World Gold Council affects not to understand central banking

Section:

11:47a ET Friday, April 24, 2009

Dear Friend of GATA and Gold:

Rob Mackinlay of InvestEgate in London this week put a few questions about gold price manipulation to an official of the World Gold Council and got predictably disappointing answers.

The official, Marcus Grubb, managing director of investment research and marketing for the WGC, showed himself ignorant of the first principle of Western central bank operations.

Speaking of those central banks, Grubb remarked to Mackinlay: "Why would they want the gold price to go down if 40-50 per cent of their reserves are in gold? There's no gain for central banks to force down gold."

But of course the first principle of Western central bank operations is not to preserve the value of their gold reserves, which they've long been dishoarding, but to preserve the value of their currencies and government bonds, which are worth infinitely more to them and are the reciprocals of the price of gold, a competitive currency and competitive financial asset. That is, gold is suppressed to keep currencies and government bonds up and interest rates down.

This is Central Banking 101, and the World Gold Council affects not to know it, which is impossible to believe.

The InvestEgate report is headlined "World Gold Council: Gold Conspiracy Would Dwarf Madoff" and you can find it here:

http://www.investegate.co.uk/invarticle.aspx?id=98707

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

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