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The Fed's Gold Is Being Audited... By The US Treasury

Tyler Durden's picture




 

When we started reading the LA Times article reporting that "the federal government has quietly been completing an audit of U.S. gold stored at the New York Fed" we couldn't help but wonder when the gotcha moment would appear. It was about 15 paragraphs in that we stumbled upon what we were waiting for: "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." In other words the Fed's gold is being audited... by the Treasury. Now our history may be a little rusty, but as far as we can remember, the last time the Fed was actually independent of the Treasury then-president Harry Truman fired not one but two Fed Chairmen including both Thomas McCabe as well as the man after whom the Fed's current residence is named: Marriner Eccles, culminating with the Fed-Treasury "Accord" of March 3, 1951 which effectively fused the two entities into one - a quasi independent branch of the US government, which would do the bidding of its "political", who in turn has always been merely a proxy for wherever the money came from (historically, and primarily, from Wall Street), which can pretend it is a "private bank" yet which is entirely subjugated to the crony interests funding US politicians (more on that below). But in a nutshell, the irony of the Treasury auditing the fed is like asking Libor Trade A to confirm that Libor Trader B was not only "fixing" the Libor rate correctly and accurately, but that there is no champagne involved for anyone who could misrepresent it the best within the cabal of manipulation in which the Nash Equilibrium was for everyone to commit fraud.

Far more importantly, for all those financial novices who fail to grasp the simplest relationship between assets and liabilities, the allegation expounded by the "conspiracy theorists", as the LA Times calls them, has never been that the gold at the NY Fed is not there. It is by all means there: after all what safer place to keep it than 80 feet below the Federal Reserve itself, the same Fed which has exclusive access to the 1000+ strong Federeal Reserve Police whose "primary duty is to provide force protection to Federal Reserve facilities. Secondary responsibilities, depending on the particular location, may include liaison work with other law enforcement agencies and/or investigative work related to administrative matters."

And not only the gold belonging to the US: it is well known that the bulk of Europe's sovereign gold is also contained deep under downtown Manhattan: we wish them all the best when they attempt to repatriate the physical when they need it, such as the day after the EUR finally collapses.

No - what the "conspiracy theorists" allege 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. Indeed, this too was a conspiracy theory until the failure of MF Global proved it to be a conspiracy "fact" and the entire asset-liability rehypothecation daisy-chain threatened to begin unwinding in November of 2011, at which point forced delivery of hard assets would expose the entire facade of the modern financial system to be a hollow sham.

So unless the Treasury will also conduct a full "audit" of every single paper trail and every physical bar is mapped to all of its existing obligors, then the entire operation is absolutely meaningless and simply a waste of taxpayer money. Because the physical gold may well be there (and furthermore it is the gold at Ft. Knox that was questionable; never the gold held by the Fed, but who cares about details). The problem is if the paper claims on this gold are far greater than the actual deliverable physical gold for that moment when the latest attempt to kick the can down the rehypothecated road finally fails.

Of course, none of the this was addressed in the simplistic LA Times narrative whose sole purposes is to "frame" the issue for those uninformed and on the fence that, look officer, America is proactively doing something to address all those tinfoil hat nut job gold hoarders' allegations that the Fed actually is not in possession of its gold.

Here is what was addressed:

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 Ft. 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.

Of course, what attempt at framing would be complete with an actual quite vivid description of the frame.

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.

 

A Mint spokesman said about 1 to 1.5 grams of each sample is destroyed in the assaying process, with the remaining granules returned to the government.

Gasp: will someone think of the sacrifices. Oh wait, that is precisely what one is supposed to think of. And none of what actually matters.

At this point, the Times piece almost grasps what the real issue is, once again courtesy of Ron Paul:

"If the gold is there and everything is in order, they should welcome an audit," Paul said in an interview.

He said he doesn't suspect that anyone has replaced the gold bars with fakes. He's more interested in examining paperwork that would show whether the gold has been used in any transactions that were never disclosed to the public, such as loans to other governments.

 

He is not alone. In Germany, there have been calls by some politicians to "repatriate" the country's foreign gold reserves and return to a gold standard as the euro common currency faces an uncertain future.

 

Philipp Missfelder, a prominent German legislator in the country's ruling Christian Democratic Union party, visited the New York Fed in February seeking to inspect his country's gold.

 

Missfelder was not given access to Germany's gold bars, though it's unclear why, according to German magazine Der Spiegel. He declined to comment.

The LA Times' conclusion redirects however to more important things. Such as the Fed's current role of preserving "ze price stabeeleetee."

These days the New York Fed focuses on more pressing roles: implementing the country's monetary policy by expanding or tightening the money supply. It played a central role in propping up the financial system in 2008.

And so forth. The whole piece can be found here in its entirety.

One thing which will not be found after the jump, however, is this rather extensive explanation of a topic we touched upon: in essence how under the guise of the Fed "gaining its independence" in 1951, the Fed lost all of it.

Below we repost our article from April in which we explained every nuance of the tortured relationship between the Fed, the Treasury, and the US presidency, which finally hits a screeching crescendo in 1951... and afterwards was silent.

From Zero Hedge

Who Is Lying: The Federal Reserve Or... The Federal Reserve? And Why Stalin "Lost"

When one thinks of the early 1950's, things that often come to mind are fries and milkshake, muscle cars, Little Richard, and greased hair. Things that rarely come to mind are that the US and China were openly at war over a little piece of land called Korea, that the Treasury market did not exist, that short and long end rates were "fixed" by the Fed at 0.125% and 2.5% respectively, even as inflation was at the highest it has ever been in the post war period at over 20%. What absolutely never comes to mind, is that on March 3, 1951, the world as we know it changed forever, after a little noted event known as the Fed-Treasury Accord of March 3, 1951 took place, and mutated the role of the Federal Reserve, which set off on a path that would ultimately lead to the disastrous economic state the world finds itself in today.

Oh and another thing that never comes to mind, is that while the current iteration of the Fed, various recent voodoo economic theories, and assorted blogs, all claim that excess bank reserves are never an inflationary threat, it is precisely two Federal Reserve chairmen's heretic claims that reserves will light an inflationary conflagration, that forced then president Truman to eliminate not one but two Fed Chairmen, and nearly result in the "independent" Federal Reserve being subsumed by the Treasury to do its monetization and market manipulation/intervention bidding. Which then begs the question: who is telling the truth about the linkage of reserve accumulation to inflation - the Fed of 1951, or every other Fed since, now firmly under the control of the Treasury-banker syndicate. Because they can not both be right.

Why is March 3, 1951 such an important date? Because, more than anything, the confluence of events that led to the "Accord" signed on this day have extensive parallels to our current situation, as the attached paper by the Federal Reserve of Richmond shows in exquisite detail, yet 100% in reverse.

In a nutshell what happened in the late 1940s and early 1950s was that in the aftermath of WWII, and the outbreak of the Korean war, America found itself in a very odd situation... one never really encountered until today. The country had soaring inflation - as in real inflation, not just core inflation measured by hedonic adjustments and excluding all those thing that actually do go up in price. More importantly, it had the 1950's version of ZIRP - only then it was called a peg, in this case of 0.375%, and subsequently 0.125% on short end Treasurys, and 2.5% on long-dated paper. In other words, the monetary situation in 1951 was one where both the short and long end of the curve were artificially boosted (think ZIRP and Twist), just so holders of Treasury paper (at that time only insurance companies as banks were not allowed to invest in TSYs) did not experience losses and get further "demoralized" in addition to the war that Truman was currently waging.

In fact, the following quote from none other than Truman is as idiotic, yet as valid today, as it was 61 years ago:

[T]he Federal Reserve Board should make it perfectly plain. . . to the New York Bankers that the peg is stabilized....I hope the Board will...not allow the bottom to drop from under our securities. If that happens that is exactly what Mr. Stalin wants. (FOMC Minutes, 1/31/51, p. 9)

And this:

The FOMC met with President Truman late in the afternoon of Wednes- day, January 31.17    Truman began by stating that “the present emergency is  greatest this country has ever faced, including the two World Wars and all the preceding wars.. . . [W]e must combat Communist influence on many fronts.. . . [I]f the people lose confidence in government securities all we hope to gain from our military mobilization, and war if need be, might be jeopardized.”

This is arguably the earliest recorded iteration in modern history of a "the world will come to an end unless you don't do what I tell you" type of threat uttered by a member of the administration (ahem Hank Paulson) to a governing body. We will skip commenting on the supreme irony that according to Truman, Stalin would win if the US did not engage in the same central planning that ultimately brought the Soviet empire down. 

Yet what is so very different about this date in history, is that while it was the Treasury pushing tooth and nail for endless bond pegging by the Fed (apparently nobody had thought of QE back then yet, because it would have been all the rage), the body warning about the potential threat of runaway inflation from a surge in reserves, as well as the dangers associated with central planning was... The Federal Reserve.

