Debate Magazine

Is There Gold in the Federal Reserve Bank of New York’s Underground Vault?

By Eowyn @DrEowyn

Five months ago, on August 26, 2013, I did a post asking “Is there gold in Fort Knox?

Here’s an excerpt from that post:

Fort Knox is a United States Army post in Kentucky south of Louisville and north of Elizabethtown. The Department of Treasury maintains the United States Bullion Depository in a fortified vault building at Gold Vault Rd. and Bullion Blvd. on the army post since 1937. Inside the building supposedly is a large portion of U.S. official gold reserves — 5,046.3 tons of gold bullion (147.2 million oz. troy), roughly 3% of all the gold ever refined throughout human history – and occasionally other precious items belonging or entrusted to the federal government. Even so, the bullion depository in Fort Knox is second in the United States to the Federal Reserve Bank of New York’s underground vault in Manhattan, which holds 7,716 tons of gold bullion (225.1 million oz. troy), some of it in trust for foreign nations, central banks and official international organizations.

But that’s what we are told. How do we know there’s actually gold in Fort Knox or in the Manhattan underground vault? Did you know that the last audit of Fort Knox occurred 60 years ago in 1953?

Federal Reserve Bank of New York
Federal Reserve Bank of New York building

One of the countries whose gold is being held in trust at the Federal Reserve Bank of New York is Germany.

A year ago, on January 16, 2013, Germany’s central bank, Deutsche Bundesbank (or German Federal Bank), announced that it wanted half of the country’s gold to be repatriated, i.e., returned to Germany:

By 2020, the Bundesbank intends to store half of Germany’s gold reserves in its own vaults in Germany. The other half will remain in storage at its partner central banks in New York and London. With this new storage plan, the Bundesbank is focusing on the two primary functions of the gold reserves: to build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold trading centres abroad within a short space of time.

The following table shows the current and the envisaged future allocation of Germany’s gold reserves across the various storage locations:

31 December 2012 31 December 2020

Frankfurt am Main 31 % 50 %

New York 45 % 37 %

London 13 % 13 %

Paris 11 % 0 %

To this end, the Bundesbank is planning a phased relocation of 300 tonnes of gold from New York to Frankfurt as well as an additional 374 tonnes from Paris to Frankfurt by 2020. 

300 tons of gold from New York + 374 tons of gold from Paris = 674 tons. Those 674 tons are to be repatriated to Frankfurt over the course of 8 years (2020-2012 = 8), which means an average of about 84 tons of gold a year (37.5 tons from New York; 46.75 tons from Paris).

It is now a year since Deutsche Bundesbank’s repatriation announcement.

How many tons of gold had been repatriated back to Frankfurt?

A paltry 37 tons — an amount that represents just 5% of the stated target, and well below the 84 tons that the Bundesbank would need to transport each year. Worse still, only 5 of the 84 tons were sent from the Federal Reserve Bank of New York; the rest came from Paris.

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