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If your interest is really piqued, try questioning central banks yourself

Section: Daily Dispatches

11:21a ET Wednesday, June 22, 2011

Dear Friend of GATA and Gold:

Dennis Gartman, publisher of the daily commodity market review The Gartman Letter (, writes today:

"One interesting facet of the gold market has made its way to our desk, courtesy again of our good friend, John Brimelow, who had it brought to his attention by Mr. Chris Woods of The Greed & Fear Report. (We normally steer very clear of newsletters with titles such as these, but Mr. Woods has shown to be quite wise when it comes to the gold market over time, and if Mr. Brimelow respects his work, so then shall we.)

"Mr. Woods noted that the Vice Governor of the Belgian Central Bank said that 43 percent of the bank's remaining gold reserves have been lent out. Despite our antipathy to the argument that GATA has been making for years that much of the world's reservable gold has been put out on lending programs, this number caught our attention. Neither we, nor John, know of any central bank that has admitted putting this much gold out on loan. What then of the Bank of France, or the Bank of Italy, or the ECB itself? Suddenly our interest is piqued. Bill Murphy, where are you?"

... Dispatch continues below ...


Prophecy (TSXV: PCY) Secures Russian Far East Seaport Allocation
and Updates Ulaan Ovoo Mine Production

Company Press Release, June 14, 2011

VANCOUVER, British Columbia -- Prophecy Coal Corp. TSX-V: PCY)(OTCQX: PRPCF)(Frankfurt: 1P2) has arranged with the Port of Sovgavan in the State of Khabarovsk, Russia, so the company will have initial access to port allocation of 25,000 tonnes of coal per month starting this month, potentially expandable to 50,000 tonnes per month, representing 300,000 to 600,000 tonnes annually. Prophecy also will be assigned a coal storage area at the port.

This arrangement provides Prophecy's Ulaan Ovoo thermal coal mine with immediate access to the Asian seaborne export coal markets. Sovgavan is strategically located on the seaboard of the Russian Far East. The port is privately owned and can accommodate seagoing vessels of up to 160 meters in length, with the depth of loading site of 9.5 meters. The port has loading capacity of 6,000 tonnes per day and direct connections to Trans-Siberian railroads and uncongested Russian state highways.

Securing the port opens Prophecy to a significant number of coal buyers, and the company is placing top priority to conclude rail transport within Russia and coal offtake contracts.

Prophecy's Ulaan Ovoo mine commenced production in 2011. So far this year the mine has produced 200,000 tonnes of coal, which are being stockpiled. The average quality is 4,200 kcal/kg NAR with 5 percent ash and 0.5 percent sulphur. Those attributes compare favorably to the coal being purchased by local Russian and Mongolian power plants.

For the complete company statement, please visit:

Of course Murphy, GATA's chairman, is where he always has been: Screaming to try to get financial journalism to pay attention to the issue of central bank gold lending, a major mechanism of gold market rigging. Two years ago GATA obtained an admission from the Federal Reserve that it was involved in this rigging, an admission that the Fed has gold swap arrangements with foreign banks that must remain secret:

In December 2010 GATA's friend the German journalist Lars Schall pressed Germany's central bank, the Bundesbank, as to whether it had undertaken any gold swaps with any agency of the U.S. government, and the Bundesbank replied, as the Fed did, that all this stuff must remain secret:

Gartman acknowledges being aware of GATA's claim that central bank gold lending is far more extensive than acknowledged or generally believed and is part of a general scheme of currency market manipulation. But who outside GATA itself seeks to nail this information down and explain what it means? Who reviews the extensive official documentation GATA has compiled and published --

-- and even summarized to make it easily understood, as here?:

As Gartman often has sneered at GATA over the years, we're glad that his interest is piqued as the evidence keeps piling up. But why ask for Bill Murphy? If Gartman and other financial writers want to know the true status of central bank gold reserves, why don't the financial writers try asking the central banks themselves and start piling up and publishing their own stack of "no comments"? The central banks might just take a telephone call from Gartman, the Financial Times, The Wall Street Journal, The New York Times, the London Telegraph, the Washington Post, the Associated Press, Reuters, and Bloomberg News, among others.

Here's how to contact the Bank of France:

Here's how to contact the Bank of Italy:

Here's how to contact the European Central Bank:

Here's how to contact the Bundesbank:

Here's how to contact the Federal Reserve:

Here's how to contact the U.S. Treasury Department:

Try asking them: How much of your gold reserves has been leased? How much is actually in your vaults? What is the purpose of this leasing? How much of your gold is at what the Bundesbank calls "gold trading centers," and why? Do you have gold swap arrangements with other central banks and with financial institutions, and if so, why? Have these arrangements been implemented, and how and why?

And if you won't attempt this much journalism, how about directing your skepticism away from the gadflies asking the questions and toward the government agencies that won't answer them?

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

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Lewis E. Lehrman on How to Solve the U.S. Debt Problem

Lewis E. Lehrman, chairman of the Lehrman Institute, sponsor of The Gold Standard Now project, advises that to reduce the $1 1/2 trillion U.S. deficit, the Republican Party must initiate an investment program.

Working Americans are not saving, which enables the banks to lead the country into a cycle of debt, leverage, boom, panic, and bust.

Lehrman says: "Eliminating the budget deficit of a trillion and a half dollars cannot be done overnight. The proposal by U.S. Rep. Paul Ryan was very dramatic -- one Republican called it radical -- but it was not happily received. The solution, of course, is to design an American program for prosperity, because you can solve these entitlement problems with a growing economy.

"We need a tremendous program of investment, and investment comes from savings. When you pay savers, middle-income professionals and working people, 0 percent at the bank, you are not going to encourage them
to save. Then we are left with a bank cycle of debt, leverage, boom, panic, and bust."

To read more and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit: