Koos Jansen
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Koos Jansen
Posted on 20 May 2014 by

Gold Price Manipulation Goes Mainstream On German TV

Public TV channel 3sat, which is a cooperation between Germany, Austria and Switzerland, broadcasted a short documentary on gold price manipulation on May 9, 2014. More and more mainstream news outlets are covering the allegedly gold price manipulation, after evidence is pilling up and many other market manipulations, like LIBOR, are coming out. From the Financial Times February 23, 2014:

Global gold prices may have been manipulated on 50 per cent of occasions between January 2010 and December 2013, according to analysis by Fideres, a consultancy.

The findings come amid a probe by German and UK regulators into alleged manipulation of the gold price, which is set twice a day by Deutsche Bank, HSBC, Barclays, Bank of Nova Scotia and Société Générale in a process known as the “London gold fixing”.

Fideres’ research found the gold price frequently climbs (or falls) once a twice-daily conference call between the five banks begins, peaks (or troughs) almost exactly as the call ends and then experiences a sharp reversal, a pattern it alleged may be evidence of “collusive behaviour”.

“The behaviour of the gold price is very suspicious in 50 per cent of the cases. This is not something you would expect to see if you take into account normal market factors,“ said Alberto Thomas, a partner at Fideres.

Oddly enough this article from the Financial Times was removed from their website two days after publication.

One of the most extensive researches that has been done on gold price manipulation is by Dimitri Speck in his book “The Gold Cartel”. On his website there is a chart that illustrates what Fideres’ found about the London gold fix. Dimitri Speck was, amongst others, interviewed by 3sat for the documentary.

London Gold Price Fix Manipulation Chart, By Dimitri Speck

I do not agree with everything that’s being said in the video, for example they state Chinese gold demand was 1066 tonnes in 2013, which is based upon numbers from the World Gold Council I happen to disagree with, or that it’s not necessary to invest in physical gold stored outside the banking system, though I thought it was worth sharing this clip with subtitles for the English speaking world. Germany is one of the few Western countries where there is a broad consensus about the importance of gold and sound money.

Press the captions button and choose English. Translated by Behfar Bastani.

Transcript:

Presenter: Good evening and welcome to the business magazine Makro. For many people, the purchase of gold represents a safe reserve for bad times. No wonder that, at the height of the financial crisis savers were queuing up at gold dealers. Throughout history, gold has served as a promise of reliability and stability. But today there are considerable doubts as to whether that promise remains valid, because an examination of gold prices reveals machinations fit for a financial thriller.

Narrator: London, the most important gold market in the world. Whether the price of gold rises or falls is determined here. Twice a day, a handful of bankers confer on the phone to fix the daily price of the precious metal. Thus arises the most important reference value for physical gold, used by businesses ranging from jewellers to gold mines. There is no public oversight for the “Fixing”. Apparently, this lack of restraint has led to serious manipulations of the gold price, as pointed out by a current investigation which has detected strange price movements spanning a number of years.

Rosa Abrantes-Metz: The setting of the gold fixing is, in my view, problematic. It opens the door for abuse and manipulation. There is absolutely no transparency in the arrangements made during the private phone conversations of this small group of participants as they decide what the price of gold should be.

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Narrator: Experts have long complained that this system is particularly susceptible to manipulation. Only five banks participate in the London gold fix, thus far including the Deutsche Bank. In the more extreme futures markets, where bets are made on gold price developments in future months, the quantities that exchange hands are of quite different magnitudes.

Folker Hellmeyer: We have a situation where this market is dominated by three essential players, three banks, in the USA. These banks have a market share on the order of 80 percent. In other words, we are talking about an almost monopolistic structure which of course also provides the power to manipulate the market.

Narrator: And which power is apparently being abundantly used. The futures market, intended to provide predictability and stability for future prices, is controlled by the following three banks: HSBC, Citibank, and JP Morgan. Their tool: paper gold securities.

Thorsten Schulte: It is possible to simply sell scraps of paper, thereby creating fear, especially fear among those who possess gold in its physical form, and who may then arrange to sell their metal, eventually resulting in such a a wave of fear …

Narrator: The gold price has been attacked in this fashion time and again, often with massive price declines within a matter of a few minutes. Yet, there is quite a bit more to the story.

Dimitri Speck: Gold is the opponent of debt based moneys, i.e. currencies, and in particular the US Dollar. Therefore, the US Federal Reserve has an interest in a weak gold price, and the US government protects the manipulation of the gold price by the private banks.

