By: Tom Chatham – Author of The American Dream Lost
As one of the financial capitals of the world, New York has some of the worlds’ largest financial companies. Among them is the NY branch of the privately owned Federal Reserve Bank. This bank is actually owned by some of the largest banks in the world. As a center of global finance, it only made sense in the past to store some of the gold from many countries there so trade imbalances could be quickly satisfied by moving gold from one pile to another. The Federal Reserve operates on the confidence of other central banks around the world.
As of 2010 the NY Fed had something on the order of 200,000,000 troy ounces of gold in storage for many different nations. It has become common knowledge that many of the worlds’ banks and institutions have leased out and sold literally tons of gold in the last several years. The gold stocks have been moved around so much the last few years, at the very least on paper, that rightful ownership of much of it is now in question.
Since the Fed is merely storing this gold for other countries, they have the right to withdraw it at any time and repatriate it to local bank vaults, at least in theory. With the U.S Dollar coming under pressure in the last few years and the reserve currency status of the Dollar now in question, many governments are now contemplating the return of their gold to backstop their own currencies if something happens to the dollar.
Recently Germany decided to bring some of their gold home and decided to repatriate about 374 tons from France and 300 tons from the U.S. The Fed is currently holding about 1,500 tons of Germanys’ gold. Since Germany is only asking for 20% of its gold back from the Fed that would seem like a small matter to resolve. For some strange reason, Germany will have to wait 7 years to get that amount out of the Fed. This raises some very troubling questions.
Some people have speculated that much of the gold has been leased or outright sold and very little remains in the vaults. The fact that no one is allowed to audit their gold stocks is also a troubling sign. Let’s just suppose for a moment that the gold has been sold. What would that mean?
Keep in mind that the Federal Reserve is a privately owned bank. It is owned by some of the largest banks in the world. If they sold this gold the parent banks would almost certainly have to know about it and approve the transactions. Also keep in mind that this gold is owned by governments henceforth the citizens in many cases and not the banks themselves. If the banks sold this gold they profited from it immensely, at least until they have to replace it. With the price of gold at near record levels it would be devastating if the banks have sold all of that gold and had to replace it at much higher prices. That presents another problem.
If the Fed had to buy large sums of gold to replace stocks, what would that say to the markets? The bankers have always called gold a barbarous relic and don’t consider it real money. If the Fed suddenly started buying large sums of gold it would signal to everyone that they consider gold more valuable than the money they print. Remember, the Dollar is the world reserve currency so why do you want to own any gold? If they sold the gold, and printed money was just as good, then they could just replace the gold with currency, right?
With the large amount of gold in the vaults, 300 tons should be an easy matter to fix by just buying it back from the current owner with newly printed money and no one would be the wiser. That would be easy unless the gold is not physically in the vaults. If it had been removed and was somewhere else in the world, they would have to go into the world markets to buy it back, thus exposing themselves. Some have speculated that much of this gold has ended up in China, and if so, they probably won’t want to sell it back anytime soon.
So, you are a banker that has sold 1/3 of a trillion dollars in other peoples gold and now they are starting to ask for it. What do you do now? If they accept cash instead you’re ok but they don’t want cash, they want the hard stuff. Buying back all of that gold would be impossible because once people realized you were printing more money to buy it they would refuse to sell at any price. That is if you can even find that much gold to buy.
But why would you need to print more money? What happened to the money you got from the original sale? Gee, maybe you shouldn’t have given everyone all those multi million dollar salaries every year.
So what happens when you tell everyone you don’t have any gold to give them? They won’t come after the U.S government because they have no control over the Fed. They will come after the bankers with a vengeance. So as a banker how do you save your neck without having to give the gold back?
I’m sure everyone has seen the James Bond movie Goldfinger. The arch villain wants to destroy the U.S. supply of gold in order to make his gold worth more. How do you destroy gold? With a radiological bomb of course, making it radioactive for a very long time.
If a “terrorist” group made its way into the NY Fed vaults and exploded a radiological bomb, everything in the vault would be radioactive for a very long time. If the blast was contained in the vault and only irradiated the contents, it would be an easy way to eliminate gold that does not really exist. This would let the bankers off the hook as none of the gold could be removed or even audited. Would someone do something like that for real? What would you be willing to do if you stole 1/3 of a Trillion dollars in gold and wanted to cover it up?
Could a bank stage something like this? Not on its’ own, but with the help of a major government that it basically owns, it would be a simple matter. Would the U.S. government do something like this? Why not? It would get the bankers off the hook and provide the government with a crisis to institute even more measures to lock the country down. We know the government has no shortage of lame plots that it is willing to feed to the gullible public and they have little concern about any casualties.
Is this speculation? Of course. But if the gold is really gone, how will they hide it? I suspect that it is gone and the crisis that is building will reveal it sooner rather than later. Where do I think it is? To allude to an old song, all the gold in New York City, is in a bank in the middle of Switzerland in somebody else’s name.