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Gold Anti-Trust Action Committee - Essays





 



Why invest in the monetary metals and their miners if they won't defend themselves?

Wed, 21 Dec 2016 03:02:06 +0000

All the market riggers are primary dealers of U.S. government securities, the most intimate associates of the Federal Reserve Bank of New York. * * * 10:25p ET Tuesday, December 20, 2016 Dear Friend of GATA and Gold: The more it exposes and documents manipulation of the monetary metals markets by governments, central banks, and their agents in the financial industry, the more GATA is resented by those in the monetary metals industry who are merely touters of mining shares. That's because GATA tells people what they are up against when they invest in the monetary metals -- indeed, when they aspire to free and transparent markets and to liberty itself. So while there was a victory for GATA in this month's disgorgement in federal court in New York of Deutsche Bank's electronic records of market rigging by its traders and the traders of other banks, on the whole the revelations may have been a defeat for the mining industry. ... Dispatch continues below ... ADVERTISEMENT Sandspring Resources Commences 2016 Exploration Campaign Company Announcement August 17, 2016 Sandspring Resources Ltd. (TSX VENTURE:SSP, US OTC: SSPXF) is pleased to announce commencement of the 2016 exploration campaign at its Toroparu Gold Project in Guyana, South America. In 2015 the company completed a 3,700-meter diamond drilling program on the promising Sona Hill Prospect, located 5 kilometers southeast of the main Toroparu deposit. Sona Hill is the easternmost gold anomaly in a cluster of 10 gold features located within a 20-by-7-kilometer hydrothermal alteration halo around Toroparu. Drilling at Sona Hill in 2012 and in 2015 intercepted high-grade mineralization in both saprolite and bedrock, and confirmed the continuity and grade potential of the Sona Hill mineralization. For the remainder of the announcement and highlights of the 2015 drill program: https://finance.yahoo.com/news/sandspring-resources-commences-2016-explo... Toronto market analyst and broker Michael Ballanger explained why in his financial letter this week: https://www.streetwisereports.com/pub/na/twas-the-week-before-christmas Ballanger wrote: "Until the regulators can finally put an end to this horrific process whereby the bullion banks have a total carte blanche to issue as many [futures] contracts as they desire under the guise of 'hedging,' prospective gold investors are simply going to say, 'Nope, not playing.' The intervention, collusion, and bank-coordinated gang attacks such as we are now witnessing via the Deutsche Bank evidence coming out is actually having a negative effect on sentiment, because as much as the revelations are creating transparency, they are also scaring prospective investors. The prevailing wisdom emanating from the trading desks is: 'Wow! If they can get away with that, why would anyone put money into the gold and silver markets?'" The Deutsche Bank disgorgement has incriminated not just Deutsche Bank itself but all the recent participants of the daily London gold and silver price "fixings" -- HSBC, Bank of Nova Scotia, UBS, Barclays, and Societe Generale. But apparently none of them is reported to be under investigation by government law-enforcement agencies for rigging the gold and silver markets. Indeed, three years ago the U.S. Commodity Futures Trading Commission announced that it had closed a five-year investigation of the silver market without finding any cause for an enforcement action: http://www.cftc.gov/PressRoom/PressReleases/pr6709-13 While the CFTC has subpoena power and dozens of investigators, it apparently was unable to discover what the anti-trust class-action lawsuit in New York did. It is not hard to understand why the CFTC might have failed -- or, rather, why it might not have tried very hard. That is, all the trading bank defendants in the gold and silver lawsuits are also primary dealers in U.S. government securities, the most intimate associates of the Federal Reserve Bank of New York. This is unlikely to be a mere coincidence. According to the New York Fed -- https://www.newyorkfed.org/markets/primarydealers -- "Pr[...]



Alasdair Macleod's study of "Gibson's Paradox" posted by GATA

Mon, 10 Aug 2015 17:02:50 +0000

1:04p ET Monday, August 10, 2015 Dear Friend of GATA and Gold: GoldMoney research director Alasdair Macleod's study of the breakdown of the historic correlation of interest rates and the general price level, a correlation set forth by "Gibson's Paradox" in economics, a study called to your attention by GATA on Sunday -- http://www.gata.org/node/15635 -- has been posted in full in PDF format at GATA's Internet site here: http://www.gata.org/files/AlasdairMcLeod-GibsonsParadox-08-2015.pdf CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. CPowell@GATA.org ADVERTISEMENT USAGold: Coins and bullion since 1973 USAGold, well known for its Internet site, USAGold.com, offers contemporary bullion coins and bullion-related historic gold coins for delivery to private investors in the United States, Europe, Canada, Australia, and New Zealand. It is one of the oldest and most respected names in the gold industry, with thousands of clients and an approach to investment that emphasizes guidance and individual needs over high-pressure sales tactics. The firm's zero-complaint record at the Better Business Bureau makes it an ideal match for the conservative, long-term investor looking for a reliable contact in the gold business. Please call 1-800-869-5115x100 and ask for the trading desk, or visit: http://www.USAGold.com USAGold: Great prices, quick delivery -- all the time. Join GATA here: New Orleans Investment Conference Hilton New Orleans Riverside Hotel Wednesday-Saturday, October 28-31, 2015 http://noic2015.eventbrite.com/?aff=gata The Silver Summit and Resource Expo 2015 Hyatt Regency Hotel, San Francisco Monday-Tuesday, November 23-24, 2015 http://cambridgehouse.com/event/50/the-silver-summit-and-resource-expo-2... Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference: https://jeffersoncompanies.com/landing/2014-av-powell Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: http://gata.org/tshirts Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: http://www.gata.org To contribute to GATA, please visit: http://www.gata.org/node/16 AttachmentSize AlasdairMcLeod-GibsonsParadox-08-2015.pdf448.81 KB [...]


Media Files:
http://www.gata.org/files/AlasdairMcLeod-GibsonsParadox-08-2015.pdf




Chris Powell: Gold now defends not just liberty but simple reality

Sat, 10 Mar 2012 20:02:25 +0000

2:57p ET Saturday, March 10, 2012 Dear Friend of GATA and Gold: GATA can't vouch for the data published in the latest edition of Alan M. Newman's financial letter, Crosscurrents, which argues that financial manipulation has become the main pursuit of the United States economy, but he is far from alone in his observations. Commentary about this trend arose around 20 years ago, perhaps first in The New Republic magazine. And there is a well-established entry about it at Wikipedia, the Internet encyclopedia, here: http://en.wikipedia.org/wiki/Financialization Newman writes that dollar trading volume (presumably in U.S. markets) now is more than four times larger than the U.S. gross domestic product as well as four times larger than total stock market capitalization. "The churn continues at the most ferocious pace, making a mockery of our capital markets," Newman writes. "The theme of investing for the future is now meaningless as high-frequency trading distorts price discovery, resulting in gross pricing inefficiencies." ... Dispatch continues below ... ADVERTISEMENT Golden Phoenix Discusses Royalty Mining Growth Strategy on '21st Century Business' on Fox Business Network Golden Phoenix Minerals Inc. has discussed its royalty mining growth strategy on the Fox Business Network program "21st Century Business" with host Jackie Bales. Golden Phoenix's director of corporate communications, Robert Ian, told how the company narrows its focus to project generation and future royalty streams. He explained why Golden Phoenix believes it's better to own joint-venture interests in several producing mines instead of full exposure to just one project. "21st Century Business" has been airing for 15 years. Previous hosts have included Gen. Alexander Haig, Gen.l Norman Schwarzkopf, and Secretary of Defense Caspar Weinberger. Golden Phoenix appeared as paid programming on this broadcast. To view the program with Golden Phoenix, please visit Golden Phoenix's Internet site here: http://goldenphoenix.us/fox-business-network/ This echoes what GATA board member Adrian Douglas, publisher of the Market Force Analysis letter (www.MarketForceAnalysis.com), often has written about the gold and silver markets particularly -- that paper trading is scores of times greater the actual metal traded and, perhaps more important, scores of times greater than actual metal available for delivery. This means, as you've heard from this quarter before, that there are no markets anymore, just interventions (http://www.gata.org/node/6242), with the virtually infinite amounts of money necessary for manipulation being delivered by central banks to the monster financial houses that act as their agents both officially and openly as well as unofficially and surreptitiously. And yet we too may be faulted for paying such close attention to it. Yes, these manipulations supply the main cues for all asset and consumer prices, but now that "trillion" has become a commonly accepted term, the economy's connection to reality itself is being lost. For as Zimbabwe discovered recently and as Weimar Germany discovered 90 years ago, when it comes to human affairs, "trillion" exists only in the imagination, if there. It is incomprehensible. The digits that flash on our computer screens every day are now mostly just the reflections of holograms concocted by machines. These machines may not yet have taken over the world in the much-feared moment of "singularity," catapulting us all into the losing side of some Arnold Schwarzenegger movie, but as Newman notes they could turn on their masters at any time. You know all the old philosophical arguments in favor of gold and silver as an independent form of money -- human liberty, limited government, and so forth. But an equally compelling argument now may be the defense of simple reality. In the end monetary metal in your hand is at least something. Hurl it hard enough at an arrogant central banker, a parasitic fund manager, or a sleeping market regulator and it would sting a bit. [...]



Chris Powell: Who will put the gold questions to central banks?

