-- Posted Sunday, 30 December 2012 | | Disqus
Dear Friend of GATA and Gold:
Two U.S. State Department diplomatic cables from 1974 obtained by GATA researcher R.M. show Western central bank and treasury officials engaged in secret discussions -- that is, conspiring -- to control the price of gold and prevent any increase in its recognition as money.
The first cable was sent in May 1974 by then-Treasury Undersecretary Paul Volcker, who went on to become chairman of the Federal Reserve Board, from the U.S. embassy in Paris to the U.S. secretary of state in Washington for forwarding to another treasury undersecretary. The cable conveys a report by Netherlands Treasurer-General C.J. Oort about a meeting of European Community finance ministers in the Dutch city of Zeist on April 22 and 23.
Two proposals for controlling the gold price were discussed in Zeist, Oort wrote, according to Volcker's cable: "One is that monetary authorities periodically fix a minimum and a maximum price below or above which they would not sell or buy on the market. The other consists in creating a buffer stock to be managed by an agent who would be charged by the monetary authorities to intervene on the market such as to ensure orderly conditions on the free market for gold."
Of course the latter idea sounds like a plan to reconstitute the London Gold Pool, which controlled the gold price from 1961 until its collapse in March 1968:
Volcker's cable conveying Oort's statement is posted at GATA's Internet site here:
The second State Department cable is dated July 1974 and appears to have been sent by the U.S. financial attache in Bonn, then West Germany's capital, to the secretary of state in Washington with copies meant for the Treasury Department and Federal Reserve. The cable reports the financial attache's conversation with Otmar Emminger, then vice president of the West German central bank, the Bundesbank, who went on to become the Bundesbank's president as well.
The cable reads: "Emminger said that European Community discussions on gold are continuing but that an intervention system is not likely to be agreed upon. ...
"Regarding gold Emminger said that the Bundesbank welcomed the recent lowering of the free-market price. Within the EC discussions were continuing whether to supplement the G-10 decisions allowing central bank gold to be pledged as security for loans with some further agreements designed to avoid overly erratic price movements on the free gold market through central bank agreement to try to keep the free gold price in a range to be agreed and changed from time to time.
"Emminger said he realized that the U.S., and particularly Paul Volcker, had been opposed to such schemes in the past. He felt, however, that the current EC discussions should not give us too much concern. A distinction should be made between active central bank intervention on the gold market (i.e., buying gold to maintain its price) and passive intervention (i.e., not selling gold in a manner that would cause erratic price movements). EC agreement on active intervention was highly unlikely because very few EC central banks had the means (i.e., sufficient foreign exchange reserves) to engage in it and those who did, mainly the Bundesbank, were opposed.
"In addition the problems of reaching any agreement on who would have to intervene when in order to maintain the gold price were so complicated -- as had been shown by the experience of the old gold pool -- that an agreement being reached without U.S. participation was extremely unlikely.
"'Passive intervention,' on the other hand, was not that dangerous and in any case could be quite flexible through frequent changes in the range within which central banks sales could take place.
"Emminger said that in connection with gold he wanted to bring up one small point. Some German periodicals, particularly the Wirtschaftswoche, had reported that the recent U.S./Saudi Arabian agreement for investments in U.S. Treasury bills contained a gold clause. He knew this was not true, but if we could find occasion to make this clear it would be helpful since the supposed fact was used to argue that even the U.S. had to agree to this 'comeback' for gold."
The July 1974 cable is posted at GATA's Internet site here:
While this conspiring by the Western governments and central banks took place 38 years ago, they continue to impose the deepest secrecy on their activities in the gold market, and their interest in controlling the gold price as part of their general control over currency markets -- that is, their interest in defeating markets -- endures and requires exposure.
That is why GATA has filed requests under the U.S. Freedom of Information Act seeking access to all gold-related records held by the State Department, Treasury Department, Federal Reserve, and Federal Open Market Committee:
Of course those government agencies have not been forthcoming, and obtaining these records will require more lawsuits such as the one GATA brought against the Federal Reserve in U.S. District Court for the District of Columbia in 2009 and won in part in 2011:
Such lawsuits will involve substantial expense. The World Gold Council, which purports to represent gold mining companies and gold investors, declines to undertake this work. So if you're inclined to help us, please visit:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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-- Posted Sunday, 30 December 2012 | Digg This Article | Source: GoldSeek.com