“Surreptitious market manipulation by government is leading the world to disaster.” – GATA, the Gold Anti-Trust Action Committee in a $264K full-page color ad in the Wall Street Journal, January 31, 2008
by Jake, the Champion of the Constitution
Originally published Thursday, January 29, 2009 at http://www.nolanchart.com/article5832.html
“Gold is Money, and Nothing Else.” – JP Morgan before Congress, 1914. Notice he forgot to mention silver. GO GATA!
In Part 1, I meandered a bit but one point I belabored was that the United States under Obama will refer to China as a “currency manipulator.” In this article, please also me to meander again, but if you care to research any of the links I will introduce, you might agree with me that first Obama and “Turbo Tax” Tim have to defend my claim that America is itself a “currency manipulator.”
The Gold Anti-Trust Action Committee was organized in January 1999 to advocate and undertake litigation against illegal collusion to control the price and supply of gold and related financial securities. GATA opposes collusion against a free market in gold, other precious metals, currencies, and related securities. Their main theories center around demonstrating that governments, central banks, bullion banks, and even some major miners have colluded to suppress the price of gold. By doing so, they make their own fiat currencies appear stronger. ( photo) GATA’s evidence is summarized here and an 25-minute introductory movie is here Part (1) (2) (3)
My first two pieces of evidence are taken from a very upbeat letter celebrating the 10th anniversary of GATA written by Bill Murphy of lemetropolecafe.com. You can read the full version here. First is a description of Obama’s “new” Clinton-era, anti-gold central planners. Second is a 1961 Federal Reserve document found by researcher Elaine Supkis that clearly outlines secretive currency manipulation as standard operating procedure for America’s quasi-private central bank.
“Robert Rubin coined the phrase “US Strong Dollar Policy,” and flaunted the phrase. Rigging the price of gold was that policy’s lynchpin… Robert Rubin hatched the gold price suppression scheme while running Goldman Sachs’ operations in London. This was many years ago, when interest rates were very high (say from 6 to 12% in the US). Rubin had Goldman Sachs borrowed gold from the central banks at about a 1% interest rate. Then he sold the gold into the physical market, using the proceeds to fund their basic operations. This was like FREE money, as long as the price of gold did not rise to any sustained degree for any length of time.
“He continued his innovative money ploy as CEO of Goldman Sachs in New York and then put his Strong Dollar Policy ploy on steroids as Treasury Secretary under President Clinton.” (source Murphy letter)
[Rubin was forced to resign by Citigroup earlier this month, and was an Obama advisor during his election campaign, and is the current Chairman of the Council on Foreign Relations (CFR) - Jake]
“Lawrence Summers followed Rubin as Clinton’s Treasury Secretary, and who could be more qualified to continue Rubin’s gold price suppression scheme than him? After all, while at Harvard he co-authored a paper,”Gibson’s Paradox and The Gold Standard.” The bottom line of Summers’ analysis is that “gold prices in a free market should move inversely to real interest rates.” Control gold and it will help to control interest rates.” (source Murphy letter)
[Summers is now Obama's White House National Economic Council Director, or central planner. He also was Chief Economist at the World Bank for 3 years. Summers finished off the Glass-Steagal Act that was put in place to prevent another Great Depression, and was a big supporter of Greenspan's decision to deregulate derivatives. - Jake]
“Which brings us to Timothy Geithner, who is President-elect Obama’s nominee to be U. S. Treasury Secretary. Geithner was named president and chief executive officer of the Federal Reserve Bank of New York on November 17, 2003. In that capacity, he serves as the Vice Chairman and a permanent member of the Federal Open Market Committee, the group responsible for formulating the nation’s monetary policy. ( Photo) (2)
“Mr. Geithner joined the Department of Treasury in 1988 and worked in three administrations for five Secretaries of the Treasury in a variety of positions. He served as Under Secretary of the Treasury for International Affairs from 1999 to 2001 under Secretaries Robert Rubin and Lawrence Summers.
