Rose,
Know how you feel about GATA, but think you might enjoy this view:
The King Doesn’t Like Gold, Never Has, Never Will – Unlike Mr. Chang
by Burton S. Blumert
"Thanks for coming to the this year’s Freedom Futility Award ceremony.
"CSPAN is covering our event today, so those of you here in the audience, don’t be caught napping if the camera scans you.
"I was only kidding, America, that was my little joke.
"Nominees for the award are passionate freedom fighters generally identified with organizations committed to hopeless causes.
"The winner of last year’s Freedom Futility Award was the Libertarian Party, and true to their tradition, they have proudly worn the mantle of futility over the past 12 months.
"Now, ladies and gentlemen, we come to the exciting moment when this year’s award recipient is revealed. Mr. Rockwell, the envelope please.
(Sound of envelope being torn open, slicing through the breathless silence.)
"And the winner is...the GATA Group."
To those unfamiliar with these unsung, yet futile heroes at GATA (Gold Anti-Trust Action Committee), let me briefly describe the evil they have "discovered," and the windmills they battle.
The GATA folks realized after getting kicked in the teeth 37 times that the gold market does not behave as other markets. They deduced that a scheme to suppress the price of gold involved not only bullion trading banks, but also governments, particularly the US government. (Wonder of wonders.)
GATA believes that the gold price suppression will end when it is exposed, and to their credit, they have hammered away at getting the word out. They also advocate litigation and actually helped bring suit in US District Court in Boston, Howe vs. Bank for International Settlements, et al.
Occasionally, events overwhelm the conspiracy, and gold prices shoot higher. GATA is always quick to celebrate such victories, proclaiming that the tide of battle had turned.
Unfortunately, so far every victory has been short lived, the conspiracy persists, and gold loses the gains.
Does GATA deserve the Freedom Futility Award?
Yes.
The GATA folks seem blind to the history of gold: that the role of gold as a monetary commodity cannot be legislated away. From the beginning the "king" hated the yellow metal. He always did and always will. His power to influence the market is virtually without limit and the stream of negativism is constant: "Gold is a barbaric relic. It’s a horrible investment. Why, buying and holding gold is downright unpatriotic."
Should the propaganda barrage fail, government can always employ the iron fist. "Restrict imports. Smash the market. Make it illegal again. Confiscate the citizen’s gold," as the feds did in 1933.
Gold historically reveals the mischief the "king" has been up to, and as it is much easier to manipulate the price of gold than to remedy the mischief, the king is forever intervening in the gold market.
So, the GATA folks remain frustrated. They seem puzzled by the actions of the US government and its allies: "the banks, the brokerage houses, and the gold mining management" itself and the unwholesome influence they wield.
Let me remind the GATA gang how it used to be.
When I was a young gold dealer in the 1960s, severe restrictions existed on the holding of gold. Many of the products we handle today would have sent you to prison then. Markets were rigidly controlled and the gold police were always lurking.
Being a gold dealer at the time was not only dangerous but uncertainty prevailed. Gold coins dated 1932 or older were legal IF they were already in the US. You could bring them in from overseas only if you were granted a license – but licenses weren’t being issued. An American couldn’t buy a Krugerrand in Switzerland even if it were stored overseas.
A prestigious currency trading company in San Francisco was raided and the employees shackled and arrested because they had some Austrian gold coins of questionable legal status on display.
By the manner in which the press handled that event one would think that bales of heroin were the issue. To those who read about it in the papers, it seemed that these were real criminals.
This tyranny existed for over 40 years (and GATA wrings its hands over the present day level of government intervention. Hmphh.)
Finally in 1974 restrictions were lifted, and all forms of gold, including bars, were legal to manufacture and to hold. (Some credit this exhilarating event to Nixon’s near impeachment. I don’t know about that, but surely the breakdown of government led to gold’s legalization.)
So here we are. The good folks at GATA continue to whine on a daily basis.
If they think that government will ever be neutral towards the gold market, they are fools. It is equivalent to thinking the US government – or any government for that matter – would relinquish their ability to collect taxes.
To protect the corrupt stranglehold they impose on the economy, the insiders will violate every commandment. Intervening in the gold market is just a minor chore.
Will the price of gold ever go up? Yes.
Will the house of cards collapse? Yes.
Will the paper dollar be repudiated in the marketplace? Yes.
When?,you ask.
There will be a clear signal. The fat lady will finally sing when there is a hemorrhage of dollars leaving the US. That will be your indicator.
Where will those dollars go? Nobody knows – but it won’t take many of the greenbacks seeking refuge in precious metals to cause an explosion in price.
By the way, as the gold price increases, the king’s intervention will become more desperate. Remember , the king doesn’t like gold, never has, never will.
The last small rally that gold enjoyed carried it to $306 per ounce (it has since fallen back to $290). One of the reasons given for the run-up was that new money was pouring into gold from Japan and China.
We don’t get much reliable information about those markets but I’ve experienced very strong inclination among Asians towards gold.
Which reminds me of my favorite Chinese customer, Mr. Chang.
I don’t remember when he first became a customer but it had to be a decade before 1974. He barely spoke English, and I’m not even sure he was legally in the US. He worked in food service at United Airlines, and his wardrobe was Shanghai c.1930.
We didn’t have much in common. His English was primitive and my Chinese non-existent.
The only thing we shared was his interest in gold and my desire to sell it to him. In those days we were prohibited from selling anything that could be considered a bullion coin. That didn’t matter to Mr. Chang.
There was only one coin he would buy and that was the US $20 Liberty Head coin. He was familiar with it from China and to him the Liberty $20 gold coin was gold and gold was the Liberty $20 gold coin. Any other gold item might as well be counterfeit.
Through the years I saw him almost monthly. He brought his paycheck, would negotiate price, and then decide how many coins he wanted. (The $20 Liberty cost about $50 each.) I would give him change against his check.
Originally, I was amused that he came with his own balance scale. It was made of bamboo with a plate at one end and a weighted rock at the other. It was designed to balance the $20 Liberty. If a coin failed, it was either (cont)
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