Narrator: For years, the US Federal Reserve has served as the lender of last resort. Gold must be weak if a loss of confidence in the US Dollar is to be averted. It has been difficult to prove that this is a rigged game with a stacked deck, but if the gold market manipulations are indeed encouraged in addition to being condoned, that would explain why oversight bodies have thus far turned a blind eye to it, despite years of massive conspicuous activities in the futures markets, as with the gold fixing in London.

Presenter: Incidentally, the Deutsche Bank intends to withdraw from the gold fix. As of now, no other bank has expressed an interest
in filling that spot. Too many banks are scared to damage their good reputation in London. Gold is a speculation commodity with a high symbolic power. Its price is therefore strongly influenced by many fears and hopes. Here are a few facts about that from our Makroskop.

Narrator: 31.1 grams, the weight of one ounce of refined gold. The precious metal is regarded foremost as protection in times of crisis. Gold climbed rapidly during the financial and economic crisis. Currently gold trades for about USD $1300 per ounce. Yet the more hopes grow for an end to the international economic slowdown, the more the price of gold declines. The US government continues to hold the largest governmental gold reserves at 261.6 million ounces, over 8100 metric tonnes. The US is followed by Germany, Italy, France, and China. But the largest demand comes from the Middle Kingdom. From gold coins to gold bars, the Chinese are accumulating large quantities. In 2013 the Chinese acquired 1065.8 tonnes, moving for the first time ahead of the Indians who purchased 974.8 tonnes in 2013. Jewellery accounts for the highest portion of the demand. In China, jewellery sales have tripled since 2004. They represent about 30 percent of worldwide demand. About 400 tonnes was purchased by businesses. In particular, China’s electronic manufacturers need industrial gold for production. Meanwhile, in the mining sector, China has risen from being a small player to become the number one gold producing country. In the past tens years, Chinese gold production has more than doubled from 217 to 437 tonnes.

Presenter: Today, the course of the gold market is being set by China. What are the worldwide consequences of this? Let’s talk about that with the chief editor of the Frankfurter Börsenbrief.

Presenter: A very good evening to you, Mr. Bernhard Klinzing. These days the flow of gold seems to be from the west to the east, as we have just seen. There are considerably more buyers in Asia than in the developed western countries. What do you attribute this to?

Klinzing: The reason is that India and China, which together make up half the gold market, do not have state provided elder care, which is valued differently there. Inflation fears are another factor. “The Chinese are the Germans of Asia”, it is said, and so they sit on gold.

Presenter: We have seen that the price of gold is heavily manipulated. There are manipulators that are apparently backed
from the highest places. Do you believe that, or do you regard it as a conspiracy theory?

Klinzing: I don’t believe that based on the Deutsche Bank and the London fix, but based on what we just saw from the Americans I absolutely do see that danger, because there is a quasi “Edward Snowden”. His name is Paul Roberts and he worked at the US treasury department and he has confirmed that the Fed, together with a number of banks, are preventing gold from rising above $1400 per ounce by continually providing gold bids which put downward pressure on the price.

Presenter: Given the unsound loans that came to light in the Libor scandal or the forex markets, do you believe that this is only the tip of the iceberg in the gold trade?

Klinzing: I would say that we are only seeing a snow ball from the iceberg while a lot more is hidden at the bottom. The banks earn a hefty sum whenever they fix the gold price by as little as 1/10th of a US Dollar upwards or downwards. You can see that with Goldman Sachs who published studies predicting gold’s decline to $950 per ounce while at the same time increasing their own gold positions by 20%. That does not match up. Presenter: What are some consequences for other market participants? You stated that the banks are lining their pockets, but what are some of the consequences?

Klinzing: Yes, there is a hedge fund manager by the name of William Kaye who has said that the German gold is no longer stored in the vaults of the Fed in New York, but has already found its way to China because the Fed needed the gold in order to carry out its market manipulations. This is as yet only a suspicion, and it may even be a conspiracy theory, but the Germans were denied an opportunity to touch or take samples of their own gold in New York.

Presenter: One could hardly think up a better plot for an economic thriller. I would like to talk about investors again. Is gold a good investment for the, let’s say, small investor?

Klinzing: One should not construct a portfolio with only gold, that much should be clear. But of course gold is a very attractive portfolio addition, whereby investors can insure the value of their portfolio against currency risks. Because if the Euro rises, the value of gold falls, so you can participate only less than possible, therefore invest always in a currency protected fashion.

Presenter: How can I do that as an investor?

Klinzing: There are certificates for doing this, there is no need for an investor to store gold in their own vault or under their pillow. For that there are very good solutions on the financial markets.

Presenter: Before we wrap up, what are your thoughts on how the gold price develops further from here?

Klinzing: We can see that in China the standard of living is rising, the middle class will grow from 300 million people to 500 million by 2020, and urbanization is accelerating. This means that there will be much more demand for gold from China, as well as from India. I don’t believe that gold will break $1400 per ounce this year, but we will see a new gold rally in the next few years.

Presenter: An overview of the gold price from Bernhard Klinzing of the Frankfurter Börsenbrief. Thank you for being on the show with us tonight. Dear viewers, if you have any questions for our studio guest, please visit the Makro blog where Mr. Klinzing will be available for a little while longer after the show. On our homepage you will also find additional background material on the topic of gold.

In Gold We Trust

Koos Jansen
E-mail Koos Jansen on:

  • JerseyJoe

    One additional point that carries much significance in this discussion: ABN AMRO – an LBMA clearing house, forcibly defaulted on their gold obligations to their customers.

    This occurred after the Troika forced a Bail-in down the throat of Cyprus. It was rumored after this that old European family wealth was pulling their gold for safer keeping in private vaults. These rumors were supported by reports from private vaulting companies having would-be customer being told an apparent wide array of reasons why they could not get their allocated gold. Some reported waiting weeks and receiving not their inventoried gold but that of new vintage bars.

    On top of this the NY Fed only returned a small portion of a small portion of Germany’s gold – not enough to fulfill the agreement in the time allotted if the shipments remain as small as the first shipment.

    This is great news that the media (outside the US corporate media that laughs at gold) is picking up on the fraud. As a follow-up, I wish someone would look at how the mining sector and the 100s of thousands of miner have been effected by this fraudulent manipulation. Even Cat had to shut down its mining division. hundreds of thousands have lost work and millions of investors worldwide have been defrauded in shareprice and cut dividends. The banksters responsible should be lynched – well at least serve time with Bubba.

    • davidnrobyn

      There’s always the other side of the coin–this manipulation is making gold and especially silver available at bargain-basement levels. Trade a substantial portion of your FRNs to metal during this windfall opportunity.

  • ramu

    Wow, another excellent video. Main stream media simply don’t show these. But the poor Germans have already lost their gold. I don’t think Fed will ever give them all their gold back. I doubt if there is much gold there even in Fort Knox.

  • vas

    Klinzing agrees that there is manipulation, agrees that German gold may be gone, he states that the known manipulation is likely the tip of the iceberg and yet his advice is not to buy physical gold and hold it which has no counterpart risk; his advice is to buy paper gold certificates which makes the manipulation possible, makes one vulnerable to the manipulation, and gives you all the counter party risk in a market he admits is fraudulent. This makes no sense.

    If german gold is gone by letting the Fed store it, why should an investor trust the financial system to honor a paper certificate? Buy and hold physical gold, it has no counter-party risk. Don’t support the fraudulent paper market by participating in it. If there is a financial or currency crisis a paper certificate is worth zero. Don’t be a sucker.

  • Michael Yates

    I can’t help but think this event and ones like Deutschebank pulling out of the gold fix are Germany’s revenge on the FED for not returning their gold. Similar to China, now Germany is influencing their people to buy gold. Even more, this presentation boldly talks about the manipulation and pins the blame squarely on the US. Notice how the guest at the end absolves everyone but the US for the rigging.

    • JustMe

      Sorry, but living in Germany, I can assure you that nobody “pushes the people here to buy gold”.

      It´s the other way around, if you go to a bank or call them and ask them to physically buy gold or silver, they will do anything to talk you into buying paper instead.

      This might also be in the interest of the German government, b/c once you have gold/silver physically at home under your bed or buried in the garden (or elsewhere), the goverment (via tax agency) does not have any possibility to gain access to it and/or to tax it…

      Having the bank secret here more or less eleminated in the last years, the tax agency can look whatever you have on the bank, thus they want people to buy paper gold and other paper values that you have to store in the bank´s computer systems..

      And if there is no problem and the USA are sooo innocent, why does the FED not just give Germany back the gold NOW?

      You “revenge” approach is much too simple…

  • http://GreatRedDragon.com EdwardUlyssesCate

    This is a great step in the right (honest) direction. Unfortunately, this is probably the best they can do right now and still have it aired. It’s sad that so many folks are so far behind in understanding gold. As I wrote several years ago, “Understanding gold IS taking the red pill.”

