This Is Where The Gold Is(n't) - The New York Fed Guide To The Most Valuable Vault In The World

Tyler Durden's picture




 

Much has been said about the secretive vault situated 80 feet below ground level at 33 Liberty street, which contains over 20% of the world's gold (allegedly*), currently estimated at over $350 billion. Some have even robbed it: with the barrier between fantasy and reality a blur, courtesy of the total farce we live in which has rendered the IPO of TheOnion impossible, there is nothing wrong with actually believing Die Hard With A Vengeance did in fact happen. But if your knowledge of the vault is limited to the perspective of one John McClane, you are missing our on a lot. Which is why the new York Fed, in those rare occasions when it is not monetizing debt, and/or telling Citadel which securities to buy, has been courteous enough to put together "The Key To The Gold Vault" - the official brochure of the warehouse where more gold is stored than at any other place in the world.

Some excerpts:

The gold stored at the Federal Reserve Bank of New York is secured in a most unusual vault. It rests on the bedrock of Manhattan Island—one of the few foundations considered adequate to support the weight of the vault, its door, and the gold inside—80 feet below street level and 50 feet below sea level.

 

As of early 2008, the Fed’s vault contained roughly 216 million troy ounces of gold (1 troy oz. is 1.1 times as heavy as the avoirdupois ounce,  with which we are more familiar), representing about 22 percent of the world’s official monetary gold reserves. At the time, the vault’s gold value was about $9.1 billion at the official U.S. government price of $42.2222 per troy ounce, or about $194 billion at the market price of $900 an ounce. At the current official U.S. government price, one of the vault’s gold bars (approximately 27.4 pounds) is valued at about $17,000. At a $900 market price, the same bar is worth about $360,000.

 

Foreign governments and official international organizations store their gold at the Federal Reserve Bank of New York because of their confidence  in its safety, the convenient services the Bank offers, and its location in one of the world’s leading financial capitals.

 

The Bank stores gold in the form of bars that resemble construction bricks and stacks them on wooden pallets like those used in warehouses. To reach the vault, the bullion-laden pallets must be loaded into one of the Bank’s elevators and sent down five floors below  street level to the vault floor. The elevator’s movements are controlled by an operator who is in a distant room and communicates by intercom with the armed guards accompanying the shipment.

 

Once inside the vault, the gold bars become the responsibility of a control group consisting of representatives of three Bank divisions: Auditing, Vault Services, and Custody. A member of each division must be present whenever gold is moved or whenever anyone enters the vault.

 

If everything is in order, the gold is either moved to one or more of the vault’s 122 compartments assigned to depositing countries and official international organizations or placed on shelves in one of the “library” compartments shared by several countries. The bars are  stacked one at a time in an overlapping pattern similar to that used to stabilize a brick wall. Each compartment is secured by a padlock, two combination locks, and an auditor’s seal.

And here is why we used a * footnote above:

Confidence results from the Bank’s being part of the Federal Reserve System—the nation’s central bank and an independent governmental entity. The political stability and economic strength of the United States, as well as the physical security provided by the Bank’s vault, also are important factors.

Good luck finding it then. And for those who want to pull a Simon Peter Gruber and have already rented out the dump trucks:

Storing almost $194 billion [ZH: at very old prices] of gold makes extensive security measures mandatory at the New York Fed. An important measure is the background investigation required of all Bank employees. Continuous supervision by the vault control group also prevents problems from arising by ensuring that proper security procedures are followed.

 

The Bank and its vaults are secured by the Bank’s own uniformed protection force. Twice a year, each federal officer must qualify with a handgun, shotgun and rifle at the Bank’s firing range. Although the minimum requirement is a marksman’s score, most qualify as experts.

 

Security is also enhanced by a closed-circuit television system and by an electronic surveillance system that alerts Central Watch when a vault  door is opened or closed. The alarm system signals the officers to seal all security areas and Bank exits. This can be accomplished in less than twenty-five seconds.

 

The gold also is secured by the vault’s design, which is a masterpiece of protective engineering. The vault is actually the bottom floor of a three-story bunker of vaults arranged like strongboxes stacked on top of one another. The massive walls surrounding the vault are made of a steel-reinforced structural concrete.

