The Los Angeles Times’ Andrew Tangel has a brilliant write-up (including “Die Hard” references and a Ron Paul interview) of an unusual and secretive operation underway at the New York Fed: the Treasury Department is auditing its gold reserves.
It’s the first-ever audit of the Fed’s bullion — previously they were only performed at Ft. Knox, West Point and the U.S. Mint in Denver.
The process involves drilling small holes into the gold to measure its purity.
“The audit, which began in January, took place 80 feet below the Fed’s limestone and sandstone Italian Renaissance building in Manhattan’s financial district. Visitors to the vault make their way through a steel and concrete entrance where a 90-ton door rotates open.
“The bars were first weighed on a small electronic scale, then transferred to a table mounted with a long, thin drill used to burrow into the gold, said a person familiar with the operation who was not authorised to speak publicly. Workers were careful to collect any stray gold bits, the source said. Based on the market price of about $1,600 per troy ounce, the Treasury removed more than $110,000 worth of gold samples.”
The results of the audit are expected to be announced at the end of the year.