House Rep, Alexander Mooney, introduced a Bill that would the first true audit of gold owned by the United States in more than 65 years. The Bill, if passed, would require a full assay, inventory and audit of the U.S. gold every 5 years. Currently the gold is being “safe-kept” by the Fed.
The last time a Bill was introduced to audit the Fed, specifically the gold and gold swaps activity, the Fed spent millions in lobbying fees to have the legislation drafted by then House Rep, Ron Paul, buried. Then Chairman of the House Financial Services Committee, Barney Frank, made sure the Bill never left Committee.
What exactly does the Fed have to fear with respect an audit of the U.S. citizens’ gold held at the Fed?
Here’s the crux of the proposed legislation:
(a) GAO Assay, Inventory, And Audit.—The Comptroller General of the United States shall conduct and complete, not later than nine months after the date of enactment of this Act, and every 5 years thereafter—
(1) a full assay, inventory, and audit of all gold reserves, including any gold in “deep storage”, of the United States at the place or places where such reserves are kept;
(2) an analysis of the sufficiency of the measures taken to ensure the physical security of such reserves;
(3) a full accounting of any and all encumbrances, including those due to lease, swap, or similar transactions presently in existence or entered into at any time during the past 15 years with respect to the gold reserves;
(4) a full accounting of any and all sales, purchases, disbursements, or receipts at any time during the past 15 years—whether directly or indirectly undertaken—with respect to the gold reserves, including the specific terms and parties involved in such transactions; and
(5) a full accounting of all gold in which the U.S. Government (including the Board of Governors of the Federal Reserve System or any other Federal agency) presently has a direct or indirect interest, including gold that may be held by third parties, including, for example, the Bank for International Settlements, the International Monetary Fund, the Exchange Stabilization Fund, any foreign central bank, or any other party, public or private.
Though this proposed Bill should be enacted in this form by both the House and the Senate, I would bet my last nickel that the Fed will make sure this legislation never sees the light of day. The only question is my mind is whether or not Rep. Mooney will end up being found in his shower some morning dead by “suicide.”