Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Jim Rickards Speculates About a Bank Run on the New York Fed’s Store of Gold

  by    0   0

Could we be seeing a run on the Federal Reserve Bank of New York? Jim Rickards thinks we just might be. But it’s not your typical cash run. It’s a run on the bank’s gold.

The classic image of this is the scene from the Christmas-season film It’s a Wonderful Life, with Jimmy Stewart. We’ve all seen it. Now, something similar is happening at the Federal Reserve Bank of New York. What’s different is that the run on the bank involves gold, not cash. The New York Fed will never run out of cash because they can print all they need. But they could run out of gold.”

The New York Fed has about 6,000 tons of gold stored in its vaults on Liberty Street in Lower Manhattan. Much of that gold belongs to countries around the world, as well as the International Monetary Fund. But over recent years, a lot of countries have been bringing their gold home.

Germany recently brought a lot of its gold back. Last summer, the country completed a gold repatriation project three years early. The Bundesbank said it made the decision to move the gold home “to build trust and confidence domestically.”

Turkey has been on a gold-buying spree and has also been bringing some of its hoard home in a quest for independence from the dollar.  Rickards said Turkey has about 220 tons of gold stored in New York.

And it’s not just large gold holders repatriating their metal. Azerbaijan recently reclaimed some of its gold from New York. A US state is even getting into the act. The Texas legislature authorized a state Gold Bullion Depository a couple of years ago. One reason given for establishing the institution was to move the state university’s gold out of New York back home to the Lone Star State.

Could this movement of gold out of the Fed be the beginning of a full-fledged bank run? That remains to be seen, but Rickards said he thinks it’s at least a possibility.

The gold stash in New York is dwindling and global behavior is coming to resemble a run on the gold bank. Skeptics claim not all of the gold is there. My own view is that New York does have the gold, although a lot of it may be leased out to support gold price manipulation by the big banks and China. Either way, we may soon find out if New York has to shut its gold doors just like any other insolvent bank. And we may also find out how much patience the world has left with the dollar.”

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Photo by Michael Daddino via Flickr.


Related Posts

Ireland Adds Gold to Reserves as Inflation Worries Increase

Over the last several years, we’ve seen strong central bank gold-buying. The surge in gold purchases has primarily been driven by a handful of consistent players. But over the last several months, we’ve seen several new countries enter the market. The most recent is Ireland.

READ MORE →

That Was One Weird Jobs Report

That was one weird jobs report. The labor department released the November employment data on Friday. The numbers simply don’t make any sense. As one chief investment officer put it, “One of the weirdest reports I have ever seen.” One thing seems pretty certain. The labor market has not recovered, no matter how the powers […]

READ MORE →

Gold Demand Continues to Rebound in India

Gold demand in India strengthened in October despite higher prices. This continues a rebound in the world’s second-largest gold market after it was pummeled by government policies during the coronavirus pandemic.

READ MORE →

I’m Dreaming of a Red Christmas?

It appears American consumers are going to have a red Christmas this year. Red — as in going deeper into debt.

READ MORE →

Singapore Adds Gold to Reserves for the First Time in Over 2 Decades

Singapore expanded its gold reserves by about 20% earlier this year, joining a growing number of countries increasing their investment in the yellow metal.

READ MORE →

Comments are closed.

Call Now