While there's no telling when exposure of Western central banking's
longstanding scheme to suppress monetary metals prices will explode the
scheme, word is getting around the world. This is signified by a long
commentary published in this month's edition of an Indian magazine of
politics and economics, Swarajya, written by Shanmuganathan Nagasundaram,
founder of a financial consulting firm.
Nagasundaram's commentary, headlined "Gold Can Help India Set Global
Agenda on Monetary Policy," cites the work of GATA, silver market
analyst Ted Butler, and Canadian investment house founder Eric Sprott.
Nagasundaram writes: "Going by the price action of the last six years,
readers might be tempted into believing that the demand for gold is less than
the supply. Nothing could be farther from the truth. Annual demand has been
running far ahead of gold mine supplies, and prices have been contained
through a deliberate price suppression mechanism orchestrated by the Bank for
International Settlements through the U.S. Federal Reserve and the Bank of
England.
"Through a series of papers titled 'Do The Western Central Banks Have
Any Gold Left?,' Eric Sprott of Sprott Inc., a global precious metals
investor, has shown that annual net consumer demand has been running for the
last decade or so at about 4,000 tonnes per year, whereas the new mine supply
has averaged about 2,800 tonnes.
"How prices have been contained under such conditions of
demand-supply mismatch is a rather technical issue that will need a separate
article by itself. Just to provide a one-line summary, it's done in the
futures market by holding concentrated short positions by non-verifiable
participants. For interested readers, this issue has been extremely well
documented by the Gold Anti-Trust Action Committee, metals price analyst Ted
Butler, and several others.
"What is more relevant here is how this supply shortfall to the tune
of around 1,000 tonnes per year has been met with year after year. As has
been shown by Sprott, this marginal supply could have come only from the
Western central banks without disrupting overall market conditions.
"A valid question would be: Would these sales not be reflected as a
decrease in gold holdings on their balance sheets? The central banks
sidestepped the issue by showing owned and leased holdings of gold as one
line item.
"So, as happened during Raghuram Rajan's tenure, the Reserve Bank of
India (RBI) swapped/leased a good portion of its 557-tonne gold reserves with
the Bank of England. The Bank of England, in turn, would lease this gold to
one of the participating banks, which would then sell it on the open market.
The gold would then be reflected as being owned by both the purchasing
individual as well as the RBI.
"This double counting of gold could well be to the tune of around
20,000 tonnes (around 15 percent of total supplies above ground), and the
chance that the RBI gets this leased gold back is very slim."
Nagasundaram's commentary is posted at Swarajya's internet site here:
https://swarajyamag.com/magazine/gold-can-hel...bal-agenda-o...
