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Stig,
In 25 words or less, what's the bottomline
synopsis on this information?
Thanks,Norman
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----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
Stig O
To: <A
href="mailto:realtraders@xxxxxxxxxxxxxxx";
title=realtraders@xxxxxxxxxxxxxxx>realtraders@xxxxxxxxxxxxxxx
Sent: Tuesday, July 31, 2001 5:56
PM
Subject: [RT]
From another board i picked up this.
If you are alergic to GATA drop it, but if you
like detective stories, it's good reading.
And Norman, this could be the straw we talked
about.
regards
stig
Arch Crawford
sends this along. Not all his work or
comments...Mark************I am forwarding this to all on my
lists.Please take time to read if you have any interest at all.Forgive
if it is not appropriate to you or if you get 2 copies.ACLe
Metropole Members,More developments are going to come to light over
the next few weeks that are most disturbing about the gold market.
They are stunning!While the focus is on gold, the reality is that what
the GATA camp is uncovering is frightening as it pertains to threats
to the most basic principles ofwhat America stands for. Freedom
and our democracy, as we know it, are at stake. For that reason, it is
most important that mainstream America understand what is going on at the
highest levels of our government regarding disinformation issues,
violations of the U.S. Constitution and encroachment on U.S. politicians
by the WORLD's bankers.The GATA campaign to alert Congress about the
manipulation of the gold market is gaining steam. GATA and it
supporters have made enormous progress the past couple of weeks. The tide
is going our way.We must keep the pressure on so that the truth about
what has happened to gold is allowed to surface.Chris Powell sent
me the following. It willgive you some idea of just how effective our
campaign is progressing. Please keep in mind, this isa response from
just ONE of the MANY members of Congress that GATA supporters have
impacted.BILL MURPHYCHAIRMANGOLD ANTI-TRUST ACTION
COMMITTEE***turkey hunter (07/27/01; 20:27:22MT - usagold.com
msg#: 58707)update from Senator Grassley office staff on gold
classificationsI got another email from Sen. Grassley's office
staff today. Looks like the US Mint is going to give him in written
form an explanation on the change of definitions regarding classifications
of gold. The following is the email sent to me
today.Mr.................I have just received a call from the
Liaison office for the U.S. Mint. She will be sending the Washington
office in written form, an explanation for the change in definitions.
I am sure that Senator Grassley will want to handle this explanation from
Washington, so he will have a hands-on feeling for what has happened.
Apparently, there had been MANY calls on this subject so it may be a
little while to get a copy of that explanation in your hands.
Thank you for calling this matter to the attention of Senator
Grassley.***Subj: [GATA] Send this essay by James Turk to
Congress: What is happening to America's gold?Date: 7/28/01 10:17:13
AM Central Daylight TimeFrom: GATAComm@xxxxxxxTo:
gata@xxxxxxxxxxxxxxx10:44a ET Saturday, July 28, 2001Dear
Friend of GATA and Gold:In a new essay, James Turk of the Freemarket
Gold and Money Report has documented how the U.S. TreasuryDepartment's
Exchange Stabilization Fund is intervening in the gold market and how the
Treasury Department isundertaking to conceal the intervention.
Turk's essay -- What is Happening to America's Gold? -- appears
below. GATA asks its supporters in the United States to makea
printed copy of this essay and send it to their U.S.senators and U.S.
representative with a covering letterasking their members of Congress to
obtain a full andcandid response to the essay from the Federal
Reserveand the Treasury Department.We have indications that our
writing letters to Congressto request such information is having a big
impact. Wejust can't let up. Thanks for your help.CHRIS POWELL,
Secretary/TreasurerGold Anti-Trust Action Committee
Inc.______________________________________What Is Happening to
America's Gold? By James Turk Copyright 2001, The Freemarket Gold
& Money Report Reprinted by permission This past December I
wrote (Letter No. 276, The Smoking Gun) about my discovery of a
discrepancy between two reports that tracked the status of the U.S.
Gold Reserve. The Federal Reserve prepares both reports. The
first report is the balance sheet of the Federal Reserve, and the item of
note is an entry entitled Gold Stock. Because of its ownership of the Gold
Certificates issued by the U.S. Treasury, the Federal Reserve has a
claim to the total U.S. Gold Reserve, reportedly 261.6 million ounces.
Therefore, this liability of the U.S. Treasury -- evidenced by its Gold
Certificates to pay gold -- is an asset on the balance sheet of the
Federal Reserve. The second report prepared by the Federal Reserve
presents the U.S. Reserve Assets, which records all of the Treasury's
international monetary assets. These include the Treasury's holdings of
foreign currencies, SDR's issued by the International Monetary Fund, and
gold. The item of note in this report is also the gold stock, which
again is this same US Gold Reserve. Thus, it is clear that the gold
held by the U.S. Treasury -- the U.S. Gold Reserve -- does double duty.
First, it provides a reserve at the Federal Reserve. In other
words, because the Gold Certificates are an asset of the Fed, this claim
to the U.S. Gold Reserve imparts value to the liabilities of the Fed, of
which the most important are the Federal Reserve Notes that we carry
in our pocket as cash currency. But there is a second use as well
because the U.S. Gold Reserve is also recorded as part of the
international monetary assets of the U.S. Treasury, the total of which
are a measure of this nation's financial strength relative to other
countries. The important point is that last December I observed
that the weight of gold in these two reports was different, and I
explained why each weight should always be identical. Thus, the Gold
Certificates owned by the Federal Reserve should always be equal to the
U.S. Gold Reserves reported as part of the U.S. Reserve Assets. They
are the one and the same hoard of gold, and there is a body of federal law
saying so. Further, we have been repeatedly informed by various
Treasury and Federal Reserve officials that the U.S. government does
not intervene in the gold market, that it does not trade gold for its
account or the account of others, and that the U.S. Gold Reserve remains
in storage at Fort Knox and the other depositories. If their
contention was true, then why are these two reports showing different
weights for the same hoard of gold? The answer I pointed out last
December is that the clandestine activities of the Exchange Stabilization
Fund (ESF) belie the pronouncements of Treasury officials about that
department's so-stated inactivity in the gold market. We know that the ESF
is active in the gold market because the Federal Reserve says so in
its report of the U.S. Reserve Assets. This reports states that
this weight of the U.S. Gold Reserve is the Gold Stock, including Exchange
Stabilization Fund. Thus, the difference in weights between these two
reports is attributable solely to the gold activity of the ESF. As I
stated last December, there is no other alternative. So at the time I
discovered this discrepancy I wondered how the Treasury would
eventually come to explain this difference. How would they address the
ESF's activity in the gold market? How would they explain away their
previous statements on record that neither the U.S. Treasury nor the
ESF is trading gold? In the months that have passed the Treasury has
continued to deny U.S. government activity in gold. But that is not
all the Treasury has been doing. It has also been working hard to cover up
its tracks. The U.S. Reserve Assets report now excludes all
reference to the ESF, and previous reports already published have been
changed. Not only were the figures adjusted, but all reference to the ESF
has been eliminated. Reg Howe posted to his website
(http://www.goldensextant.com/commentary18.html#anchor12493) an
excellent article addressing this change, and says: The figures could not
be changed without a change in description, proof that the earlier
discrepancies were indeed on account of gold held by the ESF. Indeed.
The Federal Reserve stopped mentioning the ESF in these reports in
February. I guess the January 2001 report was already being prepared when
my December article appeared, so it was too late to change that report.
Thus the U.S. Treasury has enlisted the Federal Reserve as its partner
in crime, as it is after all the Federal Reserve that prepares these
reports. And what is that crime? Without any explanation to anyone
(including Congress to my knowledge), the U.S. Treasury has taken steps
that can be of no other purpose and have no other intent but to hide
the truth. The ESF has been erased out of the U.S. Reserve Assets report
as if it never previously existed. Thus, these new reports being
prepared by the Federal Reserve (and up to now they had probably been
prepared this same way, since the ESF was formed in 1934) ensure that the
American public will no longer see this gold-related activity by the ESF.
As I write this, I shake my head in disbelief. All I can think of
are those old photographs showing sclerotic Soviet despots standing on the
parapets of the Kremlin, which would somehow miraculously and
inexplicably change over the years depending on who fell out of favor.
Having had their erstwhile colleagues air-brushed out of those old
photographs as well as Soviet history books, those despots who
survived the purge acted as if the truth never existed. Are our
Treasury officials no better than that with their apparent reckless
disregard for the truth, air-brushing the ESF out of the Federal Reserve
reports? Before you answer that question consider also another recent
damning action by the Treasury. This past April I wrote (Letter No.
283, Behind Closed Doors) about the Treasury's unexplained
reclassification of that part of the U.S. Gold Reserve in the Treasury
depository at West Point as Custodial Gold. Using minutes of the Federal
Open Market Committee of the Federal Reserve -- actually, very
revealing minutes referring to gold swaps that apparently were
inadvertently not redacted before being made public -- and by other
corroborating evidence, I suggested that the term Custodial Gold meant
that this part of the U.S. Gold Reserve had been swapped with gold
owned by the Bundesbank. My assertion provoked controversy but no
denial from the Treasury. Alarmingly, not only was the Treasury silent
to me, its critics, and others searching for the truth, the Treasury was
apparently also silent to Congress. But recently, the Treasury has spoken.
Last month all of the U.S. Gold Reserve was reclassified. None of
the gold stored at West Point, Fort Knox, and the other depositories is
called US Gold Reserve or even Custodial Gold. All of it is now
labeled as Deep Storage Gold. This action raises a lot of serious
questions. Does this change of label mean that this gold is no
longer the U.S. Gold Reserve, and if so, why? But if it still is the
U.S. Gold Reserve, then why did they change the label, and why don't they
still call it the U.S. Gold Reserve? How can the Treasury act
unilaterally without any prior public notification informing anyone
that this gold asset would be reclassified? What is the Treasury trying to
cover up by this latest action? While I was pondering these and
other questions, more intriguing news has come to light. The Federal
Reserve has released to Sen. Jim Bunning an internal memo to Alan
Greenspan from Virgil Mattingly, general counsel of the Fed, whose quote
of the gold swaps in the FOMC minutes was included in my April article.
