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How intimately are major gold-mining companies connected with governments and central banks?

By: Chris Powell

 -- Published: Monday, 1 October 2018 | Print  | Disqus 

Dear Friend of GATA and Gold:

Noting today's dispatch about the World Gold Council's latest confidential seminar for central bank and government officials --

-- our friend R.G. wonders just how intimately major gold-mining companies are involved with governments and central banks and indeed whether major miners are secretly cooperating with governments and central banks in controlling the price of the monetary metal.

R.G. asks whether major gold miners are diverting some of their production to government buyers, short of the ordinary markets, in exchange for favors of some sort. After all, mining companies are completely vulnerable to governments for their mining rights, royalty requirements, and observance of environmental regulations.

Of course it's unlikely that any major gold miner would acknowledge relationships that secret and sensitive. But GATA long has suspected them and has documented such a relationship involving what is now the world's biggest gold-mining company, Barrick Gold, which a few days ago acquired Randgold Resources.

In 2003, trying to win dismissal of the market-rigging lawsuit filed against it by gold dealer Blanchard & Co. in U.S. District Court in New Orleans, Barrick claimed that in borrowing and selling central bank gold the miner had become the agent of central banks in regulating the gold price and should share their sovereign immunity from lawsuit in the United States:

The court rejected the argument and Barrick settled the lawsuit, soon after which it announced that it would close its gold hedges.

Now Barrick has formally become the business partner of a major gold-mining company owned by the government of China, Shandong Gold. Shandong Gold and Barrick have even exchanged big chunks of the company, so the government of China is now a major shareholder in Barrick.

Barrick Executive Chairman John Thornton has even said the company wants a "distinctive and preferred relationship with China":

Intimate but not fully understood relationships between major gold mining companies, on one hand, and governments and central banks on the other might explain the indifference of the World Gold Council to the longstanding policy of gold price suppression by major governments and central banks. That is, what if the gold council is really representing not gold investors but certain governments in their objective of minimizing gold's traditional monetary functions?

As creators of infinite money, governments and central banks certainly have had the capacity of buying up the gold mining industry, or gaining control of it through intermediary brokers, and neutering the industry, as it has been neutered, might be awfully helpful to the cause of maintaining government's control over money.

This is at least something investors in the monetary metals might want to keep in mind.

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

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