Where in the world is the gold?

Where in the world is the gold?

GoldSeek Web - By: Chris Powell, Secretary/Treasurer, GATA



-- Posted Sunday, 23 October 2011 | Source: GoldSeek.com


Remarks by Chris Powell
Secretary/Treasurer, Gold Anti-Trust Action Committee Inc.
Fall Dinner Meeting
Committee for Monetary Research and Education
Union League Club
New York, N.Y.
Thursday, October 20, 2011

CMRE President Elizabeth Currier chose the title of my remarks -- "Where in the World Is the Gold?" -- and I didn't argue with her, but if I knew where the gold was, they'd have to kill me. And if I knew and told you before they got to me, you'd all have a big problem too.

But for our purposes tonight it is enough to know that we will never be permitted to know, at least not in the current political circumstances.

Having been raising questions about the gold market for 12 years now, I've realized that the amounts, location, and disposition of government gold reserves are secrets more sensitive than the amounts, location, and disposition of nuclear weapons. Indeed, under nuclear weapons control treaties, governments with nuclear weapons have often shared that sort of information, even with hostile powers. But gold reserve information is far more tightly held and most gold information provided officially is actually disinformation.

Why is it this way?

It's because gold is an even more powerful weapon than nukes -- an alternative currency that is not necessarily under any governments power, a determinant of the value of other currencies, interest rates, government bonds, and equities.

It's not just me saying this. Lawrence Summers, former U.S. Treasury Secretary and off-and-on economics professor at Harvard, said so in the study he wrote with University of Michigan economics professor Robert Barsky in the Journal of Political Economy in 1988, a study titled "Gibson's Paradox and the Gold Standard." This study is posted at the Internet site of my organization:

http://www.gata.org/files/gibson.pdf

A few weeks ago, maintaining that his "Gibson's Paradox" study remains dispositive of the gold price issue, Summers provided it to New York Times columnist Paul Krugman -- and did so by giving Krugman the link to it at GATA's Internet site. That's what Krugman wrote on his blog.

This close correlation among gold, interest rates, and government bond values is why central banks long have tried to control -- usually suppress -- the price of gold. For gold is the ticket out of the central banking system, the escape from coercive central bank and government power. As an independent currency, a currency to which investors can resort when they are dissatisfied with government currencies, gold carries the enormous power to discipline governments, to call them to account for their inflation of the money supply and to warn the world against it. Because gold is the vehicle of escape from the central banking system, the manipulation of the gold market is the manipulation that makes possible all other market manipulation by government.

That manipulation operates through the largely surreptitious mobilization of Western central bank gold reserves and the gold nominally held by the major exchange-traded funds. If the manipulation was done completely in the open, as governments used to manipulate the gold market, through the gold standard and then through what was called the London Gold Pool, the Western central bank gold dishoarding scheme of the 1960s, the manipulation would fail, because then the world would understand that there isn't a free market in gold -- or in any currency, any more than there is a free market in government bonds.

Anyone can determine this for himself just by putting the unanswerable questions to central bankers and treasury officials.

For example, three years ago, as the International Monetary Fund was constantly announcing plans to sell some of its gold, I wrote to the IMF to try to determine exactly where its supposed gold was kept and whether the IMF had control of its own gold or if that gold was only pledges of gold from its member nations. The most I got out of the IMF was that its bylaws allow its gold to be stored in the United States, Britain, France, and India. When I asked if there ever had been an audit of the IMF's gold, the IMF's publicist terminated our correspondence. I was refused information as to where the IMF's gold was.

At the hearing held on March 25, 2010, by the U.S. Commodity Futures Trading Commission to inquire into the precious metals market, the managing director of the metals consultancy CPM Group in New York, Jeff Christian, a consultant to central banks, testified to what he had published in an explanatory essay in 2000. Christian testified that the world's biggest gold market, the London bullion market, is actually part of a fractional-reserve gold banking system where many times more gold is sold than is delivered. Most London gold buyers don't take delivery, and so most gold in client accounts on the books of the London bullion banks doesn't exist. It is just an unsecured claim against the bullion banks, which presumably have assurances that, in an emergency like a short squeeze, they can obtain gold from central banks.

