View Full Version : US dishoarding 65 Metric tons of gold in 2009?
From the US MINT,
"The mintage of the new coin will be unlimited for one year. Among the production specifications approved by Secretary Paulson are the new coin’s business-strike finish and a diameter of 27 millimeters, making the new collectible coin about 50 percent thicker than other United States Mint one-ounce gold coins."
Does this mean the US is back on the gold standard in 2009?
http://www.coinlink.com/News/whats-new/united-states-mint-unveils-modern-ultra-high-relief-double-eagle-gold-coin/
file:///C:/DOCUME%7E1/Owner/LOCALS%7E1/Temp/moz-screenshot.jpg
From the US MINT,
"The mintage of the new coin will be unlimited for one year. Among the production specifications approved by Secretary Paulson are the new coin’s business-strike finish and a diameter of 27 millimeters, making the new collectible coin about 50 percent thicker than other United States Mint one-ounce gold coins."
Does this mean the US is back on the gold standard in 2009?
http://www.coinlink.com/News/whats-new/united-states-mint-unveils-modern-ultra-high-relief-double-eagle-gold-coin/
How much they had last year ?
Maybe they are trying to crash the price of gold next year in order to compromise any potential for gold to become a competition for treasuries in international transactions.
The Treasury cannot print gold, but they can print a gazzilion of treasuries.
As long as you have an exclusive and endless supply of power money you can play as much as you want with inflation without any fear of inducing a deflationary crash.
It makes sense. Definitely Ben is not stupid ;)
huntercav
09-17-08, 06:41 AM
I don't think this release has anything to do with dis hoarding of any gold they held in reserves. The U.S. Mint is something like a gift shop for numismatists. Think about the State Quarter Program. Do we really need those extra 100's of millions of quarters in the system? They sell like hot cakes though and have reignited interest in the hobby of coin collecting in many youngsters.
This new coin is a replica of what is widely regarded as the most beautiful coin ever produced by the U.S. and is being met with some excitement by the collecting community. It will sell well when it hits the market and can be pointed to by the burecrats at the mint as another succesful series they have introduced.
How much they had last year ?
Maybe they are trying to crash the price of gold next year in order to compromise any potential for gold to become a competition for treasuries in international transactions.
The Treasury cannot print gold, but they can print a gazzilion of treasuries.
As long as you have an exclusive and endless supply of power money you can play as much as you want with inflation without any fear of inducing a deflationary crash.
It makes sense. Definitely Ben is not stupid ;)
If enough SHTF, and the people of the world become really fearful, nothing can crash the gold market, IMHO.
phirang
09-17-08, 10:16 AM
i know for a fact that cb's and gov's have been selling into the market (some, not all: can't get more clarity beyond that).
Spartacus
09-17-08, 04:43 PM
Does this mean the US is back on the gold standard in 2009?
Heh ... <big><b><i>NO</i></b></big>
If gold money were the aim, the Gov would need to GET GOLD to use it as the basis of a sound money system, NOT get rid of it hand over fist.
What could be happening, if I really apply my cynicism, is that the US GOV is selling Gold now to raise cash, will later SEIZE Gold, then revalue it (up or down doesn't really matter - whatever <big><b><i>"they"</i></b></big> perceive is to their benefit).
Maybe someone read about the last confiscation and thought "I can be an even bigger bastard - instead of seize and revalue, I can make money, then seize, then revalue".
Nervous Drake
09-17-08, 05:06 PM
For Henry Paulson and Ben Bernanke to win this game, they have to have 100 percent belief in the monetary system they are creating. That belief might include the idea that gold is irrelevant in this new scheme of theirs that is being pushed into overdrive.
Lets face it, a new monetary system is in the works, and it is based on a feudalistic model, where the government is the "lord," and the people are the "peasants." This isn't necessarily a bad thing considering where technology is taking us, but it puts the control in government's hands, and not the people's.
This site focuses on the economic side of this, but there is evidence everywhere pointing to this model. Why are people so disapproving of Bush? They can feel the push on their daily lives that, even if subtle, is changing the way we live.
For Henry Paulson and Ben Bernanke to win this game, they have to have 100 percent belief in the monetary system they are creating. That belief might include the idea that gold is irrelevant in this new scheme of theirs that is being pushed into overdrive.
Lets face it, a new monetary system is in the works, and it is based on a feudalistic model, where the government is the "lord," and the people are the "peasants." This isn't necessarily a bad thing considering where technology is taking us, but it puts the control in government's hands, and not the people's.
This site focuses on the economic side of this, but there is evidence everywhere pointing to this model. Why are people so disapproving of Bush? They can feel the push on their daily lives that, even if subtle, is changing the way we live.
I believe that you are absolutely correct, save a minor detail: it is absolutely irrelevant who is in the White House. This evolution did not start with GWB and it will not stop with Obama.
It can be stopped only if the vast majority of people understands what is really happening .... and let's be realists ... that ain't gonna happen soon.
nathanhulick
09-17-08, 06:53 PM
This is old news. Of course they say that the mint will produce an "unlimited" amount, but that just means that they do not have a set number in advance lined up.
If people are buying the coins, they will keep making them, and if not, then they won't.
As another poster said, it seems like this is just a way to make money selling coins, like the state quarters or presidential dollars.
Lets face it, a new monetary system is in the works, and it is based on a feudalistic model, where the government is the "lord," and the people are the "peasants." This isn't necessarily a bad thing
.
This is every where and in every way a bad thing, what you smoking dude?
Total CB gold reserves are 29,813 tons. The US holds 8,133 tons.
CBs since 2001 have sold $1,350 or around 11%. The US sold none.
If the US sells 65 tons that's 0.8% of its holdings.
Lukester
09-18-08, 01:49 AM
Total CB gold reserves are 29,813 tons. The US holds 8,133 tons. CBs since 2001 have sold $1,350 or around 11%. The US sold none. If the US sells 65 tons that's 0.8% of its holdings.
