LBMA Part VII
THE GRAND LBMA EXPOS: A Collective-Mind Analysis
(The Onion PARADOX)
Part - 7
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.
Internet Commentary #36 -
Posted on the Internet October 9, 1997 by "ANOTHER"
"Gold is the only money the world has ever known" Sounds like a
simple thought but it isn't.
"Money is whatever people say it is" Not true! "Currency is
whatever a government says it is" True! "The LBMA problem" I can
now make clear for all to see.
Background; to understand the following you must rethink your
basic knowledge of money and investments. Get your aspirin ready.
Some time ago gold not only was used as money but also circulated
as currency. It had always been money and people had no use for a
separate currency to represent "gold money" so they stamped the
gold itself and used it as circulating currency. From the start,
one thing most thinkers can't quite grasp is that "money does not
have to circulate"! The first "world money", gold money that is,
could stay locked up and still represent value and wealth. People
had but to agree on who owned it in exchange for goods and
services. You have all read the articles about how paper receipts
for "gold money" were later circulated and became paper currency
receipts, then paper currency, then just currency. The western
world today, as we know it does not use money! They use "paper
currency". To fully understand what that really means you must
come to terms with this fact. "When you use paper currency you
are placing a value using another persons concept of value" You
are using a thought as a means of value! When an investment in
stocks, bonds, bank accounts, CASH, businesses etc. is priced in
US$ currency you are really holding the "intentions of providing
value" locked away in the thoughts of another mind.
This type of human interaction works well for a time, as the last
100 years or so proves. But, it is highly unstable to say the
least. It has it's own self-destruct code written inside each
mind. One day (it has already started) a type of nuclear chain
reaction will occur in the currency markets as people start
"unvaluing" the thoughts of others. Little by little all debts
owed will be marked down.
Now that we understand that concept let's move on: One of the
great money troubles facing the western currency system today is
that many third world people are starting to put a "mind value"
on real money, gold. These people don't know the true value of
gold money but they know it's worth a whole lot more than the
world paper currency price now placed on it. And that brings us
to the next problem; how can paper currency that represents
"thoughts of a nation blowing in the wind" be used to value real
money of ancient world class proportions, gold? It cannot! Any
price you can think of will do, as in no price will work! How did
we come to this unworkable mess? The best way to rework the
publics mind about gold money was by changing the way it was
viewed. "It's money of course but let's also call it a
"commodity! Then we can place a "paper" value on it and
denominate it in all forms of future contracts. It will lose it's
true value as money in peoples minds and be priced in an
unrealistic paper format." And here we are today! The banks must
sell all the gold they have to keep the system together. And once
it is all sold and the financial markets implode the nations will
use "whatever force is necessary" to pull the gold back in! That
action in and of itself would show the true value of gold money!
What of the LBMA mess?
Gold is cornered. Plain and simple. No complicated theories, no
options problems. The commodity value of gold was forced so low
in paper currency terms that all of the new mined gold, going out
some 10 years is spoken for. Between the third world buying
physical gold and the jewelry industry ( same people buying )
there is none left for the oil states! They do value oil in terms
of gold, but not IN the paper currency price of gold! How much is
gold worth in terms of oil value? Just stop supplying gold to
them in ultra cheep US$ terms and you will find out by watching
the currency price of oil! In any event, LBMA has traded so much
paper/oil/gold that any rise in the currency price of gold will
implode them. The CBs must become the full primary suppliers of
gold or the system as we know it is done.
One last note: No form of paper wealth will survive the financial
crush once the CBs stop selling! NOTHING!
Internet Commentary #37 -
Posted on the Internet October 12, 1997 by "JTF"
Spotted your post on T-Bonds. I also noted the drop in the
dollar, and Donalds post about the foreign investors selling
Treasuries. If I understand ANOTHER, the CB's could "sell" gold
(I think the term is more accurately loan it) to an intermediary,
who could buy dollars (or treasuries) thus pushing the dollar
back up. I understand all but the last paragraph of your logic.
The CB's response would be to loan the gold to keep the dollar
up, as per ANOTHER.
