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The Fed On Gold Price Manipulation
Lately various media outlets have been swamped with stories and allegations of precious metal manipulation ranging from the arcane, to the bizarre to the outright ridiculous. At issue is not that these claims of price fraud are unfounded - they very well may be completely true - but without a notarized facsimile of an actual trade ticket signed by Brian Sack, or his replacement Simon Potter, or any of the BIS traders confirming they are indeed selling gold on behalf of the Fed, BOE, ECB, SNB or BOJ simply to keep the price of the metal down, what such constant factless accusations (and no, sorry, a chart showing that the price of gold may go up or go down sharply indicates merely that and nothing about the underlying factors for such a move) do is to habituate the broader public to the real issues surrounding precious metal, and other asset class, manipulation. So instead of searching for circumstantial evidence which one can easily find everywhere, we decided to go straight to the source. To do that we go back to a post we wrote back in September of 2009, based on an internal previously confidential Fed document, which conveniently enough explains everything vis-a-vis gold manipulation and leaves nothing to speculation or misinterpretation. Zero Hedge presents the smoking gun that may provide responses to all the various open questions regarding the Fed's Modus Operandi in the gold arena which answer the core question - motive - courtesy of a declassified memorandum, written by none other than the then Fed Chairman, and addressed to the president of the United States.
From Zero Hedge, September 27, 2009.
Exclusive Smoking Gun: The Fed On Gold Manipulation
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 Central Bank 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.
* * *
As a post-script to all those complaining about gold, silver and other PM price suppression, here is one simple question: can one buy more gold at $1,600 or at $16,000? This is not a trick question.
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Why the hell not?! You'd be missing an opportunity to really feel alive!
Don't worry, I'm sure you (and a lot of other people) won't be.
Can anyone tell me what ISN'T manipulated. Our elections, our interest rates, our statistics, our housing prices, our ball games, our liberty, our privacy, our crops, our Constitution through dud decisions, our public opinion, our news,......everything is manipulated. Please tell me what's left that is functioning freely and without the hand of some sleazy or corrupt politician, banker or one per center touching it.
Peak civilization was some time ago. We are now approaching peak madness.
Statement of the year Peter!!!
Bottom line is we all know that if their is a dollar they can steal or pry from your cold dead fingers the elite will do so and not think twice about it.
All my life I was always told by my parents and even books I had read that gold was a store of wealth and protected you against inflation. The feds/government want you to only have their fiat paper so that they can control your life and destiny. They know allowing gold to be trully free from paper currencies removes their power over you so they are fighting tooth and nail to not allow gold to break out.
Who will win remains to be seen but it seems to me that $250K sitting in the bank making $100 month isn't even close to keeping up future buying power. I know somebody in this scenario and she has moved some of her fiat to gold recently.
The problem I see with physical gold being suppressed by the Fed is that by allowing paper gold they have an endless supply that competes at the same market price as physical which is limited in supply. Until a physical gold shortage appears or a significant paper gold issue arises such as loss of failth in paper gold by the investors I think we have a few more years of this crap before we see gold breakout and separate from paper.
After losing 10's of thousands in the markets in 2008 I now only invest in silver and gold. I am starting to see more and more senior citizens buying gold and silver as they try and protect their retirement money. As this demand increases and the physical supply gets stretched I think we will see an explosion similar to what happened in 2008 forward. This time it will continue up until it reaches parity with where it is trully valued. The feds will lose control of inflation and when they do it will be a rocket increase in gold and silver.
Stay long gold and silver ZH brothers and sisters!!! Buy as much as you can at these prices and keep buying.
"Please tell me what's left that is functioning freely and without the hand of some sleazy or corrupt politician, banker or one per center touching it."
~~~
My Jimmy is doin just fine as long as Barney Frank stays miles away...
Oh, we're no where near peak madness yet. It's gonna get flat out insane soon.
Please tell me what's left that is functioning freely...
The will of God. --- Calvin...
Best answer of the year.
Sorry to break this to you but there is no conclusive proof that God or Gods exist. Let's keep the fairy tales to ourselves.
The phrase 'Will of God' is used as a metaphor for 'irreducible complexity' in this case, son...you have been blinded by science.
Science!
~~~
http://www.youtube.com/watch?v=2IlHgbOWj4o
"blinded by science"
No words can describe the sheer idiocy required to even write that.
That's even worse than MDB.
