Where the Gold is Going

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"Bankers Caught in London Gold Heist!"

"Financial System is so Close to Death that the Oligarchs are Stealing Blatantly"

"The latest evidence that the world financial system is doomed and near its end is the Eddie George, chief of the Bank of England, has been caught stealing billions from that Bank -- selling off the national assets of gold at a loss to put them in private oligarchical hands. Acting on behalf of the British monarchy, George was acting to lower the gold price, which will shut down production, and permit these same oligarchical insiders to steal the gold mines and control their physical output in the post-crash world. This is indicative of a worldwide pattern of massive looting by bankers and others (,) of their own institutions."


"On May 7, Her Majesty's Trasury announced that the Bank of England would sell 415 tons of the United Kingdom's 715 tons of gold reserves over the next several years, beginning with five bi-monthly auctions of 25 tons each, starting on July 6."


"The effect of the announcement, as Her Majesty's Treasury and the Bank of England well knew, was to trigger a sharp drop in the price of gold."


"That the intent of the gold sale was to depress prices is clear from the nature of the auctions."


"But the idea was never to make money [to restructure ... invest the proceeds in other interest-bearing assets]; the idea was to cheaply transfer gold to the hands of the oligarchs while driving down the price for subsequent auctions. This is a process known as "skim and park," where assets are siphoned off and parked in private accounts, in preparation for the bankruptcy of the institution which [previously] owned them."


"The auction was structured to allow only a handful of insider institutions to buy the gold, in this case the members of the London Bullion Market Associatin (LBMA), and central banks and monetary institutions with accounts at the Bank of England."

"The LBMA ("formed in 1987 in close consultation with the Bank of England," according to the Bank itself) consists of 12 "market makers" and "50" ordinary members. The market makers include N.M. Rotschild (where the price of gold has been "fixed" twice a day since 1919), Barclays, and HSBC's Midland Bank, J.P. Morgan, Chase, AIG, Goldman Sach's J. Aron, and Republic New York from the U.S.; Switzerland's UBS and Credit Suisse; Canada's Bank of Nova Scotia; and Germany's Deutsche Bank."

"The details of who bought what have not been made public, but in a sense it doesn't matter, since they are essentially buying for the oligarchs behind the curtain."

(snip) ///////////// This is typed from a longer article in "The New Federalist," July 26, 1999, newspaper. Unfortunately, not on a web page.

FYI, the newspaper is a Lyndon LaRouche publication, one of many sources I peruse. If you get your information only from your establishment daily newspaper, Time/Newsweek, and Dan Blather, you are seriously out of the loop re what is going on in the world.

Frequently the LaRouche people have good analyses of problems. I don't think their proposed solutions are much (if any) better than what we got now. Some things might be better, some worse, so it would be a draw, in my opinion.

With these disclaimers, the point is obvious: Buy metals (not just gold). Bury it or hide it well until well into the other side, when and however that turns out.

-- A (A@AisA.com), August 06, 1999


My closing remark could have been clearer:
Despite my disclaimers about the organization and their proposed solutions, the article stands alone, merits your attention, lays it all out in, I believe, an accurate and noteworthy manner. The point is obvious .... BUY!

-- A (A@AisA.com), August 06, 1999.


Could you quote/acknowlege your source please? Without that it's impossible to tell if it's conspiracy-theorist raving or an uncommon view of things from someone who does know what they are talking about. Also, you're putting yourself in legal danger (not acknowleging someone else's copyright).

My view: consider this. Which would upset the market most, a prior announcement that 25 tons will be arriving every two months from now until 200n, or the market suddenly discovering that 25 tons extra had been dumped with no explanations as to how or from whom? I think this explains the Bank of England's actions.

This isn't to say that I think that they're doing the right thing, just that they are going about it the right way.

-- Nigel Arnot (nra@maxwell.ph.kcl.ac.uk), August 06, 1999.

