Here’s the problems in trying to get the gold rigging exposed to the public and out in the open, and also a tactic which could end the rigging overnight…
Dear Friend of GATA and Gold:
How easy it would be for any major financial news organization or trade association to confirm, expose, and combat the rigging of the gold market by governments and central banks.
Such an effort could start with the documentation, most of it from official sources, collected by GATA and compiled here:
Everything could be nailed down to the present moment by a few specific questions put to the key participants in the rigging. These questions already have been prepared and posed, just not publicized enough.
— Three months ago U.S. Rep. Alex X. Mooney, R-West Virginia, wrote to the secretary of the treasury and the chairman of the Federal Reserve asking what the U.S. government’s policy on gold is and whether it remains, as government records from years ago establish, to drive the monetary metal out of the world financial system.
Mooney also asked whether the U.S. government, directly or through intermediaries, like the Bank for International Settlements, trades in gold and gold derivatives and what the purposes of any such transactions are.
Mooney’s letter is posted at GATA’s internet site here:
Mooney has received no response.
— Last November GATA put similar questions to the BIS. What, GATA asked, is the purpose of the gold swaps and derivatives purchased and sold by the bank and the purpose of the bank’s involvement in the gold market generally?
The bank replied promptly but only to say it would not answer the question:
— Five weeks ago your secretary/treasurer and GATA consultant Harvey Organ wrote to the comptroller of the currency in the Treasury Department, Joseph M. Otting, whose office regulates the banking industry, calling attention to the recent explosion in use of the emergency procedure of “exchange for physicals” to settle gold and silver contracts issued on the New York Commodities Exchange by government-regulated banks. The financial risks undertaken by the banks in these transactions, GATA wrote, apparently were not being reported to the comptroller.
GATA’s letter concluded: “Could you review this matter and let us know your conclusions?”
The comptroller has not responded.
— On July 2 your secretary/treasurer wrote to the public relations department at JPMorganChase & Co. about the bank’s involvement in the monetary metals market, which occasionally has been controversial. The letter read:
“In April 2012 Blythe Masters, then chief of the bank’s commodities desk, told CNBC that the bank had no position of its own in the monetary metals markets and was trading only for clients:
“Can you tell me if this remains the case and if the bank’s clients in trading the monetary metals markets include governments and central banks?
“Thanks for your help.”
JPMorganChase has not responded.
— Two weeks ago your secretary/treasurer wrote to the public relations department at the International Monetary Fund, calling attention to the recent report by James Rickards’ Gold Speculator newsletter that the price of gold and the valuation of the IMF’s Special Drawing Rights currency seem to have been locked together since the Chinese yuan was incorporated into the SDR currency basket in October 2016. A copy of Rickards’ newsletter was attached to the letter to the IMF. The newsletter is summarized at GATA’s internet site here:
A link to the newsletter’s text as posted at GoldCore can be found there.
“If Rickards’ observation is correct,” your secretary/treasurer wrote, “it implies the IMF’s involvement with governments and central banks in constant surreptitious intervention in the gold and currency markets. Is the IMF aware of or party to such interventions that have not been disclosed officially to the markets and investors?”
After some prodding by GATA to the IMF, an IMF communications officer, Andrew Kanyegirire, replied:
“Please note that the IMF has not engaged in any transactions in gold since the IMF’s strictly limited gold sales (2009-10) were concluded in December 2010. In addition, the IMF’s Articles of Agreement require the IMF, when dealing in gold, to avoid managing or fixing its price, limit the types of operations and transactions in gold that the IMF can conduct, and prescribe that the IMF, when selling gold outright, conduct such sale according to prevailing market prices.
“For more details on these transactions, please refer to the fact sheet on ‘Gold in the IMF,’ which is available on the IMF’s website via the following link:
“With respect to the SDR, please also note that the daily SDR value is an aggregate of the market value of the five currencies in the basket, based on their relative amounts fixed every five years by the IMF and their daily market exchange rates against the U.S. dollar. See:
“For more background on the SDR, see:
“Finally, we would like to emphasize that the IMF’s finances are very transparent and its gold and SDR holdings reported on a quarterly basis on its financial statements are also available via the following link:
— IMF Public Affairs”
But of course none of that answered the question GATA posed. So your secretary/treasurer replied to the IMF, noting that it had not really been responsive and posing GATA’s question again:
“Is the IMF aware of or involved with any effort by China to link the SDR’s value to the gold price?
“Since the IMF issues SDRs, does the IMF know at all times how they are allocated among nations, or can they be traded among nations without the IMF’s knowledge?
“Would the IMF notice any scheme involving SDRs such as the one outlined in the Rickards letter? If a nation was controlling the value of SDRs in a way such as the Rickards letter described, would the IMF care — and would the IMF acknowledge it to the public and the markets?”
The IMF has not replied.
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These refusals to answer specific questions about an obviously sensitive point on which the value of all capital, labor, goods, and services in the world depends are as good as admissions that something deceptive and discreditable is going on with governments, central banks, gold, and the financial markets generally.
But GATA is only a small nonprofit educational and civil rights organization. While it can publicize this deception to the approximately 8,000 people on its e-mail list and can make its documentation available to financial news organizations, trade organizations, mining companies, financial houses, and investors, GATA can’t make them care or do what might be presumed to be their jobs.
Even most of the people on GATA’s e-mail list now seem to be too demoralized to act on what GATA has disclosed. That’s understandable enough, since the more that market rigging is exposed, the more of it has to be done to keep working, and the more it that is done, the more obvious it becomes, leading people to think that it can continue forever even in the open.
But it can’t go on forever. That the Treasury Department, Federal Reserve, BIS, JPMorganChase, and IMF refuse to answer the questions spelled out here shows that they fear that exposure can beat them.
While they seem to command all the money in the world, beating them really wouldn’t be that hard. As Jim Sinclair and others have noted, beating them requires mainly that investors take delivery of their monetary metal and vault it outside the banking system. (GATA would define the banking system to include the exchange-traded funds GLD and SLV, operated as they are by big investment banks that can use the EFTs to short the metals: HSBC and JPMorganChase. Unfortunately major fund managers who advocate gold ownership undermine themselves by putting their money in GLD.)
Enough exposure of the gold market rigging policy would push ordinary investors and fund managers in the right direction. It might even embolden the governments of commodity-producing countries, the big victims of gold market rigging, to protest and fight back against this most pernicious form of imperialism. Opposition on the national level might end the rigging policy overnight.
So “say not the struggle naught availeth.” Instead of despairing, help strike a blow against the bad guys.
Send this dispatch to your national elected officials with a request that they obtain and publicize answers to its questions.
Write to financial news organizations to urge them to pursue and publicize the answers too.
If you’re able and have not done so before, support GATA financially:
Even a donation of $5 will be $5 more than GATA has received from most major gold-mining companies.
All the money in the world is indeed powerful, but in the end not as powerful as the truth. That is why the deceivers fear it so. The good guys just have to be clever and courageous.
And David put his hand in his bag, and took thence a stone, and slang it, and smote the Philistine in his forehead, so that the stone sunk into his forehead and he fell upon his face to the earth.
So David prevailed over the Philistine with a sling and with a stone and smote the Philistine and slew him. But there was no sword in the hand of David.
GATA’s got the sling and the stones. Help us put them to good use.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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