May as well have said it was Libertarian scientism.
"Sorry to break this to you but there is no conclusive proof that God or Gods exist" - e-recep
"Sorry to break this to you but there is no conclusive proof that the Ocean exists. - a smug fish
Peak Gov't = Peak Madness
physics.
We learn the rules but we can't change them.
Start with evidence, understand consequence and ignore what nonsense-talkers tell you the rules ought to be. Just understand what the rules really are.
Suddenly the nonsense (but not disgust) of politicians, religion and debt-systems melts away.
can one buy more gold at $1,600 or at $16,000?
The answer to that depends whether we are talking about todaý's dollars or Weimar Dollars.
In other words it is gold's price relative to other assets that matters.
It is the cost of Gold expressed as a percentage of the average persons disposable income that matters. Since wages are stagnant and good jobs are rapidly disappearing, there will never be a better time to invest in Gold than NOW
Bernanke said "gold is not money." Get with the program.
Gold is absolutely not money. Haven't you seen the vids on youtube when people try to spend or even sell a gold coin on the street?
You've heard of toxic assets, right? Gold is incredibly toxic, that is why the government tried to collect it all in 1933.
For your safety, immediately wrap your gold in plastic and duct tape and send it to me for proper disposal.
Connect on ZChat or find AgAuMoney elsewhere for additional haz mat shipping instructions.
I have a 100 acre swamp that we can usefor landfill. I will personally arrange free loading and pickup sevice
It's MUCH safer to dispose of it in deep ocean waters. The Spanish regularly disposed of toxic shipments from the Americas this way - saying that the disposal was 'accidental' due to Hurricanes. They were afraid they might panic the populace if they revealed the true toxicity of gold and silver. Spain knew the dangers of having too much gold on hand. Look what happened to the Incas and Aztecs. They were lucky the Spanissh came along to dispose of thier gold for them before things got even worse. ROme realized this problem long ago and started removing gold and silver from its coinage to reduce exposure for the masses who handled coinage. Thank God paper money came along to eliminate the risks imposed by handlong gold and silver on a regular basis. (That's why life expectancies have risen over the years don't you know). In recent years the US was happy to let France run down its gold supplies - removing tons of the toxic material from Fort Knox. Swerves those ignorant frogs right - being stuck with tons of the toxic stuff.
FED=FAIL
I have a great idea. Let's keep the gold price suppressed and create $800 trillion in derivatives!
And it looks like our one Troll is around again. That person needs a real life, poor bastard.
From the book; Montagu Norman (Governor of the Bank of England) by John Hargrave, 1942
79 In spite of all the efforts of “Mr. Norman’s private diplomatic corps,” this particular European-bank-network scheme did not function in accordance with the dream-schedule. In fact, the network was more like a tangled skein, and, as the years went by, it became more and more tangled. Where the network broke, it was tied up with “granny knots” that gave the moment there was any strain, and there was strain at almost every moment. Nevertheless, however ramshackle this European web-of-finance was in its actual operations and co-operations, it was by means of it that High Finance, and Montagu Norman in particular, kept a hold on the kaleidoscopic state and States of Europe. They were held like flies buzzing and kicking in the same old web of debt, and could not get free. Not that any of the statesmen- including Benes and Masaryk -had even a glimmer of a notion that their attempts to make Central Europe politically modern and democratic were being frustrated by a debt system that dated back to the goldsmiths of the sixteenth century.
83 [1921] This brought forth the following extraordinary outburst in the Financial Times for September 26th of that year:-
“whoever may be the indiscreet Minister who revives the money trust bogey at a moment when the Government has most need to be polite to the banks, he should be put through an elementary course of instruction in facts as well as in manners. Does he, do his colleagues, realize that a half dozen men at the top of the Big Five Banks could upset the whole fabric of government finance by refraining from renewing Treasury bills?
The funny money Financiers don't want anybody to get " the wrong idea"... A free market in gold is not funny when you are the financiers in charge of the great ponzi.
Since they are in 100% control of Gold's price, they can time their entry and exit points perfectly. If I did not have a conscience, I would be a Banker too
if they were 100% in control of the price there'd be no cash-for-gold and no boating-accidentz.
OT but to the greater point:
Cheryl Brooks: "Mr. Taggart what, is it that makes you so unhappy?"
James Taggart: "Why should you care whether I am or not?"
