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Gold leasing is a fraud because central banks haven't wanted their metal back

Section: Daily Dispatches

3:21p ET Thursday, July 11, 2013

Dear Friend of GATA and Gold:

Gold leasing is a fraud and conspiracy, Jeff Nielson of Bullion Bulls Canada writes today, since central banks that lend gold know that it eventually will be sold into the market to diminish the value of the asset, which isn't really their own but something they hold in trust for their nations:

But the bigger fraud here is on the gold and currency markets. For while gold is an asset of central banks, its value is the reciprocal of assets far more important to them -- their currencies and government bonds.

When they have lent gold in recent decades, Western central banks have not really wanted it back; rather they have wanted the gold price suppressed or controlled and the value of their currencies and bonds thereby supported.

... Dispatch continues below ...


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That is probably why, throughout the last decade, the gold price rose steadily even as practically every week brought announcements of gold sales by Western central banks or the International Monetary Fund. No new gold was hitting the market in these "sales." Rather, most likely the "sales" were just cash settlement cancellation of leases for gold that had hit the market many years before and could not be recalled without spiking the market upward too fast for the comfort of the market riggers.

That is also probably why Barrick Gold claimed to be the agent of central banks when it borrowed and sold their gold to finance its operations --

-- and why Barrick often boasted that its central bank gold loans not only had 15-year terms but were renewed every year so they became "evergreen," or perpetual, as was explained in this Barrick financial report from 2006:

That is, Western central banks have mobilized their gold surreptitiously as part of a comprehensive scheme of rigging the currency markets, as they acknowledged in a secret report prepared by the staff of the International Monetary Fund in 1999:

Your secretary/treasurer has long suspected that the current era of gold price suppression would end the way the last era ended, the era of the London Gold Pool --

-- when the gold reserves of the participating central banks were depleted to whatever was considered the critical point. Gold sales and leasing would stop, gold would be more or less officially revalued much higher, and the central banks that had lost their metal through sales and leasing would buy it back at the higher price and begin the next era of price suppression.

When will this happen? Of course the Western central banks won't be letting GATA know in advance, but the recent startling repositioning of their agents in the gold market --

-- indicates that those agents have been told and that the new era is drawing near.

Happy as the change of eras may be for gold investors, central banking won't be any less totalitarian. It will continue to strive to control surreptitiously the value of all capital, labor, goods, and services in the world -- strive to control the whole world -- and thus it will still have to be fought. But at least it will look better with a bloody nose.

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

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