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Exclusive Smoking Gun: The Fed On Gold Manipulation

Tyler Durden's picture


Zero Hedge has recently presented several declassified documents from the pre-1971 "Nixon Shock" days, that endorse the case for gold as a major historical factor in US monetary and foreign policy, as demonstrated by State Department and CIA disclosure. Gold's special status in policy and administrative decision-making was a direct factor in Nixon's choice to abolish the gold reserve at a time of an exploding budget deficit.

Yet what about the days after 1971, and specifically, how did that critical "behind the scenes" organization, the Federal Reserve, perceive and manipulate gold in the post Bretton-Woods world? Was gold, freed from its shackles to the dollar, once again merely a symbolic representation for money?

Zero Hedge presents the smoking gun that may provide responses to all the various open questions, courtesy of a declassified memorandum, written by none other than the then Fed Chairman, addressed to the president of the United States.

On June 3, 1975, Fed Chairman Arthur Burns, sent a "Memorandum For The President" to Gerald Ford, which among others CC:ed Secretary of State Henry Kissinger and future Fed Chairman Alan Greenspan, discussing gold, and specifically its fair value, a topic whose prominence, despite former president Nixon's actions, had only managed to grow in the four short years since the abandonment of the gold standard in 1971. In a nutshell Burns' entire argument revolves around the equivalency of gold and money, and furthermore points out that if the Fed does not control this core relationship, it would "easily frustrate our efforts to control world liquidity" but also "dangerously prejudge the shape of the future monetary system." Furthermore, the memo goes on to highlight the extensive level of gold price manipulation by central banks even after the gold standard has been formally abolished. The problem with accounting for gold at fair market value: the risk of massive liquidity creation, which in those long-gone days of 1975 "could result in the addition of up to $150 billion to the nominal value of countries' reserves." One only wonders what would happen today if gold was allowed to attain its fair price status. And the threat, according to Burns: "liquidity creation of such extraordinary magnitude would seriously endanger, perhaps even frustrate, out efforts and those of other prudent nations to get inflation under reasonable control." Aside from the gratuitous observation that even 34 years ago it was painfully obvious how "massive" liquidity could and would result in runaway inflation and the Fed actually cared about this potential danger, what highlights the hypocrisy of the Fed is that when it comes to drowning the world in excess pieces of paper, only the United States should have the right to do so. 

Another notable observation is that despite a muted antagonism between the Fed and the US Treasury persisting for decades, the fuse is and always has been short, and the conflict can promptly hit a crescendo, with the Fed ultimately always getting the upper hand. In the case of the Burns memo, the Fed's position was diametrically opposed to what the Treasury proposed was the proper approach. The result: full on assault by the Federal Reserve over the Treasury's credibility and even then, more than three decades ago, a veiled threat by the Fed involving escalating problems if the recommendation of the Treasury was picked over that of the Fed. "Severe criticism on the part of prominent and influential financiers would inevitably follow if the Treasury's present position prevailed." It is not surprising that the Fed's modus operandi has not changed one bit since 1975: it is our way or virtually assured destruction/embarrassment way.

Additionally, a curious tangent of the Burns memo is the fact that gold was explicitly used as an engine to enact political doctrine: "If the United States took a stand on the gold question that failed to satisfy the French in current international negotiations, would there be adverse economic or political consequences? I doubt it... If we do ever accede to French views on gold, we should at least use our bargaining leverage to achieve some major political advantage." And while gold as a policy mechanism was unable to satisfy its role this time, one wonders on how many subsequent occasions was global democracy trampled over in order to placate the US Federal Reserve:

"I have consulted Henry Kissinger as to whether there is some political quid pro quo we might want to extract from the French in exchange for acceding to some part or all of their desired position on gold. But Henry tells me there is none at this time."

At some point governments of advanced nations will say "enough" to the covert domination of their controlling bodies by the Federal Reserve, which through manipulation of its gold and money interests, effectively has control over not just the French, but every government which has a monetary basis to its respective economy and a relationship to the US "reserve" currency... Which means virtually every country in the world. The backlash, if and when it occurs, will be memorable.

