Every Federal reserve bank shall have power:

MsMorrisine

(a) To deal in gold coin and bullion at home or abroad, to make loans thereon, exchange Federal reserve notes for gold, gold coin, or gold certificates, and to contract for loans of gold coin or bullion, giving therefor, when necessary, acceptable security, including the hypothecation of United States bonds or other securities which Federal reserve banks are authorized to hold;

[12 USC 354. Part of original Federal Reserve Act; not amended. See also 12 USC 5116 through 5118.]


Federal Reserve Act


Dr. Bernanke, is gold money?

ricko

The many statements of financial guru's aside, regarding gold (those that say it is not money, a barbarous relic etc etc etc), note that countries and central banks own and store gold....to me, actions speak louder than words, and obviously gold is value/money and the final resort when fiat money fails. Cheers, RickO

C0INB0Y

<< <i>(a) .......... when necessary, acceptable security, including the ***hypothecation*** of United States bonds or other securities which Federal reserve banks are authorized to hold;

[12 USC 354. Part of original Federal Reserve Act; not amended. See also 12 USC 5116 through 5118.] >>



WOW!! That's not good!

MsMorrisine

It's an old part of the FRA that no longer applies, but in its birth gold was money.

Hypothecation is using as collateral while holding it. Much like living in a mortgaged house. Rehypothecation is the problem.



But, ah, the good old days of money you could count on. I guess gold isn't money as long as money is only worth faith.

OPA

Not sure why you took the time to bring up an obsolete FRA. It's like revitalizing old blue laws that have been repealed such as: stores not allowed to open on Sundays or spitting in the street will get you a fine. Must be a slow day in your neck of the woods.

roadrunner

The old blue laws have been repealed and merchants now sell on Sunday.

The difference with gold is that while the international window was officially closed in 1971....it didn't change the fact that CB's still use gold as their ultimate means
of settling debts between themselves. Sure, they changed the rules in the book....just not the reality of it. Old "gold laws" were repealed to force CB's not to be
"open on any day of the week" for gold. But, they still are trading gold as openly as before 6 out of 7 days per week. If anything, they are probably trading more gold
between themselves and the bullion banks and a far higher rate the past 20 years than they did in the pre-1971 days.

OPA

<< <i>The old blue laws have been repealed and merchants now sell on Sunday.

The difference with gold is that while the international window was officially closed in 1971....it didn't change the fact that CB's still use gold as their ultimate means
of settling debts between themselves. Sure, they changed the rules in the book....just not the reality of it. Old "gold laws" were repealed to force CB's not to be
"open on any day of the week" for gold. But, they still are trading gold as openly as before 6 out of 7 days per week. If anything, they are probably trading more gold
between themselves and the bullion banks and a far higher rate the past 20 years than they did in the pre-1971 days. >>



Just like any commodity that's being traded. So what's new?

Baley

Just like any commodity that's being traded. So what's new?

the internet as a place to talk about it