Last week, we gave you the International Monetary Fund’s view of why it wouldn’t sell investor Eric Sprott gold from its fund.Mostly, the Fund pointed to following protocol and saying that its available gold can only be sold to central banks or sovereign nations.
Then we contacted Mr. Sprott himself to find out his side of the story, which was starkly different from the IMF’s rhetoric.
Sprott believes the IMF doesn’t have all the physical gold it claims it has and that these deliveries to the central banks that have bought gold from the IMF are all just bookkeeping fallacy. He believes the price of gold is being suppressed.
Enter the third part of the equation: Chris Powell (pictured here with Ron Paul), Secretary and Treasurer of the Gold Anti-Trust Action Committee, better known as GATA.
Powell’s opinion is similar to that of Sprott’s in that they both believe the IMF is lying its arse off in order to manipulate the price of gold.
When we spoke to Powell, he insisted that the IMF has no gold whatsoever in stock. His reasoning behind this dates back to April of 2008 when Powell asked the IMF many questions about gold and was evaded in “every respect” of the matter. Some may decry GATA as a conspiracy theorist group that’s out to plot against the central banks of the world.
But GATA has been asking the questions that a lot of people would normally just accept for themselves.
Some of the topics GATA has attempted to discuss with the IMF include:
- Records on physical gold including serial numbers and proof that the physical bullion actually exists.
- Did physical gold actually change hands with central banks like Mauritius or was it just bookkeeping to create the illusion of a physical gold transfer?
- What are the designated depositories for gold?
- The involvement of various governmental bodies in the manipulation of metal prices.
None of these questions could be answered by the IMF and as a result of asking such questions, Powell has since been unable to extract any sort of legitimate response from the IMF as they continue to evade GATA’s investigation. In fact, the IMF now refuses to answering all GATA/Powell emails after Powell asked for an audit in April of 2008.
And it’s not just Powell and GATA members who are up in arms over the alleged manipulation of gold prices.
An article in the New York Post from Sunday tells a story of how one JP Morgan commodities trader is coming out and detailing how the banks play hardball in order to manipulate gold and silver prices. One of the choice quotes from the article is from Andrew Maguire to another trader at the Commodities Futures Trading Commission or CFTC:
“Subject: Fw: Silver today A final e-mail to confirm that the silver manipulation was a great success and played out EXACTLY to plan as predicted yesterday. How would this be possible if the silver market was not in the full control of the parties we discussed in our phone interview?”
So what exactly is the incentive for the IMF and other central banks to manipulate metals?
It’s a matter of preserving western currencies and interest rates, Powell says. “The Federal Reserve runs the world” and that’s not changing anytime soon. Heck, even various ex-Fed Reserve chairman all say they rigged the gold market, including Volcker and Greenspan. And this isn’t something GATA concocted in a media laboratory to get what they want – this is straight from the Federal Reserve’s official website.
In FOMC minutes from 1995, one can easily read for themselves that the Federal Reserve is engaged in multiple gold swap agreements with other countries and their central banks.
Mr. Powell backs up his position, reiterating:
Meanwhile, for years the International Monetary Fund, the central bank of the central banks, has been openly intervening in the gold market by threatening to sell gold. The IMF said its intent in selling gold was to raise money to lend to poor nations. This explanation was ridiculous on its face, though the IMF has never been challenged about it in the financial press. No, the financial press has been happy to tell the world that central banks that lately have effortlessly conjured into existence fantastic amounts of money in many currencies could find a little money to help poor countries only by selling gold.
Of course the intent of the IMF and its member central banks was not to help poor countries but to intimidate the gold market and control the gold price.
That the IMF intimidated the gold market so long with this threat of gold sales was all the more remarkable because the IMF probably has never had any gold to sell in the first place.
Basically, Powell and GATA are of the belief that the gold market is ultimately rigged and suppressed. Before speaking with Powell, we were also sceptical of some of GATA’s claims on allegations that the Federal Reserve would undertake a role in this manipulation, but the group is not as crazy as they come off.
We’ll be following up with the IMF this week to address the allegations made by Sprott and GATA. Meanwhile, here is a video of Chris Powell speaking with Max Keiser on gold and markets.
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