After WWII when there were
fears of an invasion from the Soviet Union, Germany—which was
facing hundreds of thousands of Soviet troops just across its
border—stored much of its gold in the U.S., London, and France. In
2012 the German federal audit office told legislators that the
nation's gold in foreign storage had never been audited and called
for this be corrected. In previous years, dating at least as far
back as 2007, the German government requested return of at least part
of its gold stored at the U.S. Federal Reserve Bank in New York but
without success. The Fed refused to allow German representatives
even to see their gold, offering instead a variety of excuses,
including “security” and “no room for visitors.”
Eventually,
visiting German officials were shown five or six gold bars and told
these were “representative for Germany's holding.”
But the gold bars were not numbered and allocated, so they could be
shown to any number of banks as “their” gold. For years the Fed
website stated “All bars brought into the vault for deposit are
carefully weighed, and the refiner and fineness (purity) markings on
the bars are inspected to ensure they agree with the depositor
instructions and recorded in the New York Fed’s records. This
step is vital because the New York Fed returns the exact bars
deposited by the account holder upon withdrawal—gold deposits are
not considered fungible.” (emphasis
added). That message was withdrawn in 2014 and replaced with “page
unavailable.”
In
October 2012, Germany said it would repatriate 300 tons of its gold
from the Fed. Three months later, in January 2013, it was announced
that the U.S. and Germany agreed the U.S. would return 300 tonnes of
gold to Germany in a series of shipments that would take until 2020
to complete. The U.S. would continue to store the remaining 1,236
tonnes of Germany's gold.
All
this certainly gives the appearance the New York Fed did not actually
have the gold. If the bank had it, why not simply give it to Germany
instead of stalling and offering excuses? It was, after all, their
gold. And why would it take 7 years to return 300 tons? It could be
done in a week if necessary; certainly several weeks or even months
would be more than adequate—but 7 years? Germany had previously
repatriated 940 tons of its gold from the Bank of England without
undue delay.
If
the New York Fed bank did not have gold for Germany, it would have to
buy it to repay Germany, and a large purchase would push up the
price, which the bank certainly did not want. Or the bank may have
the gold, but it may have been leased, hypothecated or encumbered in
some manner so that it could not be transferred to Germany. These
possibilities, too, would require additional time to unwind.
It
is significant that back in 1999 a study by the International
Monetary Fund found that central banks of 80 nations were lending out
their gold reserves. The loans amounted to 15 percent of their gold.
The central banks were operating as fractional reserve banks, not
custodians.
In
1998 Fed chairman Alan Greenspan testified at a House Banking
Committee, “Central banks stand ready to lease gold in increasing
quantities, should the price of gold rise.”
In
other words, if gold prices go up, the Fed would make sure they come
back down. Why? Apparently because of fear a rising gold price would
weaken the dollar's exchange rate and the Fed's control of interest
rates, but it would also discourage people from buying gold as an
investment, which would also be negative for the dollar. In 2013,
gold prices were much higher than in 1998, giving the Fed a stronger
reason for knocking down the gold price. And Germany's request to
repatriate its gold would be an even stronger reason if the Fed did
not actually have all the gold it was supposed to have.
Most
Americans would be incredulous that the Fed could be involved in
manipulations that left it unable to honor its custodial agreement
with Germany. But the European Central Bank website states,
regarding statistical treatment of Eurosystem's International
Reserves: “reversible
transactions in gold do not have any effect on the level of monetary
gold regardless of the type of transaction
(i.e. gold swaps, repos, deposits or loans), in line with the
recommendations contained in the IMF guidelines.” (emphasis
theirs).
Thus central banks are permitted to carry physical gold on their
balance sheet even if they've swapped it or lent it out entirely
Perhaps
as a reaction to criticism of its own lack of transparency and
cooperation on the German repatriation, the Fed itself in September
2012 asked the Office of the Inspector General of the Treasury to
audit the gold. This was to be an audit of gold in the Federal
Reserve System and did not include Fort Knox.
The
audit took place on September 30, 2012, and the Treasury Report on it
is dated January 4, 2013. The report
states
99.98% of all Fed gold is held at the New York Federal Reserve Bank.
The remaining 0.02% is in coins at other Fed banks around the
country. The audit found the New York Fed had 13,378,981.032 troy
ounces of gold bars and 73,829.500 troy ounces of gold coins.
Converting those troy ounces to metric tons results in a combined
total of 419 metric tons. That's all. Yet Germany was supposed to
have 1,500 tons of its gold here. And at least 60 other sovereign
nations believe their gold is being stored by the Fed there, too.
Further
doubt about whether the Fed actually has German gold is raised by the
Fed's performance since it agreed in mid-January 2013 to repatriate
300 tons to Germany in seven years. In all of 2013 it sent Germany a
paltry 5 tons. In 2011 when Venezuela decided to repatriate its gold
from foreign banks, its 160 tons of gold were brought home in two
months and five days, ending in January 2012.
Dr.
Long Xinming writes that after WWII
“The
FED came to all countries in Asia, Latin America and Africa and told
them their gold holdings might not be safe because of the war, and
they should permit the FED to take all of it to the US for
safekeeping. Many countries obliged, receiving FED gold certificates
in exchange, but when they later tried to cash in those certificates
and reclaim their gold, they were told the certificates were fake,
that they contained spelling and other mistakes which the FED would
never have made, and that the serial numbers were wrong. And the FED
still has all that gold.…
“Apparently
a few people have been successful in presenting their certificates to
the FED, with documentation that was irrefutable, but even in those
cases the owners were forced to settle for only 1% or 2% of the
actual value. And most other people or nations who attempt to redeem
these certificates are arrested by the FBI for fraud – at the
request of the FED.
“Late
last year, a Canadian businessman had some of these certificates and
tried to use them as collateral for a loan, and the FED had him
arrested, extradited to the US, and charged him with fraud. Insiders
claim this is common practice to frighten every one away...
“For many years after the war, the FED denied these
transactions and even denied the existence of these certificates. But
a crashed US military plane was found in the Philippine jungle with
heavy wooden boxes full of metal containers, all with FED markings,
and all containing hundreds of billions of dollars of these same
certificates. That was when the entire story finally became public,
but the Western media have never cared to report on it.
“I
have many photos of the content of that aircraft, of the boxes and
the cans and the certificates, if anybody cares to see.”
The
Fed says it is storing gold for more than 60 central banks,
governments, and a few institutions such as the International
Monetary Fund in 122 separate accounts at the New York Federal
Reserve Bank. How many of these would have to request repatriation
or audits of their accounts before an avalanche of similar requests
will follow? If there is not enough gold to cover all accounts, no
central bank will want to be one of the last to claim its share.
There will be a run on the bank such as the world has never seen.
Hyperlinks
are not available for sources in the above, but sources are
referenced in the print version. Be sure to get the second
edition
of The
Impending Monetary Revolution, the Dollar and Gold
because it contains six new chapters not found in the earlier
edition. Amazon, Barnes & Noble and other sellers offer only the
first edition. The second edition is available only from American
Liberty Publishers. (amlibpub.com)
