"The economy's method of financing" benefits the banking insiders - no question about it. Most of us would be thrown into prison for what the bankers do routinely with the blessing of their bought politicians..............financing wars with money that we don't have............benefiting their buddies in the MIC..............nobody benefits from this except the few.
You still haven't answered the basic question..............why no audits and why bother keeping gold if it's irrelevant? Your only comeback is "because they say so", which is naive at best.
Q: Are You Printing Money? Bernanke: Not Literally
Our lives would not be affected wether it’s there or not unless someone starts refusing to take the mighty dollar.
Yay!!! A straight answer..mostly.
An audit would only placate a few barbarous relics. Faith in the dollar does not rely on US gold holdings.
What if there was an audit and it was discovered that the US had MORE gold than assumed?
Always straight answers. I agree faith in the dollar does not rely on gold specifically, but it does help. Why do you think governments (major) own it?
They don't.
Apple has over $200 billion in casha and marketable securities. That's the equivalent of 3300 tonnes. Only the USA and maybe Germany (depending on the price of gold) has an equivalent dollar value of gold.
Canada is the 8th largest economy as measured by GDP--they have no gold.
England is the 6th largest economy and has about $18 Billion worth of gold. By comparison, ExxonMobil made $15 billion profit in the last 3 months.
Our lives would not be affected wether it’s there or not unless someone starts refusing to take the mighty dollar.
Yay!!! A straight answer..mostly.
An audit would only placate a few barbarous relics. Faith in the dollar does not rely on US gold holdings.
What if there was an audit and it was discovered that the US had MORE gold than assumed?
Always straight answers. I agree faith in the dollar does not rely on gold specifically, but it does help. Why do you think governments (major) own it?
They don't.
Apple has over $200 billion in casha and marketable securities. That's the equivalent of 3300 tonnes. Only the USA and maybe Germany (depending on the price of gold) has an equivalent dollar value of gold.
Canada is the 8th largest economy as measured by GDP--they have no gold.
England is the 6th largest economy and has about $18 Billion worth of gold. By comparison, ExxonMobil made $15 billion profit in the last 3 months.
We aren’t talking about Apple, Exxon or any corporation, so why don’t you answer my question.
Why does the U.S. go to the trouble and vast expense of storing the largest gold holding in the world?
Top 10 Countries with the Largest Gold Reserves (in tons)
United States — 8,133
Germany — 3,359
Italy — 2,452
France — 2,436
Russia — 2,299
China — 1,948
Switzerland — 1,040
Japan — 846
India — 754
Netherlands — 612
Our lives would not be affected wether it’s there or not unless someone starts refusing to take the mighty dollar.
Yay!!! A straight answer..mostly.
An audit would only placate a few barbarous relics. Faith in the dollar does not rely on US gold holdings.
What if there was an audit and it was discovered that the US had MORE gold than assumed?
Always straight answers. I agree faith in the dollar does not rely on gold specifically, but it does help. Why do you think governments (major) own it?
They don't.
Apple has over $200 billion in casha and marketable securities. That's the equivalent of 3300 tonnes. Only the USA and maybe Germany (depending on the price of gold) has an equivalent dollar value of gold.
Canada is the 8th largest economy as measured by GDP--they have no gold.
England is the 6th largest economy and has about $18 Billion worth of gold. By comparison, ExxonMobil made $15 billion profit in the last 3 months.
We aren’t talking about Apple, Exxon or any corporation, so why don’t you answer my question.
Why does the U.S. go to the trouble and vast expense of storing the largest gold holding in the world?
Top 10 Countries with the Largest Gold Reserves (in tons)
United States — 8,133
Germany — 3,359
Italy — 2,452
France — 2,436
Russia — 2,299
China — 1,948
Switzerland — 1,040
Japan — 846
India — 754
Netherlands — 612
I guess I have to dumb it down. What I attempted to do was to provide context to theose "large" gold holdings. By showing that the value of those gold holdings is less than just the cash on hand a one single corporation , I was trying to show that gold has become inconsequential. Those holdings have very little relative value.
What I was showing is that Apple could buy as much gold that Germany has. Yet we should consider Germanys holdings to be important? Blah.
Our lives would not be affected wether it’s there or not unless someone starts refusing to take the mighty dollar.
Yay!!! A straight answer..mostly.
An audit would only placate a few barbarous relics. Faith in the dollar does not rely on US gold holdings.
What if there was an audit and it was discovered that the US had MORE gold than assumed?
Always straight answers. I agree faith in the dollar does not rely on gold specifically, but it does help. Why do you think governments (major) own it?
They don't.
Apple has over $200 billion in casha and marketable securities. That's the equivalent of 3300 tonnes. Only the USA and maybe Germany (depending on the price of gold) has an equivalent dollar value of gold.
Canada is the 8th largest economy as measured by GDP--they have no gold.
England is the 6th largest economy and has about $18 Billion worth of gold. By comparison, ExxonMobil made $15 billion profit in the last 3 months.
We aren’t talking about Apple, Exxon or any corporation, so why don’t you answer my question.
Why does the U.S. go to the trouble and vast expense of storing the largest gold holding in the world?
Top 10 Countries with the Largest Gold Reserves (in tons)
United States — 8,133
Germany — 3,359
Italy — 2,452
France — 2,436
Russia — 2,299
China — 1,948
Switzerland — 1,040
Japan — 846
India — 754
Netherlands — 612
I guess I have to dumb it down. What I attempted to do was to provide context toe theose "large" gold holdings. By showing that the value of those gold holdings is less than just the cash on hand a one single corporation , I was trying to show that gold has become inconsequential. Those holdings have very little relative value.
What I was showing is that Apple could buy as much gold that Germany has. Yet we should consider Germanys holdings to be important? Blah.
Yet you can not or will not answer my question. Instead you go off on tangents that has nothing to do with the issue.
Our lives would not be affected wether it’s there or not unless someone starts refusing to take the mighty dollar.
Yay!!! A straight answer..mostly.
An audit would only placate a few barbarous relics. Faith in the dollar does not rely on US gold holdings.
What if there was an audit and it was discovered that the US had MORE gold than assumed?
Always straight answers. I agree faith in the dollar does not rely on gold specifically, but it does help. Why do you think governments (major) own it?
They don't.
