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The slides for this presentation are posted here:
http://gata.org/files/GATA-Powell-Mines&M...-11-29-2017.pdf
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SLIDE 1
All you really need to know about gold could have been surmised from a
story on the front page of The Wall Street Journal on August 10:
http://www.gata.org/node/17562
SLIDE 2
In that story the newspaper quoted four experts on the gold market, all of
them associates of the Gold Anti-Trust Action Committee and all of them
introduced to the newspaper's reporter by me.
SLIDE 3
Those four experts -- gold researcher Ronan Manly, Sprott Asset
Management’s John Embry, GoldMoney founder James Turk, and futures market
analyst James McShirley -- accused the Federal Reserve of being involved with
the suppression of the gold price through the surreptitious lending and
swapping of central bank gold reserves.
The Wall Street Journal story was a triumph for GATA, even though the Journal
declined to mention GATA by name. (The reporter told GATA Chairman Bill
Murphy that the newspaper just ran out of space.)
But the story would have been a much greater triumph for us – indeed, it
would have been a triumph for free markets -- if the newspaper had not
decided, in reporting these complaints about surreptitious government
intervention in the gold market, to violate the first rule of journalism. That's
the rule about getting both sides of a story.
The Journal reported: "Some gold bugs -- investors bullish on the
yellow metal -- think the Fed secretly lends it out to suppress prices,
partly to protect the dollar's value. In theory, the Fed can feed gold into
the market through swaps with other countries."
So where were the Journal's questions about this for the Fed and the
Treasury Department? Are the Fed and the Treasury Department involved in
keeping the gold price down through surreptitious interventions, or are they not
involved?
But the Journal never asked such questions, even though for a year and a
half, as I provided the Journal's reporter with the documents of these
interventions, I repeatedly pressed her to put the questions to the Fed and
Treasury Department. I even provided the Journal's reporter with a video
showing New York Federal Reserve Bank President William Dudley refusing to
answer a question about gold swaps during his appearance at the Virginia
Military Institute on March 31, 2016:
http://www.gata.org/node/16341
https://www.youtube.com/watch?v=p0JYoJ_rKxQ
Ordinarily news organizations are most interested in questions that high
government officials refuse to answer. But mainstream financial news
reporters are not interested in questions about secret government
intervention in the gold market and secret interventions in markets
generally. No, such questions are too sensitive, considered matters of
national security.
The best that mainstream financial news organizations can do is just to
acknowledge the questions sometimes. Mainstream financial news organizations
can never pursue the answers, no matter how easy it would be to do so.
Unfortunately most gold market analysts themselves will not pursue these
questions either -- at least not yet. GATA will continue working on them.
But market manipulation issues have kept coming close to the surface
during the last year.
Last month GATA consultant Robert Lambourne, who studies the gold activity
of the Bank for International Settlements, reported that gold swaps
undertaken by the BIS have exploded from zero a year and a half ago to about
570 tonnes as of last month:
http://www.gata.org/node/17790
The increase in the BIS' gold swaps is revealed in the footnotes of the
bank's latest annual report and its statement of account for this October.
This page is taken from the BIS annual report issued in June, covering the
year ending March 31. It acknowledges 438 tonnes of gold swaps:
SLIDE 4
This page, from the BIS' October statement of account, shows that gold
loans have risen substantially since March.
SLIDE 5
Lambourne says there is reason to believe that the swaps undertaken by the
BIS in the last year and a half were undertaken just as the gold price showed
signs of breaking upward.
The BIS is the primary gold broker for its central bank members and does
all sorts of gold business for them. This business is acknowledged in the
bowels of the BIS' internet site:
http://www.bis.org/banking/finserv.htm
SLIDE 6
Contrary to what some people would have you believe, central bank gold
reserves don't just sit quietly in their vaults all day. They are mobilized
every day, often with the help of the BIS, not just through sales and leases
but also through issuance of the various kinds of derivatives listed on the
screen.
Indeed, when the BIS thinks that only its central bank members and
potential members are listening, it even advertises that its services
include secret interventions in the gold market.
