GATA's friend and
consultant R.M. calls attention to some documents demonstrating that the Bank
of England's involvement with the gold market may be even more intimate than
generally understood.
In a presentation to the
London Bullion Market Association's Fifth Annual Assaying and Refining
Seminar, held in March 2013, a Bank of England customer relationship manager,
Luke Thorn, disclosed that the bank participates on three LBMA committees.
"We are not a member of the LBMA," Thorn
said of the bank, "but we continue to play a key role in the London
market. We have observer status on the Management, Physical, and Vault
Committees."
Thorn's presentation is
posted at the LBMA's Internet site here --
http://www.lbma.org.uk/assets/ThornAR13Trans.pdf
-- and at GATA's Internet
site here:
http://www.gata.org/files/LBMAAssayingSeminar-Thorn-03-2013.pdf
And at the LBMA's
Precious Metals Conference in Rome last September, the head of the Bank of
England's Customer Banking Division, Matthew Hunt, confirmed the bank's
participation on two of those committees:
"More specifically
on gold," Hunt said, "though we are not active traders in the
market, we are a large custodian and some of the people in our team
responsible for gold observation sit on the LBMA Management Committee and the
LBMA Physical Committee as observers. Thus we retain a significant engagement
with the gold market via that route."
Hunt's presentation is
posted at the LBMA Internet site here --
http://www.lbma.org.uk/assets/Speeches/Hunt%2020130930.pdf
-- and at GATA's Internet
site here:
http://www.gata.org/files/LBMARomeConf-09-30-2013-HuntBankOfEngland.pdf
Thorn said the Bank of
England holds gold "on behalf of our customers, who are Her Majesty's
Treasury, central banks, and some LBMA members."
Of course having private
customers and such a "significant engagement" in a commodity market
puts a central bank in a peculiar position. After all, as Thorn notes, there
are many gold vaults in Britain besides the Bank of England's. So it may be asked
why the bank maintains such business at all -- unless, of course, gold is not
a mere commodity but the world's natural and international money whose
valuation central banks may very much want to control lest gold embarrass
their own currencies.