Apple has over $200 billion in casha and marketable securities. That's the equivalent of 3300 tonnes. Only the USA and maybe Germany (depending on the price of gold) has an equivalent dollar value of gold.
Canada is the 8th largest economy as measured by GDP--they have no gold.
England is the 6th largest economy and has about $18 Billion worth of gold. By comparison, ExxonMobil made $15 billion profit in the last 3 months.
We aren’t talking about Apple, Exxon or any corporation, so why don’t you answer my question.
Why does the U.S. go to the trouble and vast expense of storing the largest gold holding in the world?
Top 10 Countries with the Largest Gold Reserves (in tons)
United States — 8,133
Germany — 3,359
Italy — 2,452
France — 2,436
Russia — 2,299
China — 1,948
Switzerland — 1,040
Japan — 846
India — 754
Netherlands — 612
I guess I have to dumb it down. What I attempted to do was to provide context toe theose "large" gold holdings. By showing that the value of those gold holdings is less than just the cash on hand a one single corporation , I was trying to show that gold has become inconsequential. Those holdings have very little relative value.
What I was showing is that Apple could buy as much gold that Germany has. Yet we should consider Germanys holdings to be important? Blah.
Yet you can not or will not answer my question. Instead you go off on tangents that has nothing to do with the issue.
I did answer it. You just don't want to alhear or accept it.
That gold on the books has been there for years, when it was worth something. Now it has little relevance. That's why you don't see Canada.or England or Germany or USA adding. I
Ugh! Not really an answer. We aren’t talking about if our holdings are relevant or not. We also aren’t talking about other countries. The question is, once again - Why does the U.S. go to the trouble and vast expense of storing the largest gold holding in the world?
@Exbrit said:
I think we hit a brick wall. Sorry to the OP for going off topic.
I don't want to speak for the op but no worries round here (well mostly). Just continue to add the Au, I suspect you will one day in the future you will be very happy. RGDS!
@jmski52 said:
"The economy's method of financing" benefits the banking insiders - no question about it. Most of us would be thrown into prison for what the bankers do routinely with the blessing of their bought politicians..............financing wars with money that we don't have............benefiting their buddies in the MIC..............nobody benefits from this except the few.
That's a bunch of trite cliches but has nothing factual to back it up. It's a bunch of political talking points that could be said about dozens of government agencies, departments, etc.
Why do you think we would be thrown into jail if we did as bankers do ? What do they do that is illegal ?
I don't think you understand modern banking or finance.
You still haven't answered the basic question..............why no audits and why bother keeping gold if it's irrelevant? Your only comeback is "because they say so", which is naive at best.
Because gold is a strategic metal. It's worth hundreds of billions at current prices but ridiuclous to sell as it would depress the price. It has use in commerce and for next-generation technologies from the James Webb Space Telescope to the next-generation of EVs.
The government makes more money off Federal Reserve Open Market Operations each year and from check-clearing than it does if all the gold was sold and put into interest-bearing assets.
So, now gold is a strategic metal worth billions, but not worth enough to warrant an audit and an accounting? Gee, that's odd. Every private business has to account for their inventories or suffer the consequences of IRS assessments and penalties.
Nobody suggested that the (imaginary?) gold ought to be sold, but now that you mention it, gold naysayers always disparage gold ownership by saying that it doesn't bear interest, but you imply that it's okay for gov.com to let it sit without collecting interest. Isn't that mismanagement of our tax dollars?
Aside from the (privately-owned) Fed's money-from-thin-air trick (counterfeiting if you or I did it), you seem to think that the Fed presidents don't frontrun their own interest rate decisions. I seem to recall that Bullard was caught doing just that, a few short weeks ago.
You don't think that bankers engage in highly illegal activities and get away with it? Google "2008 financial crisis" and read about it - but I'm sure you're gonna tell us all about it and how I've got it all wrong. If it's just "the cost of doing business" to pay fines, why does that make it okay? You haven't addressed why it's okay to break laws for a mere accounting entry.
Interestingly, the mark-to-market accounting rules got changed so that the big banks wouldn't be held accountable, but there's no corruption. Nothing to see here, right?
Goldman Sachs got special treatment that Bear Stearns & Lehman didn't get. Ain't it great to have friends in high places?
I can't wait to hear you tell me that this is all a bunch of trite cliche's.
Q: Are You Printing Money? Bernanke: Not Literally
In the EU, gold is a "Tier 1" asset. This means 100% of the value of the gold held by a bank can be used as part of the required reserve holdings of that bank. That alone makes gold important.
@Exbrit said:
Why does the U.S. go to the trouble and vast expense of storing the largest gold holding in the world?
Please quantify trouble and "vast expense". I found a number of $5 million in annual security cost. To me, that number is inconsequential and far, far from what I would consider a "vast expense". By comparison, Gitmo in Cuba costs $13 million to secure. Do you have other information for me to consider?
Of course gold has value and needs to be protected from thieves, who could barter it for nefarious things. But it does not protect the dollar, or the USA. We do not go through "vast expense" to store and protect it.
Probably too much information in this attached file for some folks, but it is a great summary of the history of "money". We are 100% fiat now and are in a new modern age of risk.
Whether gold or other PMs will have a comeback is certainly debatable, but in times of war or political instability, fiat money supplies usually increase to pay for them worldwide, and inflation results. Hard assets become more desirable to hold than electronic numbers in mainframe computers.
@jmski52 said:
So, now gold is a strategic metal worth billions, but not worth enough to warrant an audit and an accounting? Gee, that's odd. Every private business has to account for their inventories or suffer the consequences of IRS assessments and penalties.
You want to audit the size of the National Parks, too ? We did this 48 years ago. You want to go to Fort Knox and count bars, be my guest.
Nobody suggested that the (imaginary?) gold ought to be sold, but now that you mention it, gold naysayers always disparage gold ownership by saying that it doesn't bear interest, but you imply that it's okay for gov.com to let it sit without collecting interest. Isn't that mismanagement of our tax dollars?
I guess they can always lend it out to short-sellers.
Aside from the (privately-owned) Fed's money-from-thin-air trick (counterfeiting if you or I did it), you seem to think that the Fed presidents don't frontrun their own interest rate decisions. I seem to recall that Bullard was caught doing just that, a few short weeks ago.