CB: "Because...well, if you haven't the right to be happy and proud, who has?"
JT: "That's what I want to know - who has? He didn't invent iron ore and blast furnaces, did he?"
CB: "Who?"
JT: "Rearden. He didn't invent smelting and chemistry and air compression. He couldn't have invented his Metal but for thousands and thousands of other people. His Metal! Why does he think it's his? Why does he think it's his invention? Everybody uses the work of everybody else. Nobody ever invents anything."
(from Atlas Shrugged)
Sound familiar?
Steel is real.
52100 steel (for bearings) bitchez!
Rearden didn't build that -- somebody else did. Is that what you were getting at?
Yes kind of RR; that almost the exact words and sentiments were spoken in a book written 55 years ago describing how the (fictional) government, media and society was rampant with fraud, deceit, ineptitude, manipulation and rent seeking. Also the character of James Taggart is an inept chairman of the company he inherited and while his sister took all the risk and sacrificed he got all the credit and although he knew how dispicable he was he still wanted to tear down Rearden and his very own sister who saved the company in the preceding events. He believed he was entitled to everything without merit.
There are particular points made in the book as well about politicians/analystst/experts/scientists making vague/misleading statements without ever taking a position on something but rather pandering to get their issues/interets passed or to influence public opinion. Or how people are always passing the buck and never taking responsibility. Many parallels I just thought that one was most topical presently.
I'd like to take the time to read her works again but I'm too old and my time is more valuable now than it was when I was 20 when I read all her stuff the first time. All machinations aside, nobody builds a railroad (or a sewer cleaning service) in a total vacuum. Politics is no excuse for the opposition party nor the media to take a sentence out of context and beat one over the head with it. I'm no Obama lover but I can tell you that the brouhaha made of the sentence was actually a brou-ho-hum. If an election can't be won on the actual issues (not manufactured ones) then the truth will suffer.
I agree with you completely. Life immitates art sometimes though.
I like the sentiment regarding merit, but I had to put the book down. More steel, poured more quickly into faster trains.
Growth should be about learning. Sometimes, more steel and concrete is not always an improvement.
And if you learn to do something more efficiently? Lighter, stronger, faster, at lower real cost without fudging the denomination? Imagine eating a fresh apple in NYC picked in Washington state hours ago. Imagine the impact on agriculture, that's just one implication. That's what built the rails, what drives private enterprise to supercede the boundaries of human endeavor, and you utterly fail to acknowledge it. So I junk you and everyone who cites "growth" and then stops short. Your "growth" is cancerous, sure it gets bigger and more powerful, but it kills the host.
That's not growth through learning? Improvement is not learning? You need to widen the brackets on your conceptualizations.
Yes he missed the point; although these days "growth" has a different meaning when used by PhD economists who rather are describing debt and serfdom of the global populace.
Well what is the point of growth in the book? Yes they try to inovate, ... to make more. How much 'more' more do we need?
Yes, you can have your own interpretation of 'growth' that might be newer, lighter, more Brito or whatever, but that doesn't seem to be the perspective of the book.
So Germany and France bought all of the USA gold for 44 bucks an ounce? But the Fed was opposed to it. Good job fed. You kinda suck you know?
These are not the price controls you're looking for.
Good Treasury? Bad Treasury!
When I click the link to read the full memo, I am getting a page not found error. Did the Fed scrub it already?
Still available at time of post; though I wish ZH would use a different website than Scribd so I could download these documents as freely as they are presented.
edit: Saving each page as an image worked; so for those wanting to have a copy of this (and similar) Scribd docs you can get one in that roundabout method.
The "link" is to a ZeroHedge file system, so no, the Fed didnT scrub it, ... maybe the NSA did.
Try GATA's copy:
http://www.gata.org/files/FedArthurBurnsOnGold-6-03-1975.pdf
Use the download link at the bottom of the embeded PDF instead
___________________________________
Compare gold and silver prices
Outstanding, ZH, outstanding. I'll get you a case of beer for that one! --Col. Kilgore
This is great historical information, another piece of the puzzle.
Thanks, TD
CME margin adjustments not withstanding.
www.tradewithdave.com
Another perspective...
All the benefits and architectural innovations of the ECB stand in place now as a kind of safety net for the Eurozone for whenever the $IMFS collapses under its own weight. And the signs of this happening sometime soon are ominous and many.
