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So where's all the gold coming from?
2:44p ET Sunday, April 28, 2013
Dear Friend of GATA and Gold:
Observing the recent smash in the paper gold market, our friend S.S. asks whether it may signify that Western government gold reserves, particularly U.S. gold reserves, are a lot larger than reported, or if world gold holdings generally are a lot larger than estimated, so much so that gold price suppression can continue for decades or centuries. He cites the famous story about the supposed hoard of looted Asian gold amassed by Japanese Army Gen. Tomoyuki Yamashita during World War II, a hoard some believe to have been spirited away by the U.S. government and used for secret operations around the world:
http://en.wikipedia.org/wiki/Yamashita%27s_gold
Of course the world must have far more gold than is reported to government agencies and the World Gold Council. Government gold reserve data is always disinformation, as central bank gold swaps and leases are not reported (http://www.gata.org/node/12016) and governments sometimes don't fully report gold in their possession (http://www.gata.org/node/9545). Nobody -- not peasants in India, the new middle class in China, coin collectors in the United States, and lordly old families in Europe -- files a public inventory of his gold possessions.
... Dispatch continues below ...
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But if the U.S. government had access to a vast secret stash from Yamashita's gold, it likely would have been pressed into the service of supporting the dollar through the London Gold Pool in the 1960s and the gold pool would not have collapsed because of Western gold reserve inventory draining in March 1968 (http://en.wikipedia.org/wiki/London_Gold_Pool).
Similarly, with a vast secret stash to draw from, the U.S. government probably would not have terminated the convertibility of the dollar into gold for foreign governments in August 1971 (http://en.wikipedia.org/wiki/Nixon_Shock).
And if such a vast secret stash had been available to the United States, it seems unlikely that Britain, the closest U.S. ally and, through the Bank of England, the longtime executor of the gold price suppression scheme, would have felt obliged to begin selling half its gold reserves in 1999 to avert a short squeeze in the gold market (http://en.wikipedia.org/wiki/Sale_of_UK_gold_reserves,_1999-2002).
If so much secret metal was still available to Western governments for gold price suppression, that suppression probably still would be operating through the dishoarding of metal from official reserves, as it operated through the London Gold Pool, rather than through the sale of futures and options contracts -- paper gold -- supervised by the Bank for International Settlements (http://www.gata.org/node/11622 and http://www.gata.org/node/11012).
That Germany's Bundesbank has chosen to repatriate only a fifth of the gold it believes it has deposited at the Federal Reserve Bank of New York and to repatriate it only over seven years (http://www.gata.org/node/12124) does not suggest a great surplus of metal either. To the contrary, it suggests that for its gold price suppression purposes the U.S. government lately has been drawing not on Yamashita's gold but on the gold long deposited with the United States by its allies.
Of course we aren't permitted to know certain things here. Since most of the financial news media won't question central banks about gold, we aren't permitted to know even that we aren't permitted to know (http://www.gata.org/node/12395). But it's a fair assumption that if gold was as plentiful as the gold price suppressors would like the world to think, the prize in every Cracker Jack box (http://en.wikipedia.org/wiki/Cracker_Jack) would be not a little piece of plastic but a Louis d'or (http://en.wikipedia.org/wiki/Louis_d%27or).
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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