How Many Confessions Do You Need?

The following public comments and quotes are loosely compiled from www.gata.org and other sources believed to be reliable.  GATA is the Gold Antitrust Action Committee started by a former commodities trader, Bill Murphy, and a newspaper guy, Chris Powell.

They have amassed a large body of evidence at their website pretty clearly demonstrating (to me, at least) that somebody's fingers are on the gold price scale.  GATA has been producing evidence on gold price suppression since 1999 with little or no public recognition…because the major media, including newspapers, magazines, radio and TeeVee have flat out ignored them.  (Keep in mind, the major media have ignored gold and silver generally, precious metals mining company executives, gold mutual fund managers and gold investors of ALL kinds during the last 5 years…while the price of gold has moved from $255 an ounce to over $550 an ounce - a price movement colloquially known as a "bull market.")

I'm a recovering lawyer, and this is the outline of an argument.  When I was trying cases for a D.A.'s office years ago…, as long as the corpus delecti (elements) of the crime had been established, ONE confession was usually considered more than sufficient to convict.  Today, without having any fingerprints or direct documentary evidence about the gold's woefully sluggish price performance over the last 10 years, I've sorted through and collated a mess of my saved GATA emails.  (If you'd like to be on their mailing list, sign up at gata-subscribe@yahoogroups.com.) 

I doubt if I could "prove" price fixing in a courtroom.  I doubt if anybody could without the abject confessions of the guys rigging prices every week on the Comex in New York.  But I do think GATA has collected an awful lot of highly self-incriminating comments made by guys who certainly should have known what they were talking about when they said these things. I've written some of these down quickly without extensive checking…so don't hold me to exact punctuation, dates, etc.  But two final things here:

  (1)  If you're going to invest in gold, you need to know what GATA knows,
  (2) More than a few of these statements sound a lot like bragging:

July 24, 1993:  The usually turgid Alan Greenspan, before Congress in one of his bi-annual Humphrey-Hawkins testimonies, came right out and said:  "Central Banks stand ready to lease gold in increasing quantities should the
price rise." ("Leasing" has several advantages for NY banks in a gold price suppression scheme, i.e., the boys in NY get to make more money off it than outright sales…)

Sometime after September 26, 1999 (the date of the first "Washington Agreement"  wherein 14 mostly European Central Banks agreed to LIMIT their gold sales, and the gold price roared upwards of $50 in two weeks.) 

"The rise in the gold price threatened one or more finance houses and could have taken the rest down in their wake.  The British were very helpful in controlling the price, also the Americans."  by Mr. George, the Governor of the Bank of England.  

Mid-2000:  Representatives from GATA visit Congressional leaders including the Speaker, Dennis Hastert, with graphs and charts of price movements in London and NY which are too opposite to each other to ignore…arguing that the price of gold is rigged.  They are told in so many words that gold is national security issue and is too
potentially explosive to be looked into by Congress.

Early 2004 - the 2003 Annual Report of the Australian Central Bank:  "We hold gold primarily to support intervention (in the gold markets)."

June, 2004:  Oleg V. Mozhaiskov, Deputy Chairman of the Central Bank of Russia at a London Bullion Marketing Association (LBMA) meeting in London, citing GATA's work said, "The NY gold market is less than free."  London is a present delivery market, NY is a futures, paper market, which is pretty easy to control with leverage and lots of financial institution money at your disposal.

August 24, 2004:  John Embry, senior portfolio manager of the Sprott Mutual Fund group, a multi- billion dollar complex in Canada, produces and publishes a 60 page study of the "Gold Market, Not Free, Not Fair, available at their website www.sprott.com. Research by James Turk and Frank Veneroso, as well as GATA are quoted to support Embry's belief that the gold price has been "managed" for political purposes.

March 3, 2005:  The Gulf Cooperation Council, a well respected middle eastern "think tank" issues a report, citing GATA's work and suggesting that middle eastern Central Banks should diversify into gold.  And these guys have apparently been doing exactly that.

June, 2005: The BIS, the Bank for International Settlements (the Central Bank of Central Banks in Basel, Switzerland) issues a report of its 4th annual conference and includes a speech by William R. White, an officer, who in his speech entitled,  "The Past and Future of Central Bank Cooperation" said, "The intermediate objectives of CB cooperation are:…(P)rovision of international credits, and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful."

WELL…if you're creating boatloads of funny money called fiat currency, influencing the price of gold would always be "useful."  And what exactly was the "Strong Dollar Policy" under President Clinton, if not a stepping on the price of gold?  Did you see anybody raise interest rates in the 1990's to strengthen the dollar, like Volcker did?  And
speaking of the dollar strengthener hisself…

Late 2005:  Jay Taylor, a newsletter writer, publishes an interview with Paul Volcker, the highly respected former head of the FED from 1979 until 1987 who did strengthen the dollar by jacking interest rates up to the moon.  In the interview, Volcker said, "It was probably a mistake to allow gold to rise so high."  I.e., in retrospect, he thought they should have stopped it.  No doubt in his mind here, that with options and futures that had been "invented" back in the 1980's, they could have.

 He's undoubtedly aware of these financial products…because he wrote an editorial back in May of 2005 in the Washington Post saying they were dangerous.

February 6, 2006:  A subsidiary of a large (and one of the few) investment banks in France, Credit Agricole issues a report partially entitled "…Gold, Let the Hoarding Begin."

The report went on to cite GATA again and the extraordinary supply/demand imbalances in gold mining around the world.  (Begin Hoarding is not the sort of language bankers ordinarily use in thoughtful reports on commodity markets…, but this is France, the gold understanding country where Charles DeGaulle busted up the LAST international attempt to suppress gold back in the 1960s…the infamous "London Gold Pool.")

February 16, 2006:  Congressman Ron Paul of Texas, makes a long speech on the floor of the House talking about the "End of Dollar Hegemony," and the value of gold.  He's been the only Congress person over the last decade to try and corner Alan Greenspan over his profligate debt creation ways.  (And remember, kids, Sir Alan was knighted
by the Queen of England, and was awarded the Enron Distinguished Service Prize back in the late 1990's…isn't this what they call kicking somebody upstairs…the Peter Principle at work.)

April 2006:  Registered Representative magazine, the free magazine sent to over 90% of the nation's stockbrokers, actually runs a 2 page article noticing that there are rumors about the price of gold being suppressed.  They seemed to be saying, "You guys in the business of selling securities need to know this…; since price suppression schemes ALWAYS blow up sooner or later, don't get caught with your clients' money short in gold…" An even dozen comments by authoritative voices about gold being stomped.

Enough for ya? As I hinted at above, if these are brags, I can predict that pride will probably goeth before the proverbial fall of the bad guys. My syllogism/argument concludes as follows:

Gold is valuable and the price has actually been suppressed below where it should be in a free market.

Therefore, since the big boys can't do it forever…gold will be even moooooore valuable down the road.

"Got Gold?"