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GATA's friend and researcher R.M. writes today
from Europe:
"If the U.S. judiciary deemed protection
of the nation's currency or similar national interests (such as stable
financial markets and oil prices) as justification not to prosecute a
cartel's war against gold by federal authorities, foreign governments, and
their agents, could anti-trust law ever be brought to bear against such activity
in our lifetimes?
"What I'm asking essentially is: What is
the Achilles' heel of gold market collusion that would provoke enforcement in
a compromised judicial system?"
I have replied to R.M. as follows.
As I read the Gold Reserve Act of 1934 as
amended, it authorizes the U.S. government to trade secretly not just in the
gold market but in any market:
http://www.treasury.gov/resource-center/inter...ges/esf-inde...
The Gold Reserve Act describes its objective
as "an orderly system of exchange rates." Any administration almost
certainly would construe that objective as an exemption from anti-trust law
and I doubt that any court would have the nerve to disagree.
This question came up more or less during the
first lawsuit against gold market manipulation, the lawsuit brought by
Reginald Howe with GATA's support in U.S. District Court in Boston in 2001
against the Bank for International Settlements, the U.S. Federal Reserve and
Treasury Department, and various bullion banks. For the details of that
lawsuit, see the entry for "Gold Price Fixing Case" at Howe's
Internet site here:
http://www.goldensextant.com/
There was only one public proceeding in that
case, held in Boston on November 5, 2001, on the defendants' motion for
dismissal via "summary judgment." "Summary judgment" is a
determination by the court that even if everything in the plaintiff's
complaint is true, there is no remedy at law and nothing for the court to do
about it. I attended that hearing. While I had to sit in the back of the courtoorm and the acoustics were not good, I heard an
assistant U.S. attorney assert that the government, without admitting that it
was doing what Howe complained of, very much claimed the power to do it. See
my report on the hearing as posted at GATA's old Internet site here:
http://groups.yahoo.com/group/gata/message/912
The government lawyer's assertion in support
of "summary judgment" against Howe was pretty much a confession and
perhaps the great success of the lawsuit. The government lawyer's assertion
outlined the whole scheme.
After all, the United States was essentially
on a gold standard through 1968 and the collapse of the London Gold Pool and
then through 1971 when President Nixon discontinued gold redemption of
dollars held by foreign governments, and by definition a gold standard is
government's rigging of the gold price. Nobody suggested back then that such
market rigging was illegal. Howe argued that since the U.S. government had
formally unfixed the gold price in 1971, free-market law had to be construed
to have taken over.
Since the judge granted "summary
judgment" to the defendants on a jurisdictional issue -- Howe's supposed
lack of standing to sue in the first place, a dodge by the court -- the issue
of authority for market rigging was never settled.
But the U.S. Treasury Department acknowledged
to GATA in 2005 that it claims comprehensive market-rigging power
under the Trading with the Enemy Act of 1917 and the International Emergency
Economic Powers Act of 1977, under which, upon a proclamation of an emergency
by the president, the Treasury Department would consider itself authorized to
seize or freeze not just gold and silver and gold- and silver-related assets
but and and all
financial assets. See GATA's correspondence with the Treasury Department in
the "Confiscation" section of our Internet site here:
http://www.gata.org/node/5606
Given the totalitarian scope of the U.S.
government's claim to power, I long have believed that the way to defeat the
government's market rigging is simply to expose it to enough participants in
the rigged markets. That's why GATA sued the Federal Reserve for gold
information in 2009 and beat the Fed in U.S. District Court for the District
of Columbia last year, extracting some very compromising information:
http://www.gata.org/node/9917
And it's why we will bring another
freedom-of-information lawsuit against the Fed, the U.S. Treasury Department,
and the U.S. State Department as soon as our finances allow:
http://www.gata.org/node/11606
For people won't trade in markets they
understand to be rigged. When people realize how and why the major gold
markets are rigged and almost always have been rigged, they'll go
outside those markets to get their gold -- taking delivery of their metal and
moving it outside the banking system, as Jim Sinclair and others on our side
long have urged. Such removal of gold from the banking system is exactly what
caused the collapse of the London Gold Pool, a fully public operation, in
March 1968 --
http://en.wikipedia.org/wiki/London_Gold_Pool
-- and such removal of gold from the banking
system will be, I think, what collapses the current London Gold Pool, a
largely surreptitious operation, which GATA board member Adrian Douglas has
exposed so well:
http://www.gata.org/node/8918
http://www.gata.org/node/8936
I suspect that some Sunday evening before the
Tokyo markets open there will be an announcement from a secret conference of
central bankers -- maybe held at BIS headquarters in Basel, Switzerland, or
in Frankfurt, Singapore, or Washington again (where the Washington Agreement
on Gold was devised, even though the United States was not a signatory) --
about new currency exchange rates. These new exchange rates likely will
include a price that the participating central banks henceforth will pay for
gold -- a much higher price than today's.
Such an announcement will signify that the
second London Gold Pool has failed just as the first did. The gold for market
rigging will have run out and the central banks and their governments will
offer a premium to recover it. Maybe their offer will be of the
"godfather" sort, an offer people can't refuse, an offer
accompanied by the threat of criminal prosecution of gold owners, or
accompanied by a punitive "windfall profits" tax. Or maybe the
central banks and their governments will just be good sports and admit that
they finally lost another round in the gold game and start up a new one.
Whatever the central banks and their
governments do, they won't be alerting us in advance -- just their agent
bullion banks. But all will be revealed at last, and even the silly Jeff
Christians and Jon Nadlers will see it, if they
really don't already see it and are just doing their dirty jobs of
disinformation.
Given the recent research by Sprott Asset Management's Eric Sprott
and David Baker --
http://www.gata.org/node/11796
-- and GoldMoney's
James Turk and Juan Castenada --
http://www.gata.org/node/11827
-- I think that we just might live to
see the day. Then "ye shall know the truth, and the truth shall set you
free," and it will be a great day indeed:
http://www.youtube.com/watch?v=HB8p8mKvi34
CHRIS
POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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