Fred - You probably have a lot on your plate, but did you have a chance to skim through what I posted about Frank Veneroso's estimations of "leasing-adjusted" real gold reserves at the world's central banks? The CB's don't seem too enthusiastic about audits so the data reconstructions are necessarily circumstantial, but Veneroso's methodology seemed quite businesslike and conservative in there. You are citing stated bank reserve numbers without including any iTulip remark qualifying that government issued data. Given that these reserves seem only to get audited once every few decades, perhaps a bit of skepticism regarding the reserve numbers and their potential leasing drawdown would not be inappropriate.
iTulip may have been too busy, or too skeptical to read much over at GATA, but these folks are industrious and not exactly stupid. Some of us would argue that people of Veneroso's calibre require more than a perfunctory look at what they put forward. They are digging around hard for data to support their arguments and while as noted a lot of the material regarding CB's bullion reserves is circumstantial, they don't come up empty handed either.
Bottom line - Anyone who's done a little reading around about the long established practice of metals leasing has more than a passing idea that the central bank "reserves" are in all likelihood "something less than full and forthright" numbers. Veneroso's estimations build a hypothesis from six different data points, then halve his own numbers to be super conservative in estimations. What he's coming up with are strong suggestions that as much as ten to fifteen thousand tons has been leased incrementally over the decades. That would be about half of those stated reserves you refer to, which once leased out, are of course practically unrecoverable in bullion kind if or when the bullion markets ever tighten.
They have been engaged in that for 30+ years, while progressively more leased amounts are continually maintained "on the books" as reserves. Veneroso was not tracking any gold flows incoming to the CB's in this process - all the flow was out, in the form of leasing. If this is a cumulative process, one could see how it's later stages become quite "interesting". This is on a tangent to your point of course. It's understood that the coin sales represent a tiny irrelevant fraction of central bank gold sales. Indeed, according to Veneroso, the gold sales are the decoy, and the real story is in the long precedent of leasing. iTulip is supposed to be iconoclastic everywhere. Opening, peering, peeling back the BS, debunking and shredding conventional truths. But on the central bank reserves you guys are sounding fairly conventional.
Fred - You probably have a lot on your plate, but did you have a chance to skim through what I posted about Frank Veneroso's estimations of "leasing-adjusted" real gold reserves at the world's central banks? The CB's don't seem too enthusiastic about audits so the data reconstructions are necessarily circumstantial, but Veneroso's methodology seemed quite businesslike and conservative in there. You are citing stated bank reserve numbers without including any iTulip remark qualifying that government issued data. Given that these reserves seem only to get audited once every few decades, perhaps a bit of skepticism regarding the reserve numbers and their potential leasing drawdown would not be inappropriate.
iTulip may have been too busy, or too skeptical to read much over at GATA, but these folks are industrious and not exactly stupid. Some of us would argue that people of Veneroso's calibre require more than a perfunctory look at what they put forward. They are digging around hard for data to support their arguments and while as noted a lot of the material regarding CB's bullion reserves is circumstantial, they don't come up empty handed either.
Bottom line - Anyone who's done a little reading around about the long established practice of metals leasing has more than a passing idea that the central bank "reserves" are in all likelihood "something less than full and forthright" numbers. Veneroso's estimations build a hypothesis from six different data points, then halve his own numbers to be super conservative in estimations. What he's coming up with are strong suggestions that as much as ten to fifteen thousand tons has been leased incrementally over the decades. That would be about half of those stated reserves you refer to, which once leased out, are of course practically unrecoverable in bullion kind if or when the bullion markets ever tighten.
They have been engaged in that for 30+ years, while progressively more leased amounts are continually maintained "on the books" as reserves. Veneroso was not tracking any gold flows incoming to the CB's in this process - all the flow was out, in the form of leasing. If this is a cumulative process, one could see how it's later stages become quite "interesting". This is on a tangent to your point of course. It's understood that the coin sales represent a tiny irrelevant fraction of central bank gold sales. Indeed, according to Veneroso, the gold sales are the decoy, and the real story is in the long precedent of leasing. iTulip is supposed to be iconoclastic everywhere. Opening, peering, peeling back the BS, debunking and shredding conventional truths. But on the central bank reserves you guys are sounding fairly conventional.
The data are from World Gold Council (http://www.gold.org/). Recommend you go to the site and download the data. It includes data that is adjusted for leasing , etc.
Lukester
09-18-08, 03:43 PM
The data are from World Gold Council (http://www.gold.org/). Recommend you go to the site and download the data. It includes data that is adjusted for leasing , etc.
Fred - Recommend you do some more wide ranging reading of your own before issuing summary dismissals to contributors here who suggest your vetting of your sources is as thorough as it needs to be. If you hold up the WORLD GOLD COUNCIL as your "reliable source" you are standing squarely out on a limb. The following pile of unwholesome data has been regularly put forward by GATA - precisely TO the World Gold Council, with a request that they at least discuss it's collection of various points.
Be aware then, that the World Gold Council has repeatedly and insistently refused to discuss any of the points raised below. This is a direct equivalent to what EJ has on occasion pointed out as Mish's great flaw - that when pressed with critical data pressuring his adopted positions, he retreats into the "I don't have time for this" cop-out. This is precisely the cop-out which the World Gold Council has adopted for a half dozen years now, and the singular reluctance to discuss even the smallest detail of what is below smells strongly enough that it can be smelt by most astute observers far and wide. iTulip seems curiously behind the curve on the "viability" of the World Gold Council as a final arbiter on this topic.
The World Gold Council's extraordinarily stubborn refusal to discuss ANY of the points raised below represents a red flag large enough to rouse even the most somnolent observer. (not iTulip apparently, who places implicit trust in the Gold Council's pronouncements).
And another thing - for the first year I was posting here I insistently put arguments before you that you were not looking carefully enough at the issue of the Petroleum price run-up, as iTulip was determinedly framing this as entirely a currency based phenomenon. It was only after copious prodding that iTulip roused itself to take a closer look at that topic, at which point, you promptly adopted it as your own, with the word "Cheap" thrown in to create an "iTulip version". In the meantime, I was treated to much the same supercilious dismissal you employ here on the murky aspects of gold leasing. I note that the sum result of my putting it squarely on your plate for examination was that ultimately you did examine it, and found it overturned your previous conceptions on that matter.
