24 karat gold bars are seen at the United States West Point Mint facility in West Point, New York June 5, 2013. (Reuters/Shannon Stapleton)

There are grave doubts whether the Federal Reserve actually holds the 8,044 tons of gold it claims it does. The former International Monetary Fund director, France’s Dominique Straus-Kahn, demanded an independent audit of the Federal Reserve gold after the US refused to deliver to the IMF 191 tons of gold agreed to under the IMF Articles of Agreement signed by the Executive Board in April 1978 to back Special Drawing Rights issuance. Immediately before he could rush back to Paris, he was hit by a bizarre hotel sex scandal and abruptly forced to resign. Straus-Kahn had been shown a secret Russian intelligence report prepared for President Vladimir Putin in which ‘rogue’ CIA agents revealed that the US Federal Reserve had no gold reserves and only lied that it did.
The stakes for Washington and Wall Street in depressing the gold price are staggering. Were gold to soar to $10,000 or more, where many believe current demand-supply pressures would find it, there would be a panic selloff of the dollar and of US Treasury bonds. China now holds a record $3.7 trillion of foreign currency reserves and the US Treasury bonds and bills are about half that.
That sell-off would send US interest rates sky-high, forcing a chain-reaction of corporate & banking bankruptcies that have been avoided since the financial crisis broke in 2007 only owing to record near-zero Federal Reserve interest rates. That sell-off, in turn, would be the end of the US as the world’s sole superpower Little wonder the Obama Administration is manipulating gold.
It cannot last very long at this pace, however.

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By William Engdahl, originally posted on RT.com:

In the very days when a deep split in the US Congress threatened a US government debt default, the gold price should normally jump through the roof, yet the opposite was the case. It is worth a closer look why.

Since August 1971, when US President Richard Nixon unilaterally tore up the Bretton Woods Treaty of 1944 and told the world that the Federal Reserve ‘gold window’ was permanently closed, Wall Street banks and US and City of London financial powers have done everything imaginable to prevent gold from again becoming the basis of trust in a currency.

On Friday, October 11, when there was no sign of any deal between US Congress members and the Obama White House that would end the government shutdown, the Chicago CME Group, which operates Comex – the Chicago Commodity Exchange, where contracts in gold derivatives are traded – announced that at 8:42am Eastern time the trading was halted for 10 seconds after a safety mechanism was triggered because a 2-million-ounce (56.7 million grams) gold futures sell order was executed.

Something rotten in gold market

The result of that huge paper gold sale was that at just the time when a possible US government debt default would send investors in a panic rush to the safety of buying gold, instead, the price plunged $30 an ounce to a three-month low of $1,259.60 an ounce. Market insiders believe the reason was direct market manipulation.

David Govett, head of precious metals at bullion broker Marex Spectron, calls the sudden huge futures sale suspicious.

“These moves are becoming more and more prevalent and to my mind have to either be the work of someone attempting to manipulate the market or someone who really shouldn’t be trusted with the sums of money they are throwing around. There are ways of entering and exiting a market so that minimum damage is caused and whoever is entering these orders has no intention of doing that,” Govett said.

UBS gold trader Art Cashin echoed the suspicion.

“…if that happens once it could be an accident of technology, or it could be a simple error. But when it happens five times over a period of months, it does raise questions. Is it being done purposefully? Is somebody trying to influence the market?” 

That ‘someone’ market sources believe is the Obama White House, in league with the Federal Reserve and key Wall Street banks that would be ruined were gold to really rise.

In March 1988, five months after the worst one-day stock market plunge in history, President Ronald Reagan signed Executive Order 12631. Order 12631 created the Working Group on Financial Markets, known on Wall Street as the ‘Plunge Protection Team’ because its job was to prevent any future unexpected financial market panic selloff or ‘plunge’.

The group is headed by the US Treasury Secretary and includes the chairman of the Federal Reserve, the head of the Securities & Exchange Commission, and the head of the Commodity Futures Trading Commission (CFTC) which is responsible for monitoring derivatives trading on exchanges.

Numerous times since 1988, reports have surfaced of secret interventions by the Plunge Protection Team to prevent a market panic selloff that could threaten the role of the US dollar. Former Clinton White House staff chief George Stephanopoulos admitted in 2006 that it was used to support the markets in the 1998 Russia/LTCM crisis under Bill Clinton, and again after the 9/11 terrorist attacks in 2001.