If gold goes up, it is because the CB's have decided to let the
dollar fall. I do agree with one point you made in your last
paragraph --- "gold is not a credit instrument" The CB's have
achieved the manipulation of the dollar without using the
conventional methods of credit and interest manipulation. To me
this is like a Corporation that has a secret set of books, one
for the Auditors (i.e., the general public, or non-Fed members of
our own government), and the "real" ones that hide many secrets.
Doesn't it sound odd that Greenspan does not want full disclosure
of derivative trading? Perhaps there are too many skeletons in
the closet. Either way it makes life especially difficult for
people like us, because after we think we know the rules, we find
out there really aren't any, except possibly those of the LBMA,
where private individuals, corporations, and central banks all
trade in secret.
You ought to read Vronsky' post #6 on the LME and the Copper
fiasco. If I remember correctly a single investor had cornered
1/10 of the copper market, and there was suspicion of some shady
dealings at the LME that were "promptly stopped". Since the LBME
and the LME are connected, apparently with similar structure --
the same dealings could be happening with gold. Perhaps some
powerful intermediaries who were originally working with some
Central Banks have struck out on their own, and are manipulating
the price of gold -- up or down! ANOTHER did allude to this also!
He did say that the process set up by the CB's had gotten out of
hand, and so did Big Trader! The key question in all of this is -
how much longer can the CB's maintain control of the price of
gold -- or is it now in the hands of "others"?
Internet Commentary #38 -
Posted on the Internet October 12, 1997 by "ANOTHER"
Thoughts!
How DO they do it?
It's more complicated than this but here is a close explanation.
In the beginning the CBs didn't sell their own gold. They
(through third party) found someone else who had bullion. That
"party" sold to a broker who sold forward for a mine or
speculator or government). In the end the 3rd party had the
backing from the broker that he had backing from the CB to supply
physical if needed to put out a fire. The CB held a very private
note from the broker as insurance and was paid a small fee. This
process mobilized free standing bullion outside the government
stockpiles. The world currency gold price was kept down as large
existing physical stockpiles were replaced by notes of future
delivery from the merchant banks (and anyone else who wanted to
play).
This whole game was not lost on some very large buyers WHO WANTED
GOLD BUT DIDN'T WANT IT'S MOVEMENT TO BE SEEN! Why not move a
little closer to the action by offering cash directly to the
broker/bank (to be lent out) in return for a future gold note
that was indirectly backed by the CBs. That "paper gold" was just
like gold in the bank. The CBs liked it because none had to move
gold and it took BIG buying power off the market that would have
gunned the price! It also worked well as a vehicle to cycle oil
wealth for gold as a complete paper deal. Are you with me?
Well a funny thing happened right after the Gulf war ended. What
looked like big money before turned out to be little money as
some HK people, I'll call them "Big Trader" for short, moved in
and started buying all the notes and physical the market offered.
The rub was that they only bought low, and lower and cheaper.
They never ran the price and they never ran out of money. Seeing
this, some people (Middle-East) started to exchange their
existing paper gold for the real stuff. From that time, early
1997 LBMA was running full speed just to stay in one spot! In
other words paper volume had to increase to the physical volume
on a worldwide scale, and that was going to be one hell of a
jump. It could not be hidden from the news any longer. This was
not far from the time that "Big Trader" said that "if gold drops
below $370 the world would see trading volume like never before
seen". The rest is history. Now the CBs will have to sell 1/3 to
1/2 of their gold just to cover what's out there. To use the
Queens English "it ain't gonna happen dude"!
Everything is now upside down and reversed. The more the CBs sell
outright the more the price will rise. It's not a bearish sign
anymore. They will now sell to keep the price rising slowly.
What of those T-bonds and the US$?
Internet Commentary #39 -
Posted on the Internet October 12, 1997 by "JTF"
LBMA, gold, oil, US$, US Treasuries -
Another interesting post from ANOTHER. Will be digesting it.
Looks like "when" may be sooner than I thought. We should all
remember that the LBMA has been around for a long time, and
therefore also the gold loan business. The gold associated
derivative trading is new, and would only affect post 1987, I
would guess. This new method of controlling gold/oil/US dollar/US
treasury prices is what is critical to our understanding what is
happening. Sure feels like we are slowly peeling layers of
mystery away from the truth.
