Responding to growing concern about the quality of the Federal Reserve System’s assets, former Federal Reserve Governor Lyle Gramley told reporters last week that “You have to reckon with the fact that one of the Fed’s assets is gold certificates, which are priced, as I remember, at US$42 an ounce, and if we were to price them at market prices, the Fed’s leverage would look a lot less than it is now.”

Humor me. Let’s crunch those numbers.

Those gold certificates have a book value of about US$14 billion, if you include special drawing rights and coin holdings ($1.7 billion). Even if you revalued this inventory, it would still total less than $300 billion, or 12% ofthe Fed’s total assets. So far,…

We are all being deceived by the nature of our banking system, says Matthew Collins. Fractional reserve banking is corrupt. And with the Fed at the heart of the scam, it’s no wonder things are so messed up. Matthew says it’s time we stand up and demand answers.

After record declines in October’s producer and consumer price indexes, deflation is today’s buzzword. But Bill Bonner says the explosion of assets on the Fed’s balance sheet will create serious monetary inflation problems further down the line.

“Nothing like this has ever been done before by the Federal Reserve,” says Bud Conrad. From holding mostly US treasury notes and gold, the Fed’s balance sheet has been expanded by a whole range of questionable assets and liabilities. In time, Bud says the consequences for the US dollar will be grim.