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What's in your vault? Uncle Sam audits its stash of gold at the New York Fed

The gold audit is a first for the institution and includes drilling into several hundred ingots. It could put the conspiracy theories to rest.

August 02, 2012|By Andrew Tangel, Los Angeles Times

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 New York Fed hasn't typically rolled out the red carpet to the central banks and international organizations wanting to audit their gold accounts, according to Ernest Patrikis. He's a former New York Fed official who had stints as the institution's general counsel and chief operating officer.

"They could come in and take a look," said Patrikis, now an attorney in private practice in New York. But if they wanted to count the gold, "you've got to take it away, count it and bring it back."

America's central bank began taking foreign gold deposits when it opened in 1924. Gold piled into the New York Fed's vault during World War II, as countries stored it there for safety. Foreign reserves quadrupled to $4 billion worth of gold by the war's end, according to the Fed.

The gold vault swelled with bullion until 1971, when the U.S. stopped backing dollars with gold. Since then, the Fed role as keeper of the yellow metal now carries less significance.

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.

Paul suggests that the government offload its gold reserves if they serve little purpose.

"I would just as soon they sell the gold," Paul said. "And then we would find out if they really had it."

Times researcher Scott Wilson in Los Angeles contributed to this report.

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