The True Gold Standard (Second Edition)
The largest concentration of monetary gold in the world is not at Fort Knox or West Point.
It's in the vault of the Federal Reserve Bank of New York at 33 Liberty Street in Manhattan.
33 Liberty Street is the current home of the Federal Reserve Bank of New York. It is located in Lower Manhattan in New York City's Financial District. It is three blocks north of Wall Street between Nassau Street on the west and William Street on the east. It is two blocks east of Zuccotti Park between Maiden Lane on the north and Liberty Street on the south. Built in 1924, it is where the monetary policy of the United States is executed by trading dollars and United States Treasury securities. It reportedly holds 25% (unaudited) of the world's existing reserves, making it the largest known treasury in the world.
The visual impact of the neo-Renaissance structure derives from its monumental size, fortress-like appearance, fine proportions and the overall quality of construction. It set the precedent for many later banks which were greatly influenced by its design.
Built from 1919 through 1924, this massive building occupies an entire city block, reaching fourteen stories tall with five additional floors underground. The stone exterior is reminiscent of an early Italian Renaissance palace with the horizontal and vertical joints of the stones deeply grooved or rusticated. The building was purposely designed to resemble a Florentine palazzo so as to inspire trust and confidence.
The vault rests on Manhattan's bedrock, 50 feet (15.24 m) below sea level. The weight of the vault and the gold inside would exceed the weight limits of almost any other foundation. The gold and other precious metals belong to 36 governments and is stored for free, but every time a bar is moved, a handling fee is applied. There are elaborate procedures for the handling of the gold, with three different teams monitoring every transaction.
According to CNET:
In 2008, there was a total deposit in the vault of 216 million troy ounces of gold--a troy ounce is 1.1 times heavier than a standard ounce. In total, that amounted to 22 percent of the entire gold reserves on Earth, and at Monday's market price of $1,181, is worth about $255 billion. ...
One bar weighs about 27.4 pounds--and, at $1,181 per ounce, is worth $388,312.
You can also imagine the strain such a large collection--not to mention the enormity of the vault required to hold it--would put on the ground beneath it. That's why the gold vault was built over a rare piece of New York City foundation stable and strong enough to support the gold and its incredible cage. The vault is 80 feet below street level and was cut into a 90-ton section of steel.
Oct 20, 2014
Lawrence H. White is an economics professor at George Mason University who teaches graduate level monetary theory and policy. Lawrence White As described by the Wikipedia, "White earned his BA at Harvard University (1977) and PhD at the University of California at Los Angeles (1982). Before his current role at George Mason...
The Federal Reserve System's James Narron and David Skeie, career officials with the Federal Reserve System, are two eminent historically erudite figures. Writing in the New York Federal Reserve Bank's online publication, Liberty Street Economics, they recently provided a continuation of their valuable historical "revue," Crisis Chronicles: The Collapse of the...
Jul 23, 2014
An article headline in Saturday’s Wall Street Journalread “Rate Talk Heats Up Within The Fed.” As Journalreporters Jon Hilsenrath and Michael Derby...
Oct 05, 2014
Key Monetary Writings
Lawrence H. White is an economics professor at George Mason University who teaches graduate level monetary theory and policy. Lawrence White As...
Why the Gold Standard?