Huh !!??

The same Fed that can not withhold its exuberance in encouraging ZIRP, Twist, LSAP, selling of Treasury Puts, and every other form of market intervention known to man, warning the president these very same actions would lead to ruin? And not only that but Truman being forced to get rid of not just Fed veteran Marriner Eccles (after whom the building in which centrally planned schemes are hatched every single day in yet another supreme irony), but also his successor Thomas McCabe who also refused to follow the precepts of central planning... who in turn was replaced by a Treasury muppet, or someone who will gladly monetize US debt whenever needed, at which point the scene for the final outcome was set.

That is impossible you say. Oh, not only is it impossible but it gets much better.

Because not only did the two veteran Fed chairmen warn against the state's incursion into central planning, but they explicitly said something which the Fed, or at least its modern versions, have rejected over and over, especially during congressional committees: that a build of bank reserves is the surest way to spark hyperinflation.

But....but....but.... this is what fringe tin-foil hat blogs allege.... not Fed chairmen who between them have over 20 years of tenure.

Well, here are the facts:

“We have marched up the hill several times and then marched down again. This time I think we should act on the basis of our unwillingness to continue to supply reserves to the market by supporting the existing rate structure and should advise the Treasury that this is what we intend to do—not seek instructions” (FOMC Minutes, 8/18/50, p. 137).

 

[Fed member] Sproul would state the idea that a central bank controls inflation through the monetary control made possible by allowing market determination of the interest rate: "[T]he Committee did not in its operations drive securities to any price or yield....[M]arket forces had been the determining factor, and that only in resisting the creation of reserves had the committee been a party to an increase in interest rates. That...was the result of market forces, and not the action of the Committee. (FOMC Minutes, 3/1/51, pp. 125–26)"

In response to Truman's ceaseless demands for pegging interest rates even as inflation was spiking over 20%, NY Fed president Sproul said that...

...this “would make the Federal Reserve System a bureau of the Treasury and, in light of the responsibilities placed in the System by the Congress, would be both impossible and improper” (FOMC Minutes, 1/31/51, p. 23).

In other words, pegging (i.e., ZIRP, Twist, LSAP)... is "impossible and improper"... is unconstitutional another word for it?

In retrospect perhaps we were a little too rought on Mr. Martin, who despite being a Treasury puppet, had these words to say:

In his speech accepting an appointment to the Board of Governors, Martin (1951, p. 377) said:

 

"Unless inflation is controlled, it could prove to be an even more serious threat to the vitality of our country than the more spectacular aggressions of enemies outside our borders. I pledge myself to support all reasonable measures to preserve the purchasing power of the dollar."

There are those who claim the Fed has become the bankers' puppet. It was not always so. In fact, the bankers loathed the Fed... Until the "Accord"

The banking community contributed to the Fed’s isolation by refusing to support its position. On February 2, the Board had met with the Federal Advisory Council, which represents the views of large banks. At that meeting, Eccles accused bankers of a lack of “courage and realistic leadership” (Board Minutes, 2/20/51, p. 389).

 

The Executive Committee refused to withdraw the FOMC’s letter to the President. Furthermore, it wrote a defiant letter to Senator O’Mahoney. The initial substantive paragraph began with the famous quote from John Maynard Keynes: “[T]hat the best way to destroy the Capitalist System was to debauch the currency” (FOMC Minutes, 2/14/51, p. 87).

It just gets better, as Marriner Eccles puts it into overdrive:

"We favor the lowest rate of interest on government securities that will cause true investors to buy and hold these securities. Today’s inflation. ... is due to mounting civilian expenditures largely financed directly or indirectly by sale of Government securities to the Federal Reserve.. . . The inevitable result is more and more money and cheaper and cheaper dollars." (FOMC Minutes, 2/7/51, p. 60)

Yet punchline #1:

[We are making] it possible for the public to convert Government securities into money to expand the money supply....We are almost solely responsible for this inflation. It is not deficit financing that is responsible because there has been surplus in the Treasury right along; the whole question of having rationing and price controls is due to the fact that we have this monetary inflation, and this committee is the only agency in existence that can curb and stop the growth of money.. . . [W]e should tell the Treasury, the President, and the Congress these facts, and do something about it....We have not only the power but the responsibility....If Congress does not like what we are doing, then they can change the rules. (FOMC Minutes, 2/6/51, pp. 50–51)

And #2 and final:

Governor Eccles and Representative Wright Patman, who was a populist congressman from Texarkana, Texas, went head-to-head:

 

Patman: Don’t you think there is some obligation of the Federal Reserve System to protect the public against excessive interest rates? 

 

Eccles: I think there is a greater obligation to the American public to protect them against the deterioration of the dollar. 

 

Patman: Who is master, the Federal Reserve or the Treasury? You know, the Treasury came here first. 

 

Eccles: How do you reconcile the Treasury’s position of saying they want the interest rate low, with the Federal Reserve standing ready to peg the market, and at the same time expect to stop inflation? 

 

Patman: Will the Federal Reserve System support the Secretary of the Treasury in that effort [to retain the 2 1/2 percent rate] or will it    refuse?. . . You    are    sabotaging    the    Treasury.    I    think    it    ought    to    be stopped. 

 

Eccles: [E]ither the Federal Reserve should be recognized as having some independent status, or it should be considered as simply an agency or a bureau of the Treasury. (U.S. Congress 1951, pp. 172–76)

And there you have it folks, clear as daylight, every aspect of the tension of the "independent" Fed brought to the surface. Because the few men who dared to stand up against Truman,  the doctrine of central planning, "pegging" Treasury prices,  and the banking cartel whose sole prerogative has always and only been cheap and easy money, all got their just deserts:

Fed president #1:

Eccles also reported in his memoirs that shortly before this event he had completed a letter of resignation to the President. He then decided to postpone his resignation. Eccles had been Chairman of the FOMC from its creation in 1935 until 1948. He did not intend to leave Washington with the Federal Reserve under the control of the Treasury. According to a Truman staff member, Truman had failed to reappoint Eccles as Board Chairman in 1948 to show him “who’s boss” (Donovan 1982, p. 331).

And Fed president #2...

While in the hospital, Snyder conveyed to Truman the message that he felt he could no longer work with McCabe. Without a working relationship with the Treasury, McCabe could not function as Chairman of the Board of Governors. McCabe sent in a bitter letter of resignation, but resubmitted a bland version when asked to do so by the White House. McCabe, however, conditioned his resignation on the requirement that his successor be acceptable to the Fed.

As a reminder Snyder was the Secretary of the Treasury.

And whom did Truman replace McCabe with?

On March 15, the President appointed William McChesney Martin to replace McCabe.

Martin was undersecretary of the Treasury: the same institution that wanted all objectors to central planning scrapped. His position? Quote the Fed:

Truman and Snyder were populists who believed that banks, not the market forces of supply and demand, set interest rates. Truman felt that government had a moral obligation to protect the market value of the war bonds purchased by patriotic citizens. He talked about how in World War I he had purchased Liberty Bonds, only to see their value fall after the war.

Yet by keeping bonds pegged at ridiculously low prices during the late 1940s, and early 1950s, inflation exploded.

And that is what marked the beginning of the end, as while the Fed may have gained its independence, the US presidency, acting on behalf of the banks and populism (to keep capital losses to a minimum) made it all too clear anyone who steps out of line would be fired.

Call it a Stalinist putsch.

Actually hold on, did we say Stalin lost? Perhaps we may need to revise that. And while we got closure on that, we are still confused: is the real seed of inflation in reserves?

"Forced by the rate peg issue to make a stand on the role
of a central bank in creating inflation, Eccles expressed the nature of a
central bank in a fiat money regime. It was not private
speculation or government deficits that caused inflation, but rather
reserves and money creation by the central bank."
[The Treasury-Fed Accord: A New Narrative Account, Richmond Fed, Robert L. Hetzel and Ralph F. Leach]

Ok, now we get it.

And should we listen to the Fed or the... Fed?

Read the full absolutely must read Rchmond Fed narrative of the 1951 accord here. We can only hope someone in Congress can ask Bernanke for his take on the allegations made by the man responsible for the name of the current Fed headquarters.

 

 

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Thu, 08/02/2012 - 21:28 | 2674570 kill switch
Thu, 08/02/2012 - 21:35 | 2674583 baby_BLYTHE
baby_BLYTHE's picture

Straight from the FED's lips.. They hold no physical gold. If there is one thing Ron Paul's monetary hearings have brought to light, it is this very issue.

