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Forum Post: This Is Where The Gold Is(n't) - The New York Fed Guide To The Most Valuable Vault In The World

Posted 12 years ago on Jan. 24, 2012, 8:19 p.m. EST by MonetizingDiscontent (1257)
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The Federal Reserve Bank of New York:

The Key To The GOLD VAULT

~((($)))~ http://www.scribd.com/doc/79237637/FRBNY-Gold-Vault




This Is Where The Gold Is(n't) - The New York Fed Guide To The Most Valuable Vault In The World

http://www.zerohedge.com/news/where-gold-isnt-new-york-fed-guide-most-valuable-vault-world

-01/24/2012-

Much has been said about the secretive vault situated 80 feet below ground level at 33 Liberty street, which contains over 20% of the world's gold (allegedly*), currently estimated at over $350 billion. Some have even robbed it: with the barrier between fantasy and reality a blur, courtesy of the total farce we live in which has rendered the IPO of TheOnion impossible, there is nothing wrong with actually believing Die Hard With A Vengeance did in fact happen. But if your knowledge of the vault is limited to the perspective of one John McClane, you are missing our on a lot. Which is why the new York Fed, in those rare occasions when it is not monetizing debt, and/or telling Citadel which securities to buy, has been courteous enough to put together "The Key To The Gold Vault" - the official brochure of the warehouse where more gold is stored than at any other place in the world.

Some excerpts:

The gold stored at the Federal Reserve Bank of New York is secured in a most unusual vault. It rests on the bedrock of Manhattan Island—one of the few foundations considered adequate to support the weight of the vault, its door, and the gold inside—80 feet below street level and 50 feet below sea level.

As of early 2008, the Fed’s vault contained roughly 216 million troy ounces of gold (1 troy oz. is 1.1 times as heavy as the avoirdupois ounce, with which we are more familiar), representing about 22 percent of the world’s official monetary gold reserves.

At the time, the vault’s gold value was about $9.1 billion at the official U.S. government price of $42.2222 per troy ounce, or about $194 billion at the market price of $900 an ounce. At the current official U.S. government price, one of the vault’s gold bars (approximately 27.4 pounds) is valued at about $17,000. At a $900 market price, the same bar is worth about $360,000.

Foreign governments and official international organizations store their gold at the Federal Reserve Bank of New York because of their confidence in its safety, the convenient services the Bank offers, and its location in one of the world’s leading financial capitals.

The Bank stores gold in the form of bars that resemble construction bricks and stacks them on wooden pallets like those used in warehouses. To reach the vault, the bullion-laden pallets must be loaded into one of the Bank’s elevators and sent down five floors below street level to the vault floor. The elevator’s movements are controlled by an operator who is in a distant room and communicates by intercom with the armed guards accompanying the shipment.

Once inside the vault, the gold bars become the responsibility of a control group consisting of representatives of three Bank divisions: Auditing, Vault Services, and Custody. A member of each division must be present whenever gold is moved or whenever anyone enters the vault.

If everything is in order, the gold is either moved to one or more of the vault’s 122 compartments assigned to depositing countries and official international organizations or placed on shelves in one of the “library” compartments shared by several countries. The bars are stacked one at a time in an overlapping pattern similar to that used to stabilize a brick wall. Each compartment is secured by a padlock, two combination locks, and an auditor’s seal.

And here is why we used a * footnote above

Confidence results from the Bank’s being part of the Federal Reserve System—the nation’s central bank and an independent governmental entity. The political stability and economic strength of the United States, as well as the physical security provided by the Bank’s vault, also are important factors.

Good luck finding it then. And for those who want to pull a Simon Peter Gruber and have already rented out the dump trucks:

Storing almost $194 billion [ZH: at very old prices] of gold makes extensive security measures mandatory at the New York Fed. An important measure is the background investigation required of all Bank employees. Continuous supervision by the vault control group also prevents problems from arising by ensuring that proper security procedures are followed.

The Bank and its vaults are secured by the Bank’s own uniformed protection force. Twice a year, each federal officer must qualify with a handgun, shotgun and rifle at the Bank’s firing range. Although the minimum requirement is a marksman’s score, most qualify as experts.

Security is also enhanced by a closed-circuit television system and by an electronic surveillance system that alerts Central Watch when a vault door is opened or closed. The alarm system signals the officers to seal all security areas and Bank exits. This can be accomplished in less than twenty-five seconds.