Lastly, the memo presents a useful snapshot into the cloak-and-dagger, and highly nebulous world of CB negotiations and gold price manipulation:

"I have a secret understanding in writing with the Bundesbank that Germany will not buy gold, either from the market or from another government, at a price above the official price."

So to all conspiracy theorists claiming that gold is being manipulated on a daily basis by the Federal Reserve: when it occurs over and over, and is so well documented, it is no longer a theory, it is merely sad. And the fact that the US government goes to great lengths to hide the illicit dealings of the Federal Reserve, which through its monetary tentacles, has prima facie control over not just US policy but also over sovereign governments, is an unprecedented failure in the checks and balances system that the founding fathers had planned when they created the United States of America. Yet saddest is that the United States no longer pursues strategic goals that are in the best interest of the majority of its citizens, but merely manipulates other, less powerful nations into a servile existence that only provides gain to a very limited subset of the American financial oligarchy. It is time for the Fed's unprecedented control over affairs, both global and domestic, to end.

Full memo from Arthur Burns presented, compliments of Geoffrey Batt who collaborated in the creation of this post.



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Mon, 09/28/2009 - 13:58 | 81597 lsbumblebee
lsbumblebee's picture

An empty pop bottle? Some gum wrappers?

Mon, 09/28/2009 - 12:44 | 81512 Anonymous
Anonymous's picture


Lets hope that people start to wake up.

My real fear is that nothing will change.

Mon, 09/28/2009 - 12:48 | 81515 Anonymous
Anonymous's picture

say what? the FED manipulates gold. Well i never!. say tyler, why don't you send this information over the squarehead from sunny niceville and let him take a look at it. oh wait. no worries mate. he reads this blog constantly anyway and i am sure he will see this. silly me.

Mon, 09/28/2009 - 15:24 | 81683 SWRichmond
SWRichmond's picture


Mon, 09/28/2009 - 12:53 | 81526 AN0NYM0US
AN0NYM0US's picture

The head of the World Bank on Monday sounded a cautionary note about granting greater regulatory power to the U.S. Federal Reserve and said the dollar's future will "depend heavily on U.S. choices."

My questions is why would he say that - i.e. what's the angle here, we know they're on the same side.

please excuse the CNBS link

Mon, 09/28/2009 - 13:08 | 81541 AN0NYM0US
AN0NYM0US's picture

President has decided to go to Copenhagen to pitch Chitown vis a vis the Olympics = it's a done deal (otherwise he wouldn't be going). 


Is it possible to short Chicago?

Mon, 09/28/2009 - 13:09 | 81543 Anonymous
Anonymous's picture

Can anyone give a summary that's a little less alarmist? - Thanks.

Mon, 09/28/2009 - 17:56 | 81829 TumblingDice
TumblingDice's picture

The memorandum is seven pages long, written in very large font, with healthy margins. Read it and think for yourself.

Mon, 09/28/2009 - 19:18 | 81903 Hephasteus
Hephasteus's picture

I find your insistance on free thought disturbing. You will never be allowed in the global elite brotherhood with that attitude mister. Shape up or ship out. :)

Mon, 09/28/2009 - 20:52 | 81979 Miles Kendig
Miles Kendig's picture

I am sure that is why the dice tumble.  hehe

Mon, 09/28/2009 - 21:40 | 82032 TumblingDice
TumblingDice's picture

Yup. They tried rehabilitating me, but it turned out my problem was rooted too deeply: my gambling addiction. Try as they might to tell me that 2+2=5 it didn't faze me. Deuces are wild, after all.

Mon, 09/28/2009 - 22:19 | 82068 Miles Kendig
Miles Kendig's picture

Twenty years of diesel therapy has helped to shape the person I am today...

Mon, 09/28/2009 - 22:29 | 82079 TumblingDice
TumblingDice's picture

Sorry to hear that. Can't even imagine being forced to see the world from that awful perspective for so long.

Mon, 09/28/2009 - 23:11 | 82110 Miles Kendig
Miles Kendig's picture


From either side of the fence.   After all, I am an All American volunteer.

I am Miles Kendig and I will never go back, for any amount of money.

Tue, 09/29/2009 - 01:44 | 82162 MsCreant
MsCreant's picture

Working on mysteries without any clues...

Tue, 09/29/2009 - 03:06 | 82198 Miles Kendig
Miles Kendig's picture



What to leave in.  What to leave out.

