Friday, October 26, 2012
Where's the gold?
There have been a flurry of reports in the mainstream media (e.g., here) about Germany wanting to audit it's gold reserves, most of which is kept in the US. The concern is that the gold has been leased or swapped and is not actually at the Federal Reserve Bank of New York. Gold is commonly leased to finance gold mines. Since the miners owe gold, not dollars, they are hedged in case the price of gold goes down. I have a theory that the gold was leased to China (a major holder of US debt) and possibly Russia under the pretense of financing mines, but in reality to reassure them with regard to our national debt. I don't think we'll ever see it again.