Alex, it was just pointed out to me that what I thought was my scoop
of the news article of the BBC in the UK was posted here by you many
hours before my post. I must confess that I fell into that trap, or
call it a flaw or bad habit, that only what I post is worth reading
and other posts of a long nature, more than a screen full, get the
fast read treatment. I did read your post, but too fast.
Now that I have confessed my weakness, I ask you and other readers of
this post to take the time to read what I condenced very tight from
Le Metropole Cafe Sunday's articles of two commentators.
To me each gave a different reason for the gold being controlled,
and I would like to suggest that each is 1/2 of the puzzle,
and both are needed and used by those needed to control gold.
First, that money and power angle.
Second, those of above need the cooporation and green light of people
that will allow the gold to be controlled. Example, President Clinton
of USA has to be convinced that gold needs to be controlled so that
world peace and stability can continue. To me this is a con, but most
know Clinton is easily con'ed by himself, and thus others.
This second reason is described in the second Cafe article, and this
person brings a lot of new ideas that fit under the topic of this thread,
and it might be nice to have a change of discussion with Ron Reece and
Hutch and TeeVee with these new items as a focus.
DEFINING THE GOAL OF THE COLLUDERS AGAINST GOLD
By Vincent Cook, July 11, 1999
.... I can't speak for GATA, it is not difficult at all to infer what
the goal of the colluders against gold might be.....
The answer appears to be that there is no real free market in gold loans;
gold is not being competitively lent to high bidders. Instead, gold is
being lent to a few selected institutions, comprising a group of low
bidders who happen to be politically connected.
The implication of this is that central banks are in on the scam and are
coordinating it...
... If GATA is correct, central banks must be deliberately serving the
interests of certain investment banks and cooperative mine operators by
giving them credit at a discount....
Copyright 1999 Le Metropole Cafe
The Man Ray Table, Discussion du Jour: Asia
To the Cafe, Reg Howe, row@ix.netcom.com
Salut a tous: Congratulations on a most interesting web site, especially
for us old fogies who still think of gold as money. In the spirit of le
cafe (desole de ne pas avoir un clavier francais), I would like to
venture some observations and invite comment...
... gold is arbitraged like currencies, which is to say on the
basis of interest rate differentials...
.... gold had always been considered the soundest money and therefore
had always carried the lowest interest rate structure.
Today yen interest rates are lower than gold lease rates....
.... gold is in backwardation against the yen...
.... I believe that the underlying
manipulation affecting gold today is the yen interest rate. The notion
that the yen is actually a sounder money than gold, and thus deserving
of a lower interest rate structure, strikes me as ludicrous given the
state of Japan's economy, banking system and government finances.
Rather, I am of the view that today's yen interest rates are an artifice
of the current international monetary system, and represent a desperate
attempt by the world's central bankers to bail out the Japanese economy
before its problems engulf us all....
.... Another way to view gold's backwardation in yen on the TOCOM is as
payment or incentive to Japanese citizens (and others) to defer the urge
to convert yen to gold....
The difference between currencies and gold is not that gold is a
commodity, but that gold is a money whose supply -- though large -- is
not infinite. The Fed will never run out of dollars; the Bank of Japan
will never run out of yen; but both, and all the central banks together,
can run out of gold. All the talk today about gold being "demonetarised"
is as off the mark as the notion that governments "gave gold its value"
under the gold standard. Gold gave the currencies that were linked to it
their value depending upon the credibility of the link. And today, gold
is slowly revealing the bankruptcy of Japan.
.... Much of what GATA alleges, if true, supports this
view. My only disagreement with GATA goes not to the likelihood that
governments and central banks are taking actions designed to support the
shorts in the gold market, but to the underlying reasons for their
action. In my view, they are not engaged in some petty corruption for
the benefit of favored bankers, or even in an effort to somehow
demonetise or tarnish gold. They are being forced to mobilise their gold
to support a yen interest rate that is below the gold lease rate. They
are, as I have tried to point out, effectively bribing people to hold
yen today by offering discounted gold in the future. And they are doing
this, I believe, because they have run out of options to stave off
financial collapse in Japan.
.... a word about the gold mining companies....
.... do not appear to understand their product. They think they are
selling the raw material for jewelry, not money....
.... the gold mining companies
should be promoting currency exchange boards, except the money to which
the link should be made is not the currency of some big power but gold.
Any country willing to accept the discipline of a true currency board a
la that in Argentina, for example, can just as easily accept the
discipline of a gold standard. They are effectively the same system
except for one very important difference: under a currency board you
take the interest rates of the reference currency; under the gold
standard you get the interest rates historically associated with gold,
i.e., the gold lease rate.
And if you really want to bust the shorts, you get China, Taiwan and
Hong Kong to begin considering a common currency based on gold. What
better way to further the integration of Hong Kong's economy with
mainland China's, to draw investment capital to China, and to begin in a
peaceful manner the reunification of China and Taiwan? Why these three
central banks with their huge hoards of U. S. Treasuries want to keep
financing a consumption boom in the United States is beyond me. But if I
were a G-7 central banker, je pourrais te dire mon pire cauchemar. C'est
pas Japon. Bonne fin de semaine (oops, une expression quebecoise, pas un
intello, moi). A bientot.
Again, I offer these comments in the spirit of true cafe conversation,
and should you deem them worthy of posting, would be quite pleased to
receive intelligent reaction or rebuttal. Bonne chance.
Reg Howe
Copyright 1999 Le Metropole Cafe |
