THE GOLD
I mentioned the German request to repatriate its gold in an earlier post to an absolutely tumbleweeds response. That’s fine. No one seriously thought the first world war would break out until it did, either.
So let me back up. In that murky, power-vacuumed era of the mid twentieth century, as part of the Bretton Woods agreement, western powers agreed to tie their currency exchange rates to the US dollar, which was backed by a gold standard, meaning each dollar was worth a guaranteed amount of gold. Countries such as Germany and France transferred some of their gold to New York and London to be held in the Fed and the Bank of England.
Nixon abandoned the gold standard, effectively tipping many these countries into using, in place of gold, the US dollar as their reserve currency. However, much of the gold remains in New York and London.
Now Germany wants it back.
Why? Because they’re correctly suspicious that the Fed is lying about the amount of gold it is holding. (If you say you have more, you can sell more.) By some alarmist estimates, the Fed may have leveraged its actual gold supplies by up to 100 times.
Let’s get Homer Simpson simple: If I buy some gold from, say, the Fed, I don’t actually pull up in downtown Manhattan and get them to fill up a sack with a dollar sign on it. However, I should be able to in theory. Because I have purchased a ‘ticket’ for a certain amount of gold. Now, if the Fed has sold more gold than it actually has, and everyone shows up with their tickets and some of that gold is actually Germany’s… well, you see the problem.
Adding to the Bundesbank’s anxiety is the Fed’s refusal to allow Germany to even see its own gold. Why would they do that if everything is fine?
Because it’s not fine. And the first ever audit of this private bank by the US treasury, an actual government department, to check if the gold was there was completely fraudulent. They didn’t even look at the fucking gold!
Read more: http://runesoup.com/2013/04/while-we-pray-for-a-long-summer-archonology-part-2/#ixzz2XiRqdgII
