antal fekete, current article on ongoing gold backwardation

[Large Sarge]

http://www.thedailybell.com/29047/Anthony-Wile-Antal-Fekete-Gold-Backwardation-and-the-Collapse-of-the-Tacoma-Bridge

[mamboni]

Yes, excellent read, though hard to digest. I always relish anything new by Fekete, though I don't believe that I have a rigorous grasp of his thesis vis-a-vis gold and the monetary system. I like how he called Gesell a communist, LOL. Fekete sure don't mince words!

He indicates that businesses could transact "real bills with expiration dates redeemable in gold" so that banks and bank credit would be obviated. Do I have that correct? Also, he insinuates that banks would only be needed as stores of monetary gold reserves and gold certificates and gold coins would circulate freely. Yet he seems to disparage or avoid the term "gold standard." If gold certificates and gold coin circulate freely, is this not a gold standard?

He asserts that gold has the lowest rate of decline of it's marginal utility. The strength of gold as money is the high stock-to-flow ratio, which is very low and virtually constant. The historical flow has averaged 2% and in the recent decade 1.5%. He says silver is second only to gold in this parameter. Now Butlerites have claimed that silver's stock-to-flow is too high and variable, making it unfeasible as money. But if we accept Zarbuchen's estimate of 25 billion ounces of silver extant as the stock, then consider the silver flow. Per annum, ~800 million ounces of new silver are mined (annual flow). If we subtract 400 million ounces consumed by industry, then the net flow is 400 million ounces. Then silver flow to stock ratio is ~ 400,000,000/25,000,000,000 which equals 1.6%, virtually identical to that of gold. So it seems to me that silver would also make an excellent money like gold, having a large stock and low stable flow. What do you guys think?

[Large Sarge]

short summary, gold will never see 5 digits, gold will have no price by then

"none for sale"

as to many people are waking upto the fact that there is no solution for the current monetary problems, hence gold backwardation


we will slide into a barter economy

[Serpo]

Once the gold basis* goes permanently negative, the total U.S. debt, all $16 trillion of it, will not be worth one ounce of gold. That will pull the rug from underneath the international monetary system.

[SWRichmond]

Fekete contradicts himself, but uses that contradiction in an effort to distinguish / differentiate himself from the "mainstream Austrian" school:

From the article. Fekete describes gold as having a marginal utility that declines slower than everything else:
"Gold is a monetary metal due to the fact that its marginal utility declines at a rate lower than that of any commodity.

"Hayek was not a friend of the gold standard. He didn't really understand Menger's point that market has promoted gold to the status of most marketable good in making its marginal utility decline at a rate slower than that of any other substance.

"Ludwig von Mises dismissed the idea of gold having constant marginal utility. According to him constant marginal utility would imply infinite demand for gold which is contradictory. This is the greatest flaw of the economics of Mises: the rejection of the essential nexus between gold and interest.

Then later he talks about gold having a CONSTANT marginal utility:

"Ludwig von Mises dismissed the idea of gold having constant marginal utility. According to him constant marginal utility would imply infinite demand for gold which is contradictory. This is the greatest flaw of the economics of Mises: the rejection of the essential nexus between gold and interest."

This dismissive attitude towards Mises and others is unwarranted. In mathematics, conditions are quite often examined by first defining the boundaries. What would happen if something had an infinite or constant value? If in fact gold had a constant marginal utility then its demand curve would approach asymptotic, if I understand the argument correctly. This statement is NOT in any way contradictory to the statement that gold's marginal utility rate changes (declines) more slowly than others. If gold's marginal utility rate of decline is slower than others, then it is not necessarily constant.

[mamboni]

Fekete contradicts himself, but uses that contradiction in an effort to distinguish / differentiate himself from the "mainstream Austrian" school:

From the article. Fekete describes gold as having a marginal utility that declines slower than everything else:
"Gold is a monetary metal due to the fact that its marginal utility declines at a rate lower than that of any commodity.

