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Exclusive: The Bank Of England Engaged In Flagrant Gold Manipulation In The Interwar Period Via The New York Fed; Does History Repeat Itself?
- Alan Grayson
- Bank of England
- Bank of New York
- Ben Bernanke
- Ben Bernanke
- BOE
- Central Banks
- Failed Auction
- Fed Transparency
- Federal Reserve
- Federal Reserve Bank
- Federal Reserve Bank of New York
- Gold Bugs
- Grayson
- keynesianism
- Mark Pittman
- Market Manipulation
- Monetary Policy
- Money Supply
- Mutual Assured Destruction
- New York Fed
- Scott Alvarez
- Tim Geithner
- Transparency
An article written by University of Tennessee professor John R Garrett, "Monetary Policy and Expectations: Market-Control Techniques and the Bank of England, 1925-1931", which describes in exquisite detail the gold falsification measures undertaken by the Bank of England in the interwar period in order to impact interest rates in a favorable direction, performed with the full criminal complicity of the Federal Reserve Bank of New York, may mean paranoid "gold bugs" could soon be forever absolved of their "tin hat" wearing status as outright gold, and other data, manipulation by a major central bank is now proven beyond doubt. The implications regarding the possibility of comparable deceitful and treasonous acts by modern central bankers are staggering.
The Bank of England depleted its open-market portfolio by secretly sterilizing large gold inflows. Thereafter interest rates were influenced by manipulating reported gold flows.... A gold flow falsification was over two-thirds as effective as an open-market operation.
Falsifying critical gold data worked for Britain 70 years ago. Is it working now too? And is the BOE alone, or is Bernanke taking advantage of the Bank of England's experience? To be sure, the world was different with the Gold Standard the bedrock of monetary policy. Yet are the similarities between then and now not greater than the differences? With the shadow economy exposed as hinging on the investing community's desire to go with the prevailing "valuation" lie (a reason why the shadow economy in broad terms will take many years to return, if ever) the core asset is and always will be gold.
And yet the main question remains: why did the Bank of England openly and flagrantly manipulate critical data? Why did it mislead the citizens of the country it was supposed to serve? And if this happened in the past is it happening now? Is this the reason why the Federal Reserve is so opposed to exposing itself to public scrutiny and audits? If the BOE was engaging in outright fraud in the 1925-1931 period, why would today be any different?
Garett's mesmerizing report, published in the September 1995 issue of Monetary Policy and Expectations, has oddly not received much if any public notice, with not a single mention of the article or its implication in either the blogosphere or the mainstream arena. This is very unusual as Garret's disclosures would lend vast credence to not just gold bugs' claims that there is blatant (ongoing) gold data manipulation, but that Central Banks regularly engage in outright deception when it comes to achieving desired monetary policy results. To wit:
Montagu Norman, the Governor of the Bank of England... engaged in a large-scale deception that greatly over-stated the size of the effective open-market portfolio, understated the size of the gold stock, and misstated the size and even the direction of gold flows.
Not only that, but Garrett provides a direct link between secret gold market operations by the BOE and accumulation of US Treasuries: a critical concept not just in interwar Britain but more so currently, when faced with the need to finance trillions in budget deficits, the market is poised to decline by 25%+ should the US government experience a failed auction. Oh, and guess who was complicit in the BOE deception, and was used by the British central bank as a trading conduit? Why, the Federal Reserve Bank of New York, of which Tim Geithner was president from 2003 to 2009.
Norman sold pound-denominated securities to sterilize the additional bank reserves created by the gold inflow. He simultaneously sold gold for dollars, lowering the Bank's reported gold stock, and bought U.S. Treasury bills with the proceeds. He also had all transactions carried out on the New York market by the New York Federal Reserve Bank so that they could not be traced to the Bank of England. (see Figure 1) The U.S. Treasury bills were comingled with pound-denominated "other securities" in the Bank's published open-market portfolio and were assumed by the markets to have been pound-denominated securities. In one stroke the gold inflow and the decline in the open-market portfolio were hidden. Bank Rate was kept at a very high level given the abysmal state of the economy, well over the level that would have prevailed under the Bank of England's prewar reaction function.
The motive: the traditional misrepresentation of inflationary/deflationary forces to the general public.
Had it become public knowledge in the spring of 1928 that deflationary policy was three times as severe as reported and concurrently that gold inflows and the gold stock were at record levels, Norman would have been through.
And if anyone thinks the Fed's penchant for secret is a novel thing, just look at what was happening in the dark corridors of the Bank of England in those dark days after World War I:
Sayers documents that the Committee of Treasury, the Bank of England's day-to-day governing body, was left in the dark, as was the Court, the Bank's de jure and, before Norman, defacto policy body. Sayers expresses surprise at the secrecy with which open-market operations were surrounded even within the Bank's inner corridors. This extended to the point of declining to keep in the Bank's confidential archives any written records of policy decisions motivating transactions. However, for Norman's policy model the utmost secrecy was essential.
But it doesn't end there: what Montagu Norman did was virtually equivalent to treason. One, thus, can not help but wonder what Ben Bernanke does behind closed doors.
Norman's deception was audacious, as it involved the abrogation of Parliamentary authority over the coin of the realm and the subversion of the ancient charter of the Bank of England. These major questions of state, however, became bureaucratic trivialities compared to Norman's daily task of convincing the financial markets that he was in control when in fact he was not. An effective open-market portfolio of well over 50 million pounds was required to maintain control through standard open- market operations. From late 1926 until the end of the gold standard Norman never held the minimum portfolio, and normally could muster only one-fourth or less of the requisite strength.
And while we can be sure that the Federal Reserve is certainly not performing the same kind of illegal and treasonable activities, as otherwise Federal Reserve General Counsel Scott Alvarez would be in prison for gross perjury, courtesy of Alan Grayson, looking back at history may provide some other ideas of how the Fed could engage in other just as illicit monetary activities:
Montagu Norman maintained his tenuous grip on the market by fully exploiting all traditional policy instruments and through the creation of a wholly new expectations channel for monetary policy. Four methods were employed: open-market operations; special deposits; coordinating public finances; and false reporting of gold flows. The quantitatively least important method of market control was using confidential special time deposits from individual financial institutions to take reserves off the market. Special deposits had to be substantial and secret, as the Bank was claiming in its published figures that it had no reason to resort to special deposits to drain reserves. Thus special deposits were difficult to use as a regular policy tool (see Table 1). Although special deposits were used only three times, each instance came during a period of market-control difficulties (see Figure 2).
Yet monetary policy response were vastly limited:
As the open-market portfolio was completely exhausted by 1928: 2 (see Table 2), contractionary monetary policy could not have been maintained otherwise. However, there were limits to such help, as padding the Treasury's balance at the bank required issuing more Treasury bills than necessary, which cost the taxpayer, and was therefore certain to draw inconvenient questions from the Chancellor of the Exchequer.
And here is where we enter the twilight zone:
Norman published misleading Bank of England balance sheets that falsely reported gold flows. Up until late 1926 the gold inflow was consistently understated, but the direction of change in reported gold holdings faithfully followed actual gold holdings. Sayers states that Norman's intention in hiding gold was merely to accumulate a reserve cushion for a rainy day, and does not view the hidden gold as a market- control tool, though he admits that the secret reserves supported tighter monetary policy. Sayers's position, which is consistent with the pattern from July 1925 until October 1926, may reflect Norman's original intention. However, from late 1926, just as his open-market portfolio declined below the market-control threshold, Norman did not just underreport gold inflows, but began to under-, over-, and misreport gold flows as appropriate for his market-control needs. Every possible type of false reporting was committed.
