Published on Gold Anti-Trust Action Committee (http://www.gata.org)

Audit of gold at New York Fed fails to cover leases and swaps

By cpowell
Created 2013-02-18 19:09

Multiple claims to the same metal are far more important than any possible imperfections in particular bars.

* * *

Gold at New York Fed is Intact, Some Purer than Thought, Audit Finds

By Andrew Tangel
Los Angeles Times
Monday, February 18, 2013

http://www.latimes.com/business/money/la-fi-mo-gold-new-york-fed-audit-p... [1]

NEW YORK -- The U.S. government's gold in New York is safe in a vault underneath Manhattan, and some of the precious metal there is purer than previously thought.

That's according to a first-ever audit conducted last year by the Treasury Department of U.S. gold on deposit at Federal Reserve banks in New York and elsewhere.

As part of the audit, the Treasury tested a sample of the government's 34,021 gold bars in the New York Fed's vault five stories below Manhattan's financial district, according to the inspector general's office. Auditors drilled tiny holes into the bars to remove samples that were tested for fineness in a process called assaying.

... Dispatch continues below ...


Opinion Around the World Is Changing
in Favor of Gold -- Find Out Why

When Deutschebank calls gold "good money" and paper "bad money". ...

http://www.gata.org/node/11765 [2]

When the president of the German central bank, the Bundesbank, pays tribute to gold as "a timeless classic". ...

http://www.forbes.com/sites/ralphbenko/2012/09/24/signs-of-the-gold-stan... [3]

When a leading member of the policy committee of the People's Bank of China calls the gold standard "an excellent monetary system". ...

http://www.forbes.com/sites/ralphbenko/2012/10/01/signs-of-the-gold-stan... [4]

When a CNN reporter writes in The China Post that the "gold commission" plank in the 2012 Republican platform will "reverberate around the world". ...

http://www.thegoldstandardnow.org/key-blogs/1563-china-post-the-gop-gold... [5]

When the Subcommittee on Domestic Monetary Policy of the U.S. House of Representatives twice called on economist, historian, and gold standard advocate Lewis E. Lehrman to testify. ...

World opinion is changing in favor of gold.

How can you learn why and what it will mean to you?

Read the newly updated and expanded edition of Lehrman's book, "The True Gold Standard."

Financial journalist James Grant says of "The True Gold Standard": "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman she has finally found him."

To buy a copy of "The True Gold Standard," please visit:

http://www.thegoldstandardnow.com/publications/the-true-gold-standard [6]

In three of the 367 tests, the gold was more pure than Treasury records indicated, according to the Treasury's inspector general. As a result, the government notched up the value of its gold holdings by approximately 27 fine troy ounces -- or about $43,500, based on gold’s market value Monday.

The audit of the Fed gold came after 2012 presidential contender and former U.S. Rep. Ron Paul, R-Texas, questioned the central bank's gold holdings. While he was in Congress, Paul questioned whether the New York Fed had loaned or otherwise encumbered U.S. gold in financial arrangements, and he advanced a bill that would have required a full assay and audit of the country's gold reserves.

The assaying process consumed 10 ounces of gold, and the remaining 69 ounces removed for sampling were returned to the Treasury, according to the inspector general's office.

The U.S. gold at the New York Fed has been placed under so-called Official Joint Seals, attesting to the results of the audit.

"At this point, we do plan to conduct this audit annually," the inspector general's office said in e-mailed responses to questions. "However, since the gold is now under Official Joint Seal, we would not anticipate weighing, counting, and assaying unless the seal shows signs of tampering."

Results of the audit were released in January. The audit also examined internal controls, security, and operations at the New York Fed.

"Our audit disclosed no material weaknesses and no instances of reportable noncompliance with laws and regulations," the Treasury’s audit report said.

The New York Fed holds 99.98 percent of the U.S.-owned gold bars and coins in the custody of the Federal Reserve. The rest of the gold is on display at Fed banks in cities such as Richmond, Kansas City, and San Francisco.

As of Sept. 30, when the market price of gold was $1,776 an ounce, the Fed banks held $23.9 billion in U.S. gold. (Gold has since declined in value, and on Monday the precious metal was hovering around $1,610 an ounce.)

The vast majority of the country’s gold reserves is held elsewhere, in Fort Knox, West Point, and Denver.

* * *

Join GATA here:

California Resource Investment Conference
Saturday-Sunday, February 23-24, 2013
Hyatt Regency Indian Wells Resort and Spa
Palm Desert, California
http://www.cambridgehouse.com/event/california-resource-investment-confe... [7]

* * *

Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:

http://www.goldrush21.com/order.html [8]

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts [9]

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal [10]

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org [11]

To contribute to GATA, please visit:

http://www.gata.org/node/16 [12]


Get the real story about the precious metals
from the Sprott Precious Metals Round Table

Now you don't have to travel to attend a financial conference to hear Sprott Asset Management's precious metals experts -- Eric Sprott, Rick Rule, and John Embry. They'll be holding a round-table discussion via the Internet at 2 p.m. ET Tuesday, February 12, and you can be part of it. Among their topics:

-- Why are precious metals such a compelling investment opportunity?

-- Why are non-G7 central banks buying gold? Do Western central banks have any left?

-- Why are investors buying as much silver as gold in dollar terms? What does this mean for the price of silver?

-- Is the growing supply deficit of platinum and palladium going to push their prices higher?

To register for this Internet conference and participate from the comfort of your own home or office, please visit:

http://w.on24.com/r.htm?e=579230&s=1&k=70B829852A33CD255CC2A43ED63D18D0 [13]