"Hayek was not a friend of the gold standard. He didn't really understand Menger's point that market has promoted gold to the status of most marketable good in making its marginal utility decline at a rate slower than that of any other substance.

"Ludwig von Mises dismissed the idea of gold having constant marginal utility. According to him constant marginal utility would imply infinite demand for gold which is contradictory. This is the greatest flaw of the economics of Mises: the rejection of the essential nexus between gold and interest.

Then later he talks about gold having a CONSTANT marginal utility:

"Ludwig von Mises dismissed the idea of gold having constant marginal utility. According to him constant marginal utility would imply infinite demand for gold which is contradictory. This is the greatest flaw of the economics of Mises: the rejection of the essential nexus between gold and interest."

This dismissive attitude towards Mises and others is unwarranted. In mathematics, conditions are quite often examined by first defining the boundaries. What would happen if something had an infinite or constant value? If in fact gold had a constant marginal utility then its demand curve would approach asymptotic, if I understand the argument correctly. This statement is NOT in any way contradictory to the statement that gold's marginal utility rate changes (declines) more slowly than others. If gold's marginal utility rate of decline is slower than others, then it is not necessarily constant.

In a free market where gold freely circulates, the declining marginal utility of gold is a function of the interest rate, no?

[Glass]

I think the interesting point he made which was starign me in the face, an increase in the price of gold results in a reduction in production of gold. This goes against all other commodities, but maybe it doesn't go against all others.

The point was that when the price of a comoddity goes up, supply starts to increase as people move into production to caplitalise on this price increase which is an apprarent demand signal. With gold its different and probably more a reflection of scale than anything else.

Part of that almost had me feeling he could be the true identity of the real HyperTiger.

I've tried to tell people that if your plans are to "invest" in PM's with a view to making a "profit" then you are probably making a mistake at this point in proceedings. That's my don't come crying to me if you're left with a pile of PM's you can't sell for money spiel. Seems some people can't hear me when I say that because I know a few who are seriously top heavy on PM's and I don't think they will profit. I'm hoping they at least break even so I don't have to listen to any complaints.

[mamboni]

The world is moving away from the dollar and to gold using China as proxy. I conclude this based on two observations:

1. China continues to import massive quantities of gold bullion in a price insensitive manner whilst retaining all domestic gold production within it's borders by fiat. China is the world's largest gold producer BTW.

2. China is rapidly expanding Yuan-based trading and bypassing the dollar and the Euro.

China Currency Swap Agreements List of Countries:

Pakistan, Australia, Argentina, Belarus, Hong Kong, Indonesia, Japan, Kazakhstan, Malaysia, New Zealand, Singapore, South Korea, Thailand, Turkey, Uzbekistan, Iran, Russia, India, Iceland, United Arabs Emirates, Ukraine, Mongolia, Vietnam

China Currency Swap Agreements in Progress- Countries:

England, France, Switzerland, Luxembourg, Taiwan


An HSBC forecast projected that by 2015, the yuan will become one of the three most used currencies in global trade, in league with the dollar and euro. The report, issued in April, also foresees a third of China’s cross-border transactions being carried out in yuan.
The Chinese yuan is the 13th most-used currency in the world for international payments, according to a February 2013 report (http://www.swift.com/assets/swift_com/documents/products_services/monthly_RMB_tracker_Feb2013.pdf) by the Society for Worldwide Interbank Financial Telecommunication (SWIFT). It jumped 6 places from the previous year.

According to Jim Willie and other analysts, the BRIIICS bank for international trade will back it's letters of credit with gold. At the present time, estimates of Chinese gold reserves range from 4,000-10,000 tons! And China continues to accumulate gold at a fever pace. One should be asking, given flat gold production, from where is all this gold coming from?OO)~

[chad]

The world is moving away from the dollar and to gold using China as proxy. I conclude this based on two observations:

1. China continues to import massive quantities of gold bullion in a price insensitive manner whilst retaining all domestic gold production within it's borders by fiat. China is the world's largest gold producer BTW.