If after reading this historical evidence of Central Banking treason, senators are unable to pass Ron Paul's Fed Transparency Act then there has to be open social action to clean out the Senate of all those who claim that the Fed's actions are pure and true, as they are merely corrupt cronies, bought entirely by interests of the Federal Reserve, and thus Wall Street. Furthermore, we urge readers to follow through on footnote 34 of the Garrett report "For example, Woolley, Monetary Politics; and Neumann, "Precomitment." Note that Woolley also finds evidence for the U.S. of a channel of influence running "backwards" from the central bank to the administration." We are very curious just what "evidence", besides the circumstantial, exists that the administration is nothing but the Fed Chairman's puppet.
The BOE's actions, which were open and flagrant fraud and deceit, went far beyond just gold manipulation. One can easily find parallels between the Mutual Assured Destruction wild card used by Norman and such "end of the world" exhortation by Paulson, Bernanke, Geithner, Blankfein and everyone else who stands to see their accumulated wealth disappear should there be a full audit of the Federal Reserve.
Norman's proffered scenario called for a rise in Bank Rate supported by open-market operations. To restore reserves the London clearing banks would call in their overnight money, the chief source of finance for the discount market's bill portfolio. To pay off their call-loan borrowing, the discount houses would be forced "into the Bank," forced to discount their portfolios at Bank Rate, a full 2 percent above the call-money rate. Thus Norman was threatening to force the discount houses to liquidate their highly leveraged portfolios at rates 3 percent above those contemplated when the portfolios were purchased (the 2 percent differential between call money and Bank Rate plus a 1 percent increase in Bank Rate). Given the thin margins and low capital levels in the discount business, this would have produced severe losses.
Despite Norman's weekly meetings with the discount houses' governing body, he waited to deliver his ultimatum until the pound's seasonal autumn weakness, when the market was already nervous about an increase in Bank Rate, five months after the market-control incident began. Why Norman had simply not drained sufficient liquidity out of the market at the time of the incident was probably puzzling to the discount houses, but the dire consequences of Norman's threat made it unlikely that anyone would call his bluff, if anyone could have even conceived that he was bluffing. In fact, he was. His portfolio was empty.
Garrett's findings ultimately provide a critical basis to reevaluate the entire foundation of modern fiat-system based economics.
The results may be summarized as follows. Markets can not tell when a central bank is lying. They then have the option to accept all or reject all forecast information emanating from the central bank. Under such circumstances the credibility model asserts that private financial markets reject all central bank information. This is possible because the financial markets' private information is assumed to be almost complete. However, the results presented here contradict this assumption and lend support to the opposite case: the markets' private information is so incomplete that they can not dispense with central-bank sources. The implication for the credibility model is devastating because pervasive ignorance and uncertainty allow the central bank to maintain its position as a disseminator of forecast information even if the central bank is guilty of extreme dishonesty, as under Norman. Under these circumstances monetary policy will be an effective instrument to stabilize the economy against both money demand and real shocks, which contradicts the core result found in the large and influential credibility-model literature.
And, sure enough, with these findings, the death of Monetarism and Keynesianism is one step closer:
Recently support has increased for Kindleberger's "internationalness" hypothesis and in particular the role played by the internationally shared characteristics of the macroeconomic policy system. The three most important features of the macroeconomic policy system were fiscal policy constraints through balanced budget policy rules or laws; the independent central bank as the uncontested policy authority; and the gold standard as the system's enforcer. The postwar international financial order was managed by central bankers who were not stabilizers, whether of a Monetarist (stabilizing the money supply) or Keynesian (stabilizing the level of output) variety. Montagu Norman's policy model and his policy choices lend clear support to the new interpretation. Much of the earlier literature explicitly or implicitly assumes interwar central bankers were stabilizers. Conclusions dependent upon this premise must be reevaluated.
Garrett's conclusion is stunning. Should comparable deception be found at the epicenter of monetarism, i.e., the Federal Reserve, the refutation of the entire "goal seek" science of economics as we know it may soon be at hand.
[T]he behavior of British financial markets is shown to be inconsistent with the microfoundations of the new classical model- expectations not only moved in a policy reinforcing rather than a policy negating direction, but expectations became a reliable, systematic policy instrument. One of Thomas Sargent's hopes is fulfilled-economic history proves to be fertile ground for testing the accuracy of complex macroeconomic theory-though the outcome is probably not what he had expected.
We urge readers to read the Garrett paper and to send it to their representatives and senators, with the hope that once it becomes fully clear that formerly reputable Central Bankers openly, repeatedly and in flagrant violation of their charters, engaged in outright market manipulation and data fraud, that the Federal Reserve will finally be audited or abolished, which for all intents and purposes, will end up being the same thing.
We are confident that somewhere Mark Pittman is smirking, all too knowingly.
Full must read Garrett research paper.
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As it will be in the future, it was at the birth of Man
There are only four things certain since Social Progress began.
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wabbling back to the Fire;
And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!
If we should chance into a solar minimum at the same time, history surely will rhyme - good and hard
Birth of the FED? 1913
During 2008-2009 NASA scientists noted that the Sun is undergoing a "deep solar minimum," stating: "There were no sunspots observed on 266 of [2008's] 366 days (73%). To find a year with more blank suns, you have to go all the way back to 1913, which had 311 spotless days:
Can we assume an implied bitchslap to every dumb yank who refers to the U.K. as 'England'.
Thanks ever so.
Some unfair junking going on here. As a Yank, I happen to know there is lots of confusion on this side of the pond regarding the composition of UK and Great Britain.
I have always assumed Great Britain is composed of England, Ireland and Scotland. The United Kingdom is composed of England, Ireland, Scotland and the principality of Wales ( homeland of my ancestors )....and perhaps other parts of the world holding allegiance to the monarchy ??
Don't go around any Irish pubs saying that. Good way to get your "i" dotted. Great Britain is the physically connected mass, which puts your assumption backwards as Wales is considered a part, and including N. Ireland creates the "United Kingdom" of Great Britain.
Ireland & Scotland are a pair of unemployed shits in their basement..surely you can forgive us for ignoring them
forgiven sir
Having traveled to both countries extensively over the last several years it is my opinion that England's glory days are in the past, while Ireland's are still ahead. I know a couple who teaches both Irish and English children and they agree with my assessment. Will see how that English Entitlement Syndrome works out for you and your countrymen.
Actually, old boy, some of us prefer it, on account of how the English actually pay for everything that goes on around and in these sceptered isles.
Look a lot of nasty crap happened during this gold standard period. One needs to study the period where the US currency was on the gold standard in detail in order to get a sweep of the concerns and actual problems that arose in terms of capital flows and gold demand.
For example in 1914 the NYSE was SHUT for 4 1/2 months to prevent the Europeans from selling the common shares they had invested in US companies (we were an emerging economy back then!) to raise dollars to redeem for gold ($ were convertible to gold) and then buy the armaments they needed to kill each other.
If the NYSE was not closed it would have crashed--at least that is the cover story.There was also a question of whether the US had the gold to cover the demand, and if the Treasury needed more, where it would come from?
http://www.researchmag.com/Issues/2009/July-1-2009/Pages/Stocks-Gold-and...
http://www.amazon.com/War-World-Twentieth-Century-Conflict-Descent/dp/15...
I always liked the period when Andrew Jackson was the President, you know, the period when Andrew had his foot stuck up the Banksters ass.
the problem with the original gold standard
and even the gold bullion and gold exchange
standards is that they all had a large fiduciary
component which left the system exposed to
panic and runs....
the problem is not with gold but with the
foxes guarding the chicken coop....
a 100% gold system significantly reduces or eliminates
the risks you describe....
The BOE has never been as good as we are at covering up the corruption and never will be. It is such a travesty that we Americans (and the rest of the world) just sit and watch as blatant corruption and multiple lawless actions are commited all in the name of wealth and progress and do nothing about it. Payback is coming and we only have ourselfs to blame for doing nothing about it. What were the Israelites banished for, something like 40 years? We should get worse.