 

There are no doors into the gold vault. Entry is through a narrow 10-foot passageway cut in a delicately balanced, nine-feet-tall, 90-ton steel  cylinder that revolves vertically in a 140-ton, steel-and-concrete frame. The vault is opened and closed by rotating the cylinder 90 degrees. An airtight and watertight seal is achieved by lowering the slightly tapered cylinder three-eighths of an inch into the frame, which is similar to pushing  a cork down into a bottle. The cylinder is secured in place when two levers insert large bolts, four recessed in each side of the frame, into the cylinder. By unlocking a series of time and combination locks, Bank personnel can open the vault the next business day. The locks are under  “multiple control”—no one individual has all the combinations necessary to open the vault.

 

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.

To think: so much trouble for a little tungsten...

 

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Tue, 01/24/2012 - 16:47 | 2093842 Clueless Economist
Clueless Economist's picture

This is Fecking nonsense...there is more gold stored at Fort Knox Kentucky

Tue, 01/24/2012 - 16:49 | 2093847 Clueless Economist
Clueless Economist's picture

"The only solution to the debt problem is more debt"

--Nobel winner Paul Krugman

Tue, 01/24/2012 - 17:07 | 2093923 gmrpeabody
gmrpeabody's picture

Well..., if there were gold, there would be more gold in Fort Knox.

Fixed it for ya.

Tue, 01/24/2012 - 17:14 | 2093945 francis_sawyer
francis_sawyer's picture

...and to think they go thru all that hoopla for a barbarous relic!

Tue, 01/24/2012 - 17:47 | 2094102 nope-1004
nope-1004's picture

No kidding.  If it were there, just open the doors and show.  Did an executive branch of the US gov't publish some "truth" about gold?

Is this the same branch that told us there was "no housing bubble" in 2006, and that the banks were "well capitalized" in 2008?

And whose President said he'd "end the senseless wars abroad and bring our troops home"?

Hell... I believe this POS. </s>

Tue, 01/24/2012 - 17:55 | 2094136 francis_sawyer
francis_sawyer's picture

Now I'm getting it... Barry O's birth certificate is stuck somewhere in between all those gold bars and it's just too much work to go in there & fetch it out...

Tue, 01/24/2012 - 18:32 | 2094309 flacon
flacon's picture

That brochure is anti-Asian. I didn't see one single asian man OR WOMAN in the brochure. No children either and no transexuals. Something is really amiss with our gold! There needs to be an INVESTIGATION! Pronto. 

Tue, 01/24/2012 - 18:48 | 2094354 Manthong
Manthong's picture

If they were to add about another 15 tons of gold to the vault the whole pile would be worth almost as mucn as AAPL.

Food for thought (and not the iPads).

Tue, 01/24/2012 - 19:01 | 2094402 jekyll island
jekyll island's picture

Exactly.  Just think how much it will be worth when faith is lost in fiat currency.  Life changing transfer of wealth opportunity straight ahead.  

Tue, 01/24/2012 - 21:04 | 2094696 NewThor
NewThor's picture

I love Zerohedge because it makes me ask questions like....

What happens if you nuked 100 tons of Gold? Does it melt? Does it turn to ash? Does it turn into a magical element? Does it turn to Gold water? Does it turn into Gold Zombies which then eat people(Which would be ironic cuz u can't eat gold)?

Tue, 01/24/2012 - 17:54 | 2094137 trav7777
trav7777's picture

yes...this is totally stupid.  Gold is a barbarous relic.  You can't eat it.

Why bother protecting it at all when you can digitally create eGold in an account somewhere and move it with a few mouse clicks?  Hell, you can just dial up a few trillion $ at the push of a button.

Tue, 01/24/2012 - 18:01 | 2094174 francis_sawyer
francis_sawyer's picture

The pic in the Fed brocure is photoshopped... I have a copy of the original here...

http://3.bp.blogspot.com/-gfOZxLxL8E8/TdL-EY1dl3I/AAAAAAAADJs/u5sDA_5PEUI/s1600/EmptyVault.jpg

Tue, 01/24/2012 - 23:06 | 2095139 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Yes, until you can't!

