Basel 3 rules will wreck gold price suppression, LBMA warns Bank of England

Pending “Basel III” regulations emanating from the Bank for International Settlements could destroy the clearing and settlement system for unallocated “paper” gold…

by Chris Powell of the Gold Anti-Trust Action Committee (GATA)

Dear Friend of GATA and Gold:

Pending “Basel III” regulations emanating from the Bank for International Settlements could destroy the clearing and settlement system for “unallocated” — that is, “paper” or imaginary — gold and silver, the London Bullion Market Association and the World Gold Council warned the Bank of England this week.

In a 58-page protest submitted to the Bank of England’s Prudential Regulation Authority, the LBMA and the World Gold Council complained that the “Net Stable Funding Ratio” provision of the Basel III regulations would require the London bullion banks to hold funds offsetting 85 percent of the value of the unallocated gold they hold for customers, and the banks could not afford this.

Most precious metals held by the LBMA’s trade-processing banks, operating as the London Precious Metals Clearing Ltd., are “unallocated” metal, the protest says.

According to the protest, the new rules will have a “damaging effect” on the precious metals clearing and settlement system, “potentially undermining the system completely.”

The protest continues: “The required stable funding for short-term assets would significantly increase costs for London Precious Metals Clearing Ltd. clearing banks to the point that some would be forced to exit the clearing and settlement system, which may even be at risk of collapsing completely. …”

The protest acknowledges that LBMA-member banks obtain gold loans from central banks and re-land the metal “to support the liquidity of the market,” the longstanding euphemism for central bank intervention to suppress monetary metals prices and support government currencies and bonds.

The LBMA and World Gold Council protest is dated May 4 and is posted at the LBMA’s internet site here:

https://www.lbma.org.uk/articles/lbma-responds-to-prudential-regulation-…

For safety’s sake, it is also posted at GATA’s internet site here:

LBMA-WorldGoldCouncil-BaselIIIProtest.pdf

In an interview posted Friday for Kinesis Money, London metals trader Andrew Maguire called the LBMA-WGC protest a surprising confession of weakness. Maguire construes the Basel III regulations as an attack on the “paper gold” mechanism of gold price suppression, a trigger for an upward revaluation of gold, and thus an attack against the domination of the currency markets by the U.S. dollar.

Maguire’s interview is posted here.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
[email protected]


Join GATA here:

New Orleans Investment Conference
Hilton New Orleans Riverside Hotel
2 Poydras St., New Orleans, Louisiana
Tuesday-Friday, October 19-22, 2021

https://neworleansconference.com


Toast to a free gold market
with great GATA-label wine

Wine carrying the label of the Gold Anti-Trust Action Committee, cases of which were awarded to three lucky donors in GATA’s recent fundraising campaign, are now available for purchase by the case from Fay J Winery LLC in Texarkana, Texas. Each case has 12 bottles and the cost is $240, which includes shipping via Federal Express.

Here’s what the bottles look like:

http://www.gata.org/files/GATA-4-wine-bottles.jpg

Buyers can compose their case by choosing as many as four varietals from the list here:

http://www.gata.org/files/FayJWineryVarietals.jpg

GATA will receive a commission on each case of GATA-label wine sold. So if you like wine and buy it anyway, why not buy it in a way that supports our work to achieve free and transparent markets in the monetary metals?

To order a case of GATA-label wine, please e-mail Fay J Winery at [email protected]


Support GATA by purchasing
Stuart Englert’s “Rigged”

“Rigged” is a concise explanation of government’s currency market rigging policy and extensively credits GATA’s work exposing it. Ten percent of sales proceeds are contributed to GATA. Buy a copy for $14.99 through Amazon —

https://tinyurl.com/3xt6uw66

— or for an additional $3 and a penny buy an autographed copy from Englert himself by contacting him at [email protected]


Help keep GATA going:

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16