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Would you believe me if I told you that BOTH the Fed and Treasury...
Rasputin - Sun, Sep 13, 2009 - 05:07 PM
...claim to own the same U.S. stockpile of gold, in what is apparently a case of "double counting"?
Well, it's true, unless there is something I'm missing.
And I believe I can prove this allegation, NOT by citing some "Doom and Gloom", "End of the World", conspiracy-minded Website, but rather by providing links to the Fed and Treasury's own published reports on the matter.
Let's start with the Fed. Perusing the Federal Reserve's "H.4.1" report found here:
http://www.federalreserve.gov/releases/h41/Current/
...under the section entitled:
"1. Factors Affecting Reserve Balances of Depository Institutions"
...we find the following entry:
"Gold Stock: $11,041"
(Ras): That $11,041 number (in billions) represents the roughly 260 million ounces of U.S. gold, valued at the insanely-low $42.22 per ounce price that the U.S. government decided to slap on their stash of the useless yellow rocks.
So, 260 million ounces, times $42.22 per ounce, yields roughly 11 billion fiatscos of gold.
On the Federal Reserve's balance sheet.
As an asset.
Period.
With no apparent off-setting liability.
Which is as it should be since we all know that "Gold is no one else's liability.", right?
Now, let's turn to the U.S. Treasury, who ALSO claims the exact, same, gold on THEIR balance sheet!!!
Here are the relevant links:
The overall "Financial Report" site can be found here:
http://www.fms.treas.gov/fr/index.html
...and the specific financial statement of the U.S. Treasury can be found here:
http://www.fms.treas.gov/fr/08frusg/08stmt.pd
...and under the heading:
"Cash and Other Monetary Assets"
...we find the total amount of said "Cash and Other Monetary Assets" to be:
$424 billion, with an asterisk stating: "See Note 2"
Of course, Uncle Sugar doesn't make it easy to discern just what those "Other Monetary Assets" are in "Note 2", hiding them in a separate document of "Notes". But persistent little Rasputins have the patience to burrow down into the bowels of the beast to find the answer.
And here is the link to that separate "Notes" document, which explains what's what:
http://www.fms.treas.gov/fr/08frusg/08notes.pdf
Scrolling down to page seven of the PDF (which corresponds to page 49 for whatever strange reason), we see all the descriptions of what constitutes "Cash" and what comprises "Other Instruments".
And lo-and-behold if the U.S. Treasury isn't counting THE EXACT, SAME 262 MILLION OUNCES OF GOLD AS THEIRS!!!
Here is the actual passage, ripped right from the document (from page eight of the PDF):
"Gold is valued at the statutory price of $42.2222 per fine troy ounce. The number of fine troy ounces was 261,498,900 as of September 30, 2008,...Gold totaling $11.0 billion as of September 30, 2008,...was pledged as collateral for gold certificates issued and authorized to the FRBs by the Secretary of the Treasury. Treasury may redeem the gold certificates at any time. The liabilities for the gold certificates issued are included in Note 16—Other Liabilities."
(Ras): Think about this, folks. The Fed clearly states in THEIR balance sheet that they hold $11 billion in gold.
However, so too does the U.S. Treasury, who mentions that the Treasury used the gold to "collateralize" "Gold Certificates", which Treasury issued to the Fed (with an offsetting "liability" for the gold certificates).
So, the Fed is holding "Gold Certificates", but doesn't state as such on their balance sheet. They just state "Gold Stock". Furthermore, there is no specific line item that I can find in the Fed's balance sheet that says something to the effect:
"Um, this isn't really our gold, we're just holding it for the Treasury in the form of "Gold Certificates" and, besides, there is an offsetting liability on our books for those certificates."
And the U.S. Treasury states that the $11 billion in gold is part of their "Cash and Other Monetary Instruments".
So, how can BOTH the Fed AND the Treasury claim to be holding the same gold?
Furthermore, what happens to the Fed's balance sheet if Uncle Sugar really DOES redeem their "Gold Certificates"? Again, there is no line item on the Fed's balance sheet that states:
"Offsetting Liability of Gold Certificates" for Gold Held as an Asset"
(Ras Conclusion): In what is apparently the most egregious case of double-counting in the history of the U.S., we now have both the Federal Reserve and U.S. Treasury claiming to hold the same gold.
Furthermore, the stash of buggy whips is only valued at $42.22 per ounce, when in fact the spot price today is TWENTY-THREE TIMES that number!!!
And don't even get me started on whether the gold is really in Fort Knox, that's a conspiracy for another day.
The bottom line: Who's gold is it? Why are they apparently double-counting it?
Furthermore, for what are these "Gold Certificates" used?
Inquiring Ras's wanna know. If anyone has any insight into this matter, please share it.
[ Post Last Edited By Rasputin on Sun, Sep 13, 2009 - 05:12 PM ]
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Would you believe me if I told you that BOTH the Fed and Treasury...
Rasputin - Sun, Sep 13, 2009 - 05:07 PM
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