Central banks are steadily losing their cover in the gold market
10:55p ET Thursday, December 15, 2011
Dear Friend of GATA and Gold:
Thanks to the latest commentaries by Brady Willett of Fall Street, Tom Szabo of Metal Augmentor, and Jim Willie of the Golden Jackass, more people are realizing the potential for market manipulation through central bank gold leasing, of which there lately have been strong indications.
In "Did Ron Paul Slay the Gold Bull?" Willett remarks that favorable lease rates "allow powerful interests to more readily manipulate gold":
In "Charlatan Exposed: Negative Gold Lease Rates," Szabo writes: "The gold forward rate has increased during both the late September and current selloffs in gold, which probably means that gold is being leased by central banks in order to provide liquidity for the banking system. ... The gold bugs are essentially right that the gold price is falling this time because paper gold is flooding the market."
... Dispatch continues below ...
The United States Once Again Can Establish
a Stable Dollar Worth Its Weight in Gold
Lewis E. Lehrman, chairman of the Lehrman Institute, sponsor of The Gold Standard Now project, has released a plan to restore economic growth through a stable dollar.
The plan, titled "The True Gold Standard: A Monetary Reform Plan Without Official Reserve Currencies," responds to the recurrent economic crises of the last century and outlines a detailed proposal for America's leadership on "how we get from here to there." That is, how we get from the present unstable paper dollar to a stable dollar as good as gold.
James Grant, author and editor of Grant's Interest Rate Observer, says of the Lehrman plan: "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman the country has finally found him."
To learn more and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit:
Szabo seems to concur with GATA's interpretation of the London Bullion Market Association as a fractional-reserve gold banking system generating a lot of imaginary gold for price-suppression purposes. He writes: "Other than the use of unallocated gold for swap, collateral, or trading purposes, the only other reason why an owner of gold would seek to 'deposit' physical gold with an LBMA member in an unallocated bullion account would be to avoid storage fees associated with allocated gold. It is not known to what extent the LBMA unallocated account is used by customers to avoid storage fees, but a significant amount of gold, perhaps several thousand tonnes, has been converted to paper form as a consequence of the bullion banks' business. The theoretical result is that the paper gold will have to be converted back to physical metal in the future when the customer requests a withdrawal. We say 'theoretical' because the gold market may not be able to handle mass withdrawal requests from unallocated account holders should a future monetary crisis make all counterparty risk untenable. In fact, mass withdrawal requests would probably lead to a default in those LBMA unallocated accounts that are not backed by physical metal. At the present time, that would be most if not all of them."
Szabo's commentary is posted at Metal Augmentor here:
And in "Pathogenesis of Central Bank Ruin," Willie writes: "The gold market has gone into the Twilight Zone. The ruin of the European banking system, dragged down by toxic sovereign debt, has made the big European banks desperate. They are tapping into the virtually unlimited dollar swap facility, using borrowed money to lease gold. The Powerz have made the lease rate negative in order to attract borrowers."
Willie's commentary is posted at GoldSeek here:
And at 24hGold here:
All this points to constant surreptitious intervention by central banks and their agents in the gold market, and as the Bank of England said this week, while the public and the markets may be given some access to records of that intervention on a historical basis, they must not be allowed any knowledge of that intervention contemporaneously -- must not be allowed to know exactly how central banks are intervening today. (See http://www.gata.org/node/10778.)
No, contemporaneous information about the surreptitious central bank intervention in the markets is the preserve of the investment banks that serve as the central banks' agents and are rewarded with the right to trade on inside information.
This is all as obvious as sunrise and sunset, and GATA is as tired of belaboring it as many of you may be to hear it. But it remains so important because it cannot yet be reported or even asked about by the mainstream financial media, even as its only utility is in its surreptitiousness.
That surreptitiousness could be exploded tomorrow, changing the world. Maybe it was already exploded tonight by Willett, Szabo, and Willie. Or maybe exploding it will take many more years. After all, those who would explode it are up against all the money and power in the world, or nearly so. But as Lee Strasberg's Hyman Roth coughed out in one of "The Godfather" movies, "This is the business we've chosen." We will have to press on in the morning.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
Join GATA here:
Vancouver Resource Investment Conference
Sunday-Monday, January 22-23, 2012
Vancouver Convention Centre West
Vancouver, British Columbia, Canada
California Investment Conference
Saturday-Sunday, February 11-12, 2012
Hyatt Grand Champions Resort
Indian Wells, California, USA
Support GATA by purchasing a silver commemorative coin:
Or by purchasing a colorful GATA T-shirt:
Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:
Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon:
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:
To contribute to GATA, please visit:
Be Part of a Chance to Discover
Multi-Million-Ounce Gold and Silver Deposits in Canada
Northaven Resources Corp. (TSX-V:NTV) is advancing five gold and silver projects in highly prospective and politically stable British Columbia, Canada.
Check out the exploration program on our Allco gold/silver project :
-- A large (13,000 hectare) property, covering more than 15 square kilometers of a regional mineralized trend just 3km from a recently announced 1.2-million-ounce gold and 15-million-ounce silver deposit.
-- The property hosts historic high-grade silver workings and many mineral showings as well as former mines at the property's northern and southern boundaries.
-- A deep-penetrating airborne geophysics survey has just been completed on the entire property and neighboring deposits and its results are eagerly awaited.
To learn more about the Allco property or Northaven's other gold and silver projects, please visit:
Or call Northaven CEO Allen Leschert at 604-696-3600.