1700 tons of West Point gold belongs to Germany?
roadrunner
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Below is an excerpt from Bill Murphy's latest article on www.321gold.com. This is very interesting in that the hypothesis is that US Treasury's exchange stabilization fund swapped our West Point gold with the German Bundesbank. Then later on sold the gold to the bullion banks off our books. The gold at West Point belongs to Germany and is listed on the books as "on loan." Supposedly, up to 15,000 tons of central bank gold has been moved around the world and the balance sheets do not show who really owns the gold. Another little-known process that was created to help 'work" the price of gold in the 1990's. (ESF: a clandestine govt trading body with no oversight by Congress that was created by law in the 1980's by Reagan. The ESF works its magic through various financial houses like Goldman Sachs. They do leave "little" footprints after their trades),
Another point that Murphy makes is that the 10-15,000 tons of gold that has been "lent" out by the central banks during the last 10 years at levels from $280-330/oz, eventually has to be paid back at today's higher prices.
Accounting for the ESF's Gold Swaps
by James Turk
August 13, 2001
http://www.gata.org/esf_gold.html
Last April in "Behind Closed Doors", I presented evidence that the US government had swapped with the Bundesbank some 1,700 tonnes of gold stored at the depository in West Point. At the time, I wasn't able to figure out where the transaction was hidden in the US governments accounts, but I now have the answer. This 1700 tonnes at $280 per ounce is a $15.3 billion transaction. This accounting entry is in the $20 billion liability explained above, which at $280 per ounce allows for the possibility that the size of the gold swap has increased to $20 billion. I say 'possible' because the rest of this liability may have arisen from a currency swap.
So here's the accounting. The US government swaps gold with the Bundesbank, which now owns the gold in West Point. Further, to secure this transaction, the Bundesbank receives SDR Certificates, which solves "The Mystery of the Disappearing SDR Certificates" (Letter No. 289, August 13th, 2001). The ESF gets the gold in the Bundesbank's vault, which it then lends to the bullion banks in an off-balance sheet transaction.
Since I first reported that the Bundesbank owns the gold in the Treasury vault at West Point, I have been asked countless times, how can the gold still be reported as being held in the Treasury vaults and listed as a US Reserve Asset if it is really owned by the Bundesbank? Well, according to GAAP accounting it can't. And that is what I have now discovered in the 2000 CFS, which presents the offsetting gold liability in the IMA.
This 2000 CFS footnote was changed from the 1999 CFS for a reason - to reflect new conditions in the accounts. As further confirmation of this point, we already know that on September 30, 2000 in its reports of the US Gold Reserve, the Treasury began labeling the gold in West Point as "Custodial Gold", changing it from its previous classification of "Bullion Reserve". This gold is being held in custody for the Bundesbank, its owner.
It is worth recalling that all of these changes took place in the fiscal year ending September 30, 2000. That year began October 1st, 1999, just days after the Washington Agreement. There has been a lot of evidence presented that the Bank of England and other central banks intervened heavily in the gold market to cap the rally then underway to get the gold price back below $300 per ounce. See for example, Paragraph 55 of Reg Howe's Complaint against the Bank for International Settlements et al., at www.goldensextant.com.
James Turk's original work on Germany's gold in this piece: Behind Closed Doors by James Turk, April 23, 2001, may be reviewed at http://www.fgmr.com/clsddoor.htm
roadrunner
Another point that Murphy makes is that the 10-15,000 tons of gold that has been "lent" out by the central banks during the last 10 years at levels from $280-330/oz, eventually has to be paid back at today's higher prices.
Accounting for the ESF's Gold Swaps
by James Turk
August 13, 2001
http://www.gata.org/esf_gold.html
Last April in "Behind Closed Doors", I presented evidence that the US government had swapped with the Bundesbank some 1,700 tonnes of gold stored at the depository in West Point. At the time, I wasn't able to figure out where the transaction was hidden in the US governments accounts, but I now have the answer. This 1700 tonnes at $280 per ounce is a $15.3 billion transaction. This accounting entry is in the $20 billion liability explained above, which at $280 per ounce allows for the possibility that the size of the gold swap has increased to $20 billion. I say 'possible' because the rest of this liability may have arisen from a currency swap.
So here's the accounting. The US government swaps gold with the Bundesbank, which now owns the gold in West Point. Further, to secure this transaction, the Bundesbank receives SDR Certificates, which solves "The Mystery of the Disappearing SDR Certificates" (Letter No. 289, August 13th, 2001). The ESF gets the gold in the Bundesbank's vault, which it then lends to the bullion banks in an off-balance sheet transaction.
Since I first reported that the Bundesbank owns the gold in the Treasury vault at West Point, I have been asked countless times, how can the gold still be reported as being held in the Treasury vaults and listed as a US Reserve Asset if it is really owned by the Bundesbank? Well, according to GAAP accounting it can't. And that is what I have now discovered in the 2000 CFS, which presents the offsetting gold liability in the IMA.
This 2000 CFS footnote was changed from the 1999 CFS for a reason - to reflect new conditions in the accounts. As further confirmation of this point, we already know that on September 30, 2000 in its reports of the US Gold Reserve, the Treasury began labeling the gold in West Point as "Custodial Gold", changing it from its previous classification of "Bullion Reserve". This gold is being held in custody for the Bundesbank, its owner.
It is worth recalling that all of these changes took place in the fiscal year ending September 30, 2000. That year began October 1st, 1999, just days after the Washington Agreement. There has been a lot of evidence presented that the Bank of England and other central banks intervened heavily in the gold market to cap the rally then underway to get the gold price back below $300 per ounce. See for example, Paragraph 55 of Reg Howe's Complaint against the Bank for International Settlements et al., at www.goldensextant.com.
James Turk's original work on Germany's gold in this piece: Behind Closed Doors by James Turk, April 23, 2001, may be reviewed at http://www.fgmr.com/clsddoor.htm
roadrunner
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Comments
dose not sound good to me.
littlejohn
What is happening now is just the normal correction to rebalance the entire system. Imagine what the price of gold will have to do as some or most of that gold is bought back by the bullion banks to help repay the central bank loans. Gold mining companies have done the same thing by selling their "forward production" and yesterday's prices. But at least they have been slowly buying back their hedged positions in the past few years.
Bottom line is that no one but the bankers know how much gold each nation really has. You can be bet that some of our country's
"dowry" at Fort Knox was also sold in the 1990's via Clinton to help support a strong dollar. It hasn't been audited since the 1950's and don't expect a change. The nation might be a bit peeved to find up to half their gold gone. I mean, who cared about gold for the pat 20 years. It's a worthless relic with no monetary function. Just print money when you need it. The whole world know has a "solid faith" in paper currency so don't worry about it.
roadrunner
Hey my friend, this is a little complicated for me so early in the morning.
I know you think this is an important issue. Will you please give us some additional details of what you think has happened and what will be the effects.
Terry