Your dismissive citing of the World Gold Council as the "definitive source" without introducing the smallest qualifier as to their impartiality and forthrightness to answer all questions, tells me all I need to know about how up to speed the editors here are on the topic and extent of gold leasing.
___________________
Gold Price Manipulation - by Sid Reynolds
<!-- begin content -->Submitted by Administrator on Thu, 2003-12-18 08:00. Section: Essays (http://www.gata.org/taxonomy/term/4) In order to explain the Why's and How's of the Gold Price Manipulation scheme (and why it is illegal and unfair), 6 aspects need to be discussed - namely motive, means, proof, opportunity, track record and impact.
1. MOTIVE:
US Government: To artificially keep interest rates down by deceiving the bond markets about inflation, and thus the gold price. In short, lower gold price = lower inflation = higher stock market = higher reelection chances.
US Government: To artificially strengthen the US dollar relative to other currencies. Clinton's "Strong Dollar Policy" was suppression of gold price. In short, lower gold price = higher US dollar = higher stock market.
Some Bullion Banks: To provide cheap source of capital to earn huge income, providing gold price is kept low.
Refer: http://groups.yahoo.com/group/gata/message/983 http://192.168.0.104/~trevor/gata.org/www.gata.org/congress.pdf(page 6) 2. MEANS:
Background: The gold price suppression scheme was actually put down on paper, in public, by Harvard Professor Lawrence Summers, before becoming Treasury Secretary under Clinton. He wrote of the inverse relationship between the gold price and interest rates, and concluded that government could keep interest rates low by suppressing the gold price. Refer: www.gata.org/gibson.pdf (http://192.168.0.104/~trevor/gata.org/www.gata.org/gibson.pdf)
Mechanisms: In 1999, the "Washington Agreement" was signed which severely reduced capacity of Central Banks to sell gold, so alternative methods had to be found to suppress the gold price. The 2 mechanisms are:
"Leasing" of gold by Central Banks (CBs). Leasing takes 3 forms:
-Direct leasing: Where CBs lease gold to Bullion Banks (BBs) at ~1%pa, and the BBs then dump this gold on the market and then invest proceeds in bonds at ~5% - no problem unless CB's want their gold back! This is far more secretive than CB selling gold directly, because any sale appears on their books, whereas IMF has told CBs to disguise leased gold among total gold reserves and report it still as an asset (for more refer section 3, Proof #11). This problem with this scam is that it requires constant supply of physical gold held by CBs (which is running out), to offset the bullish gold fundamentals, including annual deficit (currently demand minus supply = 1400+tonnes pa!). Gold leasing is bizarre in that it is like a landlord leasing a flat, and then the tenant sells the flat, and the landlord not registering the sale at his next tax return - bizarre but legal with gold.
[NB: When will the cartel run out of physical? As much as 3 years according to analyst Frank Veneroso, but in practice much sooner due to outstanding gold fundamentals... ie declining supply, record demand, weakening $US, negative real interest rates, covering short positions, bubbles in equities & real estate]
-Swaps: Similar to gold loans, except 2 CBs actually "swap" gold with each other (eg US and Germany), then lease out gold to BBs. This is a sneakier way to lease gold, because US Fed can say they don't lease any of their gold, which is true because they actually lease Germany's gold while Germany leases out the US gold!
-Hedging or ("Forward Sales"): where a producer pre-sells un-mined gold at a fixed price to lock in profits in advance. Since the buyer wants actually physical, an equal amount of gold is "leased" from a CB and sold into the spot market by the gold producer (or "hedger"), suppressing the gold price. The hedger earns cash, but often forward sells much more gold than what they have in reserves - ie trouble!
Massive sales of gold derivatives by BBs (eg JPM, Goldman Sachs, Morgan Stanley, Deutsche) backed by government. In theory, buyers of futures contracts can demand delivery of physical gold. But in practice, physical is not required because the powerful USA doesn't want to self-destruct ie USA usually insists on cash settlement instead of delivery of dwindling physical. The more gold is demanded, the more $ they print (from their infamous printing presses that also support the Dow). Futures' sales trick people into thinking gold price is falling. However, this will either end in "default" (http://192.168.0.104/~trevor/gata.org/www.gold-eagle.com/editorials_02/hommel052902.html), or merely slow down the speed that gold rises. Why? 1) Gold is in a major bull market; 2) leasing scam will soon run out of physical; 3) little physical is needed to push down price, but keeping it there requires far more gold.
NB: For years, the daily selling patterns of these BBs are not consistent with normal profit maximisation ie gold price usually rises in London's physical market, then drops in New York's paper market. The only explanation is to suppress the price, regardless of losses incurred. This is corporate suicide, unless backed by government.
For more on J P Morgan derivatives, refer: http://192.168.0.104/~trevor/gata.org/www.gold-eagle.com/editorials_02/chapmand061302.html
For more on secret scam with BBs & US Government, refer: http://192.168.0.104/~trevor/gata.org/www.fgmr.com/manipulate.htm (search "just") Coordinator: "Exchange Stabilization Fund" (ESF) is a secret branch of US Treasury, and is not accountable to US Congress or courts. ESF reports only to US President and Treasury Secretary. Refer Proof #1, #2, #3
Co-conspirators:
CBs eg England, Germany: Refer Proof #4, #5 & #11
BBs eg J P Morgan: Refer Proof #6
Word Gold Council: Refer Proof #7
IMF: Refer Proof #11
NB: Certain Bullion Banks such as J P Morgan in effect trade for ESF and US Fed, and as such are privy to the confidential direction and intent of the US Fed. For more, refer: http://192.168.0.104/~trevor/gata.org/www.fgmr.com/manipulate.htm (search "proxy")
3. PROOF:
#1. US Supreme Court "Under the Sherman Antitrust Act, a combination formed for the purpose and with the effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity in interstate or foreign commerce is illegal per se". Put simply, while gold leasing and futures is legal, it is illegal to do so for manipulation purposes.
Refer http://192.168.0.104/~trevor/gata.org/www.gata.org/howe_complaint.html(Sections 1, 80). So ESF illegally manipulates gold price.