Great article. Thank you. How that can go unnoticed for 15 years seems silly. Surely had the internet been what it is now, more people would beaware of it.
The churchill comment someone made earlier was a bit alarming.
So this happened 80 years ago and all the people that perpetrated this are dead. How is this any more relevant than someone that posts an article about the Nazis and points alarmingly at Germany. Or is this just this week's "cry wolf".
Just stop, you give anonymity a bad name.
keep current mr ano
Of course the ends of this deception and manipulation of gold data are the same that GATA long has been asserting for the contemporary gold price suppression scheme. The falsification of gold holdings data by the Bank of England as reported by Professor Garrett is
mirrored perfectly by the data-falsification and market-manipulation scheme described in the April 1961 memorandum kept in the archive of former Fed Chairman William McChesney Martin, about which GATA consultant James Turk wrote at length in January 2009:
http://www.gata.org/node/7096
Oh, it matters alright. Montagu Norman and his Rothschild handlers were involved in deep political, not "just" economic conspiracy. For a partial elucidation see: Guido Preparata, Conjuring Hitler - How Britain and America Made the Third Reich (London, 2005).
they practiced first in bringing about communist
ussr - a revolution stolen from the bolsheviks....
after the hitler experiment they moved on to
communist china, cambodia and a whole slew
of somethings in between....
usa industrial leaders were feeding both sides
of world war 2.....prescott bush, grand-daddy
of the bush crime syndicate, was a chief ring
leader of brown harriman and was in fact caught
by the government then...fdr let them off scot
free because he needed their money and materiel...
Nice. I think this is the level of awareness we're dealing with in the public at large. Comforting.
This site and many of the people posting here have called impending doom at least 20 times in the last 6 months. Articulate sophistry is still sophistry.
Good read. They WILL lose control of this
thing - whatever they are doing will be
exposed.
Of course central bankers are liars and thieves. Of course they engage in backroom dealings while stabbing each other in the back. Of course they despise the external discipline enforced by a gold standard. Of course people come to ZH and deride hard money advocates. Of course there is no man or group of men who are wise enough to manage an economy made of 300+ million souls; those who support the notion are either fools or are complicit in the scheme.
Look around you, pick up your newspaper, take a drive around your town and see the misallocated capital, see the destroyed businesses, and think for a moment about the destroyed hopes and lives. The power to control the value of money is the power of life and death.
Central banking is a scourge upon the planet and must be eliminated. It's a disease that must be eradicated, and the only vaccine is education.
SWR - just had to say it: I love what you put out there. Always some badass, poetic comments. ;)
"And yet the main question remains: why did the Bank of England openly and flagrantly manipulate critical data? Why did it mislead the citizens of the country it was supposed to serve?"
...... cooking the books, what a suprise. Just like the credit crisis today "nobody saw it coming" because the whole "machine" was in on the deal.
I think we the people should file a petition to stop paying taxes until these problems are remedied, and all politicians take an immediate pay cut of 50% with all benefits withheld until further notice.
Two things are coming from the paper:
1. At least prior to the Great Depression, the major Western economies & financial market were purposely manipulated. Consequently, the presumable "free-market" economic processes were a charade under "central banks controls".
2. These secret financial manipulations followed by the Great Depression. Although, we do not know how much these "central banks controlled" operations contributed to the Great Depression but, at some point, this "control" was broken greatly exacerbating the Great Depression.
Importantly, we do not know the real and accurate history of the Great Depression. Consequently, by applying remedies to cure the present "Great Recession" based on wrong past & present diagnoses are doomed to fail.
Jim Rogers remains bullish on Gold. Says it will hit $2000 within a few years. Marc Faber doesn't trust Bernanke, Geithner or any of Obama's financial cronies. Faber says he will never sell his gold in his lifetime.
http://foxmuldar-conservative-thinker.blogspot.com/2010/02/marc-farber-on-us-debt-bubble.html
Great article, thanks for posting. I have to partially disagree that this vindicates what most "gold bugs" want. Most I have seen want the US to be on a gold standard. And yet we see here conclusively how powerful international central banks manipulate the gold/money supply for their benefit, at the direct expense of the common man. Bill Still advocates government owned and operated, debt free fiat money for this very reason. Similar to the English tally stick system successfully used for nearly 700 years during the ascension of the British Empire. Tally sticks were nothing more than notched planks of wood; pure fiat. You can learn about it on Still's "The Money Masters" and "The Secret of Oz."
A gold standard is wrong and unworkable. It has the equation exactly backwards. Gold is assigned a worth of X dollars, redeemable? No. A Government issuing its own currency debt free, with gold as a wealth reserve, free-to-float value market dictated by the soundness of the monetary policy, that is a sustainable system. As long as crooks are prosecuted, that is. Term limits in ALL political offices, and reining in lobbyist $$ would also go a long way toward keeping the system working.
gold is not assigned a value under a free gold standard
its value represent the total floating currencies divided by the oz of gold avaliable .
the value seems to go up as nations print.. goes down as nation live withing their means
And less war with the latter of all you mentioned.
think you need to read up a little more on gold standards.
Help me out, then. Was not the dollar devalued by arbitrarily raising the price of gold from $35 to $42? Isn't that the only way under a gold peg? Somebody junked me, so I'm here to hear what I'm misunderstanding.
a gold standard is right and most workable...
and no, gold is not assigned a worth of X dollars...
this is your 3d error and you go rapidly downhill
from there not having a clue...
gold limits central banking power. paper (and sticks with notches) increases it.
I propose that we start a petition to stop paying taxes until the FED is audited in the interest of national security, and congress take a 50% pay cut with all benefits withheld until further notice.
that will do it lol start a petition lol
It would make me feel better.
Over the last two years, government mortgage and mortgage-backed holdings have grown on net by nearly $1 trillion. Private investors and institutions have shed more than $1.5 trillion -- through foreclosure losses, pay downs, and by selling to government.
The effective result is a government-run housing market. Barofsky reports that right now, the government is responsible for about 100 percent of all new mortgage activity. You read that correctly. To put it in his own words:
"According to Federal Reserve net borrowings data, the federal government and the organizations it backs now guarantee or issue almost all net new borrowings for mortgages and MBS."
Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/columns/Barofsky_s-warning_-We...
You don't think the TBTF's will loan any money do you? They borrow at 1/4% and buy treasuries and sit back and let the taxpayers get their balance sheet looking all pretty. After all it's not like we have a choice to pay our taxes. Bring back mark to market and expose the real health of these banks. Sooner or later somethings gotta give.
What was the consequence when this deception was discovered and unwound?
These things obviously never happened. How could this academic get a pub out of it if it was "discovered?" We could argue the crap is still going on because the crap is still going on. Talk about extend and pretend, kicking the can into the next century...
Great question.
"One can easily find parallels between the Mutual Assured Destruction wild card used by Norman and such "end of the world" exhortation by Paulson, Bernanke, Geithner, Blankfein and everyone else who stands to see their accumulated wealth disappear should there be a full audit of the Federal Reserve.' Should read " and evryone else who stands to see there accumulated days on earth disappear........"
"[T]he administration is nothing but [a] puppet."
As revelations about the bailout continue, this American kabuki is becoming more obvious to the general electorate as demonstrated by the Republican upset in Kennedy's Massachusetts and recent single-digit approval levels of Congress. Obama remains clueless but the clear voices of some elected officials (Issa, Grayson and Saunders, among others) are being heard. Unfortunately, letters to your representative or critical comments on blogs remain insufficient to cause any change to the system. It will only be too late when a financial collapse strips the emperor and his eminences grise of their clothes.
Torches and pitchforks are all that we will be able to afford.
Does US Congress has balls to audit the FEDs? I seriously doubt so. Dimension of corruption is sickening.