  • Justin King

    FYI
    usawatchdog.com follows this subject closely.

  • In Gold We Trust

    From two German sources I’ve understand that 3sat is not watched by many German people, just “older people and intellectuals” (better than nothing). This clip is spreading over many gold sites (13,600 views in 16 hours on Youtube), though I wouldn’t make a big deal out of it. I don’t think all of Germany is occupied with this subject.

    • Michael Yates

      It always starts somewhere Koos. Quietly we are seeing events unfold now. Bafin has the manipulators square in their sights, UKIP on the rise, India back in the game, silver sales in north America at all time highs. Assume there are pressures behind the scenes we aren’t made aware of too.
      Like all attempts to control the world, this one will fail too, and being the biggest attempt yet, it will fall the hardest.

    • davidnrobyn

      In Germany, “intellectuals” is a larger and much more influential group than in America. Even though they’re still only a small fraction of the population, the average German respects them much more than the average American does, and their opinions count.

  • In Gold We Trust

    How is the gold market manipulated in your opinion?

    • Zhang An Ping

      “I think prices probably are manipulated – but perhaps not by one single entity or group, probably not tactically intraday but over time, and almost certainly not in the way most people provide “evidence” of”

      I will approach this topic from two distinct angles:Who and Why

      Firstly, modern-day trading has become dominated by computer-oriented discretionary investors (often referred to as Hedge Funds, but, as their activities have nothing to do with ‘hedging’, are more appropriately described as Speculators); this group are not natural users of Gold markets (as might be the case for a miner or a jeweller wishing to hedge their price exposure) and neither are they two-way ‘market makers’ who maintain regular Bid and Offer prices – these are investors who can choose when to take a position, at what price and time, and above all, in which direction. 30 years ago futures trading was dominated by ‘Locals’ who were frequently individuals operating in the ‘Pits'; this was all swept away in the late 1980’s, firstly by GLOBEX, then LIFFE’s APT system, then along came the DTB (now known as Eurex) and then LIFFE itself went fully screen-based. These days there is little finesse in the trading algorithms, speed is everything, and the Speculators are as interested in bullying the market in the direction they prefer as they are in trading it in an orderly manner. Price is often irrelevant to them – what they are in is directional movement, whatever the entry point. I believe the Close Brothers probably fitted this description, albeit during an earlier era

      The second group are the Central Banks or – rather – Governments, who may have both legitimate and illegitimate motives for intervening in bullion markets; I will give specimen examples below, but in general terms Government intervention is intended to achieve economic consequences, rather than commercial gains, and if you think Hedge Funds behave oddly when dumping all their position in one hit, then consider how strange Central Banks are when publicly pre-announcing their intentions (as Gordon Brown did before selling off the UK’s Gold reserves in 1999 http://en.wikipedia.org/wiki/Sale_of_UK_gold_reserves,_1999%E2%80%932002 and the EU nations did following the Washington Agreement in 1999 http://en.wikipedia.org/wiki/Washington_Agreement_on_Gold and again earlier this week http://www.gold.org/reserve-asset-management/central-bank-gold-agreements Obviously, it is open to interpretation whether stating that you are NOT going to do something amounts to ‘manipulation’, but it certainly displays coordinated ‘cartel-style’ tactics intended to shape market sentiment in favour of a preferred outcome – and even the London Pool in the 1960’s was not some kind of secret ‘cloak and dagger’ affair, but was conducted quite publicly

      So, moving to modes of manipulation; firstly, there are arbitrageurs amongst the discretionary investors who are able to opportunistically exploit price discrepancies in order to lock in risk-free returns. We are not talking about “Long stocks, sell bonds!” naked positions, but about ‘cash & carry’ trades where an item can be purchased cheaply spot and sold at a higher price forwards; this is the concept of “basis” and “co-basis” expounded by Keith Weiner at http://www.monetary-metals.com an explains why the inventory backing the GLD ETF is tightly correlated to the Gold Price – as the price goes down, so it becomes attractive to redeem shares in the ETF , take physical delivery and sell it forward into the market. This is not rocket science, and you can do it on a spreadsheet, but it certainly is nonetheless manipulation, as it tends to move the market back to its equilibrium ‘no-arbitrage’ state.

