Welcome to our Friday mailbag edition!

Every week, we receive great questions from your fellow readers. And every Friday, I answer as many as I can.

Now, before we dive into today’s questions, I want to tell you about an important strategy session I’m holding next week.

As you’ll know if you’ve been keeping up with Inside Wall Street, some economists are warning that we could be on the verge of a housing meltdown.

And I believe that an event happening this month could trigger a major crisis, similar to what happened in 2008.

The good news is, you don’t have to get caught on the losing side of this.

I sounded the alarm on the 2008 crisis before it hit… And even though I got a lot of hate for it, I won’t shy away from doing it again.

That’s because, if you’re armed with the right tools… and with the right strategy… you can turn this crisis into an opportunity.

So join me on Tuesday, December 13 at 8 p.m. ET.

I’ll reveal a little-known strategy I learned on Wall Street that could help you turn this housing crisis into big profits.

And I’ll even give away a free recommendation that I believe could be one of the top plays of 2023. RSVP with one click right here.

Now, on to this week’s mailbag.

Up first, readers Jim L. and Shannon J. have questions about gold…

Can you tell me if the U.S. still owns the gold in Fort Knox? How about how much gold is really in the Federal Reserve Bank in NYC?

Does the Federal Reserve and the U.S. Treasury leverage the U.S. gold holdings for options trading to manipulate the gold markets and score a little coin?

– Jim L.

Hi Jim. Thanks for your questions.

As I reported earlier this year the U.S. owns 8,133 metric tons of gold.

About half of that is stored in the United States Bullion Depository at Fort Knox in Kentucky. The rest is stored at mints in Philadelphia, Denver, West Point, and San Francisco.

Foreign governments do hold gold here in the U.S. But when the U.S. government says it has 8,133 metric tons of gold in its vaults, it doesn’t count this (foreign-owned) gold.

Foreign-owned gold is mainly stored at the Federal Reserve Bank of New York. It’s the largest gold custodian in the world. It houses gold on behalf of foreign central banks, governments, and international organizations.

As of 2019, the New York Fed vault stored roughly 6,190 metric tons of gold belonging to other countries.

It doesn’t provide a breakdown of its holdings per country. And it can’t leverage or trade gold owned by foreign nations, nor does it have a mechanism through which to trade its own holdings.

I think you would see gold as a good hedge against government and economic crises. Do you give out recommendations for the best gold/silver dealers? If so, I would appreciate a list.

– Shannon J.

Hi Shannon, thank you for your question.

Yes, I do think gold – over a longer-term holding period – makes a great hedge against government and economic crises.

Over history, it has been shown to hold and increase its value through chaos, as we have written (here, for example).

I don’t give out specific recommendations on that here, but what I will say to anyone buying gold is this: you should go with a dealer that can verify your purchase if you want to invest in real physical gold.

The U.S. Mint, for instance, will verify the integrity of the gold and silver coins that it sells to you with a certificate, and you can buy coins from them online. (You can browse their catalog here.)

Other gold and silver dealers have varying degrees of authentication, so it’s important to choose one that provides that.

Next, readers Gray W. and Don G. want to dig more into the Fed and how it works…

Have you written a book that completely explains how the Fed works? If you have, please send me the name so I can purchase it and learn.

– Gray W.

Hi Gary, thanks for your interest in my books and the Fed.

Many of my books discuss various aspects of the Fed, historically and as it’s behaved since the financial crisis, so it depends on what you are looking for exactly.

My favorite for broad context on the Fed would be in All the Presidents’ Bankers. In that book, I wrote extensively about the history of the origins of the Fed.

I also wrote about how the Fed has operated since its inception in 1913 through 2014, when the book came out.

For more recent behavior of the Fed since the financial crisis of 2008 with respect to Wall Street, I’d encourage you to check out my 2009 book, It Takes a Pillage.

Regarding the Fed as a powerful actor on the global stage, you can check out my 2018 book, Collusion.

And to see how what the Fed has done impacts The Great Distortion between the markets and the real economy that we have today, you can check out my latest, Permanent Distortion.

I just released it this October. And I shared a few excerpts in these pages. Check them out here, here, here, and here.

I think a much more interesting discussion (that would go a long way toward educating everyday U.S. citizens) would be how the Fed, as a member bank with BIS, is essentially above the law, given treaty protection and diplomatic immunity type protections against prosecution for violating U.S. law.

Those treaties and immunity from prosecution protections are why no banks or banking executives faced legal punishments after 2008 (and many other times in the past decades). Please devote more time to that discussion.

– Don G.

Hi Don, thank you very much for that idea.

As you might know, I’ve written about the Bank for International Settlements, or BIS, in these pages (catch up here).

So I’ll definitely put that on the list for a 2023 piece.

In the meantime, I have a good history of the start of the BIS in my book, All the Presidents’ Bankers.

I shared an excerpt in the April 12 Inside Wall Street. You can read it here.

And that’s all for this week’s mailbag. Thanks to everyone who wrote in!

If I didn’t get to your question this week, look out for my response in a future Friday mailbag edition.

I do my best to respond to as many of your questions and comments as I can. Just remember, I can’t give personal investment advice.

And if there are any other topics you’d like me to write about, I’d love to hear from you. You can write me at [email protected].

Happy investing… and have a fantastic weekend!

Regards,

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Nomi Prins
Editor, Inside Wall Street with Nomi Prins