Federal Reserve Bank of New York - visit report
nibanny
Posts: 2,761 ✭
Taking advantage of my half day off for the Good Friday, a while back I booked a tour at the Federal Reserve Bank of New York for this afternoon.
The building itself is beautiful (which is obvious, being it inspired to the Italian Renaissance buildings
), the entrance for the tour is on 44 Maiden Lane.
I arrived right on time for the beginning of the tour, after the security screening. The made very clear that, unfortunately, no photo devices were allowed. (pictures in this post are taken from the internet)
The tour guide, a very nice person with a good knowledge of the work they do, started the tour by an hologram of a gold bar (I knew it!
). I realized later that the real bar was one feet below the hologram.
She explained the functions of the FED: they do not print money (just buy it), they are a non-profit bank and so on. (Interesting but I don’t know much about it to fully understand what she was saying). She made me laugh when she stated that storing gold is not the main purpose of the FED (obviously) but it is just “tradition” (see Bernanke speech).
She also pointed out a couple of times that the gold standard won’t be any more possible due to the growth of the global population and the fact that there is little gold around (nice visualization: all the gold mined so far would be 94 ft of the Washington Monument in DC)
Then we stopper by a cart full of $1 banknotes. That is the type the use to stack bills in the currency vault (see pic below). It contains $275K. Of course, only the ones facing outside were real money.
By the cart there was a huge glass prism, at least 12 ft high, with shredded $100 bills. The total written on the glass was $28,000,000!
In the same area we got to see a stuffed Camel (they use this acronym to rate the banks: Credit, Asset, etc…) and some big banknotes replica to understand currency counterfeits. There was a picture with the new dollar bills – the colored ones – and I asked her if she had any update on the release of the new $100 bill. No idea.
Finally, that was the purpose of my visit (how wrong I was! – you will understand later) she led us to the elevator for the Vault where they store the gold bars.
The vault is 5 floors (80 ft) under the FED bulding. We watched a brief explanatory video and we got the chance to look at some panels with information and pictures. They FED holds 7,000 tonnes of gold at the moment, 98% belonging to foreign nations.
We then saw how the vault door works. All manual, no electronic devices are involved. There are 2 timers (she called them egg timers) that are activated right before they shut down the door.
We entered the vault, which is composed of over 200 cages, but we were allowed to see only the first cage (containing few billions of dollars in gold bars! Did I hear correctly?) because they keep the entrance to the storage area closed and sealed (like all the cages inside it – I checked a coupled of seals, just in case).
At the end of the tour she took us back upstairs and she left suggesting that we should spend some time at the coin exhibit where, her words, “there are pretty expensive coins, like the one valued to over $7M!” (what?!)
So I spend over one hour going through all the displays and, guys, what a beautiful exhibit!
There are coins and banknotes covering an extensive period of time, from Greek and Romans to the Sagacawea dollar, from the early US dollars to the Zimbabwe Trillion note.
Just to name a few American coins: 1907 DE High Relief, 1933 DE, 1804 Dollar, Fugio, PanPac, Octagonal California Gold, Raketeer nickels, Libertas Americana, Chain Cent and hundreds more from all around the world!
I asked here where I could find the list of all the coins and she said that American Numismatic Society set the exhibit up. (here is the link with the list of all the coins along with some pictures: Drachmas, Doubloons and Dollars: the history of money )
Hope you enjoyed the report. Sorry for its length and for the far-from-perfect english.
What great day!
MM
The building itself is beautiful (which is obvious, being it inspired to the Italian Renaissance buildings
), the entrance for the tour is on 44 Maiden Lane.
I arrived right on time for the beginning of the tour, after the security screening. The made very clear that, unfortunately, no photo devices were allowed. (pictures in this post are taken from the internet)
The tour guide, a very nice person with a good knowledge of the work they do, started the tour by an hologram of a gold bar (I knew it!