      Next we consider the “smash” – this is a simple fallacy, as for most funds dropping $250 million into the market is small change, given 18:1 leverage (i.e. you only need to put down $6,600 Initial Margin to speculate on $1290 x 100 oz of Gold) and the fact that many firms have billions if not hundreds of billions of Assets Under Management. However, these markets are thin – I recall that it would only take a few billion $ to buy up the entire COMEX warehouse inventory – and so dropping a “bomb” causes quite a reaction (you get a lot of bang for your buck, if that is what you are trying to achieve)

      What about Governments? Well, starting at the very beginning, whilst I can’t recommend that everyone should rush out and buy a copy, Van Arsdell’s “The Coinage of the Dobunni: Money Supply and Coin Circulation in Dobunnic Territory” ISBN-13: 978-0947816384 gives a fascinating insight into the role of gold in pre-Roman economies (which had previously used iron bars as a currency) and connects numismatic evidence (including debasement sequences) with archeological evidence in the period 30BC – 10 AD to show that the invasion of what is now the Cotswold region in Great Britain by the Catevellauni tribe was almost certainly commercially motivated and intended to sever the trade in continental imports between the Dobunni tribe and the Catevellauni’s rivals, the Atrebates. There is no archaeological evidence of widespread damage to property (i.e. burning) during this period, no evidence of population decrease, no decline in cattle bones etc, but a total change in the nature of ceramic tableware used by the Dobunni, with imports of Samian ware from the continent stopping dead and being replaced by domestically-produced tableware previously only found in Catevellaunian contexts. How did they do this? Van Arsdell calculates that the entire 620 kg of Gold held in the Dobunni’s tribal treasury was carted off, leaving the locals with nothing to pay for their preferred imported goods; rather, they were forced to barter with the CatEvellauni and, guess, what, the Dobunni controlled the overland and river trade routes from Cornish Tin Mines and Silurian iron workings (in the Forest of Dean), whose production was now diverted from going to the Atrebates and went instead to the Catevellauni in exchange for tablewares and other consumables. Gold was off the menu – except that the Catevellauni now started importing direct from Flanders, using….. yes, Gold.

      How is this relevant? After the Maidan coup, Ukraine’s entire Gold Reserve was apparently taken off to the USA for “safe keeping”; as was Gaddaffi’s before that; as was the Nazi Gold after WW2. Ever heard about Yamashita’s Gold? How come it was first in Singapore, then in the Philippines and is now in Hawaii? You’ll have to ask Ferdinand Marcos and Adnan Khashoggi about that, but these guys are not interested in whether they can afford to buy another Ferrari – they want to buy an entire Government. If you’ve got Gold, you’ve got purchasing power, and you can dictate terms of who buys what, at what price,whilst removing your trading partner’s ability to negotiate a rival deal elsewhere. So, Route 1 for a Government to manipulate the Gold supply – invade and steal it; if that doesn’t work, prop up the local (Saudi) regime and force them to use your currency in exchange for supplying them with advanced weaponry. The minute they start dropping hints about the Gold Dinar (Saddam), you know what to do …..

      Route 2? Steal it from your own citizens and use it to revalue your fiat – http://www.presidency.ucsb.edu/ws/?pid=14611 That’s pretty direct manipulation.

      http://ironmikemag.com/wp-content/uploads/2013/06/gold-confiscation-roosevelt-19331.jpg

      Can’t steal it? Why not tax it (which is what India has done) – that should manipulate your collapsing currency and dwindling capital pretty effectively.

      Think that’s a bit draconian and likely to be circumvented by smuggling? Why not just use tax as a means of demonetizing Silver, as in the UK, where a 20% VAT sales tax applies? Want another example? – try this http://en.wikipedia.org/wiki/Coinage_Act_of_1873

      OK, so we’ve tried invasion, tax, confiscation and de-monentisation as a means of achieving our wider economic goals – what else do we have in the locker? How about we manipulate the value of silver by debasing the coinage – as with the Denarius in Rome, ‘clipping’ coins in medieval Europe, cutting down the Silver content of Kennedy dollars, or simply banning the use of silver as a medium of exchange altogether – http://cowles.econ.yale.edu/P/cm/m04/m04-29.pdf If you haven’t had enough of obscure historical books just yet, you are going to love this one: http://books.google.com.sg/books/about/Stability_of_exchange.html?id=WU1OAAAAYAAJ&redir_esc=y

      Yes, that’s really quaint, but how about direct Government intervention to move the price? Ever heard of these two gems? http://en.wikipedia.org/wiki/Bland%E2%80%93Allison_Act or http://en.wikipedia.org/wiki/Sherman_Silver_Purchase_Act