2. China is rapidly expanding Yuan-based trading and bypassing the dollar and the Euro.

China Currency Swap Agreements List of Countries:

Pakistan, Australia, Argentina, Belarus, Hong Kong, Indonesia, Japan, Kazakhstan, Malaysia, New Zealand, Singapore, South Korea, Thailand, Turkey, Uzbekistan, Iran, Russia, India, Iceland, United Arabs Emirates, Ukraine, Mongolia, Vietnam

China Currency Swap Agreements in Progress- Countries:

England, France, Switzerland, Luxembourg, Taiwan


An HSBC forecast projected that by 2015, the yuan will become one of the three most used currencies in global trade, in league with the dollar and euro. The report, issued in April, also foresees a third of China’s cross-border transactions being carried out in yuan.
The Chinese yuan is the 13th most-used currency in the world for international payments, according to a February 2013 report (http://www.swift.com/assets/swift_com/documents/products_services/monthly_RMB_tracker_Feb2013.pdf) by the Society for Worldwide Interbank Financial Telecommunication (SWIFT). It jumped 6 places from the previous year.

According to Jim Willie and other analysts, the BRIIICS bank for international trade will back it's letters of credit with gold. At the present time, estimates of Chinese gold reserves range from 4,000-10,000 tons! And China continues to accumulate gold at a fever pace. One should be asking, given flat gold production, from where is all this gold coming from?OO)~

all of the cash for gold is being smelted and sent over there.

[mamboni]

Look at this chart - China is in a mad dash to buy gold - as if they know something big is coming. Look at the acceleration in their gold purchases! The conspiracy theorist in me thinks that maybe China is behind the recent gold smash:

China: We want more gold for lower price. Cooperate or we start dumping Treasuries.
FED: We need more time.
China: Fook yu! You printing like mad, screwing our principle. And you stole the gold we leased to you in the 1990s in exchange for most favored nation status...
FED: Not sold, leased...
China: Fook yu! You can shove the technicality BS up your ass. We done dealing. We make lots of shit for you like crappy American flags and Chia pets and stinky drywall. We accept your paper and buy Treasuries. Now we want gold in exchange for Treasuries. This is, how you say, poetic justice, as we are getting back the gold you stole, and a little more for our troubles. Oh, we're keeping all your factories, thank you American pigdog imperialists!
FED: Ok, ok, we'll dump a few hundred tons of gold on the market at the usual wee hours when no one is trading - should be good for a 2 or 3 hundred dollar drop. You good with that?
China: Yeah, Ok yankee, that's good for now. Until next time.

http://www.tfmetalsreport.com/sites/default/files/users/u2/hk_imports_2012-2013_0.jpg

http://d1w116sruyx1mf.cloudfront.net/ee-assets/gsd/yesterday/HK-China_Gold_Imports.png

[Uncle Salty]

Great read.

But I need a fucking dictionary every time I read one of his articles!!

[Serpo]

Gold - Who's selling who's buying who's lying





-- Posted Wednesday, 8 May 2013 | Share this article | Comment - New!


Although the Pharisees of paper money successfully forced down the price of gold, like those who lobbied Pontius Pilate to crucify Jesus, the consequences of their actions will backfire beyond their wildest imagination.



The decision of the paper money cabal to force down the price of gold is akin to Japan’s decision to attack Pearl Harbor. Although the attack was successful, the eventual consequences were not what Japan had envisioned.



Recently, an article, The Gold Correction: What’s the Big Deal?, at Seeking Alpha posted the following chart. However, measured from its September 2011 high of $1901.35, gold’s fall is 28 %, a drop remarkable similar to its 2008 correction of 27.7 %.








