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.
About a half dozen Mint, Treasury Inspector General's Office and New York Fed employees took part in the audit. It's being monitored by the Government Accountability Office, the branch of Congress that wields investigative powers.
Other than that, Treasury officials have thus far refused to provide any details about the operation or its findings. They only say that the results will be announced towards the end of the year.
The New York Fed has also refused to comment.
But one anonymous Fed official, apparently speaking in the direction of conspiracy theorists, quipped recently that the audit will show that "Goldfinger didn't sneak in at night" and take off with the gold.
Though the gold kept at Fort Knox, West Point and the US Mint in Denver, Colorado, have all been audited and tested in the past, the remaining 5 per cent – or about $21 billion – of America's gold, held at the New York Fed, has never been exhaustively checked out.
Taking into consideration the gold owned by other nations, the New York Fed's vaults hold about 23% of the world's official gold reserves.
And even if the audit shows that the gold's all there, it's not likely to satisfy many, including Paul.
He claims he's not concerned with whether the gold is real or fake, but with the paperwork that would outline what it's been used for. Many suspect deals that were never made public, like loans to foreign governments.
The US stopped backing dollars with gold in 1971, bringing an end to the Gold Standard. Today, the gold in vaults across the country carries little weight, so to speak.
To that, Paul suggests that Washington simply get rid of it.
"I would just as soon they sell the gold," he's said. "And then we would find out if they really had it.
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I must say, I am exremetly interested to see what they will find when they audit the Fed. I suspect the powers that be will just shuffle gold around to make sure that all the gold in the Fed is real when it is inspected. I just dont buy the idea that the USA has heaps of gold. If they did, they wouldn't keep having to invade other countries and steal their gold (Iraq, Libya) or run scams like the one where they nicked half of the UK gold supply and then told them that they wouldn't give it back, but they would give them the money at the current value. This i where people get the misconception that Brown sold half of the UK's gold at the bottom of the market. The truth is more complicated. In about June 2008, when Blair was still in power, all the London's ATM's stopped working for 2 days. Why? Because a new high speed link was being installed between New York and London. When they switched the computers back on, half of the UK's gold supply had dissapeared. Since it was stored in New York, it was easy to just change the ownership record. When they Uk asked for the gold back, the US refused, but said that they would give them the dollar value of the gold at the current spot price, which as we all know, was incredibly undervalued.
Blair got in very serious trouble for this, and it is why he was fired and replacled with Gordon Brown on the orders of Prince Phillip or the Queen. He knew what a mess he was about to inherit, even by buying as much gold as they could, the UK's physical bullion supply had still been cut in half. Interestingly, two weeks after that, there was an very smallarticle in one of the london dailies saying that the gold from the London Mint had to be removed 'to re-test it for it's purity' allegedly, this was because they had been there for so long, they were worried that the gold may have changed somehow.
Now ofc, anyone who knows the bullion business knows this is bullshit, Gold does not change. The only possible explaination is that either they needed the gold in the mint to cover some transaction or to make it look like they had a full gold reserve, or that they were afraid that Tony Blair had somehow allowed the Americans into the mint to replace or otherwise interfere with the gold.
Of course, the proof for this will never come out. You will just have to take my word for it, although anyone who was in London that year should remember the two days when every ATM in the city ceased working.
I guess the real lesson is, with friends like the Americans, who needs enemies. They dont just rip off their enemies, but rip off their friends as well. Some people may recall that around that time, due to this and a number of other events, a common saying around London was 'Never trust an American.'
Incidentally, Iran, who has just been put on the hook by a US court for 6Billion USD in damages for causing 9/11 (I wont even go into how preposterous that is) meaning that if and when they invade, they will be able to confiscate the Iranian Crown Jewels and their gold reserves. Personally, I can see no other reason for this judgement.
Christopher Carrion.
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