One ounce 24 karat gold proof blanks are seen at the United States West Point Mint facility in West Point, New York June 5, 2013. (Reuters/Shannon Stapleton)

 

He said, “They have an informal agreement among major banks to come in and start to buy stock if there appears to be a problem.”

Clearly stocks are not the only thing the government manipulates. Gold these days is a prime focus. The price of gold in recent years—since the eruption of the US dot.com IT stock bubble in 2000—has exploded from around $300 an ounce to a recent record high above $1,900 in August, 2011. Gold rose an impressive 70 percent from December 2008 to June 2011, after the Lehman Brothers collapse and the start of the Greek crisis in the eurozone.

Since then, with no clear reason, gold has reversed and lost more than 31 percent, despite the fact that talk of a unilateral Israeli military strike on Iran and the US financial debacle combined with a euro crisis, and now, threat of US government default, created overall huge demand for investment in gold.

This past April 10, the heads of the five largest US banks, the Wall Street ‘Gods of Money’ — JPMorgan Chase, Goldman Sachs, Bank of America and Citigroup — requested a closed door meeting with Obama at the White House. Fifteen days later, on April 25, the largest one-day fall in history in gold took place. Later investigation of trading records at Comex revealed that one bank, JP Morgan Securities, was behind the huge selloff of gold derivatives. Derivatives are pieces of paper or bets on future gold or other commodity prices. To buy gold futures is very inexpensive compared with gold but influence the real physical gold price, largely because the US Congress, under lobby influence from Wall Street, since 2000 and the Commodity Trading Modernization Act, has left gold derivatives unregulated. The President’s Plunge Protection Team was at work now as well, clearly.

China smiles & buys

In effect a war, a financial war, is underway between the Wall Street giant banks and their close allies, including the major City of London banks and banks like Deutsche Bank on the one side, using paper gold derivatives trading in the unregulated COMEX, with covert support of the US Treasury and Fed. On the other side are real investors and Central Banks who believe that the world financial system, especially the dollar system, is teetering on the brink of disaster and that physical gold is the historical best safe haven in such a crisis.

Here, the recent buying of gold reserves by several central banks including Russia, Turkey and especially China, are notable. The short-term derivative gold price manipulations by JP Morgan and Goldman Sachs are creating smiles at the Peoples’ Bank of China and the Russian Central Bank among other buyers of physical gold. Since 2006 Russia’s central bank has increased its gold reserves by 300 percent.

Now, the Chinese central bank has just revealed data showing that China imported 131 gross tons of gold in the month of August, a 146 percent increase compared to a year prior. August was the second highest gold importing month in its history. More impressively, China has imported more than 2,000 tons of gold in the past two years. According to a 2011 cable made public by WikiLeaks, the Peoples’ Bank of China is quietly seeking to make the renminbi (the yuan) the new gold-backed reserve currency.

Hmmmm.

According to unofficial calculations, the Peoples’ Bank of China today holds about 3,500 tons of monetary gold, surpassing Germany, to make it number two in the world after the Federal Reserve.

24 karat gold bars are seen at the United States West Point Mint facility in West Point, New York June 5, 2013. (Reuters/Shannon Stapleton)

And there are grave doubts whether the Federal Reserve actually holds the 8,044 tons of gold it claims it does. The former International Monetary Fund director, France’s Dominique Straus-Kahn, demanded an independent audit of the Federal Reserve gold after the US refused to deliver to the IMF 191 tons of gold agreed to under the IMF Articles of Agreement signed by the Executive Board in April 1978 to back Special Drawing Rights issuance. Immediately before he could rush back to Paris, he was hit by a bizarre hotel sex scandal and abruptly forced to resign. Straus-Kahn had been shown a secret Russian intelligence report prepared for President Vladimir Putin in which ‘rogue’ CIA agents revealed that the US Federal Reserve had no gold reserves and only lied that it did.

The stakes for Washington and Wall Street in depressing the gold price are staggering. Were gold to soar to $10,000 or more, where many believe current demand-supply pressures would find it, there would be a panic selloff of the dollar and of US Treasury bonds. China now holds a record $3.7 trillion of foreign currency reserves and the US Treasury bonds and bills are about half that.