The gold also is secured by the vault’s design, which is a masterpiece of protective engineering. The vault is actually the bottom floor of a three-story bunker of vaults arranged like strongboxes stacked on top of one another. The massive walls surrounding the vault are made of a steel-reinforced structural concrete.

There are no doors into the gold vault. Entry is through a narrow 10-foot passageway cut in a delicately balanced, nine-feet-tall, 90-ton steel cylinder that revolves vertically in a 140-ton, steel-and-concrete frame. The vault is opened and closed by rotating the cylinder 90 degrees. An airtight and watertight seal is achieved by lowering the slightly tapered cylinder three-eighths of an inch into the frame, which is similar to pushing a cork down into a bottle. The cylinder is secured in place when two levers insert large bolts, four recessed in each side of the frame, into the cylinder. By unlocking a series of time and combination locks, Bank personnel can open the vault the next business day. The locks are under “multiple control”—no one individual has all the combinations necessary to open the vault.

The weight of the gold—just over 27 pounds per bar—makes it difficult to lift or carry and obviates the need to search vault employees and visitors before they leave the vault. Nor do they have to be checked for specks of gold. Gold is relatively soft, but not so soft that particles will stick to clothing or shoes, or can be scraped from the bars. The Bank’s security arrangements are so trusted by depositors that few have ever asked to examine their gold.

To think: so much trouble for a little tungsten...


Alan Grayson: "Which Foreigners Got the Fed's $500,000,000,000?" Bernanke: "I Don't Know."

(((Video))) http://www.youtube.com/watch?v=n0NYBTkE1yQ

Rep. Alan Grayson: "Has the Federal Reserve Ever Tried to Manipulate the Stock Market?"

(((Video))) http://www.youtube.com/watch?v=mXmNpdYpfnk

Alan Grayson on the Worst Deal Since Manhattan Was Sold for $24 in Trinkets

(((Video))) http://www.youtube.com/watch?v=A-DOwLnQ4nk&feature=relmfu

Alan Grayson: Is Anyone Minding the Store at the Federal Reserve?

(((Video))) http://www.youtube.com/watch?v=cJqM2tFOxLQ

Congressman Dennis Kucinich: "It’s Time to Take our Freedom Back from The Federal Reserve," This, in Response to Recent Revelations that the Fed Granted $7.77 Trillion in SECRET Bank Loans

(((Video))) http://www.youtube.com/watch?v=X1dkZShYP78&feature=player_embedded

Congressman Dennis Kucinich (D-OH), a longtime advocate for reform of the Federal Reserve, is sharply criticizing the Federal Reserve today after Bloomberg news reported that the Federal Reserve secretly committed nearly $8 trillion in support to American and international financial institutions during the 2008 bailout. Kucinich recorded a video for his website before going to the floor of the House of Representatives to call upon Congress to reclaim its Constitution primacy over monetary policy.


The Federal Reserve's Covert Bailout of Europe

When is a loan between central banks not a loan? When it is a dollars-for-euros currency swap.

(((WallStreetJournal))) http://online.wsj.com/article/SB10001424052970204464404577118682763082876.html?_nocache=1325091067684&user=welcome&mg=id-wsj
-DECEMBER 28, 2011-

America's central bank, the Federal Reserve, is engaged in a bailout of European banks. Surprisingly, its operation is largely unnoticed here.

The Fed is using what is termed a "temporary U.S. dollar liquidity swap arrangement" with the European Central Bank (ECB). There are similar arrangements with the central banks of Canada, England, Switzerland and Japan. Simply put, the Fed trades or "swaps" dollars for euros. The Fed is compensated by payment of an interest rate (currently 50 basis points, or one-half of 1%) above the overnight index swap rate. The ECB, which guarantees to return the dollars at an exchange rate fixed at the time the original swap is made, then lends the dollars to European banks of its choosing.


Federal Reserve Secretly Bailing Out Europe

(((CNBC-Video))) http://www.youtube.com/watch?feature=player_embedded&v=_u8tFqOIarc
-Dec 28th, 2011 | 11:50 AM ET-

A former Federal Reserve official says in the Wall Street Journal that the Federal Reserve is covertly bailing out Europe. Insight with Gerald O'Driscoll, Cato Institute senior fellow, who says the Fed operated a "temporary U.S. dollar liquidity swap arrangement."