Tue, 09/29/2009 - 03:29 | 82205 Hephasteus
Hephasteus's picture

It's all in the brain. Gotta keep processing the signals.

Wehn it cmoes to the eeys tohgue its mroe ipomratnt taht you see the wohle tihng.

Stretch your mind to ecompasse the whole and you can derive the signals better.

The problem is the little eye floating above the pyramid. It thinks it can be divorced from the pyramid and simply hover above it seeing the whole and confusing the rest of the pyramid. Till the wittle people on the pyramid climb up it and grab it by the nuts and drag it down into the masses.

Tue, 09/29/2009 - 03:51 | 82207 Renfield
Renfield's picture

"Stretch your mind to ecompasse the whole and you can derive the signals better...Till the wittle people on the pyramid climb up it and grab it by the nuts and drag it down into the masses."

Existentialism mixed with salacious populism and a soupcon of bitter revolucion.

This is why HerosEdge is the Best Blog on the Web. More than just math, trends, charts and loose ladeez pix. (aka, The Quant Hos.) You get the occasional $$ philosopher too.

Sometimes I can't decide whether David Lynch or Mickey&Mallory is writing some of the comments here...


Mon, 09/28/2009 - 19:40 | 81935 Sancho Panza
Sancho Panza's picture

The Fed's job is to manage monetary policy.  This memo proves that to manage monetary policy, the Fed has formed agreements, behind closed doors, with other central banks to suppress the alternative to their fiat: gold.  To my knowledge, this information is new to the public.  Whether the agreements were lawful might be called into question.

Mon, 09/28/2009 - 13:16 | 81553 Careless Whisper
Careless Whisper's picture


Did Hu Jintao get the memo?

Mon, 09/28/2009 - 13:32 | 81569 Anonymous
Anonymous's picture

Hmm... idk.

How many commenters read the document?

Mon, 09/28/2009 - 14:02 | 81601 Michael
Michael's picture


Paul Krugman joins Al Gore in the annels of stupidity. We want both your Nobel prizes returned.

Cassandras of Climate


Mon, 09/28/2009 - 14:12 | 81611 Apocalypse Now
Apocalypse Now's picture

This may mean that gold is the only asset class that is not liquidity inflated and over valued.  Enjoy a discount on the price of physical gold, by courtesy of the powers that be.

Mon, 09/28/2009 - 15:25 | 81686 SWRichmond
SWRichmond's picture

This is IMO the correct way to view our current situation.  Take possession of physical now, while you can.

Mon, 09/28/2009 - 15:51 | 81703 MyKillK
MyKillK's picture

One of the most common arguments I see against the use of gold as a currency is that there isn't enough gold relative to economy and GDP. However, that's only true in nominal currency terms and proves how utterly out of control the masters of the printing presses have been over the last century. If we want to return to a system where gold is actually backing the value of the currency, without crippling deflation, gold has to be revalued massively. Maybe $100,000 per ounce would be sufficient, but even that probably wouldn't be enough.

Mon, 09/28/2009 - 16:04 | 81719 Anonymous
Anonymous's picture

We can use paper as long as we don't print so much of it. Or we can re-issue script after declaring BK, subject to a maximum of 100k per person. All debts are resolved by the BK. Almost all govt workers are fired and all taxes are abolished. In short a massive over-haul is needed.

Mon, 09/28/2009 - 18:07 | 81837 Anonymous
Anonymous's picture

What if every wage earner pulled aside 2 months worth of income, bought gold, and put it in the ground to be dug up in the future, maybe 50 years hence.

Say 2.5 billion wage earners, burying 3 oz. of gold each.

7 billion oz. or approx. 7 trillion USD. 1/6th of an annual gross production of the globe.

Not enough gold ever mined or promised in order to do so.

Now what if, instead of burying it, they just hold it in reserve as an asset class beyond the reach of the money masters?

Bankers fear gold because it withdraws all the power from their system. If lost, it is lost forever. Not so with FRN or any fiat, Poof! just print more. Inevitably the balance is lost from the natural expansion of an economy and money supply.

But with gold, it is far better than diamonds, because it is truly forever and the ultimate everyman's strike at the oppressive and tyrannical powers seeking to plunder the natural production of the sun, earth, and mankind.

