Basic Physical Gold Questions!

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DoChenRollingBearing

DoChenRollingBearing

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I am almost ashamed that I do not even know certain basic facts about actual gold that is claimed to be owned by governments and central banks! I finally have access to a very knowledgeable community, and we can get all these basics straightened out NOW!

1) Our central bank, the Federal Reserve owns gold worth some $11 billion (valued at $42.22 / oz). It is on their balance sheet! You can see it week in Barron's in their "Market Laboratory" section, probably at barrons.com as well. Valued at $1600, that total value would be some $416 billion. My estimate is that the Fed owns approx. 260,000,000 oz.

-- Where is that gold? Is it ALL there in the vault in NYC?
-- Does that include gold owned by the Germans and the Dutch (should not...)?
-- Some commercial banks evidently own the Fed. So who OWNS that gold?

2) I keep seeing (or THINK I am seeing) that we have 8000 tons (tonnes?) at Ft. Knox, Denver and West Point (maybe some in San Francisco as well). I calculate that at roughly 200,000,000 oz worth some $320 billion.

-- Is that 8000 tons 90% pure (gold coin melt after 1933's confiscation)?
-- Is that gold SEPARATE from the Fed's gold (I would presume so)?

3) What about Europe? I read at FOFOA (maybe I will send these questions to him as well) that members of the Eurozone had to chip in something like 15% of each nation's gold to join (and so I believe THAT gold (the 15%) would be owned by the European Central Bank (ECB)). But, probably ALL of the national Eurozone members have THEIR OWN gold as well.

-- Where is the gold owned by the ECB? Is that "15%" really owned by the ECB?

4) What about gold at the Bank of International Settlements (the BIS, owned by many of the Western central banks)? I know they have gold there.

-- How much do they have?
-- Who owns it (I think I read that the BIS moves title ownership around when there are central banks buy & sell it)?
-- Is the gold is located in/near Basel (BIS location)?

5) Same questions with the IMF, there are some 100 - 200 tonnes that they "own" or have borrowed, much of it from the USA.

-- Where is that gold and who really "owns" it?

*****

Getting answers to much of the above would greatly enhance my understanding of gold, so thanks in advance for any answers!

*****
 
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Well, good luck with finding the answers. Did you see this sub committe hearing a while back?

Long version:


Short version:


Clear as mud?
 
Back at you PMBug!

No I missed that hearing, of course. And this hearing is about the IMF and our gold contribution.

Clear as mud, you're right. I watched the "Short Version" just now.

Maybe some of this information might be at wikipedia? I'll go check...

---

In the meantime:

WhITFGold?!?!
 
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From wikipedia (search result for Federal Reserve, then Balance Sheet section of the article):

Analyzing the Federal Reserve's balance sheet reveals a number of facts:
The Fed has over $11 billion in gold stock (certificates), which represents the Fed's financial interest in the statutory-determined value of gold turned over to the U.S. Treasury in accordance with the Gold Reserve Act on January 30, 1934.[162] The value reported here is based on a statutory valuation of $42 2/9 per fine troy ounce. As of March 2009, the market value of that gold is around $247.8 billion.

---

I guess that means that the Fed's gold is "certificates" and not physical gold owned and held by them.

I HAVE seen (on the internet, search for it) a brochure published by the Fed in which it looks like a BIG part of the gold that they store there (in a vault deep under the Federal Reserve Bank of New York) is owned by foreigners who want it held for "safekeeping" (LOL). Lots of pretty & shiny 400 oz bars... They show scales, auditors(?) and other employees in that brochure as well.
 
From wikipedia (http://en.wikipedia.org/wiki/United_States_Bullion_Depository (article linked from "Fort Knox")):

