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From CCW
KISSING THE TROJAN HORSE
As some might already know, the G-20 met in Mexico City last weekend. The debt
and deficits of developed (advanced economies) countries was a hot issue along
with the lack of performance in implementing the global plantation
commitments. That heated globalization attitude extended to the fact that the
political parties and Congress had agreed to keep the debt issues and “fiscal
cliff” off from the campaign trail presentations and off from the legislative
calendar. One presentation at the G-20 meeting put U.S. total debt at $222
trillion and summarized the absurdity and conditions as the "End Game."
U.S. elections are now over and the dog and pony show push and finger pointing
begin. While remembering that there is “no mathematical solution” and “no
market solution” to the debt crisis, and that inflation, deflation and
stagflation are all in motion at the same time, it is hoped that you are
prepared. Like Greece, the Culture of Corruption is kissing the back end of
the Trojan Horse. The impacts are foreseeable and foreseen.
____P.S. Germany has called for the physical return and repatriation of its foreign gold deposits. The Federal Reserve Bank of New York and central bank of France are delaying delivery. Those foreign banks use those gold deposits as "reserve assets" on their corporate accounting books. Basel II, II.5, and III accepted gold as a reserve asset. Basel III moved gold up to a Tier I reserve asset while requiring banks to hold and maintain higher amounts of reserves. ************* http://news.yahoo.com/obama-gop-leaders-lay-down-markers- budget-deal-080338986.html
From Der Spiegel
GERMANS FRET ABOUT THEIR FOREIGN GOLD RESERVES
NOVEMBER 4, 2012 1 COMMENTA large portion of Germany’s massive gold reserves are stored abroad, mainly in the Federal Reserve in New York. But are the bars really where they are supposed to be? A dispute has broken out over whether the central bank needs to check on its gold, or if Germany can trust its international partners.Germany has gold reserves of just under 3,400 tons, the second-largest reserves in the world after the United States. Much of that is in the safekeeping of central banks outside Germany, especially in the US Federal Reserve in New York. One would think that with such a valuable stash, worth around €133 billion ($170 billion), the German government would want to keep a close eye on its whereabouts. But now a bizarre dispute has broken out between different German institutions over how closely the reserves should be checked.Germany’s federal audit office, the Bundesrechnungshof, which monitors the German government’s financial management, is unhappy with how Germany’s central bank, the Bundesbank, keeps tabs on its gold. According to media reports, the auditors are dissatisfied with the fact that gold reserves in Frankfurt are more closely monitored than those held abroad.In Germany, spot checks are carried out to make sure that the gold bars are in the right place. But for the German gold that is stored on the Bundesbank’s behalf by the US Federal Reserve in New York, the Bank of England in London and the Banque de France in France, the German central bank relies on the assurances of its foreign counterparts that the gold is where it should be. The three foreign central banks give the Bundesbank annual statements confirming the size of the reserves, but the Germans do not usually carry out physical inspections of the bars.‘No Doubts’According to German media reports, the Bundesrechnungshof has now recommended in its confidential annual audit of the Bundesbank for 2011 that Germany’s central bank check its foreign gold reserves with yearly spot checks.The Bundesbank has rejected the demand, arguing that central banks do not usually check each others’ reserves. “The scope of the checks that the Bundesrechnungshof wants does not correspond to the usual practices among central banks,” the Bundesbank said in a statement quoted by the Frankfurter Allgemeine Zeitung newspaper. “There are no doubts about the integrity and the reputation of these foreign depositories.”Now the finance committee of the German parliament, the Bundestag, has gotten involved. Parliamentarians apparently demanded to see the Bundesrechnungshof’s audit report on the Bundesbank after they were alarmed by a report in the influential tabloid daily Bild, which claimed that the central bank had not checked its gold reserves in five years.. The Bundesrechnungshof will now provide the committee with its report, a spokesman for the federal auditors confirmed on Monday.Germany moved some of its gold reserves abroad during the Cold War to protect them from a possible Soviet attack. Some of the gold was moved back to Frankfurt after the collapse of communism. But the Bundesbank argues that it still makes sense to store some gold in major financial centers so that it can be sold quickly if necessary. Although the Bundesbank does not provide exact details about the distribution, it has revealed that the largest share of Germany’s gold is held in New York, followed by Frankfurt, London and Paris.Skeptical about the ReservesIn times of uncertainty about the future of Europe’s common currency, gold is a hot topic, and some Germans take a dim view of the fact that much of the country’s gold — which theoretically belongs to the people — is held abroad. Some members of parliament have even expressed doubts as to whether the foreign gold reserves really exist. Philipp Missfelder, a member of the conservative Christian Democratic Union (CDU), wanted to see the gold for himself and traveled to New York in person to inspect the holdings, according to the newspaper Frankfurter Rundschau. His trip was apparently unsuccessful, though. When he