      And all this without ever once needing to pick up the phone to JP Morgan

      And if you do feel the itch to pick up that phone, what are you going to do? Well, to prop up your currency you can always sell XAU or XAG – which are quoted as currencies – you don’t even need to go to COMEX or drink afternoon tea with the LBMA; or, if your currency is a bit overcooked and/or your exports are looking a bit uncompetitive, why not buy some Gold and print more of your own worthless fiat to pay for it?: that should drive the exchange rate down a bit, whilst giving you a “Get Out of Jail” card when you feel its time to pump it back up again

      Want to learn some more? Well, the hard way is to read another obscure book – http://mises.org/books/historyofmoney.pdf (A History of Money and Banking in the United States by Murray Rothbard), but if digesting joined-up sentences poses a bit of a challenge for you, why not just look at the pretty pictures on TF Metals or Williambanzai and ‘keep stackin’ ? instead

      My point (if Koos will graciously allow me to make it without censoring this Comment): there is no single protagonist moving the price of Gold, no Evil Empire (well, not one which is in any way more Evil than all the others), no “smackdown” in the dead of night (when Asia is wide awake and trading), and – oddly enough – no outcry from the Goldbugs every time Gold is “smacked” up. It’s called volatility – deal with it, and if you can’t stand the heat, get out of the kitchen. Nobody forced you to invest in precious metals rather than a Post Office Savings Account, nobody told you it was “fair”, nobody owes you a profit and, above all, nobody really cares what you think. Bleating about how the Bigger Boys are all bullies does not form the basis of a successful ling-term investment strategy. Your Mission – should you accept it – is to navigate a path through the Real World as it is (and as it probably always has been) rather than idly fantasizing about Silver going to the moon, the collapse of COMEX or the “reset” due tomorrow, the next tomorrow, or the one after that

      If you want to get a measure of how badly you have been duped by these scare-merchants, read this article and try to forget that it was written 10 years ago http://www.silver-investor.com/charlessavoie/cs_mar04.htm

  • In Gold We Trust

    Another chart just released by Nick Laird from Sharelynx.

    • rowingboat

      I always check the vertical scale of charts like this because fluctuations can be easily exaggerated.

      Looking at Speck’s chart above, the difference between peak and trough is 0.5 (1000.3 minus 999.8) or just 0.05% difference. If the author calculated the standard deviation accounting for natural variation of the price data and included a ‘variance band’ around the mean values, say to 2 standard deviations or 95% confidence level, I bet these bands would be very thick and engulf the chart. In other words, the fluctuations we see would be statistically insignificant and the line horizontal through the 24 hr period.

      Putting it a different way, how much do gold prices vary in a 24 hour period on average? I’d suggest 1% give or take ($13). So that 1% dwarfs the 0.05% mean variation seen in Speck’s chart, which are picking up fundamental yet overall very minor aspects of the market, which Jeff Christian has explained.

      • In Gold We Trust

        What are your thoughts on this one?

        • Zhang Lan

          1. Notable that Gold Services are “On Balance Sheet”; clearly debatable what this means under GAAP, but presumably disclosable rather than hidden from view. This is consistent with other Government/Agency actions which – whilst of questionable legality – appear to have been by and large conducted in public – e.g. The London Pool, the Washington Agreement http://en.wikipedia.org/wiki/Washington_Agreement_on_Gold, the UK’s sale of 390 tons in 1999 and the recent sequence of EU Accords http://www.ecb.europa.eu/press/pr/date/2014/html/pr140519.en.html

          In this document they state that

          In the interest of clarifying their intentions with respect to their gold holdings, the signatories of the fourth CBGA issue the following statement:

          — Gold remains an important element of global monetary reserves.

          — The signatories will continue to coordinate their gold transactions so as to avoid market disturbances.

          The signatories note that, currently, they do not have any plans to sell significant amounts of gold.