Bernanke Tells Senators Federal Reserve Has No Plan to Aid European Banks

http://www.bloomberg.com/news/2011-12-14/bernanke-tells-senators-federal-reserve-has-no-plan-to-aid-european-banks.html

-Dec 14, 2011-

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[-] 3 points by MonetizingDiscontent (1257) 12 years ago

By Alan Grayson (D) - Former U.S. Congressman from Florida's 8th District

::::::::::::::::::::::::::The Fed Bailouts: Money for Nothing::::::::::::::::::::::::::

http://www.huffingtonpost.com/rep-alan-grayson/the-fed-bailouts-money-fo_b_1129988.html

-Dec, 5th 2011-

(Alan Grayson - Former U.S. Congressman from Florida's 8th District) I think it's fair to say that Congressman Ron Paul and I are the parents of the GAO's audit of the Federal Reserve. And I say that knowing full well that Dr. Paul has somewhat complicated views regarding gay marriage.

Anyway, one of our love children is a massive 251-page GAO report technocratically entitled "Opportunities Exist to Strengthen Policies and Processes for Managing Emergency Assistance." It is almost as weighty as that 13-lb. baby born in Germany last week, named Jihad. It also is the first independent audit of the Federal Reserve in the Fed's 99-year history.

::::::::::::::::::::::Feel free to take a look at it yourself, it's right here::::::::::::::::::::::

http://www.gao.gov/new.items/d11696.pdf

It documents Wall Street bailouts by the Fed that dwarf the $700 billion TARP, and everything else you've heard about.

I wouldn't want anyone to think that I'm dramatizing or amplifying what this GAO report says, so I'm just going to list some of my favorite parts, by page number.

(((Page 131))) - The total lending for the Fed's "broad-based emergency programs" was $16,115,000,000,000. That's right, more than $16 trillion. The four largest recipients, Citigroup, Morgan Stanley, Merrill Lynch and Bank of America, received more than a trillion dollars each. The 5th largest recipient was Barclays PLC. The 8th was the Royal Bank of Scotland Group, PLC. The 9th was Deutsche Bank AG. The 10th was UBS AG. These four institutions each got between a quarter of a trillion and a trillion dollars. None of them is an American bank.

(((Pages 133 & 137))) - Some of these "broad-based emergency program" loans were long-term, and some were short-term. But the "term-adjusted borrowing" was equivalent to a total of $1,139,000,000,000 more than one year. That's more than $1 trillion out the door. Lending for these programs in fact peaked at more than $1 trillion.

(((Pages 135 & 196))) - Sixty percent of the $738 billion "Commercial Paper Funding Facility" went to the subsidiaries of foreign banks. 36% of the $71 billion Term Asset-Backed Securities Loan Facility also went to subsidiaries of foreign banks.

(((Page 205))) - Separate and apart from these "broad-based emergency program" loans were another $10,057,000,000,000 in "currency swaps." In the "currency swaps," the Fed handed dollars to foreign central banks, no strings attached, to fund bailouts in other countries. The Fed's only "collateral" was a corresponding amount of foreign currency, which never left the Fed's books (even to be deposited to earn interest), plus a promise to repay. But the Fed agreed to give back the foreign currency at the original exchange rate, even if the foreign currency appreciated in value during the period of the swap. These currency swaps and the "broad-based emergency program" loans, together, totaled more than $26 trillion. That's almost $100,000 for every man, woman, and child in America. That's an amount equal to more than seven years of federal spending -- on the military, Social Security, Medicare, Medicaid, interest on the debt, and everything else. And around twice American's total GNP.

(((Page 201))) - Here again, these "swaps" were of varying length, but on Dec. 4, 2008, there were $588,000,000,000 outstanding. That's almost $2,000 for every American. All sent to foreign countries. That's more than twenty times as much as our foreign aid budget.

(((Page 129))) - In October 2008, the Fed gave $60,000,000,000 to the Swiss National Bank with the specific understanding that the money would be used to bail out UBS, a Swiss bank. Not an American bank. A Swiss bank.

(((Pages 3 & 4))) - In addition to the "broad-based programs," and in addition to the "currency swaps," there have been hundreds of billions of dollars in Fed loans called "assistance to individual institutions." This has included Bear Stearns, AIG, Citigroup, Bank of America, and "some primary dealers." The Fed decided unilaterally who received this "assistance," and who didn't.

