Just found the following snippit in an editorial on Gold Eagle.
If it's true, it's damaged my belief that the RBA is a lot smarter than the US Fed.
THE RBA GOLD VAULT IS EMPTY The Reserve Bank of Australia has stated that their official gold holdings was 79.9 tonnes of bullion at the end of 2001(World Gold Council stats), this was after they sold off about 167 tonnes in 1997. Their gold holding is worth about $1.5 billion on today's gold price During research for a television advertising campaign for Gold Report, in June 2002, the RBA was asked if it would be possible to shoot some footage beside their gold holding and Gold Report was told that, "we only have about 20 bars left".
It was then explained that the RBA leases their bullion to Bullion banks and Producers. The bullion banks or producers then take physical delivery, sell the bullion on the open market and reinvest the proceeds in a higher yielding investments or use the proceeds to fund a mining venture (in the case of producers).
The idea is that at a later date the lessors will buy back the bullion from the market and return it to the RBA vault.
To back this information up, the RBA released their Annual Report on Wednesday, 28/8/02. This report states that the RBA has made $22 million from its leasing arrangements. To make a $22 million return, they must have 100% of their gold holding (still $1.5 billion) leased at an average of 1.47%, which has been approximately the average lease rate for the last year.
As the gold price continues to improve, this looks like creating a problem for the RBA, bullion banks and producers, by making it increasingly expensive to buy back the RBA bullion and return it to their vault. If the large bullion banks go to the wall, where does this leave the RBA? Still empty, that's where! (luckily, the RBA still has the bullion on paper!)
++++++++++++++++++++
"I wish to point out that the RBA's $22 million in gold loan balance sheet assets are not assets at all in today's $325 per ounce gold market. In order to replace the loans with the gold, the RBA is obliged to enter the open market at prices much higher than when the loaned the gold out. The difference is not an asset but a liability for the RBA. These central bank gold loans are really liabilities in a rising gold regime and they should be treated as such under GAAP rules.
This is exactly what GATA has been reporting for 6 years. The problem at the Royal Bank of Australia can be multiplied by over 10,000 tonnes of gold loans and swaps conducted by central banks including the US Treasury."