          So, what do we make of that? Bluffing? Double-bluffing? Double-double-bluffing? Can you believe anything “The Powers that Be” say? Did “The Powers that Be” actually say that? Do “The Powers that Be” actually exist, or should we be more worried about “The Powers that Might Not Be (but pretend they are)” and what they are up to? How about “The Powers that Might Be but we haven’t heard about Yet”? – surely, they are the really dangerous ones (and they are “capping” the price of Gold every day of the week, unlike these clowns who pretend “not to have any plans to sell” etc. because they “want to avoid market disturbances” i.e. print money and rob the poor. Liars! Cartel! Gold to da moo….. ok, you get the picture)

          2. “Interventions” are, as I have previously remarked, almost exclusively for economic rather than commercial purposes; whether this is legitimate or fair is for each to decide for himself, but it is quite clearly “normal” and I have yet to see any compelling evidence that it is always to suppress the price of Gold – in fact, a public agreement NOT to sell Gold would appear to be intended to support the price, rather than undermine it

          3. It is odd that these instruments – all of them – are referred to a “Products” and that the BIS apparently accepts “Commercial Orders”: why would a Central Bankers Bank operate a commercial book, and why would any Central Bank or other prospective client not execute e.g. Deposits via its local banking relationships? Does the BIS actively seek out new business opportunities from “Commercial” customers and/or could I open an account with them?

          4. The fact that Asset Management is considered to be “off balance sheet” indicates that this is performed on an Agency (or ‘bailment’) basis and not for the Bank’s own account (else the Assets would surely appear in the BIS’ own Balance Sheet). What then of Gold interventions? If the Asset Management logic is applied, “Interventions” (being On Balance Sheet) are apparently not performed at the instruction of 3rd parties, but for the BIS’s own account, suggesting that it is prosecuting its own monetary policy / manipulation rather than someone else’s. This may be stringing it out a bit far, but only goes to show the limits of distilling meaningful information from what appears to be a single Powerpoint slide

          Where did this screenshot come from (other than ‘the BIS’) and in what context was the information provided? Is there another section – i.e. a proper Balance Sheet in a set of published Financial Statements – which fleshes out and puts numbers on each of these categories?

          • In Gold We Trust

            Thanks for your analysis. This is the full powerpoint:

            https://docs.google.com/file/d/0B_GhvGyl1tuQRE5KZDVxN2t0MWM/edit

            On page 16 we can see the balance sheet of the BIS (March 2008, denominated in SDR’s). I do not know anything else on the context of the presentation. This is the balance sheet of the BIS March 2013 and 2012:

            http://www.bis.org/publ/arpdf/ar2013e7.pdf#page=44

            On page 126 we can see “gold and gold loans” in SDR’s. It’s not disclosed how much of it is lent or not.

            I’ve sent an inquiry to the press department of the BIS, asking if they could expand on forex and gold interventions, and where (on what balance sheet) we can track these interventions.

        • Zhang Lan

          This is a footnote to an earlier reply which has been suppressed – at least temporarily – by Koos, lest it contains anything which contradicts his point of view

          In that Comment I referred to “The Powers That Might Not Be” and “The Powers which Might Be (but we don’t know about). Some people may interpret that as me being facetious or glib, but I am deadly serious, as follows

          i. At least “TPTB” (in this particular instance the BIS) are not only identifiable, but tell us what they are doing (as per e.g. last week’s Central Bank Gold Agreement http://www.ecb.europa.eu/press/pr/date/2014/html/pr140519.en.html ), ok, so they must be lying (for the simple reason that what they are clearly stating contradicts my narrow-minded preconceptions) but at least we know who they are and have some inkling of what they at least claim to be doing and why

          ii But what if they were telling the truth, and not manipulating Gold always and forever downwards? Given that my narrow-minded preconception tells me that Gold is always being manipulated always and forever downwards (or at least “capped”), then if it’s not them doing it, then who is? This is really sinister, and if The Powers that Be are in fact The Powers that Might Not Be (after all), then that means that The Powers that Might Be (but I don’t know about) are some really shady characters (probably associated with Chinese “Trust” banks and “ponzi schemes” and “backwardation” which I read about on King World News but don’t really understand)

          iii So, to close the logical loop, it is easy to see and [insert generic ad hominem abuse here if you can’t see that] the real manipulation is being conducted not by the BIS or the Feds, but by The Powers That Might Be (But we don’t know about), because if the markets are – as they surely are – being manipulated [insert generic ad hominem abuse here if you can’t see that] then, somebody must be behind it, and its them we should be focusing on (whoever they are).

          iv. All in all, therefore, the simple fact that the BIS tells us that it is involved in “Intervention” and that the Central Banks tell us that they are not going to sell Gold is conclusive proof not only that they are lying, but that other more sinister forces are involved which we don’t even know about. How scary is that!?! (so Keep Stackin’….)

          • In Gold We Trust

            All comments on this blog must be approved first, like on many other blogs, hence the delay. That’s all there is to it.