Fri, 05 Aug 2011 23:32:33 +0000

Remarks by Chris Powell, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. GATA Gold Rush 2011 Savoy Hotel, London Friday, August 5, 2011 Those of you who have been following GATA for a long time are owed a bit of an apology from me today. For I will say some things you have heard before, as they may be new to others here, as I'm reminded of the advice given to me some years ago by a friend who was twice elected to Connecticut's state legislature, three times to the U.S. House of Representatives, and three times as governor of Connecticut. He told me that repetition is crucial in politics, and that, tedious as it may seem, just when you think you're going to have to kill yourself if you say something over again, that's when people are just starting to listen. Of course that was before he disgraced the state, was caught taking gifts from government contractors, resigned under threat of impeachment, pleaded guilty to a federal corruption charge, and was sent to prison for a year. But I guess he didn't get everything wrong. GATA is still about what it was about when it was founded in January 1999 -- exposing and opposing the rigging of the gold market and related markets. Why is the gold market rigged? It's rigged because, despite Federal Reserve Chairman Ben Bernanke's insistence the other day that gold is not money, just "tradition," gold is indeed a currency that competes brutally with government-issued currencies and helps determine not only the value of those currencies but also the level of interest rates and the value of government bonds. This was all documented in an academic study published in June 1988 in the Journal of Political Economy written by Harvard economics professor Lawrence Summers and University of Michigan economics professor Robert Barsky. This Summers-Barsky study was unearthed and interpreted by another speaker at this conference, gold price suppression litigator Reg Howe. The study implied that if governments could get control of the gold price, they could also get control of interest rates. ... Dispatch continues below ... ADVERTISEMENT Golden Phoenix Q2 2011 Conference Call Posted at Company Internet Site The second quarter 2011 conference call of Golden Phoenix Minerals Inc. (GPXM) has been posted at the company Internet site for immediate playback. The call includes updates on the start of gold production at the company's Mineral Ridge gold project in Nevada, the letter of intent to acquire the Santa Rosa gold mine in Panama, and the company's due-diligence efforts to secure a senior stock exchange listing. The conference call is 18 minutes long and you download an mp3 of it here: http://www.goldenphoenix.us/audio/GPXMCC071211.mp3 Or play back the call here: http://goldenphoenix.us/conferencecalls/ Golden Phoenix is a U.S. mining company with international exposure to gold, silver, and strategic metals. The company's business model combines project generation and royalty mining that offers the potential for exploration upside, coupled with the backing of production and future royalty streams. View company videos here: http://goldenphoenix.us/ Of course Summers went on to become U.S. treasury secretary, an office in which expertise in controlling the gold price is highly desirable. How is the gold price rigged, and by whom? It is rigged openly through outright sales of gold by central banks, as it was rigged openly in the 1960s by the association of Western central banks known as the London gold pool, and, since the gold pool's collapse in 1968, rigged both openly and surreptitiously through central bank sales and leases and by bullion bank short positions and derivatives that are backstopped by access to Western central bank gold. GATA has established this extensively from official sources whose admissions are compiled in the "Documentation" section of our Internet site: http://www.gata.org/taxonomy/term/21 That is, the gold price suppression scheme is not what it is disparaged as being, "conspi[...]



Chris Powell: Piercing the mystery of the gold market

Fri, 29 Oct 2010 04:51:12 +0000

Remarks by Chris Powell Secretary/Treasurer, Gold Anti-Trust Action Committee Inc. New Orleans Investment Conference Hilton New Orleans Riverside Hotel Wednesday, October 27, 2010 The precious metals markets have tremendous potential for investors. But they are also wrapped up in great mystery -- deliberately so. Gold is the worst understood financial market. Most official data about gold is actually disinformation. Years ago GATA disclosed that the International Monetary Fund, the leading compiler of official gold reserve data, allowed its member nations to count gold they had leased, gold that had left their vaults, as if it was still in their vaults. The effect of this accounting fraud was to deceive the gold market into thinking that central banks had much more gold left to bomb the market with than they really did. But that's only the start of the false data. In April 2009 China caused a bit of a sensation by announcing that its gold reserves had increased by 76 percent, from 600 tonnes to 1,054 tonnes. For the previous six years China had been reporting to the IMF only 600 tonnes. Had China acquired those 454 new tonnes only in the last year? Very unlikely. Experts now believe that China acquired those 454 new tonnes over at least several years, largely by purchasing the production of China's own fast-growing gold mining industry. So for as many as six years the official gold reserve data about China was way off. ... Dispatch continues below ... ADVERTISEMENT Prophecy Resource Goes Into Production at Ulaan Ovoo Coal Mine in Mongolia A commission appointed by Mongolia's Ministry of Mineral Resources and Energy has conducted the final permit inspection at Prophecy Resource Corp.'s Ulaan Ovoo mine site and has instructed the company to begin coal production. Prophecy Resource (TSX.V: PCY) has begun production of its first 10,000 tonnes of coal as a trial run of supply to be taken by rail to electric power stations in Darkhan and Erdenet, Mongolia's second and third largest cities after the capital, Ulaanbaatar. The company is the second-ever Canadian mining company to get a permit to mine in Mongolia and start production there. For the company's complete announcement, please visit: http://www.prophecyresource.com/news_2010_oct14.php This June the World Gold Council reported that Saudi Arabia's gold reserves had increased by 126 percent, from 143 to 323 tonnes, just since 2008. That the world's oil-exporting superpower had made such a new commitment to gold in its foreign exchange reserves also caused a brief sensation. But a few weeks later the governor of the Saudi Arabia Monetary Authority, Muhammad al Jasser, insisted to news reporters in Kuwait that Saudi Arabia had not purchased the gold cited in the June reports but rather had that extra gold all along in what he called "other accounts" -- that is, in accounts not reported officially, just as the true status of China's gold accounts was not reported officially for six years, if the true status is being reported even now. Some analysts think that China and Saudi Arabia have accumulated far more gold than they're reporting and are accumulating still more gold surreptitiously -- China to hedge its dollar foreign exchange surplus, Saudi Arabia to hedge both its dollar surplus and the depletion of its oil reserves -- but that China and Saudi Arabia can't acknowledge this accumulation lest they spook the currency markets and devalue their dollar surpluses before those surpluses are fully hedged. In August 2009 GATA consultant Rob Kirby of Kirby Analytics in Toronto obtained from Germany's central bank, the Bundesbank, a written admission that much of Germany's national gold is held outside the country at "trading centers" at which the Bundesbank may "conduct its gold activities." Without explicitly confirming that the Federal Reserve Bank of New York was one of those "trading centers," the Bundesbank noted to Kirby that the New York Fed holds gold f[...]



The secret knowledge and the secret gold market

Tue, 11 May 2010 02:44:40 +0000

11p ET Monday, May 10, 2010 Dear Friend of GATA and Gold: We at GATA have sometimes called gold's enduring role in the international monetary system "the secret knowledge of the financial universe." This view is shared by the anonymous but most alert and well-informed blogger FOFOA -- for Friend of Friend of Another, a reference to the famous "Another" and "Friend of Another" postings at the old USAGold Forum of Centennial Precious Metals in Denver, many of which can be found here: http://www.usagold.com/goldtrail/archives/another1.html In his most recent essay, addressed last night to the European heads of state who were busily conjuring up a trillion of something or other to rescue themselves and their banks with, FOFOA remarked that the gold secret is known to only about a hundred people. This is not actually true, for the secret is known to hundreds and maybe thousands of the 6,000 people on the GATA Dispatch list and to thousands more on the membership list of GATA Chairman Bill Murphy's LeMetropoleCafe.com, as well as to many of the old readers of the USAGold Forum. But FOFOA's remark was metaphorically true, even as he would bring still more people in on the secret, as GATA would. That secret is that there are two gold markets -- a visible market to mislead other markets with, a largely paper market for which Kitco's Jon Nadler and CPM Group's Jeff Christian, among others, are the small publicity, and an invisible market, a market among the central banks, where gold is much different -- real -- and, because it is real, valued immensely more than it is in the visible and largely paper market. FOFOA expects that governments will escape their impending bankruptcies by vastly revaluing their remaining gold reserves. He cites GATA and some of the things GATA has brought to your attention over the years, like the intriguing comments about gold made by former Federal Reserve Governor Lyle Gramley on Business News Network in Canada in December 2008: http://www.gata.org/node/6989 FOFOA also quotes GATA favorites Eric Sprott and Jim Rickards. He plainly has been following GATA's work closely. FOFOA's premise is similar to that of the British economist R. Peter W. Millar, founder of Valu-Trac Investment Research, whose May 2006 study, "The Relevance and Importance of Gold in the World Monetary System," predicted an upward revaluation of gold by between 700 and 2,000 percent to avert worldwide debt deflation: http://www.gata.org/node/4843 When Millar wrote that study gold in the visible market was trading at about $650 per ounce. Millar thus envisioned the necessity of a gold price of between $4,550 and $13,000. FOFOA puts gold's secret market price at around $6,000 as of some years ago. On CNBC the other day, Rickards said he expected gold to reach $5,000 once the manipulation of the paper market was defeated. (See http://www.gata.org/node/8605.) FOFOA observes: "The effect of the contract gold market on the ordinary price of gold has been to keep it at manageable levels for 30 years now. But physical gold and contracts for gold are different things entirely. New contracts can be produced much faster than new physical gold can be mined. But when demand shifts from contracts to physical (which is happening), this puts great strain on the market that tries to price them as equals. And what must ultimately happen when this strain breaks the parity between physical gold and contract gold is that the membrane separating the Bank for International Settlements' physical gold price from the ordinary market will break. "When this happens, all your debt problems will be reset to manageable and sustainable levels again. In fact, the entire monetary and financial order will be reset. This is going to happen. And the central bankers can make it happen whenever they want, when they finally feel the heat of the fire on their own butts." Turning up the heat is GATA's work. FOFOA's commentary suggests t[...]



