Weekly Wanderings 29 September 2009
As usual in these weekly wanderings we present you with topical and interesting items we’ve come across during the week…
This week, over at King World News , Eric hosts a fantastic audio interview with Bill Murphy and Chris Powell, of the Gold Anti-Trust Action committee (GATA). We consider this to be an important and revealing piece, and make no apology for making the contents the centerpiece of our column for this week.
- The Federal Reserve has admitted in correspondence with GATA that is has gold swap arrangements in place with other central banks. This admission is of major importance because it openly confirms that the Fed has the power to actively intervene in the gold market, if this be deemed necessary.
- GATA has been trying to gain information relating to the operation of the gold market for more than 10 years – to be fobbed off at every turn, despite the so-called Freedom of Information act. This admission marks a major breakthrough.
- The Fed intervenes surreptitiously in many markets, in particular it suppresses the price of gold to make the US dollar appear stronger.
- The “audit the Fed” proposal before Congress is gaining momentum. The Fed, whose operations are cloaked in secrecy, itself seems to have the view that if its operations became public knowledge, then the world would collapse. Alan Blinder, a former Fed official stated on US public TV, that “the last duty of a central banker is to tell the public the truth”.
- If the claims made by GATA that half or more of the US gold reserves are gone are shown to be correct – and they have been very carefully researched – then this may spell serious trouble for the dollar.
- Gold price suppression, if it indeed has been, and is, taking place, is the foundation of the manipulation of all markets, leading to reckless over-consumption in the US itself, and impoverishment of the rest of the world, particularly the developing world, due to artificial dollar strength.
- With regard to the gold price at present, the central banks are taking on China. Jim Sinclair of jsmineset.com has pointed out that when central banks go up against countries, they are faced with opponents that are as powerful as they themselves…in terms of the depth of their pockets.
- GATA is, and has been, in discussions with senior economic advisors in both Russia and China – with Chinese officials over the last 18 months. Chris Powell remarked that he had been present last year at a dinner of the Committee for Monetary Research and Education in NY, at which Professor Robert Mundell stated that he had advised the Chinese government to buy any and all gold that might be sold by the IMF. The Chinese are concerned not to initiate a drastic plunge in the value of the dollar, but they have to hedge against their massive dollar position, and one way to do this is to continue buying gold.
- The battle is now joined between the financiers – the central bankers – and the producers – the productive sector of the economy. It is not an exaggeration to say that the proposal to audit the Fed, if it is allowed to be passed, could significantly influence the destiny of everyone in the US and the rest of the world, by causing a seismic change in the relative values of worldwide capital and labour markets.