        • rowingboat

          http://www.bloomberg.com/news/2014-06-02/ecuador-sends-gold-reserves-to-goldman-sachs-in-liquidity-hunt.html

          “Gold that was not generating any returns in vaults, causing storage costs, now becomes a productive asset that will generate profits,” the (Ecuador) central bank said in the statement. “These interventions in the gold market represent the beginning of a new and permanent strategy of active participation by the bank, through purchases, sales and financial operations, that will contribute to the creation of new financial investment opportunities.”

          When the economic going gets tough, these sorts of ‘interventions’ happen at an individual, institutional and country level. If Forbes is correct and 60-70% of new loans in China are roll-over of existing ones and overall credit has been contracting of late, then one can see how gold could be liquidated leading then to a drop in net demand (imports). I suspect this is what happened on a grand scale in the early stages of GFC, second half of 08. Shock then recovery… and perhaps what your data is beginning to show, Koos.

          • rowingboat

            http://www.telegraph.co.uk/finance/china-business/10868381/China-explores-bond-buying-in-first-hint-of-QE.html

            China gold demand recovery in expectation of QE? From Evans-Pritchard:

            “Officials have been clamping down on credit to puncture the property bubble but are clearly having second thoughts as money supply weakens and bad debts accumulate…

            Standard Chartered said it would amount to “money printing”, and would be a remarkable turn of events given Beijing’s caustic comments about the “irresponsible” monetary policy of the US Federal Reserve.

            “For the Chinese to consider domestic bond purchases would be a significant move,” said George Magnus, a senior adviser to UBS. The authorities might conclude that QE packs more punch than further RRR cuts…

  • In Gold We Trust

    Though I’m as well against sensationalizing, you may be wrong about some people “deliberately and deviously” writing false information about the gold market.

  • Lulzasaur

    I find it funny how today 5/21/14, all these pro-gold headlines have come out (Russia’s deal with China, India considering lifting its controls, Russia dumping treasuries to buy gold…and yet the gold price is down because the Fed isn’t scared of inflation…

  • Silver T. Rader

    It is nothing new. In the USA Banking Panic of 1893, Banks began to insert clauses in loans and mortgages requiring payment in gold coin; clearly the paper dollar was no longer trusted. Gold exports intensified in 1892, the Treasury’s gold reserve declined, and a run ensued on the U.S. Treasury. The cause? To preserve the paper currency liquidity of English banking, the Bank of England was forced to obtain a gold loan from the Bank of France, and English banking houses began to withdraw their American credits for the paper loans that resembled today’s Quantitate Easing.
    The names of the players have changed. About 2% to 4% of Americans understood the fiat issue and prepared. As for the rest, the banks closed the doors with an extended Bank Holiday, the wealthy were allowed to enter and cash out. In May 1893, the stock market collapsed, and a month afterward, in June 1893, distrust of the fractional reserve banks led to massive bank runs and bank failures throughout the country. This all happened with just a 6% decrease in the money supply.
    American Universities blame the US debt reduction of 57% in 1891 as the reason and totally discount the largest paper money expansion from 1887 to 1893 as the cause. Many will say “if only they would have printed more debt…”.

  • Chiang Kai-Shek

    China – population 1,400,000, 000

    Taiwan – population 24,000,000

    Ratio: 58:1

    Terrorist Attack in China – 31 dead, headline news and just further proof of the endemic social unrest in an oppressive Communist dictatorship

    4 killed in Taiwan knife attack, 21 injured – http://www.vancouversun.com/news/killed+injured+knife+attack+Taiwan+subway+train/9862512/story.html and not a word in the mainstream Western media

    (58 x 4 = 8 times as many) – remember to keep a sense of proportion

  • Zhang Lan

    Potentially Important News Article http://www.bbc.com/news/business-27536127

  • rowingboat

    “Presenter: Today, the course of the gold market is being set by China. What are the worldwide consequences of this?”

    You’d think it should be abundantly clear by now that Western nations and their investors set the course of the gold market. Thousands of tonnes ebb and flow through UK, Switzerland and North America, through bull / bear cycles, as revealed in the national import / export data. The sheer tonnage of Western supply has overwhelmed Chinese demand since 2011 just as it did in the 1990’s when India became a large importer. What’s so disingenuous with reports like this is they never question who drove gold from $250 to $1900 in the first place, who were the importers in other words, and why these smart people exited the market to no doubt reappear for the next bull cycle. Instead we have to endure whiners who’ve been long and wrong and blaming manipulation (again).

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