Gold and coin holdings

Gold holdings peaked during World War II at 20,205 metric tons (649.6 million oz. troy). Today, holdings are 4,578 metric tons (147.2 million oz. troy ) in 368,000 standard, 400 oz. troy (12.4 kg or 27.4 lb avoirdupois) gold bars. At August 22, 2011 rates of $1890.04 an ounce [5] it is worth $278.3 billion, while the World War II total of 649.6 million oz. troy would be worth $909 billion. The depository also holds monetary gold coins. The 1933 Double Eagle was also a temporary resident after transfer from 7 World Trade Center in July 2001, until its sale in July 2002 for $7.59 million. Sometime in 2004, 10 additional allegedly stolen 1933 Double Eagles were transported to Fort Knox for safekeeping.
Not all the gold bars held in the depository are of exactly the same composition. The mint gold bars are nearly pure gold. Bars made from melted gold coins, however, called "coin bars", are the same composition as the original coins, which is only 90% gold. Unlike many .999 fine gold bullion coins minted in modern times for holding-purposes today, the coin alloy for pre-1933 U.S. coins, which were intended for circulation, was a much tougher and wear-resistant .900 fine alloy (balance copper) used for all U.S. gold coins since 1837. (See crown gold for further gold coin alloy history).
All of the gold in the depository, if pure, could form a cube 20.3 feet (6.19 m) on a side—a volume of 237 m³. In comparison, all the gold ever refined in history (an estimated 165,000 tonnes) is about 40 times greater, so the facility alone holds about 2.5% of all gold ever refined.[6]
The United States holds more gold bullion than any other country, with about 2.39 times that of the next leading country, Germany.

*****

Not addressed in the article is other US Treasury owned gold at Denver, West Point and maybe San Francisco.

Kind of a bitch trying to find this out, no?
 
Well, my Trail Guide FOFOA sure explained most of what we need to know about my gold questions. And quickly!

Any questions about how much FOFOA knows? Heh!

fofoa.blogspot.com

Keep in mind that FOFOA answered quickly and is a busy guy. Also that I am a beginner at Google Docs, so please no whining about formatting, etc.

Check out the link (I inserted links at his request, Google Docs did not do that automatically for me):

https://docs.google.com/document/d/1zjWHC46wrsx1zGroSYBCFdYbFghcWOJ3koEmD06uZqw/edit?pli=1&hl=en_US

***
 
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Very nice thread Bearing.....these types of questions roll around in my brain quite often too!
 
DoChenRollingBearing said:
From wikipedia about the BIS:

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

No mention of gold at the wiki article.

*****

OK, let's try this:

www.bis.org

Searching for "gold" yielded an article with this sentence:

In addition, the Bank owned 116 tonnes of fine gold at 30 September 2011.

http://www.bis.org/banking/balsheet.htm
Click to expand...

From the official website of the BIS

Foreign exchange and gold services

Services offered are:
spot deals, swaps, outright forwards, options, FX-linked deposits
foreign exchange overnight orders
safekeeping and settlements facilities available loco London, Berne or New York
purchases and sales of gold: spot, outright, swap or options
Click to expand...
http://www.bis.org/banking/finserv.htm
 
I envision a reworking of Mel Brooks' song The Inquisition retitled Re-hypothecation:

Re-hypothecation, let's begin
Re-hypothecation, banking for the win
...
 
oh man...education at hand. this is getting sent to some folks for sure!
 
DoChenRollingBearing said:
From wikipedia (search result for Federal Reserve, then Balance Sheet section of the article):

Analyzing the Federal Reserve's balance sheet reveals a number of facts:
The Fed has over $11 billion in gold stock (certificates), which represents the Fed's financial interest in the statutory-determined value of gold turned over to the U.S. Treasury in accordance with the Gold Reserve Act on January 30, 1934.[162] The value reported here is based on a statutory valuation of $42 2/9 per fine troy ounce. As of March 2009, the market value of that gold is around $247.8 billion.

---

I guess that means that the Fed's gold is "certificates" and not physical gold owned and held by them.

I HAVE seen (on the internet, search for it) a brochure published by the Fed in which it looks like a BIG part of the gold that they store there (in a vault deep under the Federal Reserve Bank of New York) is owned by foreigners who want it held for "safekeeping" (LOL). Lots of pretty & shiny 400 oz bars... They show scales, auditors(?) and other employees in that brochure as well.
Click to expand...

Yes, that`s right. The Fed does not own any physical gold, only some gold certificates that are redemable only in currency (paper trash). All the previously held Fed physical gold was transferred to the treasury during the 1933 Rooseveld gold confiscation. :noevil:
 
Of course, this all depends on what you mean by "the fed". The institutions that own the fed might indeed be holding plenty of physical gold, having bought it from "the fed" long ago, leaving "the fed" with only paper.

The game of privatize the profits and socialize the risk has been going on quite awhile now, why would this be any different?
 
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