Posted on 10/13/2010 6:57:02 AM PDT by WebFocus
The Federal Reserve Bank of New York, a neo-Florentine fortress of sandstone and limestone in Lower Manhattan, covers a city block. A battery of structural and technological defenses makes it perhaps the world’s most secure bank; it can be sealed off in less than 25 seconds. On a recent visit to its subterranean vault, beneath 80 feet of bedrock, I walked along a narrow passageway through a 90-ton steel cylinder that can create an airtight and watertight seal. On the other side was a vault with neatly stacked walls of 27-pound yellow bricks—one of the largest collections of gold in the world.
Standing next to this mass of concentrated wealth all but paralyzes one’s sense of financial proportion. But after the initial awe of this King Midas moment, a question nagged: what’s the point?
Nearly 40 years after President Nixon suspended the dollar’s link to gold, the United States still sits on far more of it than any other nation: official holdings total 8,965 tons, or roughly 260 million troy ounces, according to the Treasury Department. (Most of it is stored in Fort Knox, Kentucky; the New York Fed holds about 11 million troy ounces, along with gold reserves from other countries and international organizations.) Gold is easily convertible into cash, and America’s mountain of metal is now worth more than ever: assuming the recent market price of $1,200 a troy ounce, the value of the federal stock exceeds $300 billion. Yet in an age of soaring deficits, our gold reserves earn no income, incur huge storage and security costs, and serve no practical purpose, short of a politically unthinkable renaissance of gold-based money (see “The Tea Party’s Brain,” page 98). Why?
Getting straight answers (or any answers at all) from Washington about our hoard of gold is weirdly difficult.
(Excerpt) Read more at theatlantic.com ...
That his stash. He givin it to us.
Either pay off the national debt or link it to the dollar. But please, don’t sit on it.
Countdown to conspiracists posting that Fort Knox is empty: 3, 2, 1 . . .
It is an interesting question. Either gold is a barbarous relic, in which case selling it at an all-time high nominal price would look like a pretty good idea, or else it’s the one rock solid monetary asset, in which case, we never should have abandoned that use of it as completely as we did. Nobody in charge is completely sure which it is, so it sits there.
=)
In a crunch, it’s worth more than 1’s and 0’s.
I would posit that millenials of history conclude that it’s the latter.
Because its fake ?
The Fed is a conspiracy.
And exactly when was a complete audit done of our gold holdings?
$300 billion won’t make a dent in the national debt. Our gold reserves are a strategic asset. They are doing exactly what they are supposed to be doing. Sitting in a vault.
“barbarous relic”??? why barbarous?
with a debt of well over ten times this amount, what’s the big deal? if we liquidated the entire thing, where’d we be?
If the Fed did want to pay off the national debt, they would need to sell off Federal lands - preferably to future taxpayers. 300 billion in gold wouldn’t make much of a dent by itself.
it’s a quotation from John Maynard Keynes. Note that I did not choose a side, just pointing out why the gold reserve sits there, neither being sold for profit, nor added to as monetary backing for currency.
I agree. The fed own WAY too much land. Especially in Alaska. They’ve overstepped their bounds to the Nth degree.
Thanks
That gold is an insurance policy.
If or when the dollar is stripped of its value internationally, which can happen for a number of reasons, the US government has no other means of credit for *essential* strategic goods.
America’s biggest exportable assets are its military, its agribusiness (seasonally), its oil, coal and natural gas reserves (which would take a long time to get into full production), and far down the list, its rare earth elements in California and Texas.
Ways the dollar could collapse are first, the not unthinkable default on the national debt; the international community creating a non-dollar basket of currencies, then declaring monetary war against the dollar, likely to force America to adopt that new currency; and likely several other ways.
So that gold is a strategic asset. Depleting it would be as foolish as some Democrat president and congress deciding to eliminate all of our nuclear weapons, because having them “might provoke our enemies.”
Because in spite of all the BS that's thrown around almost every single Government on the planet demands that a store of gold be in place to back up transactions when a nations currency goes to crap.
I recognized the quote. Keynes was a fool, but IIRC he said it about the gold standard, not about gold itself.
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