We’re all familiar with Congressman Ron Paul’s frequent calls for a full audit of the US central bank, the Federal Reserve System. Well, here’s one that may have flown beneath your radar set, and like so many stories of this sort, it has deep, and murky, and almost endless possibilities, and unfortunately, space here only permits me to go into a few of them. But first, the article itself. It’s quite lengthy, but, as a close reading will soon disclose, quite important(and I’ve written about this before, but repeat the story here, with some new information):
The Fed’s Gold Is Being Audited… By The US Treasury
Nevermind the implications of the Federal Reserve having its own police force (kind of implies jurisdiction, though, doesn’t it?). What we really need to focus on (for the moment anyway) are these at these very beginning:
“And not only the gold belonging to the US: it is well known that the bulk of Europe’s sovereign gold is also contained deep under downtown Manhattan: we wish them all the best when they attempt to repatriate the physical when they need it, such as the day after the EUR finally collapses.
“No - what the “conspiracy theorists” allege is that claims existing in paper format on the physical gold held under Liberty 33 are orders of magnitude greater than the actual physical gold these claims supposedly have recourse to. Indeed, this too was a conspiracy theory until the failure of MF Global proved it to be a conspiracy “fact” and the entire asset-liability rehypothecation daisy-chain threatened to begin unwinding in November of 2011, at which point forced delivery of hard assets would expose the entire facade of the modern financial system to be a hollow sham.
“So unless the Treasury will also conduct a full “audit” of every single paper trail and every physical bar is mapped to all of its existing obligors, then the entire operation is absolutely meaningless and simply a waste of taxpayer money. Because the physical gold may well be there (and furthermore it is the gold at Ft. Knox that was questionable; never the gold held by the Fed, but who cares about details). The problem is if the paper claims on this gold are far greater than the actual deliverable physical gold for that moment when the latest attempt to kick the can down the rehypothecated road finally fails.” (All emphases in the original)
Now I hope you caught what is really being said between the lines here: foreign gold reserves in deposit with the Federal Reserve Bank of New York were “rehypothecated” several times over such that there are not just one set of claims against this gold, but several. If we want to draw a crude analogy of what is going on here, it would be like keeping not one set of books, using “x” amount of gold as a reserve of backing for a whole set of investments, but several sets of books, each independent and separate from each other, with each set of books representing a whole series of investments made on the same basis of gold. Now, for gold bugs who view gold as a safe and reliable way of managing the output of money by banks, this is bad news, for a gold standard only works when the bankers themselves are honest.
So….with that in mind, fast forward to a little later in the article where we read this:
Read much more here:
http://gizadeathstar.com/2012/08/the-new-york-federal-reserve-and-two-germans/
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