Got Gold? Let's audit the FED and find out.

The People’s Republic of China announced a rise in its official holdings from 600 metric tons to 1,054 tons, making the country the world’s #5 holder of gold reserves.  The 600 metric ton level had remained constant since 2003. While a rise of 454 tons sounds like a lot, at $900 USD per troy ounce, this is “only” $13 billion.

The United States has reported the largest reserves – over 8,100 tons, but GATA (the Gold Anti-Trust Committee) reports these holdings may not exist as they are strangely reported as “Deep Storage Gold.” 

Congressman Ron Paul’s bill, HR 1207, the Federal Reserve Transparency Act, will audit the Federal Reserve, including our gold supply.  This week over 20 more co-sponsors joined, bringing the bill to 88 co-sponsors.

From my experiences of having lived in Shanghai, China for the past 3-4 years and having read the IMF reporting rules, I have the following comments:

1. China has a lot more gold than this doubling of their official reserves – for instance any state bank holdings are not reported to the IMF. One day the world will wake up and realize India and China possess a large amount of the gold in the world.
2. The timing of this announcement is, of course, an eco-political power play.  The gold price and the shrinking future spreads will be key to watch.
3. From 2006 through mid-2008 you could buy gold in the bank shops, and at banks, but this was fairly difficult to do.  In mid-2008, a massive propaganda campaign hit the major banks, with gold displays in bank lobbies and active advertisements.
4. Asian populations have a deep cultural appreciation and respect for gold as money, unlike most Americans.
5. China took over the title of world’s largest gold mine producer from South Africa last year.

As the integrity of the US banking system is compromised, private citizens should consider becoming their own central banks.  The days of irredeemable paper fiat currencies may be approaching its end, and there is a reason why the central banks hold gold – it is their default insurance.

Do not be fooled, the gold reserves of central banks are their actual Money.  Debt-based paper dollars, yen, pounds are all just ridiculous currencies, sad shadowy mirrors of their former selves, which is gold and silver coin.

So, got gold?