gold in Fort Knox: Pledged Gold or Ownership?

According to legal documents and archival materials, in 1977 the USSR and the US entered into the Washington Agreements, under which the USSR deposited 35,000 tons of gold in Fort Knox as collateral to service international settlements. This gold was supposed to be returned to the USSR after the fulfillment of obligations, but the US did not fulfill its part. By 1982, this gold was reclassified as a US debt to the USSR in the amount of 70,000 tons (including a doubling). These claims have never been settled.

Thus, the gold that the US considers its own is actually collateral, not property. The US holds it illegally, as a pledge holder that failed to fulfill its obligations.

9.3. The Dollar as a Debt Obligation Without Backing

If the gold in Fort Knox is collateral for US debts to the USSR, then the US dollar as a currency is also a debt obligation backed by this collateral. But since the collateral was transferred illegally (without proper fulfillment of conditions), the issuance of dollars based on this collateral is also illegal.

Consequently, all dollar reserves accumulated by countries around the world are, in essence, claims on the US, but these claims are backed by gold that legally belongs to the USSR, not the US. Therefore, central banks purchasing US Treasury securities are effectively lending to the US against someone else’s gold.

9.4. Who Has Rights to Gold Purchased by Central Banks?

If the gold stored at Fort Knox and other depositories belongs to the USSR, then the gold that central banks (including China, India, and BRICS+ countries) are buying on the market can also be challenged. After all, this gold is part of the global supply that was illegally appropriated by Western countries after 1971.

Thus, central bank gold purchases are not “reserve accumulation” but an attempt to reclaim part of what was illegally taken. But even these purchases do not confer legal ownership, as title to all world gold remains with the USSR.

9.5. What Does This Mean for the Current Situation?

If the legal force of these arguments is recognized, then:

9.6. Practical Implications for Investors and States

PART X. FUTURE SCENARIOS

10.1. Baseline Scenario: Gradual De-Dollarization

In this scenario, the dollar retains its status as the primary reserve currency, but its share continues to decline slowly (to 50–55% by 2030). Gold rises to $5,000–5,500 per ounce, central banks continue buying gold, but without sharp moves. Legal claims remain unrealized due to political will.

10.2. Pessimistic Scenario: Dollar Collapse

If confidence in the dollar collapses (for example, due to a US debt default or hyperinflation, as well as the onset of international litigation over gold ownership rights), the dollar could lose its reserve currency status. In this case, gold could rise to $8,000–10,000 per ounce or higher. The world would transition to a multipolar currency system with gold as the anchor.

10.3. Optimistic Scenario: Return to a Gold Standard

Unlikely, but technically possible: global powers could agree on a new system partially backed by gold. This would require revaluing gold reserves at market prices, coordinating monetary policy, and resolving property claims.

10.4. Revolutionary Scenario: Digital Gold and a New Bretton Woods

A new reserve currency could be created, backed by a basket of commodities including gold, or a central bank digital currency (CBDC) convertible into gold at a fixed rate. This could form the foundation of a new global financial order in which property rights issues are resolved.

CONCLUSION

What We Have as of 2026:

What Does This Mean?

We are witnessing the end of the era of dollar hegemony. The system created in 1944 survived in its original form until 1971, and then for another 55 years — on trust and inertia. This trust has been undermined by:

Gold is returning to the center of the global financial system — not as a currency, but as a neutral reserve asset, independent of political circumstances. The world is moving toward a multipolar currency system in which gold will serve as an anchor and the dollar will be one of several reserve currencies.

In the coming years, we will face tectonic shifts in global financial architecture. Investors, companies, and states must account for these risks and adapt to a new reality where the dollar is no longer an unconditional asset, and gold once again becomes the foundation of global stability.

INVITATION TO JOINT RESEARCH

The editorial board of the journals Kafedra and Sfornews invites lawyers, historians, political scientists, economists, and all interested readers to join our research project. We have at our disposal documents and artifacts that allow us to view current events from a different angle. We are convinced that only through collective effort — through the exchange of hypotheses, fact-checking, and interdisciplinary analysis — can we approach an understanding of the foundation on which the modern world order actually stands.

Subscribe to Kafedra on Dzen and to SforNews to follow the progress of our investigation. In future materials, we will continue to examine legal aspects of succession, privatization, and international treaties, as well as offer specific tools for asset protection in conditions of growing uncertainty.

SOURCES

This review is based on open sources and legal documents. The analysis is for informational purposes only and does not constitute investment advice.