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- Deception of the highest standard: The US Mint has become a hub for the legalization of contraband
Deception of the highest standard: The US Mint has become a hub for the legalization of contraband
The administration of US President Donald Trump has been embroiled in another scandal — the media reported that the US Mint, promising investors a guarantee of "100% American gold," buys precious metals from illegal mines. We are talking about the mines of Colombian drug cartels, Mexican and Peruvian pawnshops and conflict mines in the Congo. It has been prohibited to use foreign gold for coinage in the United States since 1985, however, as journalists found out, both Republicans and Democrats violated the law while in power. For more information, see the Izvestia article.
Illusory guarantees
A scandalous investigation into the work of the US Mint was published by The New York Times. The editorial board has been studying the supply chains of the precious metal for five years, establishing a link between the agency of the US Treasury and illegal mines.
The main problem is that back in 1985, the United States banned the use of foreign gold for minting investment coins. Initially, the measure was taken to avoid the use of precious metals extracted through slave labor in South Africa. Later, the United States maintained this policy in order to protect investors from gold that found itself on the market by criminal means.
However, as the NYT found out, both the de facto Republican and Democratic administrations did not comply with the current ban. Journalists have established that for years the Mint has been using for minting gold obtained from illegal mines controlled by Colombian drug cartels (for example, the Del Golfo Clan cartel, which is one of the largest and most dangerous criminal gangs in Colombia), and from other questionable supply chains. Among the identified options are street pawnshops in Mexico and Peru, as well as mines in the Democratic Republic of the Congo, which are controlled by armed groups to finance violence, human rights violations and armed conflict. Another scandalous example is the cooperation of the American bureau with a company from Honduras, which excavated an ancient Indian cemetery for access to the mine.
Such "dirty" gold is allegedly used to issue the iconic American Eagle coins (considered one of the most liquid investment coins in the world due to purity and weight guarantees provided by the US government). Even Trump's coins, dedicated to the 250th anniversary of America, are likely to contain illegal gold mined outside the country.
The precious metal enters the official supply chain of the U.S. Mint through a multitude of intermediaries and forged documents. Illegally mined gold is sold to small traders, for whom more lenient rules apply, which makes it possible to legitimize it. As a result, during the export process, information about the origin of the precious metal is hidden or completely deleted.
In the United States, this gold ends up at refineries in Texas, where it is melted and mixed with precious metals from other legally mined sources. This is what makes it possible to formally comply with the law — according to industry experts, the final product is considered to be made in the United States as long as American gold is at least partially used in the refining process.
The factories might not even know that they were smelting gold linked to Colombian cartels, because such schemes always involve a large number of intermediaries and require some effort to track the supply chain, admits international columnist Andrei Kuzmak.
— Another question is that no one bothered to check. Everyone only knew that this gold came from abroad, which is already considered a violation of the law. But for the United States, with its complex system of state institutions, this is an absolutely natural situation. The same special services often carry out a huge number of operations without any budget at all and do not report to anyone," he notes.
The market has been decided
US Treasury Secretary Scott Bessant has already responded to The New York Times investigation. He promised to conduct a comprehensive analysis of the practice of purchasing gold by the Mint, checking the compliance of supply chains with the law.
However, American officials close to the situation privately admit that the United States will not be able to completely abandon the supply of foreign gold, as mining in the country's domestic mines does not meet the huge market demand.
The interest in gold in the world is really quite high. Over the past five years, the value of precious metals has increased by more than 100% in dollar terms. Economic instability and geopolitical risks have attracted investors to the protected asset. The conflict in the Middle East has only intensified the trend observed earlier. Experts expect that by the end of 2026, the average price of gold will be around $5,000 per ounce.
U.S. Treasury Secretary Scott Bessant
The U.S. Mint is considered the largest in the world. Every year, it sells more than $1 billion worth of investment-grade gold coins, issuing several main series of various denominations. The volume of minting depends on market demand, not on a fixed limit. And this practical dilemma makes it difficult to exercise real control.
The situation with gold smuggling from Latin America is indeed largely related to the global shortage of precious metals, which is manifested in the domestic American market, confirms political analyst Malek Dudakov. And therefore, in his opinion, companies in the United States working in this field are turning a blind eye to the origin of gold, paying less and less attention to how the law is being observed.
High demand and rising metal prices will lead to the fact that the scandal surrounding the Mint is unlikely to change the attitude towards gold coins produced in the American market, the expert believes.
— Some individual countries may start purchasing gold coins of American origin to a lesser extent. But in general, I think that the consequences of this scandal will not be the most serious," he expects.
Ripples on the water
The price signal of recent years has stimulated illegal gold mining, attracting more and more criminals to the industry. Not only drug cartels like the Del Golfo Clan are showing interest in mining, but also terrorist groups, including those affiliated with Al-Qaeda (a terrorist organization banned in the Russian Federation). As a result, the precious metal trade is becoming a significant source of financing for armed conflicts and terrorism.
A paradox arises: investors buy gold to hedge against the uncertainty associated with wars and financial crises, but this demand leads to higher prices, which fuels criminal activity and military conflicts, increasing geopolitical instability. In such circumstances, given the existing complex structure of supply chains, the difference between legal and illegally mined gold often exists only on paper.
Therefore, in a sense, criminal organizations do indirectly receive money from the United States, admits Andrei Kuzmak. But similar precedents arise not only with gold and no one is even surprised anymore. An example is the major Iran-Contra political scandal that broke out in the second half of the 1980s, when individual members of the US administration organized secret arms shipments to Iran, violating the arms embargo against that country.
— In this sense, The New York Times does not just write such materials and conduct investigations. In principle, in the field of defense procurement alone, you can write several more of the same articles, and everything will be true," the expert points out.
The situation could be a blow to the reputation of US President Donald Trump, who is actively talking about his fight against drug cartels, admits Izvestia's interlocutor. But this is more of an "image hairpin" rather than a serious shadow. On the whole, this is unlikely to surprise anyone at the international level - the United States has always considered itself entitled to dictate to other countries not only ethical norms, but also state structure and domestic law, while easily ignoring them.
— Therefore, I think that this will not affect the image of the United States in any way, because it has already faded as far as possible, — the expert is sure.
US President Donald Trump
The Mint scandal will not affect the ability of the United States to influence the global economy either, he believes. Because it is influenced by much larger geopolitical factors.
— Yes, they will make noise. Yes, once again, a huge multi-year corruption scheme has been discovered in the system of American government. Yes, this has already happened. Yes, there will be an audit now, if there is one, and yes, huge shortages will be revealed, as was the case with the Pentagon. But with this, the story will fade out and be inundated with other news from the information field," the international observer is convinced.
This story could potentially take off in Latin American countries, where leaders who oppose the United States are in power, Malek Dudakov does not exclude. It can be used as part of a certain electoral strategy as a tool to criticize the actions of the United States.
But more importantly, this scandal is, in fact, another "small brick" in building distrust of the system of government within the United States, Kuzmak clarifies.
— America will once again be horrified that the system of government is in a deplorable state, which is only getting worse from year to year, and this will slightly change the attitude of ordinary Americans towards government institutions. Especially against the background of not the best economic indicators and a gradual deterioration in living standards," he concludes.
Переведено сервисом «Яндекс Переводчик»
