Fed’s Dirty Little Secret: “The Gold Isn’t There… Exists as Paper IOU’s”

The assumption by global depositors who have entrusted their national savings with the Federal Reserve and US Government has always been that when they request to repatriate their holdings the Fed would simply open the vault, access said assets and ship them back to where they belong.

That’s exactly what Germany expected would happen last year when the country requested that the Federal Reserve return about one-fifth of their gold reserves. But that’s when things got really dicey. The Fed announced that Germany’s gold would be returned… but it would take seven years to get back home.

The response to Germany’s request turned heads all over the world and raised concerns that the Federal Reserve had squandered its gold holdings. But this isn’t the only red flag that was raised. Public pressure reached such levels that the Fed was forced to take steps to maintain confidence in its operations, so it started shipping gold to Germany. Except it turns out that the gold being sent back to the Bundesbank wasn’t actually German gold. It contained none of the original serial numbers, had no hallmarks, and was reportedly just recently melted.

The implications are earth shattering and hit the very core of the problems facing America today. The whole system as it exists is just one big paper IOU.

In this must-watch interview with Future Money TrendsJefferson Financial CEO Brien Lunden weighs in on Germany’s gold, what is happening at the Fed and what other central banks are doing right now. Brien also shares his thoughts on where the gold market is today, what to expect in coming years as gold supplies tighten up, how mining companies like Brazil Resources are taking advantage of the current environment, and how to profit from gold in coming years.


(Full transcript and interview)

For the reply to be that it would take seven years for this Gold to be sent back to you, your Gold to be sent back to you, was an obvious admission that the Gold just isn’t there.

Yes, it’s an admission that the German reserves were not still sitting there in the vault in the same form that they were sent there after WWII. They were not the original Central Bank Gold bars, same serial numbers etc. It’s an admission that at some point since then, that Gold has been used for other purposes.

So the dirty little secret here, is that a significant portion of central bank Gold reserves, including the U.S., don’t exist now in their original bar form. In fact, they exist as IOU’s, paper IOU’s, from the very banks that were bailed out in 2008 by the Federal Reserve.

So the Gold isn’t there, and the secret that they’re hiding is that it’s been replaced by IOU’s, and importantly those IOU’s are for Gold that was borrowed at much lower prices.

The Fed, through their recent actions, has essentially admitted that the gold stored in their vaults isn’t really there. Just as our government refuses to be openly transparent to with the American people, the Fed has resisted all calls to open their books (and vaults) to impartial third-party accountants for review.

The whole system, it seems, is now operating on IOU’s. Be it consumers, banks, the Fed or even the US government, all of the US dollars being exchanged are nothing but worthless pieces of paper, because given the lack of transparency at the Fed, we have to assume that the physical assets supposedly backing all this currency have already been spent.

Are we wrong in making this assumption?

If you were to store some emergency funds with a friend who promised to get them back to you whenever you asked, and then you ask and are told it’ll be a few years before he’ll get you the cash, what assumption would you make?  That your friend has the money on him right now, or that he’s used it for other purposes and doesn’t really know exactly when he’ll have it available for repayment?

Our entire consumer economy, as well as the credit worthiness of our nation, is built upon confidence. It’s took decades to get America in a position where our country’s monetary issues and services would be trusted by the international community. It’s taken just a few years for that confidence to be lost.

It’s now only a matter of time before our creditors and global investors pull the plug on the whole thing.

empty-vault


SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You

White House strikes “secret side deal” with Iran over nuclear issue, despite State Dept denials, reports L.A. Times. How will Congress & Israel react?

(whitehouseWashington, D.C.) — The Obama White House appears struck a previously undisclosed “side deal” with Iran over the nuclear issue, despite the fact that just yesterday a State Department spokeswoman denied such a deal existed.

The Los Angeles Times is reporting the existence of a secret 30-page document the spells out understandings between the U.S. and Iran regarding expectations of what Iran can and cannot do with its nuclear program, understanding not included in the official, public deal that is being negotiated in Geneva.

The Times indicates that according to the “secret side deal” worked out by the Obama administration:

  • not a single Iranian nuclear facility will be shut down
  • Iran will continue to enrich uranium
  • Iran’s nuclear research operations will actually expand; and
  • new, state-of-the-art centrifuges will be allowed to come on-line in Iran

Is this accurate? Is it the full picture? Will the document be released to the public, and to the full U.S. government and our allies?

Members of Congress are only just hearing about this now, and have yet to react.

No official reaction yet from Israel yet either, though the existence of a secret deal with Iran could add to the tensions between the Obama and Netanyahu governments over how to stop the mullahs in Tehran from being able to build operational nuclear warheads.

More on this story as it develops.

In the meantime, here are excerpts from the breaking news story out of Los Angeles:

“Key elements of a new nuclear agreement between Iran and six world powers are contained in an informal, 30-page text not yet publicly acknowledged by Western officials, Iran’s chief negotiator said Monday,” reports the Los Angeles Times. “Abbas Araqchi disclosed the existence of the document in a Persian-language interview with the semiofficial Iranian Students News Agency.”

“The new agreement, announced over the weekend, sets out a timetable for how Iran and the six nations, led by the United States, will implement a deal reached in November that is aimed at restraining Iran’s nuclear ambitions,” the Times notes. “When officials from Iran and the world powers announced that they had completed the implementing agreement, they didn’t release the text of the deal, nor did they acknowledge the existence of an informal addendum. In the interview, Araqchi referred to the side agreement using the English word ‘nonpaper,’ a diplomatic term used for an informal side agreement that doesn’t have to be disclosed publicly. The nonpaper deals with such important details as the operation of a joint commission to oversee how the deal is implemented and Iran’s right to continue nuclear research and development during the next several months, he said.”…..

“Asked late Monday about the existence of the informal nonpaper, White House officials referred the question to the State Department,” reported the Times. “A State Department comment wasn’t immediately available…..A State Department spokeswoman, Marie Harf, denied later Monday that there was any secret agreement.”….

“In his interview, Araqchi touched on the sensitive issue of how much latitude Iran will have to continue its nuclear research and development,” said the Times. “U.S. officials said Sunday that Iran would be allowed to continue existing research and development projects and with pencil-and-paper design work, but not to advance research with new projects. Araqchi, however, implied that the program would have wide latitude.”

“No facility will be closed; enrichment will continue, and qualitative and nuclear research will be expanded,” he said. “All research into a new generation of centrifuges will continue.”

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