Mattingly now says that he has no clear recollection of what he
actually said at the FOMC meeting that fateful day, but nevertheless he
believes that his remarks were transcribed inaccurately or otherwise
became garbled. Hmmm, transcribed inaccurately. So he didn't say gold
swaps to provide an example of ESF authority? Well, let's see. What could
he have said, and how were those words transcribed inaccurately? Would
the correct transcription have been bold wasps? Or did Mattingly really
say that day that ESF authority was demonstrated by cold swats?
Actually, there is no need to guess what Mattingly really said.
The Federal Reserve's website says: Beginning with the 1994 meetings, the
FOMC Secretariat produced the transcripts shortly after each meeting
from an audio recording of the proceedings. Therefore, there is no
need to speculate what Mattingly really said. Let's go back and listen to
the original tape of the meeting. And while we're at it, let the
American public listen to the WHOLE TAPE, including all of the material
and discussions about the ESF that were redacted from the transcript
released to the public. These recent developments have stimulated
in my mind a lot of questions. Why is the U.S. Gold Reserve no longer
called that by the Treasury? Why did the Treasury force the Federal
Reserve to change its reporting of the U.S. Reserve Assets to exclude the
gold-trading activity of the ESF? And who is the mastermind behind
what obviously is becoming a clear (and probably illegal) cover-up of the
truth? These are only a few of the questions that I would like
answered. But all of them pale in comparison to one big question:
What is happening to America's gold? * * * A note on
earmarked gold. I mention in the above article the recent essay
written by Reg Howe, and provide a hyperlink to it. I strongly
recommend that you read this essay because it is full of informative
material, including details of the so-called earmarked gold being stored
at the Federal Reserve Bank of New York. This gold is owned by
foreign governments and institutions such as the International Monetary
Fund, but is stored at the New York Fed. It is specially earmarked in
order to establish that this gold is not part of the U.S. Gold Reserve,
some of which is also stored at the New York Fed. This weight of
earmarked gold is one of the largest hoards in the world stored in any one
place, but its size has been declining in recent years. There were
13,387 tonnes of earmarked gold stored at the New York Fed in 1990,
but this total has dropped to 9,235 tonnes as of April 2001, which is the
most recent report, a decline of 4,152 tonnes, or 31 percent.
There has been a pattern to this flow of gold out of the New York
Fed, mainly reflecting bigger flows out when the gold price is rising.
This pattern of activity may have been one of the factors that Fed
Chairman Alan Greenspan was referring to when he testified before
Congress that central banks stand ready to lease -- that is, lend --
gold in increasing quantities should the price rise. However, that
pattern has been changing. Since September 2000 at least 40 tonnes of gold
have been removed from the New York Fed each month. Reg Howe notes
that the central banks have not only increased their leasing and sales
activities but also made them less obviously targeted to price increases.
This observation is important. In my view, this change in the
pattern of dishoarding from the New York Fed smacks of desperation. The
shorts need physical bullion to keep the gold price from exploding.
The shorts can't get this bullion from new production or other
sources, so they have to pull it out of the New York Fed, regardless of
whether the gold price is rising. More gold is coming out of the New York
Fed each month than is being mined by South Africa, the world's
largest producer. According to the Washington Agreement, central banks
cannot dishoard more than 400 tonnes per year, nor increase their
lending of gold. If so, then why is gold being pulled out of the New York
Fed at a rate more than 480 tonnes per year? But the real picture is
probably even worse. It is likely that the 150 tonnes being sold
by the Bank of England this year is stored in the BoE's own vault in
London, not the New York Fed. So when taking the 80 tonnes' difference
calculated above and this 150 tonnes, we can conclude that 230 tonnes more
gold is being dishoarded from the New York Fed than required for the
central banks if they are indeed sticking to their Washington Agreement. I
see only two interpretations to this analysis. The obvious
conclusion is that the central banks are breaking the Washington Agreement
and selling more than 400 tonnes per year and/or increasing their gold
lending. The less obvious conclusion is that the central banks that
signed the Washington Agreement are indeed sticking to it, but some
non-signatory is lending and/or dishoarding gold. Though long-time
readers of these letters know that I have a very low regard for central
banks and their commitment to honor their agreements/promises, I think
that they deserve the benefit of the doubt this time. My guess is that
someone else is shipping this 40 tonnes of gold a month out of the New
York Fed. If we assume that the signatories of the Washington
Agreement are indeed honoring their commitment, and given the size of
the weight of this gold being shipped monthly out of the New York Fed,
there are only two possible parties that have this much gold -- the
International Monetary Fund and the U.S. Treasury. So could the
Treasury somehow be swapping more gold with the Bundesbank? Or is the IMF
involved? I think it is the latter. Note all of the talk in this
past weekend's G-8 meeting about debt relief for poor countries, but in
contrast to years past, there's been no mention of selling the IMF's
gold to raise the money to provide this relief. Maybe they are
purposefully not mentioning the IMF's gold because they are already
tapping into it. -END- To
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