What do you expect? If mortgage bankers can't sell mortgages extended to borrowers who don't have a pot to piss in to some thief on wall street, how else will we insure 'everyone in america can own a home'? You have to declare income to take advantage of a tax credit.
Tip of the frikkin' iceberg.....but the tide is slowly retreating with your help
Here are 200 pages of criminal conspiracy episodes....even the one you have "discovered" !
READ AND PROMOTE THIS BOOK
Absolutely Required reading for all Patriots
(IDEA: Between Olympic events, read a few pages during the commercials)
http://www.apfn.org/apfn/reserve.htm
CHAPTER 11 is about that which you speak.
"Lord Montagu Norman is the only man in history who had both his maternal grandfather and his paternal grandfather serve as Governors of the Bank of England. His father was with Brown, Shipley Company, the London Branch of Brown Brothers (now Brown Brothers Harriman). Montagu Norman (1871-1950) came to New York to work for Brown Brothers in 1894, where he was befriended by the Delano family, and by James Markoe, of Brown Brothers. He returned to England, and in 1907 was named to the Court of the Bank of England. In 1912, he had a nervous breakdown, and went to Switzerland to be treated by Jung, as was fashionable among the powerful group which he represented.*"
Thanks for the great source JD! This site is literally packed and bursting at the seams with the genuine historical narrative on the evolution of this economic political and societal cataclysm, sure to provide a torrent of Information that's going to keep me occupied for the near term.
As soon as I started I couldn't stop reading. It literally is ALL RIGHT THERE.
You wouldn't happen to be a "closet" farmer too would ya' ?
Thanks Johnny Dangeraeux.
Is anyone really surprised by any of this?
It's beautiful in it's simplicity.
Mankind is no different to any other part of the animal kingdon - there are entrenched and genetically encoded levels of heirachy across all species and man is no different.
Does a worker ant know it's a worker ant? No. If it did, ant colonies would disintegrate. Do the masses of human workers slaving at a proverbial loom earning 300 times less than his boss stand up and take action? No. Well, sometimes yes and revolutions ensue, but nothing actually changes through the eons. Any society-based animal has those at the top and those at the bottom.
White Europeans have had a hell of a good run at being at the top of the tree. They invaded foreign lands and stole resources to live fine lives. But they've been hit with a double whammy of their own making in the last 20 yrs - the advent of the internet that allows totally unconnected peoples worldwide to transmit their ideas to one another, questioning the ruling elites motives, plus the realisation that there will be an inevitable decline in our most precious resource of all - oil - which has provided us with the means to expand our inhabitants of the planet ten fold since the industrial revolution.
It's not about money - it's about retaining the power to sustain the lives we are used to living in the West, from top to bottom. And we will do anything to retain that. Cheating, lying and stealing are de rigour here. Embrace it or lose it.
Anon #230642--- Very much agree with the truth that you've expressed. Well said. White (male) Europeans have enjoyed the domination you alude to, but that is changing rapidly before our own eyes. And in the end ...as you sow, you shall also reap....This truth is beautiful in it's simplicity. Mankind was offered an oppurtunity to rise above the animal kingdom, but the ascendent heirarchy chose to follow it's base instinct---domination...much to the dismay of slain indigenous populations/cultures.
The PTB have shown no restraint in their quest for wealth and power, and the result is the current chaos and corruption, which will soon be followed by anger and violence by the masses of human slaves that you mention. Amid unbridled population growth worldwide, the quest to sustain our Western standards of living will prove futile. Cheating, lying and stealing are di rigueur here.
Those who live by the sword, die by the sword. Embrace it at your peril. The elite are parasitic and cancerous. Their eradication is coming.
Since Bernanke is a "student of the depression" one can make an assumption he read this book & realized the mistake of the FED during that era as he has publicly stated. It also provides fertile ideas for his own manipulations & schemes with other central bankers to obfuscate data or deal covertly with the markets. The markets can disable him if & when confidence is broken. When that happens, his credibility is gone. Audits & transperancy is a stake thru his heart & policies.
Excellent work, ZeroHedge!
What amazes me is that this document remained luring in the background for so long. Since its inception, the FED has been engaged in dark activities, and in deceiving the American people. It's time for the citizens of this country to shine a bright light on the FED's activities!
Audit the FED! Then abolish it.
If it has been in the public domain for 15 years I doubt we're likely to see any huge impact. The truth has never had much bearing on this system. The only thing that can change the continuous corruption of the system is public outrage or food riots. I think the puppeteers know this and have so far designed a system where there is enough Big Mac and reality TV to keep people from flooding into the streets. Perhaps this will change some time but I'm still seeing almost no signs of unrest.
If you can' dazzle them with brilliance, baffle them with bullshit. Then behind closed doors do whatever the hell you want.
In the US where this is doctrine, it does mostly work.
I see times when reality pokes through though. People going, what I like to call, snap mad.
Road rage. Office workers losing it. Postman rage. Kids shooting up schools. Whatever... Reminds me of a predator that's been kept in a cage too long with no way out. One day it's just going to rip your head off, and you won't see it coming. That's the US public right now.
I see it on a daily basis. If there is a mass collective American unconciousness, then it has PTSD is manic bi polar, and could snap at any moment in any which way.
This corruption and financial malfeacense was much easier to overlook when most of us had decent paying jobs and we were blissfully unaware of the trainwreck ahead.
We wont see much unrest until the collapse, but when it occurs it will come quickly and decisively ala 1929.
Excellent point. We see what we choose to most the time anyway
I am a sign of unrest. And one of the things making me so unrestful is this: more and more often, I see people buying their Big Macs...with credit cards.
When using my debit card, I always answer "credit" when asked. There is protection in not having your PIN captured that way, and fraud is limited to $50 instead of balance available. I don't like that it dings the retailers margin, but it is still the smartest use of the card. It comes out of checking either way, so don't assume what you see is a debt transaction.
it still going on.. 80 years ago 40 years ago now
Of course the ends of this deception and manipulation of gold data are the same that GATA long has been asserting for the contemporary gold price suppression scheme. The falsification of gold holdings data by the Bank of England as reported by Professor Garrett is mirrored perfectly by the data-falsification and market-manipulation scheme described in the
April 1961 memorandum kept in the archive of former Fed Chairman William McChesney Martin, about which GATA consultant James Turk wrote at length in January 2009:
http://www.gata.org/node/7096
What are you going to do about it chumps?
carl, only a chump is going to answer you now.
goddamit, how do you erase-a this tyler?
Dov'e il suo fratello! Benvenuto di nuovo! Ho pensato che tu hai lo ucciso.
grazie,
i took my ashes to the mountain.
i am back to say that even a goddamn werewolf goes down with a bullet, so what's so hard about any solution.
The quickest way to shut down the banksters is to close out your accounts with them. No deposits and they go out of business.
Phony accounts and other instruments would be created to replace them. The TBTF institutions will always look solvent on paper and the major media is under enough control so the actual state of insolvency does not matter. That is as long as the reserve currency remains intact and the secrets behind it remain veiled. The fact remains that those who control the money are not trusted by those who bear the arms. When the rule of law was supplanted by the policy of judicial exclusion order was supplanted as well.
The only way to shut this down is to short gold on all cartel take downs then buy physical with profits.
The trade of the century!
This takes physical out of the system at an alarming rate and once the paper price of gold gets down far enough, say to $700 or $800 there will be no physical available. No one on ebay is going to sell physical for $700 with the world financial crisis worsening.
Bust the COMEX and LBME and you get your FREEDOM, you poor little fiat slaves!
The Constitution list only 2 crimes by name: Treason and Counterfeiting.
