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GATA presses Fed to give up its golden secrets

Section: Daily Dispatches

12:01a ET Saturday, August 22, 2009

Dear Friend of GATA and Gold:

Yesterday GATA's Washington-area law firm, William J. Olson P.C. of Vienna, Virginia -- -- filed with the Federal Reserve Board an administrative appeal of the Fed's most recent refusal to grant us access to the agency's records involving the U.S. gold reserve.

By letter dated August 5, the Fed reported to us that 137 pages of documents being withheld "contain the following kinds of exempt information: 'trade secrets and commercial or financial information obtained from a person and privileged or confidential' (confidential commercial information); and 'inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency' (staff memoranda, draft memoranda and letters, and intra- and inter-agency communications). Such information is exempt from disclosure under authority of Exemptions 4 and 5 of the [Freedom of Information] Act, respectively, 5 U.S.C. 552(b)(4) and (b)(5)."

We construe this as an admission that the U.S. gold reserve has been put into private hands to some extent or has been compromised in some way by possession by private interests, such as financial houses that trade in gold. Really, why should any Federal Reserve record involving the national gold reserves be confidential, except perhaps records involving the most ordinary security of the reserve's vaulting? Plainly the Fed has knowledge of something that has been done with the gold reserve that the U.S. government does not want the American people and the financial markets to know.

Further, GATA's administrative appeal notes, the Fed's search of its records in response to our request was negligent, insofar as it did not cite at least one document involving gold swaps that is posted and publicly accessible at the Fed's own Internet site. That is, it seems that GATA's lawyers looked harder for the relevant documents than the Fed itself did.

It strikes GATA as remarkable that the financial market commentators who most often disparage suggestions that central banks are intervening surreptitiously as well as openly in the gold market never have tried to put a critical question about gold to any central bank. Even big financial news organizations have failed to do this when reporting on the gold market. But if they ever did start asking critical questions, they would have to report that the Fed has some big secrets about gold. It is more justification for U.S. Rep. Ron Paul's legislation to audit the Fed.

You can read GATA's administrative appeal of the Fed's denial of our freedom-of-information request here:

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

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