Internet Commentary #40 -
Posted on the Internet October 12, 1997 by "JTF"
My assessment is the following: The Central banks began the gold
market manipulation by offering private gold to brokers. Since
they could use their own real gold as "insurance", they did not
need to sell their own gold. As the paper gold (the derivative
gold?) became popular, all the trading of US$/oil/US treasuries
became based on the paper gold method. Eventually "Big Trader" or
some other individual stepped in and started pushing down the
"paper" price of gold. Other traders, possibly those selling oil
decided that they wanted to go back on the gold standard, and
wanted real gold. Now however, the paper trading volume was so
high that the Central Banks could not possibly maintain control
of the markets, let alone supply enough real gold to cover all
demands. If we are now talking about the CB selling of 1/3 to 1/2
of their gold, the public will find out, with catastrophic
consequences, regardless of how "worthless" that gold they were
told is. Looks like the choice between the proverbial rock and
the hard place! Is there really any gold in Fort Knox?
Internet Commentary #41 -
Posted on the Internet October 15, 1997 by "Cmax"
@Food for thought
ANOTHER has made various comments as to the relation between oil
and gold, due to the Arab's (well-founded) distrust of U.S.
paper, and that they demand certain percentages of their payment
in gold.
In light of Middle-East tensions, an interesting undercurrent has
been developing during the last year and a half in regards to the
U.S.'s energy allies: The U.S. NOW obtains the majority of it's
oil from Venezuela. Venezuela does not desire gold for their oil
purchases, and are extremely U.S. friendly. Venezuela has
recently discovered oil reserves that now total more oil than
Iran and Iraq combined. So persons looking for an oil or gold
squeeze due to petroleum, should really factor this into the
equation.
ANOTHER: A personal thanks for your posts; you have put
(perception of) rationality back into a market that I have seen
as a total contradiction, and cost me many lost nights of sleep.
Please continue posting, and don't pay attention to the
knuckleheads that are attracted by the anonymity of the Internet.
Internet Commentary #42 -
Posted on the Internet October 15, 1997 by "Zardoz"
Oil and Gold....a golden marriage -
Cmax and ANOTHER...your comments regarding the connection between
gold and oil are intriguing. ANOTHER (re: Red Baron's reference
to your comments on LBMA part 5) ...I would like you to share
more of your insights on evidence connecting Mid-East oil and
Mid-East payment for oil in terms of gold, as funneled through
South Africa and through the LBMA in London (through the
Rothschild house and others). I too note the curious situation in
Alberta, Canada where billions have been committed to expanding
the HUGE reserves of oilsands (reserves which rival the Saudi oil
pool and exceed anything in Venezuela) by companies like Shell
(Royal Dutch Shell being largely controlled by Rothschilds) and
Imperial Oil (Exxon parent in the U.S. controlled mainly by
Rockefellers) and others. I have estimated that at current
production Alberta's oilsands would produce synthetic and bitumen
crude oil for more than 3,000 years. This investment is curious
since world oil prices are still in a stable trading band between
$19-25 per barrel and oilsands production costs are somewhere
between $9-12 per barrel (compared with Saudi oil costs of
roughly $2 per barrel).
Question: why are these companies investing now in future
oilsands (as in the case of Venezuela)? I asked noted
international journalist Gwynne Dyer (noted Canadian war
correspondent during the Gulf War and commentator on global oil
production) this question last week in person. He suggested that
the billions committed to Alberta's oilsands development is
mainly for security reasons. Security? Could the big oil
companies (the biggest controlled by the Rothschilds and
Rockefellers) be concerned about security of supply in the Middle
East? Quite likely given the inherent instability in Saudi Arabia
with rising Islamic youth movement. Also, a comment Dyer made in
a previous newspaper article is more important...that is, that
global oil production may peak as early as 2005 and that is
assuming constant consumption by China and India (demand is
certain to rise) ....This would then suggest that if a production
peak does emerge that there should be enormous pressure of the
price of oil rise yet the future markets ( which are not that
future oriented..maybe 6 months out) don't seem to pay any
attention to such supply analysis (like ignoring the predictions
of the Club of Rome) ....Point being that if ANOTHER is right,
there may be a deliberate effort to keep the price of oil in a
sustainable price range by placating the Arabs by making payments
in gold (through CB gold sales) ....of course a rise in the price
of oil would cause inflationary pressures in the U.S., Japan and
Europe (ala the 1970s oil situation) which would effectively
cause the Fed to raise interest rates and burst the stock market
bubble.
