The New York Fed On The "Phenomenal Asset" That Is Gold

Tyler Durden's picture

The New York Fed has a few words to say about gold:

A PHENOMENAL ASSET

For centuries, gold had a profound impact on history, as a symbol and a storehouse of wealth accepted universally around the world. Gold functions as a medium of exchange, particularly in areas where currencies are distrusted. Yet gold has not been without controversy. The influential economist, John Maynard Keynes, referred to gold as a “barbarous relic.” Later in the 20th century, former Chairman of the Federal Reserve’s Board of Governors, William McChesney Martin, praised gold as "a beautiful and noble metal. What is barbarous," Martin said, "is man’s enslavement to gold for monetary purposes." Clearly, this precious metal has aroused great passion. It undoubtedly will continue to do so long into the future.

Yup. The New York Fed. Which, incidentally, explains why the Fed holds it. All of it. Including Europe's. Here's the reason:

The weight of the gold—just over 27 pounds per bar— makes it difficult to lift or carry and obviates the need to search vault employees and visitors before they leave the vault. Nor do they have to be checked for specks of gold. Gold is relatively soft, but not so soft that particles will stick to clothing or shoes, or can be scraped from the bars. The Bank’s security arrangements are so trusted by depositors that few have ever asked to  examine their gold.

See: it's safe, not rehypothecated infinitely courtesy of the Libor-equivalent manipulated system, GOFO. Which is why nobody wants theirs back. Simple.

More here:

 

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SGS's picture

Long SPiderman towels.  Zippy zappy chappy

HoofHearted's picture

This article just convinced me to send all of my gold to the NYFed. It appears they are the most trustworthy people ont he planet. I'm so glad that William Dudley took over Timmay's place. At least we have some of the people who do God's work in place there. So, all of ZH, put your gold into envelopes and send it straight to the Fed. Everybody trusts them, and nobody even wants to have assurance that their gold is still there. Only Commie bastards like Hugo Chavez wouldn't trust the Fed.

Wait. What did those little bears jst say about the William Dudley? Oh crap. Now I'm conflicted. Everyone trusts animated bears, and everyone trusts the Fed. I think my brain will explode.

Mr Lennon Hendrix's picture

The Bank’s security arrangements are so trusted by depositors that few have ever asked to  examine their gold.

Trusting, another word for:  complacent.

Temporalist's picture
CFTC's Chilton expects silver investigation to finish by October

"I am hopeful and expect the silver investigation to conclude in the not-too-distant future, hopefully in September or October," Chilton, a 52-year-old Democrat, said in an e-mail. "It has already taken way too long."

http://www.bloomberg.com/news/2012-07-23/cftc-s-chilton-sees-silver-prob...

WASHINGTON -- A four-year probe of potential price manipulation in the silver market may be completed as early as September, according to Bart Chilton, a member of the U.S. Commodity Futures Trading Commission.

 

found on http://www.gata.org/

Bay of Pigs's picture

Headline: CFTC Finds No Evidence of Silver Manipulation

silvertrain's picture

They will be found quilty, served up a fine to pay and promise to not do it again..Move along, nothing to see here..
Silver will fix its self when there isnt any to make new tablets and Iphones, solar panels etc.thats when the shit gets real, not until..

NewThor's picture

"There has never been a drop in housing prices."

"Gold is not money."

"Baphomet will be good to me when I die."

- Ben Bernanke

engineertheeconomy's picture

Oh I get it now...

Gold is used to ENSLAVE...

Fiat paper enables FREEDOM & LIBERTY...

Those assholes...

They know they're on their way out

 

strannick's picture

Bart ''Uncle Tom" Chilton is the yapping mouthpiece of the CFTC's enabling of silver manipulation. He's the good cop, offering you one of his smokes, while JIll Sommers and Jeff Christian chuckle in the other room.

ParkAveFlasher's picture

In May it was July, in July it is September.  September it'll become November.  November will become February, which, in turn, will become May again.  You see, Chilton's self-assessment is more important than anything else, and you must also realize that there is a lot of polo to watch, many gimlets to drink, many sailboats to sail, and many blue blazers to sport.  Now you understand?  The world is complex.  Have no fear.  What matters is not the result, it's the pursuit!

[sarc]

Quinvarius's picture

Longest white wash in the history of mankind.  They must have had to paint a whole lot of ass until it was completely covered.

Overfed's picture

These are not the 'droids you're looking for.....

viahj's picture

damn...again?! WTF are they?

alfred b.'s picture

 

    Yeah,,,,and the results of the investigation will probably be released on JPM stationery...(sic)

 

 

JLee2027's picture

Bart Chilton is always buying time, saying everything is just a few months away. Last year it was position limits, which never happened. Last I heard they were still defining the word swap.  It's tiresome, and obviously a stall tactic.

CuriousPasserby's picture

Trusting, another word for: FOOLS!

