-- Published: Wednesday, 22 April 2015 | Print | Disqus
Dear Friend of GATA and Gold:
"Regulating the gold price in the free market" was recommended to central banks by the president of the Bank for International Settlements," Jelle Zijlstra, in a speech at International Monetary Fund headquarters in Washington in September 1981.
The speech, located this week by gold researcher and GATA consultant Ronan Manly, was given as a lecture memorializing the former managing director of the IMF, Per Jacobsson.
Those who follow GATA may recall that Zijlstra, who was president of the Netherlands Central Bank simultaneously with his holding office at the BIS, wrote in his memoirs in 1992 that the price of gold long had been held down by central banks at the behest of the United States, which sought to minimize competition for the dollar as the international reserve currency:
http://www.gata.org/node/11304
In his speech at the IMF in 1981, Ziljstra said: "I feel that it is necessary for us, within the Group of Ten and Switzerland, to consider ways to regulate the price of gold, admittedly within fairly broad limits, so as to create conditions permitting gold sales and purchases between central banks as an instrument for a more rational management and deployment of their reserves."
Ziljstra added: "On the occasion of the annual meeting of the IMF in Belgrade in 1979 this was brought up, but regrettably, insufficient agreement could be reached to make even a modest start with regulating the gold price in the free market. It is my conviction that relatively small-scale interventions, though not forestalling the subsequent explosion in the gold price, would at least have reduced it to more manageable proportions. Now that the turbulent emotions seem to have quieted down, we would be wise to reflect anew and without prejudice on these subjects."
Western central banks seem to have heeded Zijlstra's advice, as the BIS now functions largely as their gold broker, buying and selling not only gold but gold futures, options, and other derivatives on their behalf nearly every day for purposes never revealed to the public --
http://www.gata.org/node/12717
-- but explained among themselves as "interventions" designed "to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful":
http://www.gata.org/node/11012
http://www.gata.org/node/4279
Zijlstra's speech is also notable for its candid wish that central bankers should be allowed to run the world without the interference of mere elected officials. Having served in the Netherlands parliament and even five months as the country's prime minister before heading its central bank and the BIS, Zijlstra surely found central banking a lot easier than democracy.
His speech to the IMF is posted at the Internet site of the Per Jacobsson Foundation here --
http://www.perjacobsson.org/lectures/1981.pdf
-- and at GATA's Internet site here:
http://www.gata.org/files/JelleZijlstra-PerJacobssonLecture-1981.pdf
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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-- Published: Wednesday, 22 April 2015 | E-Mail | Print | Source: GoldSeek.com
