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Could gold's day of deliverance be at hand?
Get back to work. If it comes, you'll notice.
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11:48p ET Saturday, April 27, 2019
Dear Friend of GATA and Gold:
Does this weekend's assertion on King World News by London metals trader Andrew Maguire that a central bank intends to acquire whatever gold remains at the New York Commodities Exchange --
-- mean the end of the international gold price suppression policy?
Any central bank with substantial financial resources indeed could make trouble for the policy, since not much gold ever seems to be immediately available through the Comex. But don't bet your life that Maguire's story begins the countdown to the day of deliverance -- if only because, like many involved with GATA, you may already have bet too much that the day of deliverance will come in your lifetime.
Here are a few cautionary thoughts.
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Maguire is as sharp and experienced as they come in the monetary metals business, is supremely well-informed, and has done heroic service in fighting price suppression policy and exposing its tactics in the futures and over-the-counter markets. But are his sources telling him the truth? Or are they telling him what they would like the world to think, or using him to send a threat that may not be fulfilled?
For a few years now central banks have turned from net gold sellers to net gold buyers, announcing their purchases with some frequency, without exploding suppression policy and without reversing the trend of the gold price, which has been downward since 2011.
Prior to April 2013 many financial analysts were writing that China's steady acquisitions had placed a put under the gold price. But the smashdown in gold in that month, obviously a coordinated intervention by central banks, vaporized the idea of a Chinese put. China's foreign exchange reserves, the world's largest, enable China to control any market, and the April 2013 smashdown could not have succeeded without China's assent.
The U.S. economists Paul Brodsky and Lee Quaintance hypothesized in 2012 that most central banks, including those acquiring gold, were participating in suppression policy because its objective is to let central banks reacquire gold cheaply in a redistribution of world gold reserves in favor of central banks whose foreign exchange reserves are held disproportionately in U.S. dollars, which central banks figure must be devalued. Upon completion of that redistribution and the dollar's devaluation, Brodsky and Quaintance predicted, central banks would reliquefy themselves by revaluing gold dramatically upward:
The Brodsky-Quaintance hypothesis fits the facts and was reiterated if without attribution seven weeks ago by a surprisingly candid report in the Italian newspaper It Sole / 24 Ore:
Also more or less confirming that all major central banks have been participating in gold price suppression was a speech given in 2005 by the head of the monetary and economic department of the Bank for International Settlements, William R. White. He told a conference at BIS headquarters in Basel, Switzerland, that among the five most important objectives of central bank cooperation is "the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful."
That is, rigging the gold and currency markets is simply what modern central banking does:
So a central bank's move on the Comex gold futures market, a primary mechanism of price suppression, would suggest that central bank cooperation was weakening if not coming apart.
But even if such a move is underway, it well might be resisted for a long time with countermeasures by other central banks and governments.
Vaulting the gold of many other countries, the United States and United Kingdom have access to plenty of metal that might be thrown at the Comex to repel an attack, at least for a while. The Bank of England already has essentially confiscated Venezuelan gold reserves at the request of the United States:
If such countermeasures seemed likely to fail, they might be backed up by more of the economic warfare the United States is already waging against much of the world, weaponizing the dollar, the world reserve currency, more than ever before.
GATA has been documenting international gold price suppression policy for almost 20 years --
-- and while it has been an amazing education -- the secret knowledge of the financial universe, actually -- it is also the study of a cosmic injustice, the daily triumph of totalitarian imperialism. So no one could wish for the policy to explode more than GATA does. We would like to turn our lives to something else -- if only flying saucers, Bigfoot, or the search for D.B. Cooper.
For many years we have thought that gold price suppression policy's implementation through market intervention could not get more obvious, and yet it has gotten more obvious almost every week, still with not a peep of complaint or even curiosity from the monetary metals mining industry or mainstream financial news organizations.
In that respect GATA has been a humiliating failure.
So while we hope for victory and expect that the ascent of man will continue through the centuries ahead, we don't predict or promise victory, just persistence, figuring that, as Lee Strasberg's Hyman Roth tells Al Pachino's Michael Corleone in the second "Godfather" movie, "This is the business we've chosen":
Whenever gold price suppression policy blows up or is changed -- whether it happens Sunday night, or next year, or 10 years on, or longer -- if you're still alive, you'll notice.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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