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Responses from Members to Challenge Facing GATA
Dear fellow members of GATA,
This Easter weekend has been a time to reflect; as many of you have been
reflecting, I am sure.
With Art Bell, for example: "The World is not a nice place and OUR BOMBS
will not make it so." ( http://www.artbell.com/kosovo.html )
Or along these lines of Albert Einstein: "I know not with what weapons
World War III will be fought, but WorldWar IV will be fought with sticks
I am no Einstein, no Art Bell; just a teacher of money values watching
the world go to war down a debt money chute. And here in this Easter
reflection, wanting to
1. name the colluders who are ruining the world economically,
2. encourage GATA members to beat debt with gold as money.
Most people now know, all that passes for money today is debt money; if
everybody paid off their debts, if they could, there would be no $s,
etc., in circulation. And therein lies the root cause to the mess the
world is in. "Who goeth a borrowing goeth a sorrowing," said Benjamin
Franklin truly. Almost all the world is sorrowing today.
One can go far on a lie, till caught out. And money-wise, from the
beginning of fractional reserve banking, that has been the way of it.
There have been incredible gains in technology and wealth creation; all
based on a lie a lie that became more and more bare-faced, open and
ugly from August 1971, when gold no longer had to be put on the counter
to cover purchases in $s and $ exchanges anywhere in the world.
When Nixon did the dirty on gold in 1971, there was some $20 billion
dollars worth of currency exchanged daily; now there is well over a
trillion $s worth of currency exchanged daily, of which less than five
percent is to cover actual trade and services. The rest is for what is
called speculation, but should be called currency-wrecking directed at
the wrecking of every currency ultimately, but the dollar itself, in the
cyber accounts of eventually just a few hundred players, using a few, a
very few banks and investment houses.
I have been slow in coming to the first of the two points I want to make
in this reflection, but now I am there and ready to name the colluders.
On March 1, the Financial Times reported that the world's leading 10
investment banks have almost doubled their share of "fee-based and
advisory business" in the global capital markets since 1990. According
to the Stern Business School in New York, they now have 77 percent of
The growing concentration of market share in the hands of the top banks
has coincided with an explosion in the global capital markets during the
1990s, the Stern study showed; from a total volume of less than $1,500
billion at the start of the decade to almost $4,000 billion last year.
The top 20 investment banks increased their share of global capital
markets business from 80 percent in 1990 to 97 percent last year.
The findings, which are based on statistics from Securities Data, the US
information group, showed that the top 10 banks are Goldman Sachs,
Morgan Stanley Dean Witter, Merrill Lynch, Salomon Smith Barney, Credit
Suisse First Boston, Warburg Dillon Read, Deutsche Bank, JP Morgan,
Chase Manhattan and Lehman Brothers.
"There is still a lot of juice in this business," said Roy Smith,
professor of international business at Stern, and co-author of the
report. "You can foresee a situation where there are just 10 or 12
banks, instead of 20 accounting for almost all the market."
Aha, I thought, remembering the first Scandale Gold, of 20 January 1999,
by Midas at the Cafe (www.lemetropolecafe.com), which led to the
founding of GATA two days later. For Bill Murphy, as Midas, wrote there:
"Twelve major banks chaired by Goldman Sachs and JP Morgan in early
January formed a 'Counterparty Risk Management Group' 'with the intent
of enhancing best practices in credit and market risk management. The
policy group will develop standards for strengthened risk management
practices'. We realize this group was not just formed because of the
gold issue, but why the need for it to be formed now? Is this not a
'cabal planner' of sorts."
Of course the Counterparty Risk Management Group is a cabal and planning
-- a cabal to dominate the global capital (for which read "debt") market
entirely - - a cabal to ruin the world.
With $4,000 billion, if you focus it, you could buy the total combined
household, enterprise and government debt of Sweden FIFTY TIMES OVER; or
you could take over the gross international reserves of every country in
the world TWICE OVER, including all 33,400 tonnes of gold held by the
central banks of the world at end 1997, at the then market price of
$290.02 an ounce (Source: World Bank Development Report- 1998/99).
Obviously not such power of focus is vested in the Counterparty Risk
Management Group but. . . have we not seen "capital" flow out of Asia,
and then back in, with first devastating then harrowing effect? -- with
earnings to the Group on the "in" as well as the "out", no doubt. And
the same with Brazil.
As George Soros put it in testimony to the U.S. House of Representatives
Committee on Banking and Financial Services in September 1998, "Instead
of acting like a pendulum financial markets have recently acted more
like a wrecking ball, knocking over one economy after the other." That
accurately reflects the power of the Counterparty Risk Management Group
to ruin the world and incidentally grin and bear down on gold.
"There are no free markets, they are obviously all rigged," Robert
Chapman, Editor of The International Forecaster wrote in an essay called
Derivatives Mess (12 December 1998). In the essay he reckoned "off the
balance sheet" derivatives from all sources world-wide to be $140
trillion (i.e. $60 trillion i.e. just one and a half years of world
economic activity more than Alan Greenspan acknowledges). How much of
that has been generated off the balance sheets by the members of the
Counterparty Risk Management Group, I wonder. (Source:
Mr. Greenspan has claimed that "derivatives are mainly a zero sum game:
One counterpartys market loss is the other counterpartys market gain."
