Central banks kept conspiring against gold long after it left the financial system

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Central banks kept conspiring against gold long after it left the financial system by Chris Powell – GATA

Dear Friend of GATA and Gold:

The documents from the Bank of England’s archive published today by gold researcher Ronan Manly —

https://www.bullionstar.com/blogs/ronan-manly/new-gold-pool-at-the-bis-b…

— showing an attempt by central bankers in 1979 to create a second “gold pool” to control the price of the monetary metal, may be most important because, while they are 37 years old, they show the central bankers conspiring against the monetary metal long after it was officially removed from the international financial system.

That is, in 1971 the United States revoked convertibility of the dollar to gold for other nations and in 1976 the Jamaica Accords confirmed that currencies were no longer officially tied to gold under the Bretton Woods system. These circumstances continue to prevail today, at least nominally.

But in 1979, the documents show, central bankers still feared gold’s influence on currencies, commodities, and the general price level. A conspirator from the Bank of England wrote of the need of central banks to sell gold “to break the psychology” of a rising gold market market, as they had done during the first gold pool, the London Gold Pool of 1961-68.

Signifying the interest of the United States particularly in breaking the gold price, U.S. Federal Reserve Chairman Paul Volcker is recorded as proposing a central-bank gold-selling operation involving up to 10 percent of the gold reserves of the participating nations.

Saudi Arabia is described as very concerned about the relationship of gold and oil prices and fearful that gold is getting ahead of oil. Central banks are said to have discussed rumors that the United States is secretly selling gold to Saudi Arabia to assuage its concerns that oil was too cheap.

The Bank for International Settlements is described as prepared to function as the gold broker for the major central banks if they decided to undertake a new gold pool, the first having been the London Gold Pool of 1961 to 1968.

Central bankers are recorded as favoring selling gold when it was strong and repurchasing when it was weak, a policy that disappointed the United States, which, predictably enough, wanted the European central banks to sell their gold outright and let it go, presumably to eliminate competition for the U.S. dollar and its hybrid, the Special Drawing Rights of the U.S.-controlled International Monetary Fund, in accordance with longstanding U.S. policy:

http://www.gata.org/node/17361

Later this week Manly will publish more documents about the central bank conspiracy to establish a second gold pool.

Given the secrecy and unaccountability of central bank policy on gold today and the additional documentation compiled by GATA here —

http://www.gata.org/node/14839

— can anyone really believe that central banks have lost interest in gold, that they no longer believe that gold is a mortal threat to their power over the world, and that they no longer do whatever they can to prevent its functioning as a reserve currency in a free market?

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

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Chris Powell

The Gold Anti-Trust Action Committee was organized in the fall of 1998 to expose, oppose, and litigate against collusion to control the price and supply of gold and related financial instruments. The committee arose from essays by Bill Murphy, a financial commentator on the Internet (LeMetropoleCafe.com), and by Chris Powell, a newspaper editor in Connecticut. Murphy's essays reported evidence of collusion among financial institutions to suppress the price of gold. Powell, whose newspaper had been involved in antitrust litigation, replied with an essay proposing that gold mining and investor interests should act on Murphy's essays by bringing antitrust lawsuits against financial institutions involved in the collusion against gold. The response to these essays was so favorable that the committee was formed and formally incorporated in Delaware in January 1999. Murphy became chairman and Powell secretary and treasurer.