Where’s the gold? NY Fed undergoes first-ever audit Get short URL email story to a friend print version Published: 04 August, 2012, 06:57 Edited: 04 August, 2012, 20:48
AFP Photo / Michal Cizek
A massive trove of gold kept under lock and key five stories below Manhattan at the New York Federal Reserve has been undergoing its first audit in history. It could put conspiracy theories - for example, that the gold is a sham - to sleep for good?
According to the official record, the US government keeps billions of dollars in gold stored beneath the New York Fed's Italian Renaissance fortress around the block from Wall Street.
But conspiracy theorists claim that the gold stock may have been stolen years back in a dramatic caper, that it's been used for backdoor deals with foreign governments, or even that it's been removed and replaced with gold-painted metal bars.
And as many know, the stash has caught the attention of some politicians, most notably Texas Representative Ron Paul.
For years, Paul has called for an independent audit of not only the New York Fed, but of the Federal Reserve Bank as a whole.
But the government hasn't been eager to grant his wish.
In 1981, when Paul served on the Gold Commission – a panel formed by Congress to look into expanding gold's role in the US financial system – he argued for full gold audits to be carried out on an annual basis.
He has proposed legislation for an exhaustive review of all the gold kept on US soil, which includes bullion owned by various foreign governments in addition to America's. "If the gold is there and everything is in order, they should welcome an audit," Paul said, as quoted by The Los Angeles Times.
Now, things seem to be moving in Paul's direction, at least at the New York Fed – which is by leaps and bounds the largest by assets, and most influential of America's 12 reserve banks.
The US government has been quietly carrying out an audit of all the American-owned gold at the New York Fed. The process involves drilling small holes in about ten per cent, or roughly 350, of the bars to make sure they're pure. About a half dozen Mint, Treasury Inspector General's Office and New York Fed employees took part in the audit. It's being monitored by the Government Accountability Office, the branch of Congress that wields investigative powers. Other than that, Treasury officials have thus far refused to provide any details about the operation or its findings. They only say that the results will be announced towards the end of the year. The New York Fed has also refused to comment.
But one anonymous Fed official, apparently speaking in the direction of conspiracy theorists, quipped recently that the audit will show that "Goldfinger didn't sneak in at night" and take off with the gold. Though the gold kept at Fort Knox, West Point and the US Mint in Denver, Colorado, have all been audited and tested in the past, the remaining 5 per cent – or about $21 billion – of America's gold, held at the New York Fed, has never been exhaustively checked out.
Taking into consideration the gold owned by other nations, the New York Fed's vaults hold about 23% of the world's official gold reserves.
And even if the audit shows that the gold's all there, it's not likely to satisfy many, including Paul. He claims he's not concerned with whether the gold is real or fake, but with the paperwork that would outline what it's been used for. Many suspect deals that were never made public, like loans to foreign governments.
The US stopped backing dollars with gold in 1971, bringing an end to the Gold Standard. Today, the gold in vaults across the country carries little weight, so to speak. To that, Paul suggests that Washington simply get rid of it. "I would just as soon they sell the gold," he's said. "And then we would find out if they really had it.
What else did you expect from the Fed? In The News Today March 5, 2013, at 1:03 pm by Jim Sinclair in the category In The News | Jim Sinclair’s Commentary http://www.jsmineset.com/
QE is going to infinity. All that anti-gold, pro-dollar interest can do is add outrageous volatility to the gold market. They cannot deny gold’s price at $3500 and higher.
Fed’s Yellen: Full steam ahead on QE3 March 04, 2013|Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — A key member of the Federal Reserve on Monday gave her clear support for continuing the central bank’s policy of buying bonds at current levels.
“At present, I view the balance of risks as still calling for a highly accommodative monetary policy to support a stronger recovery and more rapid growth in employment,” Federal Reserve Vice Chair Janet Yellen said Monday in a speech to the National Association for Business Economics.
While there are some potential costs to the purchases, “at this stage, I do not see any that would cause me to advocate a curtailment of our purchase program,” she said.
Yellen is seen as a possible replacement for Fed Chairman Ben Bernanke if he steps aside when his second term ends in January 2014.
Bernanke also endorsed the Fed’s current policy, in a speech on Friday night.
“A premature removal of accommodation could, by slowing the economy, perversely serve to extend the period of low long-term rates,” Bernanke said in a speech to a Fed research conference in San Francisco.
Yellen’s comments add weight to the idea the Fed will maintain an $85 billion-a-month bond purchase program at its next meeting on March 19-20.
More…
Jim Sinclair’s Commentary
All the talk is just that, talk. With the dollar firmer because of the currency wars, there is absolutely no limit to the amount of QE that the Fed can do.
