Hong Kong’s airport is going to more than sextuple the size of its gold vault.
Hong Kong International Airport will expand the capacity of its precious metals depository by over five times to 1,000 tonnes, in line with the government’s plan to develop the city as an international gold trading hub.
Airport Authority Hong Kong said it is finalizing the expansion plan of the depository, which it is reaching full capacity amid fast-growing demand.
The capacity will be first increased to 200 tonnes from the existing 150 tonnes and subsequently expanded up to 1,000 tonnes.
…Last Wednesday, Chief Executive John Lee Ka-chiu said that the city will establish an international gold trading market in line with its broader aim to establish an ecosystem for commodities trading.
Most of the time you don’t actually need the physical commodities, you just need pieces of paper or electronic accounting that says you have the commodities in a warehouse. Having commodities and having slips of paper saying you have them are not the same! Just ask J.P. Morgan about nickel!
So you’re immediately thinking that the Hong Kong Triads are going to immediately pull off a raid like the Lufthansa heist at New York JFK, Goodfellas-style right? Like, maybe that’s even the idea behind storing so much gold in one place and announcing you’re going to do it?
According to data from the Mint, the U.S. holds 274 million ounces of gold (that’s more than 17 million pounds of gold, and at a price of $2,722.09 per ounce it’s worth $745.9 billion). Of this, 54% is reportedly held at Fort Knox while significant holdings are kept at the Denver Mint; New York Assay Office; San Francisco Assay Office and Federal Reserve Bank of New York. Small amounts are held at the Banks of England and Canada.
During the Roosevelt administration is was made generally illegal for individuals to own gold. Fort Knox was built out of fear of German attacks on New York and Philadelphia.
Members of Congress visited in 1974 out of concern that the depository didn’t actually hold the gold. Gold deposits have been audited but some of the practices have been questionable? According to a former director of the U.S. Mint, a comprehensive audit should be authorized.
@NotoriousCLO @HereTizz @KoosJansen Not much but wouldn't satisfy him. IMO there should be a comprehensive audit authorized by Congress.
— Edmund Moy (@EdmundCMoy) January 19, 2015
Maybe the audit will find some missing gold at the Hong Kong airport! Though I expect that most of it remains at Fort Knox and the Denver Mint.
(HT: Enilria)
Send in Pussy Galore to do the job!
Just to follow up, Secretary of the Treasury Andrew Mellon was a coin collector, bless him, and got an exception for numismatic items. That’s why, along with what came back from Europe after the ban was lifted, we can buy 19th century double eagles and so on–not that they are exactly affordable these days. And of course there were industrial needs for gold and other needed exceptions. But I can’t imagine such an executive order being accepted by citizens in this day and age, not that there may be much point since the dollar hasn’t been even partially backed by gold since 1971. (Almost no currencies are today.)