speculation

This is why/how gold will end the fed.

THE GOLD-LEASING OPERATION

For at least a decade, central banks have been lending gold to specialized brokerage firms, called bullion banks. The bullion banks borrow this gold at absurdly low interest rates — well under 1% per year. Then they sell this borrowed gold into the world’s private gold markets. This keeps down the price of gold: added supply.

The bullion banks then take the money they earn from the sale of this borrowed gold and purchase higher yielding debt certificates. They may get 6%. So, they are borrowed short — the low lease rate — and lent long: bonds.

They owe gold, not money. The central banks still list this leased/sold gold on their books. But there is no leased gold in central banks’ vaults; it has been leased out, then sold. The public believes that this gold is there, but it’s gone. It has gone into jewelry, maybe in India. Some daughter has her share of the central banks’ gold in her dowry in the form of a necklace or rings.

https://www.garynorth.com/public/19354.cfm

>>6093932

>>6093932

Part 2

So, the gold overhang of the central banks is no longer the sword of Damocles. It is more like the switchblade knife of Damocles.

The central banks now face a major problem. If gold’s price gets too high, the private bullion banks will be trapped. They owe gold to central banks, but they cannot afford to buy gold in the private markets in order to repay it to the central banks. If they are ever asked to repay, they will go bankrupt.

The central banks therefore will face exposure as being in collusion with a bunch of profit-seeking Enrons: busted and owing the government’s gold to the central banks. My guess is that central bankers knew from the beginning that they would never see this gold again. They just wanted a cover: “leasing” rather than “sales” of the government’s gold.

The downward pressure on gold is today no longer so great as it was a decade ago. The threat is reduced because the vaults are less full.

https://www.garynorth.com/public/19354.cfm

>>6093964

"We" may have the gold, but that doesn't preclude the fed getting screwed by/for their chicanery.