By the way, a more likely conspiracy theory. The UK government probably wants to join the Euro (uniform European currency) but faces two problems. One is that this would at present probably not pass a popular referendum. The other is that the Pound is currently too strong against the Euro, locking in at the current rate would be an economic disaster. Also one fact: if the UK joins, all the UK's gold will be transferred to the Euro Central Bank, which is already very gold-rich.

See? Sell the gold, engineer a lower pound, propose to join the Euro at the right rate, and improve public opinion because the Euro will then be seen as a strong currency against the Pound not a weak one. And of course, at no cost, because you're selling something that otherwise you'd be giving away!

-- Nigel Arnot (nra@maxwell.ph.kcl.ac.uk), August 06, 1999.


Immediately following the last (snip) is the attribution to the source.


Following the BOE sale, anyone with the money was able to buy gold bullion at lower prices, including you and Andy. Are you and Andy "oligarchs"? :-)

As is illustrated by Nigel's posts, the same actions can be interpreted in very different ways.

More generally, keep in mind that the effects of actions are independent of the motives, "good" or "bad", of the actions. Whether or not you will profit from your gold investments will depend on the actions of subsequent gold market players, not on the motives of supposed "manipulators".


-- Jerry B (skeptic76@erols.com), August 06, 1999.

Jerry B:

Many of your assertions are correct. However, the harsh reality is that, since the dawn of markets, there have been those who manipulate them. In the stock market, you have the "pump-and dump" schemes, for example. Although anyone can play, the winners are those who understand what's happening. I am very new to the gold market and a variety of other complex issues that have become relevant since y2k hit the charts. It seems very clear to me that the gold market is being manipulated. Where it gets a little wierd is that we're not talking some small-cap biotech stock that trades thinly (and thus is manipulated easily), we're talking about manipulation on a global scale (if it's true, that is). I don't know about all this oligarch sh*t (and why sh*t is not swearing), but the Brits selling half their gold is a little on the strange side. I've been more than tempted to try to tweak some insight out of a close friend at Goldman Sachs about GS's putative role, but resisted cause he's a very busy guy (apparently more so than me!) Here have been my very amateuristic (sp?) theories:

(1) Gold influences the relative dollar-Euro ratio (as impenetrably described in a post about a month ago.) Britain may very well improve their access to the Euro by driving gold down (i.e., Nigel's theory).

(2) The short-sellers at GS and the comaraderie at the Bank of England noted in a post within the last month can't be excluded (but sounds a little far-fetched).

(3) Y2K! Yes indeedy, we had to get there. Let's say the Feds viewed the spiking of the price of gold as very bad in the world of "doomer control". They would sell off gold to keep the price down. The problem is that gold and Fort Knox are very symbolic in this country. In short, there might be an outcry if we did. Solution: have Tony Blair and the Brits do it for us. (Alternatively, we might ask somebody like the Israeli's, but who knows.)

Overall, it seems as though the gold manipulation, if real, is at the government level, not the George Soros level (too small time.) Has anyone heard a credible explanation for why the Brits are reputedly selling off their gold?

I must reiterate, this interest of mine is very shallow so don't flame the sh*t out of me.

Best regards (as usual)...

-- Dave (aaa@aaa.com), August 06, 1999.

Nigel, you ask valid questions.

1st of all, liquidation of central bank gold has gone on without much fanfare for quite some time now. Typically the sale is finalized and then the announcement is made. This gold does not go out into the free market. As with the BOE sale, it is a closed auction with only other central banks, specified large customers of the BOE and the London Bullion Market Association. Sorta like selling to your brother.

The effect of the announcement, well in advance of the sale created a 'gold is dead' ripple throughout the free markets, just as intended. Do I also have to mention that the BOE sold to the lowest bidder, not the highest? Strange, ey?

Well, that's because what you see on the outside is not what is happening on the inside. Gold is being manipulated big-time, and that's a fact that you can take to the bank.

Andy has made several informative posts on this subject. Go back and find them if you really want to know what's going down.

-- OR (orwelliator@biosys.net), August 06, 1999.

As I said on another thread I just bought 40oz of Gold Eagles two days ago - my gut feeling - gold is cheap cheap cheap - buy now while you have the chance...

fast forward one year...

Yardeni - 75% chance of a recession, Yourdon - 10 year depression, bankruptcies galore, unemployment (I hope this is what happens - not the 10 that I fear WILL happen...)

will you be happy that you've kept your life savings in toilet paper fiat currency?

will you reflect back and rue your decision to stay in the market and not buy precious metals when you had the chance to be pro-active for once in your sorry life ... :)))

It's make or break time folks...

-- Andy (2000EOD@prodigy.net), August 06, 1999.

I just wish I had money to buy gold. This Y2K crash is going to be terrible, but doubly for GIs like me who know it's coming and can't prepare easily because of poverty.

-- Tim the Y2K nut (tmiley@yakko.cs.wmich.edu), August 06, 1999.


Not to worry; I don't do flames, although I do occasionally do zingers. :-)

I am concerned that some folks may get overconfident of their interpretations of gold market activity, and bet more than they can afford to lose on a very speculative investment.


Usually, Gold apreciates relative to cash during a period of inflation, not during a depression. On the other hand, cash, even fiat money, usually appreciates in a depression.

Please be careful if you are considering moving a large percentage of your assets into gold.


-- Jerry B (skeptic76@erols.com), August 06, 1999.

Jerry, some of what you are saying sounds pretty darn wise. Never, I mean, NEVER put all your eggs in one or two baskets. 30% should be the maximum of any one asset.

Interestingly, one new asset group I have is "preparations for uncertainty" Awesome stuff, not much growth potential though...

trying to reach an itch...

The Dog

-- Dog (Desert Dog@-sand.com), August 06, 1999.


I like that new asset group! :-)


-- Jerry B (skeptic76@erols.com), August 06, 1999.

Nigel: Attribution and my opinion of their opinions at end of original post and follow-up post.
Their web site is http://www.larouchepub.com/
However the article came from their newspaper, not the site.
So, to join the Euro, the Brits need a weak pound? Sounds good to me! :-)

Most people are clueless; they aren't going to buy gold (or other metals). The real oligarchs can handle a few of us fleas following their moves and acting accordingly.

Yes, currency may hold or increase its value, post Y2K. It also could become entirely worthless. Gold will probably maintain its value IN PURCHASING POWER. Which is different than how it is valued according to some currency.

Impoverished -- can you get a non-secured credit card and start taking out cash advances? (Or buy everthing with the card and keep what cash you do come into by other means?) Cost will be steep (interest) but could be worth it.

-- A (A@AisA.com), August 06, 1999.

Factual correction: the gold was not sold to the lowest bidder. It was sold in a particular form of auction that is often misunderstood. Basically, you put in bids for N units at price X. The bids are sorted into price order. Enough (high) bids are taken off the top of the pile to exhaust what's on offer and the rest of the (lower) bids fail. Everyone whose bid succeeded gets to pay the same price, that being the lowest price successfully bid. There was doubtless a reserve price, but it's not in the bank's interest to let anyone in on that secret!

What it does is remove the penalty for making a silly high bid. If you wanted gold bullion in a hurry, you could safely put in a small bid at a high price without worrying yourself much about the day to day market. I'd imagine that jewellery manufacturers did just this, because they know they'll need N ounces before Xmas and will pass the market price plus (huge!) mark-up onto their customers. If you got your goods at your bid price instead of the lowest successful price bid, everyone would be more cautious and the smaller bidders might well be frightened off altogether.

-- Nigel Arnot (nra@maxwell.ph.kcl.ac.uk), August 06, 1999.

Jerry - point taken, i should have said that i have a lot of moola in the Prudent Bear in anticipation of a market cras, all will be withdrawn at any rate before rollover and put into cash and PM's - I take your point anout the "cash is king" scenario - to the other chap talking about affording stuff... well i sold my car and watches to do this, also left my job to get at my 401k 9did a bunch of other things too) - as for the gold buy yesterday i put 20% down, about $2,300 which gives me leverage on the remaining 80% I've bought. Now if gold goes lower, I'm in trouble and will have to find the margin money, If gold rallies then I'm quids in,at any rate I will be taking physical delivery before Christmas.

Where ther's a will etc.

The whole situation now is a crap shoot - just follow your instincts, win or lose at least you're doing something and not being steamrollered like the rest of the sheople... :) [no offence to sheep, sorry]

-- Andy (2000EOD@prodigy.net), August 06, 1999.

A: "Gold will probably maintain its value IN PURCHASING POWER."


There are several problems with that idea. Some of them would vary depending on how conditions actually develop, but two are common to all of them.

1. Since gold in not currently used as cash in ordinary day to day transactions, it does not have any commonly perceived purchasing power, an essential requirement of any currency.

The nearest thing that could today be called a purchasing power of gold would be some reference to its price in terms of some currency that is currently used as cash. In any scenario in which you foresee today's currency biting the bullet, such a reference would not be plausible.

Gold would have to start from scratch in building a commonly perceived purchasing power.

2. But before you go there, it would be necessary to consruct a scenario in which people would still find money useful, but prefer to abandon the currency with which they are familiar, and turn to gold as the preferred currency. Runaway inflation could do it, but if you are exepecting the banks to collapse, the machinery of inflation would not be there.


-- Jerry B (skeptic76@erols.com), August 06, 1999.


I hope you are "quids in". (I'm guessing at the meaning of that expression, but I think I get the generel idea).


-- Jerry B (skeptic76@erols.com), August 06, 1999.

Jerry B

Your point 2 above is well stated. Gold will not serve well as currency during deflation or a period of serious economic instability. It *will* preserve wealth *across* a time of chaos, where there is loss of confidence in paper currency. This requires severe inflationary pressures or near-total collapse of the current financial structure, however.

-- Elbow Grease (LBO Grise@aol.com), August 06, 1999.

Nigel -- something to that effect about the high/low bid prices and whose are accepted was in the article I quoted, but I left that part out as the whole subject is rather esoteric to most, anyway. (plus it would have been more typing. :-) )

Jerry -- right, gold may not have immediate value. After things settle down, one way or the other. Still need some currency and clad coins. (Real silver pre-64 coins same problem as gold -- perceived value -- most people don't now appreciate the diff between real and counterfeit (clad)).

Still need barter goods until a monetary system emerges.

BTW. A post Y2K business would be barter transaction facilitator. The problem with barter is that A may have an bucket of wheat and B may have an extra pig and C may have extra water treating equipment, but they don't need what the other person has. But maybe D, E, or F does. That's where you come in. Store lots of 3x5 cards and pens for your business use.

-- A (A@AisA.com), August 06, 1999.


In any scenario in which the economy gets so disrupted that barter becomes the usual means of trade, I would expect most of the population not to last more than a few weeks. I don't expect things to get that bad, but if they do, I don't think I want to be there, considering the chaos that I expect would accompany such a situation.


-- Jerry B (skeptic76@erols.com), August 06, 1999.

Jerry: Depends on where "there" is. Such a situation would not necessarily be a bad thing. What would be wrong with a lot of the stupid, shortsighted, etc., eliminated? Of course, existence (A is A) does not make value judgements. It will be "evolution in action". 200 years of maladaption will be "cleansed". Even the best prepared will need a lot of luck -- but still a better chance than non-prepared. This may be distasteful to you, but reality doesn't care what you (or I) think.

-- A (A@AisA.com), August 07, 1999.


Yes, reality doesn't take opinion polls. As for the rest of such a scenario, I'll refrain from expounding my morbid opinions. :-)


-- Jerry B (skeptic76@erols.com), August 07, 1999.

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