Thanks to Keith Weiner of Monetary Metals for at least attempting a reply
to your secretary/treasurer's recent commentary --
http://gata.org/node/18105
-- disputing his assertion that central banks don't care about gold and
aren't manipulating its price.
But in his new commentary, "Standing Ready to Lease Gold,"
posted at GoldSeek here --
http://news.goldseek.com/GoldSeek/1521468000.php
-- 24hGold here --
http://www.24hgold.com/english/news-gold-silv...dy-to-lease-...
-- and ZeroHedge here --
https://www.zerohedge.com/news/2018-03-19/...se-gold-repo...
-- Weiner just reiterates that assertion, addresses only two of the many
documents of gold price suppression cited to him, and evades the points of
those.
"Central bankers do not think about gold," Weiner writes again,
just days after Hungary's central bank announced that it is repatriating its
gold reserves from London. Could such repatriation have been done without
thinking? As for the recent explosive increase in gold derivatives on the
books of the Bank for International Settlements, Weiner says nothing. Could
those derivatives have been undertaken without thinking too?
Weiner characterizes as "conspiracy theorists" those who
complain about gold price suppression. Perhaps he will explain in his next
commentary what it is when government officials meet secretly to decide and
implement a course of action. From the Federal Reserve Board's monthly
meetings in Washington to the montly meetings of the board of the BIS in
Basle, conspiracy is regularly defined. Weiner should try attending one of
those meetings.
Weiner argues at length that the purpose of the meeting of U.S. Secretary
of State Henry Kissinger and his deputy, Thomas O. Enders, at the State
Department in April 1974 was not about suppressing the gold price. Yet Enders
was explicit: that since the Western Europeans collectively had obtained more
gold than the United States, "this gives them the dominant position in
world reserves and the dominant means of creating reserves … If they have the
reserve-creating instrument, by having the largest amount of gold and the
ability to change its price periodically, they have a position relative to
ours of considerable power."
Plainly, control of the world's currency and financial system was at stake
for the United States. This explains the motive for gold price suppression by
the United States particularly, though of course other countries might
consider gold a threatening competitor to their own currencies.
Weiner writes that "gold is not in the system anymore." This is
rank nonsense.
All major central banks book gold as a financial asset.
The BIS recently formally declared gold a Tier 1 asset, at least as good
as any government-issued obligation. The bank even advertises that its
services to members include secret interventions in the gold market.
The International Monetary Fund considers gold so powerful and sensitive
an asset that the agency allows its member central banks to fudge their
accounting so that leased gold cannot be distinguished from gold unimpaired
in the vault, lest accurate accounting interfere with their surreptitious
interventions in the gold and currency market.
Weiner offers a long digression about Federal Reserve Chairman Alan
Greenspan's testimony to Congress in 1998 opposing the regulation of
derivatives, in which he mentioned gold leasing by central banks. This
digression is mere distraction from the point your secretary/treasurer sought
to make: that Greenspan acknowledged that the objective of gold leasing was
price suppression, not what Weiner pretends, earning income for central
banks.
Weiner asserts that in the long run leasing is not suppressive of price
because the leased gold has to be returned. Not true. For central banks that
leased gold in the 1990s sold gold heavily in the following decade. Since the
gold price rose steadily despite the regular announcements of those sales,
most likely the "sold" gold never hit the market because those
sales were really just the cash settlement of the gold leases from the
previous decade.
Weiner does not address the broader point of why the Federal Reserve
should have been opposing the regulation of derivatives, which generally are
considered to pose certain dangers to the world financial system. But a more
than plausible answer is implied by Greenspan's acknowledgment that central
banks were leasing gold to keep its price down.
That is, what if central banks already were using derivatives to
control not only the gold market but all major commodity and financial
markets? Filings by CME Group, operator of the major U.S. futures exchanges,
with the U.S. Securities and Exchange Commission and Commodity Futures
Trading Commission, as well as postings at CME Group's own internet site show
that governments and central banks indeed are secretly trading all major
futures contracts.
If governments and central banks were already controlling markets
secretly with their own trading, congressional regulation of derivatives
might expose and impair that.
Three years after Greenspan testified on the subject, the British
economist Peter Warburton put it all together in an essay titled "The
Debasement of World Currency -- It Is Inflation, But Not as We Know It":
target="_blank"
http://www.gata.org/node/8303
Warburton suspected that central banks were using investment banks to
issue derivatives throughout the commodity futures markets to siphon away
from real assets money that might seek a hedge against inflation and thus
cause inflation to appear plainly in consumer price indexes.
Warburton wrote: "How much capital would it take to control the
combined gold, oil, and commodity markets? Probably no more than $200
billion, using derivatives. Moreover, it is not necessary for the central
banks to fight the battle themselves, although central bank gold sales and
gold leasing have certainly contributed to the cause. Most of the world's
large investment banks have over-traded their capital so flagrantly that if
the central banks were to lose the fight on the first front, then the stock
of the investment banks would be worthless. Because their fate is intertwined
with that of the central banks, investment banks are willing participants in
the battle against rising gold, oil, and commodity prices."
As the saying goes: "The futures markets are not manipulated. The
futures markets are the manipulation."
But there is little need for hypothesis when frank admissions of gold
market rigging are available from central bankers themselves.
William R. White, the director of the monetary and economic department of
the Bank for International Settlements, told a BIS conference in Basel,
Switzerland, in June 2005 that a primary purpose of international central
bank cooperation is "the provision of international credits and joint
efforts to influence asset prices --especially gold and foreign exchange --
in circumstances where this might be thought useful":
target="_blank"
http://www.gata.org/node/4279
A president of the Netherlands Central Bank who was also president of the
Bank for International Settlements, Jelle Zijlstra, wrote in his memoirs in
1992 that the gold price was suppressed at the behest of the United States:
target="_blank"
http://www.gata.org/node/11304
So what is Weiner thinking when he writes that central bankers don't think
about gold? Does he know their thoughts better than they themselves do?
A disappointing detail: While Weiner's disinformation lately has been
posted at 24hGold and ZeroHedge, those internet sites have declined requests
to post GATA's replies.
