What's the Fed Hiding?

Two Fed apologists, Alin Kashyap and former Fed governor Frederic Mishkin, are out with an Op-Ed in WSJ that claims the Fed is transparent enough, and that Ron Paul's Audit the Fed Bill is useless.

"It is completely appropriate to hold the Fed accountable for its decisions. But the [Ron] Paul bill, H.R. 1207, will only produce redundancies: Congress already has multiple ways of finding out what the Fed is doing and why," write the dynamic duo.

They also set up something of a strawman:

Under the banner of increasing Federal Reserve transparency, Congressman Ron Paul has sponsored a bill that would subject the Fed's monetary policies to an
audit by the Government Accountability Office (GAO).

Paul has said repeatedly that the bill is not about auditing monetary policy.

They even hail, as Paul described it, the "gutting" of the bill:

Fortunately, Congress is considering an amendment to the bill that would prevent the negative consequences of the original Paul legislation. This amendment, put forward by Rep. Mel Watt (D., N.C.) would change the focus of the bill by instructing the GAO to audit the new lending facilities at the Federal Reserve that were authorized under the 13(3) "unusual and exigent circumstances" clause of the Federal Reserve Act. The 13(3) lending authority, which had not been used by the Fed since the Great Depression, was the basis for many of the most controversial decisions made during the crisis, including the rescue of AIG and the establishment of new lending facilities.

This audit would involve oversight of the operational integrity of these facilities' accounting, internal controls, and protection against losses. It would also disclose the borrowers from these facilities one year after the facilities are closed. The audit would produce new, important information that is not otherwise available and would play to the strengths of the GAO. And the amendment would exempt the Fed's normal monetary policy actions from the audit.

There's a lot to debate here about how much transparency the Watt Amendment would kill, but I am want to focus on one matter that was gutted, that is not addressed in any way by the Watt Amendment, and is not addressed, at all, by Kashyap and Mishkin. That is the international transactions of the Fed.

They are hiding something here that they don't want the general public to see. I suspect it might have to do with gold transactions. It's just a gut feeling, but my gut tells me the Fed leased out most of, if not all, of it's gold somewhere under $500 per ounce, probably under $350. Thus, in order for central banks, who borrowed the gold (and then sold it to raise cash), to pay the Fed back in gold, they would now have to go and buy gold back at three to four times the price they sold it at. In other words, a number of central banks aided and abetted by the Fed are now short huge amounts of gold and are losing more money everyday gold ticks up. And the Fed is in the embarrassing position of having loaned the gold out and is afraid to call in the gold loans, since it would put enormous pressure on parts of the central bank cabal and push the gold price much higher, the exact opposite of the Fed's intentions when they leased the gold out.

Could the recent purchase by India of 200 tons of gold from the IMF be an attempt by the central bank cabal to shovel gold to India because they are short huge amounts of gold that was leased from the Fed? The Fed has admitted it has leased out gold, but it has never said how much it leased out and to whom the gold was leased out.

A Fed audit of transactions with international banks and other foreign government entities would answer this question. Is this what the Fed is trying to hide? There is simply no honest reason to hide what the Fed has done with the gold it is/was holding? The public really needs to know if through convoluted leasing programs the Fed has mismanaged the entire quantity of gold.The public needs to know if the Fed has messed up to such a degree that it has become politically unfeasible by those at the Fed to demand from foreign central banks the return of the gold that rightfully belongs to the United States. Is this what the Fed is afraid an audit of international transactions will uncover?