THE 2008 CORRECTION AND/OR MANIPULATION



The 2008 correction of gold occurred during a period of extreme financial and systemic distress. Global markets were in disarray, Wall Street banks were collapsing and trillions of dollars of Fed money was necessary to protect the bonuses of investment bankers whose bad bets had caused the collapse—just the environment when gold would be expected to rise.



Instead, gold fell. In 2008, as today, the same hands were on the scale forcing the price of gold lower. In the fall of 2007, gold had rise from $680 to $1,033, An astounding 51.9 % increase. This is exactly what the paper money cabal feared most, a concomitant rise in the price of gold during a period of extreme financial stress.



If gold quickly rose during a period of heightened investor fear, it would signal to fearful investors that although paper assets were at risk, gold offered not only a safe haven but outsized gains as well; and the investors’ subsequent fear-fueled greed would easily dismiss any resistance the paper money cabal might offer.



To counter the allure of gold in such heightened circumstances, in my article, Gold Buying Opportunity of a Lifetime posted March 18, 2009, I wrote:



When gold made its run in the fall of 2007 from $680 to $1,033 in spring 2008, the Swiss National Bank sold 22 tons of gold to cap gold’s rise…One year later (after the collapse of global stock markets in the fall of 2008), gold made another run at $1,000; but this time when gold hit $1,009 on February 20th [2009] , LeMetropole reported central banks sold 220 tons of gold to force gold below $900.



In 2009, the paper money cabal had also pushed gold lease rates into negative territory to prevent gold from rising above $1,000. On March 17, 2009, in his article, Gold Price Manipulation More Blatant, Patrick Heller wrote:



On Friday, March 6, gold lease rates turned negative for the day. What that means is that anyone who wanted to lease gold would actually be paid a fee in addition to getting a free gold loan.

No sane person would choose to lose money loaning physical gold, in addition to the risk of never getting the gold back from the other party. However, if someone (such as the U.S. government) wanted to suppress the price of gold, this is one tactic to try to accomplish that purpose.

I can come to no other conclusion than that a large quantity of physical gold surreptitiously appeared on the market on March 6 with the sole purpose to drive down the price of gold. The quantities were large enough that they almost certainly could not come from private parties. With most of the world's central banks now being net buyers of gold reserves, they would not be the source of this gold. By process of elimination, the suspicion falls upon the U.S. government as the ultimate party responsible for this blatant action to manipulate the price of gold.

Of course, the U.S. government would not want to be identified as the cause of this leasing anomaly. Instead, such manipulation was almost certainly conducted by multiple trading partners of the U.S. government.

This sledge hammer tactic worked at driving the price of gold further away from the $1,000 level - at least temporarily.



Mr. Heller need look no further than Alan Greenspan for confirmation that central banks—in collusion with bullion banks—were, in fact, manipulating gold with lease rates. Eleven years before, on July 24, 1998, before the House Committee on Banking and Financial Services, Fed Chairman Alan Greenspan had testified:



Central banks stand ready to lease gold in increasing quantities should the price rise.

http://en.wikiquote.org/wiki/Alan_Greenspan



Although Greenspan was to fail as an economist he excelled as a politician, and as disingenuous as Alan Greenspan’s tenure was, Greenspan’s testimony as to the readiness of central banks to lease gold in increasing quantities should the price rise is an admission sufficient to quiet those who would still believe otherwise.



Regarding the central bank leasing of gold, in The Gold Market: Seen Through A Glass Darkly, I wrote:



After gold’s explosive ascent in 1980, central bankers began seriously ‘manage’ the price of gold. A lower price of gold would indicate not only an abatement of monetary problems but investors would be less inclined to trade their paper banknotes for the safety of gold when they could more profitably leverage their paper banknotes in the bankers’ paper markets.



Since the early 1980s, supplies of newly mined gold have constantly fallen short of market demand for gold; but notwithstanding supply and demand fundamentals, gold prices nonetheless fell for 20 straight years. In 1980, the average price of gold was $615. By 2001, it was only $271. Clearly, the free market price of gold was being distorted by ‘outside’ forces.