(((Pages 101 & 173))) - You may have heard somewhere that these were riskless transactions, where the Fed always had enough collateral to avoid losses. Not true. The "Maiden Lane I" bailout fund was in the hole for almost two years.

(((Page 4))) - You also may have heard somewhere that all this money was paid back. Not true. The GAO lists five Fed bailout programs that still have amounts outstanding, including $909,000,000,000 (just under a trillion dollars) for the Fed's Agency Mortgage-Backed Securities Purchase Program alone. That's almost $3,000 for every American.

(((Page 126))) - In contemporaneous documents, the Fed apparently did not even take a stab at explaining why it helped some banks (like Goldman Sachs and Morgan Stanley) and not others. After the fact, the Fed referred vaguely to "strains in the financial markets," "transitional credit," and the Fed's all-time favorite rationale for everything it does, "increasing liquidity."

81 different places in the GAO report - The Fed applied nothing even resembling a consistent policy toward valuing the assets that it acquired. Sometimes it asked its counterparty to take a "haircut" (discount), sometimes it didn't. Having read the whole report, I see no rhyme or reason to those decisions, with billions upon billions of dollars at stake.

(((Page 2))) - As massive as these enumerated Fed bailouts were, there were yet more. The GAO did not even endeavor to analyze the Fed's discount window lending, or its single-tranche term repurchase agreements.

(((Pages 13 & 14))) - And the Fed wasn't the only one bailing out Wall Street, of course. On top of what the Fed did, there was the $700,000,000,000 TARP program authorized by Congress (which I voted against). The Federal Deposit Insurance Corp. (FDIC) also provided a federal guarantee for $600,000,000,000 in bonds issued by Wall Street.

There is one thing that I'd like to add to this, which isn't in the GAO's report. All this is something new, very new. For the first 96 years of the Fed's existence, the Fed's primary market activities were to buy or sell U.S. Treasury bonds (to change the money supply), and to lend at the "discount window." Neither of these activities permitted the Fed to play favorites. But the programs that the GAO audited are fundamentally different. They allowed the Fed to choose winners and losers.

:::::::::::::::::::::So what does all this mean? Here are some short observations:::::::::::::::::::::

  • (1) In the case of TARP, at least The People's representatives got a vote. In the case of the Fed's bailouts, which were roughly 20 times as substantial, there was never any vote. Unelected functionaries, with all sorts of ties to Wall Street, handed out trillions of dollars to Wall Street. That's now how a democracy should function, or even can function.

  • (2) The notion that this was all without risk, just because the Fed can keep printing money, is both laughable and cryable (if that were a word). Leaving aside the example of Germany's hyperinflation in 1923, we have the more recent examples of Iceland (75% of GNP gone when the central bank took over three failed banks) and Ireland (100% of GNP gone when the central bank tried to rescue property firms).

  • (3) In the same way that American troops cannot act as police officers for the world, our central bank cannot act as piggy bank for the world. If the European Central Bank wants to bail out UBS, fine. But there is no reason why our money should be involved in that.

  • (4) For the Fed to pick and choose among aid recipients, and then pick and choose who takes a "haircut" and who doesn't, is both corporate welfare and socialism. The Fed is a central bank, not a barber shop.

  • (5) The main, if not the sole, qualification for getting help from the Fed was to have lost huge amounts of money. The Fed bailouts rewarded failure, and penalized success. (If you don't believe me, ask Jamie Dimon at JP Morgan.) The Fed helped the losers to squander and destroy even more capital.

  • (6) During all the time that the Fed was stuffing money into the pockets of failed banks, many Americans couldn't borrow a dime for a home, a car, or anything else. If the Fed had extended $26 trillion in credit to the American people instead of Wall Street, would there be 24 million Americans today who can't find a full-time job?

And here's what bothers me most about all this: it can happen again. I've called the GAO report a bailout autopsy. But it's an autopsy of the undead.

Courage,

Alan Grayson

(((Follow Alan Grayson on Twitter))) http://twitter.com/alangrayson


[-] 3 points by demcapitalist (977) 12 years ago

I'm liking Alan Greyson MD never looked at him before. always learn something new here.