#2. The US Treasury at its website denies that the ESF has conducted a gold swap in the last 10 years. In addition, a court filing on behalf of Secretary O'Neill specifically denied that the ESF had conducted gold swaps after 1978: Refer http://192.168.0.104/~trevor/gata.org/www.zealllc.com/files/HvBD0013.pdf (page 3, footnote 2.)
This is contradicted during a confidential US Fed meeting, where there was admission of dealing in gold swaps.
Refer: http://groups.yahoo.com/group/gata/message/733 (p69 of meeting transcript, or p72 of pdf file)
For more on admission of existence of ESF, refer http://192.168.0.104/~trevor/gata.org/www.treas.gov/offices/international-affairs/esf/index.html
#3. Alan Greenspan, at a testimonial at a 1998 House Banking Committee hearing: "Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise."
Refer: http://192.168.0.104/~trevor/gata.org/www.gata.org/howe_complaint.html (Section 38)
#4: In front of 3 witnesses, Bank of England Governor Eddie George spoke to Nicholas J. Morrell (CEO of Lonmin Plc) after the Washington Agreement gold price explosion in Sept/Oct 1999: George said "We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K." Refer: http://192.168.0.104/~trevor/gata.org/www.gata.org/bofi.html
#5. The infamous Bank of England gold sales, where the gold went to the LOWEST bidder, not the highest bidder: ".... Applicants whose bids are accepted will be allotted gold at the lowest accepted price."
Refer http://192.168.0.104/~trevor/gata.org/www.bankofengland.co.uk/markets/forex/goldinfmem.pdf(page 9, "4. Acceptance of Bids...")
Extraordinary! But wait, there is more:
advertising the sales, which noone ever does (unless they want less money for their gold)
drawing the sales out over a period, rather than just one single auction
Refer: http://192.168.0.104/~trevor/gata.org/www.gold-eagle.com/gold_digest_01/hamilton031601.html #6. After years of denials, Barrick Gold admit that they and their banker J P Morgan are involved in manipulation of the gold price, and/or they are agents of central banks. A US court judge has thrown out their dismissal appeals.
http://groups.yahoo.com/group/gata/message/1538 http://groups.yahoo.com/group/gata/message/1653
Barrick then announce cessation of hedging, after extolling its virtues 1 day earlier. Many say it's due to Barrick going $16m more in debt for every $1 rise in gold price. http://groups.yahoo.com/group/gata/message/1768
#7: Why won't World Gold Council (WGC) answer letters/emails worldwide regarding Manipulation? The 2 biggest contributing gold producers to WGC are Barrick Gold and AngloGold. These 2 companies are disliked in the gold industry, because they are the biggest hedgers, and therefore provide much gold to the gold price manipulation scam. For Barrick, refer Proof #6. For AngloGold, why is Frank Arisman on the board of AngloGold when he is also an officer of JP Morgan? There has been an explosive growth in gold derivatives on Morgan's books in recent years, which has driven the gold price down. Clearly there is a huge conflict of interest there.
#8: Royal Bank of Canada admits there is gold price manipulation, then oddly 2 days later said it was a secret:
http://groups.yahoo.com/group/gata/message/1149http://groups.yahoo.com/group/gata/message/1153
#9. One heavy hedger Sons of Gwalia, Australia, has major financial problems. Refer:
http://groups.yahoo.com/group/gata/message/1439http://groups.yahoo.com/group/gata/message/1225
#10: For more proof in somewhat more detail refer: http://groups.yahoo.com/group/gata/message/955
http://groups.yahoo.com/group/gata/message/955 http://www.gata.org/essays.html
#11. IMF has directed CB's not to disclose how gold is leased/swapped, only total reserves (proof below).
IMF have denied this, "This is not correct: the IMF in fact recommends that swapped gold be excluded from reserve assets." Refer http://www.gata.org/bofi.html (search "correct").
However, numerous member countries/entities have proven the IMF has lied ie
Philippines: "Beginning January 2000, in compliance with the requirements of the IMF's reserves ..., gold under the swap arrangement remains to be part of reserves and a liability is deemed incurred corresponding to the proceeds of the swap." Refer http://192.168.0.104/~trevor/gata.org/www.bsp.gov.ph/statistics/sefi/fx-int.htm (search "swaps")
The Central Banks of Portugal, Finland & Italy confirmed in writing that swapped gold remains a reserve asset under pertinent IMF regulations. The staffs of the central banks of Canada, Ecuador, Finland, Holland, and Portugal have also confirmed this. Refer http://192.168.0.104/~trevor/gata.org/www.goldisfreedom.com/IMFgold.htm, (search "Finland")
European Central Bank: "Following the recommendations set out in the IMF operational guidelines of ... developed in 1999, all reversible gold transactions, including gold swaps, are recorded as collateralised loans in balance of payments and international investment position statistics. This treatment implies that the gold account would remain unchanged on the balance sheet." http://solutions.synearth.net/2003/02/21
The German Bundesbank (the secret "swapper" of gold with US) lists "Gold and Gold Receivables (loans)" as a one line item on its balance sheet. This approach is in direct conflict with Generally Accepted Accounting Principles (GAAP), and thus German banking law. So, from their published financial statements there is no way to determine how much gold Germany holds in its vaults. The refusal of the Bundesbank to provide a breakdown between physical gold and gold receivables belies any notion of market transparency.
Clearly deceptive accounting, countenanced by the IMF has allowed official sector gold to hit the market without a corresponding drawdown on the balance sheets of central banks. This has made it impossible for analysts to ascertain the exact size of official sector gold loans, swaps and deposits. The unwillingness of central banks to provide even a minimum level of transparency suggests that total gold receivables are substantially larger than the accepted industry figure of ~5,000 tonnes. Refer http://groups.yahoo.com/group/gata/message/903 4. OPPORTUNITY:
Futures: Daily, ESF tries to drop gold price with as little metal as possible, ie during paper-dominated New York trading hours, after physical-dominated London trading hours. http://192.168.0.104/~trevor/gata.org/www.fgmr.com/manipulate.htm (search "London")
Leasing: This is ESF's Achilles' Heel because physical gold is continually required and it is running out quickly. When it does run out, some analysts say it will also trigger the end of the Futures scam eg "The prices for the futures will wildly escalate in rapid fashion until bankruptcy (or bailout by government) of all who are short."