). I realized later that the real bar was one feet below the hologram.She explained the functions of the FED: they do not print money (just buy it), they are a non-profit bank and so on. (Interesting but I don’t know much about it to fully understand what she was saying). She made me laugh when she stated that storing gold is not the main purpose of the FED (obviously) but it is just “tradition” (see Bernanke speech).
She also pointed out a couple of times that the gold standard won’t be any more possible due to the growth of the global population and the fact that there is little gold around (nice visualization: all the gold mined so far would be 94 ft of the Washington Monument in DC)
Then we stopper by a cart full of $1 banknotes. That is the type the use to stack bills in the currency vault (see pic below). It contains $275K. Of course, only the ones facing outside were real money.
By the cart there was a huge glass prism, at least 12 ft high, with shredded $100 bills. The total written on the glass was $28,000,000!
In the same area we got to see a stuffed Camel (they use this acronym to rate the banks: Credit, Asset, etc…) and some big banknotes replica to understand currency counterfeits. There was a picture with the new dollar bills – the colored ones – and I asked her if she had any update on the release of the new $100 bill. No idea.
Finally, that was the purpose of my visit (how wrong I was! – you will understand later) she led us to the elevator for the Vault where they store the gold bars.
The vault is 5 floors (80 ft) under the FED bulding. We watched a brief explanatory video and we got the chance to look at some panels with information and pictures. They FED holds 7,000 tonnes of gold at the moment, 98% belonging to foreign nations.
We then saw how the vault door works. All manual, no electronic devices are involved. There are 2 timers (she called them egg timers) that are activated right before they shut down the door.
We entered the vault, which is composed of over 200 cages, but we were allowed to see only the first cage (containing few billions of dollars in gold bars! Did I hear correctly?) because they keep the entrance to the storage area closed and sealed (like all the cages inside it – I checked a coupled of seals, just in case).
At the end of the tour she took us back upstairs and she left suggesting that we should spend some time at the coin exhibit where, her words, “there are pretty expensive coins, like the one valued to over $7M!” (what?!)
So I spend over one hour going through all the displays and, guys, what a beautiful exhibit!
There are coins and banknotes covering an extensive period of time, from Greek and Romans to the Sagacawea dollar, from the early US dollars to the Zimbabwe Trillion note.
Just to name a few American coins: 1907 DE High Relief, 1933 DE, 1804 Dollar, Fugio, PanPac, Octagonal California Gold, Raketeer nickels, Libertas Americana, Chain Cent and hundreds more from all around the world!
I asked here where I could find the list of all the coins and she said that American Numismatic Society set the exhibit up. (here is the link with the list of all the coins along with some pictures: Drachmas, Doubloons and Dollars: the history of money )
Hope you enjoyed the report. Sorry for its length and for the far-from-perfect english.
What great day!
MM
The member formerly known as Ciccio / Posts: 1453 / Joined: Apr 2009
0
Comments
I understand it is very easy to turn
<<Of course, only the ones facing outside were real money.>>
None of it's real it's a concept, only gold is money.
Wonder what response you would get if you asked the tour guide, "Who are the partners/world banks with
U.S. Gov't calling themselves the Federal Reserve?
Do you think she means they buy the paper they use to print the money?
<< <i>She said the FED does not print money, they buy it?
Do you think she means they buy the paper they use to print the money? >>
She was right. Is the BEP which actually prints the money, not the FED.
No Way Out: Stimulus and Money Printing Are the Only Path Left
Larry L.
I visited the numismatic display a couple of years ago - what a magnificent exhibition!
I hope you paid attention to the area where the display is - the interiors are outstanding, especially the wrought iron.
Check out the Southern Gold Society
I enjoyed it very much especially the part about the bullion vault.
Good luck sleeping Good Friday night. You'll be counting gold bars to the wee small hours.
"Inspiration exists, but it has to find you working" Pablo Picasso
actually, nice report. length? could have been longer!
<< <i>
<< <i>She said the FED does not print money, they buy it?
