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Gold/Mining/Energy : Gold Price Monitor
GDXJ 94.04+0.6%4:00 PM EST
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To: Zardoz who wrote (29474)3/7/1999 4:02:00 PM
From: PaulM  Read Replies (2) of 116764
 
Hutch re: "The U.S. is in collusion to Support the Price of Gold"

The data and balance sheets you provide have no bearing whatsoever on your conclusion.

1. The "Gold Stock" entry represents the nation's entire gold stock. It has remained essentially unchanged for many years.

2. The Fed carries the "gold stock" entry on its balance sheet at the fixed statutory price of $42.22 an ounce. Therefore, the Fed has not had to buy gold to maintain the $11 bill amount. To my knowledge, the Fed has never and will never buy gold from anyone but the Treasury.

3. The Fed is the technical owner of the gold (i.e., in its "gold certificate account") as the gold has long ago been "monetized" (i.e. the Treasury gave the Fed another excuse to print money without, on this occasion, having to issue bonds).

4. The gold is as you say in the possession of the Mint (Treasury). The treasury can (and some day no doubt will) redeem the Fed's gold certificates at a wopping $42.22 an ounce.

5. Don't pay any attention to the assets and liabilities of the fed. It's all meaningless fiction.

6. Lastly (and this really another post) as gold is the primary competitor to the dollar for reserve currency status, the U.S. will never be in collusion to support the price of gold.

If you want to research this consult the following:

federalreserve.gov

(This is a long Fed Reserve publication distributed to the general public. You need Adobe's Acrobat. When the frames appear, click "Appendixes" and scroll to the first entry, "Gold Certificate Account")
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