Fed Offical Scott Alvarez admits FED holds no physical gold
*article

The real Killswitch

Thu, 08/02/2012 - 21:43 | 2674611 AldousHuxley
AldousHuxley's picture

98% of the gold at the Federal Reserve Bank of New York is owned by the central banks of foreign nations

 

The Federal Reserve Bank does not own the gold but serves as guardian of the precious metal, which it stores at no charge to the owners

 

The vault is open to tourists

 

official gold reserve is in fort knox , kentucky

Thu, 08/02/2012 - 21:51 | 2674630 Stackers
Stackers's picture

The Fed and Treasury were merged long before Trumman, under FDR and the Exchange Stabilization Fund and gold confiscation. FDR confiscated private gold not to get it out of the people's hands, but to steal it from the Federal Reserve and subjugate or merge them under the control of the Treasury. FDR was a communist at heart and had no love for the Fed. The banksters got around this inconvenience by simply having their Goldman Sachs cronies appointed Sec. of Treasury.

Thu, 08/02/2012 - 21:55 | 2674640 FEDbuster
FEDbuster's picture

Well at least Jon Corzine wasn't in charge of the "audit".

Thu, 08/02/2012 - 23:24 | 2674802 jeff montanye
jeff montanye's picture

jon not only wasn't in charge of the audit, he hates audits in general.  

however if jesse is right, he's going to face one of which he won't like the verdict.  here's hoping we don't have to wait on st. peter or similar powers.  somebody sees him (hey viewers in st. barts or st. tropez -- funny about those saints, isn't it?) challenge his mendacious ass.  

as i said to a neighbor, i'm voting for romney, he's not made one mistake as president.

as i said to my best friend since fifth grade, you don't get the democrats to change by voting for them.

Thu, 08/02/2012 - 23:51 | 2674841 SilverIsKing
SilverIsKing's picture

Aren't they just quantifying how much gold they are planning on stealing from the countries that store their gold at the NY Fed?

Thu, 08/02/2012 - 23:57 | 2674854 Western
Western's picture

"Federal Reserve Police" ... what the fuck?

 

Who/what are they serving?

Who/what are they protecting?

What is their jurisdiction?

What is their bonding procedure, who bonded them, do they even have a fucking bond number?

Fri, 08/03/2012 - 01:02 | 2674925 Pinto Currency
Pinto Currency's picture

 

This article is really well crafted showning the noble Fed of the 50s fighting the inflation impulse and its own shareholder banks. 

Bottom line is that debt-based fiat currency does not work and especially when the central bank is owned by the banks who benefit from loose monetary policy and then get bailed-out when it all comes crashing down from the psychopaths' terminal behavior.

Forget about the 50s.  Fiat money is inevitably inflaionary and will collapse from the abuse and ineptitude of the central banks.

Fri, 08/03/2012 - 01:05 | 2674928 sitenine
sitenine's picture

Well, we're getting pretty close to FUBAR folks. There is no more BTFD - there is only buy. Price means nothing - having it means everything.

Fri, 08/03/2012 - 02:01 | 2674983 JoeSexPack
JoeSexPack's picture

Time for the 4 G's may be near....

 

 

Guns, Gold, Groceries & a Get-away-plan.

Fri, 08/03/2012 - 03:00 | 2675009 Temporalist
Temporalist's picture
Your 119 Billion Google Searches Now a Central Bank Tool

"The central bank stands at the forefront of the world’s hunt for new economic indicators, analyzing keyword counts for everything from aerobics classes to refrigerators -- reported by Google almost as soon as the queries take place -- to gauge consumer demand before official statistics are released. The Federal Reserve and the central banks of England, Italy, Spain and Chile have followed up with their own studies to see if search volumes track trends in the economies they oversee."

http://www.bloomberg.com/news/2012-08-02/your-119-billion-google-searche...

Fri, 08/03/2012 - 05:00 | 2675058 fredquimby
fredquimby's picture

Just remember, if you ever get below 6,000 rounds you are running low.

Fri, 08/03/2012 - 02:56 | 2675007 Gief Gold Plox
Gief Gold Plox's picture

I'd imagine they're the US equivalent of: http://en.wikipedia.org/wiki/Guardia_di_Finanza

Fri, 08/03/2012 - 07:11 | 2675035 Revert_Back_to_...
Revert_Back_to_1792_Act's picture

.

 

 

Fri, 08/03/2012 - 01:12 | 2674938 zhandax
zhandax's picture

you don't get the democrats to change by voting for them

Yet half the damnfools in the country keep trying that route.  What does that say about half the damnfools in the country?  Unfortunately, you don't get the other side to change by voting for them either, and the other half of the damnfools in the country keep trying that route.  We are fucked until we educate all these damnfools.  How much progress have you made today?  It isn't easy; I made just enough progress to think maybe it wasn't a waste getting out of bed this morning.

Thu, 08/02/2012 - 23:33 | 2674813 TruthInSunshine
TruthInSunshine's picture

Summation of ZH thesis, and that which establishes that the article printed in The Los Angeles Times is the proverbial strawman:

 

1)   The Federal Reserve has custody over the amount of physical gold it claims it does, even though this custody is a bailment arrangement.  An expose in the LA Times whereby the gold is audited and proven to exist in stated quantity is a strawman.

2)  The amount of gold that The Federal Reserve has custody over regarding its bailment arrangement is insufficient, based on current valuations of various fiat currencies, including the federal reserve note (formerly known as the U.S. Dollar), to allow holders of said fiat currencies to redeem those currency in terms of purchasing goods and/or services at the purported face value of said fiat currencies.

3)  That the main conduit of inflation is actually the ability of The Federal Reserve and other fractional reserve central banks (e.g. ECB, BOE, BOJ, etc.) to trick holders of the fiat currencies they possess and the sellers of good and/or services who are willing to take said currencies as payment for such goods and/or services into believing that said currencies have not been diluted to the point that the actual physical gold held in bailment by the Federal Reserve can possibly 'cover' the transactions made in fiat currencies.

4)  That as a corollary to the illusion that it maintains, in bailment form, a relative amount of physical gold for each additional unit of fiat created, the Federal Reserve (and other fractional reserve central banks), enables government to print fiat currency in a volume that, if points 1), 2) and 3) were understood of by too many persons, would destroy the faith in the face value purchasing power of fiat currency on the part of both holders of it and those willing to accept in trade for goods and/or services at anything remotely close to the levels expressed in transactions today.

5) That as a function of 4), if this fundamental fact were known by too many persons, governments would lose control over their current ability to print the volume of fiat currency they are now able to, as spiking interest rates and demands for return of gold held in bailment would undermine that ability in quick order.

Fri, 08/03/2012 - 00:19 | 2674832 TruthInSunshine
TruthInSunshine's picture

Essential reading on gold as the ultimate disciplinarian of radical central fractional reserve bankers and welfare state excesses by that consummate 'tin-foiler,' Alan Greenspan.

 

 

Gold and Economic Freedom

by Alan Greenspan

Alan Greenspan, Gold and Economic Freedom (1966)

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

 

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

 

An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense — perhaps more clearly and subtly than many consistent defenders of laissez-faire — that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other.

In order to understand the source of their antagonism, it is necessary first to understand the specific role of gold in a free society.

Money is the common denominator of all economic transactions. It is that commodity which serves as a medium of exchange, is universally acceptable to all participants in an exchange economy as payment for their goods or services, and can, therefore, be used as a standard of market value and as a store of value, i.e., as a means of saving.

The existence of such a commodity is a precondition of a division of labor economy. If men did not have some commodity of objective value which was generally acceptable as money, they would have to resort to primitive barter or be forced to live on self-sufficient farms and forgo the inestimable advantages of specialization. If men had no means to store value, i.e., to save, neither long-range planning nor exchange would be possible.

What medium of exchange will be acceptable to all participants in an economy is not determined arbitrarily. First, the medium of exchange should be durable. In a primitive society of meager wealth, wheat might be sufficiently durable to serve as a medium, since all exchanges would occur only during and immediately after the harvest, leaving no value-surplus to store. But where store-of-value considerations are important, as they are in richer, more civilized societies, the medium of exchange must be a durable commodity, usually a metal. A metal is generally chosen because it is homogeneous and divisible: every unit is the same as every other and it can be blended or formed in any quantity. Precious jewels, for example, are neither homogeneous nor divisible. More important, the commodity chosen as a medium must be a luxury. Human desires for luxuries are unlimited and, therefore, luxury goods are always in demand and will always be acceptable. Wheat is a luxury in underfed civilizations, but not in a prosperous society. Cigarettes ordinarily would not serve as money, but they did in post-World War II Europe where they were considered a luxury. The term "luxury good" implies scarcity and high unit value. Having a high unit value, such a good is easily portable; for instance, an ounce of gold is worth a half-ton of pig iron.

In the early stages of a developing money economy, several media of exchange might be used, since a wide variety of commodities would fulfill the foregoing conditions. However, one of the commodities will gradually displace all others, by being more widely acceptable. Preferences on what to hold as a store of value will shift to the most widely acceptable commodity, which, in turn, will make it still more acceptable. The shift is progressive until that commodity becomes the sole medium of exchange. The use of a single medium is highly advantageous for the same reasons that a money economy is superior to a barter economy: it makes exchanges possible on an incalculably wider scale.

