Red Baron on the LBMA: Expose Part 1
This series may have already been posted, but I find the topic highly interesting. Please skip over the next posts if uninterested.
All interested persons: pls comment!
Thanks,
THC
THE GRAND LBMA EXPOS: A Collective-Mind Analysis
Part - 1
The London Bullion Marketing Association (LBMA) can only be
adequately described as "a riddle wrapped in a mystery
inside an enigma."
It shyly emerged upon the news airwaves on January 30, 1997.
Its appearance was almost as an after-thought, deceptively
innocuous with few superlatives to distinguish it from the
daily diarrhea of financial news spewing forth from the
bowels of the world's money centers. Few readers took note of
it... most gave it little import. To my knowledge it was an
esoteric select few at the Kitco Gold Chat group, who really
zeroed in on the draconian significance of the news.
Was the news a bureaucratic slip of utmost discreet information -
indeed top secret data - or was it a well-timed and methodically
planned leak to the press. Or perhaps it was the
"whistle-blowing" of an irate employee, who was passed over for
promotion? Who really knows? In any case we will provide all the
details surrounding this monumental announcement... and allow the
reader to draw his own conclusions.
This writer will present the entire situation via a chronicle of
all the news publications about the subject, providing dates
sources and authors - where possible. Nearly all available
information was researched from Internet sources. Most comments
are verbatim from respective authors. Occasionally, this writer
added comments of clarification and/or conclusions where the
research leaves off.
The LBMA Announcement -
Literally at the crack of London dawn on January 30, 1997, the
London Financial Times printed the following:
The London Financial Times
ft.com
Gold global market revealed
THURSDAY JANUARY 30 1997
By Kenneth Gooding, Mining Correspondent
Deals involving about 30 million troy ounces, or 930 tonnes, of
gold valued at more than $10 billion are cleared every working
day in London, the international settlement centre for gold
bullion.
This is the first authoritative indication of the size of the
global gold market, and was revealed yesterday by the London
Bullion Market Association.
With the blessing of the Bank of England,
the association overturned years of
tradition and secrecy to provide statistics
illustrating the size and depth of the
London market.
The volume of gold cleared every day in London represented nearly
twice the production from South African mines in a year, Mr. Alan
Baker, chairman of the association, pointed out.
It was also equivalent to the amount of gold
held in the reserves of European Union
central banks.
The size of the gold market will surprise many observers, but
traders insisted the association's statistics were only part of
the picture because matched orders are cleared without appearing
in the statistics. Mr. Jeffrey Rhodes, of Standard Bank, London,
said the 30m ounces should be "multiplied by three, and possibly
five, to give the full scope of the global market".
Mr. Baker said the association would produce average daily
clearance figures every month. "They will provide a useful
benchmark for comparison and analysis of trends in the volume of
the global bullion business," he predicted.
He denied suggestions that the move might drive business away
from London by upsetting clients who preferred secrecy. "These
figures do not in any way affect the confidentiality of the
market. While discretion and integrity will always be bywords in
the London bullion market, the LBMA is nevertheless conscious of
the general call for greater transparency in markets.
"The statistics demonstrate the prominence of London in the world
of bullion, something we have long been aware of but which until
now has been difficult to demonstrate with statistics."
LBMA members were divided over the move. One said he was puzzled.
"What will people make of it?" Another said the exercise was
"futile" because it did not give a complete picture of bullion
market activity.
But Standard Bank's Mr. Rhodes suggested the statistics would
"become the key indicator in the world of gold, providing the
numbers by which the market can be monitored".
Mr. Martin Stokes, vice-chairman of the association, said: "This
shows we have a serious market with a lot of depth and deserving
of more attention." The statistics showed, for example, that the
300 tonnes of gold sold recently by the Dutch central bank - a
disposal that badly affected bullion market sentiment - was not a
large amount by the market's standards. The association was
"making a bid to attract investors' interest".
The association also gave details yesterday about the silver
market. Roughly 250 million ounces of silver valued at more than
$1 billion are cleared daily in London.
It also published the results of a Bank of England survey of
turnover that the 14 market-making members of the LBMA in the
London bullion market conducted in May last year. This showed
about 7 million ounces of gold, worth nearly $3 billion, was
traded daily by these market-makers.
Writer's comment: In light of these startling revelations,
various observations may be gleaned from this publication by the
London Financial Times.
1. In view of the humongous daily trading volume of gold by the
LBMA, annual supply/demand dynamics may have little to NO
INFLUENCE on the long-term price of the noble metal - albeit
can cause short-term ripples one way or the other.
2. The formidable volume of daily trading strongly resembles
that of currency trading -- indeed many world experts
staunchly proclaim gold to be the universal currency... and
history undeniably supports this assertion.
3. Fear of Central Bank sales of gold may be totally
exaggerated - and may really have only a minuscule and
temporary impact on gold prices.
4. The LBMA is a highly liquid gold environment, conducive for
speculative trading - ESPECIALLY NOW THAT THE 'CAT IS OUT OF
THE BAG.' Could this be the ulterior motive for breaking the
secrecy code of ALMOST TWO CENTURIES?????????????
5. At the current daily trading rate, more than 100 TIMES THE
ANNUAL WORLD'S GOLD PRODUCTION RATE IS TRADED ANNUALLY in
the LBMA!!! Other than currencies, can anyone mention any
commodity experiencing yearly trading volume of 100 times
its annual production?! ANYONE?! Does this not pique your
curiosity and question the reason or purpose of all this
gold trading?!
WHY... AND MOST IMPORTANTLY, W-H-O ARE THE PLAYERS?