THE REAL QUESTION IS NOT WHETHER THE FED IS MANIPULATING GOLD BUT WHERE THE GOLD IS COMING FROM.



There has been conjecture that gold stolen by Japan from China prior and during WWII is the source of the supply of gold coming onto the market. In 2012, GATA’s Chris Powell discounted that possibility in his post, If U.S. had ‘Yamashita’s Gold’, they’d put it in Cracker Jack boxes.



While I concur with Powell that if the US had access to such gold in 1968, they would have employed it to prevent the collapse of the London Gold Pool. It is my belief, however, that such gold did exist but, in 1968, “Yamashita’s gold”, i.e. China’s stolen gold, was still a tightly held secret of the US government privy to only the top echelons of the CIA and a few others.



More importantly, however, in the 1960s China’s stolen gold, i.e. ‘Yamashita’s gold’, had not yet been laundered into the international banking system. The laundering of the illicit horde of gold was not to happen until the 1980s, the decade when, not coincidentally, American Barrick, a junior oil and gas producer, was to become Barrick Gold.



No less than the esteemed Professor Antal E. Fekete recognized the possibility of gold laundering by Barrick when he questioned Barrick’s inexplicable and self-defeating strategy of unhedged forward selling of gold at prices far below the market.



In his August 2006 article, To Barrick Or To Be Barricked, That Is The Question, Professor Fekete suggested Barricks strategy could, in fact, be an operation to cover up the laundering of gold. The professor wrote:



Is Barrick a front to cover up gold-laundering?



..unless Barrick was a front to cover up gold laundering by governments, in which case unilateral forward selling was not a mistake but a deliberate policy…The suspicion that Barrick is a front to cover up a gigantic gold-laundering operation, presumably on behalf of a government (or governments) that need more time to complete a gold acquisition program in the order of thousands of tons of gold, is hard to escape.



In my book, Light In A Dark Place, I quote from EP Heidner’s Collateral Damage which confirms what Professor Fekete had surmised—but Barrick wasn’t laundering gold to complete a gold acquisition program as believed by Professor Fekete—Barrick was, in fact, laundering China’s stolen gold to bring it into the international banking system.



US Intelligence operations had been siphoning off the gold [China’s stolen gold] for three decades. However in 1986 Vice President George Bush took over the gold from Marcos and the gold was removed to a series of banks, notably Citibank, Chase Manhattan, Hong Kong Shanghai Banking Corporation, UBS and Banker’s Trust, and held in a depository in Kloten, Switzerland.



In 1992, George Bush [former Director of the CIA] served on the Advisory Board of Barrick Gold. The Barrick operation would create billions of dollars of paper gold by creating ‘gold derivatives’ …[and] would become an investment for nearly every gold bullion bank associated with the Marcos gold recovery [China’s stolen gold]. These banks would loan gold to Barrick, which would then sell the borrowed gold as derivatives, with the promise of replacing the borrowed gold with their gold mining operation.



Barrick, which has no mining operations in Europe, used two refineries in Switzerland: MKS Finance S.A. and Argor-Heraeus S.A. – both on the Italian border near Milan, a few hours away from the gold depository in Zurich…The question that Barrick and other banks needed to avoid answering is: what gold was Barrick refining in Switzerland, as they have no mines in that region?



Barrick would become a quiet gold-producing partner for a number of major banks, and its activities became subject to an FBI investigation into gold-price-fixing. The records on this investigation were kept in the FBI office on the 23rd floor of the North Tower which was destroyed by bomb blasts shortly before the Tower collapsed.

p. 11, Collateral Damage: US Covert Operations and the Terrorist Attacks on September 11, 2001, EP Heidner (2008)



CONJECTURE, CONJURING AND CONFIDENCE GAMES



The drop in the price of gold has ignited a frenzy of gold-buying around the world. It is my belief that the gold being sold is not China’s stolen gold, but gold purloined from the central banks of countries still vulnerable to the considerable pressure of Western central banks.