Whether the single medium is gold, silver, seashells, cattle, or tobacco is optional, depending on the context and development of a given economy. In fact, all have been employed, at various times, as media of exchange. Even in the present century, two major commodities, gold and silver, have been used as international media of exchange, with gold becoming the predominant one. Gold, having both artistic and functional uses and being relatively scarce, has significant advantages over all other media of exchange. Since the beginning of World War I, it has been virtually the sole international standard of exchange. If all goods and services were to be paid for in gold, large payments would be difficult to execute and this would tend to limit the extent of a society's divisions of labor and specialization. Thus a logical extension of the creation of a medium of exchange is the development of a banking system and credit instruments (bank notes and deposits) which act as a substitute for, but are convertible into, gold.

A free banking system based on gold is able to extend credit and thus to create bank notes (currency) and deposits, according to the production requirements of the economy. Individual owners of gold are induced, by payments of interest, to deposit their gold in a bank (against which they can draw checks). But since it is rarely the case that all depositors want to withdraw all their gold at the same time, the banker need keep only a fraction of his total deposits in gold as reserves. This enables the banker to loan out more than the amount of his gold deposits (which means that he holds claims to gold rather than gold as security of his deposits). But the amount of loans which he can afford to make is not arbitrary: he has to gauge it in relation to his reserves and to the status of his investments.

When banks loan money to finance productive and profitable endeavors, the loans are paid off rapidly and bank credit continues to be generally available. But when the business ventures financed by bank credit are less profitable and slow to pay off, bankers soon find that their loans outstanding are excessive relative to their gold reserves, and they begin to curtail new lending, usually by charging higher interest rates. This tends to restrict the financing of new ventures and requires the existing borrowers to improve their profitability before they can obtain credit for further expansion. Thus, under the gold standard, a free banking system stands as the protector of an economy's stability and balanced growth. When gold is accepted as the medium of exchange by most or all nations, an unhampered free international gold standard serves to foster a world-wide division of labor and the broadest international trade. Even though the units of exchange (the dollar, the pound, the franc, etc.) differ from country to country, when all are defined in terms of gold the economies of the different countries act as one — so long as there are no restraints on trade or on the movement of capital. Credit, interest rates, and prices tend to follow similar patterns in all countries. For example, if banks in one country extend credit too liberally, interest rates in that country will tend to fall, inducing depositors to shift their gold to higher-interest paying banks in other countries. This will immediately cause a shortage of bank reserves in the "easy money" country, inducing tighter credit standards and a return to competitively higher interest rates again.

A fully free banking system and fully consistent gold standard have not as yet been achieved. But prior to World War I, the banking system in the United States (and in most of the world) was based on gold and even though governments intervened occasionally, banking was more free than controlled. Periodically, as a result of overly rapid credit expansion, banks became loaned up to the limit of their gold reserves, interest rates rose sharply, new credit was cut off, and the economy went into a sharp, but short-lived recession. (Compared with the depressions of 1920 and 1932, the pre-World War I business declines were mild indeed.) It was limited gold reserves that stopped the unbalanced expansions of business activity, before they could develop into the post-World War I type of disaster. The readjustment periods were short and the economies quickly reestablished a sound basis to resume expansion.

But the process of cure was misdiagnosed as the disease: if shortage of bank reserves was causing a business decline — argued economic interventionists — why not find a way of supplying increased reserves to the banks so they never need be short! If banks can continue to loan money indefinitely — it was claimed — there need never be any slumps in business. And so the Federal Reserve System was organized in 1913. It consisted of twelve regional Federal Reserve banks nominally owned by private bankers, but in fact government sponsored, controlled, and supported. Credit extended by these banks is in practice (though not legally) backed by the taxing power of the federal government. Technically, we remained on the gold standard; individuals were still free to own gold, and gold continued to be used as bank reserves. But now, in addition to gold, credit extended by the Federal Reserve banks ("paper reserves") could serve as legal tender to pay depositors.

When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve's attempt to assist Great Britain who had been losing gold to us because the Bank of England refused to allow interest rates to rise when market forces dictated (it was politically unpalatable). The reasoning of the authorities involved was as follows: if the Federal Reserve pumped excessive paper reserves into American banks, interest rates in the United States would fall to a level comparable with those in Great Britain; this would act to stop Britain's gold loss and avoid the political embarrassment of having to raise interest rates. The "Fed" succeeded; it stopped the gold loss, but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market, triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed. Great Britain fared even worse, and rather than absorb the full consequences of her previous folly, she abandoned the gold standard completely in 1931, tearing asunder what remained of the fabric of confidence and inducing a world-wide series of bank failures. The world economies plunged into the Great Depression of the 1930's.

With a logic reminiscent of a generation earlier, statists argued that the gold standard was largely to blame for the credit debacle which led to the Great Depression. If the gold standard had not existed, they argued, Britain's abandonment of gold payments in 1931 would not have caused the failure of banks all over the world. (The irony was that since 1913, we had been, not on a gold standard, but on what may be termed "a mixed gold standard"; yet it is gold that took the blame.) But the opposition to the gold standard in any form — from a growing number of welfare-state advocates — was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale.

Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which — through a complex series of steps — the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

Fri, 08/03/2012 - 02:01 | 2674977 zhandax
zhandax's picture

TIS, interesting you bring this up (more in reference to you prior post).  This article sparked me to do a little research and it seems the monetary base from around 1948-2008 has hovered just over $500B (shadowstats chart).  Fast forward to Sep-Oct 2008 and the base spiked up to around $2.5T before falling to again bounce off 500B in late 2010 where it spiked once more to $1.2T.  It has now declined to just under $500B.  In the intervening timeframe, gold has traded as high as $1900/oz, which gave a market value to Treasury's holdings of $496B.  In other words, gold traded up to a price where the value of the Treasury holdings almost equals the average monetary base (less spikes) over the post-1948 period (shadowstats LT chart) and the monetary base has now been managed back down almost to the the current value of Treasury's gold holdings.

I am still trying to get my arms around the implications, but wondered if you had any insights?