That is, Western central banks have figured out how to increase gold's supply by vast amounts without going through the trouble of digging it out of the ground. They help to invent and sustain "paper gold" -- imaginary gold that many buyers accept, never suspecting that they're being deceived and cheated, fooled into thinking that they are buying a finite resource to hedge against the infinite creation of currency, when what they are buying is just as subject to infinite creation as the currency they want to hedge against.

GATA - Gold Anti Trust Action Committee

Gold Anti Trust Action Committee spat with Jeff Christian getting personal

The war of words between GATA and CPM's Jeff Christian is getting increasingly bitter coming to a head after a debate at the Silver Summit conference in Spokane (Link to video of the debate attached).

Author: Lawrence Williams
Posted: Sunday , 23 Oct 2011

LONDON -

The war of words between the Gold Anti Trust Action Comittee, GATA, and CPM Group managing director and founder Jeff Christian seems to be escalating. First Christian accused GATA in an interview as "a group that makes money by basically bilking gold investors out of fees to support GATA so they don't have to get legitimate jobs." And most recently, after a debate between Bill Murphy of GATA and Christian at the Silver Summit meeting in Spokane, GATA secretary Chris Powell accused Christian of "graduating from his usual distortions to outright contrivance."
There is obviously little love lost between GATA and Christian. The former is convinced that Governments, Central Banks and their banking sector allies and some major gold mining companies are, or have been, complicit in suppressing the global price of gold, whereas Christian is firmly on the side of the status quo which disputes this.

Indeed many in the establishment mainstream will not openly recognise that GATA maybe has a point - even though it has certainly produced documentation obtained through the U.S. Freedom of Information Act which would on the face of things appear to support at least part of its case. Indeed if one assumes that Governments as a matter of course manipulate currency exchange rates, then there is logic in their manipulating the gold price too as many throughout the world consider gold as money (currency) and that a rise in the gold price thus equates to a depreciation in currencies - notably the US dollar. Why major gold mining companies might also be complicit in this suppression is perhaps a little more obscure.

But recently Gillian Tett, the award winning U.S. Managing Editor of the Financial Times, a newspaper which is frequently the subject of GATA opprobrium as being on the side of the establishment, did seem to concede that GATA's views should not be dismissed out of hand. "For my money, though" says Tett, " I think there are at least two reasons why it would be foolish simply to deride or ignore GATA. Firstly, some of its points have at least a grain of truth. Even if you find it hard to believe that central bankers would be dastardly enough to create a plot -- or competent enough to do what GATA claims -- the fact is that global commodity markets are pretty murky, central banks are often opaque, and Western rhetoric about "free" markets is often hypocritical. Those issues merit far more debate, not just among journalists but central bankers too."

One has to give Christian credit for potentially throwing himself to the wolves at the Silver Summit - very much a pro-GATA group. Indeed it is probably doubtful if any in the audience would have been sympathetic to Christian's views. There is very much a divide between GATA-friendly conferences and those which the mainstream commentators normally attend, although it is interesting that the principal GATA view proponents seldom attend the latter, and vice versa, but whether this is because they are not welcomed or choose just not to go is perhaps uncertain. To a relatively impartial observer though the GATA conferences are certainly more fun - at least judging by the recent GATA event held here in London - even if being rather more than one-sided in the views expressed!

In truth, the actual debate at the Silver Summit was, in the writer's view, a little disappointing with perhaps insufficient time, or opportunity, for either party to make any killing arguments one way or the other. A link to the video follows so readers can make their own judgements: http://www.youtube.com/watch?v=7hnIqE1_ZGU


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