Where’s the gold? NY Fed undergoes first-ever audit(!)Submitted by Katniss Everdeen on Sat, 08/04/2012 - 22:24
A massive trove of gold kept under lock and key five stories below Manhattan at the New York Federal Reserve has been undergoing its first audit in history. It could put conspiracy theories - for example, that the gold is a sham - to sleep for good.
According to the official record, the US government keeps billions of dollars in gold stored beneath the New York Fed's Italian Renaissance fortress around the block from Wall Street.
But conspiracy theorists claim that the gold stock may have been stolen years back in a dramatic caper, that it's been used for backdoor deals with foreign governments, or even that it's been removed and replaced with gold-painted metal bars.
And as many know, the stash has caught the attention of some politicians, most notably Texas Representative Ron Paul.
For years, Paul has called for an independent audit of not only the New York Fed, but of the Federal Reserve Bank as a whole.
But the government hasn't been eager to grant his wish.
In 1981, when Paul served on the Gold Commission – a panel formed by Congress to look into expanding gold's role in the US financial system – he argued for full gold audits to be carried out on an annual basis.
He has proposed legislation for an exhaustive review of all the gold kept on US soil, which includes bullion owned by various foreign governments in addition to America's.
"If the gold is there and everything is in order, they should welcome an audit," Paul said, as quoted by The Los Angeles Times.
Now, things seem to be moving in Paul's direction, at least at the New York Fed – which is by leaps and bounds the largest by assets, and most influential of America's 12 reserve banks.
The US government has been quietly carrying out an audit of all the American-owned gold at the New York Fed. The process involves drilling small holes in about ten per cent, or roughly 350, of the bars to make sure they're pure.