Fri, 08/03/2012 - 04:04 | 2675034 francis_sawyer
francis_sawyer's picture

Alternate Summation of ZH thesis (aka ~ 'The Cliffs Notes version))...

~~~

We're still living in 'The Truman Show'

Fri, 08/03/2012 - 14:12 | 2676370 TruthInSunshine
TruthInSunshine's picture

zhandax, I admit that I'm not gleaning a clear understanding of how the monetary base or money supply correlate with each other during the respective time periods that John Williams is illustrating based on the M1, M2 and M3 charts he has posted on shadowstats - but I've only tried to understand the correlations you're speaking of for a short period of time.

Thanks for those complimentary words, Ghordius.  It's a shame that so few people understand where "money comes from" and how the entire foundation of economies built on fractional reserve banking, especially with fiat currencies back by absolutely nothing of value (except empty platitudes), imperil their economic freedom at the discretion of such a small group of individuals at a such a small number of institutions.

Increasingly, though, it does appear that people are growing skeptical of the general tone and content of what they're told, and that even if they can specify what is wrong in precise detail, they understand something very fundamental is wrong.

That's a start.

 

And I agree with you that currency gaming is now an open secret between fractional reserve central banks, and it's yet another measure to kick the can in order to be able to claim that the rate of economic growth is expanding, when in reality, it is and has been contracting.

Fri, 08/03/2012 - 05:29 | 2675066 Ghordius
Ghordius's picture

TruthInSunshine, +1trillion and a <standing ovation>. If you would post more often, I would probably never have opened an account.

one little thing for the author of the excellent article, though:

"it is well known that the bulk of Europe's sovereign gold is also contained deep under downtown Manhattan: we wish them all the best when they attempt to repatriate the physical when they need it, such as the day after the EUR finally collapses".

This is the other way round. First Nixon forbade repatriation on August 1971. Then europe had think through where all this was heading and concocted the EUR as a response to the situation, present and future.

This included expectations of future currency wars and great rounds of "competitive devaluations" in an environment that would make small currencies very, very fragile in view of huge waves of hot, speculative fiat looking for something to break for a quick profit. The CHF is already hiding under the EUR skirt, if this goes on we'll soon see other small currencies in some kind of trouble (the GBP's fate will also be very interesting). No financial pundit is currently ever thinking through (in the way of Bastiat) how this mess since 2008 would have looked like with 17 eu currencies all biting each other...

Ironically, the best way to get rid of the EUR would be the repatriation of the european gold, same as in 1971.

Fat chance. As long as the US Treasury/FED goes the fiat way and the USD is the global reserve currency (the two facts reinforce each other), I don't see how this "EUR collapse" could happen with an eurozone that is a net exporter, an ECB that values it's gold at market value and the European Fiscal Compact that is going to at least try to institutionalize nearly-balanced-budgets in the eurozone's future.

For all near-blind hate against all central banks that some here have, anybody looking seriously at the current situation should realize a few of those facts, that make btw the search for "understanding where the EURUSD is going" quite irrelevant, a mere short-term distraction. By now, we all have some proof that the ECB is really guided by the compromise between 17 national interests (yeah, call them mercantile, if you wish).

Parts of the gold markets are "getting it", eventually we'll talk here about "eurogold vs. usdgold", and more about "central banks FX reserves", etc.

And for all those that are expecting a "marriage of convenience" between the USD and the EUR - or even think this is a "grand plan": please remember East Asia's policies, expectations, demands (including SDRs), past currency manipulations and plans for the future. And how the current global trade flows function.

Thu, 08/02/2012 - 23:49 | 2674833 HoofHearted
HoofHearted's picture

Treasury reports that Ben Bernanke has a foot long dick too. Trust them- they audited it, and they are the Treasury police mafia.

Fri, 08/03/2012 - 00:43 | 2674903 Cornfedbloodstool
Cornfedbloodstool's picture

Who gives a shit... I mean that all matters

 

Thu, 08/02/2012 - 22:05 | 2674669 AldousHuxley
AldousHuxley's picture

fort knox holds 150,000,000 troy oz of gold at $1600/oz, thats about $240B

 

proven oil reserves in US = 25 billion barrels x $100/barrel = $2.5T

 

Saudis have 250B barrels so that's about $25T.

 

Venezuela has 300B

 

Thu, 08/02/2012 - 23:07 | 2674774 DoChenRollingBearing
DoChenRollingBearing's picture

My understanding is the same as yours, AldousHuxley.

YES, if you get your tickets WAY in advance, a tourist can go and see the Fed's gold.  Also correct that most is owned by foreign countries, only a tiny amount by our Treasury.

If the Treasury were to want to do cut the debt down to size, it could issue a call to BUY any and all gold at some arbitrary high price, say $5000 or $10,000 an ounce.  They would get a pretty fair amount!  But, they would not get all that much, VERY LITTLE (but some!) of mine for example.  That new price would then become the FLOOR price of gold, and it is likely that we would soon see FOFOA-like numbers soon thereafter.

150 million troy ounces * $55,000 / oz = $8.25T

THAT would start to take care of the debt..., for the moment.

Thu, 08/02/2012 - 23:14 | 2674783 AU5K
AU5K's picture

I saw the gold in the Fed's vault back in the 90s.  Yes, I was gold, when gold wasn't cool.  It has its own... presence.  Got me to look into the properties of gold, which are simply fascinating.

 

Fri, 08/03/2012 - 06:23 | 2675098 BlueCollaredOne
BlueCollaredOne's picture

Did you hear about the hipster who burned his mouth drinking his coffee?

Yeah, he drank it before it was cool. 

Thu, 08/02/2012 - 23:42 | 2674824 Cthonic
Cthonic's picture

Don't forget around 480ktons of DU (caesar/breeder reactor fuel)

Thu, 08/02/2012 - 23:53 | 2674743 Michael
Michael's picture

Thanks Stackers. I find this Exchange Stabilization Fund tutorial quite reveling. I believe it gives the Executive branch way too much power.

What I have been afraid to blog about: The ESF and Its History_Part 1 to 5

http://www.youtube.com/watch?v=2ssrcD5GdPQ&playnext=1&list=PL4270752809DDF8DC&feature=results_main

Fri, 08/03/2012 - 02:22 | 2674995 zhandax
zhandax's picture

Michael, this isn't the first time this has hit the comments section but always good information to get in front of new eyes.  (You must have been going for cobia that weekend)

Fri, 08/03/2012 - 03:47 | 2675026 Michael
Michael's picture

I remembered this great work while I was reading this topic, but temporarily forgot the name of the subject I was thinking about till Stackers helped jog my memory quite quickly of it.

Things of great importance in the fishing business usually have their day in the sun such as an interest in CAFR's or interest in the ESF come to light in their own time such as this subject.

People get board of talking about the same subject all the time, so a new introduction to old subjects not talked about for a while can be brought to the forefront such as the ESF.

Thanks for acknowledging.

Thu, 08/02/2012 - 22:05 | 2674666 Al Gorerhythm
Al Gorerhythm's picture

Note the date on this article by "foiler" Reg Howe. Derivitives were a problem way back then.

http://www.usagold.com/gildedopinion/howederivatives.html

Thu, 08/02/2012 - 22:13 | 2674678 resurger
resurger's picture

 This remind me of the T.V series "Game of Thrones" when that Black King of Karth (I forgotten his name) promised Daenerys Tarqaryen (The dragons mother) of the riches behind a gigantic ass fucking vault ( like the one you see in big banks), So she was smart, and after sometime she got the king to open the vault and guess what was in it,

nothing, zero, void, nada

she kept that king to rot in it with his sweet cocksucking bytch!

What will the Americans do?

 

 

Thu, 08/02/2012 - 23:13 | 2674785 lunaticfringe
lunaticfringe's picture

With all due respect- resurger- that might be the dumbest fucking metaphor I have ever read.

Fri, 08/03/2012 - 06:27 | 2675102 resurger
resurger's picture

lol

no sweat lunatic

Fri, 08/03/2012 - 00:49 | 2674910 Cornfedbloodstool
Cornfedbloodstool's picture

That chick is hot, dont know what your talking about but the blonde was hot

Fri, 08/03/2012 - 04:19 | 2675046 francis_sawyer
francis_sawyer's picture

She looks like Snoopy...

Fri, 08/03/2012 - 00:49 | 2674911 Cornfedbloodstool
Cornfedbloodstool's picture

That chick is hot, dont know what your talking about but the blonde was hot

Fri, 08/03/2012 - 00:00 | 2674835 Alternative
Alternative's picture

"98% of the gold at the Federal Reserve Bank of New York is owned by the central banks of foreign nations.The Federal Reserve Bank does not own the gold but serves as guardian of the precious metal, which it stores at no charge to the owners.The vault is open to tourists"