Tue, 01/24/2012 - 18:22 | 2094262 Sudden Debt
Sudden Debt's picture

I've heard that most of the gold is hidden in the Andes mountains. Embeded into the rocks

Tue, 01/24/2012 - 18:55 | 2094382 Jendrzejczyk
Jendrzejczyk's picture

Apparently, most of it is at the bottom of lakes.

Tue, 05/29/2012 - 15:21 | 2473016 Overfed
Overfed's picture

That's where all of mine is!

Tue, 01/24/2012 - 19:12 | 2094441 He_Who Carried ...
He_Who Carried The Sun's picture

... follow the yellow brick road, follow the yellow brick road....

Tue, 01/24/2012 - 18:12 | 2094235 vast-dom
vast-dom's picture

fiat may turn out to be most barbarous in the end.....

Tue, 01/24/2012 - 20:45 | 2094670 Ropingdown
Ropingdown's picture

That would be 'barberific' with haircuts, a little taken off the top and sides, customer clipped.

Tue, 01/24/2012 - 17:43 | 2094061 DoChenRollingBearing
DoChenRollingBearing's picture

@ gmr

My "Trail Guide" FOFOA doubts the conspiracy theories re NO GOLD! at Ft. Knox and related.  I am inclined to agree.  

One reason that they do not let "the public" look into the vault at Ft. Knox is security related, they do not want letting out security secrets (reference the the US Bullion link at Wikipedia's Fort Knox article).

***

I got a fact straightened out the other day.  The $11 billion that the Fed "carries" on its balance sheet (you can see this in Barron's each weekend, with nominal value of $42.22 / oz) is not gold, but gold certificates.  In 1933, .gov seized the gold, even bankers' gold.  They gave the Fed the non-negotiable, non-transferable certificates.

EDIT:

http://en.wikipedia.org/wiki/United_States_Bullion_Depository

Tue, 01/24/2012 - 23:04 | 2095133 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

"My "Trail Guide" FOFOA doubts the conspiracy theories re NO GOLD! at Ft. Knox and related. I am inclined to agree."

 

Agreed!  I have it from inside that there "is" gold in Ft. Knox.  Contained therein is a one gram credit suisse gold bar

sans assay card! 

Tue, 01/24/2012 - 18:36 | 2094318 DosZap
DosZap's picture

gmrpeabody

there would be more gold in Fort Knox.

They moved it, in case of a Nuke strike, ALL would not be lost,if at Knox.

Tue, 01/24/2012 - 23:00 | 2095116 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

"There is zero chance that the U. S. will default because we can always repay our debts by printing more money.  However, there is no guarantee of what the purchasing power of that money would be."              Alan Greenspan   (former American, now globalist)

Tue, 01/24/2012 - 16:52 | 2093860 slaughterer
slaughterer's picture

The "Tyler" who wrote the first paragraph of this introduction--with that lovely hypotaxis worthy of the young Hoelderlin after he had binged on Proust--is "classic Tyler"  "Intelligent Tyler" "super snarky Tyler" "difficult Tyler" all in one, and should be given a bonus for the mind he brings here.  

Tue, 01/24/2012 - 16:57 | 2093889 I think I need ...
I think I need to buy a gun's picture

anyone think anything will come out of the speech tonight gold wise? Fed talks tomorrow.......hmmmmmmm,,,,,,manufacturing renaissance bitchez!!!!!!! No goods on the shelves coming to a f#ckin store near you!!!!!!!!!!!!!!!!!!!!!!!!!!!11

Tue, 01/24/2012 - 16:59 | 2093891 Dr. Engali
Dr. Engali's picture

Ouch I think I just went blind.

Tue, 01/24/2012 - 17:04 | 2093908 Oztralian
Oztralian's picture

must also be the "grammatically inept Tyler"

Tue, 01/24/2012 - 17:11 | 2093938 Buckaroo Banzai
Buckaroo Banzai's picture

Note the address: 33 Liberty Street.

