One could spend a lifetime trying to correct the unsupported beliefs about
the gold market expressed by Keith Weiner of Monetary Metals, but your
secretary/treasurer has his own failings to correct, like his own omission
yesterday, in "Does Weiner Really Know What Central Bankers Think Better
Than They Themselves Do?" --
http://gata.org/node/18115
-- of another telling detail refuting a major assertion by Weiner in his
latest essay, "Standing Ready to Lease Gold":
http://news.goldseek.com/GoldSeek/1521468000.php
Weiner argued that gold leasing by central banks has little effect on the
gold price because leased gold has to be returned eventually: "A lease
allows the lessee to put the physical commodity into the market to alleviate
the shortage, and get it back later when the shortage has passed."
In response your secretary/treasurer noted yesterday that a decade of gold
leasing by central banks, the 1990s, was followed by a decade of gold selling
by central banks, the 2000s. If the gold sold in the latter decade was the
same gold as was leased in the former decade, the leased gold was not
returned.
But documents refuting Weiner were not provided.
The first is a statement issued in February 2006 by the most notorious
borrower of central bank gold, Barrick Gold, which touted the generous terms
of its gold leasing contracts, which it called master trading agreements.
The Barrick statement said: "In most cases, under the terms of the
MTAs, the period over which we are required to deliver gold is extended
annually by one year, or kept 'evergreen,' regardless of the intended delivery
dates, unless otherwise notified by the counterparty. This means that, with
each year that passes, the termination date of most MTAs is extended into the
future by one year":
https://www.barrick.com/investors/news/news-d...rickEarnsMil...
And in PDF format:
http://gata.org/files/BarrickReleaseLeasin...-02-22-2006.pdf
That is, central banks really didn't want their gold back at any
particular time at all. They wanted to keep it circulating, preventing supply
shortages that might increase the gold price.
In the second document, produced in 2003, Barrick was even more explicit.
In its motion filed in U.S. District Court for the Eastern District of
Louisiana in New Orleans, seeking to dismiss a lawsuit accusing it of
manipulating the gold market, Barrick went so far as to claim to share the
sovereign immunity of central banks against suit, because in leasing gold and
selling it into the market, Barrick claimed to be helping to implement
central bank policy:
target="_blank"
http://www.gata.org/node/1858
The court denied Barrick's motion and the mining company soon settled the
lawsuit by promising to stop hedging its future gold production. Barrick went
on to reduce its hedge book of borrowed gold.
GATA has produced many documents, including admissions by central bankers
themselves, confirming an international central bank policy, largely
surreptitious, of controlling the price of gold to protect government
currencies and bonds and to control interest rates, a policy of manipulating
markets deceptively:
target="_blank"
http://www.gata.org/taxonomy/term/21
The effectiveness of various aspects of this policy may be questioned, but
its general objective is plain, and to refute Weiner it is not necessary to
understand fully every detail of the policy.
For Weiner's primary assertion is as broad as it is unsupported: that
central banks don't care about gold, even as practically every week produces
new proof that they care desperately.