You'd be wrong. Bullard is a great leader at the monetarist St. Louis Fed. I have great trust in the Fed officials. There's 1 or 2 incompetents, but by and large they can make 10x what they are paid by the government and make big sacrifices to serve as custodians of our monetary anchor.
You don't think that bankers engage in highly illegal activities and get away with it? Google "2008 financial crisis" and read about it - but I'm sure you're gonna tell us all about it and how I've got it all wrong. If it's just "the cost of doing business" to pay fines, why does that make it okay? You haven't addressed why it's okay to break laws for a mere accounting entry.
Your impressions of the 2008 Crisis are based on other people's reportings, apparently. I don't need to Google it -- I lived it hourly working in the sector and for a large European bank.
In addition, I actually looked at bank's balance sheets and knew who was in trouble (a few) and who wasn't (most).
Did you know that the biggest "bailout" was the AFL-CIO and UAW via the auto bailouts ? Yeah, you won't read about that from the "financial" press.
Interestingly, the mark-to-market accounting rules got changed so that the big banks wouldn't be held accountable, but there's no corruption. Nothing to see here, right?
Depends. MTM on government securities is a non-entity since the risk of default is nil. It wasn't the Big Banks that benefitted, it was the SMALL banks that benefitted. The preferred stocks of Fannie Mae and Freddie Mac infected hundreds of banks. Those GSEs we were told 5 months earlier were on "solid" ground by those who wanted them to keep lending for political reasons.
Now you want to accept those same backers' explanation of what went wrong in 2008 !!
Goldman Sachs got special treatment that Bear Stearns & Lehman didn't get. Ain't it great to have friends in high places?
What special treatment ? They got none that they asked for. They had $48 billion in equity capital and market capitalization at the exact bottom (I was watching every 15 minutes). They were never in trouble.
I can't wait to hear you tell me that this is all a bunch of trite cliche's.
Not so much trite cliches, but regurgitation of half-true and materially false financial non-sequiters by reporters and journalists who never took an Accounting 101, Monetary Economics, or Basics of Financial Markets course.
Read The WSJ, BARRON'S, and watch CNBC, FBC, and BloombergTV for accurate financial reporting. You wouldn't take medical advice from a garage mechanic -- don't trust what happens in the financial markets from people who just came from reporting on Kim Kardashian and Meghan & Harry.
@jmski52 said:
So, now gold is a strategic metal worth billions, but not worth enough to warrant an audit and an accounting? Gee, that's odd. Every private business has to account for their inventories or suffer the consequences of IRS assessments and penalties.
You want to audit the size of the National Parks, too ? We did this 48 years ago. You want to go to Fort Knox and count bars, be my guest.
Nobody suggested that the (imaginary?) gold ought to be sold, but now that you mention it, gold naysayers always disparage gold ownership by saying that it doesn't bear interest, but you imply that it's okay for gov.com to let it sit without collecting interest. Isn't that mismanagement of our tax dollars?
I guess they can always lend it out to short-sellers.
Aside from the (privately-owned) Fed's money-from-thin-air trick (counterfeiting if you or I did it), you seem to think that the Fed presidents don't frontrun their own interest rate decisions. I seem to recall that Bullard was caught doing just that, a few short weeks ago.
You'd be wrong. Bullard is a great leader at the monetarist St. Louis Fed. I have great trust in the Fed officials. There's 1 or 2 incompetents, but by and large they can make 10x what they are paid by the government and make big sacrifices to serve as custodians of our monetary anchor.
You don't think that bankers engage in highly illegal activities and get away with it? Google "2008 financial crisis" and read about it - but I'm sure you're gonna tell us all about it and how I've got it all wrong. If it's just "the cost of doing business" to pay fines, why does that make it okay? You haven't addressed why it's okay to break laws for a mere accounting entry.
Your impressions of the 2008 Crisis are based on other people's reportings, apparently. I don't need to Google it -- I lived it hourly working in the sector and for a large European bank.
In addition, I actually looked at bank's balance sheets and knew who was in trouble (a few) and who wasn't (most).
Did you know that the biggest "bailout" was the AFL-CIO and UAW via the auto bailouts ? Yeah, you won't read about that from the "financial" press.
Interestingly, the mark-to-market accounting rules got changed so that the big banks wouldn't be held accountable, but there's no corruption. Nothing to see here, right?
Depends. MTM on government securities is a non-entity since the risk of default is nil. It wasn't the Big Banks that benefitted, it was the SMALL banks that benefitted. The preferred stocks of Fannie Mae and Freddie Mac infected hundreds of banks. Those GSEs we were told 5 months earlier were on "solid" ground by those who wanted them to keep lending for political reasons.
Now you want to accept those same backers' explanation of what went wrong in 2008 !!
Goldman Sachs got special treatment that Bear Stearns & Lehman didn't get. Ain't it great to have friends in high places?
What special treatment ? They got none that they asked for. They had $48 billion in equity capital and market capitalization at the exact bottom (I was watching every 15 minutes). They were never in trouble.
I can't wait to hear you tell me that this is all a bunch of trite cliche's.
Not so much trite cliches, but regurgitation of half-true and materially false financial non-sequiters by reporters and journalists who never took an Accounting 101, Monetary Economics, or Basics of Financial Markets course.
Read The WSJ, BARRON'S, and watch CNBC, FBC, and BloombergTV for accurate financial reporting. You wouldn't take medical advice from a garage mechanic -- don't trust what happens in the financial markets from people who just came from reporting on Kim Kardashian and Meghan & Harry.
The 2008 automobile manufacturers bailouts amounted to 17.4 billion. That was FAR from the biggest bailout at the time.
The 2008 bailout of AIG alone was MUCH bigger at 85 billion. Of course, the Federal Reserve made sure that happened so that Fed member and insider Goldman Sachs would receive all the money that AIG owed them.
And note that the two biggest financial entities that were not bailed out and failed in 2008 were NOT member banks of the Federal Reserve: Bear Stearns and Lehman Brothers.
It is very apparent the Federal Reserve has the interests of their member banks first, and everyone else a distant second.
Another problem with the Federal Reserve is the insider trading by Fed officials. They got away with it for a long time (and probably still are, using indirect transactions). So it is also obvious that Fed officials put their own interests far ahead of those of the general public.