Price suppression may end by itself, but not as fast

Sat, 01 May 2010 18:35:05 +0000

2:49p ET Saturday, May 1, 2010 Dear Friend of GATA and Gold (and Silver): Alerted by our friend F.R. to yesterday's GATA Dispatch decrying the abuse of financial letter writer Marc Faber by people urging support of GATA (http://www.gata.org/node/8592), Faber has sent GATA a brief statement acknowledging suppression of gold and silver prices: "My position is very simple," Faber writes. "I am grateful that precious metal prices have been manipulated down, so it gave me and my readers the opportunity to buy gold and silver at artificially depressed prices for the last 10 years. Eventually, if GATA is right, prices will explode on the upside." (For information about Faber's letter, the Gloom, Boom, & Doom Report, please visit http://www.gloomboomdoom.com.) GATA's officers also are glad to have gotten into the precious metals many years ago. But some people carry their acknowledgement of precious metals price manipulation a little too far -- carry it to acceptance and even indifference if not approval. GATA first may have run into such attitudes with financial letter writer Dennis Gartman (http://www.thegartmanletter.com), who, while not quite acknowledging gold and silver price manipulation then (he since has come a lot closer), advised some of GATA's officers during the Vancouver conference a few years ago to consider it just a great opportunity to make money. Concurring with Gartman, the other day our friend Mike Maloney, a metals dealer and market analyst, remarked of the manipulation of the precious metals market, "Let them manipulate it as long as they can," because the longer the manipulation lasts, the higher metals prices will go when the free market defeats the manipulation: http://goldsilver.com/newsletters/newsID/7901/ And this month Vedant Mimani and Pratik Sharma of Atyant Capital Partners in Boca Raton, Florida, (http://atyantcapital.com/) produced a long report concluding, on its last page: "The gold market is a manipulated market. It has been since the beginning of governments. Accept this fact and learn how to trade the market instead of complaining about it." You can find the Atyant Capital report here: http://www.scribd.com/doc/30714154/Final-Why-George-Soros-and-John-Pauls... GATA has a few problems with such attitudes. First, time is money. The eventual establishment of free markets in the precious metals will be little consolation to those precious metals investors who don't live long enough to see it happen. Many such investors have died since the manipulation became especially heavy-handed around 1995. They were profoundly cheated and there can be no justice for them. Other precious metals investors may not live very long after the manipulation ends. Unless they can find a way to take their winnings with them, they will have been profoundly cheated too. Second, while market forces may overwhelm the manipulation eventually, the end of the manipulation can be hastened by education and agitation. That is what GATA was chartered to undertake, not to sit around smugly and wait for supposed nature to take its course. Third, while there is one great economic certainty -- that Western currencies will be substantially devalued, Western central banking having been invented precisely to devalue the currency -- there is also one great economic uncertainty -- how, upon that substantial devaluation, governments will treat the private ownership of the precious metals. Precious metals in possession may have no counterparty risk, but they never will be able to escape political risk. Confiscation or disproportionate new capital gains taxes could take a lot of the fun out of owning them and mining shares, and even precious metals investors who still have long lives ahead of them when the price suppression ends could find themselves cheated of the rewards that were due to them years earlier while the suppression and different rules of ownership were st[...]



Peter Warburton: The debasement of world currency: It's inflation but not as we know it

Sat, 06 Feb 2010 17:23:19 +0000

By Peter Warburton April 9, 2001 More than 20 years ago, I was a research officer in a forecasting unit at the London Business School. We called ourselves international monetarists then and we had a model that determined the inflation rate from the growth of money stock per unit of output, with long and variable lags. The value of a currency was determined, in the long run, by its monetary growth per unit of output in relation to that of the rest of the developed world. Being a young man, I was heavily into econometrics -- or economic tricks, as some would have it -- and our research group published papers showing how well this model fitted the data of that time. Basically, we had it sown up. We knew how to predict inflation; we knew the equilibrium value of currencies and the untidy realities of economic life were mopped up in the balance of payments. We felt sure that if the authorities could regulate the growth of the money supply, all would be well. How wrong we were. By the mid-1980s, central bankers had begun to enjoy a measure of success in controlling inflation, not by strict regulation of the money supply, but as a byproduct of financial deregulation and the liberalization of credit. Even allowing for the lapses of 1988-90, there was a growing confidence that the battle against inflation was won. Throughout the 1990s, economists were absorbed by the issue of the permanence of low inflation, as measured by the annual change in a weighted basket of consumer goods and services, the CPI. But was inflation dead, or merely sleeping? Residual fears that it may only be a long sleep led the US authorities to establish the Boskin commission, whose charge was to deliver inflation a heavy blow to the head. Stunned into submission, the CPI took a long while to stir from its slumbers and did not do so until higher oil prices came along last year. However, it is far from certain that this surge will persist, and quite conceivable that it will recede later in the year in response to weakness in the real economy. To all intents and purposes, inflation in its popular form looks dead or comatose. The paradox of disconnection During these past 15 years, the Anglo-American economies (US, UK and Canada) have experienced episodes of weak growth in broad money (M2 or M3) with moderate inflation (in the early-1990s) and episodes of strong monetary growth with little measured inflation of consumer prices, as now. As a result, most economists have given up on the monetary aggregates as a useful guide to anything important. Government economists, who have remained skeptical of monetary transmission mechanisms throughout, feel especially vindicated. They argue that, if double-digit money supply growth can sit happily alongside a 2 or 3% inflation target and an appreciating currency, then surely the argument is settled. I no longer regard myself as a monetarist, but I retain a deep respect for the behaviour of bank liabilities and their close substitutes. There are some things that only money can do. However, there are many other things that credit can do just as well. The avalanche of non-bank credit that has swept across the economic landscape over the past 20 years has altered it beyond recognition. On the one hand, it has enabled the monetary aggregates to grow much more slowly than the credit aggregates, helping to keep inflation lower. On the other hand, the non-bank credit avalanche has enabled a furious pace of fixed investment in physical assets that has promoted structural global excess capacity in virtually all manufactured products and exerted downward pressure on product prices. The particularly vigorous investment in information and communications technology has served a dual purpose, through the spectacular lowering of capital goods prices and by connecting disparate market participants to a common network and database. And what of the p[...]



Adrian Douglas: The 'tiny' gold market is actually the world's biggest

Mon, 18 Jan 2010 18:34:53 +0000

By Adrian Douglas Monday, January 18, 2010 Here are some Trivial Pursuit questions for you: 1) What is the biggest market in the world for a physical commodity? 2) Is the gold market one of the smallest markets in the world for a physical commodity? I would guess that you answered: 1) Crude oil. 2) Yes. Gold is one of the smallest commodity markets in the world. If those were your answers, you are wrong. What everybody believes to be the "tiny gold market" is in fact the world's biggest physically traded commodity market. Let's have a look at some facts. The London Bullion Market Association (LBMA) "over-the-counter" (OTC) gold market trades approximately 90 percent of the world's physical gold trade. The amount of gold sold each day is given at the LBMA's Internet site here: http://www.lbma.org.uk/stats/clearing The LBMA reports the net gold traded, which is termed "ounces transferred." This is not the gross trading volume. For example, if an investor were to sell 1 million ounces in the day and then buy 1.1 million ounces, the trade would be counted as 0.1 million ounces, the net difference between the purchase and the sale and the amount of gold "transferred" to the investor's account. Therefore the numbers are the amount of gold that changes ownership each day. The value of the daily trading for November 2009 is given as $22 billion. From looking at the data you might think that the trade amounts are for the entire month. But they are actually average daily figures for the month. This is clear from another page of the LBMA Internet site, which states: "Gold ounces transferred rose from a daily average of 20.6 million in September to 20.8 million, an increase of 1.2%. There was a 4.7% increase in the average price to $1,043.16, resulting in a 6.0% rise in value to a daily average of $21.8 billion. The number of transfers dropped by 0.8% to a daily average of 1,908." The world consumes 82 million barrels of crude oil each day. At $77 per barrel the physical trade of crude oil is worth $6.3 billion each day. This means that the amount of gold that changes ownership each day is, in dollar terms, 3.5 times the dollar value of crude oil that is consumed each day. In a GATA dispatch in October 2009 the market analyst Paul Mylchreest estimated that the gross volume of gold traded on the LBMA each day was about 2,100 metric tonnes: http://www.gata.org/files/ThunderRoadReport-10-15-2009.pdf That equates to $77 billion each day at 1,150 per ounce. The NYMEX WTI crude oil contract trades 400,000 contracts each day, which is 400 million barrels. At $77 per barrel, the gross value traded is $30.8 billion, which is only 40 percent of the value of the gross trade in gold. There is a myth among even knowledgeable gold investors and analysts that the gold market is tiny, but in reality it is the biggest physically traded commodity market in the world. The perception of gold being a tiny market comes from the tiny annual production of gold. Global gold production is only 2,200 metric tonnes per year, which is equivalent to the gross trade in gold on the LBMA in just one day. In a previous article I analyzed the LBMA market numbers and deduced that it was impossible for the LBMA to have enough gold in its vaults to trade such large daily volumes. The inescapable inference is that the LBMA is operating a fractional reserve system and has sold much more gold than it has or could ever have. The amount of gold that has been sold is estimated to be around 65,000 metric tonnes, while the maximum amount of London Good Delivery bars that exist in the world is around 15,000 metric tonnes. So even if the LBMA possesses the world's entire stock of LGD bars there are 50,000 metric tonnes of obligations that cannot be met if the owners ask for delivery. To put that quantity of gold into perspective, it is equal to all the gold r[...]



Gold suppression is public policy and public record, not 'conspiracy theory'

Sat, 07 Nov 2009 18:16:07 +0000

Remarks by Chris Powell, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. International Precious Metals and Commodities Show Olympia Park, Munich, Germany Saturday, November 7, 2009 Thank you for coming to listen to me today. Please forgive my inability to speak German. I'll be discussing many documents, some of them fairly complicated, but don't worry if you miss something about them. They'll be posted at GATA's Internet site with these remarks. On Friday, September 25, Jim Rickards, director of market intelligence for the Omnis consulting firm in McLean, Virginia., was interviewed on the cable television network CNBC in the United States. Talking about the currency markets, Rickards remarked: "When you own gold you're fighting every central bank in the world." That's because gold is a currency that competes with government currencies and has a powerful influence on interest rates and the price of government bonds. And that's why central banks long have tried to suppress the price of gold. Gold is the ticket out of the central banking system, the escape from coercive central bank and government power. As an independent currency, a currency to which investors can resort when they are dissatisfied with government currencies, gold carries the enormous power to discipline governments, to call them to account for their inflation of the money supply and to warn the world against it. Because gold is the vehicle of escape from the central bank system, the manipulation of the gold market is the manipulation that makes possible all other market manipulation by government. Of course what Jim Rickards said about gold was no surprise to my organization, the Gold Anti-Trust Action Committee. To the contrary, what Rickards said has been our premise for most of our 10 years, and we have documented it extensively. Rickards' assertion was spectacular simply because he was allowed to make it in the mainstream financial news media and was allowed to keep talking. While the gold price suppression scheme is a hard fact of history, it is seldom mentioned in polite company in the financial world. I have been asked to talk about it here. I am grateful for this invitation and I will try to be polite. How have central banks tried to suppress the price of gold? The gold price suppression scheme was undertaken openly by governments for a long time prior to 1971. That's what the gold standard was about -- governments fixing the price of gold to a precise value in their currencies, a price at which governments would exchange their currencies for gold, currencies that were backed by gold. Though the gold standard was abandoned during World War I, restored briefly in the 1920s, and then abandoned again during the Great Depression, that was not the end of government efforts to control the gold price. Throughout the 1960s the United States and Great Britain attempted to hold the price at $35 in a public arrangement of the dishoarding of U.S. gold reserves. This arrangement came to be known as the London Gold Pool. As monetary inflation rose sharply, the London Gold Pool was overwhelmed by demand and was shut down abruptly in April 1968. Three years later, in 1971, the United States repudiated the remaining convertibility of the dollar into gold -- convertibility for government treasuries that wanted to exchange dollars for gold. At that moment currencies began to float against each other and against gold -- or so the world was told. For since 1971 the gold price suppression scheme has been undertaken largely surreptitiously, seldom acknowledged officially. But sometimes it has been acknowledged officially, and with a little detective work, more about it can be discovered. You may have heard GATA derided as a "conspiracy theory" organization. We are not that at all. To the contrary, we examine the public[...]



