First Glimpse Inside Fed’s Gold Vault – National Geographic Documentary

In the video below, National Geographic was allowed to enter the largest gold vault in the world, the one from the US Fed. We summarize some highlights. Readers are advised to look at the first 15 minutes of the video. The remainder 15 minutes focus on cash.

Only one bank (the Federal reserve bank in New York) has been trusted enough to guard almost one quarter of the world’s entire gold supply. 80 feet below street level is the largest underground gold vault. The fed opened this vault for the first time in 1924.

The New York bank is one of 12 that make up the Federal Reserve system. Together they are the ultimate piggyback. If there’s a financial panic the Fed acts as lender of last resort. That creates a kind of trust in the entire system.

The gold that is stored is from the country (US) or from other central banks. It is strictly forbidden to share whose gold it is, although it is perfectly traceable through the serial number (every gold bar has a serial number). The Fed’s discretion and intense security are so trusted that few depositors have ever asked if their gold is still here.

If one of these bars got out of the vault and someone melted it down, there is no way to identify where the gold was coming from. It is the perfect recyclable money.

Every couple of hours trillions of dollars change hands. All that money used to be backed by gold, but not anymore. Today money is backed by a promise from the government. The fact that this works based on trust alone is simply taken for granted.

The whole financial world is based on trust. Is built on the assumption that our cash, credit card, even our bank accounts, are worse off.

Fed’s chairman Ben Bernanke explains that the world is better off with a Federal Reserve to bring economic stability (by avoiding bank runs for instance).

As of the 17 minutes mark, the documentary focuses on cash and the gigantic cash vaults EROC in the US.

Receive these articles per e-mail

Subscribe for the free weekly newsletter and receive 3 papers about physical precious metals investing