One thing I know is certain..the Roths and Rocks long for
stability...for in that situation they thrive and benefit...they
ultimately seek peace and avoid chaos....thus we may be seeing a
veiled attempt to create an illusion of stability despite the
enormous pressures which would lead to instability.....El Nino
and calamities of nature alone are reminders that instability is
not always easily controlled through human or secular power.
Internet Commentary #43 -
Posted on the Internet October 15, 1997 by "Zardoz"
Oil and Gold -
ANOTHER...if you are out there, I would like to pursue your
thought in Red Baron's post (LBMA - 5) re: gold and oil. I would
like to understand how gold may be being used a medium of
exchange for Middle East oil as I believe you implied. If as you
suggest oil is really trading at $19US+XXX units of gold from CB
liquidations and sale to the Arabs then this would suggest that
oil prices are being artificially depressed. But why? Could it be
that the Fed and other CB are afraid that rising oil prices would
result in inflation and thus the need to raise interest rates and
burst the euphoric stock bubble? And could it be that the Royal
Dutch Shells and Exxons know of the coming global oil production
peaking as early as 2005 (even without factoring in increased
demand in China and India) thus suggesting a price push in oil
prices (although future markets don't seem to suggest the threat
of a production peak), thus causing inflation (ala 1973-74)?
If you or others have any insights into this connection between
gold and oil, it would help many of us at Kitco at least attempt
to cling to the coattails of the bigger fish.
Internet Commentary #44 -
Posted on the Internet October 15, 1997 by "JTF"
...gold sales for oil? -
Zardoz: re your last post about gold sales to hold the price of
Oil down a la ANOTHER. Several days ago I did a
back-of-the-envelope calculation of how much gold would have to
be given annually to the oil producers if 1/3 of the oil price
was subsidised by gold sales. I then determined whether annual
reported CB sales could account for this. It was nowhere nearly
enough! Either some Central Banks are lying about how much gold
they are selling, or we have been misinformed. I suspect the
truth is that only a few oil producing countries demand gold from
their weaker customers, and not any of the G7. We now have
another question for ANOTHER.
Zardoz -- why don't you check my calculations? I just determined
the world production of oil in barrels, multiplied by the price
of oil and divided by 1/3 (the cost to be purchased in gold) I
then determined for the same year the total dollar value of all
official Central Bank sales.
Internet Commentary #45 -
Posted on the Internet October 15, 1997 by "JTF"
@LBMA - How much gold sales for 1/3 world Oil prodcution?) -
First: Total oil production in dollars: 65 million barrels/day
(1997) (65*10**6) * 265 * 22$/oz = $378 billion/year
1/3 of this is = 126 billion dollars worth of Oil to be purchased
with gold each year.
Second: Total world gold production available from all sources in
1994: 86 million oz * 380/oz = $32 billion
Third: Total IMF Central bank gold holdings in 1995: 905 million
oz * 380/oz = $340 billion
The entire IMF gold supply would be exhausted in three years if
1/3 of all the Oil sold in the world was bought with gold. Did I
make a mistake in my math, or have all of the IMF countries sold
their gold? Highly unlikely! I think we have "another" question
for ANOTHER.
THE RED BARON
(October 20, 1997)
READER COMMENTARY IS INVITED: Just click the email icon at the
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(Part - 8 coming in a few days)
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THE GRAND LBMA EXPOS: A Collective-Mind Analysis - Part 1
THE GRAND LBMA EXPOS: A Collective-Mind Analysis - Part 2
THE GRAND LBMA EXPOS: A Collective-Mind Analysis - Part 3
THE GRAND LBMA EXPOS: A Collective-Mind Analysis - Part 4
THE GRAND LBMA EXPOS: A Collective-Mind Analysis - Part 5
THE GRAND LBMA EXPOS: A Collective-Mind Analysis - Part 6
CENTRAL BANK GOLD OPERATIONS & ITS RAMIFICATIONS - Part I
CENTRAL BANK GOLD OPERATIONS & ITS RAMIFICATIONS - Part II
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