In 2012, India’s central bank, the Royal Bank of India, received a High Court notice to explain gold deposits currently with the Bank of England and the Bank of International Settlements in Basel, Switzerland. India’s central bank is required by law to keep 85% of its gold reserves in India yet 47% of India’s gold is deposited with the Bank of England and the Bank of International Settlements, see http://www.punemirror.in/article/62/2012050420120504025313609120ae2ba/RBI-gets-HC-notice-to-explain-gold-deposits-with-Bank-of-England.html



It is likely that India’s gold has been leased by the Bank of England in order to suppress the price of gold. India is a former crown colony and its imperial shackles have not yet been completely removed.



The international monetary system based on credit and debt is, in truth, a confidence game in which gold was once a critical component. But when ties between paper money and gold were severed in 1971, confidence in the bankers’ paper money began to falter; and, today we are witness to what happens when confidence in a global confidence game begins to evaporate.



In my current youtube video, The Economic Crisis: Then and Now, I discuss the on-going economic collapse. It isn’t over yet. When it is, then and only then, will we be free of the bankers’ dream of eternal debt.



Buy gold, buy silver, have faith.



Darryl Robert Schoon

www.survivethecrisis.com

www.drschoon.com

http://news.goldseek.com/GoldSeek/1368021900.php

[Serpo]

antal feketes right hand man...........Darryl Robert Schoon

great vid to watch



https://www.youtube.com/watch?v=xvWoY1Spr-UGold - Who's selling who's buying who's lying

https://www.youtube.com/watch?v=xvWoY1Spr-U



-- Posted Wednesday, 8 May 2013 | Share this article | Comment - New!


Although the Pharisees of paper money successfully forced down the price of gold, like those who lobbied Pontius Pilate to crucify Jesus, the consequences of their actions will backfire beyond their wildest imagination.



The decision of the paper money cabal to force down the price of gold is akin to Japan’s decision to attack Pearl Harbor. Although the attack was successful, the eventual consequences were not what Japan had envisioned.



Recently, an article, The Gold Correction: What’s the Big Deal?, at Seeking Alpha posted the following chart. However, measured from its September 2011 high of $1901.35, gold’s fall is 28 %, a drop remarkable similar to its 2008 correction of 27.7 %.








THE 2008 CORRECTION AND/OR MANIPULATION



The 2008 correction of gold occurred during a period of extreme financial and systemic distress. Global markets were in disarray, Wall Street banks were collapsing and trillions of dollars of Fed money was necessary to protect the bonuses of investment bankers whose bad bets had caused the collapse—just the environment when gold would be expected to rise.



Instead, gold fell. In 2008, as today, the same hands were on the scale forcing the price of gold lower. In the fall of 2007, gold had rise from $680 to $1,033, An astounding 51.9 % increase. This is exactly what the paper money cabal feared most, a concomitant rise in the price of gold during a period of extreme financial stress.



If gold quickly rose during a period of heightened investor fear, it would signal to fearful investors that although paper assets were at risk, gold offered not only a safe haven but outsized gains as well; and the investors’ subsequent fear-fueled greed would easily dismiss any resistance the paper money cabal might offer.



To counter the allure of gold in such heightened circumstances, in my article, Gold Buying Opportunity of a Lifetime posted March 18, 2009, I wrote:



When gold made its run in the fall of 2007 from $680 to $1,033 in spring 2008, the Swiss National Bank sold 22 tons of gold to cap gold’s rise…One year later (after the collapse of global stock markets in the fall of 2008), gold made another run at $1,000; but this time when gold hit $1,009 on February 20th [2009] , LeMetropole reported central banks sold 220 tons of gold to force gold below $900.



