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Fed admits hiding gold swap arrangements (How Thick Can It Get???)

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  • Wed, Sep 23, 2009 - 04:28pm

    #1

    Peter Bartels

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    Fed admits hiding gold swap arrangements (How Thick Can It Get???)

Just how deep can the BS get?

We’re a nation run by tyrants, and we, the American Consumer just keep putting up with it. Shrug, yawn, swig of beer. What’s on television tonight?

The latest Federal Reserve garbage. GATA nailed them, again.

Fed admits hiding gold swap arrangements

11p Tuesday, September 22, 2009

Dear Friend of GATA and Gold:

The Federal Reserve System has disclosed to GATA that it has gold swap arrangements with foreign banks that it does not want the public to know about.

The disclosure contradicts denials provided by the Fed to GATA in 2001 and suggests that the Fed is indeed very much involved in the surreptitious international central bank manipulation of the gold price particularly and the currency markets generally.

The Fed’s disclosure came this week in a letter to GATA’s Washington-area lawyer, William J. Olson of Vienna, Virginia (http://www.lawandfreedom.com/), denying GATA’s administrative appeal of a freedom-of-information request to the Fed for information about gold swaps, transactions in which monetary gold is temporarily exchanged between central banks or between central banks and bullion banks. (See the International Monetary Fund’s treatise on gold swaps here: http://www.imf.org/external/bopage/pdf/99-10.pdf.)

The letter, dated September 17 and written by Federal Reserve Board member Kevin M. Warsh (see http://www.federalreserve.gov/aboutthefed/bios/board/warsh.htm), formerly a member of the President’s Working Group on Financial Markets, detailed the Fed’s position that the gold swap records sought by GATA are exempt from disclosure under the U.S. Freedom of Information Act.

Warsh wrote in part: “In connection with your appeal, I have confirmed that the information withheld under Exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of Exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you.”

When, in 2001, GATA discovered a reference to gold swaps in the minutes of the January 31-February 1, 1995, meeting of the Federal Reserve’s Federal Open Market Committee and pressed the Fed, through two U.S. senators, for an explanation, Fed Chairman Alan Greenspan denied that the Fed was involved in gold swaps in any way. Greenspan also produced a memorandum written by the Fed official who had been quoted about gold swaps in the FOMC minutes, FOMC General Counsel J. Virgil Mattingly, in which Mattingly denied making any such comments. (See http://www.gata.org/node/1181.)

The Fed’s September 17 letter to GATA confirming that the Fed has gold swap arrangements can be found here:

http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf

While the letter is far from the first official admission of central bank scheming to suppress the price of gold (for documentation of some of these admissions, see http://www.gata.org/node/6242 and http://www.gata.org/node/7096), it comes at a sensitive time in the currency and gold markets. The U.S. dollar is showing unprecedented weakness, the gold price is showing unprecedented strength, Western European central banks appear to be withdrawing from gold sales and leasing, and the International Monetary Fund is being pressed to take the lead in the gold price suppression scheme by selling gold from its own supposed reserves in the guise of providing financial support for poor nations.

 

Read the rest right here….

http://gata.org/node/7819

  • Wed, Sep 23, 2009 - 06:30pm

    #2
    Peak Prosperity Admin

    Peak Prosperity Admin

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    Re: Fed admits hiding gold swap arrangements (How Thick Can …

Nothing, I mean nothing, surprises me anymore.  The worldwide shell game of central banks is built on deceit and misdirection.

How can anyone believe anything put forth by our government or any of it’s ancillaries?

  • Wed, Sep 23, 2009 - 06:57pm

    #3
    Peak Prosperity Admin

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    Re: Fed admits hiding gold swap arrangements (How Thick Can …

Sorry if I missed it, but I cant find any statement in these documents that says they are conducting any gold swaps hiding them?  Looks like they are just saying GATA is not allowed to see such information whether it existed or not.  Am I missing something here?