[-] 1 points by MonetizingDiscontent (1257) 12 years ago

::::::::::: European Bailout Infographic: Presenting The Truckloads Of ::::::::::::

:::::::::::::::::::::: Cash Needed To Rescue The Insolvent PIIGS ::::::::::::::::::::::

http://www.zerohedge.com/news/european-bailout-inforgraphic-presenting-truckloads-cash-needed-rescue-insolvent-piigs

-01/30/2012-

...No, literally truckloads. Our friends at demonocracy.info have been kind enough to put together an infographic that explains the European bailout in simple, visual terms, that even the most innocent of FTL truckers can grasp without much exertion, for the simple reason that it shows all the bailouts amounts in terms of trucks of cash. And here is the kicker: one would need a 13 lane highway, filled with trucks bumper to bumper, stretching for about 3 kilometers to represent the €2.91 trillion in total amounts owed by the PIIGS and their citizens (whether voluntarily or not... actually make that involuntarily) to Europe's largest banks.

What is most frightening is what is not shown: just how it is that the world's central banks are keeping all of these banks propped up. Because sooner or later all this money will be discovered to have been fatally misallocated. Then the real bailout cost will become all too evident, and just like in the US, it will be in the double digit trillions. Which means the metaphorical highway of trucks full of cash will stretch on for kilometers and kilometers and so on (or miles, for the naive US-based truckers). But since that day is in the future, there is no reason to worry about it.

(((European Bailout Infographic))) http://demonocracy.info/infographics/eu/debt_piigs/images/demonocracy.info-who_loaned_piigs_the_money-watermark-large.jpg

[-] 2 points by demcapitalist (977) 12 years ago

Health care reform "In response to Republican arguments that the Obama administration's preferred health care bill was too long and complicated, Grayson on March 9, 2010, introduced H.R. 4789, the Public Option Act (sometimes called the Medicare You Can Buy Into Act), a short four-page bill which would allow all citizens and permanent residents of the United States to buy into the public Medicare program at cost.[28] The bill immediately attracted high praise from the progressive blogosphere, and even critics of public health care plans conceded its "nearly irresistible" simplicity.[citation needed] The bill attracted 82 co-sponsors and was referred to the Ways and Means Committee." (single payer healthcare option and audit the fed, my kind of guy.)

[-] 1 points by MonetizingDiscontent (1257) 12 years ago

Well said, I really like him too, a lot. Having a choice to opt in or out is the only constitutional way to do it, force is not freedom by any measure.

If he runs, in my opinion, it would be a serious, serious alternative to the you know who ticket. I've been waiting to see, wondering if he will run, forever now already...

[-] 1 points by demcapitalist (977) 12 years ago

LOL the you know who ticket

[-] 2 points by sovaye (259) 12 years ago

These monsters are just....unforgivable. Keep exposing !!!

[-] 1 points by MonetizingDiscontent (1257) 12 years ago

:::::::::::::: The Fed’s Rain Dance at the Bottom of the Stairs ::::::::::::::

http://www.zerohedge.com/contributed/fed%E2%80%99s-rain-dance-bottom-stairs

-01/30/20120- Wolf Richter http://www.testosteronepit.com/

Apparently, Charles Plosser, president of the Philadelphia Fed, had failed to check with his handlers when he said on CNBC this morning that the Fed might have to raise short-term interest rates later this year—from practically zero to almost zero, I guess—though just last Thursday, the Federal Open Markets Committee had announced the extension of its zero-interest-rate policy (ZIRP) through late 2014.

We’ve been getting the same song and dance from the Fed about its "highly accommodative” monetary policy and "exceptionally low" interest rates since 2009. And by now we've been programmed to believe that extensions will continue ad infinitum, despite some dissenting voices here and there. In the process, the country has become hooked on low interest rates, and even the idea of raising them, or the mere mention of it, causes bouts of painful withdrawal symptoms.

At first, the expectation was that the “exceptionally low” rates would last 6 months, but now it's been three years, and three more years have already been added to the schedule, so six years in total, and soon, it'll be 20 years, à la Japanese, which isn’t exactly the paragon of a healthy economy. While there are cosmetic differences between the two, they do share ZIRP, out-of-control budget deficits, a ballooning national debt, and a political refusal to deal with reality—aided and abetted by a central bank.