How cavalier of them to do all that at no charge. Can we assume that tourist visits are enough to pay all the bills?


Fri, 08/03/2012 - 00:28 | 2674885 Reven
Reven's picture

No charge?  We'll see about that...

Fri, 08/03/2012 - 00:33 | 2674891 White.Star.Line
White.Star.Line's picture

Pardon my ignorance Aldous, but isn't the gold at Fort Knox currently held under a collateral agreement with the Federal Reserve.
Set at 35.00 an ounce, in case we have to settle all the "debt" we have incurred from the FED.

Fri, 08/03/2012 - 04:01 | 2675033 CompassionateFascist
CompassionateFascist's picture

There are no blonds in Zanzibar, and there is no gold in Ft. Knox. It was removed to Israel long ago. This is why the Zionists look with equanimity at the IranWar and subsequent global paper-ponzi collapse.

Fri, 08/03/2012 - 04:26 | 2675050 Disenchanted
Disenchanted's picture

 

 

 

That was my question...How do you audit something that is no longer there?

Fri, 08/03/2012 - 04:27 | 2675051 Red Pill
Red Pill's picture

Isn't that also where the Pentagon missing 3 Trillion $ ended up?

Fri, 08/03/2012 - 04:50 | 2675055 Disenchanted
Disenchanted's picture

 

 

 

Dov knows...

Thu, 08/02/2012 - 22:16 | 2674685 resurger
resurger's picture

thanks for the link BB

Thu, 08/02/2012 - 22:32 | 2674722 Michael
Michael's picture

It seems to me, actors are front running Dr Paul's plans while avoiding giving him credit for it.

I wouldn't be surprised if their secretly auditing Fort Knox as we speak.

Thu, 08/02/2012 - 23:16 | 2674790 FEDbuster
FEDbuster's picture

Maybe they could get Geraldo Rivera to do that one?

Fri, 08/03/2012 - 00:03 | 2674859 ronaldawg
ronaldawg's picture

Geraldo already has a gig on KABC in Los Angeles as the most race baiting pig in the world.  Fuck illegal aliens.

Fri, 08/03/2012 - 02:45 | 2675002 krispkritter
krispkritter's picture

Ron Paul's hearing today. Discussed was parallel currencies. AOCS's Rob Gray was present and called Congress useless and the Fed 'thieves'.

http://mfile3.akamai.com/65722/wmv/sos1467-1.streamos.download.akamai.com/65726/hearing080212.asx

Note how many people are in the room...

AOCS statement text: http://www.opencurrency.com/aocs-goes-to-washington/

 

Fri, 08/03/2012 - 03:10 | 2675013 Bloodstock
Bloodstock's picture

No reason to trust anything that the Fed has anything to do with. They straight up suck.

Fri, 08/03/2012 - 06:25 | 2675099 BlueCollaredOne
BlueCollaredOne's picture

Sorry Blythe, but I think KSE is better with Howard Jones. 

 

Thu, 08/02/2012 - 23:00 | 2674766 LongBalls
LongBalls's picture

This is further confirmation for me that gold is moving to a Tier 1 asset.

Thu, 08/02/2012 - 23:50 | 2674836 Zymurguy
Zymurguy's picture

The question is "why are they auditing"???  What's the point?  What's the intent?

Perhaps someone is calling in their phizz?

Fri, 08/03/2012 - 00:37 | 2674896 JLee2027
JLee2027's picture

Same as the hearings on MFGlobal which masqueraded as a cocksucking contest. To pretend to do their job, restore confidence, and then announce all the Gold is there safe and sound and no one has to worry.

And if anyone calls in their phizz, the request will be "lost", delayed, then abandoned - in that order. These are thieves we are talking about.

Thu, 08/02/2012 - 21:30 | 2674573 Kassandra
Kassandra's picture

I wonder how much tungsten they found? Will we ever know?

Thu, 08/02/2012 - 21:32 | 2674579 TruthInSunshine
TruthInSunshine's picture

Much ado about nothing.

 

The Bernank is willing to sign a sworn affidavit attesting to the precise amount of gold it is holding under bailment.

 

/s

Thu, 08/02/2012 - 21:33 | 2674581 Motorhead
Motorhead's picture

A damn shame that gold, er, tungsten, isn't money, so spake the Bernank.

Fri, 08/03/2012 - 00:12 | 2674866 palmereldritch
palmereldritch's picture

Next up...The successful colonoscopy of a skittle shitting unicorn...Why?...Because they can!

Fri, 08/03/2012 - 01:15 | 2674944 tenpanhandle
tenpanhandle's picture

obviously they would hire an expert gold bar driller who would never bend his drill on a tungsten rod.

Fri, 08/03/2012 - 02:45 | 2675003 Harbanger
Harbanger's picture

Gold-plated tungsten is available commercially from China which is the main producer of tungsten.  Better check your pandas, kids.

Thu, 08/02/2012 - 21:31 | 2674576 Motorhead
Motorhead's picture

Hmmm...$21 billion worth of tungsten, er, gold, er, tungsten, versus $16,000,000,000,000 (trillion) in debt.  I guess we should be in awe of what the NY Fed has in terms of gold, er, tungsten.

Thu, 08/02/2012 - 22:01 | 2674655 JLee2027
JLee2027's picture

So either gold increases in value 800x or the debt resets to 21 billion. There must be balance in the Force. 

Thu, 08/02/2012 - 22:34 | 2674726 TruthInSunshine
TruthInSunshine's picture

As many have mentioned and know (and I think you do, also), the Non-Federal Reserve-less Non-Bank doesn't own any gold.

It merely purportedly holds the gold of others (mainly nation-states) under a bailment arrangement.

Why does the Non-Federal Reserve-less Non-Bank, rather than...say...the U.S. Government itself, hold the gold of others under such a bailment arrangement?

That's a damn good question:

 

bailment

n. 1) the act of placing property in the custody and control of another, usually by agreement in which the holder (bailee) is responsible for the safekeeping and return of the property. Examples: bonds left with the bank, autos parked in a garage, animals lodged with a kennel, or a storage facility (as long as the goods can be moved and are under the control of the custodian). While most are "bailments for hire" in which the custodian (bailee) is paid, there is also "constructive bailment" when the circumstances create an obligation upon the custodian to protect the goods, and "gratuitous bailment" in which there is no payment, but the bailee is still responsible, such as when a finder of a lost diamond ring places it with a custodian pending finding the owner. 2) the goods themselves which are held by a bailee. Thus, the "bailor" (owner) leaves the "bailment" (goods) with the "bailee" (custodian), and the entire transaction is a "bailment."

See also: bailee  bailor 

Thu, 08/02/2012 - 23:05 | 2674772 Harbanger
Harbanger's picture

When push comes to shove, possession = ownership.

Fri, 08/03/2012 - 00:41 | 2674899 TruthInSunshine
TruthInSunshine's picture

As they say in legal & law enforcement circles, possession = 9/10ths of the law.

Fri, 08/03/2012 - 01:24 | 2674951 Dave Thomas
Dave Thomas's picture

That is unless your local LEO's are horny for Civil Forfeiture.

Otherwise then posession means you're a drug dealer or a domestic terrirst!

Then they need to take said items to keep people safe and free.

Thu, 08/02/2012 - 22:35 | 2674729 Manthong
Manthong's picture


Yep… all the gold at the Fed valued as the equivalent of $21 Billion in genuine, 100% electronic bank money FRN dollar’s.. which, if my arithmetic is correct, is about the amount of fresh, new, un-repayable FRN burden the government adds to the public debt every five freaking days of the year.

All that gold.. duplicated in nominal FRN value every five days as new public debt.

Well, THAT can go on forever, right?

 

 

Fri, 08/03/2012 - 00:10 | 2674782 cranky-old-geezer
cranky-old-geezer's picture

 

When gold redeemability was eliminated from US currency in '71, the amount of gold held by the Fed and US Treasury became meaningless.  It simply doesn't matter anymore. 

Today US currency is backed by nothing.   Whatever value it has comes solely from people's confidence in it.

A currency backed by nothing can be "printed" till the world is flooded with it ...then it loses all value when people lose all confidence in it.   It's called currency collapse. 

US currency today is nothing but a ponzi scheme, supported purely by confidence, as every ponzi scheme is. 

So it's a confidence game, or to use the slang term, it's a "con".

A ponzi scheme collapses eventually, when people suddenly lose confidence in it.  

That's what will happen to the US dollar sooner or later. 

It won't happen here in America.  It will happen outside America, when other nations lose confidence in the US dollar.

Have you ever seen a ponzi scheme collapse slowly?

No, of course not.  It collapses quickly, less than a day, even a few hours.

There's no warning and no time to get out.  You lose everything.

Fri, 08/03/2012 - 10:42 | 2675781 Bicycle Repairman
Bicycle Repairman's picture

What does the "confidence" consist of?  It may have consisted of other things in the past, but I argue that now it consists of one thing:  the ability of the American military to go get "it" from "whomever" whenever.  This was essentially what backed Germany's bonds in the 1930s.  The backing consisted of the German army's ability to pay off by stealing the proceeds from the Soviet Union.

So as long as the US military can enforce "Pax Americana", the confidence and the dollar remain.  Iran is a discrete turning point, which has a lot riding on it.  IMHO.

Thu, 08/02/2012 - 21:32 | 2674580 Abraxas
Abraxas's picture

The eye of Sauron will soon turn to US debt problem. The gold better be there, or the only way out will be war.

Thu, 08/02/2012 - 21:43 | 2674613 homer8043
homer8043's picture

First Europe, then Japan, then we get the evil eye. Still very early.