5. TRACK RECORD:
The US government has a poor track record when it comes to honesty and transparency. More recently:
Lies about Iraq's "Weapons of Mass Destruction": http://foi.missouri.edu/polinfoprop/wolfowitz2.html
Private Jessica Lynch says Pentagon used her for propaganda http://timesargus.nybor.com/Story/74284.html
The "Lewinsky Lies"
Ex-Treasury Secretary Paul O'Neill: "It's all about deluding the people... I didn't adjust (in Washington) and I'm not going to start now." Refer http://192.168.0.104/~trevor/gata.org/www.post-gazette.com/nation/20030112oneilltwonat2p2.asp
George W Bush used the better-looking $6.8 trillion of federal debt on US Fed books, than correct $44 trillion.
Refer: http://192.168.0.104/~trevor/gata.org/www.independent-media.tv/item.cfm?fmedia_id=979&fcategory_desc=Under%20Reported
Ashanti, Enron, Arthur Anderson, J P Morgan etc: eg http://192.168.0.104/~trevor/gata.org/www.securitiesfraudfyi.com/jp_morgan.html
US mainstream financial media (eg CNBC) are perpetually bullish on equities and bearish on gold eg when equities are high they say "Buy! They are going to the moon", but when low they say "Buy! They are cheap".
The US mainstream financial media also refuse to run any stories by GATA, despite vast evidence.
The US economy "added" 126,000 jobs in October 2003, but that included 25,000 grocery workers in California returning to work from a labor action. One of many fudges by US government. Source: Jim Sinclair, 7/11/03
• For more examples, refer http://192.168.0.104/~trevor/gata.org/www.gold-eagle.com/gold_digest_03/taylor110103.html 6. IMPACT:
The devastation of the economies of the developing world, and particularly sub-Sarahan Africa.
With the bond market deceived about inflation, the dollar, and the strength of the US economy, most economic decisions for the last decade have been based on horribly mistaken premises (eg Nasdaq boom/crash).
The gold reserves of US (and other countries) now adorn the wrists and necks of Indian women. The US has to accept their gold is gone, or pay a lot more to get it back, or be bailed out in declining $US.
Since some Bullion Banks are privy to confidential intent of US Fed, they have unfairly earned vast fortunes.
Owners of gold and gold shares have lost a lot of money, at the expense of these Bullion Banks.
• English citizens should be outraged that their gold was blatantly sold for as low as price as possible. By Sid Reynolds, sidr@optusnet.com.au. Feel free to distribute this concise 3-page Word Document to anyone!
Disclaimer: I am not a gold guru. I rely entirely on statements by experts. I have merely pooled them together.
phirang
09-18-08, 03:49 PM
Fred - Recommend you do some more wide ranging reading of your own before issuing summary dismissals to contributors here who suggest your vetting of your sources is as thorough as it needs to be. If you hold up the WORLD GOLD COUNCIL as your "reliable source" you are standing squarely out on a limb. The following pile of unwholesome data has been regularly put forward by GATA - precisely TO the World Gold Council, with a request that they at least discuss it's collection of various points.
Be aware then, that the World Gold Council has repeatedly and insistently refused to discuss any of the points raised below. This is a direct equivalent to what EJ has on occasion pointed out as Mish's great flaw - that when pressed with critical data pressuring his adopted positions, he retreats into the "I don't have time for this" cop-out. This is precisely the cop-out which the World Gold Council has adopted for a half dozen years now, and the singular reluctance to discuss even the smallest detail of what is below smells strongly enough that it can be smelt by most astute observers far and wide. iTulip seems curiously behind the curve on the "viability" of the World Gold Council as a final arbiter on this topic.
The World Gold Council's extraordinarily stubborn refusal to discuss ANY of the points raised below represents a red flag large enough to rouse even the most somnolent observer. (not iTulip apparently, who places implicit trust in the Gold Council's pronouncements).
And another thing - for the first year I was posting here I insistently put arguments before you that you were not looking carefully enough at the issue of the Petroleum price run-up, as iTulip was determinedly framing this as entirely a currency based phenomenon. It was only after copious prodding that iTulip roused itself to take a closer look at that topic, at which point, you promptly adopted it as your own, with the word "Cheap" thrown in to create an "iTulip version". In the meantime, I was treated to much the same supercilious dismissal you employ here on the murky aspects of gold leasing. I note that the sum result of my putting it squarely on your plate for examination was that ultimately you did examine it, and found it overturned your previous conceptions on that matter.
Your dismissive citing of the World Gold Council as the "definitive source" without introducing the smallest qualifier as to their impartiality and forthrightness to answer all questions, tells me all I need to know about how up to speed the editors here are on the topic and extent of gold leasing.
___________________
Gold Price Manipulation - by Sid Reynolds
<!-- begin content -->Submitted by Administrator on Thu, 2003-12-18 08:00. Section: Essays (http://www.gata.org/taxonomy/term/4) In order to explain the Why's and How's of the Gold Price Manipulation scheme (and why it is illegal and unfair), 6 aspects need to be discussed - namely motive, means, proof, opportunity, track record and impact.
1. MOTIVE:
US Government: To artificially keep interest rates down by deceiving the bond markets about inflation, and thus the gold price. In short, lower gold price = lower inflation = higher stock market = higher reelection chances.
US Government: To artificially strengthen the US dollar relative to other currencies. Clinton's "Strong Dollar Policy" was suppression of gold price. In short, lower gold price = higher US dollar = higher stock market.
Some Bullion Banks: To provide cheap source of capital to earn huge income, providing gold price is kept low.