That selloff would send US interest rates sky-high, forcing a chain-reaction of corporate and personal bankruptcies that have been avoided since the financial crisis broke in 2007 only owing to record near-zero Federal Reserve interest rates. That selloff, in turn, would be the end of the US as the world’s sole superpower. Little wonder the Obama Administration is manipulating gold. It cannot last very long at this pace, however.

William Engdahl is an award-winning geopolitical analyst and strategic risk consultant whose internationally best-selling books have been translated into thirteen foreign languages.

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  1. What if the US looted more war gold than they’re admitting to? If we can’t believe Russia and China to report on every ton of gold they have, why would we not expect US to have more? Sure, they may already have eaten through the claimed 8000mt, but could still have any amount left in hidden stockpiles.
    Yes, we need the US to lie their gold reserved up, because we are invest in PM’s.
    And say for yourself, how can we really estimate all the gold on earth? It’s been mined since the beginning of civilization, and people have been secret about it from the get-go. Advertize your wealth and be stolen from. Especially something as value dense as gold.
    Silver, the stockpiles HAVE to be greater than we’re told. Just add up recent year mintages and compare with what’s claimed to have been TOTAL investment demand. You know lots of silver is being turned into bullion that we cannot tally up towars a total. This additional demand was satisfied, hundreds of millions of ounces annually possibly, and most likely is still in existence. Ever heard of modern silver bullion being melted down? Waste of premium you’d say. So there IS more silver than we’re told. But is it a lot, compared to what’s left annually after deduction industry demand and adding recycling?
    Gold is more plentiful than silver, but we only have data (that we had to analyse personally) indicating that silver is more plentiful.
    If that newpaper report from the 70′s was for real, and Fort Knox was emptied, where did the excess gold THEN come from? There must have been additional stock piles. And how to say which order of magnitude those would be? While silver is relatively scarce, it doesn’t currently see an official demand  that is twice the volume of supply, as is the case with gold.
    So gold is relatively more sought after, while silver is more scarce. Yet pretty much all gold produced is free for investors, where silver has a prety steady and significant non-recyclable industrial demand. It’s actually needed for something and it’s effectively destroyed out of existence.
    Seems to me that silver could play a signficant monetary role. Just its dynamics are vastly different.
     

    • You arguments are too easy. Be more critical, also after you’ve fallen for the same hype I fell for.
      How many stackers do you know who have some form of debt? Why aren’t they using their stack to get rid of the debt? The debt gets interest, the stack doesn’t. Yet most stacker vloggers I see refer to having multiple credit cards, and at least one mortgage.
      Why would you GIVE away gold (the ultimate power) when you can flip the world the finger and never get their money back?
      They have a friggin’ printing press!!!! And you can’t print gold.
      Selling gold is an ultimate measure. Cyprus didn’t exactly volunteer to surrender theirs. Guess why. It’s power. They last little back up plan that always works, as long as you keep it.
      Who would give their last good card, if that would mean they’d lose ALL hands after this? You cannot surrender your gold. You store it, shut your mouth about it, and hope that one day it will be of value to another degree. The US is doing A-OK. They are getting away with this huge debt, stock market is booming, and the oil AND pharma AND military industrial cartels are oh so happy with their policies. 
      US doesn’t care about citizen who are starving or deprived of medical aid. they enemies get the same treatment anyways. It’s a POLICY of the top 1% to reduce world population through any means, and vaccinations.
      The US may be exporting more gold than importing, and it’s coming from somewhere. Just don’t count on the US to be honest about their reserves. And not honest about any value it ever was in the past. Why believe the 8000mt? Did your divine entity of choice confirm it to you in person? 

      Being honest about gold holdings is a rare thing. And superpowers tend to under-state it rather than over-state.
      Lybia had nice amounts of gold. And USA went to loot it. 

