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Mike Kosares: Why China thinks gold is the buy of the century

Tue, 09/30/2014 - 18:20

5:17p ET Tuesday, September 30, 2014

Dear Friend of GATA and Gold:

China's foreign-exchange surplus is so much larger than the nominal value of all the official gold in the world that a mightly upward revaluation of the monetary metal is inevitable, Mike Kosares of Centennial Precious Metals in Denver writes today. "China," Kosares writes, "through its staunch advocacy of gold, might already be in the process of forcing the issue."

Kosares' commentary is headlined "Why China Thinks Gold Is the Buy of the Century" and it's posted at Centennial's Internet site, USAGold, here:

http://www.usagold.com/publications/Oct2014R&O.html

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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BIS is main mechanism for manipulating the gold market, Rickards says

Tue, 09/30/2014 - 15:20

2:15p ET Tuesday, September 30, 2014

Dear Friend of GATA and Gold:

Interviewed by the Turkish financial journalist Erkan Oz at the Forex World conference in Istanbul last week, fund manager and author James G. Rickards remarked that central banks use the Bank for International Settlements for manipulating the gold market.

As quoted by Oz, Rickards said the BIS is "the primary intermedia for manipulating the gold market. That is not a mystery. ... This BIS is manipulating the gold market. They are the intermedia between the central banks and commercial banks and other central banks. They have been doing that."

The interview is posted at Oz's Internet site, Financial Flood, here:

http://financialflood.blogspot.com.tr/2014/09/exclusive-interview-with-j...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Koos Jansen: China aims to exceed U.S. in gold reserves

Tue, 09/30/2014 - 14:37

1:37p ET Tuesday, September 30, 2014

Dear Friend of GATA and Gold:

The president of the China Gold Association, gold researcher and GATA consultant Koos Jansen discloses today, argues that China should accumulate gold reserves greater than those of the United States because gold is a strategic asset, money without counterparty risk.

The association's president, Song Xin, adds that a "gold bank" should be established by China "to break the barrier between the commodity and monetary world. It can further help us acquire reserves and give us more say and control in the gold market."

Jansen's report is headlined "China Aims for Official Gold Reserves at 8,500 Tonnes" and it's posted at Bullion Star here:

https://www.bullionstar.com/article/china%20aims%20for%20official%20gold...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Ned Naylor-Leyland: Journalist can and should publish his report on silver rigging

Tue, 09/30/2014 - 14:23

By Ned Naylor-Leyland
Investment Director
Quilter Cheviot Investment Management
London, England, United Kingdom
Tuesday, September 30, 2014

Last week I wrote about financial journalist William Cohan's unpublished article about silver market manipulation and a regulatory cover-up. This week Cohan has claimed that lawyers for London metals trader and market-rigging whistleblower Andrew Maguire were stopping him from publishing his article.

Cohan is demanding that the main perpetrator of metals manipulation (the institution also known as Voldemort) be named specifically in the article. Without this, Cohan says, he won't publish.

... Dispatch continues below ...


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Contrary to his claim, this was never agreed by Maguire's lawyers and for legal reasons cannot happen. But since everyone has a pretty good idea who the institution is anyway, I find it ridiculous that Cohan is making a demand that cannot be met and using that as a reason to remain mute. Contrary to what he appears to be saying, this detail wasn't agreed in the version of the article he wanted to put in newspapers.

Cohan appears to want this all to go away, which it won't.

I repeat: Cohan told me that his article "got killed everywhere I took it" and that it is "an amazing story that really should be out there." These statements and that he did see the evidence and did write a long expose of the subject are unavoidable.

Cohan's thoughts on the matter, in light of his reputation, would be worthwhile indeed and metals investors deserve to have this subject cleared up. If, as well may be the case, silver and gold prices are being managed with not just impunity but also with the collusion of the government, then this truly is a monster of a story with far-reaching implications.

Maguire has been relentless in pursuit of the prosecution of criminal behavior in the metals markets, so any suggestion that he is getting in the way of Cohan's publishing his article is really absurd. Such a complaint deflects the blame, as of course Cohan said and thought he could get the article published in the mainstream financial news media and then discovered otherwise.

Who other than Maguire approached the government regulators with folders full of evidence, risked life and limb to do this, and will not let go of the subject despite a monstrous cover-up admitted by a former member of the U.S. Commodity Futures Trading Commission, Bart Chilton?

The article Cohan wrote can and should be published. He already has mentioned one of the things he was told not to publish -- that other enforcement agencies have been involved -- and the other detail he is insisting on cannot be included.

Enough of the obfuscation, please, Mr. Cohan. Let's see your article, on your own Internet site if you can't publish it elsewhere.

* * *

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Reuters
Thursday, September 25, 2014

NEW YORK -- The London Bullion Market Association (LBMA) said on Thursday it appointed Citigroup as a market maker, underscoring the bank's ambitions to expand into the precious metals sector while others are exiting due to regulatory concerns.

LBMA said it named Citibank, a unit of Citigroup, as a spot market-making member effective Thursday. Currently, LBMA has 12 market makers that serve in either one, two, or all three of the spot, forwards, and options markets. They make markets by quoting two-way prices in both gold and silver products to other market makers. ...

... For the remainder of the report:

http://www.reuters.com/article/2014/09/25/lbma-citigroup-idUSL2N0RQ2A820...

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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:

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Greenspan: Gold is the ultimate money and China well might want more

Tue, 09/30/2014 - 13:59

Golden Rule: Why Beijing Is Buying

By Alan Greenspan
Foreign Affairs
Council on Foreign Relations, New York
Monday, September 29, 2014

http://www.foreignaffairs.com/articles/142114/alan-greenspan/golden-rule

If China were to convert a relatively modest part of its $4 trillion foreign exchange reserves into gold, the country's currency could take on unexpected strength in today's international financial system.

It would be a gamble, of course, for China to use part of its reserves to buy enough gold bullion to displace the United States from its position as the world's largest holder of monetary gold. (As of spring 2014, U.S. holdings amounted to $328 billion.) But the penalty for being wrong, in terms of lost interest and the cost of storage, would be modest. For the rest of the world, gold prices would certainly rise, but only during the period of accumulation. They would likely fall back once China reached its goal.

... Dispatch continues below ...


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The broader issue -- a return to the gold standard in any form -- is nowhere on anybody's horizon. It has few supporters in today's virtually universal embrace of fiat currencies and floating exchange rates.

Yet gold has special properties that no other currency, with the possible exception of silver, can claim. For more than two millennia, gold has had virtually unquestioned acceptance as payment. It has never required the credit guarantee of a third party. No questions are raised when gold or direct claims to gold are offered in payment of an obligation; it was the only form of payment, for example, that exporters to Germany would accept as World War II was drawing to a close.

Today the acceptance of fiat money -- currency not backed by an asset of intrinsic value -- rests on the credit guarantee of sovereign nations endowed with effective taxing power, a guarantee that in crisis conditions has not always matched the universal acceptability of gold.

If the dollar or any other fiat currency were universally acceptable at all times, central banks would see no need to hold any gold. The fact that they do indicates that such currencies are not a universal substitute. Of the 30 advanced countries that report to the International Monetary Fund, only four hold no gold as part of their reserve balances. Indeed, at market prices, the gold held by the central banks of developed economies was worth $762 billion as of December 31, 2013, comprising 10.3 percent of their overall reserve balances. (The IMF held an additional $117 billion.) If, in the words of the British economist John Maynard Keynes, gold were a "barbarous relic," central banks around the world would not have so much of an asset whose rate of return, including storage costs, is negative.

There have been several cases where policymakers have contemplated selling off gold bullion.

In 1976, for example, I participated, as chair of the Council of Economic Advisers, in a conversation in which then U.S. Treasury Secretary William Simon and then Federal Reserve Board Chair Arthur Burns met with President Gerald Ford to discuss Simon's recommendation that the United States sell its 275 million ounces of gold and invest the proceeds in interest-earning assets.

Whereas Simon, following the economist Milton Friedman's view at that time, argued that gold no longer served any useful monetary purpose, Burns argued that gold was the ultimate crisis backstop to the dollar. The two advocates were unable to find common ground. In the end, Ford chose to do nothing. And to this day, the U.S. gold hoard has changed little, amounting to 261 million ounces.

I confronted the issue again as Fed chair in the 1990s, following a decline in the price of gold to under $300 an ounce. One of the periodic meetings of the G-10 governors was dedicated to the issue of the European members' desire to pare their gold holdings. But they were aware that in competing with each other to sell, they could drive the price of gold down still further. They all agreed to an allocation arrangement of who would sell how much and when. Washington abstained. The arrangement was renewed in 2014. In a statement accompanying the announcement, the European Central Bank simply stated, "Gold remains an important element of global monetary reserves."

Beijing, meanwhile, clearly has no ideological aversion to keeping gold. From 1980 to the end of 2002, Chinese authorities held on to nearly 13 million ounces. They boosted their holdings to 19 million ounces in December 2002, and to 34 million ounces in April 2009. At the end of 2013, China was the world's fifth-largest sovereign holder of gold, behind only the United States (261 million ounces), Germany (109 million ounces), Italy (79 million ounces), and France (78 million ounces). The IMF had 90 million ounces.

However much gold China accumulates, though, a larger issue remains unresolved: whether free, unregulated capital markets can coexist with an authoritarian state. China has progressed a long way from the early initiatives of Chinese leader Deng Xiaoping. It is approaching the unthinkable goal of matching the United States in total GDP, even if only in terms of purchasing-power parity. But going forward, the large gains of recent years are going to become ever more difficult to sustain.

It thus seems unlikely that, in the years immediately ahead, China is going to be successful in vaulting over the United States technologically, more for political than economic reasons. A culture that is politically highly conformist leaves little room for unorthodox thinking. By definition, innovation requires stepping outside the bounds of conventional wisdom, which is always difficult in a society that inhibits freedom of speech and action.

To date, Beijing has been able to maintain a viable and largely politically stable society mainly because the political restraints of a one-party state have been offset by the degree to which the state is seen to provide economic growth and material wellbeing. But in the years ahead, that is less likely to be the case, as China's growth rates slow and its competitive advantage narrows.

-----

Alan Greenspan was chairman of the Board of Governors of the Federal Reserve System from 1987 to 2006.

* * *

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Steve Lonegan: There are no free markets when markets don't set money's value

Tue, 09/30/2014 - 00:59

There Ain't No Such Thing as a Free Market

By Steve Lonegan
MarketWatch.com
Wednesday, September 10, 2014

Well-meaning conservative and libertarian groups beat the drum for something called "free markets." Liberal groups blame these "free markets" for many of the world's evils.

Here's the harsh reality neither side will tell you. There ain't no such thing as a "free market."

The free market ceased to exist more than 40 years ago. Nixon drove a stake through its heart by shutting down the Bretton Woods world monetary system, without which free markets cannot exist.

It cannot exist in its true form because the very money that is the foundation of our economy now is just pieces of paper: "legal tender for all debts public and private." Money's value is controlled not by the markets but by a federal agency, the Federal Reserve, that thinks it thereby can control the economy ... like tuning a carburetor on a car. ...

... For the remainder of the commentary:

http://www.marketwatch.com/story/there-aint-no-such-thing-as-a-free-mark...

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Embry, Turk tell King World News about completely corrupted markets

Mon, 09/29/2014 - 19:02

6p ET Monday, September 29, 2014

Dear Friend of GATA and Gold:

Sprott Asset Management's John Embry tells King World News today that the U.S. government now is simply making up economic statistics. He notes the constant algorithmic futures trading smashing the price of silver and says he considers the metal to be the world's most undervalued asset. The interview is excerpted at the KWN blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/29_Jo...

Also at King World News, GoldMoney founder James Turk says Comex spot silver prices seem to be falsified and that the monetary metal is in backwardation. Turk also notes that the Financial Times has permitted itself to describe the investment world as "distorted," a more polite term than "manipulated." Turk's interview is excerpted at the KWN blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/29_To...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Anglo Far-East: Think Outside the BankAnglo Far-East is a global market leader and innovator that for more than two decades has provided private purchase, vaulting, security logistics, transport, and liquidation of allocated gold and silver bullion outside of the banking system. AFE clients include individuals, family offices, and institutions like banks and regulated funds.

Here's what one of our generationally wealthy clients has to say about AFE:

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Geneva group's report predicts low interest rates forever

Mon, 09/29/2014 - 15:07

Which is to say financial repression and gold price suppression by central banks forever.

* * *

Geneva Report Warns Record Debt and Slow Growth Point to Crisis

By Chris Giles
Financial Times, London
Sunday, September 28, 2014

http://www.ft.com/intl/cms/s/0/4df99d28-4590-11e4-ab10-00144feabdc0.html

A "poisonous combination" of record debt and slowing growth suggest the global economy could be heading for another crisis, a hard-hitting report will warn on Monday.

The 16th annual Geneva Report, commissioned by the International Centre for Monetary and Banking Studies and written by a panel of senior economists including three former senior central bankers, predicts interest rates across the world will have to stay low for a "very, very long" time to enable households, companies, and governments to service their debts and avoid another crash.

... Dispatch continues below ...


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The warning, before the International Monetary Fund's annual meeting in Washington next week, comes amid growing concern that a weakening global recovery is coinciding with the possibility that the US Federal Reserve will begin to raise interest rates within a year.

One of the Geneva Report's main contributions is to document the continued rise of debt at a time when most talk is about how the global economy is deleveraging, reducing the burden of debts.

Although the burden of financial sector debt has fallen, particularly in the US, and household debts have stopped rising as a share of income in advanced economies, the report documents the continued rapid rise of public sector debt in rich countries and private debt in emerging markets, especially China.

It warns of a "poisonous combination of high and rising global debt and slowing nominal GDP [gross domestic product], driven by both slowing real growth and falling inflation."

The total burden of world debt, private and public, has risen from 160 per cent of national income in 2001 to almost 200 per cent after the crisis struck in 2009 and 215 per cent in 2013.

"Contrary to widely held beliefs, the world has not yet begun to delever and the global debt to GDP ratio is still growing, breaking new highs," the report said.

Luigi Buttiglione, one of the report's authors and head of global strategy at hedge fund Brevan Howard, said: "Over my career I have seen many so-called miracle economies -- Italy in the 1960s, Japan, the Asian tigers, Ireland, Spain, and now perhaps China -- and they all ended after a build-up of debt."

Mr Buttiglione explained how, initially, solid reasoning for faster growth encourages borrowing, which helps maintain growth even after the underlying story sours.

The report's authors expect interest rates to stay lower than market expectations because the rise in debt means that borrowers would be unable to withstand faster rate rises. To prevent an even more rapid build-up in debt if borrowing costs are low, the authors further expect authorities around the world to use more direct measures to curb borrowing.

The report expresses most concern about economies where debts are high and growth has slowed persistently -- such as the eurozone periphery in southern Europe and China, where growth rates have fallen from double digits to 7.5 per cent.

Although the authors note that the value of assets has tended to rise alongside the growth of debt, so balance sheets do not look particularly stretched, they worry that asset prices might be subject to a vicious circle in "the next leg of the global leverage crisis" where a reversal of asset prices forces a credit squeeze, putting downward pressure on asset prices.

* * *

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Rates on short-term Treasuries go negative

Mon, 09/29/2014 - 13:56

Fed 'Repo' Tests Drive Scramble for Safety

By Michael Mackenzie and Tracy Alloway
Financial Times, London
Monday, September 29, 2014

NEW YORK -- Investors are scrambling for safe assets ahead of the end of the financial quarter, with the scrum for securities exacerbated by the Federal Reserve's testing of a key financing tool for an eventual tightening of policy.

Yields on short-term Treasury bills, viewed as ultra-safe securities, have dipped below zero as the assets attracted heavy buying in the run-up to the end of the third quarter.

Negative yields on the securities mean that money market funds and other big investors are effectively willing to pay the US government for holding their cash over the end of the financial period. ...

... For the remainder of the report:

http://www.ft.com/intl/cms/s/0/34fcc25c-44d0-11e4-ab0c-00144feabdc0.html

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http://gata.org/nodBy Frank Tang
Reuters
Thursday, September 25, 2014

NEW YORK -- The London Bullion Market Association (LBMA) said on Thursday it appointed Citigroup as a market maker, underscoring the bank's ambitions to expand into the precious metals sector while others are exiting due to regulatory concerns.

LBMA said it named Citibank, a unit of Citigroup, as a spot market-making member effective Thursday. Currently, LBMA has 12 market makers that serve in either one, two, or all three of the spot, forwards, and options markets. They make markets by quoting two-way prices in both gold and silver products to other market makers. ...

... For the remainder of the report:

http://www.reuters.com/article/2014/09/25/lbma-citigroup-idUSL2N0RQ2A820...

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Lloyds fires eight over rate manipulation claims

Mon, 09/29/2014 - 13:51

By Martin Arnold
Financial Times, London
Monday, September 29, 2014

Lloyds Banking Group said it had dismissed eight people and recouped L3 million in bonuses after finding they had attempted to manipulate benchmark interest rates, as the long-running probe into rate-rigging continues to claim scalps.

The bank was criticised for "highly reprehensible" behaviour by the Bank of England in July after it became the first lender to be fined for rigging rates to cut the cost of a UK financial crisis rescue scheme, in effect costing the taxpayer millions of pounds.

It said on Monday that eight employees had been dismissed, pending their right to appeal, after an internal disciplinary process. Four other members of staff who had been suspended were cleared of wrongdoing and have returned to work. ...

... For the remainder of the report:

http://www.ft.com/intl/cms/s/0/9ab693a4-47cb-11e4-be7b-00144feab7de.html

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Monday-Friday, December 1-5, 2014

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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:

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Financial writer talks about hangup in publication of report on silver market rigging

Mon, 09/29/2014 - 13:39

12:39p ET Monday, September 29, 2014

Dear Friend of GATA and Gold:

Talk-show host Dave Janda of WAAM-1600AM in Ann Arbor, Michigan, last week interviewed financial journalist William Cohan about complications in arranging publication of a report Cohan has written about silver market manipulation, a report arising from evidence presented by London metals trader Andrew Maguire. Cohan says there is a dispute over what sort of news organization should get the report. The interview is 24 minutes long and can be heard at Janda's Internet site here:

http://www.davejanda.com/guests/william-cohan/sunday-september-28-2014

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Monday-Friday, December 1-5, 2014

http://www.minesandmoney.com/london/

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

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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:

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Singapore bourse to start kilobar gold trading to lure investors

Mon, 09/29/2014 - 13:12

By Glenys Sim
Bloomberg News
Monday, September 29, 2014

SINGAPORE -- Singapore Exchange Ltd., Southeast Asia's biggest bourse operator, will start trading a kilobar gold contract next month as it joins other nations in the biggest consuming region in a push for new price benchmarks.

The wholesale contract for 25 kilograms of 99.99 percent purity will start trading at 8:15 a.m. on Oct. 13, according to a joint statement from the exchange, IE Singapore, the World Gold Council, and the Singapore Bullion Market Association. The group said in June that trading may begin as soon as September.

The Shanghai Gold Exchange started bullion trading in the city's free-trade zone on Sept. 18, while CME Group Inc. is planning a physically-delivered futures contract in Hong Kong in the fourth quarter as global demand shifts from the West to the East. Asia accounted for 63 percent of total consumption of gold jewelry, bars, and coins last year, with China overtaking India as the biggest buyer, according to the council. ...

... For the remainder of the report:

http://www.bloomberg.com/news/2014-09-29/singapore-bourse-to-start-kilob...

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Europe Silver Bullion is owned and operated by North American and European experts in selling, storing, and transporting precious metals. We have an extensive product inventory of silver, gold, platinum, and palladium, and our network spans the world.

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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:

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ECB president's strategy for reviving Europe looks like euro devaluation

Mon, 09/29/2014 - 13:02

Draghi Devaluing Euro Cheers ECB as Inflation Seen Fading

By Stefan Riecher and Alessandro Speciale
Bloomberg News
Monday, September 29, 2014

FRANKFURT, Germany -- Mario Draghi's strategy for reviving the euro area looks like devaluation.

While the European Central Bank president says the exchange rate isn't a policy target, officials aren't secretive about their approval of the currency's almost 10 percent slide. The depreciation increases the cost of imports and boosts exporters' competitiveness, aiding the effort to revive inflation that data tomorrow will probably show is the weakest since 2009. A gauge of economic confidence published today slipped to the lowest since November.

The euro dropped from a 2 1/2-year high in May as officials unveiled a medley of stimulus measures, and consolidated below $1.30 when Draghi cut rates this month and signaled a desire to grow the ECB's balance sheet by as much 1 trillion euros ($1.3 trillion). Details of a plan to buy assets will probably come this week after the Governing Council meets in Naples, Italy.

"When Draghi mentioned expanding the size of the balance sheet, I think he was secretly thinking of the exchange rate," said Martin Van Vliet, senior euro-area economist at ING Groep NV in Amsterdam. "I'm sure he's happy to see that the euro has been going down. He's well aware that one important channel of policy transmission is the exchange rate." ...

... For the remainder of the report:

http://www.bloomberg.com/news/2014-09-28/draghi-devaluing-euro-cheers-ec...

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Monday-Friday, December 1-5, 2014

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* * *

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

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Or by purchasing a colorful GATA T-shirt:

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

http://gata.org/nodBy Frank Tang
Reuters
Thursday, September 25, 2014

NEW YORK -- The London Bullion Market Association (LBMA) said on Thursday it appointed Citigroup as a market maker, underscoring the bank's ambitions to expand into the precious metals sector while others are exiting due to regulatory concerns.

LBMA said it named Citibank, a unit of Citigroup, as a spot market-making member effective Thursday. Currently, LBMA has 12 market makers that serve in either one, two, or all three of the spot, forwards, and options markets. They make markets by quoting two-way prices in both gold and silver products to other market makers. ...

... For the remainder of the report:

http://www.reuters.com/article/2014/09/25/lbma-citigroup-idUSL2N0RQ2A820...

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

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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:

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Help keep GATA going

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Koos Jansen: Chinese gold demand 'extremely strong,' even 'astonishing'

Mon, 09/29/2014 - 12:51

11:50a ET Monday, September 29, 2014

Dear Friend of GATA and Gold:

While Western financial news organizations and the World Gold Council keep reporting a decline in Chinese gold demand, gold researcher and GATA consultant Koos Jansen writes today that demand remains "extremely strong" and, as measured by withdrawals from the Shanghai Gold Exchange for the week ending September 19, even "astonishing." Jansen's analysis is posted at Bullion Star here:

https://www.bullionstar.com/article/chinese%20gold%20demand%20explosive

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Monday-Friday, December 1-5, 2014

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* * *

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Help keep GATA going

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For one New Jersey candidate, the issue is gold

Sun, 09/28/2014 - 11:13

By Jeff Mulvihill
Associated Press
via ABC News, New York
Sunday, September 28, 2014

http://abcnews.go.com/Politics/wireStory/jersey-candidate-issue-gold-258...

NEW BRUNSWICK, New Jersey -- Republican Jeff Bell spent three decades in Washington working on policy and wrote a book promoting all aspects of social conservatism. But so far his campaign for the U.S. Senate has centered on just one issue: returning the United States to the gold standard.

It's an idea that his opponent, Democratic incumbent Cory Booker, dismisses as "defunct and debunked," which is pretty much how most economists seem to see it.

But a group of conservative thinkers pushing for the change is undaunted.

... Dispatch continues below ...


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"It wouldn't be the first time that the majority of Ph.D. economists were on one side and Jeff was on the other and he turned out to be right," said John Mueller, who runs the economics and ethics program at the Ethics and Public Policy Center, referring to the idea that Bell advanced in the 1970s — that cutting taxes could stimulate the economy.

Under the gold standard, the value of the dollar would be fixed to a certain amount of gold.

Through much of the U.S. history, that was the case. But since 1971, the U.S. has had fiat money that is not backed by gold or anything else.

Bell and other supporters of the gold standard say it would be a way to keep prices stable. He says the current means of controlling prices -- near-zero interest rates from the Federal Reserve -- is making it hard for small businesses to get loans and expand. Bell says that's a major reason that the economy is growing slowly years after the Great Recession.

"We are in a situation of stagnation," Bell said earlier this month in a speech to a real estate conference in New Brunswick. "Why don't they let market interest rates return to our economy?"

Like other supporters of the gold standard, Bell is an acolyte of Ronald Reagan and Jack Kemp, the late congressman, secretary of housing and urban development and vice presidential nominee who made the call for cutting taxes to stimulate the economy part of a national debate in the late 1970s. Bell, now 70, won the Republican nomination for a New Jersey U.S. Senate seat in 1978 largely by advocating the kind of Reagan-era tax cuts some credit with spurring the economy.

Back in 2012, IGM Forum, which surveys academic economists from U.S. institutions including Yale, the University of Chicago and Stanford, asked panelists whether they agree that the gold standard would mean more employment opportunities and price stability for average Americans. Every member who answered the question disagreed or strongly disagreed with the notion.

Eric Maskin, a Harvard economist who won a Nobel Prize in 2007, was among them. He told The Associated Press, that most in his field believe a gold standard would take away the Fed's monetary policy tool to increase the money supply during recessions and tighten to check fast growth. He also said that the fluctuating value of gold might cause some instability in the economy.

"Non-economists worry about debasement of the currency," he said. "If you're not tied to gold, what prevents a government from printing more and more money and making it worth less? If you have an irresponsible government, that could happen. That's not what our government has been doing."

Bell, at the real estate conference, said limited campaign funds leave him lacking "bandwidth" in the election.

"I can't get across two or three different ideas," he said. So he's focusing on the gold standard as his main one.

It's the main thing he talks about on a radio ad that he earlier this way on his way to winning a four-candidate Republican primary and that he dusted off again this month.

In a state where Republicans have not won a U.S. Senate election since 1972, he is seen as a longshot against Booker, a former Newark mayor and fundraising juggernaut.

But early polls have shown Bell trailing by about 10 points — close enough that Gov. Chris Christie, a Republican, has said it should be viewed as a real race. Christie has also appeared at a fundraiser with Bell and said national Republican groups should support Bell.

* * *

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New York Sun: Audit the New York Fed

Sun, 09/28/2014 - 00:31

11:30p ET Saturday, September 27, 2014

Dear Friend of GATA and Gold:

With Massachusetts' freshman liberal Democratic senator, Elizabeth Warren, calling for hearings on the Federal Reserve's subservience to big investment banks, the New York Sun muses that Kentucky's libertarian-leading freshman Republican senator, Rand Paul, could join her in a coalition to pass legislation to audit the central bank, and particularly its New York office. The Sun's editorial is headlined "Audit the New York Fed" and it's posted here:

http://www.nysun.com/editorials/audit-the-new-york-fed/88856/

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Europe Silver Bullion is owned and operated by North American and European experts in selling, storing, and transporting precious metals. We have an extensive product inventory of silver, gold, platinum, and palladium, and our network spans the world.

Visit us at www.europesilverbullion.com.

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Putin adviser suggests Russia knows all about West's gold price suppression

Sat, 09/27/2014 - 23:38

Note particularly the reference to standards for the issuers of reserve currencies.

* * *

The Threat of War and the Russian Response

By Sergey Glazyev
Russia in Global Affairs
Foreign Policy Research Foundation, Moscow
Tuesday, September 23, 2014

http://eng.globalaffairs.ru/number/The-Threat-of-War-and-the-Russian-Res...

U.S. actions in Ukraine should be classified not only as hostile with regard to Russia, but also as targeting global destabilization. The U.S. is essentially provoking an international conflict to salvage its geopolitical, financial, and economic authority. The response must be systemic and comprehensive, aimed at exposing and ending U.S. political domination, and, most importantly, at undermining U.S. military-political power based on the printing of dollars as a global currency.

The world needs a coalition of sound forces advocating stability -- in essence, a global anti-war coalition with a positive plan for rearranging the international financial and economic architecture on the principles of mutual benefit, fairness, and respect for national sovereignty.

... Dispatch continues below ...


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Curbing the Arbitrariness of Reserve Currency Issuers

This coalition could be comprised of large independent states (BRICS); the developing world (most of Asia, Africa, and Latin America), which has been discriminated against in the current global financial and economic system; CIS countries interested in balanced development without conflicts; and those European nations not prepared to obey the disparaging U.S. diktat. The coalition should take measures to eliminate the fundamental causes of the global crisis, including:

-- the uncontrolled issuance of global reserve currencies, which allows issuers to abuse their dominant position, thus increasing disproportions and destructive tendencies in the global financial and economic system;

-- the inability of existing mechanisms regulating banking and financial institutions to ward off excessive risks and financial bubbles;

-- an exhausted potential for growth within the prevailing technology-based economic system and lack of conditions for creating a new one, including insufficient investment for the broad use of basic technological solutions.

Conditions must be created to allow the national fiscal authorities to lend money for building an economy based on new technologies and carrying out economic modernization, and to encourage innovation and business activities in areas of potential growth.

The issuers of reserve currencies must guarantee their stability by capping the national debt and payment and trade balance deficits. Also, they will have to use transparent mechanisms for issuing currencies and ensure free exchange for all assets trading in their countries. [EMPHASIS ADDED.]

Another important requirement issuers of global reserve currencies should meet is compliance with fair rules of competition and non-discriminatory access to financial markets. Other countries observing similar restrictions should be able to use their national currencies as an instrument of foreign trade and currency and financial exchanges, and allow their use as reserve currencies by partner countries. It would be advisable to group national currencies seeking the status of global or regional reserves into several categories depending on the issuers’ compliance with certain standards.

In addition to introducing rules for issuers of global reserve currencies, measures should be taken to strengthen control over capital flows to prevent speculative attacks that destabilize international and national currency and financial systems. Members of the coalition will need to forbid transactions with offshore jurisdictions and make refinancing inaccessible to banks and corporations created with offshore residents. The currencies of countries that fail to follow these rules should not be used in international settlements.

A major overhaul of international financial institutions is necessary to ensure control over the issuers of global reserve currencies. Participating countries must be represented fairly, on objective criteria, such as their share in global production, trade, and finances; their natural resources; and population. The same criteria should be applied to an emerging basket of currencies for new SDRs (Special Drawing Rights) that can be used as a yardstick for determining the value of national currencies, including reserve currencies. Initially, the basket could contain the currencies of those coalition members that agree to observe these rules.

Such ambitious reforms will require proper legal and institutional support. To this end, the coalition’s decisions should be given the status of international commitments; and UN institutions, relevant international organizations, and all countries interested in reforms should be broadly involved.

In order to encourage application of socially important achievements of a new technological mode globally, countries will have to devise an international strategic planning system of socio-economic development. It should provide long-term forecasts for scientific and technological development; define prospects for the global economy, regional associations and leading countries; look for ways to overcome disproportions, including development gaps between industrialized and emerging economies; and set development priorities and indicative targets for international organizations.

The U.S. and other G7 countries will most likely reject the above proposals for reforming the international currency and financial system without discussion out of fear that they could undermine their monopoly, which allows them to issue world currencies uncontrollably. While reaping enormous benefits from this system, leading Western countries limit access to their own assets, technologies, and labor by imposing more and more restrictions.

If the G7 refuses to “make room” in the governing agencies of international financial organizations for the anti-war coalition, the latter should master enough synergy to create alternative global regulators.

The BRICS could serve as a prototype and take the following measures to maintain economic security:

-- create a universal payment system for BRICS countries and issue a common payment card that would incorporate China’s UnionPay, Brazil's ELO, India's RuPay, and Russian payment systems;

-- build an interbank information exchange system similar to SWIFT and which is independent from the United States and the European Union;

-- establish its own rating agencies.

Russia as Unwilling Leader

Russia will have a leading role in building a coalition against the U.S. since it is most vulnerable and will not succeed in the ongoing confrontation without such an alliance. If Russia fails to show initiative, the anti-Russian bloc currently being created by the U.S. will absorb or neutralize Russia's potential allies. The war against Russia the U.S. is inciting in Europe may benefit China, because the weakening of the U.S., the European Union, and Russia will make it easier for Beijing to achieve global leadership. Also, Brazil could give in to U.S. pressure and India may focus on solving its own domestic problems.

Russia has as much experience of leadership in world politics as the U.S. It has the necessary moral and cultural authority and sufficient military-technical capabilities. But Russian public opinion needs to overcome its inferiority complex, regain a sense of historical pride for the centuries of efforts to create a civilization that brought together numerous nations and cultures and which many times saved Europe and humanity from self-extermination. It needs to bring back an understanding of the historical role the Russian world played in creating a universal culture from Kievan Rus, the spiritual heir to the Byzantine Empire, to the Russian Federation, the successor state of the Soviet Union and the Russian Empire. Eurasian integration processes should be presented as a global project to restore and develop the common space of nations from Lisbon to Vladivostok, and from St. Petersburg to Colombo, which for centuries lived and worked together.

A Social-Conservative Synthesis

A new world order could be based on a concept of social-conservative synthesis as an ideology that combines the values of world religions with the achievements of the welfare state and the scientific paradigm of sustainable development. This concept should be used as a positive program for building an anti-war coalition and establishing universally understandable principles for streamlining and harmonizing social, cultural, and economic relations worldwide.

International relations can be harmonized only on the basis of fundamental values shared by all major cultures and civilizations. These values include non-discrimination (equality) and mutual acceptance, a concept declared by all confessions without dividing people into "us" and "them." These values can be expressed in notions of justice and responsibility, and in the legal forms of human rights and freedoms.

The fundamental value of an individual and equality of all people irrespective of their religious, ethnic, class, or other background must be recognized by all confessions. This stems, at least in monotheistic religions, from the perception of the unity of God and the fact that every faith offers its own path to salvation. This outlook can eliminate violent religious and ethnic conflicts and permit every individual to make a free choice. But there must be legal mechanisms in place to enable confessions to participate in public life and resolve social conflicts.

This approach will help neutralize one of the most destructive means of chaotic global warfare employed by the U.S. -- the use of religious strife to incite religious and ethnic conflicts that develop into civil and regional wars.

The role of religion in molding international politics will provide the moral and ideological basis for preventing ethnic conflicts and resolving ethnic contradictions using national social policy instruments. Various religions can also be engaged in charting social policy, thus providing a moral framework for government decisions, restraining the attitude of permissiveness and laxity that dominates the minds of the ruling elites in developed countries, and bringing back an understanding of the authorities' social responsibility to society. As the shaken values of the welfare state gain strong ideological support, political parties will have to acknowledge the importance of moral restrictions that protect the basic principles of human life.

The concept of social-conservative synthesis will lay the ideological groundwork for reforming international currency, financial, and economic relations on the principles of fairness, mutual respect for national sovereignty, and mutually advantageous exchanges. This will require certain restrictions on the freedom of market forces that constantly discriminate against most people and countries by limiting their access to wealth.

Liberal globalization has undermined the ability of countries to influence the distribution of national income and wealth. Transnational corporations uncontrollably move resources that were previously controlled by national governments. The latter have to trim back social security in order to keep their economies attractive to investors. State social investments, the recipients of which no longer have a national identity, have lost their potency. As the U.S.-centered oligarchy gets hold of an increasingly greater part of income generated by the global economy, the quality of life is dwindling in open economies and the gap in access to public wealth is widening. In order to overcome these destructive tendencies, it will be necessary to change the entire architecture of financial and economic relations and restrict the free movement of capital. This should be done in order to prevent transnationals from evading social responsibility, on the one hand, and to even out social policy costs shared by national states, on the other.

The former means eliminating offshore jurisdictions, which help evade tax obligations, and recognizing the nation states' right to regulate transborder movement of capital. The latter would mean establishing minimal social criteria to ensure accelerated improvement of social security in relatively poor countries. This can be done by creating international mechanisms for balancing out living standards, which, in turn, will require proper funding.

Acting along the concept of a social-conservative synthesis, the anti-war coalition could move to reform the global social security system. A fee of 0.01 percent of currency exchange operations could provide funding for international mechanisms designed to even out living standards. This fee (of up to $15 trillion a year) could be charged under an international agreement and national tax legislation, and transferred to the authorized international organizations which include the Red Cross (prevention of and response to humanitarian catastrophes caused by natural disasters, wars, epidemics, etc.); the World Health Organization (prevention of epidemics, reduction of infantile mortality, vaccination, etc.); International Labor Organization (global monitoring of compliance with safety regulations and labor legislation, including wages not less than the subsistence level and a ban on the use of child and compulsory labor; labor migration); the World Bank (construction of social infrastructure facilities -- water supply networks, roads, waste water disposal systems, etc.); UNIDO (transfer of technologies to developing countries); and UNESCO (support of international cooperation in science, education and culture, cultural heritage protection). Spending should be made according to the budgets approved by the UN General Assembly.

Another task to tackle is the creation of a global environmental protection system financed by polluters. This can be done by signing an international agreement establishing across-the-board fines for pollution and earmark them for environmental protection under national legislation and under the supervision of an authorized international organization. Part of this money should be committed to global environmental activities and monitoring. An alternative mechanism can be based on trade in pollution quotas under the Kyoto Protocol.

An important aspect is the creation of a global system for eliminating illiteracy and ensuring public access to information and modern education throughout the world. This will require standardizing minimum requirements for comprehensive primary and secondary education and subsidizing underdeveloped countries with revenue generated by the tax mentioned above. There must be a universally accessible system of higher education services provided by leading universities in major industrialized countries. The latter could assign admission quotas for foreign students selected through international contests and paid for from the same source. Simultaneously, the participating universities could set up a global system of free distance learning for all individuals with secondary education. UNESCO and the World Bank could commit themselves to creating and supporting the necessary information infrastructure, while drawing funds from the same source.

Anti-Crisis Harmonization of the World Order

The growing gap between rich and poor countries is threatening the development and the very existence of humanity. The gap is created and sustained by national institutions in the U.S. and allied countries that arrogate certain international economic exchange functions proceeding from their own interests. They have monopolized the right to issue the world’s currency and use the revenue for their own benefit, giving their banks and corporations unlimited access to loans. They have monopolized the right to establish technical standards, thus maintaining technological supremacy of their industry. They have imposed upon the world their own international trade rules that require all other countries to open up their markets and limit substantially their own ability to influence the competitiveness of their national economies. Finally, they have forced the majority of countries to open up their capital markets, thus ensuring the domination of their own financial tycoons, who keep multiplying their wealth by exercising a currency monopoly.

It is impossible to ensure a sustainable and successful socio-economic development without eliminating the monopoly on international economic exchange used for private or national interests. Global and national restrictions can be imposed to support sustainable development, harmonizing global public affairs, and eliminating discrimination in international economic relations.

In order to ward off a global financial catastrophe, urgent measures need to be taken to create both a new, safe, and efficient currency and a financial system based on the mutually advantageous exchange of national currencies. This new system would exclude the appropriation of global seniority in private or national interests.

To level out socio-economic development opportunities, emerging economies need free access to new technologies, conditioned on their promise not to use them for military purposes. Countries that agree to such restrictions and open up information about their defense budgets will be exempted from international export control constraints and receive assistance in acquiring new developmental technologies.

An international mechanism to prevent multinational companies from abusing their monopoly power on the market could ensure fair competition. The World Trade Organization could exercise anti-trust control under a special agreement binding for all member states. This would allow economic entities to demand elimination of monopoly power abuses by transnational corporations and seek compensation for losses from such abuses by imposing sanctions against the entities at fault. Apart from overstated or understated prices, quality falsifications, and other typical examples of unfair competition, the payment of wages below the ILO-defined minimum regional subsistence level should also be regarded as an abuse. In addition, there should be reasonable price regulation for the products and services of global and regional natural monopolies.

Because of unequal economic exchanges, countries should be allowed to retain the right to regulate their national economies in order to equalize socio-economic development levels. In addition to WTO mechanisms protecting domestic markets from unfair foreign competition, such equalizing measures could also be achieved by encouraging scientific and technological progress and providing state support to innovation and investment activities; establishing a state monopoly on the use of natural resources; introducing currency controls to limit capital flight and prevent speculative attacks on national currencies; retaining government control over strategic industries; and using other mechanisms to boost competitiveness.

Fair competition in the IT sector is essential. Access to the global information networks must be guaranteed to all people throughout the world as both information consumers and suppliers. This market can be kept open by using stringent antitrust restrictions that will not allow any one country or group of countries to become dominant.

To ensure that all parties to the global economic exchange observe international and national rules, there must be penalties for violators under an international agreement that would enforce court rulings regardless of their national jurisdiction. However, one should be able to appeal a ruling in an international court whose judgment will be binding on all states.

Binding rules and penalties for non-compliance (alongside penalties for breaking national laws) would give international agreements priority over national legislation. Countries that break this principle should be restricted from participating in international economic activities by excluding their national currencies from international settlements, imposing economic sanctions against residents, and limiting those operations on international markets.

In order to enforce all of these fundamental changes in international relations, a strong coalition will have to be created, capable of overcoming the resistance of the U.S. and G7 countries, which reap enormous benefits from their dominance on global markets and in international organizations. This coalition should be ready to use sanctions against the U.S. and other countries that refuse to recognize the priority of international obligations over national regulations. Rejecting the U.S. dollar in international settlements would be the most effective way to coerce the U.S. into being cooperative.

The anti-war coalition should offer a peaceful alternative to the arms race as a means of encouraging a new round of technological development. This alternative would lie in broad international cooperation geared towards solving global problems that require concentration of resources for creating cutting-edge technologies. For example, there is no ready-made solution to protect the planet from threats stemming from deep space. Developing such solutions will require technological breakthroughs that can be achieved by combining the efforts of leading countries and by sharing costs.

The paradigm of sustainable development rejects war as such. Instead of confrontation and rivalry, it is based on cooperation and collaboration as a means of concentrating resources in promising areas of scientific and technological research. Unlike the arms race provoked by geopolitics, it can provide a better scientific and organizational basis for managing a new technological mode. The latter will drive the development of healthcare, education, and culture, which can hardly be spurred by defense expenditures. These non-productive sectors and science will account for as much as a half of GDP in major industrialized countries in upcoming years. Therefore, a forward-looking solution would include shifting the focus of government attention from defense spending to humanitarian programs, primarily in medicine and bioscience. Since the state pays more than half of health, education, and science expenditures, such a shift would facilitate systematic management of socio-economic development and curb destructive trends.

* * *

A new election cycle will begin in the U.S. in 2017 that is likely to be underscored by anti-Russian rhetoric as the ideological basis for the world war Washington is trying to unleash in a bid to retain its power. By that time, the crisis in the American financial system may have resulted in budget spending cuts, devaluation of the dollar, and declining living standards.

Domestic problems and foreign policy crises will cause the U.S. government to ramp up its aggressive tactics, while at the same time weakening its positions. If Russia mobilizes its intellectual, economic, and military potential, it will have a chance to get through conflicts in 2015-2018 in view of the fact that the U.S. and its allies will still not be prepared for direct aggression.

Russia will face the most dangerous period in the early 2020s when industrialized countries and China are expected to begin their technological modernization and the U.S. and other Western countries will emerge from financial depression and make a technological leap forward. But Russia may dramatically fall behind technologically and economically in 2021-2025, which will impair its defense capabilities and spur internal social and ethnic conflicts in much the same way as what happened in the Soviet Union in the late 1980s. These conflicts will be fomented both from outside and inside, using social inequality, development gaps between regions, and economic problems. In order to avoid the worst possible scenario leading to the disintegration of the country, Russia will need to adopt a systemic domestic and foreign policy for strengthening national security, ensuring economic independence, improving international competitiveness, boosting economic development, mobilizing society, and upgrading the defense industry.

By 2017, when the U.S. starts threatening Russia openly and on all fronts, the Russian army should have modern and effective weapons, Russian society should be consolidated and confident of its strength, intellectuals should be in control of the new technological mode, the economy should be growing, and Russian diplomacy should succeed in building a broad-based anti-war coalition capable of pooling efforts in order to stop American aggression.

-----

Sergei Glaziev is an adviser to the president of the Russian Federation and a full member of the Russian Academy of Sciences.

* * *

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Reuters
Thursday, September 25, 2014

NEW YORK -- The London Bullion Market Association (LBMA) said on Thursday it appointed Citigroup as a market maker, underscoring the bank's ambitions to expand into the precious metals sector while others are exiting due to regulatory concerns.

LBMA said it named Citibank, a unit of Citigroup, as a spot market-making member effective Thursday. Currently, LBMA has 12 market makers that serve in either one, two, or all three of the spot, forwards, and options markets. They make markets by quoting two-way prices in both gold and silver products to other market makers. ...

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Central banks don't need Barrick much if they secretly spend and repurchase their gold

Sat, 09/27/2014 - 12:02

11:28a ET Saturday, September 27, 2014

Dear Friend of GATA and Gold:

Our friend D.K. writes:

"Former Goldman Sachs partner John Thornton is now running Barrick Gold. I'm wondering if Thornton has given the big bullion banks direct supply contracts for enough of Barrick's gold output so that they can have it refined into bars and shipped to wherever they need it. It's the only thing that makes sense to me that would be enabling the bullion banks to deliver physical gold right now."

Your secretary/treasurer has no idea whether Barrick is working any particular deals with bullion banks at the moment, but the company must have some arrangements with them, if only because the company is carrying a hedge position.

... Dispatch continues below ...


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Further, during the Blanchard & Co. antitrust litigation in U.S. District Court in New Orleans in 2003, Barrick claimed to be the gold market agent not of the bullion banks but of the central banks:

http://www.gata.org/node/1858

But here's a different possibility: That it's not Barrick but the Federal Reserve that is providing all the metal the bullion banks need for maintaining the central bank gold price suppression scheme, using the foreign official reserves held in custody by the United States and secret gold swap arrangements the Fed has with allied central banks, swaps confirmed by the Fed during GATA's freedom-of-information litigation against it in 2009:

http://www.gata.org/node/7819

While Venezuela got most of its gold back from the Bank of England and other depositories in 2011, Germany's Bundesbank has yet to recover much of its foreign-vaulted gold, and most countries vaulting their gold in the U.S. haven't asked for anything to be returned. If all that needs to be done is to pretend that the foreign gold is still safely in the New York Fed's vault in Manhattan, its shipment elsewhere will never be a problem.

The price-suppression system of the London Gold Pool collapsed in March 1968 because the metal available to it was depleting so fast that the exhaustion of the gold reserves of the participating central banks was in sight:

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

I suspect that only something like that will end the current round of price suppression.

The central banks suppressing the gold price drained their official reserves for price suppression before, so why wouldn't they do it again? After all, if the central banks want to recover their reserves, they can always create infinite money with which to repurchase the gold and start the price suppression scheme all over again at a higher level.

Indeed, the Bank for International Settlements says it trades gold and gold derivatives for its members all the time:

http://www.gata.org/node/12717

The BIS even advertises its gold market intervention services to prospective central bank members:

http://www.gata.org/node/11012

The French central bank also says it trades gold for its own account and for the accounts of other central banks nearly every day:

http://www.gata.org/node/13373

This trading needn't be and certainly isn't all selling; a central bank couldn't be repurchasing after having knocked the price way down with huge paper sales. After all, with infinite money -- which central banks have the power to create -- one can control any market, at least until the commodity being traded runs out.

There's a reason why the United States does not charge any fee to foreign governments for vaulting their gold over here, and that reason is almost certainly so the United States can control that gold -- which means using it secretly as necessary.

If, as Barrick itself asserted back in 2003, it remains merely an agent of the central banks, they have accessible in their own vaults far more gold than the mining company can scratch out of the ground over many years, and if they never have to account honestly for it, as the secret March 1999 report of the International Monetary Fund says they don't --

http://www.gata.org/node/12016

-- there is no obstacle to their using it for market rigging. Nothing prevents the Federal Reserve from putting into play all the foreign official gold reserves vaulted in New York.

As the old joke goes, if all the gold of a Western central bank was depleted through market rigging, the central bank would double the guard to keep up appearances. It would be more than enough to convince the Financial Times that everything was still all right.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

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Conspiracy fact: The European Central Bank Gold Agreement is renewed

Sat, 09/27/2014 - 11:05

10:11a ET Saturday, September 27, 2014

Dear Friend of GATA and Gold:

Bullion Vault research director Adrian Ash notes that the fourth European Central Bank Gold Agreement takes effect today, extends for five years, and removes any limits on gold sales by the 21 signatories while acknowledging that "they do not have any plans to sell significant amounts of gold," because the limits contained in predecessor agreements had come to look silly, such sales having ended long ago. Ash's commentary is headlined "End of the Central Bank Gold Agreement" and it is posted at Bullion Vault here --

https://www.bullionvault.com/gold-news/central-bank-gold-092620143

-- but from GATA's perspective the agreement's latest incarnation, announced in May, remains significant for two other reasons.

That is, the agreement, posted at the European Central Bank's Internet site here --

http://www.ecb.europa.eu/press/pr/date/2014/html/pr140519.en.html

-- renews the proclamation of conspiracy that Western financial news organizations and most purported gold market analysts refuse to see.

... Dispatch continues below ...


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"The signatories," the renewed agreement says, "will continue to coordinate their gold transactions so as to avoid market disturbances."

That is, first, the participating central banks will continue to meet secretly to consider manipulating the gold market, which is disguised as a matter of avoiding market disturbances -- or at least avoiding disturbances the central banks don't like. Financial journalists and market analysts will not be invited to these meetings, nor will any mere member of the public be allowed to attend -- not even CPM Group's Jeff Christian or Doug Casey of Casey Research, who purport to know everything central banks do in regard to gold.

And second, the U.S. Federal Reserve and the U.S. Treasury Department continue not to be signatories to the agreement and thus do not even pretend to want to avoid disturbing the gold market.

The latest European Central Bank Gold Agreement is not "conspiracy theory" but conspiracy fact, not so much hiding in plain sight as residing in the open with the participants having full confidence that financial news organizations and purported market analysts will never dare to explore what it really means, the first rule of mainstream financial journalism being that no critical questions about gold may ever be put to a central bank and that a central bank's refusal to answer critical questions about gold may never be reported.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

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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:

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Maguire tells KWN he expects a derivatives blowup in gold, silver by year-end

Sat, 09/27/2014 - 10:16

9:16a ET Saturday, September 27, 2014

Dear Friend of GATA and Gold:

In the second part of his new interview with King World News, London metals trader Andrew Maguire reports that the big bullion banks are unwinding their monetary metals positions on the Comex and that he expects a derivatives failure in the monetary metals by the end of the year. An excerpt from his interview is posted at the KWN blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/9/27_Ma...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Join GATA here:

New Orleans Investment Conference
Hilton New Orleans Riverside Hotel
New Orleans, Louisiana
Wednesday-Saturday, October 22-25, 2014

https://jeffersoncompanies.com/landing/noic2014?IDPromotion=614011014520...

Mines and Money London
Business Design Centre
London, England, U.K.
Monday-Friday, December 1-5, 2014

http://www.minesandmoney.com/london/

* * *

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

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

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

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

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