It's an ugly situation. Short-term treasury yields are at practically zero, 5-year yields hit a new all-time low of 0.71%, and even 30-year yields dipped below 3%. Savings accounts, money market funds, and short-term CDs yield just about nothing. Yet inflation... http://www.bls.gov/news.release/cpi.nr0.htm ...was 3% in 2011. The many trillions of dollars that individuals, institutions, and countries hold in these assets are slowly being ground down by inflation, but without compensation in form of yield. Financial repression. And the largest slo-mo ripoff in the history of mankind. For more on that whole debacle, and for good laugh, read.... Dear Ben, Please Print Us More Money. http://www.testosteronepit.com/home/2011/8/26/dear-ben-please-print-us-more-money.html

Wages have not kept up with inflation either, not since the wage peak of 2000. Every number hammers home that point.... Oh wait. Not every number. Personal income increased 0.5% in December, according to today’s report by the Bureau of Economic Analysis... http://www.bea.gov/newsreleases/national/pi/2012/pi1211.htm ...This coincided with a flatish December PCE inflation indicator, giving workers the first real wage increase in many months. Last week, the Bureau of Labor Statistics... http://www.bls.gov/news.release/realer.nr0.htm ...reported a similar phenomenon: a rise in hourly earnings of 0.2% in December and a flat CPI. Real wages increased! A rare event that should be celebrated around the country with a good American brew.

But for the year, real wages were still down 0.9%. For production and non-supervisory workers, the lower echelons of the labor force, real wages for the year were down 1.6%. So, one month hasn’t solved the problem yet. Yet it shows the beneficial effect of taking inflation out of the equation: real wages actually rise. A few months of this, and who knows—consumers might actually buy something with this extra money without having to borrow from the future.

NO, said the Fed, panicking at the mere thought of rising real wages. There shall be no break for workers. Real wages aren’t low enough yet. And so the Fed announced an inflation target: no less than 2% as measured by its low-ball PCE inflation index. So, closer to a CPI of 3.0%. Plenty of inflation to bring down real wages and demolish entire categories of investors, but not so much as to cause a revolt—in the hope that it would stimulate the economy? It’s a rain dance at the bottom of the stairs.

They misjudged the inexplicable American consumer. Consumer optimism, an oxymoron in the current climate, has been rising from morose multi-year lows in August to levels not seen since, well, May. And it whipped hope into a froth: rising confidence would pump up spending, which would pump up everything else. But the toughest creature out there that no one has been able to subdue yet.... The Inexplicable American Consumer strikes back. http://www.testosteronepit.com/home/2012/1/13/the-inexplicable-american-consumer-takes-a-breath.html

[-] 1 points by MonetizingDiscontent (1257) 12 years ago

::::::::::::Will The Federal Reserve Devalue Dollar by 40% as Ben Bernanke Implied in 2002?::::::::::::

Remarks by Governor Ben S. Bernanke Before the National Economists Club, Washington, D.C.

:::::::::::::::::::::::::::::::::::: Deflation: Making Sure "It" Doesn't Happen Here ::::::::::::::::::::::::::::::::::::

http://www.federalreserve.gov/boarddocs/speeches/2002/20021121/default.htm

-November 21, 2002-

In this 2002 speech by --then-- Federal Reserve Board Governor Ben Bernanke is saying that If he ever faced another Great Depression, he would do 5 things... and he has done everything he said he would do so far, now that he is at the helm, as Chairman! Accept for one final thing....

  • Interest rates to zero (CHECK)
  • Buy securities to expand the feds balance sheet (CHECK)
  • Increase the money supply (CHECK)
  • Buy the countries debt, QE1 QE2 etc etc... (CHECK)

And the only thing left that Ben promised to do, that he hasn't done yet...

  • Devalue the Dollar by 40% ~BINGO~

Ben Bernanke 2002: "Although a policy of intervening to affect the exchange value of the dollar is nowhere on the horizon today ((2002)), it's worth noting that there have been times when exchange rate policy has been an effective weapon against deflation. A striking example from U.S. history is Franklin Roosevelt's 40 percent devaluation of the dollar against gold in 1933-34, enforced by a program of gold purchases and domestic money creation. The devaluation and the rapid increase in money supply it permitted ended the U.S. deflation remarkably quickly. Indeed, consumer price inflation in the United States, year on year, went from -10.3 percent in 1932 to -5.1 percent in 1933 to 3.4 percent in 1934.17 The economy grew strongly, and by the way, 1934 was one of the best years of the century for the stock market. If nothing else, the episode illustrates that monetary actions can have powerful effects on the economy, even when the nominal interest rate is at or near zero, as was the case at the time of Roosevelt's devaluation."

This speech is of utmost importance, people need to take some time and read it. A 40% devaluation will come in some form of QE. http://www.federalreserve.gov/boarddocs/speeches/2002/20021121/default.htm