-- Posted Sunday, 22 May 2011 | | Disqus
Dear Friend of GATA and Gold:
U.S. Rep. Ron Paul, the leading critic of the Federal Reserve and leading advocate of returning the United States to a gold standard, has sparked more controversy for his comment to the New York Sun last week that the United States should sell its gold reserves:
http://www.nysun.com/national/selling-gold-at-fort-knox-emerges-as-next-...
Some people wonder whether the real objective of Paul's comment was to ease the way for an audit of those reserves, long another of his policy objectives. After all, the gold couldn't be sold until there was some official determination of how much there really is and how much of it has been encumbered by the gold swap arrangements GATA's lawsuit against the Fed prompted the Fed to acknowledge in 2009, if only inadvertently:
http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf
Market analyst Gary North writes that while few people in the gold community are coming to Paul's defense, he endorses Paul's call for selling the gold reserves, provided the gold is minted into American eagle coins and sold to the public from which some of it was taken in 1933:
http://www.garynorth.com/public/8028.cfm
But Paul really isn't alone in urging liquidation of the U.S. gold reserve. GATA and the delegates to its Gold Rush 21 conference in Dawson City, Yukon Territory, Canada, in August 2005 issued a statement calling for the open dishoarding of all central bank gold reserves except for metal necessary for coinage:
http://www.gata.org/node/4350
That statement, the Dawson Declaration, presumed that the highest objective in the world's economic liberation is to get governments out of the business of rigging markets and particularly the gold market, for without gold reserves to bomb the markets with at strategic moments, such rigging would become difficult to impossible.
As the Reserve Bank of Australia acknowledged in its annual report in 2003, "Foreign currency reserve assets and gold are held primarily to support intervention in the foreign exchange market":
http://www.rba.gov.au/publications/annual-reports/rba/2003/pdf/2003-repo...
That acknowledgement can be found on Page 31 of the RBA's annual report, Page 33 of the PDF version at the Internet link above.
But this issue may be largely academic anyway. By the time central banks talk openly of selling their gold, they probably have already lost most of it through surreptitious sales or leasing.
That is certainly the evidence of the supposed Western European central bank gold sales of the last decade. Despite constant announcements of such sales, including sales by the International Monetary Fund, the gold price rose steadily and even dramatically. How could the gold price rise if central banks kept bombing the gold market? Perhaps only because those sales were not delivering new metal to the market at all but rather just constituting the cash settlement of gold leases whose gold could not be recovered without causing a catastrophic short squeeze and exploding the gold price.
The evidence of the last decade is that central bank gold sales are nothing for gold investors to fear -- that they signify the weakness of central banks, not strength. And now that central banks outside the U.S.-European market-rigging alliance are openly adding to their gold reserves, diversifying out of the U.S. dollar, the world reserve currency, gold investors and free-market advocates might respond to hints of U.S. gold sales with Clint Eastwood's famous dare: Go ahead. Make our day.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Join GATA here: World Resource Investment Conference
Sunday-Monday, June 5-6, 2011
Vancouver Convention Centre East
Vancouver, British Columbia, Canada
http://cambridgehouse.com/conference-details/world-resource-investment-c...
Gold Rush 2011
GATA's London Conference
Thursday-Saturday, August 4-6, 2011
Savoy Hotel, London, England
http://www.gatagoldrush.com
Support GATA by purchasing gold and silver commemorative coins:
https://www.amsterdamgold.eu/gata/index.asp?BiD=12
Or by purchasing a colorful GATA T-shirt:
http://gata.org/tshirts
Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:
http://gata.org/node/wallstreetjournal
Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon:
http://www.goldrush21.com/
Help keep GATA going
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-- Posted Sunday, 22 May 2011 | Digg This Article
| Source: GoldSeek.com
