German Gold and the Crooked NY Fed by Arthur M.M. Krolman
| April 21, 2016
How To Explain the
Doggone Financial System
Goldman-Sachs man William
C. Dudley is posted at the top of the Federal Reserve Bank
of New York. Recently he gave a major speech at the Virginia
Military Institute. At the end, he accepted questions from
the audience. One man asked Mr. Dudley a pointed question
(53:19) about one customer, Germany, experiencing a delay
in getting their gold back. A syllable-by-syllable transcription
follows:
William C. Dudley: Okay.
Last question, please.
Questioner: You don’t store
a lot of gold.
WCD: Ha ha ha. Yes, we
do. I think the Federal Reserve Bank of New York is the
largest gold depository in the world.
Same Questioner: Germany
has asked to repatriate their gold. And they haven’t gotten
all their gold back. And I was wondering why they haven’t
got all their gold back when they asked for it three or
four years ago.
WCD: I’m not even sure,
ahhh, how to answer that question. The gold. We hold a lot
of gold at the New York Fed and it is almost all gold of
f-foreign countries. A lot of the gold got there during
the two world wars where people wanted a safe place for
their gold. And the reality is if peo-peo- if countries
want their gold back we’re absolutely happy to to to send
it to them. So if there’s any delay in the gold going back
to Germany, it’s pr- it’s pr- it’s because they th-th-they
something on their end I would think. And I’m not aware
of any any problems in getting their gold back. They they’ve
they’ve asked for for their gold back not just from the
US but from a few other countries. There was some, I think,
political issue in Germany about whether the gold was really
there. And so they, you know, they were sort of like someone
who wants to make sure that, you know, the money that they
have under the mattress is still there. Wanted to wanted
to check on their gold. And we’re absolutely completely
comfortable with that. Any country that doesn’t want to
hold its gold at the New York Federal Reserve we’re very
happy to make arrangements for that country to take their
gold home. Ah, we have absolutely no skin in the game at
all, ha ha, it’s completely up to those countries where
they want to hold their gold.
Same questioner: Have you
made gold swaps with other central banks or governments?
WCD: Ah, I can’t comment
on individual customer kind of transactions. Ah, I’m gonna
I wanna ask for one more question ‘cause I don’t wanna end
on that question. Ha ha ha ha.
Imagine a parallel universe where Mr. Dudley
took a different career path. He now works for Dog-sacks
Man & Co. managing their sprawling kennel franchise,
The Fido Depository of New York. One day a man asks Mr.
Dudley a pointed question about his friends, Mr. & Mrs.
German, experiencing a delay on getting their dog back.
A crowd gathers as the scene unfolds:
Questioner: You don’t store
a lot of dogs.
William C. Dudley: Ha ha
ha. Yes we do. I think the Fido Depository of New York is
the largest dog kennel in the world.
Same Questioner: The Germans
have asked to take their dog home. And they haven’t gotten
him back. And I was wondering why they haven’t got their
dog back when they asked for him three or four days ago.
WCD: I’m not even sure,
ahhh, how to answer that question. The dog. We hold a lot
of dogs at the New York Fido and it is almost all dogs of
our c- customers. Lot of the dogs got there during the two
holidays, Thanksgiving and Christmas, where people wanted
safe place for their dog. And the reality is if peo-peo-
if customers want their dog back we’re absolutely happy
to to to send it to them. So if there’s any delay in the
dog going back to the Germans, it’s pr- it’s pr- it’s because
they th-th-they something on their end I would think. And
I’m not aware of any any problems in getting their dog back.
They they’ve they’ve asked for for their dog back not just
from us but their cat from their cat-sitter too. There was
some, I think, family issue in the German household about
whether the dog was really there. And so they, you know,
they were sort of like someone who wants to make sure that,
you know, the money that they have under the mattress is
still there. Wanted to wanted to check on their dog. And
we’re absolutely completely comfortable with that. Any customer
that doesn’t want to hold its dog at the New York Fido Depository
we’re very happy to make arrangements for that customer
to take their dog home. Ah, we have absolutely no skin in
the game at all, ha ha, it’s completely up to those customers
where they want to hold their dog.
Same questioner: Have you made dog swaps
with other dog depositories or governments?
WCD: Ah, I can’t comment
on individual customer kind of transactions. Ah, I’m gonna
I wanna ask for one more question ‘cause I don’t wanna end
on that question. Ha ha ha ha.
Maybe the Germans are still waiting and
maybe they’re not. Maybe the gold or dog is gone and maybe
it’s not gone. More importantly, do people have less or
more confidence in Mr. Dudley after these answers? Less.
In fact, shaky answers like this risk a
crisis that brings down the whole doggone system.