ALL:Read This and tell me what you think:
(this is an excerpt from a private market analysis I get nightly)
"The biggest policy challenge could be coping with a sudden reversal in the
fortunes of the US Dollar."
That is a quote from the Bank for International Settlements (BIS) as reported
to BIS shareholders and the membership of more than 100 Central Banks. The
BIS Chairman, Mr Backstrom, Head of Sweden's Central Bank, stated that the
BIS had two other major concerns: "External imbalances and asset prices." The
asset prices referred to were: "Historically high valuations of major stock
markets."
All of the above refers to the United States - starting with the US Dollar,
moving on to "external imbalances" (the US current account deficit), and
finishing with high valuations of major (US) stock markets.
If the BIS has made the point - and it certainly has - the counter point has
come from a US Federal Reserve "economist", Mr Dale Henderson. Mr Henderson
has stated that it would be a good idea for the world's Central Banks to sell
ALL of their Gold - all "33,490 Tonnes" of it. An immediate and unanimous
sale of all this Gold would, according to Mr Henderson, result in a $US 75.00
fall in the Gold price.
This is not the first time that Mr Henderson, on behalf of the Fed, has
advocated cooperative Central Bank Gold selling. In June, 1997, a Discussion
Paper appeared entitled: "A Note on Government Gold Policies". Mr Henderson
now feels the need to re-state his case.
When a US Federal Reserve "economist" makes a statement, it is Federal
Reserve policy. Otherwise that person would not dare make the statement. That
policy has now been reiterated three years after it was originally put
forward. The conclusion must be that it has now become CRITICAL Fed policy.
Mr Henderson made his latest statement at an International Precious Metals
Institute conference held in Williamsburg, Virginia on June 12. His remarks
were reported in Bloomberg, with that news agency stating that they were
taken from a report which he prepared in May, 2000. Whether Mr Henderson had
prepared a brand new report, or whether this was simply a rehash of his 1997
report, is irrelevant. The Fed has repeated its call for All Central Bank's
Gold to be sold.
The price of participation is the selling of each Central Bank's current Gold
holdings. To accomplish what? According to the Fed report - a $US 75 fall in
the world price of Gold. And then what? What happens after this event, not
only to the price of Gold, but also to the US Dollar's global value? Any such
cooperative Gold sale by all the world's Central Banks would simply guarantee
a fully confirmed and absolute bottom for Gold, and an absolute and all time
high for the US Dollar.
The political price of participation would be to guarantee each Central Bank
that the public would, sooner or later, view them with outrage and contempt.
For all non-US Central Banks, it would also mean that their government's
slave status in regard to the United States would become obvious.
Once exposed so blatantly, each government that allowed its Central Bank to
participate would face hard questions from their voting public. Why bother
voting, when any professed real and basic policy of one's own nation is shown
to be a mockery? All real decisions are clearly always made in the US.
The price of non-participation is simple. Any nation which did not go along
with this "collegiate" Gold selling would simply keep their own Gold. But the
political "price" could be awe inspiring. Non-participation would amount to
leaving the US to its own devices. It could end up in the situation where the
US is forced to sell its own Gold.
If any large nation or group of large nations refused to participate in this
blatant attempt to "discredit" Gold, the US would end up with no other means
to control the price than to sell its own Gold. If that was done, once it WAS
done, a major historical bottom for Gold would be assured, as would a major
and historical "top" for the US Dollar - against Gold. That would be
followed by a descent EOM |