  • Wed, Sep 23, 2009 - 07:05pm

    #4
    Peak Prosperity Admin

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    Re: Fed admits hiding gold swap arrangements (How Thick Can …

rickets,

That’s my reading also.  However, that kind of language is frequently used to avoid having to lie.

  • Wed, Sep 23, 2009 - 08:03pm

    #5
    Peak Prosperity Admin

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    Re: Fed admits hiding gold swap arrangements (How Thick Can …

Morph,

As a frequent GATA poster, help me understand something here.

Its obvious to anyone that has a basic understanding of our fiat monetary system, that the governments of this world have a primary interest in suppressing the role of gold as a monetary form of exchange. Yet GATA wastes tremendous amounts of time and effort trying to prove the obvious.

What is the purpose in that effort? What is to be gained by it?

The value of gold is dependent on the existence of a market to trade it in. Ironically, GATA would have you believe that gold’s true value will only be obtained if the system collapses. But if the monetary system collapses, no market will exist for gold, and therefore it will hold no objective value.

To put it another way, it seems that GATA would be satisfied if the price of gold was $5,000/oz. If that happened tomorrow, how would one profit from it?

  • Thu, Sep 24, 2009 - 01:26am

    #6
    Peak Prosperity Admin

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    Re: Fed admits hiding gold swap arrangements (How Thick Can …

Morpheus,

Nice find – interesting stuff.  The folks at GATA are working hard in an attempt to remove the predatory practices between central and bullion banks in suppressing the price of gold.  Unfortunately, they have had little impact as manipulations rage on.  China seems like the only entity that is having any effect on the amount of manipulation in the gold and silver markets.  My opinion (I am not an attorney nor a “doctor” of anything) is that GATA has a flawed strategy – or maybe I just don’t understand what they are trying to accomplish.

  1. Why would GATA use an FOIA lawsuit against a private corporation?

    Back in November of 2008, Bloomberg entered an FOIA lawsuit against the Fed to discover who the recipients were of over $2 trillion dollars of taxpayer bail-out money.  This suit may have established some legal precedent  – Fed Refuses to Disclose Recipients of $2 Trillion:

    Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression.

    The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information. The institution confirmed that a records search found 231 pages of documents pertaining to some of the requests.

    The Bloomberg lawsuit said the collateral lists “are central to understanding and assessing the government’s response to the most cataclysmic financial crisis in America since the Great Depression.”

    In response, the Fed argued that the trade-secret exemption could be expanded to include potential harm to any of the central bank’s customers, said Bruce Johnson, a lawyer at Davis Wright Tremaine LLP in Seattle. That expansion is not contained in the freedom-of-information law, Johnson said.

    The Fed’s defense is that they are privately owned corporation.  Trade secrets and customer confidentiality are privlidges enjoyed by private corporations – not the way government or the public sector operates.  The Fed has a private monopoly over the issuance and control of our money and they are allowed to operate secretly, behind closed doors.  What will a FOIA lawsuit accomplish?

    Note:  The minutes are available, here’s a Federal Reseve link – general counsel, J. Virgil Mattingly, told the Federal Open Market Committee, according to the committee’s minutes, that the U.S. Treasury Department’s Exchange Stabilization Fund had undertaken “gold swaps.” 

  2. Is GATA trying to stop the private Fed from manipulating the gold and silver markets?

    While this may be admirable, I don’t think they have shown a tenable legal position.  The New York Federal Reserve branch unilaterally runs the FOMC – this is legal even if it stinks of cronyism and conflicts of interest.  The big bullion banks like Goldman Sacks, J P Morgan Chase and Citibank coincidently own a large part of the New York Federal reseve Branch.

    Yea, this is appalling, but it appears to be legal – or at least “not our business.” 
     

  3. Is GATA implying that their 1995 “minutes discovery” establishes anything new?


    According to an article posted by James Turk  – “The Federal Reserve Bank of New York has had a number of accounts abroad, of which three with nominal sums remain at present. The three accounts are with the Bank of England, the Bank of France and the Bank of Canada.  The account with the Bank of England was opened in 1917 and subsequently used for a number of transactions involving exchange operations, investments and the purchase and earmark of gold. The account at the Bank of France was opened in 1918 in order that we might establish a sight account for possible use in transactions for the stabilization of exchange rates.”

    Back in January, Elaine Supkis broke a story that documented that the Federal Reserve was involved in pricing manipulations back in the early 60’s.  James Turk added to Elaine’s article and it was published at GATA and elsewhere – James Turk: The Fed’s blueprint for market intervention (btw, this is a must read article).

I hope I’m wrong and I hope GATA has success but I don’t see how they can mount a legal charge against the Fed with an FOIA lawsuit.  The bigger issue that is hard to get people to understand, is that the private Federal Reserve is a predatory conflict of interest – by design.  The way to get rid of the Fed is to simply fire them.  And, then, a RICO investigation would be in order.

Larry

  • Thu, Sep 24, 2009 - 02:29am

    #7
    Peak Prosperity Admin

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    Re: Fed admits hiding gold swap arrangements (How Thick Can …

[quote=JAG]

Morph,

As a frequent GATA poster, help me understand something here.

Its obvious to anyone that has a basic understanding of our fiat monetary system, that the governments of this world have a primary interest in suppressing the role of gold as a monetary form of exchange. Yet GATA wastes tremendous amounts of time and effort trying to prove the obvious.

What is the purpose in that effort? What is to be gained by it?

The value of gold is dependent on the existence of a market to trade it in. Ironically, GATA would have you believe that gold’s true value will only be obtained if the system collapses. But if the monetary system collapses, no market will exist for gold, and therefore it will hold no objective value.

To put it another way, it seems that GATA would be satisfied if the price of gold was $5,000/oz. If that happened tomorrow, how would one profit from it?

[/quote]

Two things that I have to strongly disagree with here JAG. First, you’re assuming that gold is a commodity. It’s not. Governments may decree that it is, and that it’s not a monetary unit but 6000+ years of human history, transcultural at that, prove otherwise.

Gold, and silver, are a store of wealth. Don’t believe me? Look at the inflation-adjusted DJIA performance over the last 10 years vs gold. Gold has outperformed the markets hands down.

Second, GATA does not believe that it is going to require a collapse fo the monetary system for gold to spike. What they are arguing is that suppression of commodities prices via manipulation is racketeering, and that big central banks and their primary affiliates (JPMorganChase, Deutchebank, HSBC) are raking in hundreds of billions in a rigged ripoff scheme by controlling these two primary PM markets.

Jeff. For them to profit, someone has to lose. That’d be me. And a few million other people trying desperately to keep the value of our labor from being ripped off from us via inflation and/or manipulation.

The concept of gold as a commodity in our culture is very new. Less than a hundred years. It is only considered a commodity due to legal tender laws. But this is legalese. The fact of the matter is that the physical markets are experiencing huge shortages, yet the price is waffling up and down at a snails pace.

There’s a disconnect between supply and demand here Jeff. Money is what people think it is. And historically it has been gold and silver. Silver has industrial use. Therefore it can ALSO be considered a commodity in addition to money. The same cannot be said of gold. It has very limited commerical use. 85% of all the gold ever mined is still above ground and available. That’s not how a commodity functions. And people don’t buy the physical stuff because they think it’s pretty and worth a $1000 or so per coin to visually admire. They buy it because it stores value.

Now, in spite of the manipulation it’s still stores value. How can that be? And what is it’s true value if the paper gold and silver busted and real price discovery were allowed to occur? Just one more thing to chew on. China is trying to corner the physical gold and silver markets. Why?