Refer: http://groups.yahoo.com/group/gata/message/983 http://192.168.0.104/~trevor/gata.org/www.gata.org/congress.pdf(page 6) 2. MEANS:
Background: The gold price suppression scheme was actually put down on paper, in public, by Harvard Professor Lawrence Summers, before becoming Treasury Secretary under Clinton. He wrote of the inverse relationship between the gold price and interest rates, and concluded that government could keep interest rates low by suppressing the gold price. Refer: www.gata.org/gibson.pdf (http://192.168.0.104/~trevor/gata.org/www.gata.org/gibson.pdf)
Mechanisms: In 1999, the "Washington Agreement" was signed which severely reduced capacity of Central Banks to sell gold, so alternative methods had to be found to suppress the gold price. The 2 mechanisms are:
"Leasing" of gold by Central Banks (CBs). Leasing takes 3 forms:
-Direct leasing: Where CBs lease gold to Bullion Banks (BBs) at ~1%pa, and the BBs then dump this gold on the market and then invest proceeds in bonds at ~5% - no problem unless CB's want their gold back! This is far more secretive than CB selling gold directly, because any sale appears on their books, whereas IMF has told CBs to disguise leased gold among total gold reserves and report it still as an asset (for more refer section 3, Proof #11). This problem with this scam is that it requires constant supply of physical gold held by CBs (which is running out), to offset the bullish gold fundamentals, including annual deficit (currently demand minus supply = 1400+tonnes pa!). Gold leasing is bizarre in that it is like a landlord leasing a flat, and then the tenant sells the flat, and the landlord not registering the sale at his next tax return - bizarre but legal with gold.
[NB: When will the cartel run out of physical? As much as 3 years according to analyst Frank Veneroso, but in practice much sooner due to outstanding gold fundamentals... ie declining supply, record demand, weakening $US, negative real interest rates, covering short positions, bubbles in equities & real estate]
-Swaps: Similar to gold loans, except 2 CBs actually "swap" gold with each other (eg US and Germany), then lease out gold to BBs. This is a sneakier way to lease gold, because US Fed can say they don't lease any of their gold, which is true because they actually lease Germany's gold while Germany leases out the US gold!
-Hedging or ("Forward Sales"): where a producer pre-sells un-mined gold at a fixed price to lock in profits in advance. Since the buyer wants actually physical, an equal amount of gold is "leased" from a CB and sold into the spot market by the gold producer (or "hedger"), suppressing the gold price. The hedger earns cash, but often forward sells much more gold than what they have in reserves - ie trouble!
Massive sales of gold derivatives by BBs (eg JPM, Goldman Sachs, Morgan Stanley, Deutsche) backed by government. In theory, buyers of futures contracts can demand delivery of physical gold. But in practice, physical is not required because the powerful USA doesn't want to self-destruct ie USA usually insists on cash settlement instead of delivery of dwindling physical. The more gold is demanded, the more $ they print (from their infamous printing presses that also support the Dow). Futures' sales trick people into thinking gold price is falling. However, this will either end in "default" (http://192.168.0.104/~trevor/gata.org/www.gold-eagle.com/editorials_02/hommel052902.html), or merely slow down the speed that gold rises. Why? 1) Gold is in a major bull market; 2) leasing scam will soon run out of physical; 3) little physical is needed to push down price, but keeping it there requires far more gold.
NB: For years, the daily selling patterns of these BBs are not consistent with normal profit maximisation ie gold price usually rises in London's physical market, then drops in New York's paper market. The only explanation is to suppress the price, regardless of losses incurred. This is corporate suicide, unless backed by government.
For more on J P Morgan derivatives, refer: http://192.168.0.104/~trevor/gata.org/www.gold-eagle.com/editorials_02/chapmand061302.html
For more on secret scam with BBs & US Government, refer: http://192.168.0.104/~trevor/gata.org/www.fgmr.com/manipulate.htm (search "just") Coordinator: "Exchange Stabilization Fund" (ESF) is a secret branch of US Treasury, and is not accountable to US Congress or courts. ESF reports only to US President and Treasury Secretary. Refer Proof #1, #2, #3
Co-conspirators:
CBs eg England, Germany: Refer Proof #4, #5 & #11
BBs eg J P Morgan: Refer Proof #6
Word Gold Council: Refer Proof #7
IMF: Refer Proof #11
NB: Certain Bullion Banks such as J P Morgan in effect trade for ESF and US Fed, and as such are privy to the confidential direction and intent of the US Fed. For more, refer: http://192.168.0.104/~trevor/gata.org/www.fgmr.com/manipulate.htm (search "proxy")
3. PROOF:
#1. US Supreme Court "Under the Sherman Antitrust Act, a combination formed for the purpose and with the effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity in interstate or foreign commerce is illegal per se". Put simply, while gold leasing and futures is legal, it is illegal to do so for manipulation purposes.
Refer http://192.168.0.104/~trevor/gata.org/www.gata.org/howe_complaint.html(Sections 1, 80). So ESF illegally manipulates gold price.
#2. The US Treasury at its website denies that the ESF has conducted a gold swap in the last 10 years. In addition, a court filing on behalf of Secretary O'Neill specifically denied that the ESF had conducted gold swaps after 1978: Refer http://192.168.0.104/~trevor/gata.org/www.zealllc.com/files/HvBD0013.pdf (page 3, footnote 2.)
This is contradicted during a confidential US Fed meeting, where there was admission of dealing in gold swaps.
Refer: http://groups.yahoo.com/group/gata/message/733 (p69 of meeting transcript, or p72 of pdf file)
For more on admission of existence of ESF, refer http://192.168.0.104/~trevor/gata.org/www.treas.gov/offices/international-affairs/esf/index.html
#3. Alan Greenspan, at a testimonial at a 1998 House Banking Committee hearing: "Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise."
Refer: http://192.168.0.104/~trevor/gata.org/www.gata.org/howe_complaint.html (Section 38)
#4: In front of 3 witnesses, Bank of England Governor Eddie George spoke to Nicholas J. Morrell (CEO of Lonmin Plc) after the Washington Agreement gold price explosion in Sept/Oct 1999: George said "We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K." Refer: http://192.168.0.104/~trevor/gata.org/www.gata.org/bofi.html
#5. The infamous Bank of England gold sales, where the gold went to the LOWEST bidder, not the highest bidder: ".... Applicants whose bids are accepted will be allotted gold at the lowest accepted price."
Refer http://192.168.0.104/~trevor/gata.org/www.bankofengland.co.uk/markets/forex/goldinfmem.pdf(page 9, "4. Acceptance of Bids...")