@dcarr said:
The 2008 bailout of AIG alone was MUCH bigger at 85 billion. Of course, the Federal Reserve made sure that happened so that Fed member and insider Goldman Sachs would receive all the money that AIG owed them.
AIG -- and the banks -- had to pay back the money they got from TARP and were also diluted. Citibank stock is still 1/10th the pre-2008 price with all the new shares.
The UAW got preferential treatment with their general liablity claims elevated to secured creditor. Basically, it's like if you filed bankruptcy and your Visa creditors got taken care of before your mortgage company. A total upending of basic creditor rights.
And note that the two biggest financial entities that were not bailed out and failed in 2008 were NOT member banks of the Federal Reserve: Bear Stearns and Lehman Brothers.
Bear had a backstop when JP Morgan bought them. The govrnment still lied about how they'd treat the accounting of the purchase -- I wouldn't call Jamie Dimon or JPM next time they need someone to take on a troubled institution.
If Lehman had been cleaned up like Bear, the crisis never happens like it does and things probably go alot smoother. Hank Paulson probably wants a do-over on that one.
It is very apparent the Federal Reserve has the interests of their member banks first, and everyone else a distant second.
It's supposed to look out for the banking sector, since an implosion there leads to a depression here. The Fed is the Lender Of Last Resort...that's what they are supposed to do.
They're monetary policy, the government(s) are fiscal policy.
Another problem with the Federal Reserve is the insider trading by Fed officials. They got away with it for a long time (and probably still are, using indirect transactions). So it is also obvious that Fed officials put their own interests far ahead of those of the general public.
You have no proof of that statement..in fact, the evidence is to the contrary. Fed officials are under strict supervision and have severely restricted trading rights.
Basically, you're saying they only became Fed officials so they could front-run FOMC decisions and get rich -- when in fact they could all make 10-50x as much money legally and without restriction working for PIMCO or Goldman or any other asset management company.
Paul Volcker made $175,000 a year when he slew inflation in the 1980's. He could have made 100x that amount...instead, he sacrificed and had to BORROW money on his house to pay for nursing care for his elderly mother.
@dcarr said:
The 2008 bailout of AIG alone was MUCH bigger at 85 billion. Of course, the Federal Reserve made sure that happened so that Fed member and insider Goldman Sachs would receive all the money that AIG owed them.
AIG -- and the banks -- had to pay back the money they got from TARP and were also diluted. Citibank stock is still 1/10th the pre-2008 price with all the new shares.
The UAW got preferential treatment with their general liablity claims elevated to secured creditor. Basically, it's like if you filed bankruptcy and your Visa creditors got taken care of before your mortgage company. A total upending of basic creditor rights.
And note that the two biggest financial entities that were not bailed out and failed in 2008 were NOT member banks of the Federal Reserve: Bear Stearns and Lehman Brothers.
Bear had a backstop when JP Morgan bought them. The govrnment still lied about how they'd treat the accounting of the purchase -- I wouldn't call Jamie Dimon or JPM next time they need someone to take on a troubled institution.
If Lehman had been cleaned up like Bear, the crisis never happens like it does and things probably go alot smoother. Hank Paulson probably wants a do-over on that one.
It is very apparent the Federal Reserve has the interests of their member banks first, and everyone else a distant second.
It's supposed to look out for the banking sector, since an implosion there leads to a depression here. The Fed is the Lender Of Last Resort...that's what they are supposed to do.
They're monetary policy, the government(s) are fiscal policy.
Another problem with the Federal Reserve is the insider trading by Fed officials. They got away with it for a long time (and probably still are, using indirect transactions). So it is also obvious that Fed officials put their own interests far ahead of those of the general public.
You have no proof of that statement..in fact, the evidence is to the contrary. Fed officials are under strict supervision and have severely restricted trading rights.
Basically, you're saying they only became Fed officials so they could front-run FOMC decisions and get rich -- when in fact they could all make 10-50x as much money legally and without restriction working for PIMCO or Goldman or any other asset management company.
Paul Volcker made $175,000 a year when he slew inflation in the 1980's. He could have made 100x that amount...instead, he sacrificed and had to BORROW money on his house to pay for nursing care for his elderly mother.
You still think he was insider trading ?
I was writing about the current Fed officials, not Volker from 40 years ago.
Several recent and current Fed officials traded millions of dollars in personal stock holdings during the pandemic.
Dallas district Fed President Robert Kaplan resigned after controversy over his personal stock trading.
Boston district Fed president Eric Rosengren did the same.
Fed Chairman Jerome Powell sold millions in a stock index shortly before a significant stock market decline in October 2022.
PS:
The "Volker Miracle" of the early 1980s wasn't really a miracle at all.
The Carter administration had been monetizing the government debt so as to hold the line on Federal debt levels. This, of course, caused significant inflation. When Reagan and Volker came into office, all Volker had to do was stop the monetization, borrow more money to fund government instead of printing it, and let interest rates rise to meet the market.
Dallas district Fed President Robert Kaplan resigned after controversy over his personal stock trading.
Boston district Fed president Eric Rosengren did the same.
Fed Chairman Jerome Powell sold millions in a stock index shortly before a significant stock market decline in October 2022.
Yup.
Q: Are You Printing Money? Bernanke: Not Literally
Neither was remotely akin to insider trading. They were both planning on retiring, but moved up their dates so as to not embroil the Fed in any controversy. They put the institution above themselves, something alot of government officials and politicians seem unwilling to do.
I'll take the integrity of Fed officials over virtually any journalists or elected officials. They're completely transparent and extremely honest.
@dcarr said:
Fed Chairman Jerome Powell sold millions in a stock index shortly before a significant stock market decline in October 2022.
It was during the period of time he was ALLOWED to sell stock. Similar to a 10(b)-5 corporate plan for insiders of corporations.
Only smear artist Elizabeth Warren had an issue with it.
Fed officials (and politicians) do not have to give up lucrative opportunities in the private sector when they can make a lot of money doing "public service", and they have access to sensitive insider information to go along with the job.
@dcarr said:
Fed Chairman Jerome Powell sold millions in a stock index shortly before a significant stock market decline in October 2022.
It was during the period of time he was ALLOWED to sell stock. Similar to a 10(b)-5 corporate plan for insiders of corporations.
Only smear artist Elizabeth Warren had an issue with it.