It is easy and convenient for the financial press to blame the Eurozone problems on the euro itself. But I am here to show you that they are actually caused by the dollar system, counterintuitive as that may seem...
Unsustainable Deficits
The pressure on the $IMFS is building EVERYWHERE! From Greece to California, from the ECB to DC. And what exactly is all this pressure? It is unsustainable deficit spending... DEBT!
And what is the ONLY solution to this? What is the pressure release valve? It is different depending on whether you are a sovereign net creditor/saver or if you are a sovereign debtor. For the creditor/savers the ONLY solution is CUT OFF THE CREDIT and thereby FORCE AUSTERITY. If you are a debtor, the ONLY solution is DEVALUE THE CURRENCY, or more precisely, ALLOW the currency to hyper-depreciate. Yes, default is an option, but not for a sovereign that prints its own money, and not for any too-big-to-fail entities under the umbrella of such a sovereign...
The US dollar MUST devalue (one way or another) against the entire physical world. Think about this. The euro, on the other hand, might just hyper-depreciate against only one specific asset. An asset that happens to also be a MONETARY asset held by its member debtors.
The hyperinflation of the dollar is already a done deal. It has been since the 90's at least. Massive quantities of perceived dollars already exist stored in debt held globally and inside the US. Europe knows this. They have known this was inevitable since at least the mid-90's when they changed plans and went with higher gold reserves for the new ECB. They have always been willing to wait for it to happen naturally, unless the EU itself faces an existential threat from debt brought on by the $IMFS. And in this case, I believe their only option is a targeted hyper-depreciation of the euro.
By "targeted", I mean that the euro devaluation would be targeted to go only into gold. Gold can absorb a devaluation if you do it carefully, and in turn devalue the debt without causing inflationary havoc.
Of course this would cause the hyper-depreciation of the dollar as well. Only the dollar's collapse would be against all of creation, not just one asset."
True giants can never convert the percent of their savings into physical gold at today's prices as we shrimps can. If they even tried, the price would explode and they would only get a small fraction converted, and they would become the pariah of the global monetary system. So their options are a) play the paper gold game and take a little physical at a time, or b) large off market transactions at a much higher price:
What kind of money could seek to buy 200 metric tons of gold, a system-busting amount? Back at the turn of the century that would have been around $2B. Today it's about $10B. In 1974 it was around $1B. And in 1974 "oil's" revenue had just jumped to around $1B every three or four days, or about $8B/month. How much of that windfall from a finite resource do you think they wanted to preserve for future generations versus wasting it today on indoor skiing in the middle of the desert? And how much did they trust gold's 5,000 year record of preserving value over modern Western alternatives? Can you imagine that the person shopping with "savings" (excess currency) on that scale has (perhaps) a different perspective on things than you?
"You can buy paper gold to your heart's content. The bullion banks will take great care of you while you're in London! Drinks on the house! But if you go for the physical outside of official channels and blow up the price, the math is simple, you won't get your gold and, furthermore, you will be more than frowned upon by some of the most powerful people in the world. But if you've got, say, $200B you want to preserve for posterity in 1994, we, the BIS, can make it happen for you!
"You won't get the big revaluation windfall when the current system blows up, but your present purchasing power will be preserved. So let's see, $200B in 1994 would buy you 16,000 metric tons, twice the US stockpile—impossible! But we, the BIS, can give you 1,000 tonnes in physical which works out to a price of around $6,000/oz. Here's a spread sheet that'll show you that's actually a FANTASTIC deal in terms of future currency probabilities. By the way, you can't take that spreadsheet with you. Just look at it and decide—paper at $390/oz or physical at $6,000/oz?"
http://fofoa.blogspot.ca/2012/07/jeff-blondies-open-forum.html#comment-f...
Edit: As the above example illustrates, you can buy a lot more physical gold at $16,000 an oz than you can at $1,600....that is if you have the kind of cash it takes to buy in the quantities that "Giants" routinely deal in...
For the followers of FOFOA the answer to the question was so obvious as to be moot. Thanks for posting that.
The ending to that story is... "Here's your PHYSICAL then... Don't bother checking for tungsten inside... Trust us, we checked for you & assure you it's kosher"...
What? Are you just plain crazy or only trying to irritate? Are you up to speed on the topic at hand?