David Tice put him right at Le Metropole Cafe last week. "We doubt too
many government officials or citizens in Asia, Russia or Brazil would
see derivatives in such a positive light," he wrote. "When the Ruble
collapsed, the Russian banks also collapsed and defaulted on their
derivative obligations. It became one big derivative fiasco. "
As the Dow Jones could soon become one big derivative fiasco. Tice
believes that the Dows run to 10,000 was much related to derivative
trading and options expiration, and that derivatives will be a major
factor in the coming US stock market decline. "With the coming crisis it
will become obvious that losses for our financial system and economy
will be anything but "a zero sum game"!
"One major negative event and it is over," wrote Robert Chapman in
Derivatives Mess. Over for the Counterparty Risk Management Group, too,
if GATA follows through relentlessly in exposing how the Group's credit
and market risk management is against the public interest and antitrust
Sadly, collusion is so all-pervasive through the "financial market", it
is still accepted as a fact of life and "a problem" rather than as
something actually illegal, to be challenged, as GATA is challenging it.
Challenging with what consequence? And here I come to the second point I
want to make in this reflection. The outcome of our action must also see
the end to debt money and the reinstatement of gold as money; through it
being bought up by ordinary people GATA People as shamed central
banks disperse it.
"PEOPLE HAVE TO BUY GOLD, NOT THE IDIOTIC CENTRAL BANKS FOR GOLD TO
BECOME A STORE OF VALUE," GATA Member Chris Diethelm has written,
"If people would use gold to reduce the perpetuated interest on debt
they carry gold will be used for a useful function," he writes. "I have
used gold as collateral to get 5% interest on land purchases where
without it I would have to pay 10%. This has reduced my cost of the
property over time to pay for the initial cost of gold. People have to
buy gold, not the idiotic central banks for gold to become a currency
and a store of value. We in USA are too smart to figure this out. We
love perpetuated debt. You people have a good cause but are helping the
I don't quite see how GATA is helping the central banks, but I do take
the point that the bottom line to the GATA exercise must be to maintain
gold as money, and that this purpose is NOT served by fretting over the
central banks and the IMF playing footloose with gold. Bankers have
misused gold from the beginning. In the bank vaults, gold has been the
generator of debt through fractional reserve banking, not money and
now gold is being lent to bullion dealers as a commodity, not as money.
The subject is well covered in Wither Gold, the prize-winning essay by
Antal E. Fekete, posted at www.fame.irg/research/library/af-001-b.htm. I
"Rumours about the death of the gold standard are grossly exaggerated.
In 1930 Keynes. . . in his book A Treatise On Money. . . made a
convincing case that dispersal of gold from fewer to more numerous hands
has always been instrumental in promoting the monetary qualities of the
yellow metal. But Keynes went on to prophesy that the exact opposite
would take place (through the rest of) the 20th century. . . What he
referred to was the weaning of the public from the gold coin, the
concentration of gold in the central bank vaults, and the unprecedented
increase of bank notes in circulation. . . However Keynes' prophesy
concerning gold's future fell short of the mark. Keynes failed to
foresee the coming of the third (and so far the greatest) dispersal of
gold a generation after his death in 1947. It took the form of a great
official gold dumping, ushered in by the U.S. Treasury gold auctions in
1974, followed by further auctions of central bank under the aegis of
the International Monetary Fund (IMF). Later the auctions were suspended
possibly because it was belatedly realized that the U.S. Treasury and
the IMF had made themselves the laughing stock of the world. They were
throwing away their most reliable asset in exchange for irredeemable
promises to pay at ludicrous prices to boot. . . (Yet) the third
dispersal of gold is still continuing. It may be confidently predicted
that the ultimate effect will be the same as that of previous historic
dispersals: a reconfirmation of gold's position as the paramount
monetary asset of the world."
Vronsky (www.gold-eagle.com/editorials_99/vronsky022299.html) makes the
same point in an editorial of 22 February 1999, in which he shows how
central bank gold sales have been buying signals in the market rallies
of 1968 to 1975, 1979 to 1980 and 1993. "Central Bank gold selling
peaked at the beginning of 1968, whence gold rose from about $40 to
$180 Central Bank gold selling peaked at the beginning of 1979, whence
gold rose from about $210 to $675. . . Central Bank gold selling peaked
at the beginning of 1993, whence gold rose from about $325 to $405." The
rise in the third rally was constrained as a result of Goldman Sachs
turning bearish from the time Robert Rubin left the firm to become
Treasury Secretary, I suggest --see Red Baron essay
(www.gold-eagle.com/gold_digest_99/baron021199.html) of 11 February.
- - - - -
To conclude the reflection:
1. There is no question that the world is being ruined economically,
with consequent warfare, by a stupendous collusion that is against U.S.
2. There is no question that the dispersal of gold from central bank
vaults to ordinary people, West and East, is the best way to ensure
gold's continuance as money after the inevitable crash.
3. With gold as money in the hands of ordinary people, as it already is
in India and other countries of Asia, there is a chance of bringing
economic, ecological and social harmony into play on earth.
Therefore, GATA should be putting more effort into educating westerners
into buying and using gold, like Chris Diethold is doing, and Asians
have long been doing, as an integral aspect of its Gold Anti-trust
From tomorrow I will start to catch up on compiling the many messages I
have received from GATA members into E-MAIL CAMPAIGN and VIEWPOINT
GO GATA, go gold,
Boudewijn Wegerif (Bodwin)
Moderator GATA E-mail Group.