“Geithner is also happens to be a member of the Bank for International Settlements and since 2005 has been Chairman of the Committee on Payment and Settlement Systems. You might want to see what the CPSS undertakes “at their own discretion” here. (source Murphy letter)
“Gary Gensler was nominated that day to be the new chairman of the CFTC. Gensler was Undersecretary of the Treasury (1999-2001) and Assistant Secretary of the Treasury (1997-1999).
“Gensler spent 18 years at Goldman Sachs, one of the ringleaders of The Gold Cartel, making partner when he was 30, becoming head of the company’s fixed income and currency operations in Tokyo by the mid-90′s.
“As the Treasury Department’s undersecretary for domestic finance in the last two years of the Clinton administration, Gensler found himself in the position of overseeing policies in the areas of U.S. financial markets, debt management, financial services, and community development. Gensler advocated the passage of the Commodity Futures Modernization Act of 2000, which exempted credit default swaps and other derivatives from regulation.
“… It is also important to keep in mind that chairman of the CFTC is one of the four members of the President’s Working Group on Financial Markets. Now why does a bureaucrat need to participate with the President and US Treasury Secretary on the markets? I thought the CFTC was supposed to regulate them, not be a part of policy.” (source Murphy letter)
Now, why is GATA so optimistic? Well, their work has indicated that the gold suppression scheme will fail in this Obama term, and Murphy has given a full counter-proposal to the CFTC chairman with the message that Obama can find out whatever he wants to know by simply asking his current advisors.
Next, with perfect timing, FED researcher Elaine Supkis has uncovered an exciting document from the archives. The April 1961 document, which is marked “Confidential,” is from the papers of William McChesney Martin, Jr. The title of this confidential report is: Confidential – - (F.R.) U.S. Foreign Exchange Operations: Needs and Methods
GATA consultant James Turk (of goldmoney.com) has brilliantly dissected this document in an essay titled, “The Federal Reserve’s Blueprint for Market Intervention“ James Turk notes:
“In short, it lays out what the Treasury and Federal Reserve needed to do in order to begin intervening in the foreign exchange markets, but there is even more. This document plainly shows what happens when government operates behind closed doors. It also makes clear the motivations of the operators of dollar policy long described by the Gold Anti-Trust Action Committee and its supporters — namely, that the government would pursue intervention rather than a policy of free markets unfettered by government activity. The run to redeem dollars for gold had put the government at a crossroads, forcing it to make a decision about the future course of dollar policy. This paper describes what the government would need to do by choosing the interventionist alternative.
“This document provides primary, original source supporting evidence that GATA has been right all along.
“I have long hoped that a “confidential” document like this one would eventually emerge. There are no doubt countless more like it, as evidenced by the Federal Reserve’s and the Treasury’s refusal to provide all the documents requested by GATA under its recent Freedom of Information Act request. Maybe those documents will eventually see the light of day too.”
James makes a key points regarding one of the assertions of this report
“The basic purpose of such operations would be to maintain confidence in the dollar.”
“This statement confirms one of the basic planks of much of the work by me and others that has been published by GATA over the years. The efforts to cap the gold price have one aim. It is to make the dollar look worthy of being the world’s reserve currency when in fact it is not.” (source Murphy letter)
One response to Turk from Adrian Douglas:
“It got me thinking as to whether the heist they have pulled is bigger than we think. The BIS as we know, and as mentioned in this memo, is the organization that allows for cooperation behind the scenes of the Central banks. We know they went private to prevent any need for public disclosure seeding the opportunity for Reg Howe’s lawsuit. We have plenty of evidence that Central Bank gold holdings have been depleted. We keep saying that the gold is “gone”. But what do we mean by “the gold is gone”?
“Gold is not like crude oil, expensive wine, even silver it does not get consumed. It has not “gone”; it has changed ownership. The Central Banks leased out gold to the bullion banks. Now who did the the bullion banks sell the gold to? We know that the bullion banks can’t get the gold back. If the central banks ask for the gold back the bullion banks can declare bankruptcy or settle in cash. How convenient! The Central bank gold has gone into someone else’s hands that are unknown and the loss will eventually be written off.
