Financial writer Gary North today is heartened that
all the candidates for the Republican presidential nomination support
auditing the Federal Reserve, and he echoes GATA's observation that the big
question about the U.S. gold reserve is not just whether and how much gold is
held in the vaults but also whether its ownership is encumbered in any way,
as through gold swaps and leasing.
North writes: "If the Fed is fully audited, it
is likely that the audit will reveal that the gold is encumbered. Foreign
central banks have leased their gold. This is a phrase for 'sold the gold,'
since the people who borrowed it at 1% per annum then sold it for money and
bought government bonds paying 5% or more. They cannot sell these bonds at
face value; the bonds have fallen in value. They cannot afford to buy gold in
the open market to return the gold to the central banks. The price is already
far above what they sold it for. The central banks dare not demand a return
of this gold. The gold is still on their books. The IOUs they received from
the borrowers are counted as being as good as gold. The voters do not know
that the gold is missing."
North's commentary is headlined "Auditing the
Fed's Gold" and it's posted at GoldSeek here:
And at Lew Rockwell here: