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Dear Friend
of GATA and Gold:
People like Mike Shedlock
of Sitka Pacific Capital Management in Edmonds, Washington, who writes Mish's Global Economic Trend Analysis letter, will never
debate a GATA representative about manipulation of the gold market even as
they aggressively misrepresent GATA's work, as Shedlock
did again this week in his essay, "Conspiracy Theory Psychology":
http://globaleconomicanalysis.blogspot.com/2008/08/conspiracy-theory-psy...
Shedlock wrote, as if it is GATA's position: "Theory 1: The U.S.
government, foreign governments, central banks, various broker-dealers, and a
consortium of 10 large U.S. banks are all acting together in some massive
conspiracy to suppress the price of precious metals for 15 years running, and
not a single insider has stepped up to expose the fraud
even though housing fraud stories
from insiders are being disclosed at a rapid pace, and government, CIA, and
other intelligence leaks have been running rampant throughout that entire
timeframe."
Actually, of course, GATA's position is
that quite a few insiders have testified to the gold price suppression
scheme. Though Shedlock purports not to notice it,
GATA has been publicizing their admissions for years. It would be decent of Shedlock and those who share his views to familiarize
themselves with and respond to these admissions, particularly:
January 1995: The Federal Reserve's general counsel, J. Virgil Mattingly, told the
Federal Open Market Committee, according to the committee's minutes, that the
U.S. Treasury Department's Exchange Stabilization Fund had undertaken
"gold swaps." Central banks have only one purpose for "gold
swaps": market intervention. The January 1995 FOMC minutes with
Mattingly's statement are posted at the Fed's Internet site here:
http://www.federalreserve.gov/monetarypolicy/files/FOMC19950201meeting.p...
July 1998:
Federal Reserve Chairman Alan Greenspan told Congress, "Central banks
stand ready to lease gold in increasing quantities should the price
rise." That is, Greenspan himself contradicted the usual central bank
explanation for leasing gold -- supposedly to earn a little interest on a
dead asset -- and admitted that gold leasing was all about suppressing the
price. Greenspan's admission about the gold price suppression scheme is
posted at the Fed's Internet site here:
http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm
September 1999: The Washington Agreement on Gold, made by the European central banks
in 1999, was a proclamation that Western central banks were working together
to control the gold price. The central banks in the Washington Agreement
claimed that, by restricting their gold sales and leasing, they meant to
prevent the gold price from falling too hard. But even if you believed that
explanation, it was still collusive intervention in the gold market. The
Washington Agreement can be found at the World Gold Council's Internet site
here:
http://www.reserveasset.gold.org/central_bank_agreements/cbga1/
February 2003: Barrick Gold confessed to the gold price
suppression scheme in U.S. District Court in New Orleans when it filed a motion to
dismiss Blanchard & Co.'s anti-trust lawsuit against Barrick
and its bullion banker, JPMorganChase, for rigging
the gold market. Barrick's motion said that in
borrowing gold from central banks and selling it, the company had become the
agent of the central banks in the gold market, and, as the agent of the
central banks, Barrick should share their sovereign
immunity and be exempt from suit. Barrick's
confession can be found here:
http://www.lemetropolecafe.com/img2003/memoformotiontodis.pdf
September 2003: The Reserve Bank of Australia
confessed to the gold price suppression scheme in its annual report for 2003.
"Foreign currency reserve assets and gold," the RBA's report said,
"are held primarily to support intervention in the foreign exchange
market." The RBA's report is posted at the central bank's site here:
http://www.rba.gov.au/PublicationsAndResearch/RBAAnnualReports/2003/Pdf/...
June 2005:
Maybe the most brazen admission of the Western central bank scheme to
suppress the gold price was made by the head of the monetary and economic
department of the Bank for International Settlements, William S. White, in a
speech to a BIS conference in Basel,
Switzerland.
There are five main purposes of central bank cooperation, White announced,
and one of them is "the provision of international credits and joint
efforts to influence asset prices (especially gold and foreign exchange) in
circumstances where this might be thought useful." White's speech is
posted at GATA's Internet site here:
http://www.gata.org/node/4279
Further, government manipulation of the
gold price is only the unanimously accepted history of the world prior to the
period about which GATA is complaining. That's what the gold standard was
about, fixing the price of gold to certain amounts of government currencies.
That's what the London Gold Pool was about, the effort of the U.S. and
British governments, abandoned in 1968 amid extraordinary demand for the
metal, to hold the gold price at $35 per ounce.
Shedlock does acknowledge government's propensity for market manipulation. He
writes:
"Of course there are conspiracies
and manipulations. I have listed many of them.
"Blatant manipulations:
"-- Term Auction Facility.
"-- Primary Dealer Credit Facility.
"-- Term Securities Lending
Facility.
"-- SEC rule changes options
expiration week.
"-- Selective enforcement of naked
shorting rules.
"-- Discount window changes in
options expiration week.
"-- Shotgun marriages arranged by
the Fed.
"-- The bailout of JPMorgan/Bear
Stearns."
So Shedlock's
position seems to be that government is trying to rig almost every market except
the one government used to rig openly. What strange and sublime faith he must
have!
Despite the misrepresentation of GATA's
work by Shedlock and others, we're actually in
fairly respectable company in maintaining that the gold market is
manipulated. Some big investment houses have said the same thing.
Sprott Asset Management:
http://www.sprott.com/pdf/pressrelease/press_release_not_free_not_fair.p...
The Cheuvreux
brokerage house of the French bank Credit Agricole:
http://www.gata.org/files/CheuvreuxGoldReport.pdf
And Citigroup:
http://www.gata.org/files/CitigroupGoldReport092107.pdf
There's a lot of admission and
documentation above, which, it seems, is why Shedlock,
Kitco's Jon Nadler, the World Gold Council, and
others who disparage complaints of manipulation of the gold market refuse to
debate the issue, where they might be compelled to address the evidence
specifically. But GATA remains ready, any time these folks or others on their
side work up the honesty and courage.
Join GATA here:
Hard
Assets Investment Conference
Tuesday-Wednesday, September 9-10, 2008
Mandalay Bay
Resort and Casino, Las Vegas, Nevada
http://www.iiconf.com/
Silver
Summit
Thursday-Friday, September 18-19, 2008
Best Western Coeur d'Alene Inn
Coeur d'Alene, Idaho
http://thesilversummit.com
Toronto Resource Investment Conference
Saturday-Sunday, October 4-5
Metro Toronto Convention Centre, Toronto, Canada
http://goldshow.ca/ch_tor2008.html
New Orleans Investment Conference
Thursday-Monday, November 13-18, 2008
New Orleans
Marriott Hotel
http://www.NewOrleansConference.com
Chris Powell
Secretary / Treasurer
Gold Anti-Trust Action
Committee
www.GATA.org
GATA is a
civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal
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