1974 Enders To Kissinger: "We Should Look Hard At Substantial Sales & Raid The Gold Market Once And For All"

Tyler Durden's picture

Four years ago we exposed what appeared to be a 'smoking gun' of the Fed's willingness to manipulate the price of gold. Then Fed-chair Burns noted the equivalency of gold and money, and furthermore pointed out that if the Fed does not control this core relationship, it would "easily frustrate our efforts to control world liquidity." Through a "secret understanding in writing with the Bundesbank that Germany will not buy gold," the cloak-and-dagger CB negotiations were exposed as far back as 1975. Recently, we exposed Paul Volcker's fears of "PetroGold" and the importance of the US remaining "masters of gold." Today, via a transcript of then Secretary of State Kissinger's 1974 meeting we see how clearly they understood that demonetizing gold was a critical strategy to maintaining a dominant power position in the world, and "raiding the gold market once and for all."

 

Burns' 1975 Smoking Gun...

...

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.

...

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."
 

Volcker's 1974 "PetroGold" concerns...

First, here is what the S intentions vis-a-vis gold truly are when stripped away of all rhetoric:

U.S. objectives for world monetary system—a durable, stable system, with the SDR [ZH: or USD] as a strong reserve asset at its center — are incompatible with a continued important role for gold as a reserve asset.... It is the U.S. concern that any substantial increase now in the price at which official gold transactions are made would strengthen the position of gold in the system, and cripple the SDR [ZH: or USD].

In other words: gold can not be allowed to dominated a "durable, stable system", and a rising gold price would cripple the reserve currency du jour: well known by most, but always better to see it admitted in official Top Secret correspondence.

 

Specifically, this is among the top secret paragraphs said on a cold night in March 1968:

If we want to have a chance to remain the masters of gold an international agreement on the rules of the game as outlined above seems to be a matter of urgency. We would fool ourselves in thinking that we have time enough to wait and see how the S.D.R.'s will develop. In fact, the challenge really seems to be to achieve by international agreement within a very short period of time what otherwise could only have been the outcome of a gradual development of many years.

 

And Now Kissinger's 1974 Transcript...

Via Mike Krieger's Liberty Blitzkrieg blog,

The following excerpts are from a transcript of a 1974 meeting held by the then Secretary of State Henry Kissinger and his staff. This particular meeting was held on April 25, and focused on an European Commission Proposal to revalue their gold assets. What follows is an incredible insight into the minds of powerful American leaders scheming to maintain power and show other nations their place. What is most significant is how clearly they understood that demonetizing gold was a critical strategy to maintaining a dominant power position in the world.

So to those who continue to say that “gold doesn’t matter” because it hasn’t been used as an official asset in the monetary system for decades, I say give me a break. In fact, the reality of gold having been largely demonetized makes it an even greater threat going forward if the U.S. does not have all the gold it claims to, and other nations have more than they admit to.

Thanks to In Gold We Trust for bringing this to my attention. Choice excerpts are provided below, and breaks in the conversation are denoted with an “…” Enjoy.

Secondly, Mr. Secretary, it does present an opportunity though—and we should try to negotiate for this—to move towards a demonetization of gold, to begin to get gold moving out of the system.

Secretary Kissinger: But how do you do that?

Mr. Enders: Well, there are several ways. One way is we could say to them that they would accept this kind of arrangement, provided that the gold were channelled out through an international agency—either in the IMF or a special pool—and sold into the market, so there would be gradual increases.

Secretary Kissinger: But the French would never go for this.

Mr. Enders: We can have a counter-proposal. There’s a further proposal—and that is that the IMF begin selling its gold—which is now 7 billion—to the world market, and we should try to negotiate that. That would begin the demonetization of gold.

Secretary Kissinger:  Why are we so eager to get gold out of the system?

Mr. Enders: We were eager to get it out of the system—get started—because it’s a typical balancing of either forward or back. If this proposal goes back, it will go back into the centerpiece system.

Secretary Kissinger: But why is it against our interests? I understand the argument that it’s against our interest that the Europeans take a unilateral decision contrary to our policy. Why is it against our interest to have gold in the system?

Mr. Enders: It’s against our interest to have gold in the system because for it to remain there it would result in it being evaluated periodically. Although we have still some substantial gold holdings—about 11 billion—a larger part of the official gold in the world is concentrated in Western Europe. This gives them the dominant position in world reserves and the dominant means of creating reserves. We’ve been trying to get away from that into a system in which we can control—

Mr. Enders: Yes. But in order for them to do it anyway, they would have to be in violation of important articles of the IMF. So this would not be a total departure. (Laughter.) But there would be reluctance on the part of some Europeans to do this. We could also make it less interesting for them by beginning to sell our own gold in the market, and this would put pressure on them.

