[ClearCase_guy]

I don't think it is supposed to work like fractional reserve banking, but it probably does work like fractional reserve banking. The Fed probably has 5% of the gold it's supposed to have. Things go along pretty smoothly -- until too many people start saying, "Give me my stuff".

"Uhhhhhhhhh. We don't actually have your stuff."

[VerySadAmerican]

“No, you don’t understand. The money’s not here. Your money is in Bill’s house. Bill, don’t you remember that shack you lived in? And Jim, your money is in Jack’s house.” paraphrased George Bailey from Bedford Falls.

[dennisw]

The Fed is acting exactly like the gold bankers of old.... Fed is doing fractional reserve gold banking which the German situation had brought to light. The Feds gold has been lent out, leased out etc etc

For the Fed to send Germany’s gold back the Fed has to buy physical gold on the open market. It’s own gold bars are all leased out