Seems simple enough — the tourists love it — but one theory germinating on the web the past few months alleges a vast double-counting conspiracy between the Fed and none other than Wall Street powerhouse JP Morgan Chase.
Though the United States left the gold standard long ago, the Fed still houses the precious metal.
Some argue there's no point to this. The Fed has fiat power. There's really no reason in keeping sovereign gold because, theoretically, the Fed co uld issue IOUs to all sovereign nations whose gold it holds and then just print money should t hose countries ever want to redeem it.
The growing concern about the gold sitting under Manhattan has become a touchy subject ever since Germany announced earlier this year plans to repatriate its gold from Fed vaults. Some have said the move signifies German mistrust of the Fed . Others argue the Bundesbank is just one of many central banks keen on rebalancing its own gold reserves.
So where does JP Morgan fit in? Months ago ZeroHedge drudged up the fact that JPM-owned 1 Chase Manhattan Plaza has, on its fifth sub-basement , the world's largest bank vault.
You know who else has five sub-basements? The New York Fed. You know what building is across the street from 1 Chase Manhattan Plaza? You guessed it:
ZeroHedgeYup. JPM's vault, the largest in the world, is possibly inches away from the Fed's gold vault. Across the street, on the same level underground.
But are the vaults physically attached? We probably won't ever know. Either way, it would seem rather advantageous for a central bank housing other nations' sovereign gold to have an underground physical connection to a bank that trades in precious metals.
Which, for some, raises another conspiratorial question: Could JPM and the Fed theoretically "share" the resources if the latter were ever audited by, I don't know, the Germans?
Who would ever know?
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