Tags: Money | Federal Reserve | gold | own or hold

Does the Federal Reserve Own or Hold Gold?

By    |   Wednesday, 15 July 2015 12:42 PM

Own? No. Hold? Yes. That's the short answer to the question of whether the Federal Reserve owns or holds gold.

The Fed got out of gold ownership in 1934 and shipped its gold holdings to the U.S., Department of Treasury under orders from Congress and the president.

But the Federal Reserve Bank of New York warehouses gold
for various other central banks, governments and international organizations that prefer to keep their bullion locked up in the United States.

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Sitting in a vault eight stories below street level, underneath New York Fed headquarters in lower Manhattan, this is the hoard at the center of the imaginary heist in 1995's "Die Hard with a Vengeance," starring Bruce Willis.

"As of 2012, the vault housed approximately 530,000 gold bars, with a combined weight of approximately 6,700 tons," the New York Fed said on its website.

That's about $254.7 billion worth — but only if it's changing hands based on gold's spot market price of $1,190 an ounce as of May 28, 2015.

Any gold in U.S. custody, it turns out, is technically worth a lot less, as then-Rep. Ron Paul of Texas was told when the question of Fed gold came up at a 2011 congressional hearing.

Texas Republican Paul asked Fed attorney Scott Alvarez about gold assets that appeared on the Fed's books at the time.

"What appears on our balance sheet is gold certificates," Alvarez explained. "Before 1934, the Federal Reserve did own gold. We turned that over, by law, to the Treasury and received, in return for that, gold certificates."

The certificates value U.S.-kept gold at about $42 an ounce because that's what the 1934 law decreed. But Alvarez told Paul that, in any case, the gold belongs to the Treasury Department and the Fed has "no interest" in it.

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Own? No. Hold? Yes. That's the short answer to the question of whether the Federal Reserve owns or holds gold.The Fed got out of gold ownership in 1934 and shipped its gold holdings to the U.S., Department of Treasury under orders from Congress and the president.
Federal Reserve, gold, own or hold
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2015-42-15
Wednesday, 15 July 2015 12:42 PM
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