And then builds a nation based on treason and counterfeiting.
at least they knew what they were talking about
Yup. When it dies because becasue we can no longer counterfeit the savings of asians the constitution will know exactly what went wrong. Which makes it smarter than most everyone alive today.
good read: http://www.marketoracle.co.uk/Article17246.html
Keynesism by defintion seeks to preserve the status quo - intervention in the "free markets" to manipulate prices and therefore behavior is at the heart of the philosphy - the monetarist alternative had a brief five minutes of fame after the stagflation of the 1970s. Monetarism died a quick death when the polical powers found no easy way to exploit the masses in its implementation.
There are no practical alternatives to a Keynesian policy according to main stream thinking, and a Miskyesque cleansing of the system is far too painful and far more likely lead to broad social upheaval. The US has pursued a "guns and butter" policy since the late 60s and will continue to do so.
Now that the Fed and the Banking Cartel have new improved instruments with which to wage war on private wealth and capital and "control" prices of money and commodities through the use of derivatives and repo, they are even bolder in their efforts, especially as Central banks coordinate their attacks.
Keynes is the lever to move to the "New World Order" where nationalism, borders and culture, the heart of democracies, is made to beat for the eletist power class. (Soros' open society).
Gold as a medium for exchange will only be useful in a total meltdown of society, when there will be nothing but food, guns and ammo that will be worth anything. While gold will help maintain purchasing power as long as it may be legally owned, the power class will use every available tool to attempt to nullify its significance.
Only a prolonged grass roots revolution on a scale many times that of the 60s will affect any noticible changes. The probablility of that coming to fruition is about as likely as Barney Frank not accepting campaign contributions from FNM, GS and JPM.
Be careful what you wish for ZHers, embrace the beast or gird for years of living in your cave and missing the next "new normal".
Tyler- thanks for this post it is your quality research with factual backing that make ZH the go to financial site on the web.
This game of printing fiat money will end soon. End the Fed.
We are doing the same thing to China as the UK did to the US during the 20s. Run it up in a massive bubble of overcapacity.
The Chinese are full-speed ahead in their lunacy. 35% CRE vacancy rates? Build more! All the fools who revere the "efficiency" of central planning gov'ts are fools; China cannot see the iceberg about to smack them in the nose and the gov't CANNOT adjust the "consensus" of a room full of bureaucrats that quickly.
Look at our own gov'ts inertia if you don't believe it. The AGW meme has just been thrown into total disarray yet the momentum behind its implementation is still there. We are still in a State of Emergency over the Iran hostage crisis. Once it gets in motion, these leviathans CANNOT react quickly.
Private sector shed jobs that were uneconomical very rapidly but gov'ts are proceeding at flank into insolvency. And no governor even of a state can stop the ship
I'M MAD AS HELL AND... (Oh, never mind, the stupendous bowl is on).
Another tin foiler theory.
My guess is that if there were any truth to this, the hedge funds or investment banks "in the know" would have already acted and gold would be at $1,500 by now.
But instead, investors are "fleeing" into dollars instead.
Never bet against the big money.
The big money, like the Vegas Casinos in sports betting, always know the inside information before anybody else.
This guy will go down in a trash heap just like:
Jim Sinclair, who repeatedly fails to get his CIGA followers out of the way of horrific drops in gold and the XAU.
Alcoholic Bill Murphy, the "Jim Cramer" of the gold market.
Certified lunatic Jim Willie CB
John Embry, Ted Butler, and assorted other gold bugs who continually underestimate the vast appetite for gilt-edged U.S. Dollars and U.S. Treasury bonds.
well guess what asswipe?.....gold is trading
physically at a premium of at least 25% to the
paper price.....this as reported by your favorite
certified lunatic jim willie....
willie has forgotten more than you know so i
certainly would pay no heed to your voodoo
economics and cockamamie "there's no conspiracy"
horse crap....
pour yourself another double shirley temple
on the rocks and sing another stanza of camp
town races or pollyanna....
you have no idea what those in the know are doing
because you simply don't know or have a clue...
all this from a mutant IQ 25 Anonymous.
slaps a label on folks ,, whilst all the time looking out of the pitiful hell of deranged mental cell ,, # 2231
throw him a slap of meat , this will get him out of the corner ,,
blinking repeatly into box of tinker toys
My guess is bound to be wrong, since i dont know shit. just sayen
I with you on this...that is, I'm no professional when it comes to many things, but even a child knows gold is a sure thing - it's in just about every epic children's story throughout history.
And fiat-paper currency death spirals? They don't teach you in school that it can also happen to our precious dollar! So when that paper currency finally fails the CONfidence test (because governments always end up debauching their reputation), only tangibles will matter.
Great article Tyler
Silver went into backwardation Thurs and Fri, supplies are very thin. Gold is very close to the same.
Insider selling is 58 times buying last week,
The DTCC is now backstopped in its new derivative shuffling by 25 trillion bucks.
It's coming folks, to a world you live in.
Good read: http://www.marketoracle.co.uk/Article17246.html
This is why ZH is my number one blog. It will take time to absorb all this. For me you get better and better, and then incredible !
Don't let this one go. Hang on to it like a bulldog !
Having said that,
If I am having a hard time understanding John Garrett's thesis, I will bet most of you are as well. I was University educated (Cambridge, England Economics and Law). I would not mind a translation ! I will make do with your summary. Thanks.
What comes through though is deception and lying by Montague who was well known to be a Rothschild agent ("The World Order" by Eustace Mullins).
Central Bankers deliberately use obfuscation and gobbledegook to explain what they are doing or not doing, deliberately. No one ever dares stand up to Greenspan or Bernanke in Congress and say, "WTF don't you speak plain English ?" for fear of looking ignorant or stupid.
Garrett to me is the same thing...unfortunately..
Somebody needs to translate the thing into plain language ! Few in Fed politics, a lazy breed anyway, will understand what the hell he is saying. If they can't understand it either, it looses its punch.
whew! and I thought I was all alone on that. thanks for the candid and forthright statement of the obvious. this article is a one tough nut to crack and those equations require are some real mental exercise. I'm going to roll up my sleeves and attempt to wade through this again just to see how far blind determination can take me through this dense thicket
Our congressional hearing are a farce and a waste of time!
When is the last time that a member of congress told somebody testifying that if he can't 'remember' where the billions went, they will sit in jail until their memory comes back.
Wait! Wouldn't that apply to Geithner and Paulson, both who claim they dont know where the AIG billions went?
The ONLY way we will clean out this rotten smelly mess is by throwing ever member of congress out that has opposed FED transparency.
Our congressional hearing are a farce and a waste of time!
When is the last time that a member of congress told somebody testifying that if he can't 'remember' where the billions went, they will sit in jail until their memory comes back.
Wait! Wouldn't that apply to Geithner and Paulson, both who claim they dont know where the AIG billions went?
The ONLY way we will clean out this rotten smelly mess is by throwing ever member of congress out that has opposed FED transparency.
Paging CIA plant M. Bates. Where are you, douche bag?
He must go to church on Sundays. Psychopaths play off dualities very well. Doublethink, is what Orwell called it, if I remember correctly.
Probably got introduced to the Fight Club.
Skinny guys fight till they're burger. Maybe something as simple as "falling down some stairs".
so the bottom line is : when is true price of gold going to decouple from paper gold ? Is there physical shortage or not ?
can the exchanges or whatever entities manipulate the price forever ?
My guess is that the real shortage is where the big players reside. Us crumb snatchers can continue to accumulate while the titans battle it out. There is obviously a shortage when you compare gold to gold derivatives. There can be no settlement in metal, ever.
Short paper gold on all cartel take downs, and buy physical with the profits!
Trade of the century!
He's moron: http://www.marketoracle.co.uk/Article17246.html why this published?