      Germany may also have more gold that they are claiming. It’s not so hard to envision a scenario where they are in with the USA propagating gold is oh so scarce, accepting this crazy slow repatriation of a fraction of their US held gold. For everyone to see how bad it is. 
      While gold reserves around the globe may well be higher than stated and even estimated, do realize that the world economy has grown quite a bit since it was demonetized. If all of the world citizen wanted any amount of gold as proof of their human worth and dignity, there would never be enough. Same for silver of course. No way there is 1oz for everyone. But 1000 years ago, perhaps there was one ounce per citizen. Most had none, and some had lots. Look at population growth. Silver reserves may well not have kept pace. 
      Gold production is roughly a per cent of present above ground. What is population doing?
      I am not claiming there is more gold than stated, but it does seem quite plausible. I do say there is more silver than we are ready to acknowledge. And we just need to take mintage numbers of the past 5 years or so to already realize this. It’s not 100% of production, rather ~30%, but we are stacking HARD. And it adds up. Even if it doesn’t all go to citizen stackers, it’s going somewhere. And it’s not being recycled quite yet. Who is selling their stack again? Ask The Doc.

    • These are my thoughts:
      The Federal Reserve Bank DO NOT own any physical gold. What they do own, are most likely, certificates of gold issued/lent  to them by the US Treasury Dept. which The Federal Reserve Bank uses to imply they own gold (like all of the yahoos out there who own GLD/SLV ETF shares).
      It is the US Treasury Dept. (ergo, the US Govt) that holds/owns all the 8000+ tons pf physical gold. The questions about Ft. Knox and any gold there (?) are just diversions. It is quite probable that they physical gold have already been moved to the secure underound locations that being used for Armageddon Shelter by the Elite …. Did all of you miss the YouTube videos where Jesse Ventura had shown bits and pieces of these underground tunnels/cities. If I remember correctly, they are in the Nebraska (or Montana) states.
      Why do I think the US Treasury Dept. holds all the physical gold ? It was posted in many sites (maybe even here) that Ron Paul asked (earlier this year) why the US Treasure Dept. does not consider selling the US gold, to partially repay out debts … and the Treasure response was – No way in hell. Gold is necessary for our (and the world’s) financial stability.
       

    • Gen8….You are correct that the owner of the U.S. gold is the U.S. Treasury Dept. and all the Fed has are gold certificates.  Unfortunately, there is ample evidence that the gold truly is depleted, used for supporting the petro-gold-dollar trade.  Those tunnels are there for sure.  Ever visit the Denver airport?  They hub out from there.  Denver is the location for the COG(Continuity of Government) capital in case of national disaster.  Those tunneling machines are incredible.   In the future states will be insignificant.  The question will be which FEMA region do you live in.  I live in FEMA Region 9.

  2. Skater – “Seems to me that silver could play a signficant monetary role.” Be very careful here. You are using logic, good or not I will not be the judge but none the less, it is logic. Things don’t run on that anymore…..

    • Cindy – interesting. I knew about the seed vault but did not know about the bill gates/Rockafeller connection. It just so happens the former is on record for large population reduction needed on planet earth. Gates was very apolitical until 10 years or so ago when major legal action was taken against him in europe over proprietary info for his software/hardware, he needed to share that publicly we were told. what was not said publicly was he was apolitical, giving nothing towards politicians($$$) funding at the time. Law suit on, suddenly he sees political light, donates $$$$, then law suit off and his politics becomes very progressive. Loosely based info here but goes something like that. Now, just heard on the car radio this a.m. the legal system is suddenly looking into Apple’s business practices, seems they have not been as politically active with their $$$ as they should be. Stand by for further wringing out of the free market capitalists system for…..default?  Maybe someone here knows better on this subject than I, but that is how I have looked upon this issue so far…..Thanks for the link to this story…..

    • “Gates was very apolitical until 10 years or so ago when major legal action was taken against him in europe over proprietary info for his software/hardware, he needed to share that publicly we were told. what was not said publicly was he was apolitical, giving nothing towards politicians($$$) funding at the time. Law suit on, suddenly he sees political light, donates $$$$, then law suit off and his politics becomes very progressive.”
       
      Gates comes from a VERY left-wing family of lawyers… ACLU type lawyers.  Him becoming a leftist probably happened in his childhood or early teen years.  What happened was that he was just WAY too busy to spend any time on politics until he was winding down his MSFT career.  He started his foundation about then and found that to be not only very interesting but also that it needed to be politically connected for it function correctly.
       
