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The Fed's gold is good -- now sell it!

February 19, 2013|By Paul Whitefield
  • A stack of gold bars stored at the Federal Reserve Bank of New York. The New York Fed is home to an estimated 23% of the world's gold reserves.
A stack of gold bars stored at the Federal Reserve Bank of New York. The New… (Federal Reserve )

So there really is gold in them thar Federal Reserve banks.

Seems the Treasury Department conducted its first-ever audit of U.S. gold on deposit at Federal Reserve banks in New York and elsewhere last year, and lo and behold, the auditors, well, struck gold. Literally.

As my colleague Andrew Tangel reported:

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.

Which is good news for most of us -- but bad news for former GOP presidential contender and Texas congressman Ron Paul, who had questioned whether the government really had the gold it said it did. (Space does not permit me to delve into some of the wilder notions about our gold holdings hatched by those conspiracy types who live amongst us.)

So the U.S. is golden again, despite our Marxist/commie president’s best efforts to loot the Treasury, bankrupt the country and impose a dictatorship, starting with taking away everyone’s guns.

Oops, sorry, that was me channeling those conspiracy types (see above).

Back in the real world, it’s a good thing that Goldfinger hasn’t made off with our gold. But I’ve got to ask: Why should I care? What’s so special about gold, and does it really matter that the government has so much of it?

Sure, gold is scarce. It’s a precious metal. It’s been a symbol of wealth and power for centuries.

Then again, plenty of things are scarce. For instance, my local market can’t seem to keep those little Crystal Light lemonade packages in stock.

And my cat is precious -- to us, anyway, despite the fact that she glares at me, tries to claw me whenever she gets the chance and takes up my side of the bed at night.

And if you’re looking for symbols of wealth and power these days, why not measure a country’s worth in nuclear weapons? OK, sure, you’re right: When you melt down gold, you still have gold, but when you melt down an A-bomb, you have, uh, a big hole. Which is a problem. But if China attacks us, would you rather throw gold bars at them or nukes? I rest my case.

Look, I’m no economist. But it seems to me that gold just isn’t what it used to be. It’s nice in jewelry, and it makes spaceships glisten, and it has other uses in industry and healthcare and so on.

But it’s not necessary as money anymore, is it? If the United States didn’t have an ounce of gold, would we cease being the richest, most powerful country on Earth?

I say it’s time to give up the gold.  


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