Mr. Maw: Why wouldn’t that fit if we start to sell our own gold at a price?

Secretary Kissinger: But how the hell could this happen without our knowing about it ahead of time?

Mr. Hartman: We’ve had consultations on it ahead of time. Several of them have come to ask us to express our views. And I think the reason they’re coming now to ask about it is because they know we have a generally negative view.

Mr. Enders: So I think we should try to break it, I think, as a first position—unless they’re willing to assign some form of demonetizing arrangement.

Secretary Kissinger: But, first of all, that’s impossible for the French.

Mr. Enders: Well, it’s impossible for the French under the Pompidou Government. Would it be necessarily under a future French Government? We should test that.

Secretary Kissinger: If they have gold to settle current accounts, we’ll be faced, sooner or later, with the same proposition again. Then others will be asked to join this settlement thing.

Isn’t this what they’re doing?

Mr. Enders: It seems to me, Mr. Secretary, that we should try—not rule out, a priori, a demonetizing scenario, because we can both gain by this. That liberates gold at a higher price. We have gold, and some of the Europeans have gold. Our interests join theirs. This would be helpful; and it would also, on the other hand, gradually remove this dominant position that the Europeans have had in economic terms.

Mr. Rush: Well, I think probably I do. The question is: Suppose they go ahead on their own anyway. What then?

Secretary Kissinger: We’ll bust them.

Mr. Enders: I think we should look very hard then, Ken, at very substantial sales of gold—U.S. gold on the market—to raid the gold market once and for all.

Mr. Rush: I’m not sure we could do it.

Secretary Kissinger: If they go ahead on their own against our position on something that we consider central to our interests, we’ve got to show them that that they can’t get away with it. Hopefully, we should have the right position. But we just cannot let them get away with these unilateral steps all the time.

Full transcript here.

 

 

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LetThemEatRand's picture

What is most amazing about this story is that no one is even talking about charges for any of the persons involved.   

CH1's picture

And everyone obeys their edicts, just the same. (And bitch that nothing changes.)

LetThemEatRand's picture

Things would indeed change for the average person if they stopped obeying the edicts of their oligarch overlords.  Peter Schiff's father can attest to that.  

LetThemEatRand's picture

No, but they sure have a lot of hollow points and armored police vehicles and drones and big ass prisons.  Not your downvoter, by the way.  Sometimes I'm right there with you.

CH1's picture

they sure have a lot of hollow points and armored police vehicles and drones and big ass prisons.  

Still, millions of people evade them every year. And when working people stop paying them, and fixing their cars, and... it's game over.

Not your downvoter, by the way.  Sometimes I'm right there with you.

Thanks.

LetThemEatRand's picture

No doubt TPTB think you're on to something.  They are sure as shit preparing for it.

flacon's picture

What does Kissinger mean when he said that Obama can usher in a "NEW WORLD ORDER"? How has Kissinger's thought process evolved since 1974, if at all?

Pinto Currency's picture

 

 

"I think we should look very hard then, Ken, at very substantial sales of gold—U.S. gold on the market—to raid the gold market once and for all."

 

As if dumping a huge amount of gold would kill gold once and for all.

What it would do is strip the US and Europe of the most important stabilizing asset.

There is a sickness in these people and the tremendous damage they have done to the world but especially North America and Europe - and they know full well there is a reckoning coming.

The question is then, what is their next trick as they hold the reigns of power.

AlaricBalth's picture

55. Memorandum From John Reynolds of the Federal Reserve System Board of Governors Staff to the Chairman of the Federal Reserve System Board of Governors (Burns)1

Washington, November 1, 1973.

SUBJECT
Possible Consequences of Seeking a New Agreement on Gold

The question has arisen whether it would be in the U.S. interest to seek at this time to negotiate a termination of the gold agreement of March 17, 1968, together with a reaffirmation of Article 4, Section 2 of the IMF Articles of Agreement which provides that "no member shall buy gold at a price above par value plus the prescribed margin."2

It appears likely that the several parties would enter such a negotiation with very different objectives. The U.S. objectives would be (1) to permit market sales of gold by central banks at times when this sememed desirable in order to tranquilize foreign exchange markets, (2) to prevent official purchases of gold at premium prices, and hence (3) to reduce further the role of gold as an international monetary asset.