Fed officials (and politicians) do not have to give up lucrative opportunities in the private sector when they can make a lot of money doing "public service", and they have access to sensitive insider information to go along with the job.
You really are so cynical that you believe that ? They joined the Fed at $175,000 a year salary (forgoing positions on Wall Street at $5 MM or more) just so they could front-run FOMC decisions and make a few dollars by avoiding a market decline, forgetting that the market will rise and they need to re-buy at the right time ?
@dcarr said:
Fed Chairman Jerome Powell sold millions in a stock index shortly before a significant stock market decline in October 2022.
It was during the period of time he was ALLOWED to sell stock. Similar to a 10(b)-5 corporate plan for insiders of corporations.
Only smear artist Elizabeth Warren had an issue with it.
Fed officials (and politicians) do not have to give up lucrative opportunities in the private sector when they can make a lot of money doing "public service", and they have access to sensitive insider information to go along with the job.
You really are so cynical that you believe that ? They joined the Fed at $175,000 a year salary (forgoing positions on Wall Street at $5 MM or more) just so they could front-run FOMC decisions and make a few dollars by avoiding a market decline, forgetting that the market will rise and they need to re-buy at the right time ?
Yes, why would officials take a $175,000 job instead of making millions in the private sector ?
The answer is that they can make up the difference with insider trading. And their friends can also benefit (clandestinely) from info passed to them.
@dcarr said:
Yes, why would officials take a $175,000 job instead of making millions in the private sector ?
The answer is that they can make up the difference with insider trading. And their friends can also benefit (clandestinely) from info passed to them.
@dcarr said:
Yes, why would officials take a $175,000 job instead of making millions in the private sector ?
The answer is that they can make up the difference with insider trading. And their friends can also benefit (clandestinely) from info passed to them.
Except it's a fiction.
BTW, not all insider trading is illegal.
Fed officials review unpublished economic data. That have to. Otherwise, they wouldn't be doing the job.
They also know what interest rates are going to do before anybody else.
And they also trade stocks.
Even if they don't act overtly on their inside information, it it is still there in the back of their minds when they engage in personal financial transactions.
Fed officials should be able to buy US Treasury Bonds for their personal accounts. But that would be it. No trading in stocks or financial instruments that can be affected by Fed policy.
@jmski52 said: not all insider trading is illegal.
Should it be?
The Supreme Court has said NO. The SEC tried to say YES -- but were shot down.
The SEC has tried a very expansive view of "insider trading" that has been repeatedly shot down by the courts as attacks on Free Speech and/or proper (vs. improper) use of information. The seminal case is still probably DIRKS vs. SEC, where Ray Dirks blew open an insurance fraud with help from a corporate insider. The SEC wanted to punish him, the SCOTUS said not so fast.
Too many politicians and journalists scream "insider trading" without even knowing what it means or how it is defined or how it works. In theory, EVERY securities trade involves insider trading -- there's a buyer AND a seller and each is convinced they are right on the direction of the price.
@dcarr said:
Fed officials review unpublished economic data. That have to. Otherwise, they wouldn't be doing the job.
They also know what interest rates are going to do before anybody else.
And they also trade stocks.
Even if they don't act overtly on their inside information, it it is still there in the back of their minds when they engage in personal financial transactions.
Fed officials should be able to buy US Treasury Bonds for their personal accounts. But that would be it. No trading in stocks or financial instruments that can be affected by Fed policy.
They have the same "unpublished" economic data that the rest of us do. It's not the 1950's when they and BLS/BEA/Labor Dept/etc. all had the ONLY data and statistics. The private sector has information that matches and exceeds what the Fed and government have. Hedge funds pay MILLIONS for on-side drone anlysis of mall traffic, for instance...that is LIGHT-YEARS better than a months-old Retail Sales number subject to revisions.
They trade stocks ONLY under tightly controlled conditions with full disclosure. Most have blind trusts and/or mutual funds.
They have "inside information" only at key points which are rare. The Fed officials have been talking since 1994 unlike the Volcker Years. We KNOW what they think because they let us know. Their speeches jibe with their FOMC votes. There are no surprises and no U-Turns for personal benefit.
We've known for over a year that the Fed would be hiking rates. There's been NO DISSENT (surprisingly) even from "doves" -- if anything, non-FOMC voting hawks like Mester (Cleveland) and Bullard (St. Louis) have been the outliers to the hawkish side. So if the Fed officials SOLD bonds or bond funds or even stocks -- how is that acting on "insider information ?"
In order to be GUILTY of insider trading (as opposed to "appearances" which is totally separate), you have to violate 2 conditions. First, you have to have broken a fiduciary duty to your employer to not engage in the trading. Fed offcials clearly have that obligation (at CERTAIN times). An investment banker working on a takeover has the same duty. A reporter writing about a company that is going to see its stock soar or go down has the same duty to his newspaper...etc...etc...etc.
The second condition is that the information has to be material and non-public (MNPI). If it's immaterial and non-public, who cares ? If it's material but PUBLIC -- again, who cares, everybody had access to the information.
Fed Officials are very leery of condition one but when they have divulged as much information on condition two (MNPI) you can't say they are engaging in insider trading. Elizabeth Warren, who is supposed to be a law professor, you would think should know that but apparently doesn't. No doubt she would have sent Ray Dirks to jail for exposing a fraud 50 years ago.
@jmski52 said: The Supreme Court has said NO. The SEC tried to say YES -- but were shot down.
You didn't answer the question. Should insider trading be illegal?
Only if BOTH conditions are violated. Someone has to use MNPI, and it has to have been obtained illegally by inducing a fiduciary breach.
If you overhear me at a cocktail party say that my friend, an investment banker, is telling me that Microsoft is looking to buy Junk.com, that's not illegal.
OTOH, if you know I work as an investment banker and ask me to breach information I have doing work for Junk.com on their being taken over, that's insider trading that is illegal.
In a side note several senators bought gold related stocks.
Absolute PROOF that politicians don't have access to MNPI !!
Gold stocks are about as speculative and finnicky as you can get...whipsawed by numerous factors (price of gold, central bank sales, stock market, interest rates, cost of energy, etc.).
If you overhear me at a coctail party say that my friend, an investment banker, is telling me that Microsoft is looking to buy Junk.com, that's not illegal.
First of all, that's not insider information and consequently it isn't insider trading. You aren't the insider.
