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Saxo Bank economist admits central banks trade gold but sees no manipulation

Section: Daily Dispatches

9:11p ET Sunday, January 11, 2015

Dear Friend of GATA and Gold:

Manipulation of the gold market figures heavily in an interview of the chief economist and chief investment officer of Saxo Bank in Denmark, Steen Jakobsen, done for Global Gold in Switzerland by its managing director, Claudio Grass. But both the question and the answer about manipulation are unsatisfactory.

The question is unsatisfactory because, while it cites the work of gold market researcher and GATA consultant Dimitri Speck --

-- it fails to get into any of the specifics of the documentation of gold market manipulation, which can be found here:

Jakobsen's answer is unsatisfactory because, while he acknowledges that central banks are trading gold and even that certain gold market participants are trading on inside information, he purports to believe that there is no manipulation of the market.

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Grass asks: "I often see a discrepancy between the gold price and what I hear from refineries and other sources about the demand for physical gold. We recently held an interview with Dimitri Speck, who is confident that the gold price is being manipulated, particularly by the central and bullion banks since 1993. Do you think there is any truth to this?"

Jakobsen replies: "Do the central banks buy and sell? Absolutely. Do the minters and producers who have the inside scoop take the opportunity to make some extra money? That absolutely too. But you have to remember -- and at least I believe, having done this for 30 years -- over time justice prevails in the sense that gold eventually will trade at a price that is relatively close to the market forces. So I think my answer to that question is actually no, I don't think it's true, I don't think it's manipulated."

It might have been nice for Grass to pose some follow-up questions to Jakobsen. For example: If central banks are "absolutely" buying and selling gold, why? Is it just for fun, or does it have policy objectives? And if it does have policy objectives, have you ever inquired into what they might be and whether they are similar to the objectives of previous central bank undertakings in the gold market like the London Gold Pool of the 1960s?

And while justice may prevail eventually, might it prevail sooner if people bother to examine and clamor about the mounting evidence of injustice? Or does justice prevail naturally, all by itself?

Of course as Jakobsen is a well-compensated participant in an industry subject to the most arbitrary regulation by government, trying to hasten justice may be as bad for business as disseminating disinformation may be good for business. But elsewhere in the interview Jakobsen poses as an advocate of gold ownership, and encouraging people to own gold without informing them that by doing so they are challenging nearly all the money and power in the world does not exactly fulfill one's fudiciary obligations.

In any case Glass' interview with Jakobsen is posted in PDF format at Global Gold's Internet site here:

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

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