In 2009, the paper money cabal had also pushed gold lease rates into negative territory to prevent gold from rising above $1,000. On March 17, 2009, in his article, Gold Price Manipulation More Blatant, Patrick Heller wrote:



On Friday, March 6, gold lease rates turned negative for the day. What that means is that anyone who wanted to lease gold would actually be paid a fee in addition to getting a free gold loan.

No sane person would choose to lose money loaning physical gold, in addition to the risk of never getting the gold back from the other party. However, if someone (such as the U.S. government) wanted to suppress the price of gold, this is one tactic to try to accomplish that purpose.

I can come to no other conclusion than that a large quantity of physical gold surreptitiously appeared on the market on March 6 with the sole purpose to drive down the price of gold. The quantities were large enough that they almost certainly could not come from private parties. With most of the world's central banks now being net buyers of gold reserves, they would not be the source of this gold. By process of elimination, the suspicion falls upon the U.S. government as the ultimate party responsible for this blatant action to manipulate the price of gold.

Of course, the U.S. government would not want to be identified as the cause of this leasing anomaly. Instead, such manipulation was almost certainly conducted by multiple trading partners of the U.S. government.

This sledge hammer tactic worked at driving the price of gold further away from the $1,000 level - at least temporarily.



Mr. Heller need look no further than Alan Greenspan for confirmation that central banks—in collusion with bullion banks—were, in fact, manipulating gold with lease rates. Eleven years before, on July 24, 1998, before the House Committee on Banking and Financial Services, Fed Chairman Alan Greenspan had testified:



Central banks stand ready to lease gold in increasing quantities should the price rise.

http://en.wikiquote.org/wiki/Alan_Greenspan



Although Greenspan was to fail as an economist he excelled as a politician, and as disingenuous as Alan Greenspan’s tenure was, Greenspan’s testimony as to the readiness of central banks to lease gold in increasing quantities should the price rise is an admission sufficient to quiet those who would still believe otherwise.



Regarding the central bank leasing of gold, in The Gold Market: Seen Through A Glass Darkly, I wrote:



After gold’s explosive ascent in 1980, central bankers began seriously ‘manage’ the price of gold. A lower price of gold would indicate not only an abatement of monetary problems but investors would be less inclined to trade their paper banknotes for the safety of gold when they could more profitably leverage their paper banknotes in the bankers’ paper markets.



Since the early 1980s, supplies of newly mined gold have constantly fallen short of market demand for gold; but notwithstanding supply and demand fundamentals, gold prices nonetheless fell for 20 straight years. In 1980, the average price of gold was $615. By 2001, it was only $271. Clearly, the free market price of gold was being distorted by ‘outside’ forces.



THE REAL QUESTION IS NOT WHETHER THE FED IS MANIPULATING GOLD BUT WHERE THE GOLD IS COMING FROM.



There has been conjecture that gold stolen by Japan from China prior and during WWII is the source of the supply of gold coming onto the market. In 2012, GATA’s Chris Powell discounted that possibility in his post, If U.S. had ‘Yamashita’s Gold’, they’d put it in Cracker Jack boxes.



While I concur with Powell that if the US had access to such gold in 1968, they would have employed it to prevent the collapse of the London Gold Pool. It is my belief, however, that such gold did exist but, in 1968, “Yamashita’s gold”, i.e. China’s stolen gold, was still a tightly held secret of the US government privy to only the top echelons of the CIA and a few others.



More importantly, however, in the 1960s China’s stolen gold, i.e. ‘Yamashita’s gold’, had not yet been laundered into the international banking system. The laundering of the illicit horde of gold was not to happen until the 1980s, the decade when, not coincidentally, American Barrick, a junior oil and gas producer, was to become Barrick Gold.



No less than the esteemed Professor Antal E. Fekete recognized the possibility of gold laundering by Barrick when he questioned Barrick’s inexplicable and self-defeating strategy of unhedged forward selling of gold at prices far below the market.



