Central banks abandon their 20 year gold manipulation scheme as they are soon to engage in a monetary metal free for all
Central banks abandon their 20 year gold manipulation scheme as they are soon to engage in a monetary metal free for all by Ken Schortgen, Jr for Shotgun Economics
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One of the biggest frauds engendered by central banks over the past few decades has been the scheme where they sold actual gold from their vaults, but accounted for it under the guise of a ‘lease’. This means that they could manipulate the price of gold in the Spot market while at the same time fudging their books to make it appear like they had ample gold reserves.
But as many central banks begin to rapidly lose credibility following a decade of QE, ZIRP, and even Negative Interest Rates ($13.7 trillion and counting in negatively yielding bonds), a sudden flight back into gold has emerged for these same central banks, and on July 26 they officially abandoned their 20 year agreement to cooperatively manipulate precious metal accounting.
Last month, a BullionStar article titled “The Fifth Wave: A new Central Bank Gold Agreement?” brought your attention to the fact that the fourth and current round of the Central Bank Gold Agreement (CBGA) run by a cartel of heavyweight central banks in Europe was about to expire, and that these gold agreements, which have been running in rolling five year periods since September 1999, were not designed for the purposes they claimed to be.
That CBGA1 and CBGA2 from 1999 – 2008, were not intended to help the wider gold market by limiting central bank gold sales, but were really a cover by the central bank syndicate members to account for nearly 4000 tonnes of gold that had already been sold or leased in the 1990s. That CBGA3 was then used to distract the gold market about the secretive ‘gold sales’ that the IMF claimed to have undertaken in 2010, which were really another book squaring exercise for disposed IMF gold.
The heavyweight signatories to the central bank gold agreements (CBGAs) include Eurozone member banks such as the Bundesbank, the Banque de France, Banca Italia, De Nederlandsche Bank, National Bank of Belgium, the European Central Bank (ECB) itself, as well as the non-Eurozone Swedish Riksbank and the Swiss National Bank. In its composition, the consortium replicates the nexus of the 1960s London Gold Pool (Switzerland, Germany, France, Italy, Netherlands, Belgium) and the nexus of the central banks which met at the Bank of International Settlements (BIS) in 1979 and the early 1980s to plan a secretive new 1980s gold pool. – Bullionstar via Zerohedge
Sadly for Europe and much of the Western central banks, the gold they sold to China and Russia will NOT be returned to them despite their ledgering the transaction as a ‘lease’. And this means that if they want to buy gold on the open markets, it will become apparent very soon that the cost will be much greater than if they had simply abandoned this scheme a decade ago.