$300,000 of Gold, in the Palm of My Hand

Two weeks ago I visited the New York Federal Reserve, for a meeting with a high-ranking official in an elegant conference room overlooking Wall Street. It's an appropriate view now, considering that in today's post-crisis world the Fed has assumed oversight responsibility for all the financial markets, not just banks.

Before the meeting above Wall Street, though, I went below Wall Street. I went five stories down into the solid bedrock underneath the New York Fed, 30 feet below the level of the New York subway system and 50 feet below sea level.

There the New York Fed has a vault containing about $300 billion in gold bars.

It's the largest single gold hoard in the world. It holds more than Fort Knox. Almost all of it is held in custody for foreign governments -- very little of it is owned by the U.S. government, and none of it by individuals.

You enter the vault through a slot revealed when a 90-ton steel cylinder is rotated. When you are inside, and the cylinder rotates back, you are in a water-tight, air-tight room half the size of a football field stacked to the rafters with gold bricks weighing 27.4 pounds each.

Gold is so dense that these heavy bars are surprisingly small, but don't make the mistake of picking one up with only one hand. Vault workers wear ultra-light, ultra-strong magnesium shoe-covers to protect their feet from the inevitable drops that have left the cement floors pockmarked with deep dents.

It's all very old-school. The vault was built in 1921 and looks it. It still uses technology from that bygone era. Nothing digital. Nothing web-enabled. An enormous scale used to weigh gold bars looks like an enlarged version of an old-fashioned balance beam you'd expect to see in an apothecary shop -- yet it weighs precious metal tons at a time within the accuracy of the weight of a grain of rice.

But then again gold is pretty old-school, too. When you're holding one of those bars in both your hands you have the sense that you're in the presence of economic value that is fundamental and lasting. It's more than knowing that the bar is worth about $300,000. Sure, it would be a thrill to hold a briefcase stuffed with $300,000 in hundred-dollar bills. But this gleaming bar is something more. It's real.

On my way out of the vault, on my way to my meeting upstairs, my host asked if I'd like a souvenir. Sure, I said, holding out both my hands expecting one of those gold bars (not really). Instead, a small sealed plastic bag was dropped into my hands, containing about an ounce of paper shredded like confetti, paper that had once been United States currency.

Yes, I thought. Exactly! What could be a better souvenir of the world's largest stockpile of true value than a little bag of something of no value whatsoever?