Political Metals

Much has been written here and elsewhere about the merits of holding physical gold as opposed to paper representations of gold, otherwise known as gold derivatives or paper gold. However, when it comes to auditing gold stored in vaults, counting the physical gold bars and drilling holes into them are not necessarily the way to go. Ironically, when it comes to auditing, it’s the “paper” that’s more importing than the physical.

In this recent interview at Capital Account, Chris Powell, co-founder and treasurer of Gold Anti Trust Action Committee (GATA) explains why he’s not excited about news that the US Treasury is auditing its gold stored at the NY Federal Reserve.

The dramatic news of drilling into the bars to ascertain their purity is of little relevance to him. He’s more interested in an audit of the paper claims to the gold. He doesn’t doubt that the gold is physically there, nor that they are pure. Rather, he wants to know who actually owns the gold? How many parties are claiming ownership to each bar of gold? Have they been leased or swapped?

Watch this very informative interview, which also covers other topics of interest:

• Recent news on the CFTC’s  silver manipulation investigation,
• JP Morgan and the US government’s role in the silver manipulation,
• The history of gold manipulation; The London Gold Pool & the role of the BIS.

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For further reading:

• Resources on Gold Manipulation
• Resources on Silver Manipulation
• Commodities Futures Trading Commission (CFTC)