Cyrano de Bivouac's picture

Trusting, another word for clueless

.

engineertheeconomy's picture

Trusting, another word for " there isn't any, we stole it all" 

 

Treason Season's picture

From one of Bob Stone's novels;

"Trust is good. Not to trust is better."

eclectic syncretist's picture

"Gold is relatively soft, but not so soft that particles will stick to clothing or shoes, or can be scraped from the bars"

This is an outright lie.  Any half-assed chemist knows that pure gold is very soft.  So soft in fact, that it is the most malleable metal known.  These bars could easily be cut or scraped for shavings with a common butterknife (that is, if they are truly pure gold anyway)

http://www.periodic.lanl.gov/79.shtml

This lie gives away the fact that what they want is for you to feel like your gold is safe there.  Trust me, it isn't.  If there is a problem it will be your problem and you will never see your gold.  It has happened many times throughout history.

TrainWreck1's picture

If some country did ask for their gold back from the Fed (has ths ever happened and did the Fed deliver?)

Would cause a stir to see armed guard hauling heavy stuff out the front door. Bet they have a tunnel or something...

 

Other interesting gold and other valuables storage links:

http://www.bullionvault.com/help/?vault_zurich.html

http://www.viamat.com/vmi/worldmap/index.php

Papasmurf's picture

Not a problem, just a beer truck riding low on the suspension.

Precious's picture

Real men prefer lead bullets and a good scotch.   Both quite adequate investments as they are irreplaceable in dire times.

Anyone who thinks their necessities in an emergency can be transacted using gold is a complete 19th century fool. This commodity simply isn't going to practically work in today's electronic world.

Nevertheless, I have a deal today for you on assay kits, at only $299 complete, shipping included.  

Call 1 800 DUMB ASS

Oldballplayer's picture

Cipro, Cigarettes, and Coffee.....They will make you the ruler of the post apocalytkc world.  Add in some anti-depressants, and you will be in "barter" heaven.

Lord Koos's picture

Yep it's going to be bad news for addicts of alchohol, tobacco and caffiene when TSHTF but I'm not among the crowd, I'll stick with food and water, thank you.

ParkAveFlasher's picture

Can I ride shotgun in your apocalyptic dune buggy?  I have my own hockey mask and leather thong.  -thx

Precious's picture

We have a cage for you at the rear of the caravan labeled "pig slop".  You're wife however, may borrow your thong and ride shotgun (so to speak) up front.

Master_Blaster's picture

Two men enter, one man leaves.....

 

Ignatius's picture

Real men also prefer accuracy.

Keynes said that "the gold standard is a barbarous relic", not gold itself.  To miss this distinction is to miss the important point that gold is a wealth reserve asset (i.e., savings).

Benjamin Glutton's picture

no no no...you are supposed to hate and misquote Keynes whenever possible.

Fred Hayek's picture

Well, misquoting him's not fair. Hating him, on the other hand? Well . . . I mean, standing as the symbol of a two step policy guideline which pretentious economists and politicians profess to support yet none of them EVER follow the first of the two steps . . . That's inventing something almost perniciously useless for which you don't exactly deserve affection. Has there ever been a politician or economist who supported the increase of government spending in the bad times half of it who had actually demanded that the government run a surplus in the good times? Everybody wants to eat their dessert but no one wants to eat the broccoli first. And, in the end, Keynes has become the king of dessert.

Precious's picture

We all know what kind of "real man" Keynes was by his own diary admissions.

 

Precious's picture

try and stay away from the meth, psycho

Doña K's picture

Gold for monetary purposes?

Let's give them this argument but. Don't take away our argument: GOLD AS WEALTH PRESERVATION.

Give us whatever fiat you want for medium of exchange. But...let us convert any savings to gold. 

margaris's picture

Give them nothing!

Take everything from them!

Long-John-Silver's picture

Tungsten price now tracks Gold price.

Precious's picture

That's even better.  All my neighbors have expressed an interest in Tungsten.

DoChenRollingBearing's picture

Even though it's down today, gold is outperforming everything except the 10-Year bond.

bigdumbnugly's picture

that's because everyone knows the ten year is the true safe haven.

bwahahahahaha

 

Zero Debt's picture

Once the 10-year T note hits 0% we are past the inflection point where a Minsky moment of safe haven flows may move from bonds to gold.

Laundry list:

1) Sell equities, buy pheripheral bonds

2) Sell pheripheral bonds, buy high yield dividend stocks

3) Sell high yield stocks, buy core bonds

4) Sell core bonds, buy gold

Dexters pyramid bishes...

I am a Man I am Forty's picture

And municipal bonds.  Paging Meredith Whitney (eyes roll out of head and onto floor)

http://finance.yahoo.com/q?s=mub&ql=1

DCFusor's picture

Obviously, your definition of "everything" does not include almost my entire portfolio at the moment - VXX, SPXU, FAZ,AGNC - all up much more than bonds today.  Gold's not even down enough to buy, it's well above support, though its near the bottom of the most recent trading range.

Cyrano de Bivouac's picture

As of today gold down about 10$ for the year and for 5 years up about 900$ an oz.

Ray1968's picture

Until you print paper gold and sell it on the stock market and COMEX

GeezerGeek's picture

If ever there were a place for banning short sales, the PM market is it. Especially naked shorts. We need to import some Italians to do this, I suppose.

PaperBear's picture

"Martin said, "is man’s enslavement to gold for monetary purposes."" ?

Government's are enslaved is more accurate, enslaved from stealing wealth from the populace through currency debasement.