Fed Reserve Bank has no GoldSubmitted by Mark Twain on Fri, 06/03/2011 - 19:45
Federal Reserve Bank has no Gold. Dr Ron Paul receives blatant testimony from Fed lawyers. We have no gold. We gave it to the US Treasury in 1934.
Your financial statements show it as an asset? Yes, but. It is a certificate... It is a receipt for the gold we... [don't have]. - Congressional testimony, June, 2011.
Gold Anti-Trust Action Committee.
Questioned by Paul, Fed denies any interest in gold
Submitted by cpowell on Fri, 2011-06-03 22:27.
True to his word to when he met a GATA delegation in Washington a week ago, U.S. Rep. Ron Paul, R-Texas, chairman of the House Subcommittee on Domestic Monetary Policy, has begun asking the Federal Reserve questions about gold swaps, such as those admitted to GATA by Fed Governor Kevin M. Warsh in 2009:
At a subcommittee hearing Wednesday, Paul asked Fed General Counsel Scott G. Alvarez flat-out whether the Fed had engaged in any gold swaps. Alvarez denied the Fed's involvement in gold swaps but did so in a deceptive way, by pushing responsibility for the U.S. gold reserve to the U.S. Treasury Department.
"The Federal Reserve does not own any gold at all," Alvarez said, adding that all the Fed's gold was transferred to the Treasury Department in 1934.
While Paul noted that the Fed's books list as an asset the certificates issued by the Treasury against the U.S. gold reserve, Alvarez insisted, "We have no interest in the gold owned by the Treasury." Alvarez went on to suggest that the gold certificates are just antique accounting gimmicks. (Maybe the Fed now will offer the certificates for sale to the public as souvenirs.) ...
Of course the Fed's supposed indifference to gold as described by Alvarez contradicts much evidence GATA has collected over the years, including, just for starters:
- Fed Chairman Alan Greenspan's famous testimony to Congress in 1998 that "central banks stand ready to lease gold in increasing quantities should the price rise." http://www.federalreserve.gov/boarddocs/testimony/1998/19980...
- Fed Chairman Arthur Burns' assurance to President Ford in 1975 that the Fed had a secret agreement in which Germany's central bank had promised not to buy gold at a price above the official U.S. price of $42.22 per ounce. http://www.gata.org/files/FedArthurBurnsOnGold-6-03-1975.pdf
- Fed Governor Lyle Gramley's comment to Business News Network in Canada in December 2008 that, far from some antique accounting gimmickry, those gold certificates are actually hugely undervalued assets for the Fed and their repricing at market levels would much improve the Fed's balance sheet. (See http://www.gata.org/node/6989.)
Wednesday's hearing filmed by C-SPAN. Gold begins at 56 minutes:
Some excellent commentary on the exchange has been posted at GoldNews.com in Toronto here: