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  • Talking Gold Manipulation with GATA



    By Michelle Smith - Exclusive to Gold Investing News

    GATA, formally known as the Gold Anti-Trust Action Committee, insists that a gold cartel is suppressing metal prices and is set on exposing that group’s secret activities.

    Gold Investing News (GIN) contacted Chris Powell, treasurer, secretary and director of GATA, and had an extensive discussion about what is going on in the gold market.
    GIN: Can you outline how the gold manipulation scheme works?

    CP: Sure. Central banks that want to support their currencies — and support the US dollar in particular — want to control interest rates and government bond prices, so they intervene in the gold market by selling their gold outright, by leasing it into the market through bullion banks and the Bank for International Settlements (BIS) and by swapping it to other central banks that will be doing these sales or leases. They also sell gold options and futures contracts through the BIS. They do a lot of shorting of gold to control the price.

    GIN: Who is involved in this manipulation scheme?

    CP: I think all the major western central banks are at least aware of it and are cooperating, if not participating. I think all of the western central banks that were identified openly as being part of the London gold pool in the 1960s are certainly cooperating with it. Though I think the major ones lately have been the US, the Bank of England and the Bundesbank. But I think any central bank that has been identified as having swapped or leased gold is a participant.

    GIN: So, you’d say that the gold cartel is composed of central banks?

    CP: It is a central bank scheme, but they operate very often through agents like bullion banks, JPMorgan Chase & Company (NYSE:JPM) and HSBC. The BIS in Basel, Switzerland conducts much of the gold trading for the western central banks. So certainly the BIS is an agent as much as the bullion banks are.

    GIN: Who does gold manipulation affect? Is the negative impact just limited to gold investors?

    CP: Oh no. It’s the destruction of all free markets. It’s the destruction of transparency in government. Certainly gold investors and mining companies and developing countries that rely on the production of commodities for their livelihood are terribly harmed.

    But from my standpoint as an American citizen and a journalist who wants transparent government, I think the greatest casualties are free markets and accountability in government. This scheme is a matter of rigging markets surreptitiously, and when you rig markets, you don’t have free markets anymore. And when you lose free markets, you lose your competitive economy as well as your democracy when such major government action is undertaken in secret.


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