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I remember reading through FED docs in 2006
meg-abear - Mon, Sep 14, 2009 - 08:24 AM
and sending this email to Bill Murphy....
Bill:
I stumbled upon this while searching for something else on the net. It's the Federal Reserve Bank of NY's 2006 financial statement. You guys probably had this figured out long ago, but I always wondered why the US Govt. still valued gold at $42/oz. The REAL beneficiary is the FED. Per the NY FED's financial statement for 2006; they hold over 4,000 million (4 Billion) in "gold certificates" (that are valued at $42/oz!!) which they get from the Treasury under special drawing rights. Wouldn't it be nice if you and I could, in essence, take a loan for (am I doing the math wrong here???) approximately 88 Billion in gold (but hold it on the books at 4 billion)....and do whatever I/we want with it?
EXCERPT:
a. Gold and Special Drawing Rights Certificates The Secretary of the U.S. Treasury is authorized to issue gold and special drawing rights (“SDR”) certificates to the Reserve Banks.
Payment for the gold certificates by the Reserve Banks is made by crediting
equivalent amounts in dollars into the account established for the U.S.
Treasury.
The gold certificates held by the Reserve Banks are required to be backed by the
gold of the U.S. Treasury. The U.S. Treasury may reacquire the gold certificates at
any time and the Reserve Banks must deliver them to the U.S. Treasury.
At such time, the U.S. Treasury's account is charged, and the Reserve Banks'
gold certificate accounts are reduced. The value of gold for purposes of backing the gold
certificates is set by law at $42 2/9 a fine troy ounce. The Board of Governors
allocates the gold certificates among Reserve Banks once a year based on the average
Federal Reserve notes outstanding in each Reserve Bank.
SDR certificates are issued by the International Monetary Fund (“Fund”)
to its members in proportion to each member's quota in the Fund at the time of
issuance. SDR certificates serve as a supplement to international monetary
reserves and may be transferred from one national monetary authority to another. Under
the law providing for United States participation in the SDR system, the
Secretary of the U.S. Treasury is authorized to issue SDR certificates, somewhat like
gold certificates, to the Reserve Banks. When SDR certificates are issued to the Reserve Banks,
equivalent amounts in dollars are credited to the account established
for the U.S. Treasury, and the Reserve Banks' SDR certificate accounts are increased. The
Reserve Banks are required to purchase SDR certificates, at the direction of the
U.S. Treasury, for the purpose of financing SDR acquisitions or for
Financing exchange stabilization operations. At the time SDR transactions occur,
the Board of Governors allocates SDR certificate transactions among Reserve Banks
based upon each Reserve Bank's Federal Reserve notes outstanding at the end of
the pre-ceding year. There were no SDR transactions in 2006 or 2005.
------------------------------------------------------------------------
*Page 12*
FRBNY - 2006 Financial Statement
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I remember reading through FED docs in 2006
meg-abear - Mon, Sep 14, 2009 - 08:24 AM
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