Chris Powell: Remarks to the 2009 New Orleans Investment Conference

Sun, 11 Oct 2009 22:53:22 +0000

Remarks by Chris Powell Secretary/Treasurer Gold Anti-Trust Action Committee Inc. New Orleans Investment Conference Hilton Riverside Hotel Thursday, October 8, 2009 On Friday, September 25, Jim Rickards, director of market intelligence for the Omnis consulting firm in McLean, Va., was interviewed at length on the cable television network CNBC. Talking about the currency markets, Rickards remarked: "When you own gold you're fighting every central bank in the world." That's because gold is a currency that competes with government currencies and influences interest rates and the prices of government bonds. Of course such an assertion in itself was no surprise to my organization, the Gold Anti-Trust Action Committee. To the contrary, that assertion has been our premise for most of our 10 years and we have documented it extensively. It was spectacular that an analyst should have expressed it in the mainstream financial news media and have been allowed to keep talking. But since we met here in New Orleans last year there have been many spectacular disclosures of what central banks meant to be surreptitious intervention in the currency markets to suppress the price of gold -- particularly intervention by the central bank of the United States. You may have heard GATA derided as a "conspiracy theory" organization. We're not that at all. To the contrary, we examine the public record, produce documentation, question public officials, and publicize their most interesting answers, or refusals to answer. I'd like to review the spectacular disclosures of the last year. First, in January, was the discovery of a 16-page unsigned memorandum in the archive of the late Federal Reserve Chairman William McChesney Martin: http://www.gata.org/node/7096 The memorandum is dated April 5, 1961, and is titled "U.S. Foreign Exchange Operations: Needs and Methods." It is a detailed plan of surreptitious intervention to rig the currency and gold markets to support the dollar and to conceal, obscure, or falsify U.S. government records and reports so that the rigging might not be discovered. This document remains on the Internet site of the Federal Reserve Bank of St. Louis. Then in August the international journalist Max Keiser reported an interview with the Bundesbank, Germany's central bank, in which he was told that all of Germany's gold reserves were held in New York: http://www.gata.org/node/7672 Some people saw that admission as a suggestion that Germany's gold had become the tool of the U.S. government. GATA consultant Rob Kirby of Kirby Analytics in Toronto then pressed the Bundesbank for clarification. On August 24, the Bundesbank replied to Kirby by e-mail with a denial of Keiser's report that was actually pretty much a confirmation: http://www.gata.org/node/7713 "The Deutsche Bundesbank," the reply said, "keeps a large part of its gold holdings in its own vaults in Germany, while some of its gold is also stored with the central banks located at major gold trading centers. This," the Bundesbank continued, "has historical and market-related reasons, the gold having been transferred to the Bundesbank at these trading centers. Moreover, the Bundesbank needs to hold gold at the various trading centers in order to conduct its gold activities." The Bundesbank didn't specify those "gold activities" and those "trading centers." But those "activities" can mean only that the Bundesbank is or recently has been surreptitiously active in the gold market. Then last month a financial market professional and student of history named Geoffrey Batt posted at the Zero Hedge Internet site three declassified U.S. government documents involving the gold market. The first was a long cable dated March 6, 1968, from someone named Deming at the U.S. Embassy in Paris to the State Department in [...]



James Turk: A short history of the gold cartel

Mon, 04 May 2009 01:44:25 +0000

By James Turk, Editor Freemarket Gold & Money Report http://www.fgmr.com/ Sunday, May 3, 2009 Copyright 2009 by James Turk. All rights reserved. This week Bill Murphy and Chris Powell, co-founders of the Gold Anti-Trust Action Committee Inc. (www.gata.org), will be in London, England. Their trip is part of GATA's ongoing effort to raise awareness of the gold cartel and its surreptitious intervention in the gold market. Bill and Chris will meet with the British news media to explain GATA's findings. They will also attend an important fund-raising event being held in support of GATA's work. Their trip is another important step by GATA aimed at creating a free market in gold, one which is unfettered by government intervention. Governments want a low gold price to make national currencies look good. Gold is recognizable the world over as the "canary in the coal mine" when it comes to money. A rising gold price blurts the unpleasant truth that a national currency is being poorly managed and that its purchasing power is being inflated. This reality is made clear by former Federal Reserve Chairman Paul Volcker. Commenting in his memoirs about the soaring gold price in the years immediately following the end of the gold standard in 1971, he notes: "Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake." It was a "mistake" because a rising gold price undermines the thin reed upon which all fiat currency rests -- confidence. But it was a mistake only from the perspective of a central banker, which is of course at odds with anyone who believes in free markets. The U.S. government has learned from experience and has taken Volcker's advice. Given the U.S. dollar's role as the world's reserve currency, the U.S. government has the most to lose if the market chooses gold over fiat currency and erodes the government's stranglehold on the monopolistic privilege it has awarded to itself of creating "money." So the U.S. government intervenes in the gold market to make the dollar look worthy of being the world's reserve currency when of course it is not equal to the demands of that esteemed role. The U.S. government does this by trying to keep the gold price low, but this is an impossible task. In the end, gold always wins -- that is, its price inevitably climbs higher as fiat currency is debased, which is a reality understood and recognized by government policymakers. So recognizing the futility of capping the gold price, they instead compromise by letting the gold price rise somewhat, say, 15 percent per year. In fact, against the dollar, gold is actually up 16.3 percent per year on average for the last eight years. In battlefield terms, the U.S. government is conducting a managed retreat for fiat currency in an attempt to control gold's advance. Though it has let the gold price rise, gold has risen by less than it would in a free market because the purchasing power of the dollar continues to be inflated and because gold remains so undervalued notwithstanding its annual appreciation this decade. These gains started from gold's historic low valuation in 1999. Gold may not be as good a value as it was in 1999 but it nevertheless remains extremely undervalued. For example, until the end of the 19th century, approximately 40 percent of the world's money supply consisted of gold, and the remaining 60 percent was national currency. As governments began to usurp the money-issuing privilege and intentionally diminish gold's role, fiat currency's role expanded by the mid-20th century to approximately 90 percent. The inflationary policies of the 1960s, particularly in the United States, further eroded gold's role to 2 percent by the time the last remnants of the gold standard w[...]



Concentrated shorts proven to suppress gold and silver

Sat, 28 Mar 2009 04:06:01 +0000

9:05p ET Friday, March 27, 2009

Dear Friend of GATA and Gold (and Silver):

GATA Board of Directors member Adrian Douglas, editor of the Market Force Analysis letter (http://www.marketforceanalysis.com/), has combined data from the U.S. Commodity Futures Trading Commission and the Office of the Comptroller of the Currency to show that the suppression of the prices of gold and silver in the last several years correlates exactly with the growing concentration of the short positions held by two U.S. banks, JPMorgan Chase and HSBC.

Short of the official admissions of the gold price suppression scheme collected and published by GATA over the years, Douglas' report is probably the best proof yet, and certainly the most detailed. Douglas' report is titled "Pirates of the COMEX" and you can find it in PDF format at GATA's Internet site here:

http://www.gata.org/files/PIRATES-OF-THE-COMEX.pdf

GATA's supporters may be wearying of our many similar requests, but only persistence pays off, so we ask you to print copies of Douglas' report and send them -- by regular mail, not e-mail, which is ignored -- to your U.S. senators and representatives with a covering letter requesting an explanation as to why nothing is being done to stop this market manipulation. For our friends outside the United States, please send copies with similar letters to your own national legislators.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16




Chris Powell: Gold and silver market manipulation update

Fri, 14 Nov 2008 20:51:33 +0000

Remarks by Chris Powell, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. New Orleans Investment Conference New Orleans Marriott Hotel Thursday, November 13, 2008 A year ago it was still a struggle to persuade some people that the gold and silver markets were being manipulated by Western central banks. Now, after months of financial turmoil around the world and constant central bank intervention in the markets, to believe that the gold and silver markets are not being manipulated by central banks you have to believe that those markets are the only markets not being so manipulated. Why are the gold and silver markets manipulated by governments and the financial houses that serve as their agents? Because gold and silver are competitive currencies and because their value greatly influences interest rates, which ordinarily governments like to keep low. Last year at this conference I reviewed in detail the official documentations and admissions of the gold price suppression scheme. Those documentations and admissions remain posted at GATA's Internet site: http://www.gata.org/node/5654 Today I'd like to review some evidence that has turned up more recently, as well as some related developments. Maybe most interesting have been the studies of the U.S. Commodity Futures Trading Commission market reports done by silver market analyst Ted Butler and by Gene Arensberg, a market analyst for ResourceInvestor.com. Butler and Arensberg reported that as of August just two banks held more than 60 percent of the short positions in silver on the New York Commodities Exchange. This was an unprecedented and seemingly illegal concentrated short position, and it implied that the smashing down of silver was very much a manipulation by one or two very rich and powerful market participants, a destruction of the free market. Complaints about this concentrated short position prompted the CFTC to undertake still another investigation of the silver market, this time by a different division of the commission, its enforcement division. Further, CFTC Commissioner Bart Chilton has told GATA that the agency is investigating the gold market as well. This week Arensberg found that the CFTC's latest report shows that just three or fewer banks now hold half the short positions in gold on the Comex and more than 80 percent of the silver short positions. Also this week Butler obtained a copy of a letter from the CFTC to U.S. Rep. Gary G. Miller, R-California, that sought to explain the concentrated short position in silver. The CFTC's letter implied that this extreme short position resulted from JPMorganChase's acquisition of Bear Stearns in March. If we construe the CFTC's letter correctly, that would make MorganChase the big short in silver now and imply that, in financially underwriting MorganChase's acquisition of Bear Stearns, the Federal Reserve was also underwriting MorganChase's assumption of that short position in silver. Of course MorganChase was also the bullion banker to Barrick Gold, the biggest gold shorter over the last decade. In 2003 Barrick told U.S. District Court Judge Helen Berrigan right here in New Orleans that, in shorting gold, Barrick had become the agent of the central banks in regulating the gold market and thus should share their sovereign immunity against lawsuits. MorganChase is also the world's biggest issuer of interest-rate derivatives, instruments by which interest rates are suppressed. All this causes GATA to believe that MorganChase is in effect an agency of the U.S. government, or rather, perhaps, that the U.S. government is an agency of MorganChase. In any case, MorganChase has had an intimate relationship with the U.S. government since the days of J. Pierpont Mor[...]