Thu, 08/02/2012 - 22:20 | 2674697 centerline
centerline's picture

No.  There will be war before it is found the gold is wherever.  Wherever is not for you or me to know.

Fri, 08/03/2012 - 04:05 | 2675037 NidStyles
NidStyles's picture

Who says we aren't already at war?

Fri, 08/03/2012 - 10:44 | 2675786 Bicycle Repairman
Bicycle Repairman's picture

See my point above.  There will be war in any case.

Fri, 08/03/2012 - 06:57 | 2675122 Haager
Haager's picture

It won't be there, it's scam. Our money is funded on "believe me (Draghi)", and there is no problem with it as long as it remains accepted. The shit hits the fan when most people don't trust their money any longer.

Thu, 08/02/2012 - 21:38 | 2674582 Global Hunter
Global Hunter's picture

I just want to say to Tyler(s), your work is fantastic.  I have to admit most of your articles you have made your point and then proved it whithin the first few paragraphs and I skip the rest, partly because its too insane to continue, mostly because you make your point and prove it quickly.  I rarely go to mainstream news sites, I just come here.  Thanks man!

edit: I'm going back and reading this one though, great work.

Thu, 08/02/2012 - 22:30 | 2674719 XitSam
XitSam's picture

I'm still stuck on the Federal Reserve has its own police.

Thu, 08/02/2012 - 23:22 | 2674792 akak
akak's picture

I must admit, it does seem strange at first glance to me as well, but I have to assume that it is just a tradition.

Thu, 08/02/2012 - 23:52 | 2674844 SgtShaftoe
SgtShaftoe's picture

I did some work there a couple years ago at FRBNY. Those bastards are mean, they keep gas masks on their legs at all times, and can seal that building with blast doors in about 1 minute. They're loaded for bear. I'm pretty sure every bank has their own swat team as well. They aren't as much a police force, more an army... Scary shit

Fri, 08/03/2012 - 00:21 | 2674875 palmereldritch
palmereldritch's picture

And the Secret Service that protects the President have traditionally been Treasury Agents...capiche?

But now that they are part of the DHS, could that signify Debtor in Possession status?

Fri, 08/03/2012 - 06:58 | 2675123 Treason Season
Treason Season's picture

"I'm still stuck on the Federal Reserve has its own police."

Actually Eustace Mullins used to joke that all law enforcement/military personnel in the U.S. were actaully Federal Reserve police/soldiers. When people would point out that city, county, state, etc had their own individual forces Eustace would counter that was true however they were paid in FRNs!

Fri, 08/03/2012 - 00:04 | 2674861 dolce vita
dolce vita's picture

"once the truth reveals itself, you are never the same"

 

ditto salute to TD and ZHers

Thu, 08/02/2012 - 21:34 | 2674584 dick cheneys ghost
dick cheneys ghost's picture

Thank You Zero Hedge

Thu, 08/02/2012 - 22:23 | 2674704 centerline
centerline's picture

The Tyler's really put it out there on this one.  Kudo's to the Tylers.  Whomever you may be.  Honor is yours.

Fri, 08/03/2012 - 00:56 | 2674916 TruthInSunshine
TruthInSunshine's picture

They are us and we are them.

I don't mean to romanticize this notion too much (not romanticize in the 'romantic' sense, but the literary sense), but such is the power of the democratization of information able to be shared rapidly and broadly that used to be held under state mandated lock and key.

The revolution builds like a rolling tsunami wave; an unstoppable force that collects exponentially larger amounts of energy as it rolls towards the coast.

Thu, 08/02/2012 - 21:35 | 2674585 Jim in MN
Jim in MN's picture

 

 

Dear Self:  I am hiding terrible secrets in my vaults.  Sincerely, Self.

Dear Self:  Please just forget this ever happened and have some more Oxys and Jack.  Sincerely, Self.

Dear Self:  Thanks I feel soooooomuchbetter now!!!  Sincerely, Self.

Thu, 08/02/2012 - 22:24 | 2674707 knukles
knukles's picture

 

 

                      humpfth

 

                      thplxt

Thu, 08/02/2012 - 22:49 | 2674753 tekhneek
tekhneek's picture

Roses are red, violets are blue, I'm schizophrenic, and so am I.

Thu, 08/02/2012 - 21:35 | 2674586 Hype Alert
Hype Alert's picture

Kind of like a stress test for the FED done by Turbo Timmay.  I'll be holding my breath for the outcome.

Thu, 08/02/2012 - 21:47 | 2674587 Robot Traders Mom
Robot Traders Mom's picture

"Fed-Treasury "Accord" of March 3, 1951"

So the Fed profits for the private shareholders and maintains the independence of a private bank, while having an agreement to rape the taxpayers through the Primary Dealers...

The stuff we didn't learn in school.

Post Script-My little side project/website is almost done. The voting up and down and moving articles based on votes is still getting coded (the dumb user ratings will be disappearing shortly). Anyways, if anyone has anymore color (made the font smaller) on my links, subject matter, etc. please let me know! www.topthenews.com

More to come...

Thu, 08/02/2012 - 22:30 | 2674717 knukles
knukles's picture

 

 

 

Quiz of the Day!
Which Accord is the Best Accord?

a)  Treasury-Fed
b)  Plaza
c)   Honda
d)  -dion
e)  none of the above
f)   all the above
g)  some of the above
h)  maybe
i)   they're auditing the wrong shit
j)   Guess that takes care of the problem
k)  we'll find out by years end (cough)
l)   who the fuck cares
m) the powers that be must be worried to be doing this crap

 

Fri, 08/03/2012 - 00:24 | 2674878 GoinFawr
GoinFawr's picture

n) d'accord du lac Meech

Fri, 08/03/2012 - 01:29 | 2674958 Oh regional Indian
Oh regional Indian's picture

Hmmmm....I'd say the Honda Accord... Hands down, no?

ori

Fri, 08/03/2012 - 02:49 | 2675005 Byte Me
Byte Me's picture

A) Accord that fits around the necks of the bloodsucking Banksters/Pols that can be used to "elevate them to higher places".

Thu, 08/02/2012 - 21:39 | 2674598 Spitzer
Spitzer's picture

The FED only has paper gold certificates. Not a lick of physical

Thu, 08/02/2012 - 22:57 | 2674761 tekhneek
tekhneek's picture

Haven't those certificates already been rehypothecated into oblivion though?

Thu, 08/02/2012 - 21:39 | 2674599 Yen Cross
Yen Cross's picture

 nat gas spiked! We need those tungsten rods back!

Thu, 08/02/2012 - 21:39 | 2674600 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

wanted; Fox to look after hen house while owners are away.

Thu, 08/02/2012 - 21:41 | 2674603 spanish inquisition
spanish inquisition's picture

I am worried about inventory drift. They count the gold here and it drifts to Germany where they count it again....

Thu, 08/02/2012 - 21:41 | 2674605 DaveyJones
DaveyJones's picture

I hear they're almost as good as the 911 com

Thu, 08/02/2012 - 21:41 | 2674607 apberusdisvet
apberusdisvet's picture

When do we start seeing the Gold/Tungsten ratio on the Kitco charts?

Thu, 08/02/2012 - 21:42 | 2674608 you enjoy myself
you enjoy myself's picture

sometime in december: "yep, its all here"

in exactly the same way that if everyone asked their local depository bank, at the same time, "do you actually have my $2000?", they could truthfully respond to each individual that yes, we do indeed have $2000 here.

 

Thu, 08/02/2012 - 22:02 | 2674657 RichardP
RichardP's picture

If the question was asked about a checking account, the bank likely has the funds.  It the question was asked about a savings account, the questioner would be referred to the fine print, where it says that the bank can delay paying out for X number of days.  The reason this is so is because the bank may not have the money at any given time.  Users of savings accounts are supposed to know this.

Thu, 08/02/2012 - 22:48 | 2674617 kill switch
kill switch's picture

You don't understand!!!!

 

Fuck the fed the government all this shit,,,,lets enjoy

 

http://www.youtube.com/watch?v=mF_XB5xrHS4

Fri, 08/03/2012 - 00:48 | 2674905 i-dog
i-dog's picture

 

"lets enjoy"

That's what got us to here! Now it's time to do some work, before somebody else does it for us....

"Mr Citizen...Tear down this federal abortion!"

Thu, 08/02/2012 - 21:47 | 2674621 Dr. Engali
Dr. Engali's picture

My suspicion is that the administration wants the Bernank to be a little looser with the printers, and will use this as leverage to do so.

Thu, 08/02/2012 - 22:28 | 2674714 centerline
centerline's picture

The politicians are not quite as stupid as it seems.  They are keeping the Fed in the spotlight.  Gonna take them down with the ship it seems.

Fri, 08/03/2012 - 04:12 | 2675044 NidStyles
NidStyles's picture

Their about as intelligent as snakes in the grass, when they hear the lawn mower going they slither out to leave the toads and other vermin to get chopped up. Think of the Fed as the Toads, and the Mower as the currency collapse. 

Thu, 08/02/2012 - 22:22 | 2674623 Yen Cross
Yen Cross's picture

 N.Y. Times) we were duped over tungsten!

  Classified add:  used tungsten rods for sale. great for drilling xau,xag. Great for beginners.

    Inquire within! ( GSA general act.com/ Jeffrey E. Neely.)

 

  P.S. Dr. Englai you kick ass!

Thu, 08/02/2012 - 21:49 | 2674628 ClassicCommodity
ClassicCommodity's picture

How do we trust ANYBODYs gold accumulation figures? I bet the Fed aint the only ones stacking dat der Tungsten blocks

Thu, 08/02/2012 - 21:51 | 2674632 Cdad
Cdad's picture

Just outstanding, Tyler.  Thanks.

Thu, 08/02/2012 - 22:20 | 2674693 Yen Cross
Yen Cross's picture