Mon, 09/28/2009 - 16:42 | 81760 Anonymous
Anonymous's picture

Right on. The fuckers are subsidising my pension.
Keep it up Bernanke! I love discount Krugerrands!

Mon, 09/28/2009 - 17:17 | 81797 Renfield
Renfield's picture

You and me both, Apo.

AND certain pigsters who are no doubt stocking up right along with us in private vaults, so they can stay rich after most of the world's population is left with a big honkin pile of paper with lovely long meaningless numbers printed all over it.

Mon, 09/28/2009 - 14:24 | 81624 blackebitda
blackebitda's picture

does the fed manipulate the stock or futures market?


Mon, 09/28/2009 - 15:06 | 81663 Anonymous
Anonymous's picture

So the world is controlled by a cabel of bankers. We already knew that.

Mon, 09/28/2009 - 19:06 | 81882 Anonymous
Anonymous's picture

and some want the fraud exposed.

don't be such an obvious ass.

Mon, 09/28/2009 - 19:44 | 81939 Anonymous
Anonymous's picture

Exposed? I want them dead. I'm scared for the future because the proof is out now. My skill set is limited and I can't even spell cabal correctly. I better stock up on food, I can't buy ammo or gold but I know they are important as well.

Mon, 09/28/2009 - 15:10 | 81665 blackebitda
blackebitda's picture

mad as hell and the question of citizens for the US

Mon, 09/28/2009 - 15:51 | 81684 Joe Sixpack
Joe Sixpack's picture

I created a searchable/copy-pastable PDF from the one above.


Tue, 09/29/2009 - 07:59 | 82245 Anonymous Hand
Anonymous Hand's picture

Thank you, Joe Sixpack: very helpful. Aside from the kooky watermarks at the top and bottom of each page...


This is a remarkable document because it is OURS, it is publicly released, and it states in no uncertain terms that we have been governmentally involved in manipulating international markets.  Further, it states explicitly that this market manipulation (price fixing) is occuring as part of "secret understanding in writing" with other nations. In judicial terms, this is known as "Conspiracy".

Price fixing and market manipulation is actionable. I'd like to see Cuomo try to sink claws into this one. I'm suddlenly reminded of a barn cat attacking a draft horse.

Mon, 09/28/2009 - 15:52 | 81707 Anonymous
Anonymous's picture

News??? Come on, anybody trading any finanicial market currently shouldn't be surprised at all. It's happening in front of your nose day in day out in gold, stocks, bonds, and not to forget currencies and all other commodities...Wake up!!!! THERE ARE NO MORE FREE MARKETS

Mon, 09/28/2009 - 15:53 | 81710 Anonymous
Anonymous's picture

News??? Come on, anybody trading any finanicial market currently shouldn't be surprised at all. It's happening in front of your nose day in day out in gold, stocks, bonds, and not to forget currencies and all other commodities...Wake up!!!! THERE ARE NO MORE FREE MARKETS

Mon, 09/28/2009 - 15:59 | 81714 Anonymous
Anonymous's picture

I think i'd rather order the Exclsive Smoking Gun.

Mon, 09/28/2009 - 16:06 | 81722 Pilatus
Pilatus's picture

Free markets??? In 30 years, if we're still alive, we might get archived documents about the plunge protection team, both in stock and bonds, and the keep-a-lid on commodities team surfacing

Mon, 09/28/2009 - 16:07 | 81725 HankPaulson
HankPaulson's picture

Excellent work. Again. God I love this site.


[Incidentally, gotta love how Mr Arthur F. Burns denotes his first point "First", his second point "Second", his third point "Third", and so on.]

Mon, 09/28/2009 - 17:55 | 81825 Ich bin ein whatever
Ich bin ein whatever's picture

I want my TARP money back Hank Paulson.  I need it to buy CNBC for Zero Hedge.  Then I can rid te world of Steve LIESman forever!


ref to post. 81725

Mon, 09/28/2009 - 21:26 | 82019 HankPaulson
HankPaulson's picture

lol! money back? you don't seem to "get it". still, i like your pluck! :)

Mon, 09/28/2009 - 16:18 | 81734 Anonymous
Anonymous's picture

broad strokes. the details will sort themselves out. great stuff

Mon, 09/28/2009 - 16:23 | 81741 MyKillK
MyKillK's picture

On an unrelated subject....does anyone know if the constitutionality of FDR's gold seizure was ever challenged? I fail to see anything that gives the government even remotely the power to do such a thing.

