New York Fed misrepresented disclosure rules to GATA, but so what?


8:05p ET Sunday, December 1, 2019

Dear Friend of GATA and Gold:

Our friend J.D. writes today:

"I write regarding the interesting response you received from Shawn Elizabeth Phillips, corporate secretary at the Federal Reserve Bank of New York, by e-mail dated November 13, 2019:

"The New York Fed's response points to purported Dodd-Frank law rules prohibiting disclosing for two years of the identities of banks that receive 'loans made under discount window programs.' I believe that the New York Fed's response was a cute evasion that may be exposed by specifying the loan types about which GATA sought information.

... Dispatch continues below ...


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"It's correct that you asked for access to 'all records of the New York Fed's loans made this year.' It's also correct that Dodd-Frank has the disclosure restriction cited by the New York Fed. But you did not distinguish among the types of loan records for which you sought access, thus allowing the New York Fed to assume that your request involved 'discount window' lending.

"Dodd-Frank's disclosure restriction does not appear to encompass the New York Fed's activities in the repo market, the activities most at issue lately.

"I would argue the 'discount rate' is wholly different and serves a different purpose than the repo market. So I would suggest asking the New York Fed specifically for access to records of 'all repurchase and reverse repurchase transactions performed beginning September 17, 2019, to date."

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Your secretary/treasurer responded:

"Thanks much for your note, J.D.

"Pam Martens of Wall Street on Parade ( made the same observation to me when I shared the New York Fed's reply with her. One or two other people did as well. But GATA was satisfied just to have caused the New York Fed to embarrass itself with its unaccountability.

"Zero Hedge took note of the New York Fed's reply to GATA --

-- and got 31,000 page views for doing so, and Wall Street on Parade and other internet sites mentioned it as well.

"While GATA could press the matter with the New York Fed, the bank would blow us off no matter what we argued unless GATA was prepared to hire a law firm and challenge the bank's unaccountability in court. Then we'd be stuck with years of litigation and tens of thousands of dollars in legal expenses.

"We don't have the money for that, and people who want to know which investment houses are getting the repo cash from the New York Fed and what they are doing with it can always urge their congressmen to ask the question GATA posed. Congress could get the answers if it wanted to.

"Of course most congressmen don't want to touch this issue, and of course mainstream financial news organizations are useless here too. Despite their pompous posturing about freedom of the press, they are actually just tools of the government. They will never dare to put a critical question to a central bank.

"If somebody gives GATA a winning Powerball or Mega-Millions ticket, we may bring a federal lawsuit against the New York Fed and a few other market riggers. But for the time being GATA seems to have done some pretty good damage to the bad guys without incurring any expense at all -- did it just by sending an e-mail, which was free.

"Thanks again for writing."

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

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