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


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.


3 Comments

  1. My comment:
    I’m continually amazed at how long our feckless ‘leaders’ have been able to kick-the-can-down-the-road and keep the wool pulled over most people’s eyes.
    It is difficult to know which snowflake will start the avalanche.
    The more I read the more I believe that human nature is such that until a true crisis ‘hits home,’ most will continue along with the blinders created by the status quo firmly in place.
    Dimitry Orlov, in his book The Five Stages of Collapse, suggests that ‘collapse’ occurs more in the mind than anywhere else; it is a ‘cerebral shift’ that needs to take place first.
    I also think that it will be a financial crisis that is the tipping point since our access to fundamental ‘needs’ are inexorably tied to money/wealth/ability to pay.
    So, is there a point when our current financial system (the West) is seen for what it truly is, a Ponzi scheme of epic proportions?
    With our Western banks and governments leading the pack in assuring us all that the fiat currency experiment we’re all part of is stable, and of course all of us wanting to believe in this fairy tale, it is hard to say when that shift will occur. When hyperinflation hits? When the Chinese push a gold-backed remnimbi as a reserve currency? When it is discovered that Western central banks have leased/sold off all their gold? When currency wars become obvious? When trade wars begin? When another world war ignites? Who knows?
    You can’t say we don’t live in ‘interesting times’.

  2. timloyal says:

    Reblogged this on Psalm 46 Church.

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