 Thanks for your wisdom Cdad. +1

Thu, 08/02/2012 - 21:51 | 2674633 A Lunatic
A Lunatic's picture

End this dog and pony show.

Thu, 08/02/2012 - 21:52 | 2674634 earleflorida
earleflorida's picture

nothing to add here... absolutely fantastic read

Bravo Tyler!!!

Thu, 08/02/2012 - 21:55 | 2674641 user2011
user2011's picture

How do you audit Tungsten ?

I guess Gaddafi's gold has arrived in NY. That's why they feel more comfortable doing an audit.

Thu, 08/02/2012 - 22:38 | 2674735 knukles
knukles's picture

MoMar's was in held London (BoE) sold to pay in part fighter's pay-stubs, arms and ammo (horseshit) about the same day that they Arab Spring (you know who) grabbed hold of capital and CB, just in time to secure physical only moments after Chavez demanded gold delivered to Venezuela.

Look it up
That's exactly the time line and coincidences 

 

 

Thu, 08/02/2012 - 21:57 | 2674646 El Oregonian
El Oregonian's picture

"Never let a good crisis go to waste".

CBO Regulator #1: Hey,  how come when you talk I hear an ehco-echo-echo?

CBO Regulator #2: Uh-oh-oh-oh...

Thu, 08/02/2012 - 21:58 | 2674647 Bansters-in-my-...
Bansters-in-my- feces's picture

Terroist run the country and have taken over the goverment.

Thu, 08/02/2012 - 22:00 | 2674652 freedogger
freedogger's picture

to wit: Allow myself to introduce ... myself

http://www.youtube.com/watch?v=67E42LQsU24

 

Thu, 08/02/2012 - 22:00 | 2674653 AgShaman
AgShaman's picture

America Loves segregated accounts:

 

http://fms.treas.gov/gold/current.html

Thu, 08/02/2012 - 22:02 | 2674658 Marge N Call
Marge N Call's picture

THIS JUST IN:

"Wolf audits henhouse, reports that all chickens and all eggs are present and accounted for. These aren't the chickens you're looking for"

Give me a freaking break, next thing they will report is that the IRS verifies that Timmay has paid his taxes.

 

Thu, 08/02/2012 - 23:28 | 2674749 slewie the pi-rat
slewie the pi-rat's picture

hey marge_N_all!

by the time this bullshit becomes "official" it should rank right up there with:>

  • the warren commission
  • the 911 commission

they're accounting for the gold dust

they haven't been able to account for the pentagon monies for decades but they're in there accounting for the gold dust from the drill

trust but verify?  at least the justiceDept isn't involved;  or the SEC or the CFTC

could the FED have asked for this audit under its new regulatory powers:  to set the baseline?  to have something to account to?  to straighten out a mess?

one thing we know for sure:>  you and i will never hear or read one word of truth about any of this~~just what TPTB want us to "know"

Thu, 08/02/2012 - 22:03 | 2674659 tony bonn
tony bonn's picture

how do i hypothecate thee? let me count the ways.....

the usa has no gold - the london gold pool and other gold price suppression schemes saw to that.....tungsten, thy name is gold....

Thu, 08/02/2012 - 22:05 | 2674664 Colonel
Colonel's picture

Another deflection/distraction. "See the rabbit hole only goes down this far see, see?"

"at which point forced delivery of hard assets would expose the entire facade of the modern financial system to be a hollow (tungsten filled) sham."

 Therefore Stack for you and yours freedoms!

 

 

Thu, 08/02/2012 - 22:05 | 2674667 Atomizer
Atomizer's picture

Please proceed into our vault, you'll see we have logged all of our debt receipts using the dewey decimal system.

 

Thu, 08/02/2012 - 23:02 | 2674769 sunaJ
Thu, 08/02/2012 - 22:05 | 2674670 rufusbird
rufusbird's picture

As I understand it, the big question is how much gold has been lent out etc. So consider the comment...

"In Germany, there have been calls by some politicians to "repatriate" the country's foreign gold reserves and return to a gold standard"

If a foreign country  repatriates their gold, there is even that much less behind the gold that is lent out...

sounds like if something can go wrong here it will...

 

Thu, 08/02/2012 - 22:06 | 2674671 silvertrain
silvertrain's picture

count the silver when you finish with that..

Thu, 08/02/2012 - 22:14 | 2674681 CunnyFunt
CunnyFunt's picture

That's easy. 0.

Thu, 08/02/2012 - 22:25 | 2674708 ghengis86
ghengis86's picture

yep; all the reserves were melted down to make cetrifuges in Oakridge, TN during the Manhattan project

Thu, 08/02/2012 - 22:07 | 2674672 optimator
optimator's picture

So, Dr. Paul didn't need to spend all that time putting through an Audit the Fed bill, it's already been done.  Six more months and we'll know the results.  How stupid do they think we all are.

Thu, 08/02/2012 - 22:35 | 2674728 XitSam
XitSam's picture

Very.

Thu, 08/02/2012 - 22:07 | 2674673 analyzer_66
analyzer_66's picture

the bars with the tungsten were sold to the chinese as the real thing several years ago, what happened to all the gold that was in the WTC buildings ??  Was that gold Corzined ?

Thu, 08/02/2012 - 22:19 | 2674689 CunnyFunt
CunnyFunt's picture

Yes, since tungsten has a great melting point. Alloyed with thorium, it can sustain conducting electric arcs of 10k F. It's good Shiite.

Thu, 08/02/2012 - 22:14 | 2674680 notadouche
notadouche's picture

Ahh the affrontery that someone would be curious if the gold is really there.  The first clue that something could be wrong is the idea that "Goldbugs questioning the gold is tantamount to a birther...".   Not an exact quote  fromt the article but you get the gist.   Can't imagine why the fellow would think the US govt might "cook the books" when it pertains to gold,  It's not like they are tinkering with any other "facts"  

Thu, 08/02/2012 - 22:17 | 2674682 Colonel
Colonel's picture

Butt wipe er,.. paper money that ancient relic.

"The most famous Chinese issuer of paper money was Kublai Khan, the Mongol who ruled the Chinese empire in the 13th century. Kublai Khan established currency credibility by decreeing that his paper money must be accepted by traders on pain of death."

 Bernanke the barbarian.

 

 

Thu, 08/02/2012 - 22:21 | 2674699 Deathrips
Deathrips's picture

awesome...thank you.

Thu, 08/02/2012 - 22:27 | 2674709 slewie the pi-rat
slewie the pi-rat's picture

"But....but....but.... this is what fringe tin-foil hat blogs allege.... not Fed chairmen who between them have over 20 years of tenure."

...vermin-infested fringe tin-foil hat blogs, BiCheZ!

Thu, 08/02/2012 - 23:02 | 2674768 Yen Cross
Yen Cross's picture

 It's nice to have you back " Full Screen Slewie" . Were you moving, or did you break your laptop?

  All I know, is  that your true 'Vernacular" is welcome!  I"m guessing you were wiring your new house?

   No more droid/ iphone updates?

Thu, 08/02/2012 - 23:58 | 2674842 slewie the pi-rat
slewie the pi-rat's picture

slewie-curious?  L0L!!!

tyler has some GATA competition for his "1951 FED-Treasury Accord" thesis:  Has the BIS gold pool succeeded the London Gold Pool?

listen: maybe tyler is right about what harryTruman pulled off, but this BIS gold pool essay also contains a 1983 harper's article about the BIS suggesting that possibly the banksters had "moved internationally" in basel to outflank the US by 1983

the introductory GATA article quotes tyler on gold, too!

therefore we may be seeing the BIS get more involved in things, especially things AUric and int'l/europeon

Fri, 08/03/2012 - 00:06 | 2674863 Yen Cross
Yen Cross's picture

 GATA short.  BIS undecided?       161.7% new lows eur/usd certain!

  Spanish & Italian spreads widening? +!

    Bund/ust10's ugly yes?                           GAP/ UP Sunday?  YES

Fri, 08/03/2012 - 02:34 | 2674953 slewie the pi-rat
slewie the pi-rat's picture

i get the same answer from the stolper fib, Y/C

i'm happy to see that the rumor you have been writing in full sentences was greatly ex-ag-R-rated

the BIS is another level of the bankster "capitalism" boilerplate shell game of constantly moving everything around in secret and thru "swaps" and "repos" and "pomos" and re-hy...

...oh, and fraud

this was "well received" in the equities mkts earlier today:   Chart for 10 YEAR T-NOTES Sep 2012 (E) (CBOT:ZN.U12.E) SHARKS!!!

big whoops in syria, Y/C;  didya see where (former prez) medvedev, at the olympics, verified what slewie intel been saying for a freaking year?  :>  Medvedev: Libya has influenced our position on Syria — RT

Thu, 08/02/2012 - 22:29 | 2674713 “Rebellion to t...
“Rebellion to tyranny is obedience to God.”-ThomasJefferson's picture

If only we could squeeze every politician in Washington D.C. into the vault under NYC, then seal it forever. Priceless!

Thu, 08/02/2012 - 22:29 | 2674715 Colonel
Colonel's picture

Citi bank what's in your wallet, I mean vault?

Thu, 08/02/2012 - 22:34 | 2674720 Cabreado
Cabreado's picture

Just for fun...

The question (and answer) of "how much gold" becomes moot when

a) you will never get the answer, and
regardless of the answer you will never get,

b) it is controlled by forces that do not care about you,
your mission, or your sustainability

and

c) that is a bad thing, because

d) you will be in turmoil forever, 'til you live in a society based on

e) some strange mix of:
your Expectations, and Truth.

As if you didn't know...

Thu, 08/02/2012 - 22:31 | 2674721 buzzsaw99
buzzsaw99's picture

egad

Thu, 08/02/2012 - 22:32 | 2674723 DavosSherman
DavosSherman's picture

I wouldn't let Geithner audit my used toilet paper usage.

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