I propose that when a ZHer gets chronically flagged as junk for spam they get, shall we say, delisted. It's obvious we've got a few spam pumpers detracting from the normally witty and illuminating dialogue that I really enjoy. Say more than 5 posts that get flagged as junk by 10 readers. That will filter them out quickly. Whose with me!!!
Please don't flag this as junk
THANK YOU for posting this! I really like your blog!!
Common Cents
http://www.commoncts.blogspot.com
ps. Link Exchange?
In a word: CRYMEX
the biggest problem with the article is that the uk did not have an inflow of gold problem....in fact the outflow of gold by 1931 was so great that the uk abandoned the gold standard that year....
it should be noted that the gold standard in effect at the time was quite different from that of the pre-war years....it was this difference which contributed so heavily to the currency problems which britain faced at the time....
so my question is what was different which caused c. 1926 vs 1931 the change of flow? furthermore incoming gold would not be deflationary....something is missing in the story...
after consulting rothbard it is clear that
england never had excessive inflows of gold at this
time - it was outflows which were the problem
due to the overvalued pound....
british goods were not competitive on international
markets so the brits bought a lot overseas....
the foreign markets accumulated an excess of
british pounds which the foreigners were beginning
to redeem in large quantities...
but the key to the story is that norman was
inflating and providing easy money through low
interest rates to compensate for an overvalued
pound....he should have contracted money supply
to justify the high exchange rate of the pound....
the double whammy of an overvalued pound plus
a proliferating pound was partially remediated through
traitor benjamin strong's inflation of the usa
dollar...
but in the end, the forces of reality overwhelmed
both assholes leaving britain with a fake
currency and chronic high unemployment and the usa with collapsed stock market once the adults took control - who like type a idiot parents went overboard and crashed
the whole party...
there is lots more to explore but this is the
real story....not sure what kool aid garret
was drinking when he spoke of large gold in flows
to britain...
Another great place to read an account of this is in Webster G. Tarpley's book, "Surviving the Cataclysm". Some chapters in the book deal with the actions of Montague Norman in the context of causing the stock market crash in '29, and then in intentionally carrying out the gold standard default of 1931 in order to throw the world into chaos while pretending to be insane or having a mental breakdown in Canada. The controlled demolition of the world reserve currency is what locked in the delationary depression of the 1930's, not something like the tarriffs in the USA. This allowed finance oligarchs who had advanced warning to bag all the assets for pennies on the pound so to speak.
Good evidence that Norman was carying out the will of the oligarchy and was not a "rogue trader" is that he maintained his position until health forced him to retire many years later, and he has a statue of himself put up in the BoE.
Norman didn't carry out an act of treason, he carried out the desires of his true masters. The BoE and the oligarchs view the british people as slaves and property, so it is not uncommon to see actions that hurt the UK economy that are in fact carried out by the UK oligarchy just like in the USA. Remember the Soros attack on the Pound. Turns out there were many aristocrats and elitists invested with Soros, and it was just a wealth transfer scam to steal from the people and give the money to the oligarchy.
Well, it is one off my pet pieves that much economic data is made by State entities.
For example should have different inflation sources, and all Gov. accounting should be made by external entities.
I seem to remember reading a authoritative work on the first world war by Hew Strachen where in his chapter on the financing of the war he states that a person in Germany could get a Sterling cheque up to the year 1917 - given that this is considered the definitive modern take on the Great War and is delivered in a dry unemotional fashion - it is truly shocking
Of one thing I am certain. The United States secretly accumulates gold to add to their reserves. When you are paying for it with "rag paper" as President Jackson called it what is the difference?
When it is end game and the Euro is worthless and gold permanently becomes the universal currency Uncle Sam will turn around and say, "About that gold we so fervently bashed and kept artificially low for decades.Well we own 40% of the world reserves not accounting for the IMF which we have the super majority voting power".
Holy shit...google "TN Professor John R Garrett"
Help folks out babycakes:
http://www.google.com/#hl=en&source=hp&q=TN+Professor+John+R+Garrett&btn...
Now that is Gold, bitchex.
Fucking viral...
Congrats John! Your career is taking off.
It's funny - how'd a 15-year-old muddled article like that all the sudden start getting so much play the last two weeks? And why is this rehashed crap getting front-page zero hedge space, where you can normally find original, fresh, insightful analysis? "ZOMG central banks and other whales meddle in markets that they have an interest in!!!!! And try to hide their actions!!!! CAN YOU BELIEVE IT?"
I wonder sometimes if the bond trader and tech analyst Tylers let the sincere-but-ostensibly-not-as-bright goldbug Tyler into the club just for the hits (check the difference in the number [and quality] of comments on the meaty BofA CDS analysis vs the number of comments on this rewarmed turd, for example). The brighter Tylers seem to me just cynical enough to get a kick out of doing something like that.
Brandy , i am glad for you that this info leaves you so unaffected.
This proves men can be bitches too.
so taking a dead patient pumping blood analysis with Bof A and fraud laced CDS's.. is meaty ,, while the underpinnings of gold based economy earns your opinion that it is less then bright ,
I suspect keynesian leanings ,, food and poison is good..
as long as some one can explain fraudulant , lieing bags of decietful bankers and off balance sheet values
make it sound like deep meaning ful analysis .. that turns your little green head shade cap,, into a glowing number chucker
bill bonner
But our beat here at The Daily Reckoning is money...not war. Still, our opinions are the same about them both. America is overstretched...overextended...and overdue for a serious correction. Her wages are too high. Her debts are too heavy. Her expenses are too great. And her leaders have no idea what is going on.
As to most of the foregoing list, our opinions are probably no better than anyone else's. But as to the last item, we speak with authority. We are connoisseurs of imbecility. We have watched it for decades. It amuses us. It fascinates us. It intrigues and perplexes us. How come people can drive down the highway at 70mph...making thousands of precise calculations with mortal stakes, but then ask them a question about economic policy or foreign policy or no-shirt, no-service policy...and psssht...their good sense goes out the window? We've studied this question for many years....
In other words, we know an imbecile when we see one. And when we see Ben Bernanke or Tim Geithner our eyes light up. Our nostrils flare. And our chest expands. Before us is a specimen we know very well. Boobus Americanus Economistica. It is a variety of imbecile that has gotten far too little attention from the academic world. Too little research has been done on them, in our opinion. That's why it is left to us amateur imbecile-spotters to keep track of them.
Mr. Bernanke is a standout example. The former head of the Princeton University economics department knows all there is to know about a depression - except the important part. He doesn't understand what causes them. And he completely misunderstands what the role of government should be in dealing with them. But we have already explained all this to you, dear reader, so we won't repeat ourselves here...except to say that any truck driver and hair stylist knows you can't spend your way out of debt. Mr. Bernanke doesn't believe it. That's the very definition of Boobus Americanus Economistica; he has educated himself out of his common sense.
Mr. Geithner, meanwhile, tries to make up for what he lacks in scholarly gravity with one heckuva nice wardrobe and a spiffy haircut. It's definitely a plus to have such a sartorial crackerjack at the head of the Treasury Department, but it would be nice if he had some dim notion of how the bond market works too.
it just might be that these gold guys have more moxie than 15teen explainers of the workings of bonds and corrupt numbers
So, maybe French ain't you thang, but they are already trying to figure out why we need economists when they all think the same thing:
http://www.lemonde.fr/opinions/article/2010/02/13/a-quoi-servent-les-eco...
Soros has been the "bag man" for many decades now. How does one man consistently beat the market by huge margins? Inside information. I have been told by many big traders that Soros receives inside info from the political insiders. He collects the money and then distributes. Why do you think he financed Obama?
This is a very interesting follow-up article:
http://tarpley.net/online-books/against-oligarchy/british-financial-warf...
An exhausting read, thanks I guess, but the last chapter, Lord Norman, should be read, because it sums up the historical role of central banking, namely financial and economic warfare by small groups of elite insiders against absolutely everyone else, large or small.
