Are stars aligned for gold revaluation -- and is GATA finished?
Chris Powell

Dear Friend of GATA and Gold:

Today Zero Hedge posts a couple of items suggesting that central banks are intervening surreptitiously in the markets even more lately to avert deflation or that they should intervene more -- items suggesting an end to gold price and commodity price suppression as central bank policy.

The first item is from an anonymous commodity trader who can see no other explanation for the recent rally in commodities.

Such speculation is plausible since, as Eric Scott Husander, the founder of the market data firm Nanex in Winnetka, Illinois, disclosed in 2014, CME Group, operator of the major futures markets in the United States, has been offering volume trading discounts to governments and central banks for secretly trading all major futures contracts on CME Group exchanges and counts governments and central banks among its customers:

http://www.gata.org/node/14385

http://www.gata.org/node/14411

The second item at Zero Hedge reports a paper by an analyst for bond house Pacific Investment Management Co., Harley Bassman, advocating that the Federal Reserve should start buying gold to stimulate the economy by devaluing the dollar, as the U.S. government undertook devaluation against gold in 1934:

http://www.zerohedge.com/news/2016-04-21/pimco-economist-has-stunning-pr...

Bassman's paper is posted in the clear at PIMCO's Internet site here:

https://www.pimco.com/insights/viewpoints/viewpoints/rumpelstiltskin-at-...

Such thoughts evoke the paper published in 2012 by the American economists and fund managers Paul Brodsky and Lee Quaintance speculating that central banks were surreptitiously redistributing the world's gold reserves and aimed, upon the scheme's completion, to revalue the monetary metal substantially upward to reliquefy themselves, a paper GATA often has called to your attention:

http://www.gata.org/node/11373

Indeed, the idea of an upward gold revaluation to avert debt deflation was also broached in a 2006 paper by the Scottish economist R. Peter W. Millar, called to your attention by GATA the following year --

http://www.gata.org/node/4843

-- and even by a former member of the Federal Reserve Board, Lyle Gramley, during an interview with Business News Network in Canada in 2008. Though BNN seems to have removed the video of the interview, your secretary/treasurer transcribed the relevant passage when he called it to your attention here:

http://www.gata.org/node/6989

For several reasons your secretary/treasurer long has been inclined to believe that gold price suppression would be followed by an official gold revaluation.

First, of course, as Millar noted in 2006 and as Bassman notes now, official gold revaluations have happened before.

Second, because official market intervention to suppress prices always causes shortages eventually, that being the lesson of the collapse of the London Gold Pool in March 1968:

https://en.wikipedia.org/wiki/London_Gold_Pool

And third, because central banks and governments could not survive any steady erosion of their currencies in favor of gold; their currencies would become vulnerable to quick collapse. As a result central banks and governments would have to get in front of the inevitable and make it seem like their doing and thereby preserve the impression that they remain in control.

So if the stars are aligned for an official revaluation of gold, will this nullify GATA's work?

Not at all.

For as much as GATA's research long has implied a huge and uncoverable short position in gold underwritten by central banks and thus a much higher price for the monetary metal, and as much as GATA may be placed in the camp of "gold bugs" and gold investors, GATA's objectives have not really been a higher gold price. Rather, GATA's objectives have been free and transparent markets in the monetary metals and commodities; limited, accountable, and democratic government; fair dealing among the nations; and an end to imperialism, whose primary mechanism in recent decades has been currency market rigging, just as it was the primary mechanism of Nazi Germany's exploitation of occupied Europe during World War II:

http://www.gata.org/node/10457

http://llco.org/hitlers-beneficiaries-2005-by-gotz-aly/

It will gain the world little if gold's upward revaluation merely begins another, more sustainable round of gold and commodity price suppression and the undermining of free and transparent markets and democracy by central banks and governments, free and transparent markets and democracy being the great engines of human progress and liberty.

That's why the questions GATA raises are likely to remain compelling, though we may despair of their ever getting posed by mainstream financial news organizations and market analysts:

-- Are central banks trading the gold and commodity markets surreptitiously, directly or through intermediaries, or not? (Of course they are, and GATA has summarized much of the documentation of this trading here --

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

-- though it can never be addressed by people who suppose themselves respectable.)

-- If central banks are trading the gold and commodity markets surreptitiously, directly or through intermediaries, is it just for fun -- for example, to see which central bank's trading desk can make the most money by cheating the most investors -- or is it for policy purposes?

-- If central banks are trading the gold and commodity markets surreptitiously, directly or through intermediaries, is this trading for the traditional purposes of defeating a potentially competitive world reserve currency, or have these purposes expanded?

-- If central banks, creators of infinite money, are surreptitiously trading a market, how can it be considered a market at all, and how can any country or the world ever enjoy a market economy and democracy again?

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
[email protected]

* * *

Support GATA by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006:

http://www.goldrush21.com/order.html

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

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.

GATA financed the federal anti-trust lawsuit of its consultant, Reginald H. Howe -- Howe vs. Bank for International Settlements et al. -- which was pursued in U.S. District Court in Boston from 2000 to 2002. While the Howe suit was dismissed on a jurisdictional technicality, it yielded valuable information at a court hearing in November 2001 and became the model for Blanchard Coin and Bullion's anti-trust lawsuit brought the following year against Barrick Gold and J.P. Morgan Chase & Co. in U.S. District Court in New Orleans, whose settlement appears to have included Barrick Gold's decision to stop selling gold in advance.

Using the U.S. Freedom of Information Act, throughout 2008 and 2009 GATA sought access to the Federal Reserve's gold-related records, eliciting an admission from the Fed that it has gold swap arrangements with foreign banks and insists on keeping them secret. To obtain the records at issue, in December 2009 GATA sued the Fed in U.S. District Court for the District of Columbia. In February 2011 the court ruled that most of the Fed's gold records could remain secret but that one had to be disclosed: minutes of the April 1997 meeting of the G-10 Committee on Gold and Foreign Exchange. The minutes, released by the Fed two weeks after the court's ruling, showed G-10 member treasury and central bank officials secretly discussing the coordination of their policies toward the gold market. The court ordered the Fed to pay court costs to GATA.

GATA has collected and published dozens of documents showing Western treasury and central bank efforts to intervene both openly and surreptitiously against a free market in gold. GATA has held four international conferences: in Durban, South Africa, in 2001; in Dawson City, Yukon Territory, Canada, in 2006; in Washington, D.C., in 2008, and in London in 2011.

GATA's Internet site is www.GATA.org.

GATA is recognized by the U.S. Internal Revenue Service as a tax-exempt educational and civil rights organization under Section 501-c-3 of the U.S. Internal Revenue Code and is grateful for donations to sustain its work.

Contact GATA at [email protected].

www.gata.org