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New York Fed president refuses a question about gold swaps in public

Section: Daily Dispatches

3:20p HKT Tuesday, April 3, 2016

Dear Friend of GATA and Gold:

Last week at a public forum the president of the Federal Reserve Bank of New York, William Dudley, was asked whether the Federal Reserve has engaged in gold swaps with other central banks. He refused to answer.

Yesterday when your secretary/treasurer e-mailed the New York Fed's media relations director, Eric Pajonk, for confirmation of the incident and put the gold swaps question to him directly on GATA's behalf, Pajonk provided the Internet link to a video recording of Dudley's remarks but also refused to respond to the question. Indeed, he refused even to acknowledge it.

... Dispatch continues below ...


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The incident may demonstrate how easy it would be for mainstream financial news organizations to expose the Fed's surreptitious interventions in the gold market and other markets. No great investigative journalism would be necessary. Nothing more needs to be done than to ask the right questions -- questions the Fed cannot answer honestly without betraying the market rigging done by central banks.

The incident took place Thursday, March 31, as Dudley addressed the Virginia Association of Economists meeting at the Virginia Military Institute in Lexington. Dudley's address was titled "The Role of the Federal Reserve -- Lessons from Financial Crises," and the New York Fed published on its Internet site Dudley's prepared text:

In the audience was a longtime GATA supporter, W. Ware Smith Jr. of Roanoke, Virginia, who, when Dudley invited questions at the conclusion of his address, rose to ask about the repatriation of the gold of other countries that is vaulted at the New York Fed. Dudley replied that there would be no trouble about such repatriation.

Smith then asked Dudley whether the Federal Reserve has swapped gold with the governments or central banks of other countries. Dudley replied: "I can't comment on individual customer kind of transactions."

Though Smith, speaking from the audience without a microphone, cannot be heard, Dudley, at the podium, can be, and the exchange takes place at the 53:20 mark in the video of Dudley's presentation posted by the Virginia Military Institute at YouTube here:

But of course Smith had not asked Dudley to comment on "individual customer transactions." Smith had asked Dudley whether the Federal Reserve has engaged in gold swaps -- that is, whether the Federal Reserve is secretly intervening in the gold market or facilitating secret intervention.

Ironically, just a few minutes earlier, in response to another question, Dudley extolled the Federal Reserve's transparency, asserting that the Fed is "already audited" and undergoes "lots of scrutiny in terms of how we conduct our business" -- just not scrutiny for gold business. (This can be heard at the 44:10 mark.)

In 2009, adjudicating GATA's freedom-of-information request to the Federal Reserve seeking information on its gold transactions, Fed Board of Governors member Kevin M. Warsh acknowledged, if a bit inadvertently, that the Fed has secret gold swap arrangements with foreign banks:

But that was nearly seven years ago. How about now?

Asked by a mere citizen of the United States last week, the president of the New York Fed would not say. Asked by GATA yesterday, the spokesman for the New York Fed would not even acknowledge the question.

Would the New York Fed respond with such contempt to a similar inquiry from, say, The Wall Street Journal, New York Times, Reuters, Bloomberg News, or the Financial Times? The possibility of such critical and specific questioning about the Fed's surreptitious intervention in the markets probably does not worry Fed officials in the slightest. At least such questioning has never happened before.

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

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