Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench
Gold & Silver Prices in
In the same category

History Rhymes and Old Habits Die Hard

IMG Auteur
 
 
Published : October 08th, 2009
1041 words - Reading time : 2 - 4 minutes
( 0 vote, 0/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Editorials

 

 

 

 

Over the past couple weeks some interesting historical documents relating to the gold market have surfaced. First up is Zero Hedge’s, Exclusive Smoking Gun: The Fed On Gold Manipulation which features an official document uncovered by researcher / historian Geoffrey Batt - a June 3, 1975 memorandum from Fed Chairman Arthur Burns to [then] President Gerald Ford.


Writes Zero Hedge,


“[the memorandum was sent] to Gerald Ford, which among others CC:ed Secretary of State Henry Kissinger and future Fed Chairman Alan Greenspan, discussing gold, and specifically its fair value, a topic whose prominence, despite former president Nixon's actions, had only managed to grow in the four short years since the abandonment of the gold standard in 1971. In a nutshell Burns' entire argument revolves around the equivalency of gold and money, and furthermore points out that if the Fed does not control this core relationship, it would "easily frustrate our efforts to control world liquidity" but also "dangerously prejudge the shape of the future monetary system." Furthermore, the memo goes on to highlight the extensive level of gold price manipulation by central banks even after the gold standard has been formally abolished.”


Quoting from pg. 4 of the Burns memorandum,


..a large measure of freedom for governments to trade in gold a market-related price may easily frustrate efforts to control world liquidity. For example, such freedom would provide an incentive for governments to revalue their official gold holdings a a market-related price. [France has already done so.] This in turn could result in the addition of up to $150 billion to the nominal value of countries’ reserrves. Liquidity creation of such extraordinary magnitude would seriously endanger, perhaps even frustrate, our efforts and those of other prudent nations to get inflation under reasonable control. This is a matter of great concern to Mr. Witteveen, the head of the I.M.F., and to many other financiers.


Funny, ehh, the Fed worried about the inflationary impact of a nominal increase in reserves?



source: Hugo Salinas Price


And regarding the IMF [and World Bank], there are some esteemed market watchers who claim these institutions have recently “panned” the dollar. For anyone who wants to take their heads out of the sand, here’s a few words about the role of the IMF from my friend Rhody, an astute market watcher,


“The IMF and the World Bank are American institutions added to the Bretton Woods Agreement on the insistance of the U.S. The World Bank was added to facilitate the lending of U.S. dollars to the developing world. This fostered debt and control. The IMF was the bully organization used to enforce the lending agreements of the World Bank. In a sense, the World Bank was a loan shark and the IMF was the enforcer that went around and broke legs when borrower nations got in trouble financially. Add to this the occasional surge in American interest rates to 20% (1981) and America literally pillaged the world here. This is the sick system that the G20 seeks to support. I really doubt that the World Bank and IMF have panned the dollar. They can't. Their continued survival depends on the dollar. The IMF, for example is hardly likely to pan the dollar and then turn around and sell 403 tonnes of gold in return for dollars! Get real.”


There were two companion pieces to the Exclusive Smoking Gun piece, published by Zero Hedge about a week earlier; the first of which was a “declassified” 1968 U.S. State Dept. document explaining the inner workings of gold price manipulation [broadly defined as “re-shuffling”] during the days of the London Gold Pool –- here.


The second companion piece is “linked” in the Exclusive Smoking Gun piece - a declassified 1968 CIA brief, but it’s apparently no longer available. What the CIA brief outlined was the existence of two markets for gold – The Official and Private market. The brief went on to outline how South Africa [by far the world’s largest gold producer at the time] should be encouraged to sell their output on the “Private” market so as to help suppress the world gold price.


Then, Bretton Woods was abrogated by President Nixon in August, 1971.


But do look at this,



source: www.vaticanbankclaims.com/press12.html


What this document shows is [then] N.Y. Fed President, Paul Volcker [post Bretton Woods] acknowledging the existence of the same two gold markets [Official and Private] instructing the Vatican to sell “their” gold in the “Private” market – the one acknowledged by the CIA back in 1968 to be utilized for gold price suppression.


I’m going to suggest that, when you take the words of Fed Chairman Arthur Burns together with the words of N.Y. Fed President, Paul Volcker – both circa 1975 – it’s very clear that the gold price was highly managed during the “melt-up” in price throughout the 1970’s.


Almost sounds like history repeating itself, eh?


This would seem to make a mockery of Mr. Volcker’s own words [or show him as having selective memory, perhaps?] since excerpts of his memoirs were published in the Nikkei Weekly on Nov. 15, 2004 – referencing a 1973 [10 %] U.S. Dollar devaluation - where Mr. Volcker stated,


“That day, the U.S. announced that the dollar would be devalued by 10%. By switching the yen to a floating exchange rate, the Japanese currency appreciated, and a sufficient realignment in exchange rates was realized. Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake.”


Mr. Volcker may be technically correct when he states that “joint” intervention in gold sales was not undertaken; but, it would appear we can all rest assured, unilateral [American] intervention was.


None of this should surprise anyone when we all stop and consider the sage words of Mr. Alan Blinder Esq. – former Vice Chairman of the Federal Reserve – who appeared on PBS television in the 1990’s and uttered,


"The last duty of a central banker is to tell the public the truth."


It would seem that old habits really do die hard.



 

Rob Kirby

KirbyAnalytics.com

  

Also by Rob Kirby

 

Subscribers to Kirbyanalytics.com are profiting from paid in-depth research reports, analysis and commentary on rapidly unfolding economic developments.  Subscribe here.

 

 


 

 

 

 

Companies Mentionned : Gold |
<< Previous article
Rate :Average :0 (0 vote)
>> Next article
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
41 Facts about Central Banks no ...
18:48prljr
Common sense and logic dictate that if this was taught in schools it would not exist as it has these past 100 yrs. The monetary system is a CON a L...
41 Facts about Central Banks no ...
19 Decsamking73
I'm not sure that much was taught about the central banking system back when I was in school...25 + years ago. At least not the important parts.
Gold & Silver Market Morning
19 Decend
If you trade XAU/RUB and have bought XAU using RUB, you should have closed your position as he advised. Then you should have switched, buying gold ...
Muslim terrorism, the left and t...
19 DecFirebear1
All please understand this person was a Muslim,that was his believe! His character was that of a criminal as was shown by his action on the day and...
Napoleon vs. Cheney: "Interrogat...
18 Decwalmarde
Torture just put the moral line lower. Lets think about American exceptionalism. What we want ? we want to spread and defend that exceptio...
Napoleon vs. Cheney: "Interrogat...
18 Decwalmarde
Utilitarianism is bad philosphy. I'm also very disgust about torture. It will backfire in our face. We are now no better than ou...
Napoleon vs. Cheney: "Interrogat...
18 DecJosu O.5
I cannot overstate how important is that every american read this article. It's absolutely wonderful how you have summarized every aspect around to...
Muslim terrorism, the left and t...
18 Decend0
Does anyone still wonder why is Australia hotbed for second generation Muslim migrant radicalization? Does anyone still need an explanation on why ...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS
Comments closed
Subscribe to 24hGold’s daily market briefing
  • Prices and data of precious metals in 119 currencies and world mining companies
  • Daily analysis of the economy, markets and more
  • Free, daily and indispensable
Stay informed, subscribe now !
* Your email will never be shared.