visited the Fed’s safes in New York, staff were either unable or unwilling to show him exactly which bars belonged to Germany.Peter Gauweiler, a Bundestag member with the CDU’s Bavarian sister party, the Christian Social Union (CSU), is also skeptical about the foreign gold reserves. In recent years he has attempted to gain more information about Germany’s gold through parliamentary questions. Last year, he had an economics professor prepare an expert report on the subject, which concluded that the Bundesbank was not fulfilling its inventory regulations by failing to physically inspect the gold.In July 2011, SPIEGEL reported that Bundesbank employees had physically seen the gold in New York within the previous six months. However, the last time it had been checked before that was in June 2007.Gauweiler doubts that the Bundesbank would have immediate access to all its gold if necessary, suggesting that part of the gold may have even been lent out — a claim that the Bundesbank rejects.Bringing Back HomeSome Germans even want to bring the gold reserves back to Germany. An initiative called “Gold Action” is campaigning under the slogan: “Repatriate Our Gold!” Its petition has been signed by prominent industrialist Hans-Olaf Henkel and Frank Schäffler, a parliamentarian with the business-friendly Free Democrats who is known for his euroskeptic views.The initiative alleges that there is an “acute” danger that the German gold could be expropriated as a result of the financial and debt crisis. They argue that the German government could soon be forced to sell gold to cover the costs of the crisis.But the Bundesbank wants to leave the gold where it is. Observers point out that apart from the high cost of transporting the gold back to Frankfurt, the symbolic effect of Germany repatriating its gold reserves might unsettle the nervous financial markets, who could see it as a sign of an impending collapse of the euro.
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FORGOT TO ADD PRIOR EPISODE: (and given the surprises we were served with the first ever audit of the Fed, the outcome of the first-ever audit of Fort Knox is anybody's guess)
Ron Paul worries Fort Knox gold is gone
@CNNMoney June 24, 2011: 11:58 AM ETRon Paul introduced a bill that would require the Fed to manually audit every U.S.-owned gold bar.WASHINGTON (CNNMoney) -- With the price of gold at record highs, presidential candidate Rep. Ron Paul wants to make sure the U.S. gold bars at Fort Knox are really there.Paul called a congressional hearing Thursday to grill federal officials about his bill to audit and inventory all of the gold reserves at Fort Knox, Ky., West Point, N.Y., and Denver, even though Treasury officials insist that the gold is audited annually and is all there.During the hearing, Paul suggested that the Federal Reserve of New York, which has 5% of the U.S. gold reserves, has the ability to secretly sell or swap gold with other countries without anyone knowing."The Fed is pretty secret, you know," said Paul, who leans Libertarian. "Congress doesn't have much say on what's going on over there. They do a lot of hiding."Paul, a Texas Republican who wants to convert the U.S. monetary system to one based on the gold standard, says the federal government owes it to taxpayers to make sure U.S.-owned gold is safe.(Ron Paul: Bernanke's biggest critic)"This is one of the few legitimate functions of government: To check our ownership and be fiscally responsible and find out just what we own and whether it's really there," said Paul, who is among those running for the Republican presidential nomination.Audits by the Treasury Department and Government Accountability Officeare based on samples. Paul wants to open up Fort Knox and other reserves and count the bars manually."We know where it is. We know how much there is. We know it's there. None of it has been removed," said Treasury Inspector General Eric Thorson.Ron Paul, John Boehner, Nancy Pelosi: Peek at their wealth
In September, Treasury completed its latest audit, showing that U.S. gold reserves total 9,300 tons with a market value of $320 billion, Thorson said. The recent run-up in gold prices -- the precious metal is trading at about $1,515 an ounce -- puts the market value at $340 billion as of Wednesday, according to Thorson's testimony. He added that each gold bar weighs about 27 pounds and is worth around $500,000.Paul said that his questions were partly in response to the numerous Internet conspiracy theories, including those that accuse the government of secretly selling all of the gold in Fort Knox.Thorson said Treasury doesn't believe that anyone, including the Fed, has taken the gold or laid claim to U.S. gold bars. Any further audit as proposed by Paul's legislation would be redundant, he said."There is no movement. There is nothing there that can happen, once those doors are sealed," Thorson said. "It's very obvious if those seals are ever broken."William Lacy Clay, a Democratic representative from Missouri, said that doing a complete audit as Paul is calling for is a waste of federal manpower and could cost tens of millions of taxpayer dollars.Thorson reported that the U.S. Mint told him that moving, counting and testing the gold would cost around $60 million. Paul said he had heard from Treasury that it would only cost $15 million.Part of the expense would be due to the bill's requirement to "assay" all the gold, said Gary T. Engel, a director of Financial Management and Assurance at GAO. Assaying means drilling little holes in all the gold bars in order to test its purity. But that process is "basically destroying whatever that piece is."Finally, Engel cautioned, "There will be some loss of the gold from the bars through the assaying process if you do that for every single bar that's out there."