When we complain about our central bank's total failure to do it's stated job, to stabilize the economy, we are being naive. The secret goal of these institutions, where immense power is concentrated and unchecked, is without a doubt the exact opposite, to destabilize as much as it can get away with, because that is the way for the insider's club to make huge fortunes quickly without significant risk.
Soros has been the "bag man" for many decades now. How does one man consistently beat the market by huge margins? Inside information. I have been told by many big traders that Soros receives inside info from the political insiders. He collects the money and then distributes. Why do you think he financed Obama?
Ok. perhaps I'm just being dense, but I'll ask.
I'm too poor to buy gold. Can't shell out enough $ to buy an ounce of AU. Is AG a good idea?
I've gotta check the market myself on this.
Silver is a better buy than gold for several reasons, like the fact for instance that historical ratios of gold and silver are between 12 and 20 - 1 and currently the gold silver ratio is more like 64 - 1. So silver is highly undervalued. I have also read several places that most easily accessable silver has been mined, that silver unlike gold can be used up, and supply of silver is diminishing.
So yah I think silver will do better than gold, much better. It is why I have about 400 ounces of it and only 4 ounces of gold.
Central Banks hold no silver reserves.
I've been using Bullion Direct, good service and good quality stuff. 1% fee on the order and about 15 bucks to ship with insurance. Anybody know of anywhere else that's a better deal? I agree that silver will be more valuable for day to day trading. If gold goes as high as some people say you'll be using it to buy high dollar items in the future, you know like good quality toilet paper.
I've been using Bullion Direct, good service and good quality stuff. 1% fee on the order and about 15 bucks to ship with insurance. Anybody know of anywhere else that's a better deal? I agree that silver will be more valuable for day to day trading. If gold goes as high as some people say you'll be using it to buy high dollar items in the future, you know like good quality toilet paper.
yes, or just buy less than an ounce.
Yup - even when I was buying ozt, I also picked up up some 1/10 Maples & Phils for friends and family. They just don't know it, yet. Also, if it ever comes to face-to-face redemption, a small fraction might be the best way to initially evaluate who you're dealing with. A lot of folks are (and will be) priced out of Au, so I also expect Ag to see a nice demand premium. It's been called "poor man's gold", but a more accurate description will be "Joe Sixpack gold".
never thought of that.
Thanks! Also to Absinthe minded as well.
Check out goldseek.com silverseek.com goldprospector Ted Butler Jim Willie
Also many sites on utube. Easy to research on the net. I did not gold so much cause its such a tiny coin (1oz krug) . A silver 1oz round or 10oz bar is impressive. 90% silver, pre 64 us coins are worthwhile for trading after TSHTF
I also stocked up on food, fertilizer,ammo and seed for the garden. Pretend you are by yuorself in the old west, there arent any stores and your survival is up to you!
Toilet paper, oh yes tampons for trade and tools that all may be hard to impossible to get in a few weeks.
Fear and simpathy for those in the large cities
Historical gold price manipulation is actually detailed in the official financial history from reputable publishers like MIT Press, Princeton University Press and Cambridge University press, written by actual scholars.
Now, most gold scaremongers (as a separation from mere gold bugs) of course don't tell you this. They make their 'own' reports with sensationlist headlines, 'revealing' matters that have been in the public record for decades.
And then, they draw useless post hoc fallacy that all current price drops in gold are a direct cause of central bank manipulation, or some other such drivel.
It is a fact, that gold may go up, gold may go down. Nobody knows. All people claiming otherwise are deluded. They can *think* that they know, but true knowledge they don't have.
If anybody really wants to understand gold, gold standard, gold investing from a non-tin foil hat point of view, the following books are heartily recommended:
Anatomy of an International Monetary Regime - Classical Gold Standard 1880-1914
Gold Standard in Theory and History; Eichengreen, Routledge, 1997
Lever of Empire - International Gold Standard and Crisis of Liberalism in japan, Metzler
Gold Standard Illusion, Kenneth Mouré
Again, a gold scaremonger will try to play your reptilian brain to buy-buy-buy with emotion, without analytical and emotioneless detachment, which you should have to all of your trades.
Think about it: why would you believe anybody, who wants to make you scared?
Don't buy the hype, educate yourself and draw your own conclusions.
If you come up with a gold nugget - a general false believe, like the synthetic ABS market, which is completely mispriced in the markets, you can make a killing (like Paulson's bet on against structured asset backed securities).
Believing in global conspiracy theories is unlikely to give you one.
You are either in this to make money or to lose money. There are no two ways about it.
Money? What's that?
exactly
In much the same way most reading this blog *think* that the fed is doing the dirty, but true knowledge they don't have?
I have been following this blog for much of the last year, and have been surprised at the lack of reference to the ideas of another+friend of another+fofoa, especially considering the overwhelming popularity of posts concerning gold.
Their writings would be of no small interest to all with an interest in the (invisible) role gold has played in the floating fiat currency system, and how its role may evolve as said system reaches its inevitable end.
FOFOAs latest post,
http://fofoa.blogspot.com/2010/02/greece-is-word.html
makes more sense regarding our present predicament than anything else I've read lately.
Funny what a paradigm shift can do for your day...
Wrong. I'm in it to keep my savings...
We'll be gone when the shit hits. Sound familiar?
The money quote: "Markets can not tell when a central bank is lying."
This is both profound and deeply important.
For anyone who believes that markets are an effective and efficient means of discovering value, let this insight forever disabuse them of such folly.
Markets are blind and easily mislead -- over the short and long term.
Given this fact -- and given the fact that a small group of insiders are privy to this knowledge (and repeatedly act on it to their own benefit), why is there still a market at all?
What possible argument can be made by the market's other participants for their continued willingness to play ball?
There is no market. The market is dead. What we have is game so impossibly rigged that only P.T. Barnum would be impressed.
There is only one logical option: Sell.
Tyler,
This is the kind of reporting, sunshine, truth-seeking that many have come to expect from ZH. Very well done and thank you!
The FED and US Treasury, along with other US intellegence assests were playing gold games between the wars in Asia as well.
From "Gold Warriors" ~ Seagrave
beginning chapt 17 pg 14..
What concerns us here is the mission of the two B-29s with
all the Fed notes and bonds. Professor Richard Aldrich of Nottingham University, co-editor of the journal Intelligence and
National Security, described the strategic situation in 1948 in
testimony before a British court in 2003:
As Chairman Mao’s forces advanced through China in 1948,
Dr. Aldrich said, Britain and the US dreaded the prospect that one
of the world’s largest stocks of gold – worth $83-billion at current
prices – would fall into communist hands. So it was decided to
extract the gold reserves from China before the communists could
seize them. The CIA provided the means for this bullion-rescue
mission, flying in B-29 bombers disguised in the livery of its CAT,
later renamed Air America. CAT flew numerous missions to bring
huge shipments of gold out of Mainland China.
Where did the FRNs and FRBs fit in? Professor Aldrich said
they may have been used “for persuading managers of major
banks in the interior of China to part with their vast stocks of gold.”
Printing FRNs and FRBs with a face value much greater than that
of the gold they were to replace, he said, served to encourage the
banks or wealthy individuals to swap their gold for the bonds and
notes, which would be easier to hide and later smuggle out of
China to be cashed in the West. As Aldrich said, the US almost
certainly had no intention of honouring them, anyway.
Professor Aldrich explained that the CIA was only emulating
Britain’s Special Operations Executive (SOE), which printed and
circulated massive quantities of counterfeit currency and bonds
during the war.
“Foreign Office files also show that the CIA was involved in
other currency issues, including the movement of printing plates
for Chinese currency,” Aldrich testified.
But why were such huge quantities of FRNs and FRBs flown
out to China?
