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New York Fed contradicts its former vice president about gold accounts

Section: Daily Dispatches

2:03p ET Monday, April 14, 2014

Dear Friend of GATA and Gold:

The Federal Reserve Bank of New York has contradicted the assertion of its former vice president that it has provided gold accounts to bullion banks.

The assertion of such accounts was made by H. David Willey, the former New York Fed vice president in charge of foreign central bank accounts and the gold vault at the New York Fed, in a speech given in May 2004 to the American Institute for Economic Reserve in Great Barrington, Massachusetts. See Page 62 here:

Willey said: "The Federal Reserve Bank of New York provides limited facilities for gold transactions. The bank will allow gold accounts only for foreign monetary authorities and for banks that are members of the Federal Reserve System, not for other gold dealers in the U.S. markets."

... Dispatch continues below ...


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This was more of an admission of the New York Fed's involvement with the gold market than seemed ever to have been made officially, so in January your secretary/treasurer asked the New York Fed's public information office about it: Does the New York Fed provide gold accounts to bullion banks, or did the New York Fed ever do so, as its former vice president said in that speech in 2004?

The New York Fed's public information office acknowledged the question but refused to pursue the information sought. So your secretary/treasurer put the question by certified mail to the president of the New York Fed, William Dudley, and sought the assistance of some members of Congress in getting an answer.

That answer arrived today, 2 1/2 months later, in the form of a letter from Timothy J. Fogarty, the New York Fed's senior vice president for central bank and international account services, apparently Willey's successor.

Fogarty wrote:

"The bank presently opens and maintains gold custody accounts only at the request of central banks, governments, and official international organizations, and we have not located any evidence that the bank has historically opened a gold custody account at the rquest of a member bank of the Federal Reserve System. ...

"In connection with Congress' lifting of the ban on private ownership of gold in 1974, the Board of Governors of the Federal Reserve System publicly issued a policy statement on December 9, 1974, which expressly stated that the Federal Reserve banks will not perform services for member banks with respect to gold, including safekeeping. In accordance with that policy statement, the bank has not provided gold custody services to member banks from 1974 to the present."

Fogarty's letter is posted at GATA's Internet site here:

So somebody has gotten this issue very wrong.

In a presentation to the Committee for Monetary Research and Education in New York in May 2003, Willey expressed doubt that the U.S. government was trying to suppress the gold price:

If he's still around, maybe he can explain why his former employer maintains that he didn't know what he was talking about in Great Barrington.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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