Under the circumstances Ross Norman, CEO of London bullion dealer Sharps
Pixley, was pretty heroic with his cordial reply today --
http://www.gata.org/node/16842
-- to the questions your secretary/treasurer publicly posed to him
Saturday:
http://www.gata.org/node/16839
That is, virtually alone in the bullion dealing and banking industry,
Norman acknowledged the possibility that central banks are surreptitiously
intervening in the gold market and manipulating the monetary metal's price.
"I don't know for sure," Norman wrote, "but I would not be
surprised." He added that central banks certainly have motives for
rigging the gold market.
While Norman declined your secretary/treasurer's invitation to review and
challenge or accept the documents of that intervention summarized by GATA
here --
http://www.gata.org/node/14839
-- no one has ever challenged them, presumably because they are genuine
and support the conclusions GATA has drawn from them and because if Norman
had lent any credibility to them he would be quickly ostracized from his
industry.
Having been pressing this issue for 17 years against what seems to be all the
money and power in the world, GATA knows very well that this issue is
essentially prohibited in polite company. After all, the world financial
system now rests on the lies that markets are free and currency values true.
If those lies are ever exposed and understood, all power arrangements on the
planet will change.
So let us be grateful for Norman's friendly hint that he knows better.
Norman went on to counter with some questions and issues of his own, and
while your secretary/treasurer is little more than a scribe and archivist,
hardly a font of knowledge and wisdom, Norman answered and thus deserves
answers in return.
1) Emphasizing that his interest is entirely in assuring that the daily
London gold price fixing, the benchmark price, has integrity, Norman asks
what your secretary/treasurer would recommend for a benchmarking process. The
answer is: nothing. For the general sentiment in GATA long has been to wonder
why the world needs any special gold benchmarking process in the first place.
After all, there are no special benchmark prices for other commodities or
currencies, and no benchmark prices for stocks and bonds. Rather, there are
closing prices and daily continuous pricing charts, and the world seems to
make do with them. The London gold fix is a very odd and inexplicably
venerable duck. GATA long has suspected that the fix has endured mainly
because it facilitates control of the gold price by governments and central
banks. For if governments and central banks are represented at the fixes --
through bullion bank intermediaries, of course -- they may be less compelled
to strive to influence the price by trading surreptitiously around the clock.
2) Norman asks why Deutsche Bank would admit involvement in rigging the
gold and silver markets and agree to settle the lawsuits making such
accusations. He suggests that such a settlement is only part of the bank's
general inclination to confess to just about anything these days, to pay some
big penalties, and to start fresh. Of course GATA doesn't know Deutsche
Bank's motives and Deutsche Bank is not about to answer GATA's inconvenient
questions any more than the Federal Reserve and Treasury Department are. But
note that, unlike some of its other admissions, in the gold and silver
rigging cases Deutsche Bank reportedly has agreed to provide evidence against
other participants in the London gold fix. We will have to await
developments, and we will await them eagerly insofar as the discovery and
deposition process in the rigging cases may implicate central bank
involvement.
3) Norman fears that GATA's complaining about market rigging in gold is
discouraging investment. He has plenty of company in that fear. For the more
GATA has proven that governments and central banks are rigging the monetary
metals markets, the less popular GATA has become with people selling gold and
gold-related products and investments. While some people still disparage GATA
as a touter of gold, the organization now is generally regarded as being bad
for business, since we warn investors of what they are up against even as we
explain the potential consequences of the enormous naked short position in
gold represented by "paper gold" and gold derivatives. The logic of
GATA's case is that the monetary metals are grossly undervalued. But if, as
GATA believes, surreptitious intervention by central banks is the primary
determinant of the gold price and if the objective of that intervention is
generally suppressive, would we help gold and free markets more by remaining
silent about the intervention? Given their surreptitiousness and
unaccountability in the gold market, central banks themselves plainly have
concluded that exposure would demolish their policy, maybe even demolish
central banking itself, and help gold. In this respect GATA agrees with
central banks, so we persist, figuring that if we can't easily make friends
in the monetary metals industry, then we can aim for something else: Fiat
justitia ruat cælum.