This advertisement was part of the BIS presentation that was made to
potential central bank members during a conference at BIS headquarters in
Basel, Switzerland, in June 2008.
http://www.gata.org/node/11012
SLIDE 7
What exactly is the BIS doing in the gold market, for whom is it making
its transactions, and what are their objectives?
Two weeks ago I put that question to the bank's press office. I sent the
bank's press office Lambourne's analysis of the bank's gold transactions and
asked if he was right or wrong and, if he was wrong, how so. I added:
"Could you also please tell me the BIS' purpose and objectives with
these gold swaps and with the bank's involvement in the gold and gold
derivatives markets generally?"
The following day I received a curt and unsigned reply from the bank. The
press office wrote: "We do not comment on specific accounts / holdings
of central banks or of the BIS. Please see our latest annual report for
details on gold. Further information can be gleaned from central banks
directly."
Ironically, on the same day the BIS' press office told me to drop dead, the
bank's research director, Hyun Song Shin, attended a conference at the
European Central Bank in Frankfurt, Germany, giving a speech titled "Can
Central Banks Talk Too Much?":
http://www.gata.org/node/17802
SLIDE 8
Shin told the ECB conference: "If central banks talk more to
influence market prices, they should listen less to the signals emanating
from those same markets. Otherwise, they could find themselves in an echo chamber
of their own making, acting on market signals that are echoes of their own
pronouncements.
"On the other hand," Shin continued, "talking less is
hardly a viable option. Central bank actions matter too much for the lives of
ordinary people to turn the clock back to an era when silence was golden.
Accountability demands that central banks make clear the basis for their
actions."
Accountability in central banking? That's a laugh, especially in regard to
gold.
All you need to know about the supposed accountability of central banking
is conveyed by the secret March 1999 report of the staff of the International
Monetary Fund to the fund's executive board.
http://www.gata.org/node/12016
SLIDE 9
The report told the board that central banks conceal their gold swaps and
leases to facilitate their surreptitious interventions in the gold and
currency markets. That is, central banks conceal their gold swaps and leases
to defeat accountability.
The BIS is a powerful organization but most of its power comes from the
refusal of mainstream financial news organizations and gold market analysts
to ask the bank to explain what it does in the gold market and then to report
the bank's refusal to explain.
Confirmations of gold and silver market rigging below the central bank
level have poured in during the last year.
In December last year Deutsche Bank agreed to pay $60 million to settle a
class-action anti-trust lawsuit's complaints that it had manipulated the gold
market. In October last year Deutsche Bank agreed to pay another $38 million
to settle a similar complaint that it had manipulated the silver market.
Perhaps more importantly, Deutsche Bank agreed to provide the plaintiffs with
evidence against the banks it admitted conspiring with:
http://www.gata.org/node/16964
SLIDE 10
Unfortunately the discovery and deposition procedures in the class-action
anti-trust lawsuits against Deutsche Bank have been put on hold at the
request of the U.S. Justice Department, which purports to be undertaking its
own investigation of the bank. More likely the Justice Department is just
trying to delay exposure of the U.S. government's own involvement with the
market rigging.
http://www.gata.org/node/17157
In June a former metals trader for Deutsche Bank pleaded guilty in federal
court in Chicago to using "spoofing" techniques to manipulate the
futures markets for gold, silver, platinum, and palladium. The former trader
for Deutsche Bank also admitted front-running customer orders.
http://www.gata.org/node/17407
In May gold researcher Ronan Manly, reviewing records at the Bank of
England, discovered minutes showing that Western central bankers conspired in
the early 1980s to suppress the gold price in exchange for continued cheap
oil exports from the Middle East. These Bank of England minutes are
confirmation of the long-held belief in gold circles that gold price
suppression originates in part from the desire of Middle Eastern oil
exporters to be able to exchange their oil for better money than U.S.
dollars, money that can't be devalued so easily:
http://www.gata.org/node/17386
SLIDE 11
Reviewing those Bank of England records, Manly also discovered that
Western central banks conspired in 1979 to create a second London gold pool
to control the metal's price:
http://www.gata.org/node/17372
SLIDE 12
In May GoldMoney Vice President John Butler discovered still another U.S.
