Suspicion about Bundesbank's gold dealings with Fed is getting respectable

11:37 ET Friday, January 25, 2013

Dear Friend of GATA and Gold:

Interviewed today for market analysis by Daniela Cambone of Kitco News, Cameron Hanover Managing Partner Vince Lanci disparages the Bundesbank for "lying" as it changed positions on repatriating Germany's gold reserves. Lanci also speculates that the German gold may not be readily available because the Federal Reserve Bank of New York may have loaned it to bullion banks to facilitate the gold carry trade over the years.

Lanci doesn't claim to know anything in particular on the subject. What is remarkable about his interview with Kitco News is its showing that the Bundesbank's gold repatriation has made discussion of central bank gold loans respectable even as financial journalists and commentatators still are not prepared to put the compelling questions to the primary sources, the central banks themselves, as GATA long has been doing in litigation and through ordinary inquiries:

http://www.gata.org/node/9917

http://www.gata.org/node/11661

http://www.gata.org/node/11862

http://www.gata.org/node/11988

As is shown by the material posted at the first link above, the Federal Reserve grudgingly admitted to GATA in 2009 that it has secret gold swap arrangements with foreign banks. Thus swaps as well as loans should be part of any questioning of central bank gold policy.

And as was documented by the confidential International Monetary Fund report obtained and published by GATA last month, central banks loan and swap gold and conceal the transactions to facilitate their secret interventions in the gold market:

http://www.gata.org/node/12016

The Bundesbank isn't alone in changing its tune here. In an interview with Kitco News a month ago Lanci himself sounded much more skeptical of central bank gold market manipulation than he sounds today:

http://www.gata.org/node/12015

How much longer can this neglect of the obvious continue? If suspicion now can be expressed in respectable circles that central banks may have secret policies and practices with gold, maybe it won't be too much longer before a few financial journalists drop their assumption that central banks should not be questioned and begin attempting actual journalism. If that ever happens, it will be the end of central banking as we know it, as central banking's primary power arises from its never having to account for itself in ordinary democracy, a power conferred on it only by incompetent, cowardly, or dishonest financial journalism.

Video of the Kitco News interview with Lanci is 10 minutes long, with the gold discussion beginning at 4:15, and is posted here:

http://www.kitco.com/KitcoNewsVideo/index.html?v=13-01-24_Vince_Lanci_1

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.