European countries might share the first objective. But their main interest in gold at the moment is to make use of it in intra-European settlements which, as a practical matter, they are prepared to do only at a market-related price, well above the official price. Some of them, in addition, wish to reserve the right to buy gold in the market as well as to sell. In general, they wish to increase the usability of gold as means of international settlement, and thus to enhance or at least preserve the role of gold, rather than to reduce it.

Against this background, any negotiation to reach a new agreement on gold seems likely to be difficult, and to precipitate decisions about gold that it has so far been possible to postpone, and that might be contrary to broader U.S. objectives in C–20 negotiations.

http://history.state.gov/historicaldocuments/frus1969-76v31/d55

Manthong's picture

China is going to change all that devious nonsense.

SWRichmond's picture

Hence my assertion that "Bitcoin is controlled op".  Who gives a fuck about Bitcoin, really?  GIVEN THE HISTORY OF FIAT CURRENCIES, WHY WOULD ANYONE PUT ANY VALUE AT ALL IN ANY CURRENCY BACKED BY NOTHING?  People are so stupid.

markmotive's picture

Personally, if SHTF the most useful currencies will be guns, non-perishable food and shelter.

The Mises view on bitcoin may come as a surprise to some.

http://www.planbeconomics.com/2013/11/the-mises-view-bitcoin-hits-1000-m...

quintago's picture

Charges? We just had a hollywood producer come out and admit that he ran nuclear devices and such for Israel, and a bunch of others saying they knew about it. 

...and a bunch of crickets is all we get.  

JohnnyBriefcase's picture

Hmm what do that hollywood producer(Arnon Milchan) and Kissinger have in common...

Oldwood's picture

The beauty of corruption is that it is extremely profitable to those who participate.

mrmister's picture

My thoughts exactly. Why is the media publicizing Bitcoin so much? Maybe just another way to say "poof and its gone".

AlaricBalth's picture

60. Paper Prepared in the Department of the Treasury1

Washington, March 5, 1974.

Possible U.S. Proposal on Gold
"...U.S. could propose a package agreement which would attempt to trade a U.S. commitment to limit severely possible U.S. gold sales over the next few years in exchange for European commitments not to take what we regard as a backward step toward placing gold back in the center of the international monetary system and to join with us in some steps toward phasing gold out of the system."

http://history.state.gov/historicaldocuments/frus1969-76v31/d60

And here is link to a treasure trove of documents concerning the US suppression of gold within the monetary system due to its challenge to the USD as the reserve currency.

http://history.state.gov/historicaldocuments/frus1969-76v31/ch2

artless's picture

Kissinger? Thought process? Evolved?

Are you kidding? Henry Kissinger is the same mass murdering war criminal, piece of shit, double agent, new wrold order, global elitist scumbag he ever was. Guys like this do not change. He is a sociopath. What he sees in Barry "The Empty Suit" Obama is what he sees when he looks in the mirror. 

Guys like this go to the grave never examing their thoughts or considering alternative ideas. And they usually live long, lucrative, lives as the parasites they are instead of being frog marched off to the worst prison in the world where they belong.

If there were justice or karma or something like that Kissinger and Soros would share a cell.

Fred Hayek's picture

If you saw Kissinger or Soros floating in your pool you'd slap your dog.

earleflorida's picture

@ Flacon

"France in Search of Security"    Spring/1993 Edition 'Foreign Affairs'                                                                     (towards a New Transatlantic Pact)* and the EU)

http://www.foreignaffairs.com/articles/48763/pierre-lellouche/france-in-search-of-security

"Timeline: History of the Euro"   11/30/2010   (1969- 11/2010)

http://www.telegraph.co.uk/finance/markets/8170326/Timeline-history-of-the-euro.html

,... and this book by Frank Costigiola (c.1992) quoting "Rothschild's Right-Hand Man?", Kissinger *((?the fat man?))-- "France and the United States: 'The Cold Alliance Since World War II'"

Note: These guys (Kissinger, etel.) are just messengers for the grand-plan's... devised decades ago, with alterations need be necessary and somewhat TIMELY? The Rothschild's finance countries debt-- they're not interested in the small stuff... their's is to own all countries debt (beggar`d-thy-neighbour?) and the FRB System is their tool. Why did the Rothschild's leave the "LBMA"in Feb/2004 and three months later, AIG leaves May/2004?