State Department memorandum detailing U.S. government policy to drive gold
out of the world financial system in favor of the U.S. dollar and the Special
Drawing Rights issued by the International Monetary Fund, which then was
under U.S. government control.
http://www.gata.org/node/17361
SLIDE 13
The memo was written in 1974 by Deputy Assistant Secretary of State Sidney
Weintraub for Secretary of State Henry Kissinger and the Treasury
Department's undersecretary for monetary affairs, Paul Volcker, who of course
went on to become chairman of the Federal Reserve.
Weintraub wrote: "To encourage and facilitate the eventual
demonetization of gold, our position is to keep the present gold price,
maintain the present Bretton Woods agreement ban against official gold
purchases at above the official price, and encourage the gradual disposition
of monetary gold through sales in the private market."
In April the British Broadcasting Co.'s "Panorama" program
obtained and broadcast a recording of a conversation between two officials of
Barclays bank that implicated the Bank of England in the infamous rigging of
the London Interbank Offered Rate, the LIBOR interest rate.
http://www.gata.org/node/17303
SLIDE 14
In the recording a senior Barclays manager, Mark Dearlove, instructs the
bank's LIBOR rate submitter, Peter Johnson, to lower the rates Barclays is
submitting.
Dearlove tells Johnson: "We've had some very serious pressure from
the UK government and the Bank of England about pushing our LIBORs
lower."
Johnson objects, saying that this would mean breaking the rules for
setting LIBOR, which required Barclays to submit rates based only on the cost
of borrowing cash. Johnson asks: "So I'll push them below a realistic level
of where I think I can get money?"
His boss Dearlove replies: "We've got the Bank of England, all sorts
of people involved in the whole thing. ... I am as reluctant as you are. ...
These guys have just turned around and said just do it."
In January the TF Metals Report discovered in the Wikileaks archive of
State Department diplomatic cables a cable sent in December 1974 from the
U.S. embassy in London to the State Department in Washington. The cable shows
that the U.S. government had just gotten assurances from London bullion banks
that the imminent creation of a gold futures market in the United States
would cause so much volatility in the gold price that ordinary investors
would be driven out of gold:
http://www.gata.org/node/17081
SLIDE 15
In GATA's view there are four crucial questions about the gold price. I
urge you to put these questions to those who speak about gold at this
conference. I also urge you to put them to the executives of companies that
mine the monetary metals.
SLIDE 16
1) Are governments and central banks active in the monetary metals markets
or not?
2) Are the documents compiled by GATA from government archives and other
official sources asserting such activity genuine or forgeries?
3) If governments and central banks are active in the monetary metals
markets, is it just for fun or is it for policy purposes?
SLIDE 17
4) If such activity by governments and central banks is for policy
purposes, do those purposes involve the traditional objectives of defeating
an independent world currency that competes with government currencies and
interferes with government control of interest rates and, indeed, interferes
with control of the entire economy and society itself?
In GATA's view there are good arguments for investing in the monetary
metals and the companies that mine them. But investors need to know what
they're getting into, what they're up against, and what they can do to
improve the prospects for their investments and for the restoration of free
markets.
Remember, as author and fund manager Jim Rickards said on CNBC a few years
ago: "When you own gold you're fighting every central bank in the
world."
So if we want free and transparent markets and limited and accountable
government, we just have to beat the bastards.
The documents and events I have reviewed today are mainly those that have
been unearthed or developed during the past year. There is much more
documentation of the central bank gold price suppression scheme at GATA's
internet site:
http://www.gata.org/taxonomy/term/21
A good summary of the scheme is posted in "The Basics" section
of the GATA site:
http://www.gata.org/node/14839
You can find GATA on the internet at GATA.org, where you can sign up for
our daily e-mail dispatches and, if you're inclined to help us, make
contributions that are federally tax-deductible in the United States. We
really could use your help. Of course I'll be glad to hear from you by e-mail
at target="_blank" CPowell@GATA.org.
SLIDE 18
Thanks for your kind attention.
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