If the monetary system collapses, he who has the most gold and silver wins. Because they have the wealth. And guess who that is? Dollars are paper. They are currency. A mere medium of exchange that do not truly store the value of labor. If you own gold in spades, other than having a humanitarian heart (and I wish that all people would), why would you care if the currency collapsed? You have MONEY. Now, instead of coverting your money (gold and silver) to paper currency in order to spend your stored labor you’d have to go two routes: First, spend the coins directly, or Second, convert your gold/silver to a foreign currency that still has some usefulness as a medium of exchange. Either way, your money didn’t vaporize the way a currency can, and does.

Spend the coins when people want bread not gold/silver? Yes. Exactly. I can take a silver coin and buy gas with it. The guy that sold me gas will trade that coin for for some auto parts. The auto parts guy will take it to the local farmers market and buy flour, sugar, and yeast. Viola, from silver to bread.

Gold and Silver. They are fungible, rare, and has been vastly accepted, regardless of culture, throughout the anthropological record. The same cannot be said of paper.

Do you know what the currency of choice is in Zimbabwe? Not the USD. Nope. Gold dust.

History repeats itself.

  • Thu, Sep 24, 2009 - 02:31am

    #8
    Peak Prosperity Admin

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    President’s Working Group or Plunge Protection team

The President’s Working Group on Financial Markets…….gives me great concern…….It’s now the Plunge Protection Team. 

President Reagan used them to work the markets in ’88 and I’ll bet they are a very powerful force in keeping this ship upright as long as it has.

From: http://www.rense.com/general52/secretsoftheplunge.htm

Executive Order 12631 – Working Group on Financial Markets – Mar. 18, 1988; 53 FR 9421, 3 CFR, 1988 Comp., p. 559.

 “By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, and in order to establish a Working Group on Financial Markets, it is hereby ordered as follows:

 Section 1. Establishment. (a) There is hereby established a Working Group on Financial Markets (Working Group). The Working Group shall be composed of:

(1) the Secretary of the Treasury, or his designee; (2) the Chairman of the Board of Governors of the Federal Reserve System, or his designee; (3) the Chairman of the Securities and Exchange Commission, or his designee; and (4) the Chairman of the Commodity Futures Trading Commission, or her designee.

 

 

 

 
From 1997: http://www.washingtonpost.com/wp-srv/business/longterm/blackm/plunge.htm

From Ellen Brown: http://www.webofdebt.com/articles/wag_the_dog.php

  • Thu, Sep 24, 2009 - 03:58am

    #9
    Peak Prosperity Admin

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    Re: Fed admits hiding gold swap arrangements (How Thick Can …

Morph,

Thanks for the reply. I want you to know that I’m in no way criticizing you and that I too own gold and silver. My inquiries are merely an effort to understand the gold market better.

I’m aware of gold/silver’s well established role as money throughout history and I obviously can’t argue with it. Gold is a very unique market in that the price of gold has been clearly shown to be correlated to the fear in the marketplace. Currently, that fear is of a currency-crisis, 6 months ago the fear was of a deflationary spiral, and a year ago the predominant fear was run away inflation. 

My experience with investing in other financial markets has taught me that making an investment decision based on fear is always a losing proposition. But gold appears to be an investment in fear itself. Thus my trading instincts tell me that gold is the worst of all investments because demand for it guarantees poor market timing.

It is this inherent poor timing that I believe creates the perception of overt manipulation in the gold market. 

 

 

  • Thu, Sep 24, 2009 - 04:34am

    #10
    Peak Prosperity Admin

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    Re: Fed admits hiding gold swap arrangements (How Thick Can …

JAG wrote:

It is this inherent poor timing that I believe creates the perception of overt manipulation in the gold market.

Jeff, markets gave way a long time ago to manipulations, including gold.  These are not perceptions, it is the way it is.  The markets, the bail-outs and the private Federal Reserve are all part of a huge scam – the U.S. is being bamboozled.  I don’t think you understand who and what the Federal Reserve is and I suggest you visit the CM “essential books” section and buy the The Creature from Jekyll Island : A Second Look at the Federal Reserve.

Or better yet, try Ellen Brown’s Web of Debt: The Shocking Truth About our Money System.  That is a much better book from a mechanical perspective.

Larry

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