My only quibble with FOFOA is his Euro bullishness. I don't think the Euro can survive. Plus, much the so-called "gold reserves" that Germany and other European countries have are conveniently located at the New York FED! Oops! Like Jim Rickards says, in a US Dollar crisis, that gold will be taken to prop up the Dollar. European gold was sort of confiscated at the end of WWII in exchange for the US protecting Europe from the Soviet Union. Any move by Europe to recall that gold back home may not end well.
"can one buy more gold at $1,600 or at $16,000? This is not a trick question."
if it's not a trick question, the answer is "one can buy more gold at $1600 than at $16,000"
unless it's a trick question
Since the implied unit is 'per troy ounce' and the 'at' can be assumed to be an '@', (i.e. at the rate of) the answer must be no, since each will buy one troy ounce @ that price.
"you can't predict the day when, as I say, the great margin call in the sky comes down." - David Stockman
Move along. Nothing to see here.
'It is time for the Fed's unprecedented control over affairs, both global and domestic, to end.'
When TSHTF they will likely not be found in this country. But where will they go with an entire world looking to lynch them.
To the control room which launches drones armed with nerve gas.
Manipulation? by the Fed? ECB? BOJ? Noooo. It's price STABILITEEEE stupid.
GATA also brought several documents thanks to the Freedom of information act into the public's light, that have proven the manipulation in the gold market.
If interventions in the currency market, the treasury market, the oil market are common practice, even if the LIBOR is manipulated, the GOLD market as the natural seismograph for the overindebtedness and state of bancruptcy of the monetary system being constructed as ponzi-scheme of exponential growth because of interests, as the only market NOT being manipulated? What an insult to the intelligence.
Tyler. Yes you can OBVIOUSLY buy more gold at $16,000 (Olympic Gold that is). This is not a trick answer.
If tricks are going for $16,000 at the Olympics, then I think the corporate sponsorships have had a very serious impact on private enterprise in London.
Gov't Men - "We're here to help you." And, Presidents do make a difference and accomplish much. As long as these two thoughts are held paramount and sacred in the minds of Americans, we ain't goin' nowhere, baby....
In the late 60's, the problem of the "gold drain" appeared. The Fed had inflated the dollar so that the cost to mine gold was much more than $35/oz. But the US government was still redeeming dollars for gold (for foreign countries) at the old rate of $35/oz.In effect, the US government was selling gold at far below the cost of production.
If you had an opportunity to obtain an ounce of gold for $35 at a time when the cost to mine an ounce of gold was more than $70, wouldn't you jump at the chance? You could obtain an ounce for $35, sell it for $70, then use the $70 to get two more ounces of gold, sell those for $140, and so on. US citizens were not permitted to do this back then, but certain governments (the French in particular) had begun to do this in a big way.
So if Nixon hadn't acted, all of the US gold reserves would have been gone within couple of years. Nixon could have solved the problem by devaluing the dollar to $70 or even $100/oz but that would have meant admitting to all the inflation that had occurred between 1946 and 1971. So he just eliminated the gold peg entirely.
How the US dollar managed to remain the reserve currency after this is a mystery to me since the original basis for making the dollar the reserve currency had been the US government's promise to back it with gold. Force of habit, I guess. Plus, the US had the world's largest economy and all the other major enonomies were using fiat currencies, just like the dollar.
They managed to maintain RESERVE CURRENY designation by making a deal with the Arabs. They made an agreement with the Suadis to, only, price and sell oil in USD for protection against other agressors. It is the reason we go to war with any country that trades oil in anything but US Dollars. Saddam started trading oil in Euros and look what happened. Iran is now trading oil for gold and look what is happening. The Petro-Dollar is the key to keeping the US Dollar the reserve currency. Saddam atached Kuwait and who was there to protect Saudi Arabia. The Petro-Dollar is the key. When another standard is used to trade oil, other than the US Dollar. Game over. US Bonds will become toilet paper.
This "protection" was first and foremost: protection from US agression; protection against others was secondary.
The deal was-
either you sell your oil in petro-dollars, or we[USSofA] will take it from you, and then we will sell it in petro-dollars. The Saudis were given freedom of choice [sic].
