The Federal Reserve Bank
of New York has contradicted the assertion of its former vice president that
it has provided gold accounts to bullion banks.
The assertion of such
accounts was made by H. David Willey, the former New York Fed vice president
in charge of foreign central bank accounts and the gold vault at the New York
Fed, in a speech given in May 2004 to the American Institute for Economic Reserve
in Great Barrington, Massachusetts. See Page 62 here:
http://www.gata.org/files/WilleySpeechAIERMay2004.pdf
Willey said: "The
Federal Reserve Bank of New York provides limited facilities for gold
transactions. The bank will allow gold accounts only for foreign monetary
authorities and for banks that are members of the Federal Reserve System, not
for other gold dealers in the U.S. markets."
This was more of an admission of the New York Fed's involvement with the gold
market than seemed ever to have been made officially, so in January your
secretary/treasurer asked the New York Fed's public information office about
it: Does the New York Fed provide gold accounts to bullion banks, or did the
New York Fed ever do so, as its former vice president said in that speech in
2004?
The New York Fed's public
information office acknowledged the question but refused to pursue the
information sought. So your secretary/treasurer put the question by certified
mail to the president of the New York Fed, William Dudley, and sought the
assistance of some members of Congress in getting an answer.
That answer arrived
today, 2 1/2 months later, in the form of a letter from Timothy J. Fogarty,
the New York Fed's senior vice president for central bank and international
account services, apparently Willey's successor.
Fogarty wrote:
"The bank presently
opens and maintains gold custody accounts only at the request of central
banks, governments, and official international organizations, and we have not
located any evidence that the bank has historically opened a gold custody
account at the rquest of a member bank of the
Federal Reserve System. ...
"In connection with
Congress' lifting of the ban on private ownership of gold in 1974, the Board
of Governors of the Federal Reserve System publicly issued a policy statement
on December 9, 1974, which expressly stated that the Federal Reserve banks
will not perform services for member banks with respect to gold,
including safekeeping. In accordance with that policy statement, the bank has
not provided gold custody services to member banks from 1974 to the
present."
Fogarty's letter is
posted at GATA's Internet site here:
http://www.gata.org/files/NewYorkFedReply-04-11-2014.pdf
So somebody has
gotten this issue very wrong.
In a presentation to the
Committee for Monetary Research and Education in New York in May 2003, Willey
expressed doubt that the U.S. government was trying to suppress the gold
price:
https://groups.yahoo.com/neo/groups/gata/conversations/messages/1506
If he's still around,
maybe he can explain why his former employer maintains that he didn't know
what he was talking about in Great Barrington.