Mon, 09/28/2009 - 16:56 | 81776 George the baby...
George the baby crusher's picture

Nobody seems to have taken up on the real big issue here.  Yeah sure gold is manipulated, but what about the fact that the US FED is manipulating other countries and the world's monetary system? We've all seen the FEDs track record, and then to find out that they are the master of all....Now there is your gob smack.

Mon, 09/28/2009 - 17:11 | 81794 Renfield
Renfield's picture

This isn't really about gold. This is about the Fed and how goddamn stupid it is to allow your (our) countries to be governed by unrepresentative bankers. (Who inevitably turn evil once they're given unfettered political power through control of the nation's purse-strings.)

I don't think floating fiat will ever work. But fiat or not, asset-backed or not, give your political power to a central bank and watch your country fall.

Props to Karl Denninger (who hates gold) for posting this UTube vid:!-4-Minutes-With-An-Elephant.html

Watch the second one. Well, both show that the sheeple are waking up slowly to what's been done to them in the two major 'empire' countries, but the American one is funnier.

Hey hey hey hey. Fk th Fd.

Mon, 09/28/2009 - 20:04 | 81948 Joe Sixpack
Joe Sixpack's picture

"This is about the Fed and how ... stupid it is to allow your (our) countries to be governed by unrepresentative bankers. "


It is Congress that allows it.

Mon, 09/28/2009 - 17:38 | 81810 Anonymous
Anonymous's picture

All of this was covered in Sutton's "The War On Gold" in 1976. Nothing has changed other than the technical methods of manipulation.

Mon, 09/28/2009 - 18:00 | 81824 AN0NYM0US
AN0NYM0US's picture

what's interesting is that documents from the Ford Library typically have a seal   and the layout that indicates photocopy is also different.  (not suggesting anything but it is curious, perhaps it has to do with the timing of the declassification)


here are some examples:

Mon, 09/28/2009 - 20:50 | 81977 Miles Kendig
Miles Kendig's picture

Noteworthy.  You must be an archives sort of person....

Mon, 09/28/2009 - 17:58 | 81831 Chumly
Chumly's picture

"They will throw their silver into the streets and their gold will be like refuse."  I believe this pertains to Satan's minions, not all.

Mon, 09/28/2009 - 18:16 | 81842 Anonymous
Anonymous's picture

As someone said earlier, its not the manipulation of gold per say, but the idea that the FED dictates the policies of other countries. Amazing that this would be allowed. Not by our own government, but by the governments of the rest of the world. I do realize that it isn't that simple...

...but maybe it is.

Mon, 09/28/2009 - 18:23 | 81847 Anonymous
Anonymous's picture

This makes perfect sense. Gold you see, is the ultimate extinguisher of debt. You can never get out of debt (irremdeemable dollar). "When on August 15, 1971, Richard Nixon defaulted on the gold obligations of the United States and declared the irredeemable dollar the "ultimate" means of payments and liquidator of debt."

Please visit for some brilliant research into monetary "science."

Mon, 09/28/2009 - 19:58 | 81945 Jacks Complete ...
Jacks Complete Lack of Surprise's picture

Sup Tyler.

The old money is giggling at you in Europe. What next, you gonna realize that the Fed is backing the US dollar on corporate paper instead of government debt obligations, as per their charter they got to write?

I am loving everyone commenting here acting as if the veil has finally been removed when this has been known for quite some time. Shocked, shocked I say, to find out the Fed used gold to further the hegemony of the US Dollar.

There's that complete lack of surprise again.

Btw, what are the whistle rules around here?

Mon, 09/28/2009 - 20:23 | 81959 Anonymous
Anonymous's picture

#7 - Fights will go on as long as they have to.

Mon, 09/28/2009 - 21:08 | 81998 Jacks Complete ...
Jacks Complete Lack of Surprise's picture

I'll go put on a pot of coffee then. Nothing like a bout of shadow boxing.