Since interest rates are nothing other than the product of the US treasury instrument’s market, he remains in full control. The stock market is making new highs based on LIQUIDITY while the gold banks for the Fed have manipulated gold lower to camouflage the real situation.
Gold will trade at $3500 and higher. Good gold shares can mine money cheaply. Major mines are built on production loans, not share issuance.
The experiment is would the Great Depression have occurred if you lied about everything. The answer is yes, greater, and later.
Jim Sinclair’s Commentary
The Financial Times should know that high frequency trading has but one purpose and that is front running real buy and sell orders. That is totally illegal right now. The only reason the exchanges look the other way is because the exchanges as pubic companies benefit from volume traded, and therefore they see no evil.
If the FBI really wanted to do their jobs they ought to look at the gold and silver markets, but they do not.
FBI joins SEC in computer trading probe By Kara Scannell in New York March 5, 2013 5:41 pm
The FBI has teamed up with securities regulators to tackle the potential threat of market manipulation posed by ultra-fast computer dealing methods such as high-frequency trading that have taken markets beyond the scope of traditional policing.
FBI agents have joined forces with a new unit within the Securities and Exchange Commission that examines hedge funds and other firms that are using algorithm trading strategies.
The SEC’s Quantitative Analysis Unit is focusing on the emergence of high-frequency trading firms and the rise of dark pools. Traders using these methods can manipulate the market by flooding it with quotes, known as quote stuffing, or placing millions of orders that are quickly cancelled, to drive others to trade in ways that benefit their position, a practice known as layering.
Some of these trading strategies have been accused of destabilizing the market and putting retail investors at a disadvantage. Their supporters have said they increase liquidity in securities and reduce volatility.
The FBI has historically investigated cases of market manipulation but people familiar with the matter said the collaboration with the SEC was an attempt to beef up the agency’s expertise and catch up with fast-changing technology-driven trading strategies.
Jim Sinclair, Just what he has been saying for years –
The QE will continue, no matter what!
CIGA Wolfgang Rech
"While Congressional members and economists push their pick for Fed chair, international investor Jim Rogers tells The Daily Ticker: it doesn’t matter who Obama picks because all Fed Chair candidates “are lapdogs for the establishment.”
He expects any new Fed chair will continue current policy, which he says is “insane.”"
Fed Chair Hopefuls Are “Lapdogs for the Establishment”: Jim Rogers By Bernice Napach | Daily Ticker
At last count, more than 350 economists, 38 female House Democrats and about 17 Senators have signed letters to President Obama urging him to nominate Fed Vice Chair Janet Yellen as the next Chairman of the Fed. She emerged as the frontrunner for the job now that Larry Summers, a former economic advisor to the president and Treasury Secretary under President Clinton, has withdrawn his name from consideration.
While Congressional members and economists push their pick for Fed chair, international investor Jim Rogers tells The Daily Ticker: it doesn’t matter who Obama picks because all Fed Chair candidates “are lapdogs for the establishment.” He expects any new Fed chair will continue current policy, which he says is “insane.”
"They should stop all of this, printing $1 trillion every year,” says Rogers, author of “Street Smarts: Adventures on the Road and in the Markets.” He explains: “The world will suffer very badly, very badly when this comes to an end. It’s an artificial sea of liquidity.”
25 Fast Facts About The Federal Reserve – Please Share With Everyone You Know
Michael Snyder Economic Collapse September 16, 2013
As we approach the 100 year anniversary of the creation of the Federal Reserve, it is absolutely imperative that we get the American people to understand that the Fed is at the very heart of our economic problems. It is a system of money that was created by the bankers and that operates for the benefit of the bankers. The American people like to think that we have a “democratic system”, but there is nothing “democratic” about the Federal Reserve. Unelected, unaccountable central planners from a private central bank run our financial system and manage our economy. There is a reason why financial markets respond with a yawn when Barack Obama says something about the economy, but they swing wildly whenever Federal Reserve Chairman Ben Bernanke opens his mouth. The Federal Reserve has far more power over the U.S. economy than anyone else does by a huge margin. The Fed is the biggest Ponzi scheme in the history of the world, and if the American people truly understood how it really works, they would be screaming for it to be abolished immediately. The following are 25 fast facts about the Federal Reserve that everyone should know…
#1 The greatest period of economic growth in U.S. history was when there was no central bank.
#2 The United States never had a persistent, ongoing problem with inflation until the Federal Reserve was created. In the century before the Federal Reserve was created, the average annual rate of inflation was about half a percent. In the century since the Federal Reserve was created, the average annual rate of inflation has been about 3.5 percent, and it would be even higher than that if the inflation numbers were not being so grossly manipulated.
#3 Even using the official numbers, the value of the U.S. dollar has declined by more than 95 percent since the Federal Reserve was created nearly 100 years ago.