It was a match made in heaven. We the ,Rockerfeller, oil interest had the technology and manufacturing infrastructure to get the oil out of the ground. The Sauds were/are just camel jockeys and, without the USA/Aramco, could never exploit their reserves without US technology. If they tried to go to the Soviets we would have gone to war. It is/was well understood by the USSR and the USA that the Middle East, at that time, fell exclusively under the British sphere of influence. We hid behind British Post-Colonial subjugation and later Israeli domination of the region. You are correct to say we gave them an ultimatum. That Ultimatum is still in force. The Petroleum-Dollar foundation is the only force which keeps the US dollar the reserve currency of the world. I think that foundation is now crumbling as the USA can no longer afford to enforce the Petro-Dollar Regime. We threaten other nations and use the Israelis as a proxy in the region trying to keep the Arabs in line but, the day has come when the Chinese, with backing from Russia, can easily take our place in the production vaccum created with USAs withdrawl from the region. Gold is now emerging as the only other alternative since we are no longer, economically speaking, to bully the Mid-East into doing our bidding. It is just a matter of time until oil rich nations refuse to trade in the US dollar. Good times!!!!
"If you are a debtor, the ONLY solution is DEVALUE THE CURRENCY, or more precisely, ALLOW the currency to hyper-depreciate"
It's coming in a big way! Bernanke's s weapon is the printing press if you read his papers.
It's a coordinated effort effort by Bernanke, the Fed and the ECB to devalue the currencies. Everyone overseas needs to dump US dollars before their holdings are worth substantially less.
Treasury Admits It Underestimated Debt Needs, Predicts Ceiling Breach In 2012; $600 Billion More Debt In Second Half
Faster and faster it piles up. Faster and faster Beranke and the Federal Reserve banksters print to devalue. Hyper-devalue.
Transfer out of the US dollar while you can!!
Believe it or not I have a Yuan/RMB denominated savings account w/ Bank of China on Madison Ave. in NYNY. I transfer money to a USD savings account from my credit Union to BOC and then transfer the mopney to my Yuan/RMB denominated account. I made about 5% in currency arbitrage last year and when the USD gets dumped I'll have some savings in a currency which will hold it's value!? Hopefully! I'll see how it works. I have been sticking money had been sinking into the market into this account for almost two years and it's even FDIC insured. Who can afford gold? When the Chinese start dumping their Treasury Bonds I hope the BMB maintains value?
Is the price of gold manipulated? Sure. So what?
In 1971 an ounce of gold bought about 15 barrels of oil.
The gold/silver ratio was 25 ($35 in US 90% silver coins = 25 troy ounces)
Today an ounce of gold buys about 18 barrels of oil (WTI).
Gold/silver ratio is 57.5.
I like gold just fine, but if you think I'd ever trade 57 ounces of silver for an ounce of gold, you're out of your freaking mind.
Fuck You's Central Bankers.
You's are terrorist with the blessing of the goverments.
Unfucking real.
Guess eveyone needs a paycheck,even goverments.
Ps .fuck you especially little weasel timmy g.
and there you have it! nothing new to people that have been buying since gold standard was abolished! ha,ha,ha, what a great retirement!
No huge surprise to see Greenspan copied in. Never too early to get knee deep in manipulation ...
I thought it was only $5 an ounce to get it out of the ground? Isn't that what somebody said? Cause I have a pocket full of 5's and a shovel and I can't find any. Anybody here finding it for $5 an ounce?
You can do it if you do it yourself. You just have to find a moderately rich vein by today's standards. Let's say .20 oz gold per ton.
So if you're willng to process 5 tons of gravel with that shovel, you can easily get an ounce for FREE!
But I'm still betting on the guy selling the shovels to be the eventual winner on the gold gambit.
In olden days when an individual used to buy up all the floating stock of a product purely for price gain, it was called hoarding and punishable by law. Now the same activity is called investment demand and awarded with bonuses.
The end effect on the actual consumer is the same, the product, be it house, commodity, or shares become un-affordable or too expensive for the actual user or consumer. http://www.marketoracle.co.uk/Article35345.html www.letstalkmoney2012.in
I care, oh so very little! WFC stole my book of business. So now I have lawyers bills instead of house bills.
Did I tell you guys I sold my house? Took some of my principal and bought some gold, welding equipment, and uh ah um some motorcycle stuff too. I can't resist the stupid things!
So anyway I file against Wells tomorrow. Hopefully this will be resolved in about nine months and I can give the whole finance "industry" the middle finger and get back to doing real shit for real people.
This experience is getting me to want to jump on Let Them Eat Rand's anti corporation movement. Fucking assholes.
Thank you Tyler for reposting this. I had not read it before.