Extraordinary! But wait, there is more:
advertising the sales, which noone ever does (unless they want less money for their gold)
drawing the sales out over a period, rather than just one single auction
Refer: http://192.168.0.104/~trevor/gata.org/www.gold-eagle.com/gold_digest_01/hamilton031601.html #6. After years of denials, Barrick Gold admit that they and their banker J P Morgan are involved in manipulation of the gold price, and/or they are agents of central banks. A US court judge has thrown out their dismissal appeals.
http://groups.yahoo.com/group/gata/message/1538 http://groups.yahoo.com/group/gata/message/1653
Barrick then announce cessation of hedging, after extolling its virtues 1 day earlier. Many say it's due to Barrick going $16m more in debt for every $1 rise in gold price. http://groups.yahoo.com/group/gata/message/1768
#7: Why won't World Gold Council (WGC) answer letters/emails worldwide regarding Manipulation? The 2 biggest contributing gold producers to WGC are Barrick Gold and AngloGold. These 2 companies are disliked in the gold industry, because they are the biggest hedgers, and therefore provide much gold to the gold price manipulation scam. For Barrick, refer Proof #6. For AngloGold, why is Frank Arisman on the board of AngloGold when he is also an officer of JP Morgan? There has been an explosive growth in gold derivatives on Morgan's books in recent years, which has driven the gold price down. Clearly there is a huge conflict of interest there.
#8: Royal Bank of Canada admits there is gold price manipulation, then oddly 2 days later said it was a secret:
http://groups.yahoo.com/group/gata/message/1149http://groups.yahoo.com/group/gata/message/1153
#9. One heavy hedger Sons of Gwalia, Australia, has major financial problems. Refer:
http://groups.yahoo.com/group/gata/message/1439http://groups.yahoo.com/group/gata/message/1225
#10: For more proof in somewhat more detail refer: http://groups.yahoo.com/group/gata/message/955
http://groups.yahoo.com/group/gata/message/955 http://www.gata.org/essays.html
#11. IMF has directed CB's not to disclose how gold is leased/swapped, only total reserves (proof below).
IMF have denied this, "This is not correct: the IMF in fact recommends that swapped gold be excluded from reserve assets." Refer http://www.gata.org/bofi.html (search "correct").
However, numerous member countries/entities have proven the IMF has lied ie
Philippines: "Beginning January 2000, in compliance with the requirements of the IMF's reserves ..., gold under the swap arrangement remains to be part of reserves and a liability is deemed incurred corresponding to the proceeds of the swap." Refer http://192.168.0.104/~trevor/gata.org/www.bsp.gov.ph/statistics/sefi/fx-int.htm (search "swaps")
The Central Banks of Portugal, Finland & Italy confirmed in writing that swapped gold remains a reserve asset under pertinent IMF regulations. The staffs of the central banks of Canada, Ecuador, Finland, Holland, and Portugal have also confirmed this. Refer http://192.168.0.104/~trevor/gata.org/www.goldisfreedom.com/IMFgold.htm, (search "Finland")
European Central Bank: "Following the recommendations set out in the IMF operational guidelines of ... developed in 1999, all reversible gold transactions, including gold swaps, are recorded as collateralised loans in balance of payments and international investment position statistics. This treatment implies that the gold account would remain unchanged on the balance sheet." http://solutions.synearth.net/2003/02/21
The German Bundesbank (the secret "swapper" of gold with US) lists "Gold and Gold Receivables (loans)" as a one line item on its balance sheet. This approach is in direct conflict with Generally Accepted Accounting Principles (GAAP), and thus German banking law. So, from their published financial statements there is no way to determine how much gold Germany holds in its vaults. The refusal of the Bundesbank to provide a breakdown between physical gold and gold receivables belies any notion of market transparency.
Clearly deceptive accounting, countenanced by the IMF has allowed official sector gold to hit the market without a corresponding drawdown on the balance sheets of central banks. This has made it impossible for analysts to ascertain the exact size of official sector gold loans, swaps and deposits. The unwillingness of central banks to provide even a minimum level of transparency suggests that total gold receivables are substantially larger than the accepted industry figure of ~5,000 tonnes. Refer http://groups.yahoo.com/group/gata/message/903 4. OPPORTUNITY:
Futures: Daily, ESF tries to drop gold price with as little metal as possible, ie during paper-dominated New York trading hours, after physical-dominated London trading hours. http://192.168.0.104/~trevor/gata.org/www.fgmr.com/manipulate.htm (search "London")
Leasing: This is ESF's Achilles' Heel because physical gold is continually required and it is running out quickly. When it does run out, some analysts say it will also trigger the end of the Futures scam eg "The prices for the futures will wildly escalate in rapid fashion until bankruptcy (or bailout by government) of all who are short."
5. TRACK RECORD:
The US government has a poor track record when it comes to honesty and transparency. More recently:
Lies about Iraq's "Weapons of Mass Destruction": http://foi.missouri.edu/polinfoprop/wolfowitz2.html
Private Jessica Lynch says Pentagon used her for propaganda http://timesargus.nybor.com/Story/74284.html
The "Lewinsky Lies"
Ex-Treasury Secretary Paul O'Neill: "It's all about deluding the people... I didn't adjust (in Washington) and I'm not going to start now." Refer http://192.168.0.104/~trevor/gata.org/www.post-gazette.com/nation/20030112oneilltwonat2p2.asp
George W Bush used the better-looking $6.8 trillion of federal debt on US Fed books, than correct $44 trillion.
Refer: http://192.168.0.104/~trevor/gata.org/www.independent-media.tv/item.cfm?fmedia_id=979&fcategory_desc=Under%20Reported
Ashanti, Enron, Arthur Anderson, J P Morgan etc: eg http://192.168.0.104/~trevor/gata.org/www.securitiesfraudfyi.com/jp_morgan.html
US mainstream financial media (eg CNBC) are perpetually bullish on equities and bearish on gold eg when equities are high they say "Buy! They are going to the moon", but when low they say "Buy! They are cheap".
The US mainstream financial media also refuse to run any stories by GATA, despite vast evidence.
