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Inside Notes: Gold, the Stuff of Dreams

By Curtis Parrott

Oh…that sparkling gold and all it represents. Gold is some great stuff. Its usefulness is derived from a diversity of special properties it holds. Gold is an excellent conductor of electricity, it will not tarnish, it’s very easy to work with and can even be drawn into wire. Gold can be hammered into thin sheets, it can alloy with many other metals and can be melted and cast into beautiful detailed shapes of all types. Most of all it has a wonderful color and a brilliant luster that we want to hold and spend.

Georgia Director, Curtis Parrott
Georgia Director, Curtis Parrott.

Origins of Gold

According to scientists, Gold is thought to have been produced in a supernova nucleosynthesis (the making of chemicals from a really big explosion that produces the stuff the universe is made of), also from the collision of neutron stars and to have been present in the dust from which the Solar System was formed. Because the Earth had a molten center when it was formed, almost all of the gold present in the early Earth sank into the planetary core. In fact, there are enough precious metals located in the core to cover the entire surface of Earth with a four-meter thick layer. Now that’s a lot of metal.

Uses of Gold in Space and Computers

One of the biggest threats to the delicate electronics on a spacecraft is radiation. With no atmosphere to protect them from that amount of intense radiation, not only people but all electronics get a direct hit, transferring heat and risking serious damage to components. Gold is excellent at reflecting the dangerous effects of radiation. It reflects as much infrared and UV radiation as copper, aluminum, and silver, but it does them better by absorbing a large amount of visible light at the same time. This means it won’t blind astronauts with massive reflections and solar radiation as the gold coating on the helmet fends off these dangerous effect.

From vapor-deposited gold taping to gold coating, it is used because of its multiple benefits in outer space. Gold helps protect against corrosion from ultraviolet light and x-rays and acts as a reliable and long lasting electrical contact in onboard electronics. Gold is the thing for space if your going to travel to the stars.

Everyone who’s owned jewelry knows that silver and copper tarnish very easily. Gold stays nice and shiny, which means less maintenance for jewelry wearers.

Gold is found in most computers. Gold can also be found in most standard desktop and laptop computers. The precious metal is used in a CPU’s memory chip and motherboard, allowing parts of your computer to receive power and communicate with each other. Gold refining yields of the Pentium Pro have been reported to be as high as around one gram per CPU.

Gold and the Banking Industry

The United States went off the gold standard in 1971. Today, Fort Knox’s gold is now an asset on the Federal Reserve’s balance sheet, not a key part of our monetary system.

As per the Department of the U.S. Treasury, here is the Bureau of Fiscal Service status report of the U.S. Government gold reserve as of March 31, 2019.

   Total – Federal Reserve Bank-Held Gold

  • $13,452,810.545- Fine Troy Ounces
  • $568,007,257.40-Book Value

U.S. Government Gold Reserve

  • $261,498,926.241-Fine Troy Ounces
  • $11,041,059,957.90-Book Value

During the Great Depression, in 1933, President Roosevelt issued an executive order requiring anyone with gold to surrender it to a Federal Reserve bank or any member bank of the Federal Reserve system.

The Federal Reserve banks also required the commercial banks to hand over their gold to the Fed. Now, suddenly, the gold went out of the commercial banks into the Federal Reserve Bank.
But under the Gold Reserve Act of 1934, the Federal Reserve was ordered to surrender all its gold to the Treasury Department. All the nation’s gold in effect came under direct government ownership.

Now here is the trick…the Federal Reserve is actually a private system, while the Treasury is an arm of the U.S. government. And the Fifth Amendment of the Constitution prevents the government from taking private property without just compensation. To get around that legal issue, compensation was a gold certificate the Treasury issued to the Federal Reserve in exchange for its physical gold. To this day, the Federal Reserve carries that gold certificate on its balance sheet.

Where is All the Gold Now?

There is a lot of gold in the Federal Reserve Bank in New York City. But, gold stored there is for central banks, governments and others monetary gold. The New York vault today remains the world’s largest known depository of international organizations on behalf of the Federal Reserve System, which remember is a private entity.

Our gold is supposed to be stored at Fort Knox in Kentucky. However that is not totally correct. A little more than half the gold is at Fort Knox, but the rest is said to be stored at West Point on the Hudson River in New York.

Now if you were the Federal Reserve or the U.S. Treasury and you want people to think that gold is not that important, why would you show it off to ordinary citizens and advertise it? You show off things that are important. If the Fed doesn’t want you to think that gold is important, it follows that they would take this course of action.

Gold has always been a real sneaky business in our world. It is coveted by all. No one seems to want anyone else to know how much they have stored. This is like a magician telling you to look at his right hand while his left hand is hidden from view doing who knows what. We live in an ever changing world where gold is still the King and number one power on earth!

Keep the Faith!

 

 

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