Unlocking the Money Matrix - The Summers Gold Price Suppression Scheme
By Jake Towne, the Champion of the Constitution
Here is how the scheme works:
1. Central banks, like the FED, takes gold bars from their vaults and leases them to cartel entities like Goldman Sachs at a low rate typically around 1%. Unless the sale is announced like Gordon Brown's infamous sale of 60% of England's gold reserves from 1999-2002 at $275/oz., the central bank continues to carry gold on lease and gold in the vault as one line item on their balance sheet.
2. The cartel then sells the physical gold into the futures market at spot price. The spot and future prices were suppressed by this extra supply. Large dumps can be orchestrated to cause "waterfalls" in the price due to algorithm or stop-loss trading.
3. Now the cartel has plenty of capital which could be leveraged by an investment bank at 30:1 or higher and used for ANY transaction. (Similar plays on interest rate mismatches were also executed on fiat currencies, most infamously the Japanese Yen-US Treasury carry trade, but these plays were made far easier with the golden 'canary' silenced.)
4. The physical gold bars leave the exchanges. Most of the central bank gold is melted down to meet the supply deficit, and now adorns the necks of Indian women or rests in the vaults of investors.
There are approximately 160,000 metric tons of aboveground gold stock. The World Gold Council reports that the world's central bank gold reserves are at 29,698 metric tons as of June 2009, and this is a fall from the 35,582 metric tons reported in 1990 while the world's money supply has more than tripled since then. However, the WGC statistics do not have the rigor of independent audits and are incorrect as shown by the abrupt doubling of China's disclosed reserves overnight. As Ed Wener of GATA reported in 2005 and James Turk related in 2009, it is highly probable that 12,000 to 15,000 additional metric tons has been leased by the central banks into the marketplace.
In the March 2001 audit of the Exchange Stabilization Fund (ESF), the Treasury refers its (unconstitutional) powers to "deal in gold, foreign exchange, and other instruments of credit and securities the Secretary considers necessary" to promote "orderly exchange arrangements and a stable system of exchange rates." Along with the blatant remark by Greenspan above, this appears to me to be a carte blanche to trade in the gold market, and as late as 2000 the FED still publicly reported the ESF as controlling an unspecified portion of our nation's gold. To this day, the US government and the FED report gold stock on lease and gold in the vault as a single line item.
It is not outside the realm of possibility – though unproven - that the US government completed a gold swap transaction with Germany, where we traded gold stored in the US for gold stored in Germany as Turk surmised in "Behind Closed Doors," which was based on FED meeting minutes in 2001. Of course, the swapped gold from Germany would then have been used by the US government to dump gold on the London market. Recent events with Germany and subsequent Obama-Merkel meetings hint that they may be calling for the return of their gold. The Bundesbank even published a document back in 2000 that gave a hypothetical example of a gold swap with the FED.
http://news.goldseek.com/GoldSeek/1247554800.php
Federal Reserve Warns of Economic Disaster If HR 1207 Passes
Presently, the Government Accountability Office has not been able to audit the Federal Reserve System. Mr. Kohn said on this topic, “The Federal Reserve strongly believes that removing the statutory limits on GAO audits of monetary policy matters would be contrary to the public interest by tending to undermine the independence and efficacy of monetary policy.” Mr. Kohn, and others within the Federal Reserve, believes that government meddling in the U.S. Central Bank could come at a high cost, “The bond rating agencies view operational independence of a country’s central bank as an important factor in determining sovereign credit ratings, suggesting that a threat to the Federal Reserve’s independence could lower the Treasury’s debt rating and thus raise its cost of borrowing.”
http://blog.puppetgov.com/2009/07/13/federal-reserve-warns-of-economic-disaster-if-hr-1207-passes/
Government meddling in the US Central Bank? Who is this jackass kidding? Himself, obviously. The money the US Central bank plays with is, quite frankly, the government's money. The government created the Federal Reserve, and if the government so choses they can destroy the Federal Reserve just as easily. The US Government backs the money, NOT the Federal Reserve. Their assertion here is ludicrus. Mr Kohn, Mr Bernanke, and their bankster buddies have all gotten far to big for their britches. It is high time the American people demand the death penalty for these thieves. The Federal Reserve is a 100% unconstitutional entity that has been stealing the wealth of the American People for FAR TO LONG. Contact your congressman and senator today and DEMAND the destruction of the US Federal Reserve.
The Game Changer?
By: Theodore Butler
I am convinced that the CFTC now fully appreciates the position limit and manipulation problem in silver. Fix the position limit problem in silver and the manipulation is over. Let me repeat that. If the CFTC sets position limits in COMEX silver at 1000 to 1500 contracts for both longs and shorts and discontinues the phony hedging exemptions currently granted to the big US banks and other shorts, the silver manipulation is history. I think this is in the cards. I think this is what Chairman Gensler and Commissioner Chilton intend. But it won’t happen if the big shorts get their way. If they are allowed to continue to hold their manipulative short positions, then we must wait for the physical shortage to break the manipulation.
For more than 20 years, the CFTC has turned a blind eye and a deaf ear to the problem of legitimate position limits in silver. Apparently, that has changed. The new Chairman appears to be interested in the public’s opinion on this issue. It’s time for you to speak up. It’s time to be specific. The issue is position limits, not the budget deficit, not the dollar, not his previous employment at Goldman Sachs. He is doing what he should be doing and as such, deserves to be treated with respect. Ask him and the other commissioners to reduce the position limits in silver to between 1000 to 1500 contracts, or please explain why that limit is not appropriate. Ask him to do away with the phony exemptions granted to a few big shorts or make transparent the reason why they are short. Make it short, sweet and specific - lower the silver limits to equal all other commodities and disallow phony exemptions. Send this article if you want. This could be a game changer. Don’t delay.
Ggensler@cftc.gov
Mdunn@cftc.gov
Bchilton@cftc.gov
Jsommers@cftc.gov
http://news.silverseek.com/TedButler/1247586939.php
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