Federal Reserve Notes Are Backed By Gold


Retraction: After many quite personal attacks on my character, it has been pointed out to me that the “gold” in question is pledged to the Federal Reserve specifically as collateral, meaning that the Treasury must pay the contract if the Federal Reserve calls in the “collateral”. I don’t mind being wrong, and will always endeavor to correct such mistakes. But I must say the abuse is intolerable (in the comments below) from what are supposed to be the good guys; “the people”. This gives little hope of our future as an organized group of people. I apologize for being tricked by this misleading writing, and hope to correct that here:

Here is a comment from Walter Burien, correcting my error:

The report Clint sent out was a trap he fell into after certain circumstances of reporting changed to hide the assignment of the Treasury gold to the FR.

Most would not have caught the word play for misrepresentation now revised in the reports including maybe myself if I looked for the first time now. Being that I looked over a decade ago, that is why I caught it.

In reference to Clint: “This is the problem with most Americans today.” and that is 99% not accurate in reference to Clint.

He has done what 1 out of a million would do and that is take the time and have the intelligence; fortitude; and will to “look”. We all get caught in traps from time to time. You should not diminish him for having done so…

Note 19 on page 101: “Notes to the Financial Statements” and line item values listed.

Page 102. The key phrase is the last sentence:

“All of the Department of the Treasury’s certificates issued are payable to the Federal Reserve banks.”

Being gold certificates issued by the Treasury, the word “payable” means payable in gold.

Now I did notice they are doing something differently then they were doing in 1999. They are now “floating” the certificates back and forth between the federal reserve member banks redeemable in dollars and foreign currency. There is no physical gold that changes hands, just the paper certificates. I mentioned to look at the 1999 Federal AFR being the wording and the swaps of certificates were not being done then and there was no word play. The “gold was pledged to the Federal reserve by “gold certificates” to do what they do. If the Federal Reserve called up those certificates, the FR got the gold in redemption of those certificates.

As I mentioned I put out a CAFR1 post eight years ago on that point and Opps, the gang had to cover their asses in extended word play and the new certificate swaps to blur what they did in the “give up” of the gold by certificates issued at $42 oz.

Hell probably hit the fan when the full Congress and the Senate realized what had been done and thus implemented the gold certificate swaps to generate money for the Treasury.

If the Federal Reserve had ever “called up” the original certificates issued and took possession of the gold, the Treasury would not have had the ability to profit off the gold certificate swaps. The treasury would no longer have the gold in their possession to do so. I note the gold certificates is a VERY small percentage of the value listed in the Federal Reserve’s AFR.

Being that I now have had to focus on this issue, I now understand the play push to audit the Federal Reserve “members” of if which done would collapse the Federal Reserve’s participation of and from member banks. It was used as a pressure point to accomplish several points. One to force the FR into taking on more US Debt between the members (as the increase is noted in both the FR and Federal Government’s AFR report’s notes) and also probably to force the ability to use the gold certificates (never redeemed for the physical gold) through in and out swaps in trade mandating return of the certificates (owned by the FR) on call where the “Treasury” directly benefited from that activity.

–Walter

***Note that Walter alludes to the most important aspect here: the collusion – not competition – between the Federal Reserve and the Treasury. And the gold, of course, can’t just be ignored. It is the peoples wealth pledged without acquiescence to contract.

.

And here was the original post:

It is always good to know that the sacrifices I’ve made and the endless hours of research I’ve done don’t just fall on deaf ears…

I received an email a couple of days ago from a reader of my blog, who went above and beyond the call of duty to verify the research in my recent videos, not just taking it at face value. If only all of us did this with each others research, we would no doubt have a whole lot less confusion in our search for “truth”.

Besides my gratitude, I would also offer this man my highest accommodation of valor (if I had one) for taking the time to not only find the Comprehensive Annual Financial Reports (CAFR’s) I mentioned, but to read them and link them in his email.

Thank you, sir!

I’d like to share that email here…

“John Smith” wrote:

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Fact: The Federal Reserve Notes are backed by gold.

Yes, you read that right. The Federal Reserve notes are backed by gold.

Hitler (Joseph Goebbels) was right when he said, “If you repeat a lie enough times, people will believe it (paraphrase).”

I know what you are thinking. OK, John. Prove it.

If you look at page 453 and 490 of  the 2009 Annual Financial Report of the Federal Reserve (CAFR) you will see there actually is collateral held against Federal Reserve Notes. This means the money we use is backed by something.

(LINK – http://www.federalreserve.gov/boarddocs/rptcongress/annual09/pdf/ar09.pdf)

What is it backed by?

There is the Gold Certificate Account (The Fed has the gold and the Treasury has the certificates.)

How much gold?

$11,037,000,ooo. worth of gold. This can also be found on page 61 of the Federal Government’s CAFR.
(LINK – http://www.gao.gov/financial/fy2010/10notes.pdf)

How many (troy) ounces (of gold) is backing the Federal Reserve Notes? On page 62, the last paragraph reads:

“Gold is valued at the statutory price of $42.2222 per fine troy ounce. The number of fine troy ounces was 261,498,900 as of September 30, 2010, and 2009. The market value of gold on the London Fixing was $1,307 and $996 per fine troy ounce as of September 30, 2010, and 2009, respectively. Gold totaling $11.1 billion as of September 30, 2010, and 2009, was pledged as collateral for gold certificates issued and authorized to the FRBs by the Secretary of the Treasury. Gold certificates were valued at $11.0 billion as of September 30, 2010, and 2009, which are included in Note 19—Other Liabilities. Treasury may redeem the gold certificates at any time. Foreign currency is translated into U.S. dollars at the exchange rate at fiscal year-end. The foreign currency is maintained by various U.S. Federal agencies and foreign banks.”

 

How much money (Federal Reserve Notes) is in circulation?

All of that hard and easily liquidated currency is known as the M0 money supply. This includes the bills and coins in people’s pockets and mattresses, the money on hand in bank vaults and all of the deposits those banks have at reserve banks. According to the Federal Reserve, there was $908.6 billion in the M0 supply stream as of July 2009.

(LINK –  http://www.federalreserve.gov/releases/h41/20090730/)

What is the real value of the Federal Reserve Notes?

This can be viewed 2 ways (statutory value or market value).

Let’s do some calculating:

The statutory price of gold is $42.2222 per ounce. The Fed is holding 261,498,900 ounces of gold This equals to $11,041,058,855.58 ($11 billion). There is $908,600,000,000 ($908 billion) in circulation. According to the statutory price of gold, the dollar is worth $.012 (Just over 1 cent per dollar).

The market price of gold is $1,307.00 per ounce. The Fed is holding 261,498,900 ounces of gold. This equals to $341,779,062,300.00 ($341.7 billion). There are $908,600,000,000 ($908 billion) in circulation. According to the market price of gold, the dollar is worth $0.37 (37 cents per dollar).

(Note: The average market price of gold is actually over $1,600 for November)

I guess the dollar really isn’t worth a dollar (in gold).

Warning: My lack of funds are being compensated by my knowledge.

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Again, my congratulations to John for taking the initiative to research and verify the facts (instead of just insulting the messenger).

.

–Clint Richardson (realitybloger.wordpress.com)
–Monday, November 21, 2011

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