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Gartman calls GATA 'always' bullish on gold but mining industry disagrees
2:55p ET Wednesday, December 26, 2018
Dear Friend of GATA and Gold:
Thanks to GATA's old friend, gold market analyst John Brimelow, publisher of the Brimelow Gold Jottings letter, for calling attention to Dennis Gartman's comments about GATA in today's edition of The Gartman Letter:
"The major news over the weekend is from GATA, a group that in the past has found fault with The Gartman Letter on an all-too-regular basis over the years for there are times when we've been bearish of gold and GATA is
always, always bullish. Even when we are bullish of gold, we are never bullish enough to satisfy the men and women at GATA.
... Dispatch continues below ...
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"That said, on GATA's website it is being reported that Russian buying of gold is swiftly approaching actual international purchases, for heretofore the buying by the reserve bank has always been done as the bank has bought domestic production. If this is true -- and as yet we cannot confirm that it is true -- then this is really quite supportive of gold in the long and the short term and shall serve to spur us to be longer of gold than we are already. Certainly it does not spur us to being less long of it. At least, certainly that."
Gartman's comments can use some clarification.
First, of course, the report that the Bank of Russia's gold purchases seem about to overtake the country's domestic production must be credited to Bullion Star gold researcher Ronan Manly:
http://www.gata.org/node/18719
GATA can take credit only for supporting and publicizing Manly's work, which long has been heroic.
Second, Gartman misconstrues whatever criticism GATA has directed at him over the years. That criticism has not been for being insufficiently bullish about gold. To the contrary, GATA is largely indifferent to price predictions for the monetary metal.
Rather, Gartman, like many other market analysts, has disappointed GATA over the years for not candidly acknowledging central bank intervention against the gold price, though his letter in the last couple of years has done better in that respect.
Further, GATA is not really "always, always" bullish on gold in the conventional sense.
Rather, GATA has noted the huge naked short position in gold that has been carried by central banks, using bullion banks as intermediaries and using outright sales, swaps, and leases so that each ounce of real metal in the central banking and bullion banking system is supporting scores of investor claims against it, perhaps as many as a hundred claims.
This inflation of the supposed supply of investment gold has been the mechanism with which central banks have kept the gold price far below the true rate of inflation in the world, thereby crippling a competitor to their currencies and particularly a competitor to the world reserve currency, the U.S. dollar.
Evidence of this abounds. For example:
-- Federal Reserve Chairman Alan Greenspan's testimony to Congress in 1998 that the purpose of gold leasing by central banks is price suppression:
https://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm
-- The secret March 1999 report of the staff of the International Monetary Fund affirming that central banks conceal their gold swaps and leases to facilitate their surreptitious intervention in the gold and currency markets:
http://www.gata.org/node/12016
-- The admission in 2005 by William R. White, chief of the monetary and economic department of the Bank for International Settlements, that a primary purpose of central bank cooperation 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":
-- The heavy involvement of the BIS in gold leases and swaps, which is confirmed, if largely concealed, by the bank's monthly statements of account:
http://www.gata.org/node/18669
-- The many admissions by government-controlled news organizations in China that Western governments rig the gold price:
http://www.gata.org/node/10380
http://www.gata.org/node/10416
-- And the documentation in the archives of the U.S. State Department showing that driving gold out of the world financial system to protect the dollar is longstanding U.S. policy:
http://www.gata.org/node/13310
In a fractional-reserve gold banking system as overstretched as this, the upward potential for the gold price is enormous. But the central bank and government power supporting that system is also enormous, and for cautioning investors about it, GATA is typically ostracized from the gold-bullish crowd, dominated as it is by mining companies that are interested mainly in building their shareholder base and getting their share prices up. Thus GATA is often perceived as having a bearish influence on the gold price, if not as being bearish itself.
If GATA was really perceived as "always, always" bullish on gold, it wouldn't increasingly be excluded from conferences that, in part, aim to sell mining shares to investors. If gold mining companies wanted to break the price-suppression policy of governments, they might support GATA, help spread its message, and protest the policy to their government representatives. They don't precisely because they consider GATA not bullish enough on gold.
Anyway, GATA is grateful to Gartman for mentioning the organization in his letter from time to time, and maybe this explanation will correct his misapprehension about us.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
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