OTOH, if you know I work as an investment banker and ask me to breach information I have doing work for Junk.com on their being taken over, that's insider trading that is illegal.?
Secondly, that is insider information and consequently that is insider trading.
Clear?
Q: Are You Printing Money? Bernanke: Not Literally
@jmski52 said: If you overhear me at a coctail party say that my friend, an investment banker, is telling me that Microsoft is looking to buy Junk.com, that's not illegal.
First of all, that's not insider information and consequently it isn't insider trading. You aren't the insider.
Technically true, but the courts have and would probably rule that I inherited the obligation to not trade on the information because I knew or should have known that my friend's information was MNPI and I was aware he had a fiduciary obligation to not disclose it.
While I did NOT trade on it, someone else did trade on MNPI inadvertently. But no fiduciary breach took place so NO illegal insider trading.
Both conditions have to be met. And these conditions were set pre-internet which is a good thing -- you'd have chaos if simply trading on MNPI was illegal as the Internet can disseminate information to hundreds or thousands of buyers or sellers. Look at the problems with reigning in crypto hawkers or the Redditt chat boards on Gamestop or AMC.
Comments
I stand corrected.......8200 tons.
"The economy's method of financing" benefits the banking insiders - no question about it. Most of us would be thrown into prison for what the bankers do routinely with the blessing of their bought politicians..............financing wars with money that we don't have............benefiting their buddies in the MIC..............nobody benefits from this except the few.
You still haven't answered the basic question..............why no audits and why bother keeping gold if it's irrelevant? Your only comeback is "because they say so", which is naive at best.
I knew it would happen.
They don't.
Apple has over $200 billion in casha and marketable securities. That's the equivalent of 3300 tonnes. Only the USA and maybe Germany (depending on the price of gold) has an equivalent dollar value of gold.
Canada is the 8th largest economy as measured by GDP--they have no gold.
England is the 6th largest economy and has about $18 Billion worth of gold. By comparison, ExxonMobil made $15 billion profit in the last 3 months.
https://en.m.wikipedia.org/wiki/Gold_reserve
Knowledge is the enemy of fear
We aren’t talking about Apple, Exxon or any corporation, so why don’t you answer my question.
Why does the U.S. go to the trouble and vast expense of storing the largest gold holding in the world?
Top 10 Countries with the Largest Gold Reserves (in tons)
United States — 8,133
Germany — 3,359
Italy — 2,452
France — 2,436
Russia — 2,299
China — 1,948
Switzerland — 1,040
Japan — 846
India — 754
Netherlands — 612
I guess I have to dumb it down. What I attempted to do was to provide context to theose "large" gold holdings. By showing that the value of those gold holdings is less than just the cash on hand a one single corporation , I was trying to show that gold has become inconsequential. Those holdings have very little relative value.
What I was showing is that Apple could buy as much gold that Germany has. Yet we should consider Germanys holdings to be important? Blah.
Knowledge is the enemy of fear
Yet you can not or will not answer my question. Instead you go off on tangents that has nothing to do with the issue.
I did answer it. You just don't want to alhear or accept it.
That gold on the books has been there for years, when it was worth something. Now it has little relevance. That's why you don't see Canada.or England or Germany or USA adding. I
Knowledge is the enemy of fear
Ugh! Not really an answer. We aren’t talking about if our holdings are relevant or not. We also aren’t talking about other countries. The question is, once again - Why does the U.S. go to the trouble and vast expense of storing the largest gold holding in the world?
I think we hit a brick wall. Sorry to the OP for going off topic.
I don't want to speak for the op but no worries round here (well mostly). Just continue to add the Au, I suspect you will one day in the future you will be very happy. RGDS!
The whole worlds off its rocker, buy Gold™.
That's a bunch of trite cliches but has nothing factual to back it up. It's a bunch of political talking points that could be said about dozens of government agencies, departments, etc.
Why do you think we would be thrown into jail if we did as bankers do ? What do they do that is illegal ?
I don't think you understand modern banking or finance.
Because gold is a strategic metal. It's worth hundreds of billions at current prices but ridiuclous to sell as it would depress the price. It has use in commerce and for next-generation technologies from the James Webb Space Telescope to the next-generation of EVs.
The government makes more money off Federal Reserve Open Market Operations each year and from check-clearing than it does if all the gold was sold and put into interest-bearing assets.
So, now gold is a strategic metal worth billions, but not worth enough to warrant an audit and an accounting? Gee, that's odd. Every private business has to account for their inventories or suffer the consequences of IRS assessments and penalties.
Nobody suggested that the (imaginary?) gold ought to be sold, but now that you mention it, gold naysayers always disparage gold ownership by saying that it doesn't bear interest, but you imply that it's okay for gov.com to let it sit without collecting interest. Isn't that mismanagement of our tax dollars?
Aside from the (privately-owned) Fed's money-from-thin-air trick (counterfeiting if you or I did it), you seem to think that the Fed presidents don't frontrun their own interest rate decisions. I seem to recall that Bullard was caught doing just that, a few short weeks ago.
You don't think that bankers engage in highly illegal activities and get away with it? Google "2008 financial crisis" and read about it - but I'm sure you're gonna tell us all about it and how I've got it all wrong. If it's just "the cost of doing business" to pay fines, why does that make it okay? You haven't addressed why it's okay to break laws for a mere accounting entry.
Interestingly, the mark-to-market accounting rules got changed so that the big banks wouldn't be held accountable, but there's no corruption. Nothing to see here, right?
Goldman Sachs got special treatment that Bear Stearns & Lehman didn't get. Ain't it great to have friends in high places?
I can't wait to hear you tell me that this is all a bunch of trite cliche's.
I knew it would happen.
Bear Stearns and Lehman were bankrupt.
Goldman -- not even close.
In the EU, gold is a "Tier 1" asset. This means 100% of the value of the gold held by a bank can be used as part of the required reserve holdings of that bank. That alone makes gold important.
Bear Stearns and Lehman were bankrupt.
Goldman -- not even close.
No, but they sure got special treatment via the AIG bailout.
And then they all got bonuses.
I knew it would happen.
As is said by angry stockholders when the company they have invested in is on the rocks: "Show us the books".