“We know that Central Banks are owned or controlled by some of the richest families and/or entities in the world. Is it possible that these “bankers” can benefit from a fiat ponzi scheme while it can be maintained AND still end up with the gold in which case they can benefit from a return to a gold standard and when the gold standard eventually gets abused and abandoned in the future they will play the whole fiat game over again? It would certainly require cooperation between central banks to pull off such a heist.
“It would be great to have the whole world sitting in a room and ask those who own more than 10 million ozs of gold to raise their hands!
“The crime may be more than manipulating the price of gold to “defend the US dollar” and concealing the evidence from the public. The Cartel may well have aided and abetted embezzlement of the citizens’ gold of the Western world. And who ever has it, they bought it perfectly legally from the bullion banks with fiat currency.
“This seems to make sense because Central bankers and the “elitists” (Rockefellers, Rothchilds, Morgans, Mellons, Carnegies, Vanderbilts etc etc) are not stupid. They must know gold is real money. They can study monetary history too. The fiat money game in this context is a decoy for the theft of sovereign gold.
“It is not without precedent, the great inflationist, John Law, was arrested escaping with a coach loaded with gold and silver!” (source Murphy letter)
Then from GATA Board member Catherine Austin Fitts:
“My hypothesis since 2001 is that the NWO is shifting assets out of sovereign governments and shifting liabilities back in. The goal is to reengineer global governance into the hands of private banks and corporations in a manner that dramatically centralizes control. This is why the creation of a genetically controlled seed and food supply, etc.
“If you use fiat currency to acquire ownership and control of all the real assets on the planet, then you need a gold standard to make sure you keep them. So, it would not surprise me to see G8 and GATA start to move into alignment, strange as it may sound.” (source Murphy letter)
“To achieve such centralization requires the centralization of the gold and silver stores. Whoever has the gold has the most powerful financial asset. So if you want a new centralized currency, you need a monopoly on gold and silver. I think part of the end game is to shift back to something involving some kind of gold standard.“
What? This central banking cabal, this “New World Order” elite, or as GATA refers to them, the Gold Cartel, might have actually studied monetary history too? Huh? And actually they consist of two segments – one of the Keynesian/Monetarist brainwashed masses who have really have little clue, and an inner circle that has studied Austrian economics and is just doing whatever they believe necessary to defeat it for their own comparative advantage? Cough! Cough! Reminds me, Cough! Of Alan Greenspan! Cough, cough! He wrote “Gold and Economic Freedom“! Cough, cough!
Well, I am so sure that the above could never occur, so I have merrily continued my midnight studies of ancient economic texts in the hopes they will shed some further light on the future. One such book is from 1894, called COIN’s Financial School by W. Hope Harvey. [Recommend the B&W PDF since its well illustrated.]
In its heyday, COIN’s sold over 1 million copies, and was a key piece of propaganda for the silver populist movement. It relates the story and dire effects of the demonetization of silver, which was causing Panics – the 1800s equivalent of recession and bank runs combined. However, for the entire book (save parts of the conclusion) it aims to be solely a work of flawless scholarly logic, and actually has me rethinking some aspects of bimetallism and the “Austrian standard” I introduced here.
Boy, was I surprised to see this big 1894 Rothschild spider thingey looking back at me!! Darn it, didn’t we get RID OF the British in the 1700s? The caption for this claims that the Rothschilds controlled over half of the global gold stock back then. (photo from COIN’s Financial School, not in copyright)
I’ll probably refer to COIN’s in my later writings, but let me relate one pretty amazing fact, which is the relative amounts of gold in the world. Per the World Gold Council (free subsciption required, see page 15/16), their widely accepted estimate of 5.3 billion troy ounces of aboveground gold stock may sound like a lot – current dollar value of $4.7 Trillion @ $890/oz, but its pretty much what the United States government will spend next year.
