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Treasury, Fed evade congressman's gold questions so he presses them again, and more

By: Chris Powell

 -- Published: Tuesday, 31 July 2018 | Print  | Disqus 

Dear Friend of GATA and Gold:

The U.S. Treasury Department and Federal Reserve responded incompletely and evasively this month to the questions about their involvement in the gold market that were posed in April by U.S. Rep. Alex X. Mooney, R-West Virginia.

So Mooney last week wrote back to Treasury Secretary Steven Mnuchin and Federal Reserve Board Chairman Jerome Powell, repeating his questions and adding a few others about surreptitious U.S. government intervention in financial markets.

In doing so Mooney has drawn from GATA's documentation of such intervention.

Mooney's first inquiries to the Treasury and the Fed are described in a GATA dispatch here:

Mooney's letter containing those inquiries is here:

Mooney originally asked Mnuchin and Powell to describe the U.S. government's policy on gold and cited documentation from the U.S. State Department archive showing that this policy has been to drive gold out of the world financial system.

Mnuchin, whose response was written by Treasury's acting assistant secretary, Brad Bailey, and Powell did not address this question at all. Mooney has posed it again.

The Treasury's reply denied that the department trades gold through the Bank for International Settlements, Bank of England, and other central banks or governments. But Mooney now asks if the Treasury trades gold through its Exchange Stabilization Fund or through any other government agency or through commercial banks and brokers.

Powell's reply denied any involvement by the Fed with gold swaps. But Mooney's new inquiry calls attention to minutes of the Fed's Federal Open Market Committee from 1995, wherein Fed General Counsel Virgil Mattingly says the Exchange Stabilization Fund has engaged in gold swaps.

Mooney also calls attention to the 2009 admission to GATA by Fed Governor Kevin M. Warsh that the Fed has gold swap arrangements with foreign banks and will not disclose them.

Mooney asks Powell for an explanation of what seem like contradictions of his denial.

In his new letter Mooney notes that the auditing of the U.S. gold reserve that is described in Bailey's letter on behalf of the Treasury is not really auditing at all, and the congressman asks: "When was the last time, if ever, that there was a complete inventory conducted of U.S. government-owned gold? What were the results of the most recent inventory?"

Mooney adds: "A true audit would also review any encumbrances placed upon the metals owned by the United States. Has there been an accounting for any such encumbrances, as part of any audit, inventory, or other review? If so, when did this last occur and what were the results?"

Mooney's new letter notes the recent close correlation of the gold price with the price of the Chinese yuan and the valuation of the International Monetary Fund's Special Drawing Rights, and he asks, "Do these correlations reflect surreptitious intervention in U.S. currency markets by China and currency manipulation by China? What do the Fed and Treasury think of these correlations?"

GATA's open letter to the U.S. Commodity Futures Trading Commission, published Sunday, pressed that issue as well:

Perhaps most satisfying for believers in free markets and limited and transparent government, Mooney now asks the Treasury and Fed to come clean about everything. He writes: "What markets, if any, are the Federal Reserve and Treasury trading in, and through what mechanisms? If the Federal Reserve and Treasury are engaged in trading, what is the objective?"

Stefan Gleason, president of the Sound Money Defense League and coin and bullion dealer Money Metals Exchange, who has supported Mooney's inquiries, today welcomed the congressmen's persistence.

"This obfuscation by the Fed and the Treasury is unacceptable," Gleason said, "and we are encouraged Congressman Mooney is calling them out on their game playing. The American people are entitled to transparency and accountability when it comes to the status and use of America's gold reserves."

Gleason's statement is posted at the Money Metals Exchange internet site here:

The replies to Mooney from the Treasury and Fed are posted at GATA's internet site here:

Mooney's new letters of inquiry to the Treasury and Fed are posted at GATA's internet site here:

With his detailed questioning of the Treasury and Fed and his persistence, the congressmen is essentially conducting both the sort of serious policy review Congress seldom does anymore as well as investigative journalism that most mainstream financial news organizations prohibit about gold and market rigging by government.

On the whole the monetary metals mining industry and metals market analysts are too timid to pursue these questions. But ordinary U.S. citizens and investors can help immensely here simply by calling Mooney's inquiries to the attention of their U.S. senators and representatives and asking them to make and publicize their own similar inquiries.

It's easily done: Just print this dispatch and send it with a covering note to your members of Congress. If enough members of Congress support Mooney's inquiries, market rigging will get much more difficult for the government.

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

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