A few weeks ago, through GATA, I called attention to the assertion by the
chief executive of the London Bullion Market Association, Ruth Crowell, that
the London gold market can never be fully transparent while central banks
remain such big participants:
http://www.gata.org/node/15241
Here is another telling comment by someone connected to the LBMA
concerning central banks and the gold market, Jonathan Spall. The comment is
found on the Internet site of his precious metals consultancy company, G
Cubed Metals Ltd.:
http://gcubedmetals.com/index.html
G Cubed Metals Ltd. was established by Spall last year soon after he left
Barclays in London, where he was a product manager in the commodities area
and acted as one of Barclays' directors in the London Gold Market Fixing Ltd.
company.
Since leaving Barclays, Spall has, he says, conducted an "independent
review" of the candidates for the LBMA silver price competition (last
June and July), served as an "independent chair" for the LPPM daily
platinum and palladium fixings last August until they moved to an automated
platform, and last October was appointed "senior adviser" to the
LBMA.
Spall provides his credentials at his company's Internet site here:
http://gcubedmetals.com/credentials.html.
Other people, not identified by G Cubed, are described as the firm's
affiliates, since Spall "has teamed up with a number of other leading
authorities in this field" so that "G Cubed Metals will be able to
put together the right team for the job":
http://gcubedmetals.com/affiliates.html
Spall's telling comment about central banks is on the "Services"
page of the G Cubed site. He says:
"All connected with G Cubed Metals are well aware of the need for
confidentiality in all financial markets as well as the additional
sensitivity that comes from transacting in precious metals -- particularly
when it involves the 'official sector' such as governments, central banks,
and sovereign wealth funds."
See: http://gcubedmetals.com/services.html
And a duplicate in PDF format, just in case:
http://www.gata.org/files/GCubedMetalsServices.pdf
Confidentiality in business is often a given, and in relation to precious
metals, if the "additional sensitivity" in precious metals
transaction was related to physical security and security of transport and
vaulting, this would fall under normal "additional security." But
the context of Spall's comment suggests that this "additional
sensitivity" means market sensitivity. This is supported by the
Spall's next observation, which clarifies that, yes, indeed, there is a need
for "additional sensitivity" particularly "when it involves
the official sector, such as governments, central banks, and sovereign wealth
funds."
Spall therefore concedes that the London gold market and the LBMA will not
provide transparency when dealing with the "official sector"
because the "official sector" requires this lack of transparency.
Spall's statements thus also indicate that the commercial sector will gladly
give the official sector this "additional sensitivity" -- that is,
this lack of transparency.
So the question becomes: What transactions in gold are being undertaken by
the "official sector" that require such secrecy and sensitivity?
Most likely these official transactions involve the surreptitious rigging
of the gold and currency markets, transactions that, in 1999, the staff of
the International Monetary Fund found member central banks so determined to
conceal:
http://www.gata.org/node/12016
Spall's advertisement for his new company is more evidence supporting the
frequent assertion by GATA Secretary/Treasurer Chris Powell that "the
location and disposition of national gold reserves are secrets far more
sensitive than the location and disposition of nuclear weapons."
-----
Ronan Manly is a gold market researcher and consultant to GATA.
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