"33" is the most important number to Masons, Illuminati, and the dark occult.

Calling it "Liberty" street is of course a little joke at your expense. It's their Liberty, not yours, that is being secured.

"hidden in plain sight", as they say.

Tue, 01/24/2012 - 17:49 | 2094085 nope-1004
nope-1004's picture

Tue, 01/24/2012 - 17:47 | 2094104 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

33, 9/11, 66, 77, shit what number don't they like?

Tue, 01/24/2012 - 17:56 | 2094148 trav7777
trav7777's picture

42?

Tue, 01/24/2012 - 18:02 | 2094179 Andrew Jackson ...
Andrew Jackson epitaph's picture

22K gold ?

Tue, 01/24/2012 - 19:29 | 2094488 akak
akak's picture

i

Tue, 01/24/2012 - 23:00 | 2095120 geekgrrl
geekgrrl's picture

No, that is their most favorite number!

Wed, 01/25/2012 - 04:15 | 2095663 tocointhephrase
tocointhephrase's picture

22 or 24 in our pockets!

Tue, 01/24/2012 - 17:57 | 2094155 francis_sawyer
francis_sawyer's picture

ZERO... No wait, they like that one too... They voted a ZERO President... (for the 44th one)

Tue, 01/24/2012 - 18:29 | 2094290 zerotohero
zerotohero's picture

69

Tue, 01/24/2012 - 19:17 | 2094456 xela2200
xela2200's picture

69?

Tue, 01/24/2012 - 20:10 | 2094586 zerotohero
zerotohero's picture

nudge wink........please tell me your getting it now.

Tue, 01/24/2012 - 19:19 | 2094461 Sub-MOA
Sub-MOA's picture

47...as in Ag

Tue, 01/24/2012 - 22:52 | 2095077 gravedestruction
gravedestruction's picture

"what number don't they like?"

[this number]

Tue, 01/24/2012 - 22:57 | 2095096 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

#7 (the sign of the lamb)

Wed, 01/25/2012 - 08:51 | 2095828 NoClueSneaker
NoClueSneaker's picture

Jamie & Lloyd don't like the publicity.  69 censored .

Tue, 01/24/2012 - 18:03 | 2094185 Flakmeister
Flakmeister's picture

The great Rolling Rock mystery is now solved....

Tue, 01/24/2012 - 19:10 | 2094430 tongue.stan
tongue.stan's picture

Bucky: you, Sir, make me proud to be an American.

Tue, 01/24/2012 - 20:52 | 2094676 peekcrackers
peekcrackers's picture

The gold is all the vatican.. under gods great eyes . swiss army gards and the most honest truth telling  could do no wrong people on this earth.

Wed, 01/25/2012 - 00:13 | 2095350 mofreedom
mofreedom's picture

And Soros resides on the 33rd floor of his office on 7th ave in NYC, BFD, but true!  Go drink yourself sober ande spend yourself rich you hoser, cause I am, cheers mate!

Tue, 01/24/2012 - 16:54 | 2093869 ATG
ATG's picture

"Currently, it is reputedly the largest gold repository in the world (though this cannot be confirmed as Swiss banks do not report their gold stocks) and holds approximately 7,000 tonnes (7,700 short tons) of gold bullion ($415 billion as of October 2011), more than Fort Knox. Nearly 98% of the gold at the Federal Reserve Bank of New York is owned by the central banks of foreign nations.[8] The rest is owned by the United States and international organizations such as the IMF. 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, but charging a $1.75 fee (in 2008) per bar to move the gold."

http://en.wikipedia.org/wiki/Federal_Reserve_Bank_of_New_York

Tue, 01/24/2012 - 16:59 | 2093897 Big Ben
Big Ben's picture

Free storage! What a bargain for those central banks. How wise they are to trust the US government (which confiscated most of its gold from its own citizens) to safeguard their gold. Who said central bankers were stupid?

Hey central banks: I've got an even better deal for you. I will hold your gold at no charge and will even waive the $1.75 moving fee.

Do NOT follow this link or you will be banned from the site!