Mon, 09/28/2009 - 21:26 | 82018 Renfield
Renfield's picture

Or better yet, you could go back to watching 'American Idol'...

Mon, 09/28/2009 - 22:35 | 82082 Jacks Complete ...
Jacks Complete Lack of Surprise's picture

Ah, I expect better taunting from the users here, this is subpar. Quite a pugna stipes you have here Tyler.

And by the way my good man, who seems quite culturally ignorant, American Idol is idle at the second, so good day to you, sir.

Mon, 09/28/2009 - 22:41 | 82087 MsCreant
MsCreant's picture

"American Idol is idle at the second"

So you knew? Eeeeeeew!  Seems to me he read you correctly.

Cultural ignorance (of that sort) is bliss.

Mon, 09/28/2009 - 23:05 | 82108 Renfield
Renfield's picture

Pugnandi ratio as my old granpappy used to say... ;-) Alas my rusty latin but as you noticed, what he said came out sort of a compliment. Credit where due, he's quite right at that - I forgot to check the online TV Guide before I posted! Now don't I feel silly.

Tue, 09/29/2009 - 00:07 | 82149 Miles Kendig
Miles Kendig's picture

Aww.  The best jokes need to be on ourselves once in a while for humor to really work.

Tue, 09/29/2009 - 19:39 | 83050 Anonymous
Anonymous's picture

that you seem deem American Idol culture betrays your attempts at snobbery, dear sir.

please feel free to return Jack's Complete Arrogant Cousin...the fight's only begun amigo.

Mon, 09/28/2009 - 22:53 | 82099 TumblingDice
TumblingDice's picture

Theyre backing it with shit.

Tue, 09/29/2009 - 10:40 | 82339 Anonymous
Anonymous's picture


GATA has been working for years to uncover concrete physical evidence of this sort. This memo could serve as exhibit A for HR 1207 coming to a floor vote, and IMHO, we'll be seeing alot of references to this document soon.
If you watched any of the Sept 26th hearings on HR 1207, you see the continued dodge ball stance by the FED to direct questions involving Trillions... why is Congress still playing charades?

Mon, 09/28/2009 - 20:14 | 81956 Econophile
Econophile's picture

Brilliant! Another chapter in the Fed's war against real money.

Mon, 09/28/2009 - 20:29 | 81961 AN0NYM0US
AN0NYM0US's picture

I posted above  some inconsistencies with the markup of the document cited in the lead article - It would be great if ZH could provide a link to a primary source as opposed to a Scribd rendition.

Mon, 09/28/2009 - 20:35 | 81967 mkkby
mkkby's picture

I respectfully disagree. My interpretation of this "news" is that gold is manipulated for the APPEARANCE of low inflation. So, really, who cares? We have other inflation measures. We have market-driven currency exchange rates.

Why does gold even matter? Answer -- it doesn't. Only in the minds of central bankers who are old enough to remember when it was convertible. Are we ever going to be able to buy anything with it? No. Is it ever going to be the basis for any currency? No. Imagine going back to the gold standard. The price would have to be upwards of $1 million per oz.

Tue, 09/29/2009 - 11:34 | 82421 Anonymous
Anonymous's picture

"We have market-driven currency exchange rates"
Do we? At all times? The rest is not worth commenting on.

Wed, 09/30/2009 - 08:47 | 83532 Anonymous
Anonymous's picture

Where you say

Why does gold even matter? Answer -- it doesn't. Only in the minds of central bankers who are old enough to remember when it was convertible. Are we ever going to be able to buy anything with it? No.

Yes its easily converted to any currency as long as its in recognized 999 fine ingots and coins.Probably would need to take it to a mint but I used to be able to take it to a local bank until they stopped selling it there but I herd that Scotiabank is doing it again in Canada where I live.
See and c-gold my favorite but unfortunately with them I must ship my gold to them or buy from someone else who can ship to them for you.You can then electronically transfer ownership of whatever amount you want electronically to anyone that you want.Not sure about the exchange fees etc if you want to pay in whatever currency you want.I think they must also have an account but it could be that you could have c-gold mail money I really never tried it.
I myself would prefer to be payed in gold anywise so it works especially good that way.Would have been great if I could sell on ebay using them instead of pay pal as it so much cheaper especially where I am Canadian and most of my customers are US and you save avoiding exchange fees to convert.