#4 The secret November 1910 gathering at Jekyll Island, Georgia during which the plan for the Federal Reserve was hatched was attended by U.S. Senator Nelson W. Aldrich, Assistant Secretary of the Treasury Department A.P. Andrews and a whole host of representatives from the upper crust of the Wall Street banking establishment.
#5 In 1913, Congress was promised that if the Federal Reserve Act was passed that it would eliminate the business cycle.
#6 The following comes directly from the Fed’s official mission statement: “To provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role in banking and the economy has expanded.”
#7 It was not an accident that a permanent income tax was also introduced the same year when the Federal Reserve system was established. The whole idea was to transfer wealth from our pockets to the federal government and from the federal government to the bankers.
#8 Within 20 years of the creation of the Federal Reserve, the U.S. economy was plunged into the Great Depression.
#9 If you can believe it, there have been 10 different economic recessions since 1950. The Federal Reserve created the “dotcom bubble”, the Federal Reserve created the “housing bubble” and now it has created the largest bond bubble in the history of the planet.
#10 According to an official government report, the Federal Reserve made 16.1 trillion dollars in secret loans to the big banks during the last financial crisis. The following is a list of loan recipients that was taken directly from page 131 of the report…
Citigroup - $2.513 trillion Morgan Stanley - $2.041 trillion Merrill Lynch - $1.949 trillion Bank of America - $1.344 trillion Barclays PLC - $868 billion Bear Sterns - $853 billion Goldman Sachs - $814 billion Royal Bank of Scotland - $541 billion JP Morgan Chase - $391 billion Deutsche Bank - $354 billion UBS - $287 billion Credit Suisse - $262 billion Lehman Brothers - $183 billion Bank of Scotland - $181 billion BNP Paribas - $175 billion Wells Fargo - $159 billion Dexia - $159 billion Wachovia - $142 billion Dresdner Bank - $135 billion Societe Generale - $124 billion “All Other Borrowers” - $2.639 trillion
#11 The Federal Reserve also paid those big banks $659.4 million in fees to help “administer” those secret loans.
#12 The Federal Reserve has created approximately 2.75 trillion dollars out of thin air and injected it into the financial system over the past five years. This has allowed the stock market to soar to unprecedented heights, but it has also caused our financial system to become extremely unstable.
#13 We were told that the purpose of quantitative easing is to help “stimulate the economy”, but today the Federal Reserve is actually paying the big banks not to lend out 1.8 trillion dollars in “excess reserves” that they have parked at the Fed.
#14 Quantitative easing overwhelming benefits those that own stocks and other financial investments. In other words, quantitative easing overwhelmingly favors the very wealthy. Even Barack Obama has admitted that 95 percent of the income gains since he has been president have gone to the top one percent of income earners.
#15 The gap between the top one percent and the rest of the country is now the greatest that it has been since the 1920s.
#16 The Federal Reserve has argued vehemently in federal court that it is “not an agency” of the federal government and therefore not subject to the Freedom of Information Act.
#17 The Federal Reserve openly admits that the 12 regional Federal Reserve banks are organized “much like private corporations“.
#18 The regional Federal Reserve banks issue shares of stock to the “member banks” that own them.
#19 The Federal Reserve system greatly favors the biggest banks. Back in 1970, the five largest U.S. banks held 17 percent of all U.S. banking industry assets. Today, the five largest U.S. banks hold 52 percent of all U.S. banking industry assets.
#20 The Federal Reserve is supposed to “regulate” the big banks, but it has done nothing to stop a 441 trillion dollar interest rate derivatives bubble from inflating which could absolutely devastate our entire financial system.
#21 The Federal Reserve was designed to be a perpetual debt machine. The bankers that designed it intended to trap the U.S. government in a perpetual debt spiral from which it could never possibly escape. Since the Federal Reserve was established nearly 100 years ago, the U.S. national debt has gotten more than 5000 times larger.
#22 The U.S. government will spend more than 400 billion dollarsjust on interest on the national debt this year.
#23 If the average rate of interest on U.S. government debt rises to just 6 percent (and it has been much higher than that in the past), we will be paying out more than a trillion dollars a year just in interest on the national debt.
#24 According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress is the one that is supposed to have the authority to “coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures”. So exactly why is the Federal Reserve doing it?
#25 There are plenty of possible alternative financial systems, but at this point all 187 nations that belong to the IMF have a central bank. Are we supposed to believe that this is just some sort of a bizarre coincidence?
This article was posted: Monday, September 16, 2013 at 5:49 am
Montanore thanks, China, Japan and all USA debt etc. which is in fiat$ currency - fed should print up the fiat$ a.s.a.p. and pay them off.
USA at a later day print another currency backed by a Gold Standard so it becomes legal Money - a legal tender - as stated by the org. USA Constitution -
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