Do you think she means they buy the paper they use to print the money? >>
She was right. Is the BEP which actually prints the money, not the FED. >>
there is info on the Fed Res. website that describes how they get money.
they request notes from the Bureau of Engraving and Printing (DC and Fort Worth) and the gov't supplies it to them. They "buy" the notes by holding collateral on their balance sheet. The majority of the colleateral they hold is... drum roll... US Treasuries.
the coins they have to pay the mint @ face for them. $1 for $1. no collateral, but fully paid in. Which is why the Fed Res. issued an opinion that the true cost of dollar coins is higher. (but they neglected to say why. They can hold collateral against the $1 note, but have to truly buy the $1 coin)
All that said, the cent and the nickel are being produced at a loss. This is all documented each year in the annual report produced by the Mint and available to the public.
<< <i>Having seen the "true cost of the dollar coin" from the inside, I can say without a doubt the only thing that could change the cost is the overhead allocation process. The cost of the dollar coin without overhead, i.e. the true manufacturing cost including metal and fabrication is calculated down to a very small numerical percentage of a dollar. The overhead allocation tends to be a bit more problematic, but from what I have seen it is reasonable and fluctuates depending upon the production volume of each coin.
All that said, the cent and the nickel are being produced at a loss. This is all documented each year in the annual report produced by the Mint and available to the public. >>
the overhead costs of each coin, including the dollar coin, are listed in the annual report also.
Back to the Tour:
98% of the gold being held is foreign goverrnment gold.
did anyone ask why we are holding that much gold for them?
you know, holding a lot of something that is not circulating costs money. Do we have a roughly equal amount in stored overseas sovreign banks? are we collecting storage fees? (at some point it would seem shipping it would prove more cost effective than storing it indefinitely)
So Many Questions...
<< <i>
Back to the Tour:
98% of the gold being held is foreign goverrnment gold.
did anyone ask why we are holding that much gold for them?
you know, holding a lot of something that is not circulating costs money. Do we have a roughly equal amount in stored overseas sovreign banks? are we collecting storage fees? (at some point it would seem shipping it would prove more cost effective than storing it indefinitely)
So Many Questions... >>
I suppose that they store so much foreign gold because the US was the safest country in the world.
She said that the storage is for free, as a mean to keep good relationship with other countries.
I have read that the charge to move the bars (at a very small fee, I think it's a few bucks). She claimed that they don't move the bars very often.
Do any other Fed branches have tours like this? All of that sounded very interesting.
Do any other Fed branches have tours like this? All of that sounded very interesting.>>
At least some do.
THe Philadelphia Federal Reserve Bank had a display in their lobby. I went there on Easter Monay 1958. They had a series 1934 gold certificate and at least two large size $1,000 dollar gold certificates. They also had a touring exhibit that went around to various local banks.
The guard challanged me to state my business on the way in. Visiting the display was sufficient reason.
Looking for Top Pop Mercury Dime Varieties & High Grade Mercury Dime Toners.
<< <i>
<< <i>
<< <i>She said the FED does not print money, they buy it?
Do you think she means they buy the paper they use to print the money? >>
She was right. Is the BEP which actually prints the money, not the FED. >>
there is info on the Fed Res. website that describes how they get money.
they request notes from the Bureau of Engraving and Printing (DC and Fort Worth) and the gov't supplies it to them. They "buy" the notes by holding collateral on their balance sheet. The majority of the colleateral they hold is... drum roll... US Treasuries.
the coins they have to pay the mint @ face for them. $1 for $1. no collateral, but fully paid in. Which is why the Fed Res. issued an opinion that the true cost of dollar coins is higher. (but they neglected to say why. They can hold collateral against the $1 note, but have to truly buy the $1 coin) >>
There may be a flaw in this process if they buy notes holding collateral on their balance sheet, then use these same notes to purchase coins... which effectively they are putting the coins on collateral as well. I wonder.
Ray