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What did Greenspan mean about leasing gold if the price rose?

By: Chris Powell

 -- Published: Wednesday, 15 November 2017 | Print  | Disqus 

Dear Friend of GATA and Gold:

When Federal Reserve Chairman Alan Greenspan testified to Congress in July 1998 that "central banks stand ready to lease gold in increasing quantities should the price rise," was he, as GATA maintains, essentially confessing to the gold price suppression scheme?

Financial letter writer Avi Gilburt of disputes that in commentary posted today at GoldSeek, "Did the Fed's Alan Greenspan Admit that Gold Is Being Manipulated?":

Gilburt argues that Greenspan's comments have been taken out of context. Instead, Gilburt writes, Greenspan "was saying that if someone attempted to manipulate the gold market, the Fed may have a tool to combat such manipulation attempts. More importantly, he never even opined as to whether such a tool would or could be successful."

Greenspan's July 1998 testimony remains posted at the Fed's internet site, where GATA has cited it many times:

His topic was "The Regulation of OTC Derivatives" and he was trying to dissuade Congress from legislating to regulate them. His full comment about gold was this:

"Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise."

That is, Congress needn't worry about a long corner in gold because central banks always had the ability to short the market.

Yes, as Gilburt notes, Greenspan didn't confirm that central banks were shorting and thus manipulating the gold market at that moment. Unfortunately it seems that no member of the committees to which Greenspan testified that month ever asked.

But note what Greenspan did not say: "Central banks stand ready to buy gold in increasing quantities should the price fall because of a short corner."

Of course Greenspan didn't offer the latter observation because Western central banking's well-publicized policy since at least the commencement of the London Gold Pool in 1961 had been to control gold's price in order to sustain the currency exchange system established by the Bretton Woods agreement in 1944:

No matter, for if any insiders didn't understand what Greenspan meant about gold in his testimony to Congress, eight months later the staff of the International Monetary Fund, of whose Board of Governors Greenspan was then a member, explained in a secret memorandum that central banks conceal their gold swaps and leases to facilitate their secret interventions -- their manipulations -- in the gold and currency markets:

Of course Greenspan isn't the only former Fed chairman to express sentiments favorable to gold market rigging. His predecessor, Paul Volcker, reflecting on an international currency revaluation in 1973, wrote in memoirs published by the Nikkei Weekly in Japan in November 2004: "Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake."


A memorandum dated April 1961 found in the papers of former Fed Chairman William McChesney Martin described a plan by which the United States would secretly rig the gold market by various methods, including even the falsification of official government reports:

So much more of this stuff has been compiled by GATA over the years here:

The bigger stuff has been summarized here:

Even this week the Bank for International Settlements has been caught concealing its interventions in the gold market on behalf of its member central banks:

When the public isn't looking, the BIS even advertises to potential central bank members that its services include secret interventions in the gold and currency markets:

When he was Fed chairman Greenspan was a member of the Board of Directors of the BIS as well.

So why is Gilburt so obtuse about this stuff? Apparently that's what overreliance on technical analysis does to some people. They have yet to address the four crucial questions about the currency they purport to analyze:

1) Are governments and central banks active in the monetary metals markets or not?

2) Are the documents compiled by GATA from government archives and other official sources asserting such activity genuine or forgeries?

3) If governments and central banks are active in the monetary metals markets, is it just for fun or is it for policy purposes?

4) If such activity by governments and central banks is for policy purposes, do those purposes involve the traditional objectives of defeating an independent world currency that competes with government currencies and interferes with government control of interest rates and, indeed, interferes with control of the entire economy and society itself?

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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