However, what is shocking is that ALL of the gold ever mined by mankind (very little has been been consumed) would fit inside of a cube that is only 20.5 meters to a side!! (Specific gravity of 19.3 grams per cubic centimeter, 31.1 grams per troy ounce)
What happens when we look at silver? Well, there is no “World Silver Council” to look at what used to be known wide and far as “The People’s Money” and is a very special precious metal in its own right as I wrote about here. The best authority I have found on silver is not some elitist “Council” it’s just a smart dude named Ted Butler. In a recent column, he reiterates his estimates of 40 billion troy ounces mined BUT ONLY about 1 billion ounces exists as unconsumed aboveground silver stock, and even grants his estimate is probably a bit high. At about $11.90/oz., this amounts to a dollar value of just $11.9 Billion! This is just a small fraction (0.25%!!!) of the dollar value of the world’s gold stock!
All of the world’s aboveground silver stock would fit inside of a cube that is only 14.5 meters to a side! (Specific gravity of 10.49 grams per cubic centimeter)
No wonder investors like Michael Maloney are heralding the possibility of the “Greatest Wealth Transfer Ever!”
It is also interesting to take a look at COIN’s view of what causes Panics. He relates that although the value of silver and gold are insignificant when compared to the “Property of the World” and the “Debts of the World,” the world does more or less OK when the Debts are half the size of the Property. However, he cautions that from his studies if the Debts ever reach two-thirds the value of the Property, wars and revolutions will ravage the planet. (photo from COIN’s Financial School, not in copyright)
Well, as a person living 115 years after COIN in the technologically advanced year of 2009, I can surely scoff at COIN’s naivety, right? It’s not as if the size of the world’s Debt – its debt-based fiat currencies and $684 Trillion of OTC “dark” derivatives does not now DWARF the value of its Property, right? It’s not as if we are in the grips a global Depression, right?
I mean, its not AS IF the United States has launched a war for control of the oil supply like Iraq, right? Or attempted to place a total global blockade on another major oil supplier like Iran, right?
Or has occupied and attacked countries like Afghanistan and Pakistan where the oil and natural gas pipelines from the Western-friendly former Soviet republic dictatorships could flow to our waiting oil tankers in the Indian Ocean protected by the US Navy right? Or via the Georgia-Turkey pipeline, right?
It’s not AS IF the world is so scared of Somalian “pirates” that Blackwater is sending its mercenaries to protect merchantman vessels, right? There are no other wars and revolutions in Africa besides Somalia, Sudan, Congo, the Ivory Coast and a few others, right?
It’s not AS IF a whole race of people have been barricaded inside a wall and are being shot at like some kind of a sick WWII Polish ghetto, right?
It’s not AS IF the whole British banking and equity markets weren’t just 3 hours from complete collapse in October 2008, right?
It’s not AS IF Edwin Vieira did not explain in 100 minutes of excruciating detail why our current crappy paper money is unconstitutional per Article 1, Section 10, Clause 1 of the Constitution of the United States and what needs to be done to bring about change!!
And it’s not AS IF our government isn’t going to try to paper over the ravaging of our economy by passing a $850 Billion spending bill that will certainly not work while the banking system is helplessly insolvent… right?
Join the rEVOLution! Restore the Republic! My advice if you decide to buy precious metals is to buy some ounces of gold and buy a lot more ounces of silver! No ETF or “paper metal” junk!
Jake, the Champion of the Constitution
The Year of the Ox Arrives in China, Land of “Currency Manipulation” (PART 1/2)
Published: January 27, 2009
A few interesting contrasts between life in China and life in the United States as I ramble from the Chinese Yuan to Fireworks to Freedom of the Press to Global Warming
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
As always, unlike the NFL, the author grants full permission to allow any accounts of, rebroadcasts, retransmissions, repostings in part or full of this article to your blog or anywhere else in order to promote the Restoration of our Republic.
Veritas numquam perit. Veritas odit moras. Veritas vincit. Truth never perishes. Truth hates delay. Truth conquers.
Tu ne cede malis sed contra audentior ito. Do not give in to evil but proceed ever more boldly against it.
As a disclaimer of sorts, I am a supporter of owning physical gold, physical silver, www.gata.org and www.goldmoney.com. Any investment or financial views expressed in the article are mine and mine alone, so make your own financial decisions by educating yourself. All I am doing is sharing my views to help you decide, even if its just to become aware that you do have a decision to make. You can even say its a charitable but naive act, given the historical tendency of the US government to oppress and steal. Any questions, feel free to email me. [Reach the Author Here!]