In his August 2006 article, To Barrick Or To Be Barricked, That Is The Question, Professor Fekete suggested Barricks strategy could, in fact, be an operation to cover up the laundering of gold. The professor wrote:



Is Barrick a front to cover up gold-laundering?



..unless Barrick was a front to cover up gold laundering by governments, in which case unilateral forward selling was not a mistake but a deliberate policy…The suspicion that Barrick is a front to cover up a gigantic gold-laundering operation, presumably on behalf of a government (or governments) that need more time to complete a gold acquisition program in the order of thousands of tons of gold, is hard to escape.



In my book, Light In A Dark Place, I quote from EP Heidner’s Collateral Damage which confirms what Professor Fekete had surmised—but Barrick wasn’t laundering gold to complete a gold acquisition program as believed by Professor Fekete—Barrick was, in fact, laundering China’s stolen gold to bring it into the international banking system.



US Intelligence operations had been siphoning off the gold [China’s stolen gold] for three decades. However in 1986 Vice President George Bush took over the gold from Marcos and the gold was removed to a series of banks, notably Citibank, Chase Manhattan, Hong Kong Shanghai Banking Corporation, UBS and Banker’s Trust, and held in a depository in Kloten, Switzerland.



In 1992, George Bush [former Director of the CIA] served on the Advisory Board of Barrick Gold. The Barrick operation would create billions of dollars of paper gold by creating ‘gold derivatives’ …[and] would become an investment for nearly every gold bullion bank associated with the Marcos gold recovery [China’s stolen gold]. These banks would loan gold to Barrick, which would then sell the borrowed gold as derivatives, with the promise of replacing the borrowed gold with their gold mining operation.



Barrick, which has no mining operations in Europe, used two refineries in Switzerland: MKS Finance S.A. and Argor-Heraeus S.A. – both on the Italian border near Milan, a few hours away from the gold depository in Zurich…The question that Barrick and other banks needed to avoid answering is: what gold was Barrick refining in Switzerland, as they have no mines in that region?



Barrick would become a quiet gold-producing partner for a number of major banks, and its activities became subject to an FBI investigation into gold-price-fixing. The records on this investigation were kept in the FBI office on the 23rd floor of the North Tower which was destroyed by bomb blasts shortly before the Tower collapsed.

p. 11, Collateral Damage: US Covert Operations and the Terrorist Attacks on September 11, 2001, EP Heidner (2008)



CONJECTURE, CONJURING AND CONFIDENCE GAMES



The drop in the price of gold has ignited a frenzy of gold-buying around the world. It is my belief that the gold being sold is not China’s stolen gold, but gold purloined from the central banks of countries still vulnerable to the considerable pressure of Western central banks.



In 2012, India’s central bank, the Royal Bank of India, received a High Court notice to explain gold deposits currently with the Bank of England and the Bank of International Settlements in Basel, Switzerland. India’s central bank is required by law to keep 85% of its gold reserves in India yet 47% of India’s gold is deposited with the Bank of England and the Bank of International Settlements, see http://www.punemirror.in/article/62/2012050420120504025313609120ae2ba/RBI-gets-HC-notice-to-explain-gold-deposits-with-Bank-of-England.html



It is likely that India’s gold has been leased by the Bank of England in order to suppress the price of gold. India is a former crown colony and its imperial shackles have not yet been completely removed.



The international monetary system based on credit and debt is, in truth, a confidence game in which gold was once a critical component. But when ties between paper money and gold were severed in 1971, confidence in the bankers’ paper money began to falter; and, today we are witness to what happens when confidence in a global confidence game begins to evaporate.



In my current youtube video, The Economic Crisis: Then and Now, I discuss the on-going economic collapse. It isn’t over yet. When it is, then and only then, will we be free of the bankers’ dream of eternal debt.



Buy gold, buy silver, have faith.



Darryl Robert Schoon

www.survivethecrisis.com (http://www.survivethecrisis.com)

www.drschoon.com (http://www.drschoon.com)

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