Chris Powell: A new summary of GATA's work

Sun, 24 Aug 2008 14:33:05 +0000

By Chris Powell Secretary/Treasurer Gold Anti-Trust Action Committee Inc. Sunday, August 24, 2008 While the gold price long has been at least "managed" by Western central banks -- as with the gold standard itself, and then the London Gold Pool of the 1960s -- the current arrangement, largely surreptitious, may have originated with an academic paper co-written in 1988 by Lawrence Summers, then a professor at Harvard, later deputy to Treasury Secretary Robert Rubin and then his successor. The paper was titled "Gibson's Paradox and the Gold Standard" and was published in the Journal of Political Economy. You can find it here: http://www.gata.org/files/gibson.pdf It's very dense but GATA consultant Reginald H. Howe, a lawyer and gold mining company investor in Massachusetts, the first litigator against the gold price suppression scheme and a Harvard grad himself, put it in context in 2001 with his essay "Gibson's Paradox Revisited: Professor Summers Analyzes Gold Prices," which you can find in the "Essays" section on the home page at Howe's Internet site here: http://www.goldensextant.com/ Essentially, the scheme as implied by Summers' paper is to keep interest rates down and government bond prices up by rigging the gold market, gold and interest rates ordinarily being inversely correlated. I've long had a hunch that the scheme became U.S. government policy because of President Clinton's resentment upon being told, soon after taking office, that the foremost objective of his administration should be to placate the bond market. There is a famous quotation about this in Bob Woodward's book about the Clinton administration's early days, "The Agenda." The full book isn't available on the Internet but the quotation appears in several reviews of the book that have been posted. Clinton says: "We're Eisenhower Republicans here. We stand for lower deficits, free trade, and the bond market. Isn't that great? ... We help the bond market and we hurt the people who voted us in." Here's a link to one such review: http://www.counterpunch.org/pollin10182003.html My hunch is that not long after Clinton expressed this resentment of the bond market, Rubin told Clinton how the bond market could be deceived by rigging the gold market, and Clinton gave his approval. While this scenario is admittedly speculation, the gold-carry trade, on which the gold price suppression scheme was based -- the lending of Western central bank gold reserves to investment houses at an only nominal interest rate, the investment houses' sale of those reserves, and their use of the proceeds to purchase government bonds for a risk-free income of 5 percent or so -- is a matter of public record. Even if it wasn't the intent, this had the effect of suppressing the gold price, supporting government bond prices, and lowering interest rates. Further, a gold mining company executive, a longtime GATA supporter, who worked with Rubin at Goldman Sachs prior to Rubin's appointment as treasury secretary, witnessed Rubin's involvement in the gold carry trade at Goldman. While the people who formed GATA sensed as early as 1998 that something was wrong technically in the gold market, it took us a couple of years to figure out that the culprits were not the visible players in the futures markets -- the New York investment banking houses -- but rather the Western central banks, and that the investment houses were just their agents, their cover. A British economist, Peter Warburton, may have been the first to put it together comprehensively, with his 2001 essay, "The Debasement of World Currency: It Is Inflation, But Not as We Know It," which you can find here: http://www.gold-eagle.com/gold_digest_01/warburton0[...]



Chris Powell: There are no markets anymore, just interventions

Sat, 19 Apr 2008 05:18:38 +0000

Remarks by Chris Powell, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. GATA Goes to Washington -- Anybody Seen Our Gold? Hyatt Regency Crystal City Hotel, Arlington, Virginia Friday, April 18, 2008 Groucho Marx made a small fortune in vaudeville and then lost it all in the stock market crash of 1929. His sense of humor was no help to him then. One day in the early 1930s he was sitting in a bar with his friend Morrie, and Morrie was trying to console him. "Yes," Morrie told Groucho, "we've lost a lot of money and it hurts, but we’ve still got our health and our lives ahead of us, and some people don’t even have that. Take my cousin Fred. He's much worse off than we are but he’s pressing on as best he can. Fred lost his leg in a carriage accident when he was 5. His parents were killed in a tenement fire when he was 12. His wife ran off with his best friend when he was 27. And then he had diabetes at 29." Groucho was not to be consoled; he had lost too much money in the crash. He snarled back at Morrie: "Diabetes at 29? That's nothing. I had Radio at 104." We investors in the precious metals have taken some hard blows lately, if not quite as hard as the blows taken by, say, investors in Bear Stearns. But we've taken such blows regularly over the last decade and still have come out ahead, so we should be able to put things in perspective. It may be a little easier for those of us in the Gold Anti-Trust Action Committee. The committee was founded in 1999 to expose manipulation of the gold market and the rigging of related markets. From the start we were ridiculed as "conspiracy nuts." But hardly a day goes by now without evidence of official market rigging showing up in even the establishment news media. We in GATA haven't minded the "nuts" part that much. But we're actually public record nuts. For the scheme to suppress the price of gold is increasingly a matter of ordinary public record. It was a matter of public record in January 1995, when the Federal Reserve's general counsel, J. Virgil Mattingly, told the Federal Open Market Committee, according to the committee's minutes, that the U.S. Treasury Department's Exchange Stabilization Fund had undertaken "gold swaps." Those minutes are still posted at the Fed's Internet site: http://www.federalreserve.gov/monetarypolicy/files/FOMC19950201meeting.p... It was a matter of public record in July 1998, six months before GATA was formed, when Federal Reserve Chairman Alan Greenspan told Congress: "Central banks stand ready to lease gold in increasing quantities should the price rise." That is, Greenspan himself contradicted the usual central bank explanation for leasing gold -- supposedly to earn a little interest on a dead asset -- and admitted that gold leasing was all about suppressing the price. Greenspan's admission is still posted at the Fed’s Internet site: http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm Incidentally, while we gold bugs love to cite Greenspan's testimony from July 1998 because of its reference to gold leasing, that testimony was mainly about something else, for which it is far more important today. For with that testimony Greenspan persuaded Congress not to regulate the sort of financial derivatives that lately have devastated the world financial system. The Washington Agreement on Gold, made by the European central banks in 1999, was another admission -- no, a proclamation that central banks were working together to control the gold price. The central banks in the Washington Agreement claimed that, by restricting their gold sales and leasing, they meant to prevent the gold price from falling too hard. But even i[...]


Media Files:
http://www.gata.org/files/BarrickConfessionMotionToDismiss.pdf




Facts, Evidence and Logical Inference by Frank A. J. Veneroso

Thu, 19 Jul 2007 14:38:34 +0000

Facts, Evidence and Logical Inference A Presentation On Gold Supply/Demand, Gold Derivatives and Gold Loans By Frank A. J. Veneroso INTRODUCTION Currently head of Veneroso Associates, formerly partner of the hedge fund Omega Advisors where he was responsible for global investment policy formulation. Through his own firm, Mr. Veneroso has been an investment and economic adviser in investment strategy to institutions and governments around the world in the areas of money and banking, financial instability and crisis, privatization, and development and globalization of securities markets. His clients have included the World Bank, the International Finance Corporation, The Organization of American States. He has advised the Governments of Bahrain, Brazil, Chile, Ecuador, Korea, Mexico, Peru, Portugal, Thailand, Venezuela and the United Arab Emeritus. Frank is a graduate from Harvard and has authored many articles on the subjects of international finance. Well, James Turk gave you interesting detective work that shows the possible hand of Government intervening in the gold market---sexy stuff. I am going to talk about the dry stuff---which is statistics on gold supply and demand. I sort of apologize for this but I guess it is an important part of the whole case. I am going to try and focus just on facts and evidence and simple logical inferences from them---rather than allegations, footprints, paper trails and the like. You might want to know why I have come all the way down here to participate in this conference. I find it extremely annoying that there is a hell of a lot of obvious evidence out there that something is happening in the gold market---that there are very large supplies coming into the market---larger than the consensus would claim---and no one is willing to discuss it. I have had interviews with the press. After the interviews, its has always turned out that the articles were killed. I have requested debates with Goldfields Mineral Services and they have refused to show up. I have asked the World Gold Council to fund pertinent research studies and they have not responded. I never get a response that counters the evidence that I can bring forward. I simply get extreme silence. Only GATA has looked at this evidence and taken it to the public, and so, as a result, I feel it is incumbent on me to present it once again in their forum because I think that it represents evidence of very large undisclosed official supplies in the market that is systematically ignored. If there are any producers here who have influence on organizations like the Gold Council---if you find this persuasive---you should go to them and say, "Hey, listen, this guy has real evidence. He may not be right but it poses serious questions. It should be addressed. Why isn't it being addressed?" Now, when we went to Congress in May of last year---exactly a year ago today---the subject was a gold derivative banking crisis. I will be talking about gold banking and gold derivatives, but I think you first have to understand what they are. We just had an article in the FT about the gold conspiracy being debunked or disproved by Antony Neuburger - a consultant to the World Gold Council. I have spoken to Mr. Neuburger. I've told him what I will tell you. He systematically has ignored it. Implicit in the work of a lot of these people is a flawed understanding of gold lending and gold derivatives. So I think it is best if I explain to you the process of gold lending and gold banking and the origin of gold derivatives first so that what I then discuss later makes more sense. It is a simple, simple idea. Central banks[...]