Mon, 09/28/2009 - 20:43 | 81971 Anonymous
Anonymous's picture


Close but no cigar :-)) Still, unreserved hat tip for your dogged determination.

Some background to put this memo in context.

In 1975 France was pushing very hard for a restoration of the gold standard. A Mr Valerie Giscard d'Estaing, first treasury secretary and then President of France pursued this effort very hard from 1971 onwards. This is the same Giscard d'Estaing of the famed gold backed 'emprunt Giscard' mentionned in Liar's Poker.

Valuing central bank reserves at gold market prices would have been one step closer to accepting restoration of the gold standard. This was wholly unacceptable to the Fed since it had a mandate of monetary expansion from the White House at the time, and the US gold reserves were totally inadequate to support the dollars in circulation, even at current market price (something hidden from US citizens and that could not be made public, but that French taxpayers later discovered to their horror).

The memo must be put in this context, where there was a strong sovereign push for restoration of the gold standard, something that is not on the horizon now (although China's recent antiques might prove me wrong).

Hope this helps.


I came across this looking for some dates, this is from VGE's assistant during those years, quite an insight.

It's in French but can be translated via Google

Mon, 09/28/2009 - 21:40 | 82031 waterdog
waterdog's picture

Global Oligarchy Liability Diversion

Mon, 09/28/2009 - 22:46 | 82093 Anonymous
Anonymous's picture

Could the second provision on page 5 of the memo be involked today?
Imagine a default of US sovereign debt involving an "emergency mobilization" of the nation's gold reserves in relief or as condition of relief of such debt.

What goes around comes around.

Mon, 09/28/2009 - 23:20 | 82119 lsbumblebee
lsbumblebee's picture

Out of the mouths of babes...

"Gold falls despite dollar prices fell despite criticism of the dollar by the World Bank president."

I doubt if this Forbes reporter realizes that in a parallel universe he would be up for a pulitzer.

Tue, 09/29/2009 - 10:08 | 82306 Stuart
Stuart's picture

Mish's comments are shockingly dismissive.  

'Ya, so what? So the same gang is in the same hangout as they were 30 years ago with the same motive, same tools. All this says is that this gang willfully conspired to murder someone 30 years ago. Doesn't say that they've murdered anybody lately or proof they're now capable of it again. "  

Unbelievably willfully dismissive.   If he took a position we never landed anyone on the moon, good luck in proving it to him. 

Tue, 09/29/2009 - 10:20 | 82317 Anonymous
Anonymous's picture

C'mon, Tyler. Why is this pinned?

It's ancient news. Yes, the actual document might be something new, however every man and his dog has known and been telling the world that "gold is rigged" since the '70's.

It was worth a post, but Prime Position on the blog? Getouttahere!

Tue, 09/29/2009 - 11:28 | 82407 Anonymous
Anonymous's picture

It's pinned because it represents a glitch in the matrix. Manipulation talk can't be tinfoil hatted so effortlessly anymore. Surely you haven't slept through "the worlds" response to previous allegations?

Tue, 09/29/2009 - 14:53 | 82674 Anonymous
Anonymous's picture

This is clearly a (well done) hoax: the 'DECLASSIFIED' stamp indicates Executive Order 12953 (Clinton, 27 Feb 95, relating to child support), but the actual EO doesn't have a section 3.8, and is totally irrelevant. Further, the dates on the Declassify stamp are in 2004-2005, which again is in the wrong time frame. Together with the lack of the standard watermarking from the Ford Library as already mentioned, this document fails the sniff test....

Tue, 09/29/2009 - 14:54 | 82677 Anonymous
Anonymous's picture

This is clearly a (well done) hoax: the 'DECLASSIFIED' stamp indicates Executive Order 12953 (Clinton, 27 Feb 95, relating to child support), but the actual EO doesn't have a section 3.8, and is totally irrelevant. Further, the dates on the Declassify stamp are in 2004-2005, which again is in the wrong time frame. Together with the lack of the standard watermarking from the Ford Library as already mentioned, this document fails the sniff test....

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designerhandbagsoutlet's picture

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