It makes me realize what a fucking genius Ronald Reagan was when he ended the ban on holding gold and required the US gov to mint gold and silver Eagles. He was freeing us from fiat slavery.
Now we have a choice we din't have thanks to him.
More fuel for the coming MASS ARRESTS! Obama, Brenanke, and thousands of top traitors will be wearing chains and orange jumpsuits before long! http://tinyurl.com/cd5cyjo/
End the Fed!
The tangible always wins over the intangible; always.
Gold in the hands of the public is an enemy of the state
Adolf Hitler
And the moral of the story is just keep BTFDs.
The last thing they want are the general public swapping out of fiat currency into PMs.
How future history will reflect on a world populous that bought into using raffle tickets for currencies.
Greenspan in 1998, before Congress:
"central banks stand ready to LEASE GOLD in increasing quantities, should its price rise."
http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm
William S. White June stipulated in 2005 ( head of the Monetary and Economic Department of the Bank of International Settlements in Basel ):
"One of the five main purposes of central bank cooperation is the provision of international credits and joint efforts to influence asset prices – especially gold and foreign exchange – in circumstances where this might be thoughtful."
Australian Central Bank 2003:
"Foreign currency reserves and gold are held primarily to support intervention in the foreign exchange markets!"
Dutch central bankster Nout Wellink (CFR member and Bilderberger) always said to his colleagues:
“There are two thing you can lie about as central banker, gold and interest rates.”
Jim Rickards about Gold Manipulation:
“We call it market manipulation the central banks simply call it policy.”
Excellent information. However, Greenspan would be the first to admit the Fed cannot totally suppress the price of gold. The Fed can influence it or knock it down at critical technical levels and damage investor confidence in the short run, but in the long run the price must rise commensurate with demand (regardless of paper gold inflation). And this is exactly what has been observed over the past 10 years. What they do is knock down gold when appears to be moving in a parabolic direction (like last summer). Recall when the Swiss central bank announced their currency intervention program to devalue the Swiss Franc against the Euro last summer? At exactly this time there was global coordinated action against gold as the system was getting close to having a crisis of confidence. They have forestalled that crisis of confidence a year now, but to say they can do so indefinitely is folly. Therefore, manipulation only serves to allow the Chinese and others without gold to load up at artificially low prices.
So if we take the example from this document would could conclude current market price of gold is $4800 rather than the offical $1600
I'll tell everyone straight up why they want paper money and not gold.
It's because gold actually pays for something and paper is a promise to pay for something.
Paying with paper money only extinguishes the debt in personam but the debt "in rem" remains.
That means there is a lien by operation of law on the purchased property in favor of the promissor which in this case is the FED.
The easist way to see the truth of this is the NOTICE of Federal tax lien. It's a notice of a lien that has always existed. It is not created by non payment of tax.
When you purchase with another parties credit they are the true owner.
The US has a single payor monetary system.
Isn't this the cryptic point that keeps blobbing up in Ananonomous's posts ?
Pope Clement said:
It's hard to tell. His posts let loose a tsunami of insanitation big enough to swamp the USS Nimitz, so any cogent points he may make are engulfed in the surrounding deluge.
Gold is the enemy of central bankers. They fear it.
When the yellow stuff is at $16,000/oz it'll still be affordable because it'll be when hyperinflation hits and my monthly pay will be adjusted with lots of zeros and will mostly likely cover it ;)
No one else pissed off that this important document is behind scribd's dammed paywall?
Any suggestions for a free download source of the pdf?
This is crap, gold is nothing but a bubble,
BECAUSE: Hydraulic fracking of Tight Gold Shales is about to become a game changer! Not only will we swim in gold, in a few years we can buy golden smartphones, yes, even cars! All we have to do is to pump this water, sand, toxic chemicals into the earth and then microwave the drilling hole .. and .. drum roll.. voilá, we get liquid gold that we can easily pump to the surface!
Btw, I'm looking for investors, spread the word!
There is also 'Abiotic' gold (aka 'tungsten')...
I like the bit where Mr Burns says that $150 billion is an unthinably large liquidity injection and would cause problems controlling inflation.
The US adds this to it's national debt every few months. In recent years there have been trillions in liquidity. Billion was obvioulsy a big number back then, not so much now it seems.
The perturbative threat of inflation has been controlled, by chronic inflation.
Now if we can Dimon some of that central bank gold. That would be great, assuming it's not mostly Corzined and filled with tungsten rods.