Secrecy of central bank gold lending condemned in new study

Thu, 14 Dec 2006 03:01:19 +0000

9:37p ET Wednesday, December 13, 2006 Dear Friend of GATA and Gold: Lending of gold by central banks depresses the price and the only possible reasons for the secrecy around it are manipulation of the gold market and the enrichment, through inside information, of the financial houses to which central banks lend their gold, a study by New Orleans coin and bullion dealer Blanchard & Co. has found. The study, written by Blanchard's vice president and director of economic research, Neal R. Ryan, published today, calls on the International Monetary Fund to require central banks to make complete and frequent disclosure of their gold lending and thereby equalize information in the gold market. In its own studies this year, the IMF already had acknowledged the inadequacy of central bank gold accounting, and Ryan says he has forwarded his study's recommendations to the IMF and has been told he will receive a response soon. Among the Blanchard study's findings: -- No accurate statistics about loaned central bank gold are published by individual countries or the IMF. Instead gold loans are estimated by outside sources and these estimates vary. -- Gold loaned into the market can significantly affect the price. -- Central banks actively manage their gold loans even as they deprive the market of information about them. -- Bullion banks, the borrowers of central bank gold, have a huge advantage over the investing public in the gold market, inside information acquired in their dealings with the central banks. -- The IMF could start a transparent gold market by requiring accounting changes for central bank gold. "Why," the Blanchard study asks, "aren't gold loans made public? Good question. There is no reason (save the argument made by some that central banks are using gold loans to manipulate the gold price) Blanchard's research has been able to unearth that explains why gold lending information is not made public, except for the unconscionable advantage it gives to bullion banks." "For the market to be transparent for all, central bank loaned gold levels need to be reported to ALL market participants on a quarterly if not monthly basis. Loan information is AVAILABLE to be published; it is simply not REQUIRED to be published. The IMF has the ability to make this requirement and change the gold market for the better for all participants. "Blanchard and Co. believes that this simple change to our market will allow all market participants to begin to realize not only greater gains in their gold investments but the ability to make smarter decisions on when and how to invest. Gold has made incredible gains in the past few years in a market that is still not completely transparent. This change has the ability to increase those gains immeasurably. ... "Level the playing field for all market participants, bring an end to proprietary information within the market for an exclusive few, and allow the bullion market to function in a fair and equitable manner, ridding itself of conspiracy theories that diminish its relevance and stability. By ending opaque transactions and accounting procedures, the gold market then becomes accessible to all participants and ends the 'clubhouse' attitude that governs the London [Bullion Market] Exchange. "The gold market has made great advances in the past few years not only in terms of price increases but also in the availability of gold to purchase for all market participants and the transparency of information. It is time to continue those advances and make the last few steps to having a truly open and free marketplace." The Blanchard study reports th[...]



IMF Gold Accounting Study

Fri, 02 Jun 2006 07:00:00 +0000

IMF COMMITTEE ON BALANCE OF PAYMENTS STATISTICS
RESERVE ASSETS TECHNICAL EXPERT GROUP

TREATMENT OF GOLD SWAPS AND GOLD DEPOSITS (LOANS)

Prepared by Hidetoshi Takeda, IMF Statistics Department
April 2006

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Media Files:
http://www.gata.org/files/IMFGoldSwapsPaperApril2006.pdf




BIS official: Central banks cooperate to influence gold price

Thu, 09 Mar 2006 08:00:00 +0000

1:28a ET Thursday, March 9, 2006 Dear Friend of GATA and Gold: Alan Greenspan confessed to the gold price suppression scheme while he was chairman of the Federal Reserve. He gave his famous testimony to Congress on July 24, 1998: "Central banks stand ready to lease gold in increasing quantities should the price rise." http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm The European Central Bank confessed to the gold price suppression scheme when it entered the Washington Agreement on Gold on September 26, 1999. The bank's members acknowledged that they had gotten together to regulate the gold price through gold sales and leasing: http://www.ecb.int/press/pr/date/1999/html/pr990926.en.html Barrick Gold confessed to the gold price suppression scheme in U.S. District Court in New Orleans on February 28, 2003, when it filed a motion to dismiss Blanchard & Co.'s anti-trust lawsuit charging that Barrick was doing exactly what its motion admitted. The motion said that in borrowing gold from central banks and selling it, Barrick had become the agent of the central banks in the gold market, and, as the agent of the central banks, shared their sovereign immunity and thus could not be sued: http://www.lemetropolecafe.com/img2003/memoformotiontodis.pdf The Reserve Bank of Australia confessed to the gold price suppression scheme in its annual report for 2003. "Foreign currency reserve assets and gold," the RBA's report said, "are held primarily to support intervention in the foreign exchange market. In investing these assets, priority is therefore given to liquidity and security, in order to ensure that the assets are always available for their intended policy purposes." http://www.rba.gov.au/publications/annual-reports/rba/2003/pdf/2003-repo... And now the Bank for International Settlements, the central bank of the central banks, has confessed to the gold price suppression scheme. The confession of the BIS came last June in a fairly candid speech by the head of the bank's monetary and economic department, William R. White, to central bankers and academics gathered at the BIS' fourth annual conference, held in Basel, Switzerland. The speech was provided to GATA this week. White's speech was titled "Past and Future of Central Bank Cooperation" and he said in part: "The intermediate objectives of central bank cooperation are more varied. "First, better joint decisions, in the relatively rare circumstances where such coordinated action is called for. "Second, a clear understanding of the policy issues as they affect central banks. Hopefully this would reflect common beliefs, but even a clear understanding of differences of views can sometimes be useful. "Third, the development of robust and effective networks of contacts. "Fourth, the efficient international dissemination of both ideas and information that can improve national policy making. "And last, the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful." That is, central banks collaborate -- and since they do so in secret, it may be said that they conspire -- to rig the gold and currency markets. To use White's word, the central banks collaborate "especially" to rig the gold and currency markets. Thankfully White did not accuse those who read his speech of being "conspiracy nuts." We still have Dennis Gartman, Tim Wood, and a few others for that, even if their band is rapidly diminishing. Interestingly, among those listed as having atten[...]


Media Files:
http://www.gata.org/files/WhiteSpeech-BIS.png




Cheuvreux equity brokerage report on gold market

Wed, 01 Feb 2006 08:00:00 +0000

Remonetisation of gold: Start hoarding

by Paul Mylchreest
Investment Analyst
+44 20 7621 5257
pmylchreest@cheuvreux.com

(CheuvreuxGoldReport)

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Media Files:
http://www.gata.org/files/CheuvreuxGoldReport.pdf




The Manipulation Of The Gold Market

Wed, 16 Nov 2005 08:00:00 +0000

The key to understanding the manipulation of the gold market, this enormous scandal and fraud, is that it can be compared to a murder trial. In the United States a murderer can be put to death if he is found guilty beyond a reasonable doubt. Many times murder defendants are convicted based solely on "circumstantial" evidence because a reasonable person could reach no conclusion other than guilty. For seven years GATA has discovered one piece of evidence after another supporting our long-held contention that the gold market is managed by certain central banks and their agents, the bullion banks. It is a price-fixing case involving some very powerful people and institutions … in fact it is a Gold Cartel. The U.S. attorney handling the Samsung conspiracy conviction said in an interview this fall that the United States had experienced an "epidemic" of price-fixing cases in the late 1990s. All GATA has done is uncovered one of them, the grandest of all. For one to appreciate how this can go on and on and not be brought to the attention of the public, one need only to reflect on Enron and Refco. Before its initial public offering of stock, Refco was audited by the most highly regarded firms on Wall Street and nothing wrong was discovered. Yet look at what was really transpiring behind the scenes. Now the company is bankrupt and under criminal investigation. That said, GATA does have its "smoking gun." It has to do with derivatives and central bank gold. The mainstream gold world says the central banks have nearly 32,000 tonnes of gold in their vaults (minus a small amount that has been sold in recent years or is on loan to gold producers for their hedging operations). GATA says the central banks have less than half of that -- the difference being what was clandestinely fed into the market to suppress the gold price over the last 10 years. The work of three respected GATA consultants -- Reg Howe, Frank Veneroso, and James Turk -- each using different methodologies, supports GATA's contention of vastly diminished central bank gold supply. Veneroso made a presentation at GATA's African Gold Summit in Durban, South Africa, on May 10, 2001, laying out why the central bank gold loans are far higher than generally believed. This presentation, "Facts, Evidence and Logical Inference ... A Presentation On Gold Supply/Demand, Gold Derivatives and Gold Loans," may be reviewed at: http://www.gata.org/node/5275 Howe and Turk have done the same at their Internet sites: http://www.goldensextant.com/ and http://www.goldmoney.com/. Meanwhile the International Monetary Fund has instructed central banks to lie about their gold reserves -- to count gold loans and swaps as gold in their vaults. So as not to be so audacious without backup to validate our more than dramatic claim, let me explain. Canadian GATA supporter Andrew Hepburn posed the following question to the IMF in October 2001: Why does the IMF insist that members record swapped gold as an asset when a legal change in ownership has occurred? See http://groups.yahoo.com/group/gata/message/903 The IMF responded: "This is not correct: the IMF in fact recommends that swapped gold be excluded from reserve assets. (See Data Template on International Reserves and Foreign Currency Liquidity, Operational Guidelines, para. 72, http://www.dsbb.imf.org/guide.htm" (For more on this, see http://groups.yahoo.com/group/gata/message/904. The IMF link mentioned above is no longer operating. It was in 2001 as noted in the GATA dispatch.) Yet[...]