      I can’t say that I know Bill Gates but I have met him.  That was back around 1988.  He questioned and wanted to know EVERYTHING.  We had quite a discussion at the computer club I was in at the time.  His intelligence was decent but what really impressed me was his vision, drive, and ambition.  THAT was what made him a multi-billionaire.  That and being at just the right place at just the right time.
       

  3. They might have had 8000 tons in the fifties, but I’d wager my last cigarette they don’t have anything but coin melt now, if that.
    Think; with all these voices accusing them of malfeasance regarding the treasury’s gold, if they really had some wouldn’t it be a simple matter to shut down all those ‘liars’?  A simple audit and maybe a tour through the vaults for a few VIPS would be all it would take to close everyone’s tater traps.  Yet they act gut shot when anyone brings up the dreaded “A” word.. 
    The gold was fed into the maw of the demand for metal over the years.  The dollar has been tested many times over the decades.  What was an emergency in 1980 is a dim memory now.  Now it’s gone and the treasury says, “Sell gold? No waaay, man, no waay!”
    That’s what I would expect them to say with an empty vault.
     

    • Yeah I just don’t see how anyone can argue with the power of a simple audit. If there is someone out there with a differing opinion, let’s hear it! And while you’re at it, tell us all the legitimate reasons there are for the US to delay the return of Germany’s gold.

    • What really surprises me is that they don’t bring in a group of shills to “inspect the gold”, have it on pallets, and quickly shuttle it from vault to vault, out of sight, so that the inspectors can tour the vaults, see the same gold over and over, and then report on seeing a HUGE amount of gold.  This would just be a PR stunt but it is just the kind of thing that governments do when pushed to the wall on some issue or other.
       

  4. Putin actually needed intelligence operatives to determine the USSA does not have the 8000 tons they claim?!?!?   ROLLING ON THE FLOOR LAUGHING MY ASS OFF!   Hell, a high school history buff should be able to figure that out!!!    It’s already known and documented that the USSA burned through over 12000 tons during the 1960s and 70s trying to suppress the gold price (London gold pool etc).    Shit, USSA used to have 20,000 tons, now only 8,000?   So they expect people to believe they used >12,000 tons trying to keep gold from going to a few hundred bucks in the 1970s, but miraculously they didn’t expend ANY gold keeping gold rangebound for over two decades in the $300-500 range???   YEAH, RIIIIIIIGHT.
    USSA gold is in the same place where the Madoff money and the Social Security money went to:  up in smoke or in someone else’s pockets!   

    • If you search the Internet, you can find a few sources that claim that the US once had 28,000 tons of gold.  Not sure when that was but no doubt just after WW-II when the US had the only major economy that was not devastated by the war.  Like you, I am wondering exactly what happened to the 20,000 tons that are now gone, according to their 8000+ ton claim.  Where did it go, when did it leave, why did it leave, and who signed off on it leaving?  Lots of questions and no answers.

  5. @40oz-
    Exactly, man.  Germany didn’t even ask for ALL their gold back, but a small percentage (about 20%, I think).
    They won’t even let them visit it, much less hand it over.  The simple wisdom of’ Occam’s razor’ tells us they don’t have it.
     

  6. “The result of that huge paper gold sale was that at just the time when a possible US government debt default would send investors in a panic rush to the safety of buying gold, instead, the price plunged $30 an ounce to a three-month low of $1,259.60 an ounce. Market insiders believe the reason was direct market manipulation.”
     
    So the price plunged, thanks to their screwing around with paper.  Man, what possible better time to buy is there?!?!  While that may frighten the Timid Timmies who TRADE gold futures, it does nothing but encourage the stackers to buy all they can.

  7. 3,500 tons. Way off. The only data-point you can get from china is via HK. They are importing from Switzerland, London, US etc direct to Shanghai, Beijing and other ports that there are no figures for. Also, they do not export any gold mined in China.

  8. @digi, I’m with you. I don’t think people are counting all of the chinese gold supply loose ends properly. Even if they are off by 500 tons to 4,000 tons, with the US below 8,000 tons and still owing people like Germany. It pretty much means that in 1 to 2 years China will pass US.  World markets discount the future so to speak so now is the confident time to buy the rumor prior to selling the news.  China’s currency is backed, USA’s currency is not.  Obamanation is polishing off the end of USA achievment and prominence.

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