Noting today's dispatch about the World Gold Council's latest confidential
seminar for central bank and government officials --
http://gata.org/node/18527
-- our friend R.G. wonders just how intimately major gold-mining companies
are involved with governments and central banks and indeed whether major
miners are secretly cooperating with governments and central banks in
controlling the price of the monetary metal.
R.G. asks whether major gold miners are diverting some of their production
to government buyers, short of the ordinary markets, in exchange for favors
of some sort. After all, mining companies are completely vulnerable to
governments for their mining rights, royalty requirements, and observance of
environmental regulations.
Of course it's unlikely that any major gold miner would acknowledge relationships
that secret and sensitive. But GATA long has suspected them and has
documented such a relationship involving what is now the world's biggest
gold-mining company, Barrick Gold, which a few days ago acquired Randgold
Resources.
In 2003, trying to win dismissal of the market-rigging lawsuit filed
against it by gold dealer Blanchard & Co. in U.S. District Court in New
Orleans, Barrick claimed that in borrowing and selling central bank gold the
miner had become the agent of central banks in regulating the gold price and
should share their sovereign immunity from lawsuit in the United States:
http://www.gata.org/node/1858
The court rejected the argument and Barrick settled the lawsuit, soon
after which it announced that it would close its gold hedges.
Now Barrick has formally become the business partner of a major
gold-mining company owned by the government of China, Shandong Gold. Shandong
Gold and Barrick have even exchanged big chunks of each company, so the
government of China is now a major shareholder in Barrick.
http://gata.org/node/18494
http://gata.org/node/18498
http://gata.org/node/18520
Barrick Executive Chairman John Thornton has even said the company wants a
"distinctive and preferred relationship with China":
http://gata.org/node/18525
Intimate but not fully understood relationships between major gold mining
companies, on one hand, and governments and central banks on the other might
explain the indifference of the World Gold Council to the longstanding policy
of gold price suppression by major governments and central banks. That is,
what if the gold council is really representing not gold investors but
certain governments in their objective of minimizing gold's traditional
monetary functions?
As creators of infinite money, governments and central banks certainly
have had the capacity of buying up the gold-mining industry, or gaining
control of it through intermediary brokers, and neutering the industry, as
the industry has been neutered, might be awfully helpful to the cause
of maintaining government's control over money.
This is at least something investors in the monetary metals might want to
keep in mind.