The Dawson Declaration -- A resolution adopted at Gold Rush 21

Tue, 09 Aug 2005 07:00:00 +0000

Tuesday, August 9, 2005 The Gold Anti-Trust Action Committee's Gold Rush 21 conference concluded today in Dawson City, Yukon Territory, Canada, by adopting the Dawson Declaration, appended here: THE DAWSON DECLARATION Resolved by the Gold Anti-Trust Action Committee's Gold Rush 21 conference at Dawson City, Yukon Territory, Canada, on Tuesday, August 9, 2005: Having come to the heart of gold country to inquire into the condition of the monetary metals and the industry that produces them, we conclude and declare: While governments affect to have no use for them anymore, the monetary metals are of greater importance than ever because of their ability to hold value independent of arbitrary government power. So ownership of and free trade in the monetary metals are basic human rights against expropriation. While the monetary metals are unique as assets of intrinsic value that cannot default because they are no one's liability, this also has become their crippling weakness. For in being no one's liability, the monetary metals have had -- unlike their competitors, government-issued currencies -- no sovereign defenders. Indeed, for years now the monetary metals have had few defenders at all, the gold mining industry's trade organization having been dominated by short-selling corporations that have obtained metal at the sufferance of the issuers of government currencies, the central banks. This has left the monetary metals almost helpless against competing currencies. Since they issue competing currencies, governments have a powerful interest in suppressing what is perceived as the value of the monetary metals. Governments have achieved this suppression through strategic and often surreptitious lending and dishoarding of their metal reserves. While it is seldom officially acknowledged as such, this is the manipulation of currency and commodity markets that should be free and transparent. This manipulation of the currency and commodity markets has become the primary mechanism of imperialism, projecting and maintaining the power of the international reserve currency, the U.S. dollar, and its issuer, the U.S. government, and compelling other countries to sell their exports for less than fair value. To assist in the suppression of the monetary metals and at the urging of the International Monetary Fund, IMF member governments engage in deceptive accounting of their gold, deliberately confusing gold in the vault with gold that has been leased or swapped or whose ownership otherwise has been impaired. In the absence of a government currency's direct and fixed convertibility to the monetary metals, the only purposes for government reserves of the monetary metals are currency intervention and market manipulation. To preclude this manipulation, governments should sell their reserves openly by a date certain, except metal needed for coinage. As defenders of the monetary metals, we do not necessarily maintain that they should be the only means of exchange. We do not worship the golden calf or the silver bull; we are not idolaters. To the contrary, we believe that individuals and nations alike have the right to decide what they will use as money, even as we acknowledge that freely traded gold and silver are simply the most convenient guarantors of economic liberty. Accordingly, we will: * Defend the crucial place and purpose of the monetary metals and the industries that put them into circulation. * Encourage the use of the monetary metals as parallel[...]



A Look at Central Bank Gold Reserves

Mon, 16 May 2005 07:00:00 +0000

By Ed Wener Last week in a Midas commentary we saw a brief paragraph with a quote from the CPM group. I have not seen any reaction to this news. I believe the message from the CPM Group is important to Gold investors so I decided to do a little research into the opaque world of Central Bank Gold and share it with you. Here is the CPM quote. To maintain consistency throughout this article I’ve added (in brackets) the Gold equivalents in tonnes : “The likelihood of lower central bank gold sales could keep prices firm. These banks sold an average of 14-mil oz/year (435 tonnes) since 1989. For 2005, net central bank sales may be 6-mil to 8-mil oz (186 to 248 tonnes), about half of the 12.5-mil oz (388 tonnes) sold last year and less than half of what has been coming into the market on average over the past 15 years. "This reduction in physical gold sales by central banks should contribute to tighter physical markets, and exert some upward pressure on prices," said CPM. " While central banks still own more than 1-bil oz of gold (31,100 tonnes), most appear content to hold on to most of what they have. There are a few small sales from smaller European national banks, and the French commitment to sell, announced last April. Other than that, however, there is no clear source for massive gold sales from official inventories this year, or in the near future." Also, the potential sale of IMF gold has been bogged down in international politics and is unlikely to occur any time soon.” What is the CPM group telling us? Well, implicit in the first sentence is the fact that Gold was NOT FIRM because of previous Gold sales. In other words, it was these Central Banks that kept the Gold price from rising. Average sales of 435 tonnes per year totals 6500 tonnes over the period. According to the World Gold Council Central Banks had 35,582 tonnes in 1990 and 31,423 as of March 2005. They are only admitting to sales of 4159 tonnes, not 6500 tonnes. The difference is 2300 tonnes. Then the CPM estimates 2005 Gold sales of less than 250 tonnes which is half the amount allocated under the 2nd Washington Agreement. This is VERY bullish for Gold. Gold investors have long waited for the end of Central Bank dishoarding. Is this really it? Can we learn something from past behaviour of the Central Banks? The CPM group, like many others, likes to lump all Central Banks together and scare us with their Billion ounces of Gold. Gold just waiting to be sold to snuff out any rally. What I’ve done is check the historical record over the past 25 years and prepared a series of Tables. I’ve divided the World into a series of Blocs with some loose parameters such as geography or political allegiance. Each table shows Central Bank Gold Reserves in Tonnes for 1980, 1990 and March 2005. At the bottom of each table are the Bloc Totals in Tonnes and then in US Dollars converted at $420 per oz. All the numbers come from Tables found at the World Gold Council Website. The numbers are derived from Official Central Bank releases that may or may not be accurate. I doubt all of them are accurate. For example, we know a lot of Gold leasing has taken place yet leased Gold can be included in the Reserve reports [...]


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A Call to Arms - Ed Steer

Sat, 12 Mar 2005 08:00:00 +0000

"Cautious, careful people, always casting about to preserve their reputation and social standing, never can bring about a reform. Those who are really in earnest must be willing to be anything or nothing in the world's estimation, and publicly and privately, in season and out, avow their sympathy with despised and persecuted ideas and their advocates, and bear the consequences."Susan B AnthonyI was invited to join the board of directors of GATA -- the Gold Anti-Trust Action Committee -- a little over a year ago, and it has been a privilege for me to work shoulder to shoulder with people of such good character.What started out as a whim and a small donation more than five years ago has turned into a virtual life pursuit. That wasn't the plan back then, but that's what it has become. I'm fifty-six years old and I've done a lot of things in my time and been a lot of places around the world, but at the end of it all, my life's work will be defined by my efforts on behalf of GATA and its ongoing struggle against all the power and all the money in the world. Except for my family and my means of making a living, this battle has become all-consuming. I'm not the only person associated with GATA who thinks that way. It reminds of an old expression: To love what you do, and know that it matters -- How can anyone ask for more out of life than that?That's basically where I and many others associated with this undertaking stand.As you are aware, the prices of gold and silver are managed by the bullion banks and the central banks of the world, and most of the market rigging is occurring on the COMEX, where, as silver expert Ted Butler says, "eight or less traders" pretty well run both the gold and silver price show.However, in the last year, the "money trusts," as William Jennings Bryan called them, are starting to have a few problems, the biggest one is that world-wide physical demand for both gold and silver is eating them alive. Adding to their woes have been national and international reports from highly credible individuals and groups outlining how the Western banking system in general and the United States financial system in particular have been intervening against the free-market prices of gold and silver.For gold, they've been doing it off and on since the 1960s. Their latest efforts have been going on covertly for more than fifteen years; and, for silver, far longer than that. It can be flatly stated that no one knows what the free-market price of either silver or gold would be if they were allowed to seek a price that was unhindered by (quoting GATA consultant Reg Howe) "malignant government intervention."However the reasons why the central banks and bullion banks are doing it should be obvious to anyone with more than a room-temperature I.Q. in degrees Fahrenheit. One reason that this market manipulation has gone on as long as it has, is, first, the influence of the World Gold Council and Gold Fields Mineral Services. As GATA Chairman Bill Murphy...over at LeMetropoleCafe...and others have stated, these two organizations are controlled by "The Empire"-- my name for today's powers that be.The second reason is the gold and silver mining industry itself. Most top gold and silver mining companies in the United States are either directly or indirectly under the influence of The Empire, most of th[...]



A Monthly Review Of Gold From Frank Veneroso

Mon, 07 Mar 2005 08:00:00 +0000

Summary: • Gold and Gold Equities: The near term is uncertain. The near-term path of the dollar is unclear. The world is probably decelerating towards disinflation. This could be a negative. The ability of the gold futures market to absorb large spec liquidation on a small price break is long term bullish. Perhaps, the official sector is conducting an orderly retreat. As opposed to our very positive supply/demand framework, the “official” gold supply/demand framework is not especially constructive. It now diverges so much from historical trends and abundant anecdotal information, that it has become discredited. First, The Big Picture... We stated in our fourth quarter letter to certificate holders of the ABN Amro gold certificate: “Recent developments now make us even more bullish on gold longer term. We also believe that, owing to the recent correction, the shorter-term risks have abated. (See below.) “Yet, on balance we fear the shorter-term downturn in the gold price since late last year may remain in force. In addition, we are concerned that, late last year, the global economy outside the U.S. (Japan, Europe, even China) began to slow, and that this may be the beginning of a major cyclical shift from global reflation to disinflation. “The global bond market seems to sense this. But other markets have not. Such a shift could prove costly to reflation plays. Gold and gold equities would probably not go unscathed. Lastly, owing to a severe fall off in interest in the junior golds, this sub sector faces special risks should the overall gold sector fall further.” That said, let us go on to the longer-term bullish case. The Intermediate- To Longer-Term Looks More Bullish From our quarterly letter: “We regard the recent reduction in the net spec long position on Comex to below prior reaction lows (38,000 versus 50,000) on a fairly modest (10%) break in the gold price as very bullish” Why? At this point it is appropriate to bring up our basic supply/demand framework for the gold market, which was laid out in our 1998 Gold Book and in several papers that we have written in the intervening years. We believe that fabricated demand and bar hoarding in the gold market has exceeded mine and scrap supply by a much larger margin than is reflected in the Gold Fields Mineral Services official supply/demand balances. Second, the size of the net spec long positions in the futures and forwards markets in recent years has been larger than at any point in the past — including the 1970s. Remember, trading volumes in the OTC gold market are more than 10 times what we see on Comex, and total derivative positions may be comparably larger than Comex positions. (See our Gold Book). Speculative purchases of this magnitude have no obvious offset. In the past, producers offset such purchases with forward sales; but in recent years, they have become buyers through reductions in their forward sales positions. There is only one possible explanation for why purchases of thousands of tonnes of gold in the futures and forwards markets does not blow the price of gold sky high: The official sector must step in on gold price rallies as an offsetting forward seller. It is for these above reasons that we have long contended that the gol[...]



