-- Posted Wednesday, 1 June 2011 | | Disqus
Dear Friend of GATA and Gold (and Silver):
Back in June 2004 the deputy chairman of the Bank of Russia, Oleg V. Mozhaiskov, addressed the London Bullion Market Association conference at the Kempinsky Hotel in Moscow and let the bullion bankers know that he and the Russian government were on to their tricks, thanks to "the group of economists who came together in the society known as the Gold Anti-Trust Action Committee":
http://www.gata.org/node/4235
Mozhaiskov's speech is still timely for perceiving the manipulation of the gold market that had been achieved by derivatives, whereby paper overwhelmed real metal. In regard to the currency and financial markets Mozhaiskov observed: "The volatility of these indicators directly influences investors' interest in gold. Since this interest is realised not through operations with physical metal but through deals with gold derivatives on stock-exchange and non-stock-exchange markets (where gold is mentioned only as a base asset), the volume of these deals can exceed the volume of trade in physical metal dozens of times. Last year turnover with gold derivatives was about 4,000 million ounces (or 129,000 tonnes), but physical metal actually sold totalled 120 million ounces or some 3,860 tonnes. As it is said: Feel the difference!"
Glad as GATA was to have gotten the attention of Mozhaiskov and the Bank of Russia, only a couple of GATA's 10 or so officers and consultants at that time might have plausibly claimed the profession or even the avocation of economist. The remainder often took what pride they could in their ability to dress themselves in the morning. Indeed, they were less interested in theorizing or philosophizing about what should be in economics than in simply discovering what is -- discovering particularly what governments and their agents were doing in the gold market, and why.
Of course any survey of GATA's officers and consultants then and today probably would find a fairly strong inclination toward what is known as the Austrian School of economics, insofar as that school seems to insist on a closer reading reality than is accepted by the dominant school of economics, the Keynesian School, whose dreamy imaginings quickly lead to unlimited government power and concealment. Or maybe GATA's preference is largely a matter of ordinary dissatisfaction with the current regime and a rooting interest for fellow outs against the ins.
This rooting interest seems amply justified by a brilliant essay published in the April 18 edition of National Review and written by the magazine's deputy managing editor, Kevin D. Williamson: "Judge, Jury, and Economist: The Keynesians vs. the Entrepreneurs." Williamson's key point may be this:
"Between the theory and the policy lies the shadow: History suggests strongly that Keynesian management of aggregate demand is not translated effectively into public policy -- if it worked, we would never have a recession -- and its loudest contemporary champions, men such as the aforementioned Mr. [Robert] Reich" -- the former U.S. labor secretary -- "have a transparently different set of interests than can be justified by mere economics, chief among them moral concerns about income inequality."
That is, one can't blame the Austrians for the financial disaster the world is in. That disaster is almost entirely the product of Western central bankers, politicians, and hangers-on who consider or considered themselves Keynesians.
Of course even Lord Keynes himself likely would dispute his supposed modern disciples in important respects, and he is no longer around to defend himself. But as Williamson suggests, this is an imperfect world mainly because people are imperfect and because the extraordinary power Keynesianism claims for government can be abused and, indeed, has been abused enormously and inevitably will be abused to infinity.
That is, if an economic theory can work in practice only if it is implemented by incorruptible people, it can't work in this world. And if it can be pursued only through secret or largely surreptitious means -- as GATA considers its long research to have demonstrated (http://www.gata.org/taxonomy/term/21) -- it's nothing a free people should want any part of. If they accept it in its entirety, they become slaves.
Apart from being profound, Williamson's essay is a great read and lots of fun and you can find it at the National Review Internet site here:
http://www.nationalreview.com/articles/267555/judge-jury-and-economist-k...
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
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Sunday-Monday, June 5-6, 2011
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-- Posted Wednesday, 1 June 2011 | Digg This Article
| Source: GoldSeek.com
