Treasury completes gold audit

[tsai3904]

The U.S. government’s gold in New York is safe in a vault underneath Manhattan, and some of the precious metal there is purer than previously thought.

That’s according to a first-ever audit conducted last year by the Treasury Department of U.S. gold on deposit at Federal Reserve banks in New York and elsewhere.

As part of the audit, the Treasury tested a sample of the government’s 34,021 gold bars in the New York Fed’s vault five stories below Manhattan’s financial district, according to the inspector general’s office. Auditors drilled tiny holes into the bars to remove samples that were tested for fineness in a process called assaying.

In three of the 367 tests, the gold was more pure than Treasury records indicated, according to the Treasury's inspector general. As a result, the government notched up the value of its gold holdings by approximately 27 fine troy ounces – or about $43,500, based on gold’s market value Monday.

The audit of the Fed gold came after 2012 presidential contender and former U.S. Rep. Ron Paul (R-Texas) questioned the central bank's gold holdings. While he was in Congress, Paul questioned whether the New York Fed had loaned or otherwise encumbered U.S. gold in financial arrangements, and he advanced a bill that would have required a full assay and audit of the country’s gold reserves.

More:
http://www.latimes.com/business/money/la-fi-mo-gold-new-york-fed-audit-pure-20130218,0,2393718.story

Update - Audit Report:
http://www.treasury.gov/about/organizational-structure/ig/Audit%20Reports%20and%20Testimonies/OIG13031.pdf

[TheTexan]

When it becomes serious, you have to lie.

..

[TheTexan]

The article also says nothing about whether or not the gold has been rehypothecated, only that the gold is there

[tangent4ronpaul]

OK, so the gold is more pure than 99.999% pure, or they fucked up and put a 3mm layer around the zink bars when there should only be 2mm there?


The New York Fed holds 99.98% of the U.S.-owned gold bars and coins in the custody of the Federal Reserve. The rest of the gold is on display at Fed banks in cities such as Richmond, Kansas City and San Francisco.

The vast majority of the country’s gold reserves is held elsewhere, in Fort Knox, West Point and Denver.

INTERESTING! - so the FED only has control of a small minority of the gold in the country?

REALLY?

And when are those other places getting audited?

-t

[Matt Collins]

How does it compare to this Audit of US Mint Deep Storage Gold And Silver Reserves
http://www.treasury.gov/about/organizational-structure/ig/Documents/oig11004.pdf




Or this -
Status Report of U.S. Treasury-Owned Gold
http://fms.treas.gov/gold/current.html

[TheTexan]

Correct me if I'm wrong, but 34,000 bars is roughly equivalent to 420 tons. Which isn't really that much.

[oyarde]

Correct me if I'm wrong, but 34,000 bars is roughly equivalent to 420 tons. Which isn't really that much.

More than I have seen :) , or about .25 % of what has ever been mined total ?

[TheGrinch]

I'm not sure whether to be happy or sad that they're at least forced to pay us lip service now.

[SpreadOfLiberty]

What about Fort Knox?

[oyarde]

What about Fort Knox?

Empty ?

[tangent4ronpaul]

Really interesting question. Given a total inventory (or estimation) of the total gold supply in the US (owned by the US GVMT) if we went back on the gold standard - how much would an ounce of gold be worth? This requires knowing how much gold the country owns and how much money has been printed. Two very hard to find numbers...

I would guess - pennies...

It is an answer that would probably send shock waves over the entire centralized banks infrastructure...

-t

[Carson]

Me being me, I suppose I've got to say it is good they got this done before we start returning other countries their gold to them and there is nothing left to count or assay.

http://www.ronpaulforums.com/showthread.php?393256-Germany-wants-its-gold

With comments like;

"Yup. Like musical chairs, but they keep the music going as long as they can while they continue to remove chairs until there are dozens of people for each chair. Then the music stops."

[paulbot24]

Did they x-ray them? There's a tungsten cancer that's been plaguing the poor things for years. The cancer "eats" numerous small but long grooves, which look strangely like long drill holes and then the when the tungsten tumors fills up the groove, it covers its surface with just enough gold to stealthily hide itself and make the bar look perfectly "healthy" from the outside. Sneaky little disease.

[awake]

This "audit" did not cover US gold (not) at Ft. Knox.

[itshappening]

These are foreign holdings that do not belong to the Treasury or the US government

http://www.economicpolicyjournal.com/2013/02/get-ready-for-some-major-disinformation.html

The gold that's America's and supposed to be at Fort Knox has never been audited or assayed

[thoughtomator]

Really interesting question. Given a total inventory (or estimation) of the total gold supply in the US (owned by the US GVMT) if we went back on the gold standard - how much would an ounce of gold be worth? This requires knowing how much gold the country owns and how much money has been printed. Two very hard to find numbers...

I would guess - pennies...

It is an answer that would probably send shock waves over the entire centralized banks infrastructure...

-t

If we use M2 and the official numbers for US gold reserves (~9000 tons) then we come to a price around $35,000/oz.

I will not be all that surprised if I see gold at that price in my lifetime.

[tsai3904]

Here's the audit report:
http://www.treasury.gov/about/organizational-structure/ig/Audit%20Reports%20and%20Testimonies/OIG13031.pdf

It doesn't really say anything other than the Fed holding X amount of gold.

[DamianTV]

Maybe we should use Iridium to back our currency instead of gold? It is way more rare...

[sailingaway]

If Ron didn't sample it personally, I still wonder. Why did this happen so easily the second they could do it without his oversight?

Maybe I'm paranoid.

I wonder how the sample was selected, by them or randomly?

[Zippyjuan]

Did they x-ray them? There's a tungsten cancer that's been plaguing the poor things for years. The cancer "eats" numerous small but long grooves, which look strangely like long drill holes and then the when the tungsten tumors fills up the groove, it covers its surface with just enough gold to stealthily hide itself and make the bar look perfectly "healthy" from the outside. Sneaky little disease.


Usually random bars get selected and holes are drilled in them and the contents the drill pulls up are analyzed for purity.

http://articles.latimes.com/2012/aug/02/business/la-fi-gold-bars-20120803


Now all of us may finally get some answers.

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

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

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

The Treasury's auditing operation, including drilling, is a first for the New York Fed. The department's inspector general previously audited and tested only gold it keeps under heavy guard at 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.

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

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

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

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

[sailingaway]

It doesn't say how they were selected. I know how I'd do it, but I'd like to know how they did it. I bet Germany would, too.

[Zippyjuan]

There wasn't any selection process to make it a fair audit- otherwise it could be claimed that the bricks were pre-selected and possibly pre-placed. A random pallet of gold gets selected and a random brick (not necessarily one on the top) then gets randomly choosen from that (usually by a different person than chose the pallet).

[tsai3904]

If Ron didn't sample it personally, I still wonder. Why did this happen so easily the second they could do it without his oversight?

Maybe I'm paranoid.

I wonder how the sample was selected, by them or randomly?

Well I think Ron was more worried about the gold's chain of ownership, which they refused to audit, rather than the actual purity of the gold.