Jim Sinclair’s Commentary
If the nature of these assets was made public, the weakness now in the Federal Reserve Balance Sheet would be immediately obvious. The dollar would implode immediately and treasury instruments would have to be downgraded. It also would reveal those entities who are the near and dear of the Fed.
Fed Defies Transparency Aim in Refusal to Disclose
By Mark Pittman, Bob Ivry and Alison Fitzgerald
Nov. 10 (Bloomberg) — The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.
Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn’t require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.
“The collateral is not being adequately disclosed, and that’s a big problem,” said Dan Fuss, vice chairman of Boston- based Loomis Sayles & Co., where he co-manages $17 billion in bonds. “In a liquid market, this wouldn’t matter, but we’re not. The market is very nervous and very thin.”
Bloomberg News has requested details of the Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit Nov. 7 seeking to force disclosure.
Jim Sinclair’s Commentary
Before all this is over you will see continuing and major bullion purchases by central banks. To hell with standing agreements.
ECB-Gold reserves rise by 1 mln euros in week
Tue, Nov 11 2008, 14:27 GMT
FRANKFURT, Nov 11 (Reuters) – Gold and gold receivables held by euro zone central banks rose by 1 million euros to 220.193 billion euros in the week ending Nov. 7, the European Central Bank said on Tuesday.
Net foreign exchange reserves in the Eurosystem of central banks rose by 22.8 billion euros to 361.1 billion euros, the ECB said in its regular weekly consolidated financial statement.
Gold holdings rose mainly as a result of purchases by 1 euro zone central banks, and this was consistent with the 2004 Central Bank Gold Agreement, the ECB said.
