The Website of Dr. Joseph P. Farrell


We're all familiar with Congressman Ron Paul's frequent calls for a full audit of the US central bank, the Federal Reserve System. Well, here's one that may have flown beneath your radar set, and like so many stories of this sort, it has deep, and murky, and almost endless possibilities, and unfortunately, space here only permits me to go into a few of them. But first, the article itself. It's quite lengthy, but, as a close reading will soon disclose, quite important(and I've written about this before, but repeat the story here, with some new information):

The Fed's Gold Is Being Audited... By The US Treasury

Nevermind the implications of the Federal Reserve having its own police force (kind of implies jurisdiction, though, doesn't it?). What we really need to focus on (for the moment anyway) are these at these very beginning:

"And not only the gold belonging to the US: it is well known that the bulk of Europe’s sovereign gold is also contained deep under downtown Manhattan: we wish them all the best when they attempt to repatriate the physical when they need it, such as the day after the EUR finally collapses.

"No - what the “conspiracy theorists” allege is that claims existing in paper format on the physical gold held under Liberty 33 are orders of magnitude greater than the actual physical gold these claims supposedly have recourse to. Indeed, this too was a conspiracy theory until the failure of MF Global proved it to be a conspiracy “fact” and the entire asset-liability rehypothecation daisy-chain threatened to begin unwinding in November of 2011, at which point forced delivery of hard assets would expose the entire facade of the modern financial system to be a hollow sham.

"So unless the Treasury will also conduct a full “audit” of every single paper trail and every physical bar is mapped to all of its existing obligors, then the entire operation is absolutely meaningless and simply a waste of taxpayer money. Because the physical gold may well be there (and furthermore it is the gold at Ft. Knox that was questionable; never the gold held by the Fed, but who cares about details). The problem is if the paper claims on this gold are far greater than the actual deliverable physical gold for that moment when the latest attempt to kick the can down the rehypothecated road finally fails." (All emphases in the original)

Now I hope you caught what is really being said between the lines here: foreign gold reserves in deposit with the Federal Reserve Bank of New York were "rehypothecated" several times over such that there are not just one set of claims against this gold, but several. If we want to draw a crude analogy of what is going on here, it would be like keeping not one set of books, using "x" amount of gold as a reserve of backing for a whole set of investments, but several sets of books, each independent and separate from each other, with each set of books representing a whole series of investments made on the same basis of gold. Now, for gold bugs who view gold as a safe and reliable way of managing the output of money by banks, this is bad news, for a gold standard only works when the bankers themselves are honest.

So....with that in mind, fast forward to a little later in the article where we read this:

At this point, the Times piece almost grasps what the real issue is, once again courtesy of Ron Paul:

“'If the gold is there and everything is in order, they should welcome an audit,' Paul said in an interview.

"He said he doesn’t suspect that anyone has replaced the gold bars with fakes. He’s more interested in examining paperwork that would show whether the gold has been used in any transactions that were never disclosed to the public, such as loans to other governments.

"He is not alone. In Germany, there have been calls by some politicians to “repatriate” the country’s foreign gold reserves and return to a gold standard as the euro common currency faces an uncertain future.

"Philipp Missfelder, a prominent German legislator in the country’s ruling Christian Democratic Union party, visited the New York Fed in February seeking to inspect his country’s gold.

 "Missfelder was not given access to Germany’s gold bars, though it’s unclear why, according to German magazine Der Spiegel. He declined to comment."

Now regular readers at this website will recall that I have written previously about the calls of some countries to repatriate their gold, Venezuela, and subsequently, and more importantly, Germany. Missfelder, a member of Chancellorin Merkel's Christian Democratic Union party, thus went to the New York Federal Reserve, "seeking to inspect his country's gold."

Consider, for a moment, the implications thus far: Missfelder was, in effect, a representative, whether in an official or unofficial capacity, of the German Federal Chancellor, and, according to the article "Was no given access to Germany's gold bars" and more disturbingly, no reason is given.

Well, the New York Federal Reserve's actions regarding Germany and gold are, it seems, a part of a pattern going back several decades with respect to that country and its gold.

Consider the following passage:

"Another amusing incident arose from the fact that the Reichsbank maintained a not inconsiderablegold deposit in the Federal Reserve Bank in New York. Strong (Ed: president of the New York Federal Reserve Bank) was proud to be able to show us the vaults which were situated in the deepest cellar of the building and remarked:

"'Now, Herr Schacht, you shall see where the Reichsbank gold is kept.'

"While the staff looked for the hiding place of the Reichsbank gold we went through the vaults. We waited several minutes: at length we were told: 'Mr. Strong, we can't find the Reichsbank gold.'

"Strong was flabbergasted but I comforted him. 'Never mind; I believe you when you say the gold is there. Even if it weren't you are good for its replacement.'" (Hjalmar Horace Greeley Schacht, Confessions of the Old Wizard: The Autobiograhy of Hjalmar Horace Greeley Schacht, trans from the German by Diana Pyke[Houghton Mifflin, 1956. Literary Licensing reprint, 20 ISBN 978-1258126-742, p. 245).

Schacht was, of course, the famous, or depending on one's lights, infamous on-and-off-and-on-again President of Germany's Reichsbank during the crucial period from the end of the German hyper-inflation until the early Nazi era, and was in fact the man responsible for stabilizing the Reichsmark after the ruinous hyperinflation, and was one of the founders of the Bank for International Settlements in Switzerland.

So what do we have here?

  1. Twice in history - during the1920s and much later, during the early 2000s -  a high representative of Germany has visited the New York Federal Reserve bank and been denied access to its gold;
  2. In the first instance, the President of the New York Federal Reserve acts as if he fully expects his staff to be able to find Germany's gold, and acts astonished when it cannot;
  3. Schacht, in what can only be dubbed bizarre behavior in the extreme, does not appear the least bit upset (did he know something Strong himself did not know?)
  4. Decades later, a German Bundestag member and a representative of the governing party of the Chancellorin, visits the same bank and is denied access, which suggests that Germany's gold still is not there.

I don't know about you, but this has the malodorous scent of massive fraud, and it is, to my mind, oddly compelling that the whole odor begins to arise during that tumultuous era of financial wheeling- and - dealing associated with German war reparations, the Dawes Plan, the Young Plan, Schacht's whole role in the formation of the BIS and the strange terms he insisted upon... and there are many other dots to connect here as well, but I think you get the idea...

See you on the flip side

Joseph P. Farrell has a doctorate in patristics from the University of Oxford, and pursues research in physics, alternative history and science, and "strange stuff". His book The Giza DeathStar, for which the Giza Community is named, was published in the spring of 2002, and was his first venture into "alternative history and science".

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