Treasury Audits NY Fed's Gold But Only To Evade Leasing, Swapping, Oversubscription Issues

 
– Posted Friday, 3 August 2012 Source: GoldSeek.com

Dear Friend of GATA and Gold:

The Los Angeles Times reported yesterday that the U.S. Treasury Department is “auditing” the gold vaulted at the Federal Reserve Bank of New York, most of which is held in custody for other countries, but only to the extent of confirming the gold content of the bars kept there, and not touching on issues of ownership impairment, like swapping and leasing, the issues raised by GATA and others aggrieved by manipulation of the gold market.

Indeed, the “audit” seems intended to dispel “conspiracy theories” without actually having to disclose anything about the U.S. government’s gold market intervention policy, the issue at the heart of GATA’s freedom-of-information lawsuit against the Fed in U.S. District Court for the District of Columbia, a lawsuit that was decided more or less in GATA’s favor last year and revealed that the Fed has secret gold swap arrangements with foreign banks as well as many other gold-related records that are being kept secret:

http://www.gata.org/node/9917

Responding to the L.A. Times story, Zero Hedge quickly explained why the Treasury’s “audit” of the New York Fed’s gold is a fraud. “What the ‘conspiracy theorists’ allege,” Zero Hedge notes, “is that claims existing in paper format on the physical gold held under Liberty 33 are orders of magnitude greater than the actual physical gold these claims supposedly have recourse to”:

http://www.zerohedge.com/news/feds-gold-being-audited-us-treasury

But the L.A. Times story does quote U.S. Rep. Ron Paul on that point and even mentions the movement in Germany to repatriate that nation’s gold reserves from foreign vaults. And if the Treasury Department has felt compelled to commission exactly the wrong kind of audit to deflect rising concerns about gold issues, that’s progress too.

The L.A. Times story is appended.

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

* * *

What’s in Your Vault? Uncle Sam Audits Its Stash of Gold at the New York Fed

The gold audit is a first for the institution and includes drilling into several hundred ingots. It could put the conspiracy theories to rest.

By Andrew Tangel
Los Angeles Times
Thursday, August 2, 2012

http://www.latimes.com/business/la-fi-gold-bars-20120803,0,3466318.story

NEW YORK — For decades, the U.S. government has stashed gold five stories beneath Manhattan in a vault under the Federal Reserve’s fortress near Wall Street.

Or has it?

Some conspiracy theorists suspect that the billions of dollars’ worth of bullion might have been looted in a dramatic heist, a la the movie “Die Hard With a Vengeance.”

Others claim that the gold has been used in a shadowy government transaction, or swapped with gold-painted bars. It’s even caught the attention of politicians like Rep. Ron Paul and members of Germany’s Parliament.

Now all of us may finally get some answers.

The federal government has quietly been completing an audit of U.S. gold stored at the New York Fed. The effort included drilling small holes in the bars to test their purity.

The Treasury Department has refused to disclose what the audit has revealed so far, saying the results will be announced by year’s end. But as one former top Fed official said recently, the testing may finally prove that “Goldfinger didn’t sneak in at night” and take the gold.

“The calls for audits are saying, ‘We don’t trust the government for the last 200 years,’” said Ted Truman, a former assistant Treasury secretary and Fed official. He called perennial questions about the country’s reserves “the gold bug equivalent of the birther movement.”

The Treasury’s auditing operation, including drilling, is a first for the New York Fed. The department’s inspector general previously audited and tested only gold it keeps under heavy guard at Fort Knox, West Point, and the U.S. Mint in Denver. These three locations hold 95% of the country’s bullion.

In New York, about $21 billion in U.S. gold is locked inside the Fed’s vault. It’s stored alongside bullion from three dozen other countries and organizations such as the International Monetary Fund. All told, about 23% of the world’s official gold reserves are stored in the central bank’s vaults.

The audit, which began in January, took place 80 feet below the Fed’s limestone and sandstone Italian Renaissance building in Manhattan’s financial district. Visitors to the vault make their way through a steel and concrete entrance where a 90-ton door rotates open.

Inside, a massive scale is ringed by 122 blue cages that hold about 530,000 gold bars — 34,021 of which belong to Uncle Sam. The auditing team counted the U.S. stash, selecting more than 350 bars from which to extract samples for assaying.

The process involved about half a dozen employees of the Mint, the Treasury inspector general’s office and the New York Fed. It was monitored by employees of the Government Accountability Office, Congress’ investigative arm.

The bars were first weighed on a small electronic scale, then transferred to a table mounted with a long, thin drill used to burrow into the gold, said a person familiar with the operation who was not authorized to speak publicly.

Workers were careful to collect any stray gold bits, the source said. Based on the market price of about $1,600 per troy ounce, the Treasury removed more than $110,000 worth of gold samples

MORE HERE