Please quantify trouble and "vast expense". I found a number of $5 million in annual security cost. To me, that number is inconsequential and far, far from what I would consider a "vast expense". By comparison, Gitmo in Cuba costs $13 million to secure. Do you have other information for me to consider?
Of course gold has value and needs to be protected from thieves, who could barter it for nefarious things. But it does not protect the dollar, or the USA. We do not go through "vast expense" to store and protect it.
How many straight forward answers do you want?
Knowledge is the enemy of fear
Probably too much information in this attached file for some folks, but it is a great summary of the history of "money". We are 100% fiat now and are in a new modern age of risk.
Whether gold or other PMs will have a comeback is certainly debatable, but in times of war or political instability, fiat money supplies usually increase to pay for them worldwide, and inflation results. Hard assets become more desirable to hold than electronic numbers in mainframe computers.
National Commemorative Medals of the U.S. Mint:
https://www.pcgs.com/setregistry/u-s-coins/medals-tokens/national-commemorative-medals-united-states-mint-1940-present/alltimeset/195526
You want to audit the size of the National Parks, too ? We did this 48 years ago. You want to go to Fort Knox and count bars, be my guest.
I guess they can always lend it out to short-sellers.
You'd be wrong. Bullard is a great leader at the monetarist St. Louis Fed. I have great trust in the Fed officials. There's 1 or 2 incompetents, but by and large they can make 10x what they are paid by the government and make big sacrifices to serve as custodians of our monetary anchor.
Your impressions of the 2008 Crisis are based on other people's reportings, apparently. I don't need to Google it -- I lived it hourly working in the sector and for a large European bank.
In addition, I actually looked at bank's balance sheets and knew who was in trouble (a few) and who wasn't (most).
Did you know that the biggest "bailout" was the AFL-CIO and UAW via the auto bailouts ? Yeah, you won't read about that from the "financial" press.
Depends. MTM on government securities is a non-entity since the risk of default is nil. It wasn't the Big Banks that benefitted, it was the SMALL banks that benefitted. The preferred stocks of Fannie Mae and Freddie Mac infected hundreds of banks. Those GSEs we were told 5 months earlier were on "solid" ground by those who wanted them to keep lending for political reasons.
Now you want to accept those same backers' explanation of what went wrong in 2008 !!
What special treatment ? They got none that they asked for. They had $48 billion in equity capital and market capitalization at the exact bottom (I was watching every 15 minutes). They were never in trouble.
Not so much trite cliches, but regurgitation of half-true and materially false financial non-sequiters by reporters and journalists who never took an Accounting 101, Monetary Economics, or Basics of Financial Markets course.
Read The WSJ, BARRON'S, and watch CNBC, FBC, and BloombergTV for accurate financial reporting. You wouldn't take medical advice from a garage mechanic -- don't trust what happens in the financial markets from people who just came from reporting on Kim Kardashian and Meghan & Harry.
The 2008 automobile manufacturers bailouts amounted to 17.4 billion. That was FAR from the biggest bailout at the time.
The 2008 bailout of AIG alone was MUCH bigger at 85 billion. Of course, the Federal Reserve made sure that happened so that Fed member and insider Goldman Sachs would receive all the money that AIG owed them.
And note that the two biggest financial entities that were not bailed out and failed in 2008 were NOT member banks of the Federal Reserve: Bear Stearns and Lehman Brothers.
It is very apparent the Federal Reserve has the interests of their member banks first, and everyone else a distant second.
Another problem with the Federal Reserve is the insider trading by Fed officials. They got away with it for a long time (and probably still are, using indirect transactions). So it is also obvious that Fed officials put their own interests far ahead of those of the general public.
AIG -- and the banks -- had to pay back the money they got from TARP and were also diluted. Citibank stock is still 1/10th the pre-2008 price with all the new shares.
The UAW got preferential treatment with their general liablity claims elevated to secured creditor. Basically, it's like if you filed bankruptcy and your Visa creditors got taken care of before your mortgage company. A total upending of basic creditor rights.
Bear had a backstop when JP Morgan bought them. The govrnment still lied about how they'd treat the accounting of the purchase -- I wouldn't call Jamie Dimon or JPM next time they need someone to take on a troubled institution.
If Lehman had been cleaned up like Bear, the crisis never happens like it does and things probably go alot smoother. Hank Paulson probably wants a do-over on that one.
It's supposed to look out for the banking sector, since an implosion there leads to a depression here. The Fed is the Lender Of Last Resort...that's what they are supposed to do.
They're monetary policy, the government(s) are fiscal policy.
You have no proof of that statement..in fact, the evidence is to the contrary. Fed officials are under strict supervision and have severely restricted trading rights.
Basically, you're saying they only became Fed officials so they could front-run FOMC decisions and get rich -- when in fact they could all make 10-50x as much money legally and without restriction working for PIMCO or Goldman or any other asset management company.
Paul Volcker made $175,000 a year when he slew inflation in the 1980's. He could have made 100x that amount...instead, he sacrificed and had to BORROW money on his house to pay for nursing care for his elderly mother.
You still think he was insider trading ?
You want to audit the size of the National Parks, too ? We did this 48 years ago. You want to go to Fort Knox and count bars, be my guest.
There was never a question about auditing the National Parks. The rest of your responses are just as meaningless as this one.
I knew it would happen.
I was writing about the current Fed officials, not Volker from 40 years ago.
Several recent and current Fed officials traded millions of dollars in personal stock holdings during the pandemic.
Dallas district Fed President Robert Kaplan resigned after controversy over his personal stock trading.
Boston district Fed president Eric Rosengren did the same.
Fed Chairman Jerome Powell sold millions in a stock index shortly before a significant stock market decline in October 2022.
PS:
The "Volker Miracle" of the early 1980s wasn't really a miracle at all.
The Carter administration had been monetizing the government debt so as to hold the line on Federal debt levels. This, of course, caused significant inflation. When Reagan and Volker came into office, all Volker had to do was stop the monetization, borrow more money to fund government instead of printing it, and let interest rates rise to meet the market.
Dallas district Fed President Robert Kaplan resigned after controversy over his personal stock trading.
Boston district Fed president Eric Rosengren did the same.
Fed Chairman Jerome Powell sold millions in a stock index shortly before a significant stock market decline in October 2022.
Yup.
I knew it would happen.