Yes, the same AIG that bankrupted the USA???

jmo

earleflorida's picture

"Timeline of History, Price, and Economics of U.S. Gold"  (1579 - 2008/2010)       http://www.tchistory.org/TCHISTORY/Gold_Timeline.htm

RafterManFMJ's picture

Sometimes I feel the fear of uncertainty stinging clear

And I cant help but ask myself how much I'll let the fear take the wheel and steer

It's driven me before, it seems to have a vague

Haunting mass appeal

Lately I'm beginning to find that I should be the one behind the wheel
Whatever tomorrow brings, I'll be there

With open arms and open eyes yeah

Whatever tomorrow brings, I'll be there, I'll be there

So if I decide to waiver my chance to be one of the hive

Will I choose water over wine and hold my own and drive...

bunnyswanson's picture

http://www.youtube.com/watch?v=BmWJ_nGzSME (Lyrics)

Hunger Strike - Temple of the Dogs (Eddie Vedder) Songwriters: CORNELL, CHRIS I don't mind stealing bread from the mouths of decadence But I can't feed on the powerless when my cup's already overfilled But it's on the table The fire is cooking.  They're farming babies.  The slaves are workin. Blood is on the table and their mouths are choking I don't mind stealing bread.  I am going hungry. (It will get so ugly) http://www.youtube.com/watch?v=VUb450Alpps Official video
piceridu's picture

Goldman buying Venezuela's gold held in Europe...why?

GetZeeGold's picture

 

 

Because they already have it.....seems fair they should pay them for it.

Papasmurf's picture

That would be inconsistent with their MO.

SRSrocco's picture

I gather Jeff Christian of CPM Group doesn't read this sort of Govt Manipulation Info.  He will continue to put out forecasts on supply and demand until the day it no longer works.  However, we are breaking all records in Official Silver Coins Sales:

BREAKING: Canadian Maple Leaf Sales Q1-Q3 Already Surpass 2012 Total

http://srsroccoreport.com/canadian-silver-maple-leaf-sales-already-beat-...

Bay of Pigs's picture

Jeff Christian is a blight on the human race. He is an evil, rotten, lying, deceiving little prick.

Everything out of his mouth is pure propaganda.

GetZeeGold's picture

 

 

Jeff Christian gives me heebee geebees.

sudzee's picture

Scotia-maccotta has not been able to supply both 1/20 or 1/2 oz maples since March of this year.

ebworthen's picture

What are these "charges" you speak of?

Are they like the fabled "rule-of-law" Unicorn?

James_Cole's picture

Kissingers rap sheet of war crimes is long and diverse and nobody would dare hold him to account for that - this gold manipulation is pretty small fries.

DaveyJones's picture

he does have a medusa touch doesn't he

max2205's picture

Kissinger should have been locked up a long time ago.....

neidermeyer's picture

Kissinger was lucky to survive WW2 , he was in my fathers unit (Railsplitters - 84th Infantry) ,, having an German in your unit meant never having to decide who's going to be on point. As luck would have it my father ran into him after the war at NYU , apparently his views have been consistant forever..

Tim_'s picture

Henry Kissinger is a jew.

dark pools of soros's picture

A lizard overlord zionist that is 5000 years old

SMG's picture

Wrong. Luciferian Oligarch.  Different Religion.  Make sure the pitchforks get pointed in the right direction.

TheHound73's picture

And recipient of the Nobel Peace Prize.

mrmister's picture

Kisinger is very anti israel though. Odd as it seems. He was the one that tried to keep Nixon from helping Israel during the 73 war. Kissinger is a Nazi type just like Soros. They believe in new world order where they kill all the little people. 

falak pema's picture

In the context of that discussion they defended US interests.

But...it was the beginning of death by a thousand cuts...and more and more DENIAL of the laws of Consequence and moral hazard; aka his antics in Cambodia to kill that country in collateral damage and then S. AMerica and Pinochet and Operation Condor and then...shuttle diplomacy and ME Templar state of Israel and Egypt (Sadat) phony handshake; then petrodollar hegemony. All steps, one by one, down that road to collective deperdition.

And, that is something no Hubristic Oligarch, who feels he can "stuff it down their throats" of all deviants in his own camp, (the French gold nostalgists), could imagine will be his own inexorable destiny; just like for the Comnenos of old. 

WHO ME? end up in the dustbin? You must be joking...

rubiconsolutions's picture

One of the biggest war criminals in American history. Read the book "The Trial of Henry Kissinger" by Christopher Hitchens. It doesn't surprise me that he wanted to raid gold holdings.

sgorem's picture

"Specifically, this is among the top secret paragraphs said on a cold night in March 1968"......kinda on the subject, but I was a freshman at  College on the night of March 1968, and the only thing gold I was seeking was Alcapulco Gold. Funny how anything Gold is always in great demand...........just sayin'.

diesheepledie's picture

Kissinger - One of the greats. It's a shame that we haven't seen statesmen of his caliber since. I just wish he was as young and vital as he was then. He would straighten things out.