“Because of the possibility of operational loss,” Aldrich told
the court, “surplus amounts of FRNs were required. Regional
banks [in China] receiving FRNs in return for their gold were aware
that the FRNs were likely to be redeemable for only a proportion of
their face value. Therefore a much larger value in FRNs would
have been required than the total value of the gold that the
Americans and Chinese Nationalists were trying to extract from
China.”32
Aldrich was adamant that the FRNs being flown to China
were authentic. However, he was uncertain whether the FRNs
involved in the 2003 lawsuit were of the same provenance.
“I cannot prove that these FRNs were part of the operation to
extract gold from China,” Aldrich said. “But there is absolutely no
doubt that such an operation took place.”33
We interviewed pilot Eric Shilling, one of the original Flying
Tigers in the American Volunteer Group (AVG) in 1941, who went
on to fly for CAT and the CIA after the war. Shilling told us he
made numerous flights from Guam and Clark, ferrying FRNs and
Nationalist secret agents as far into China as Chengtu in Sinkiang
Province, and flying boxes of gold out to Taiwan. The B-29 had a
range suited to long round-trips, and Shilling was skilled at flying
the aircraft at 30 or 40 feet above the ocean to enter and leave
Chinese airspace without being picked up by radar. He told us
Generalissimo and Mme. Chiang Kai-shek were fully informed of
the flights, and on his return to Taipei once, Shilling was invited to
the presidential palace where Mme. Chiang praised him, and told
him: “I did not go to bed until I knew that you had landed safely.”34
Whether the FRNs and FRBs found in the crashed CAT
aircraft in Mindanao should be considered real or counterfeit raises
interesting legal, moral, and ethical questions, as they were printed
by the US Government at the Bureau of Engraving and Printing in
Washington, where the CIA has an office occupied full-time in such
activities, according to a CIA source we interviewed who worked
there for years.
If a promissory note is created by the US Government and
exchanged for gold by the US Government, it can reasonably be
argued that it is a legitimate document, and therefore binding upon
the government to redeem it. For, if a government can freely
create false financial documents at whim, for whatever purpose,
how do you know what to trust and what not to trust. The same
question might be raised about US currency printed by a Federal
Reserve that exists for private profit. For the government and the
banks owning stock in the Fed to renege on redeeming such
bonds would be the equivalent of grand larceny.
In the late 1980s, just after Marcos died, the wreckage in
Mindanao was discovered by a tribe of aboriginals, who found the
B-29s full of incomprehensible Fed notes and bonds. Most of the
boxes were still sealed with wax and official stamps, but some had
broken open on impact. When these were carried out to a district
town, and translated into Tagalog, it was understood that the Fed
notes were important, and in astronomical denominations.
Quantities of these Fed notes suddenly appeared in the
market as everyone and his brother tried to cash them in. The Fed
was not buying, and neither was the U.S. Treasury, which automatically denounced them all as counterfeit. Secret Service
agents were sent to Manila to pose as buyers so they could entrap
brokers trying to sell the bonds. Assassins also were sent. An
Australian private investigator was warned, “If I persisted in
pursuing these items, I would most likely receive a visit from some
very unpleasant men whose job it is to secure the safety of the
USA against any threats to the stability of its economy. I was
informed that if I ever tried to redeem them, I would not see
another birthday. A CIA friend told me that these FRNs were all
over the world, not only in the Philippines. He said Chiang Kaishek’s
family owned large quantities. Some Chinese families
involved with secret societies such as the Cherry Blossom and the
Maple Leaf also had them in certain number sequences that had
been assigned to those networks. Ferdinand Marcos had large
quantities of FRNs that he was given by President Nixon in return
for gold – which were referred to as ‘Tricky-Dickie Notes’.”35
Unfortunately for the Laurels, this was the same period when
President Reagan talked of putting the U.S. back on the gold
standard. President Nixon had taken the dollar off the gold
standard in 1970 and made it legal for the first time in nearly 40
years for private American citizens to own gold. As a result the
official price shot up – going above $800 an ounce during the early
Reagan years. If at that moment the Laurels had demanded
payment in full for the 1,665 metric tons of gold they had “loaned”
to the Federal Reserve in 1934, that amount of gold would have
been worth over $35-trillion. However, the Laurels were bound by
the terms of their original agreement, which had a face value on
maturity of only $100-billion. But even $100-billion was more than
Washington could face paying. In fact, Washington had never
really intended to redeem any of the 1934 Morganthau issue
bonds, except at very deep discounts of 1% to 10%, and then only
to “favored” individuals.
If the dollar was going to be put back on the gold standard,
the White House had to block any attempts to redeem gold
certificates and Fed bonds. No new administration likes to be held
accountable for huge debts incurred by previous administrations.
Redeeming those bonds would represent a huge drain on U.S.
assets. So Reagan’s team had to come up with a strategy to block
any attempt by owners or bearers to redeem the bonds.
Curiously, it was also in 1986 that the Federal Reserve
decided to recast all the gold-bars in its vaults, changing “good
delivery” bars from traditional rectangular ingots into trapezoidalshape.
Why this was done was never satisfactorily explained, but it allowed the Fed to change the hallmarks, serial numbers, and all
other identification, which included re-papering and earmarking,
effectively erasing all record of ownership of many thousands of
tons of gold in its different vaults.36
For a government that was up to its ears in the Iran-Contra
swindle, Death Squads, October Surprise, Swiss numbered
accounts, and lying to Congressional committees, the answer was
obvious: Declare all the Fed notes and bonds floating around Asia
counterfeit, including both the Laurel bonds and the bonds found
on the crashed planes.
Here was a fraud that had been used many times by banks
all over the world. When a gold certificate was issued in exchange
for bullion placed on deposit, embedded codes were used
including misspelled words, to “assure” that the owner’s certificate
matched the bank records exactly. These misspellings were later
easily cited as “evidence” of fraud.
In Japan, Prime Minister Tanaka had gone one step further
in designing his notorious “57s” to look completely different from
normal Japanese government bonds. If he wanted to redeem one
for an ally, he could. If he didn’t, he could declare it a counterfeit,
and point out that it didn’t even look like a government bond.
The Reagan administration’s answer was similar. A large
number of Fed bonds and gold certificates were printed at the
Bureau of Engraving and Printing, on the wrong type of paper, with
a comic variety of deliberate errors. Many were engraved with the
wrong faces, the wrong mottos, the wrong designs, the wrong
signatures. Some were even engraved and printed in traditional
Chinese characters. This would be a hilarious disinformation
campaign, flooding Asia with blatant forgeries, to make the whole
idea ridiculous. It would cut the legal legs off anyone trying to
redeem legitimate gold certificates or legitimate Fed bonds. They
could be laughed out of court.
Special engraving plates were sent to Manila where the CIA
already had presses to run them off. To confuse the issue in
Mindanao, where the planes had crashed, two “missionaries” set
themselves up with high tech presses saying they were going to
print Bibles, but instead ran off conspicuously bogus Fed notes
and bonds, which added to the impression that they were all false.
Relevant or not, suggest you learn how to redirect to an IP address. Also, I believe there are legal implications. You can provide a redirection with a synopsis.
hell of a post , SWAP
Swap, thanks.
Does Yo-Yo Ma play a mean Cello?
Gold is about to crash with the rest of the commodities and equities. Go short or go home.
In essence, what we have here is a continuation of a form of, approach to and respect of the role of governance. Be it Montague Norman, Alastair Campbell or Ben Bernanke their power is rooted upon the notion that society is made up of Gerbervores who must be fed dollops of slop in order to maintain a grip on power. These sorry examples of leadership demonstrate that the thrust of their actions has nothing to do with strengthening society, its institutions or with providing stability.
Where has chumbawamba been?
Drifting away out in left field. I expect his return at his discretion.
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