Gold market rigging is ever more documented -- and ever more suppressed by the news media
Remarks by Chris Powell
Secretary/Treasurer, Gold Anti-Trust Action Committee Inc.
Committee for Monetary Research and Education Spring Dinner Meeting
Union League Club, New York
Thursday, May 22, 2014
For those of you who haven't heard of the Gold Anti-Trust Action Committee, a few words of introduction:
Since 1999 we have been collecting and publicizing evidence and documentation of the longstanding Western central bank scheme of surreptitiously suppressing the price of gold as part of a broader scheme of controlling the currency, bond, and equity markets.
The documentation is overwhelming and includes admissions by central bankers and records in government archives. Some of this material is quite current. We have posted it all at our Internet site, GATA.org:
Because of time constraints this evening I'll review only a few important items discovered in the last year.
Last June the annual report of the Bank for International Settlements confirmed that the BIS trades secretly in the gold market for its members, central banks. The BIS report said:
"The bank transacts foreign exchange and gold on behalf of its customers, thereby providing access to a large liquidity base in the context of, for example, regular rebalancing of reserve portfolios or major changes in reserve currency allocations. The foreign exchange services of the bank encompass spot transactions in major currencies and Special Drawing Rights (SDR) as well as swaps, outright forwards, options, and dual currency deposits (DCDs). In addition, the bank provides gold services such as buying and selling, sight accounts, fixed-term deposits, earmarked accounts, upgrading and refining, and location exchanges."
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The BIS report continued:
"The bank operates a banking business in currency and gold on behalf of its customers. In this business the bank takes limited gold price, interest rate, and foreign currency risk."
In a Power Point presentation to prospective central bank members in June 2008, the BIS actually advertised that its services include secret interventions in the gold market:
Last September at the London Bullion Market Association's conference in Rome the director of market operations for the Banque de France, the French central bank, Alexandre Gautier, reported that the bank trades gold for its own account "nearly on a daily basis" and is "active in the gold market for central banks and official institutions":
Last July GoldMoney's research director, Alasdair Macleod, discovered a 1,200-tonne reduction in the records of the Bank of England's custodial gold inventory between February and July 2013, the period encompassing the gold price smashdown of April 2013. The Bank of England refused GATA's request for an explanation of whose gold came out of the bank's vaults and why and whether this reduction had something to do with the plunge in the gold price:
Last week in correspondence with me the Swiss National Bank said it stopped leasing gold in 2011, but the bank refused to answer or even acknowledge my question as to whether the bank remains active in the gold market in any way, including the trading of gold derivatives:
I have to assume that the bank refused to answer or even acknowledge the question because it does indeed remain active in the gold market directly or through intermediaries like the BIS or Banque de France.
This week in its latest communique on gold the European Central Bank confirmed that its members consult and act secretly all the time to control the gold price. The communique said:
"The signatories will continue to coordinate their gold transactions so as to avoid market disturbances."
Last November GATA discovered a particularly incriminating and instructive record in the archive of the U.S. State Department. It is the transcript of a meeting in April 1974 called by Secretary of State Henry Kissinger to consider the danger that the price of gold might get beyond the U.S. government's control.
The minutes of that meeting confirm the U.S. government's long understanding of the "golden rule" -- that is, that whoever has the gold makes the rules. The minutes explain explicitly the need for the United States to control the gold price:
Assistant Undersecretary of State for Economic and Business Affairs Thomas O. Enders: It's against our interest to have gold in the system because for it to remain there it would result in it being evaluated periodically. Although we still have some substantial gold holdings -- about $11 billion -- a larger part of the official gold in the world is concentrated in Western Europe. This gives THEM the dominant position in world reserves and the dominant means of creating reserves. We've been trying to get away from that into a system in which we can control. ...
Secretary Kissinger: But that's a balance-of-payments problem.
Assistant Undersecretary Enders: Yes, but it's a question of who has the most leverage internationally. If THEY have the reserve-creating instrument, by having the largest amount of gold and the ability to change its price periodically, they have a position relative to ours of considerable power. For a long time WE had a position relative to theirs of considerable power because WE could change gold almost at will. This is no longer possible -- no longer acceptable. Therefore, we have gone to Special Drawing Rights, which is also equitable and could take account of some of the less-developed-country interests and which spreads the power away from Europe. And it's more rational in. ...
Secretary Kissinger: "More rational" being defined as being more in our interests or what?
Mr. Enders: More rational in the sense of more responsive to worldwide needs -- but also more in our interest. ...
The transcript of this meeting is posted at GATA's Internet site:
So from the perspective of those who want free and transparent markets and limited and transparent government, the good news is that central bank intervention in the gold market to suppress the monetary metal's price is being exposed more often than ever. Sometimes it's very easy to do if you pose the right specific questions.
But there's plenty of bad news as well.
First is that the major targets of this price suppression -- gold mining companies and gold-mining countries -- have chosen to curl up and die quietly rather than fight it. Many of them have been told all about gold price suppression but will do nothing to defend themselves.
Second is that major financial news organizations all around the world have been told about the gold price suppression scheme as well but seem to have a policy of suppressing the information.
GATA has delivered to major news organizations on all continents the most important documentation and summaries of gold price suppression and what it means. While there has been some journalistic interest lately in Russia and China, and some journalistic interest in the West in regard to complaints about the daily London gold fixings, the connection to central banks has not been reported by the mainstream financial news media in the West.
I have been told by reporters at several major news organizations that the topic is simply forbidden.
For example, in March I went to Asia in large part to accept the enthusiastic invitation of a television journalist to appear on his program for what would have been the third time. On the eve of my departure, when I sought to learn the exact date and time of my appearance, the journalist's secretary told me without explanation that I would not be on the program after all. When I sought explanation from the journalist who had so enthusiastically invited me, a journalist who always had responded to me promptly and cordially, I got no response at all. I'm sure he was mortified about something that suddenly had been put beyond his control by his company's highest management. He probably had jeopardized his job.
The Western central bank gold price suppression scheme is a scheme to control surreptitiously the valuation of all capital, labor, goods, and services in the world. It is essentially a totalitarian scheme, the same scheme of currency market rigging used by Nazi Germany to loot occupied Europe during World War II. The Nazi scheme was described in detail by the November 1943 edition of the U.S. War Department's intelligence letter, Tactical and Technical Trends --
-- and by Gotz Aly's history of Nazi Germany, "Hitler's Beneficiaries" --
Today's currency market rigging scheme can be defeated only by publicity -- and publicity can defeat it, because it works only through deception.
If you believe in free markets and limited and accountable government, please look into GATA's work and urge journalists to do so as well.
Jim Grant is also a speaker here tonight and GATA sure would like to get into his financial letter, Grant's Interest Rate Observer, especially since former Federal Reserve Chairman Ben Bernanke has just told us that there won't be anything to observe with interest rates for a long time.
Once again our Internet site is GATA.org. If you need help finding something, please e-mail me at CPowell@gata.org.
Thanks for your kind attention.
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