Other Recommended Articles by the Author
Rioting at the Gates of Thermopylae: The Ramparts of the FED & Central Banks Shudder
Published: December 14, 2008
M1 hits 37% growth!! “Most of the significant American banks, the larger banks, are bankrupt, totally bankrupt.” – Jim Rogers, 12/11/2008
Part I: “The End for the Dollar and all Fiat Currencies (1/5)“ Part II: “The Next Bubble to Pop! (2/4)“ Part III: “On Gold and Market Manipulation (3/5)“ Part IV: “The Significance of Gold Backwardation Explained (4/5)“ Part V: “More on Gold and Silver Backwardation and Manipulation (5/5)“ The “We Didn’t Learn Much from the Great Depression” Miniseries
- The “Great Slump” of 2008 (PART 1/2)
- Bernanke’s Great Lie – The “Gold Standard” and the Great Depression (PART 2/2)
The Money Matrix Series
- America, Were Michael Phelps’ Eight Olympic Gold Medals Worth Winning?
- The Money Matrix – Prelude (PART 1/15)
- The Money Matrix – What is a Dollar Bill Worth? (PART 2/15)
- The Money Matrix – What Makes Money Money? (PART 3/15)
- The Money Matrix – If You Don’t Know Who the Sucker Is, Then It’s You! (PART 4/15)
- The Money Matrix Explores Seigniorage – Do not give in to evil, but proceed ever more boldly against it. (PART 5/15)
- The Money Matrix – How the FED Works (PART 6/15) (A must-read, this article’s content is important as I haven’t seen its information compactly put together in one place)
- The Money Matrix – What the Heck Are Derivatives? (PART 10/15)
- Save Ron Paul’s Voice – A Money Matrix Addendum
- A Money Matrix Addendum: Citigroup and GATA Call for an End to the Suppression of the Gold Market
- MY PROPHECY – The Federal Reserve Will End! A Money Matrix Addendum
Gold and Silver Investigation Source List
The People’s Money – a Facebook group that I assist with news postings.
A Quick History of Gold
GO GATA! The premise of the Gold Anti-Trust Action Committee that the world gold market is artificially suppressed by central banks in order to make their currencies look stronger. 25 minute intro Part (1) (2) (3)
www.GoldMoney.com – GoldMoney is an international gold and silver warehouse with insured vaults in London and Zurich. Ability to hold and pay interest on six major fiat currencies, issue payments in goldgrams, silver ounces, etc. Think of them as an alternative way to diversify where and how your physical metal is stored, but I urge you to be wary and thoroughly investigate this and ANY method where someone else holds your metal for you before investing. The best is always physical possession (or pay for storage at a Brinks-type depository) although you should always be creative with your storage locations
The World Gold Council – A wealth of information on central bank holding, gold derivatives, supply and demand statistics and more. Free login required.
Rothbard, Murray N. “What has the Government Done with Our Money?” (1990) A 50-page document that describes Austrian economics. Rothbard has written a host of other great sources as well, like the 1994 work “The Case Against the Fed.”
www.jsmineset.com Expert Jim Sinclair shares his thoughts on gold investing, financial markets, and trading. For free!
www.SilverSeek.com I particularly enjoy reading the columns of Theodore Butler and Jason Hommel
www.professorfekete.com A seriously pro-gold scholar.
www.lemetropolecafe.com Offers timely gold market advice and a daily “Midas” column. Try the 2-week free trial.
Paul, Ron. “Pillars of Prosperity.” (2008) A 400+ page compilation of Dr. Paul’s writings. After reading these, one realizes that Dr. Paul did very little recent work in putting together his best-selling “The Revolution” as most of this book was written 20+ years ago.
Millar, Peter. “The Relevance and Importance of Gold in the World Monetary System.” (2006). Self-explanatory title. Understanding Graph 2 on page 3 is key.
Greenspan, Alan. “Gold and Economic Freedom.” (1966) Interesting work from the Maestro prior to his conversion to inflationary Keynesian theory.