I'll Bush to that Obamney plan.
the FED can do no wrong according to this BI Editorial :
The Myth That The Fed Buys Treasuries To Reduce Government Borrowing - Business Insider
Now we know that negative interest rates are for the good of the economy; the negative interest rate syndrome finds a rationale that is levitated like the risk asset FIRE economy!
I wonder what the CBs are collectively cooking up for us this week...
Here is language from another post I carfted on gold lasy week or so. It has an interesting link for those not familiar with the Treasury claim ton have a lot of gold in Fort Knox:
Did it ever occur to anyone: The advent of the SLV and GLD ETFs are just a ploy to concentrate all of the gold in one place for future confiscation?
FDR did it in 1934 and, I think, they will do it again.
According to Treasury:
Status Report of U.S. Treasury-Owned Gold Overview
The Status Report of U.S. Treasury-Owned Gold (Gold Report):
http://www.fms.treas.gov/_images/bullet.gif);">- Reflects gold bullion and gold coins owned by the federal government
- Summarizes the fine troy ounces and the book value of gold held by various facilities
- Identifies the value of gold coins and bullion on display at Federal Reserve banks; coins and bullion in reserve at the Federal Reserve Bank of New York; and gold held by U.S. Mint facilities
The book value of gold is currently $42.2222 per troy ounce. The information used to compile this reporting is received from the U.S. Mint, Federal Reserve banks, and FMS.
Current Report: June 29, 2012
Contacts:
If you have questions about this report, please call (202) 874-9866.
http://www.fms.treas.gov/gold/index.html
My Point: When they confiscate your gold they will give you a whopping $42/ounce for it!
That is the reason I don't buy gold and the reason I Spend my money to enjoy myself while I am here. Live for today since they have already stolen tomorrow!
LOL.
SWAT teams with metal detectors in your back yard. America has a lot of back yards.
I'm signing up for that job. Lots of union overtime pay.
Get real. You can't buy or sell weed either, it's against the Federal law. Notice how well that is working?
A 16 year old can buy reefer easier than he can get a six pack of legal beer.
They can make anything 'law' if they they want, but if it is universally ignored, then it is no law at all.
It's a numbers thing.
I would love for the tyler's to pen an article for discussion titled "How low will the lying bastards go" or similar
As in explore some of the underhand methodology that may be employed to undermine physical metals.. ie think like the fucktards do...for starters
1. Prominent news exposes on folks that get their metal stolen...as in only idjits hold metals..
2. Pay some prof of physics to proclaim that within 5 years metal and silver will be factory made on the CERN production line...
3. Also i think that a super large amount of very well done fake ASE's being floated around would be a huge weapon for the fucktards..
just an idea...ZH are world leader's exposing how low they have gone and are best qualified to predict and explore "How low will the lying bastards go"
Follow the yellow brick road...
New York Times:
"Startling Breakthrough in Alchemy. Gold bricks made from used condoms."
As a post-script to all those complaining about gold, silver and other PM price suppression, here is one simple question: can one buy more gold at $1,600 or at $16,000? This is not a trick question.
No, it's not a trick question but it is a STUPID question which goes well with the old saw which is still trotted out that 'you can't eat gold'. The point is that neither gold nor silver have been allowed by means of simple market price discovery to find their real price for a very, very, very long time. It is completely immaterial that gold or silver are 'cheap' at present. COMPLETELY IMMATERIAL. The illogicality of the above question rests on the supposition that at some point in the future, gold and silver will rise in price which will render any purchases made now 'cheap' and therefore thsoe who bleat about price manipulation and 'conspiracies' should shut up and keep buying. It doesn't matter because PMs are cheap and the prices will, at some point unspecified in the future, sky-rocket. It is a completely fallacious argument and not worthy of ZH. It is the price discovery mechanism that has been tampered with for political reasons for decades that is important. Not that gold and silver are cheap.
Here is the ONLY QUESTION that I care about. HOW MUCH LONGER can they control the price of PMs?
...2 years? 5 years? 10 years? 25 years? as long as they want?
We have no idea what reserves are held by the banks and governments. For all we know they may have private contractors who do nothing buy mine gold and silver all day long and bring it to secrete refineries who then stock pile it in secret locations. If Gold/Silver is as valuable as everyone likes to believe (and promote) than you can bet your ass that this is exactly what the they are doing.