An Exchange with Dennis Gartman on the Sprott Report

Tue, 14 Sep 2004 07:00:00 +0000

On Gold Bugs and Net Shorts By Dennis Gartman The Gartman Letter Tuesday, September 14, 2004 www.TheGartmanLetter.com The gold bugs are a strange lot, really. They see conspiracies everywhere and at all times. If the government is not conspiring against the public, then business is conspiring against the government, or business AND the government are conspiring against the public, and, if not that, then all three are conspiring against ghostly, foreign forces that are set to wage some sort of economic war against the country. We see this as a wondrous waste of time and money as they try to prove the merits of gold ownership based upon conspiracies, far and near, visible and invisible. However, as long as they do no damage and stay within their small sphere of influence, they have the absolute right to make their case and move on. That having been said, we are always concerned when we write about the gold bugs because in the past we have gotten some of the most disconcerting threats from them, including phone calls at odd hours; e-mails threatening harm; name calling, etc. We trust today's article will draw nothing more. Having been taken to task rather often by the gold bugs, we thought we'd take the time to read a report put out by Sprott Asset Management of Toronto that has been much in the news amongst the gold bugs of late for having "proved" the case that GATA puts forth. GATA, as our clients should know, argues that there is a vast conspiracy amongst the gold bullion dealers, the Wall Street trading houses, and the various governments of the West to keep gold prices down. The Sprott paper is rather weighty, and we decided to take it with us on our long flight to Shanghai recently in order to read it cover to cover. We did, and we took notes at length. We disagree with this report in its entirety, although we do admire the sheer volume of the work done. Under normal circumstances we would call this yeoman's work and applaud the endeavor, but this is not a normal circumstance. We could, time permitting, cite passage after passage with which we disagree. However, our major point of contention is simply this: It is odd that the major analysts supporting GATA's thesis are really rather few, and they include Mr. Frank Veneroso, Mr. Reg Howe, Mr. James Turk, and Mr. Bill Murphy, GATA's founder and guiding spirit. These are fine, educated, deeply intelligent men who have done stunning amounts of work on the details of the gold market. We are especially fond of the work done by Mr. Veneroso and we do indeed rather like Mr. Murphy, for he is a wonderful conversationalist and Renaissance man. What we find odd is that Sprott, having taken GATA's position that there is indeed a conspiracy among the leading central banks and brokerage and trading firms, relies almost solely upon these other analysts who hold to the same thesis to prove the thesis. Page after page, footnote after footnote, textual citing after textual citing is done ontologically; each cites the other; each uses the other's facts and figures; each believes the other is right and each "proves" each other's proof by the proofs of the other. We had hoped to see independence amongst the citations used in Sprott's paper, for in using independent sources we might well have been willing to listen and to accept their analysis. However, in 68 pages of text, Mr. Vener[...]



Russia's Central Bank Takes Note of GATA and Gold Price Manipulation

Fri, 04 Jun 2004 07:00:00 +0000

The London Bullion Market AssociationBullion Market ForumBaltschug Kempinsky Hotel, MoscowJune 3-4, 2004Perspectives on Gold: Central Bank ViewpointBy Oleg V. Mozhaiskov, Deputy ChairmanBank of Russia English translation provided to GATA by the Bank of Russia I would like to thank the conference organisers for this opportunity to share my thoughts on such a complex, even mythical subject as gold and the prospects for the near and medium-term. I assume that the request was made for one simple reason: that I, as a senior executive of the Bank of Russia, should know more than other ordinary mortals. In general, this logic is flawed, although there is sense to it: It is necessary to understand the Central Bank perspective regarding this precious metal, particularly given that it does have approximately 500 tonnes of the metal in its vaults.It is from this perspective, that of central bank, that I intend to base my presentation. I hope you can understand that it is quite a specific topic, management of gold reserves. This is distinct from the views adopted by gold prospectors, industrialists, investors, speculators, and ordinary purchasers of jewellery. For the central bank, the gold stock is the international payment reserve for the whole country -- for the state authorities, private companies and corporations, as well as individual citizens. Like any reserve, it needs to be conserved, in terms of both actual physical form and its value. To a lesser extent, we need to be concerned about its liquidity, or more precisely, market price developments. The central bank’s duties in managing gold reserves may therefore not seem particularly onerous to a commercial trader, who has to close dozens of transactions daily to achieve results by the end of the day.In this there is a grain of truth. The central bank’s specialists do not have to follow real-time price movements every day and every minute, or react instantaneously to every little twist and turn in the market. We are concerned with other, less immediate problems regarding gold. In a figurative sense the central bank’s attitude can be compared with that to a giraffe. I have in mind an image of an animal that suggests certain ambiguity, at least in the Russian language. On the one hand, when Russians say that someone is reacting like a giraffe, they are highlighting that person’s slow reaction. It even suggests a degree of slow-wittedness. On the other hand, the evident magnificence of the animal commands respect. "The giraffe is tall, and he sees all" -- the words of the Russian bard Vladimir Vysotskii are well known throughout Russia.With this allegory in mind, I would like to mention the issues concerning gold which fall within the "giraffe category", or more formally, present concerns of a central bank. These are several: the volume of actual precious metal stock, both in absolute and relative terms (essentially, the optimum component of the metal in total monetary reserves); methods of controlling the stock; ensuring both security and availability for liquidity purposes and at the same time optimising income-earning potential. All these issues reflect very practical concerns. It may seem strange but all bear direct relation to a problem that is often considered purely theoretical: What is gold currently, and what will i[...]


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How Do We Know that Central Banks Rig the Gold Market? They Told Us. - by Chris Powell

Sun, 30 May 2004 07:00:00 +0000

By Chris Powell, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. May 30, 2004 How does the Gold Anti-Trust Action Committee know that central banks are working with bullion banks and other financial houses to suppress the price of gold? We know because of the painstaking research of our consultants -- Reg Howe, James Turk, Andrew Hepburn, Mike Bolser, and Bob Landis. They have gone through the official reports and the footnotes of the Bank for International Settlements, the International Monetary Fund, the Federal Reserve, the U.S. Treasury Department, central banks and government agencies, mining companies, and financial houses, and have amassed enormous evidence. But that's the complicated stuff, and we also know for a very simple reason. We know that the central banks and their intermediaries are working together to suppress the price of gold because time and again they have TOLD us so. After all, what was the Washington Agreement of September 1999 if not a proclamation that the 15 participating central banks were colluding to regulate the gold price? Of course in the Washington Agreement the central banks affected to be SUPPORTING the gold price; they pledged to limit their gold sales to 400 tonnes per year for five years -- lest, they said, the gold market be flooded with metal and the gold price collapse, taking with it the economies of gold-producing countries. Of course GATA has put a different construction on the Washington Agreement. We consider it the device by which central bank gold LOANS are written off as SALES at discounted prices, rather than be called back and cause a short squeeze in gold. That is, far from supporting the gold price, the Washington Agreement was how the central banks kept gold from rising and prevented the bankruptcy of the financial houses that, at the invitation of the central banks, eagerly joined the gold carry trade of the 1990s. In that carry trade gold was, in effect, loaned by the central banks for next to nothing and sold by the financial houses to depress its price, strengthen the U.S. dollar, reduce interest rates, and inflate the price of paper assets, which were purchased with the proceeds of the gold sales. But no matter how you want to construe it, the Washington Agreement was admittedly a co-ordinated action by the central banks to regulate the gold price. That central banks get together to discuss and unify their policy toward gold is a matter of ordinary public record. Anyone who really believes that this collusion is always benign, in the public interest, and without ulterior motives shouldn't go even grocery shopping alone. The Washington Agreement wasn't the first coordinated intervention of the central banks in regard to gold. It was at least the second and probably much more belated than that. How do we know? Because Federal Reserve Chairman Alan Greenspan told us. In fact, he told Congress too. As usual, no one in the financial press seems to have been paying attention. But on July 24, 1998, Greenspan told the House Banking Committee: "Central banks stand ready to lease gold in increasing quantities should the price rise." He repeated that statement a few days later to the Senate Agriculture Committee: http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm Of course, like the central banks[...]


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8 Reasons to Ignore the New Central Bank Gold Agreement - by James Turk

Mon, 15 Mar 2004 08:00:00 +0000

By James Turk Copyright 2004 by The Freemarket Gold & Money Report All rights reserved Letter No. 341 March 15, 2004 On March 8th the European Central Bank and 14 of Europe’s national central banks made the following announcement: http://www.ecb.int/press/04/pr040308.htm “In the interest of clarifying their intentions with respect to their gold holdings, the undersigned institutions make the following statement: 1. Gold will remain an important element of global monetary reserves. 2. The gold sales already decided and to be decided by the undersigned institutions will be achieved through a concerted programme of sales over a period of five years, starting on 27 September 2004, just after the end of the previous agreement. Annual sales will not exceed 500 tons and total sales over this period will not exceed 2,500 tons. 3. Over this period, the signatories to this agreement have agreed that the total amount of their gold leasings and the total amount of their use of gold futures and options will not exceed the amounts prevailing at the date of the signature of the previous agreement. 4. This agreement will be reviewed after five years.” This statement contains only 147 words, and it appears simple and straightforward enough on the surface. The central banks even tell us the reason for their statement - to ‘clarify their intentions’. Wow, aren’t they swell guys. But don’t be deceived. Central banks deserve our scorn, and for that matter, our enmity too for the interventionist, statist policies that they inflict upon us in order to sustain the fiat currency that they create, which the politicians then debase to our detriment. To truly understand the significance of any central bank pronouncement, one has to read between the lines. Here’s how I read their statement: (1) Central banks only tell you what they want you to hear. If this premise weren’t true, they would not keep the public in the dark by holding meetings in secret and then redacting the minutes. They would not report on their balance sheets ‘gold in the vault’ and ‘gold on loan’ as one line item, in obvious disregard for generally accepted accounting principles. So when central banks say that they want to ‘clarify their intentions’, it is prudent to be skeptical - suspicious even - because that is not the way they operate. They operate in secret, and any pretense of openness is just a sham. (2) As a corollary to #1 above, central banks are transparent only when it serves their interest, and are transparent only to the extent that shedding some light on a matter in fact helps obfuscate their true intent. In other words, they tell half-truths, and then let people draw their own - usually wrong - conclusions from the central bank’s statement. For example, although the Bank of England signed the first central bank gold agreement in September 1999, they did not sign this one because according to a statement released after the new agreement was announced, “Britain did not INTEND to sell any gold during the period covered by the deal”[emphasis added]. Sounds plausible enough at first blush, but hey. Wasn’t the purpose of this new agreement to ‘clarify’ central bank intentions? So if the BoE does not intend to sell any gold during this period a[...]