Internet Commentary #1 -
Posted on the Internet January 30, 1997 by Selby of Canada
930 X5 X 52 =241,800 tons of gold moving through London per year.
This unexpected amount must have some effect on the forces
postulated here and elsewhere as moving the price daily--even
intra daily. Can the CB's really fine tune the price with this
amount of gold to deal with daily? Hoarding and annual
fluctuations in production seem minor. New production would have
a minor effect (got my question answered I think ). Does the cost
of production count for much after all? Can summer vacations of
Italian chain makers still be used to explain the sometime summer
dip? Does any of this gold ever get into the kiddy market that
the rest of us play in? Matched orders are not included in the
figures according to a report posted earlier. Does this mean that
the 241,000 tons are an actual market and not just paper entries
being assigned to a few hands when the music stops at the end of
each day. Who has the cash to play this game?
Internet Commentary #2 -
Posted on the Internet January 31, 1997 by vronsky
LOCO LONDON NOT SO LOCO (crazy in Spanish): CMAX INSIGHTFUL AND
INCISIVE OBSERVATIONS REGARDING LOCO LONDON REVELATIONS
Since there was absolutely no discussion elicited from CMAX's
keen conclusions about the heretofore occult gold trading
operations by the London Bullion Market Association, may I
respectfully submit that it was NOT carefully read by Kitco
viewers. The news is without a doubt - IMHO - monumental with
potentially dramatic influence on gold prices. And therefore
should be re-read carefully - word for word - so the full impact
and long-term significance may be appreciated. We definitely need
more keen discussion on this subject by the highly discerning and
perceptive analytical minds at Kitco. With all due respect to the
financial press, I believe an erudite interpretation - and
ramifications - of this blockbuster news is well over the heads
of most journalists. Thx CMAX for helping clear my own thoughts
on the subject.
Internet Commentary #3 -
Posted on the Internet January 31, 1997 by GFD
I think that CMAX has hit the nail on the head. It is very hard
not see the loco revelations as announcing a new currency. BTW
aurophile was alluding to this yesterday with his observations on
how the LME has grown to dominate copper trading and has
supplanted the New York Fed as the primary gold clearing house.
While the London market appears to be large enough to shrug off
CB manipulation the CB's must almost certainly have had complete
access to their statistics. Furthermore, I suspect that they did
have to get approval of the Central Bank's to "come out" - at
least from the Bank of England.
So here we have the bizarre possibility that the CB's have agreed
to the announcement of their own ( paper based ) demise - with
the public emergence of a viable commodity based currency
system...
So, repeating a question I raised yesterday, is this announcement
a powerplay by London to replace New York and Tokyo?? Or is there
some more "occult" reason for this??? Are the Central Bank's
laying the ground for a "backup" system due to fears of an
impending (but occult) meltdown in paper??
Internet Commentary #4 -
Posted on the Internet January 31, 1997 by Cmax
HOW HOW WOW....., is this "enlightened" age of information, exist
something SO large as loco London?? It has been hidden all this
time not by government mandate...but by private enterprise. Selby
gives a number of 241,000 tons per year moved through this
market; that is 660 TONS PER DAY! And we have been blaming news
releases on the Dutch for their little 300 ton sale (during the
year) as a major contributing factor in the slump of gold? No
way. The "discovery" of loco London, economically, is akin to the
discovery of the New World by Columbus. 30 million ounces traded
in ONE day (Jan 29)? These are not COMEX numbers....these are
numbers of a GOLDEN ALTERNATE CURRENCY, here and NOW. I don't
think the world has yet REALLY assimilated what this really
means. Goldgugs have been putting the excuse of their plight on
gold "management" by Central Banks. With these numbers flowing in
the previously occulted London Exchange, Central Bank's could not
possibly manipulate. Gold then must be acting NOW as a commodity,
supply and demand. And the price that we have now, is it's
commodity price (rather than manipulated price). And as any
commodity, it is subject to the market's perception. Popular
economists refer to gold as a dead horse....these are not numbers
of an inactive currency. WHEN the masses translate this loco
London information, the perception of gold must change
dramatically.
After all, this information was only released what....3 days ago?
The Central Bank directors must be squirming when they see these
numbers. With such incredibly high volume, and great
fundamentals, do you REALLY think that this large of a market can
allow gold to drop much further? I don't see how. However, we do
have a paradox: Since gold as an alternative currency DOES exist,
why is it SO cheap? I remember Ann Rand saying somewhere that in
nature, paradoxes cannot exist......one must recheck their
premises. Our PREMISES definitely need some rechecking now; OR
the general market needs to recheck their's. Gold, with this
volume (and new information), is behaving paranormally. Next
question is:
What ever prompted the "perfectly" occulted London gold
market to go public??
This is against the very nature of it's participants. And against
the interests of the Central Bank's and governments. This London
market is no little news...what are their intentions with this
release? First thing that comes to mind, is that if I wanted to
undermine the very root of fiat currencies, this is exactly the
information I would release.
Internet Commentary #5 -
Posted on the Internet January 31, 1997 by IDT
Perhaps the LBMA news was released under political pressure
because the Brits want out of the common European currency, or
perhaps a stronger hand in its formation. What they are in effect
saying is that while the dollar, yen, and DM are the world's
reserve currency, we hold the gold currency.
THE RED BARON
(September 8, 1997)
READER COMMENTARY IS INVITED: Just click the email icon at the
bottom of this page.
(Coming in a few days Part - 2)
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CENTRAL BANK GOLD OPERATIONS & ITS RAMIFICATIONS - Part I
CENTRAL BANK GOLD OPERATIONS & ITS RAMIFICATIONS - Part II
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