Bill Gross: Fed Claims To Own Billions in Fort Knox Gold; “With Nothing In The Vault To Back It Up—Amazing!”
January 5, 2013 | By Tekoa Da Silva
Bill Gross, founder of Pimco, the world’s largest bond fund with over $1.92 trillion under management, penned a new piece entitled, “Money for Nothin’ Writing Checks for Free.” In his editorial, he called attention to the near $10 trillion explosion in global central bank money issuance since 2006, and the impending doom historically associated with a “money for nothing” monetary policy.
His conclusion: The whole charade will soon hit a brick wall.
Of particular interest were his comments on gold, commodities, and the “Fort Knox Fairy Tale“…ie. Fed gold certificate claims on Fort Knox bullion holdings which may or may not actually exist.
Says Gross, “Supposedly they [the US Fed] own a few billion dollars of “gold certificates” that represent a fairy-tale claim on Ft. Knox’s secret stash, but there’s essentially nothing there but trust…$54 trillion of credit in the U.S. financial system based upon trusting a central bank with nothing in the vault to back it up. Amazing!”
Gross comments on the end-game picture in saying, “…[G]overnment financing schemes such as today’s QE’s or England’s early 1700s South Sea Bubble end badly…The future price tag of printing six trillion dollars’ worth of checks comes in the form of inflation and devaluation of currencies either relative to each other, or to commodities in less limitless supply such as oil or gold.”