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Tom Luongo Basel 3 and the new role for gold
His hypothesis evokes 1974 warning to Kissinger, 2006 study by Peter Millar, and 2012 hypothesis by Paul Brodsky and Lee Quaintance.
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3:32p ET Tuesday, May 25, 2021
Dear Friend of GATA and Gold:
An interesting hypothesis about the purpose of the "Basel 3" banking regulations being pressed by the Bank for International Settlements is offered by financial writer Tom Luongo in his new commentary, "Basel 3 and the New Role for Gold."
Luongo argues that the new regulations, which the London Bullion Market Association says would make "unallocated" gold too expensive for its member banks to continue to carry --
-- are meant to explode that primary mechanism of gold price suppression and thus to boost the gold price to reliquefy the European Central Bank, which holds a lot of gold as well as depreciating debt instruments.
... Dispatch continues below ...
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Luongo writes: "Basel III is coming to destroy the paper gold markets and destroy the money-center banks in New York and London while setting the stage to bail out the euro-zone."
Luongo's analysis may remind GATA supporters of a few items often called to their attention:
-- The transcript of the April 1974 meeting of U.S. Secretary of State Henry Kissinger and his deputy, Thomas O. Enders, during which Enders warned Kissinger that the United States could not afford to let European nations return gold to the world financial system. Europe, Enders noted, had taken the lead in gold reserves over the United States, and whichever sovereign power has the most gold can revalue it periodically and thereby alter all financial valuations in the world, potentially to the disadvantage of the United States:
https://www.gata.org/node/13310
-- The 2006 study by the Scottish economist Peter Millar arguing that periodic upward revaluation of gold by central banks is required to devalue currencies in a fiat money system to prevent interest expense on debt from going exponential and devouring the real economy:
https://www.gata.org/node/4843
-- The 2012 hypothesis of the U.S. economists Paul Brodsky and Lee Quaintance that gold price suppression policy was being used to help major central banks redistribute the world's gold supply among themselves so that central banks holding a large position in U.S. dollar assets would be suitably hedged with gold upon the dollar's inevitable devaluation:
https://www.gata.org/node/11373
Luongo's analysis is posted at his internet site here:
https://tomluongo.me/2021/05/23/basel-iii-and-the-new-role-for-gold/
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
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