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Greenspan vs. gold's anti-salesman

Section: Daily Dispatches

1:38p ET Thursday, September 16, 2010

Dear Friend of GATA and Gold:

An editorial in yesterday's New York Sun reports on remarks made about gold that day to the Council on Foreign Relations by former Chairman Alan Greenspan, who is quoted as saying:

-- "Fiat money has no place to go but gold."

-- And, "If all currencies are moving up or down together, the question is: relative to what? Gold is the canary in the coal mine. It signals problems with respect to currency markets. Central banks should pay attention to it."

The phrase "canary in the coal mine" is, coincidentally, the one used about gold for many years by GATA Chairman Bill Murphy. That Greenspan should pick up Murphy's phrasing may puzzle mainstream gold market analysts like Kitco's Jon Nadler, who insists that central banks have "no interest" in interfering with the gold market.

But of course over the years Greenspan many times has acknowledged central bank interest in the gold market and even central bank interest in manipulating the gold market, such as his famous testimony to Congress in July 1998 that "central banks stand ready to lease gold in increasing quantities should the price rise" ( and his musing at the May 1993 meeting of the Federal Open Market Committee about the potential for central bank gold sales to change the psychology of the gold market, remarks disclosed and analyzed by GATA consultant Dimitri Speck here:

So with Greenspan's remarks this week to the Council on Foreign Relations, Nadler is once again contradicted about the most import factor in the gold market, the interest of central banks in controlling the price of a competitive currency that profoundly influences not only currency values but interest rates and the value of government bonds and equities generally.

You can find the New York Sun's editorial quoting Greenspan's latest remarks, headlined "Greenspan's Warning on Gold," here:

Though Kitco is nominally in the business of retailing precious metal, Nadler has spent years as a sort of anti-salesman there. While he always maintains that investment portfolios should include gold, he never advocates buying it now. With Nadler there's no danger of being misled by the enthusiasm that infects real estate, where "now" is always the time to buy. With gold's anti-salesman, the time to buy has not yet arrived or is so far in the distant past that it might be remembered only by those who helped British Chancellor Gordon Brown empty the Bank of England's vaults to rescue the short-squeezed bullion banks.

Having perpetrated most of them, Greenspan knows all the tricks of central banking and is now an adviser to the Paulson & Co. hedge fund, which taken a huge position in gold. Apparently the anti-salesman didn't dissuade them from finding a time to buy.

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


Sona Resources Expects Positive Cash Flow from Blackdome,
Plans Aggressive Exploration of Elizabeth Gold Property

On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia.

Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013."

For complete information on Sona Resources Corp. please visit:

A Canadian gold opportunity ready for growth

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Prophecy to Become Coal Producer This Year
with 1.5 Billion Tonnes of Resource

Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen.

For Prophecy's complete press release about its production plans, please visit: