Even Greenspan and White House are worried about systemic risk now

Section:

8:50p ET Wednesday, March 3, 2004

Dear Friend of GATA and Gold:

Again, our apologies for the bogus dispatches being
generated at Yahoo!Groups, which has yet to solve
its security problem. But we're nagging them about
it, and the bogus messages are not harmful. Since
Yahoo!Groups does not allow transmission of attached
files, these e-mails can't carry viruses -- which is
one reason for sticking with Yahoo!Groups despite
this problem.

A better reason for a dispatch tonight is the Reuters
story appended below, wherein financial market
analysts acknowledge that the central banks
themselves acknowledge that they manipulate the
gold market. Note some of the phrases in the Reuters
story: "to prevent uncoordinated sales from
destabilising the market. ... the agreement's aim is
to bring stability to the market and avoid any
speculation about unexpected sales. ... any rise would
be tempered by central bank desires for an orderly
market. ... central bankers by definition want orderly
markets. ..."

This market rigging is couched in the gentlest and most
high-minded tones, but market rigging it is. And those
gentle, high-minded tones are deceptive. Central banks
claim to be dabbling in the gold market for the market's
own good -- "stability" -- when the banks have ulterior
motives, like maintaining the value of their currencies
and particularly that of the world reserve currency, the
dollar, as measured in gold, the enduring international
currency.

This central bank gold sale talk is all nonsense anyway,
since, as GATA has demonstrated, most of the central bank
gold is gone already -- swapped and leased out and sold.
This talk about not wanting to flood the market with
central bank gold sales is just cover for the banks' REAL
agenda: bailing out the financial institutions that
borrowed the central bank gold and now can't get it back
without inducing a short squeeze. So the public's gold
will be marked "sold" at below-market prices and written
off.

Don't be scared or fooled.

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

* * *

Gold market on alert for new central bank sales pact

http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=4488677

By Veronica Brown

LONDON, March 3 (Reuters) -- Central banks may soon
renew a pact limiting official gold sales ahead of its
September expiry, with an announcement possibly
coming this week, analysts said on Wednesday.

Under the current Central Banks Gold Agreement, which
dates back to 1999, 15 European banks agreed to limit
sales of gold to 2,000 tonnes over five years to prevent
uncoordinated sales from destabilising the market.

Meetings of the European Central Bank (ECB), World
Bank, International Monetary Fund (IMF), and Bank for
International Settlements (BIS) have come increasingly
under the microscope as September approaches.

The current pact took the gold market completely off
guard when it was announced on the sidelines of the
September 1999 IMF/World Bank meeting in Washington.

With an ECB Governing Council session due on Thursday,
analysts have hinted at hearing something about the
accord's imminent renewal.

"The decision will be taken by an ECB board meeting --
there is one tomorrow and there is another one next month
-- it could happen after a meeting any time between
tomorrow and September," Frederic Panizzutti, analyst at
Switzerland-based MKS Finance, said.

"We think that the agreement's aim is to bring stability to
the market and avoid any speculation about unexpected
sales.

"The logic will be not to wait until the last minute and have
the market rushing into panic about the renewal -- so it
would probably make more sense if it was announced in
advance," he added.

Kamal Naqvi of Barclays Capital said it made more sense
for renewal to come in April, when the IMF and World Bank
meet.

"Given that the first agreement was announced at or just
before the IMF/World Bank meeting, the feeling is that they
may follow a similar pattern and announce it in April."

Analyst forecasts on sales limits in a new agreement have
ranged from no change to 2,500 tonnes over five years.

"Our forecast is 550 tonnes a year as that would seem to
be a reasonable volume that the gold market could
adequately absorb," Ross Norman of TheBullionDesk.com
said. Naqvi said he also expected a rise in sales, but an
increase to 2,500 tonnes would be at the top end of
expectations.

"With the exception of Germany, we haven't yet had any
other major central banks come out with any large-scale
selling intentions -- in contrast to 1999," he said.

"There still is considerable scope for sales within the
2,000 tonnes," Naqvi added.

Independent consultant Rhona O'Connell said any rise
would be tempered by central bank desires for an orderly
market.

"On balance the market would seem to be reasonably robust,
I would have thought that there is probably room to raise it
slightly and I wouldn't be surprised if they did," she said,
adding that 500 tonnes a year would be at the top end of
expectations.

"Central bankers by definition want orderly markets," she
said.

The gold market is currently around $390-395 an ounce after
surging to a 15 year high of $430.50 in January as the euro
surged against the dollar.

At one stage in September 1999 the gold price was little
more than $250.

Naqvi said a new pact could include new signatories, particularly
those countries joining the European Union.

"It seems logical that those looking to join the EU and in the
future the euro zone could well agree to join the agreement,"
Naqvi said.

"Presumably the more countries that join, the better it is for
the market."

Analysts have also said central banks may drop a reference to
restrictions on lending gold in a new sales pact due to low
interest rates and a sharp drop in producer forward sales.

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----------------------------------------------------

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