Neither was remotely akin to insider trading. They were both planning on retiring, but moved up their dates so as to not embroil the Fed in any controversy. They put the institution above themselves, something alot of government officials and politicians seem unwilling to do.
I'll take the integrity of Fed officials over virtually any journalists or elected officials. They're completely transparent and extremely honest.
It was during the period of time he was ALLOWED to sell stock. Similar to a 10(b)-5 corporate plan for insiders of corporations.
Only smear artist Elizabeth Warren had an issue with it.
Fed officials (and politicians) do not have to give up lucrative opportunities in the private sector when they can make a lot of money doing "public service", and they have access to sensitive insider information to go along with the job.
And there is the answer to dcarrs question about my avatar. It ain't fear, but understanding whats behind comments like this.
Knowledge is the enemy of fear
You really are so cynical that you believe that ? They joined the Fed at $175,000 a year salary (forgoing positions on Wall Street at $5 MM or more) just so they could front-run FOMC decisions and make a few dollars by avoiding a market decline, forgetting that the market will rise and they need to re-buy at the right time ?
Yes, why would officials take a $175,000 job instead of making millions in the private sector ?
The answer is that they can make up the difference with insider trading. And their friends can also benefit (clandestinely) from info passed to them.
Except it's a fiction.
BTW, not all insider trading is illegal.
not all insider trading is illegal.
Should it be?
I knew it would happen.
Fed officials review unpublished economic data. That have to. Otherwise, they wouldn't be doing the job.
They also know what interest rates are going to do before anybody else.
And they also trade stocks.
Even if they don't act overtly on their inside information, it it is still there in the back of their minds when they engage in personal financial transactions.
Fed officials should be able to buy US Treasury Bonds for their personal accounts. But that would be it. No trading in stocks or financial instruments that can be affected by Fed policy.
The Supreme Court has said NO. The SEC tried to say YES -- but were shot down.
The SEC has tried a very expansive view of "insider trading" that has been repeatedly shot down by the courts as attacks on Free Speech and/or proper (vs. improper) use of information. The seminal case is still probably DIRKS vs. SEC, where Ray Dirks blew open an insurance fraud with help from a corporate insider. The SEC wanted to punish him, the SCOTUS said not so fast.
Too many politicians and journalists scream "insider trading" without even knowing what it means or how it is defined or how it works. In theory, EVERY securities trade involves insider trading -- there's a buyer AND a seller and each is convinced they are right on the direction of the price.
Only one can be.
They have the same "unpublished" economic data that the rest of us do. It's not the 1950's when they and BLS/BEA/Labor Dept/etc. all had the ONLY data and statistics. The private sector has information that matches and exceeds what the Fed and government have. Hedge funds pay MILLIONS for on-side drone anlysis of mall traffic, for instance...that is LIGHT-YEARS better than a months-old Retail Sales number subject to revisions.
They trade stocks ONLY under tightly controlled conditions with full disclosure. Most have blind trusts and/or mutual funds.
They have "inside information" only at key points which are rare. The Fed officials have been talking since 1994 unlike the Volcker Years. We KNOW what they think because they let us know. Their speeches jibe with their FOMC votes. There are no surprises and no U-Turns for personal benefit.
We've known for over a year that the Fed would be hiking rates. There's been NO DISSENT (surprisingly) even from "doves" -- if anything, non-FOMC voting hawks like Mester (Cleveland) and Bullard (St. Louis) have been the outliers to the hawkish side. So if the Fed officials SOLD bonds or bond funds or even stocks -- how is that acting on "insider information ?"
In order to be GUILTY of insider trading (as opposed to "appearances" which is totally separate), you have to violate 2 conditions. First, you have to have broken a fiduciary duty to your employer to not engage in the trading. Fed offcials clearly have that obligation (at CERTAIN times). An investment banker working on a takeover has the same duty. A reporter writing about a company that is going to see its stock soar or go down has the same duty to his newspaper...etc...etc...etc.
The second condition is that the information has to be material and non-public (MNPI). If it's immaterial and non-public, who cares ? If it's material but PUBLIC -- again, who cares, everybody had access to the information.
Fed Officials are very leery of condition one but when they have divulged as much information on condition two (MNPI) you can't say they are engaging in insider trading. Elizabeth Warren, who is supposed to be a law professor, you would think should know that but apparently doesn't. No doubt she would have sent Ray Dirks to jail for exposing a fraud 50 years ago.
The Supreme Court has said NO. The SEC tried to say YES -- but were shot down.
You didn't answer the question. Should insider trading be illegal?
I knew it would happen.
https://www.quiverquant.com/sources/senatetrading
In a side note several senators bought gold related stocks.
Only if BOTH conditions are violated. Someone has to use MNPI, and it has to have been obtained illegally by inducing a fiduciary breach.
If you overhear me at a cocktail party say that my friend, an investment banker, is telling me that Microsoft is looking to buy Junk.com, that's not illegal.
OTOH, if you know I work as an investment banker and ask me to breach information I have doing work for Junk.com on their being taken over, that's insider trading that is illegal.
Clear ?
Absolute PROOF that politicians don't have access to MNPI !!
Gold stocks are about as speculative and finnicky as you can get...whipsawed by numerous factors (price of gold, central bank sales, stock market, interest rates, cost of energy, etc.).
If you overhear me at a coctail party say that my friend, an investment banker, is telling me that Microsoft is looking to buy Junk.com, that's not illegal.
First of all, that's not insider information and consequently it isn't insider trading. You aren't the insider.
OTOH, if you know I work as an investment banker and ask me to breach information I have doing work for Junk.com on their being taken over, that's insider trading that is illegal.?
Secondly, that is insider information and consequently that is insider trading.
Clear?
I knew it would happen.
Technically true, but the courts have and would probably rule that I inherited the obligation to not trade on the information because I knew or should have known that my friend's information was MNPI and I was aware he had a fiduciary obligation to not disclose it.
While I did NOT trade on it, someone else did trade on MNPI inadvertently. But no fiduciary breach took place so NO illegal insider trading.
Both conditions have to be met. And these conditions were set pre-internet which is a good thing -- you'd have chaos if simply trading on MNPI was illegal as the Internet can disseminate information to hundreds or thousands of buyers or sellers. Look at the problems with reigning in crypto hawkers or the Redditt chat boards on Gamestop or AMC.