The US economy "added" 126,000 jobs in October 2003, but that included 25,000 grocery workers in California returning to work from a labor action. One of many fudges by US government. Source: Jim Sinclair, 7/11/03
• For more examples, refer http://192.168.0.104/~trevor/gata.org/www.gold-eagle.com/gold_digest_03/taylor110103.html 6. IMPACT:
The devastation of the economies of the developing world, and particularly sub-Sarahan Africa.
With the bond market deceived about inflation, the dollar, and the strength of the US economy, most economic decisions for the last decade have been based on horribly mistaken premises (eg Nasdaq boom/crash).
The gold reserves of US (and other countries) now adorn the wrists and necks of Indian women. The US has to accept their gold is gone, or pay a lot more to get it back, or be bailed out in declining $US.
Since some Bullion Banks are privy to confidential intent of US Fed, they have unfairly earned vast fortunes.
Owners of gold and gold shares have lost a lot of money, at the expense of these Bullion Banks.
• English citizens should be outraged that their gold was blatantly sold for as low as price as possible. By Sid Reynolds, sidr@optusnet.com.au. Feel free to distribute this concise 3-page Word Document to anyone!
Disclaimer: I am not a gold guru. I rely entirely on statements by experts. I have merely pooled them together.
GATA is so tilting at windmills. Yes, governments sell gold, and they ahve been recently. The reality is, though, that gold hasn't been a good investment for a LONG time because, frankly, it's useless. Now, it may act as a transitional currency until a new paradigm is established. That's why I own it and its mining shares.
If there were no huge securitization bubble and gold were 900, i'd short it ON MARGIN.
nuff said.
Lukester
09-18-08, 04:16 PM
The reality is, though, that gold hasn't been a good investment for a LONG time because, frankly, it's useless.
GATA is so tilting at windmills.
Phirang - you seem to be engaged in a discussion with an imaginary gold zealot here on the "merits of gold"? What does any of the above post have to do with gold's merit as an investment? The topic is central bank leasing - how much of it exists, how far along it's gotten, and whether the World Gold Council statements on central bank reserves net of leasing are A) factual, B) ingenuous, or C) disingenuous.
I must confess I find it whimsical on your part, that you breezily call GATA's work "tilting at windmills" without any further substantiation, while they largely restrict themselves to merely collecting "interesting statements" such as the following - which presumably require most readers to draw some rational conclusions:
#3. Alan Greenspan, at a testimonial at a 1998 House Banking Committee hearing: "Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise."
Refer: http://192.168.0.104/~trevor/gata.or...complaint.html (http://192.168.0.104/~trevor/gata.org/www.gata.org/howe_complaint.html) (Section 38)
#4: In front of 3 witnesses, Bank of England Governor Eddie George spoke to Nicholas J. Morrell (CEO of Lonmin Plc) after the Washington Agreement gold price explosion in Sept/Oct 1999: George said "We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K."
Refer: http://192.168.0.104/~trevor/gata.or....org/bofi.html (http://192.168.0.104/~trevor/gata.or....org/bofi.html)
#6. After years of denials, Barrick Gold admit that they and their banker J P Morgan are involved in manipulation of the gold price, and/or they are agents of central banks. A US court judge has thrown out their dismissal appeals.
Refer: http://groups.yahoo.com/group/gata/message/1538 (http://groups.yahoo.com/group/gata/message/1538) http://groups.yahoo.com/group/gata/message/1653 (http://groups.yahoo.com/group/gata/message/1653)
EXTRACT of # 6 above:
___________________
Tuesday, 06-10-03
Barrick Gold has confessed that it and its bullion banker, JP Morgan Chase & Co., are the direct agents of the central banks in the international control of the gold price.
Barrick's confession was filed in U.S. District Court in New Orleans as part of a legal maneuver to gain dismissal of the federal anti-trust lawsuit brought against it and Morgan Chase by Blanchard & Co., the New Orleans-based coin and bullion dealer. Barrick moved to dismiss the Blanchard lawsuit on the grounds that the suit had failed to include as defendants some "indispensable parties" whose vital interests are at stake, the central banks; that the central banks, having what is called sovereign immunity against suit, simply could not be included in the suit; and that the suit therefore had to be dismissed.
Barrick's confessional motion was dated February 28 this year and is posted at the Barrick Internet site here, headlined "Memorandum in support of motion to dismiss for failure to join indispensable parties": http://www.barrick.com/2_Press_Releases/ (http://www.barrick.com/2_Press_Releases/)
Fortunately, the judge hearing the Blanchard lawsuit, Helen G. Berrigan, denied Barrick's motion two weeks ago after an exchange in open court with one of the company's many lawyers, Mark D. Wegener. That exchange is appended here. The judge concluded that Barrick's motion to dismiss argued in effect that an illegal action involving "so many powerful entities from all around the world" is "going to be immune from being challenged."
"That's, as we say, not acceptable," Judge Berrigan said, denying Barrick's dismissal motion.
___________________
What part of the above quotes do you find "equivocal" Phirang? In my book, any entity purporting to provide "objective data" on the state of the world's leasing of gold (which is by definition a Central Bank activity), and which has as among it's principals the "symbiotic twins", Barrick and JPMorgan, would set several alarm claxons to sounding off in my head. JPMorgan is Barricks financier and bullion bank intermediary of long standing. Barrick gold provides the forward production of gold which permits the extendability and growth of gold derivative products. JPMorgan as we all fully accept, also happens to be the US Governments most trusted henchman for monetary manipulations. Hmm. It seems we are at some dis-juncture here in terms of "rationally reading the data" when it comes to the "natural allegiances" of the World Gold Council with these two among it's principals. Do you do more skeptical investigative work in your oil industry analyses than you are disposed to employ here?
Total CB gold reserves are 29,813 tons. The US holds 8,133 tons.
CBs since 2001 have sold $1,350 or around 11%. The US sold none.
If the US sells 65 tons that's 0.8% of its holdings.
Thanks Fred. The data you provided makes a lot of sense. I have one more question if that is not too much trouble: what is the reporting time lag ? (how close is that data to a real time inventories report?)
Thanks for help.
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