Tag Archives: USD

Guest Post: I have a Theory On The Swiss Franc

I have had a theory about markets for as long as I have watched gold. The theory is everything is about gold. Well, maybe not everything but close enough. Which is why the move by the SNB had me look at the charts. And those charts tell me a story that is very different from the official one. Now please understand I have zero proof outside of the charts, so this is speculation on my part but it is reasoned speculation as you will see.

I believe the SNB was massively short gold and dropped the peg to cover their short. Here is why I believe it.

On September 6, 2011 The SNB instituted a peg to stop the Franc from appreciating against the Euro. On that day the gold price topped. If you believe gold is a commodity and not a currency, stop reading. If you do believe gold is a currency this is noteworthy.


What we have established is there is some tie between gold and the SNB. It could be a function of a consortium of CB balance sheets but the top in gold and the peg are connected.

Fast forward to 2014 and we have the Swiss referendum where the Swiss equivalent of Yellen, Thomas Jordan took to the pulpit claiming gold is a mistake. He was quickly backed up by a shrill formerly of Citi claiming gold is a 6000 year bubble. Bottom line from all of this is the SNB did not want to buy gold. Even though the amount needed and time allowed were very reasonable, Jordan wanted none of it.

That takes us to 2015. The SNB announced they made $38 billion in 2014. Per Bruce Krasting that total was 50% of the Swiss government budget. Does that sound like a CB that is in trouble to you? What we were told is the SNB capitulated on the peg because Draghi was about to crush the Euro and coupled with inflows from Russian oligarchs the SNB was under enormous pressure. Again, that may indeed be the case but they had just made $38 billion in 2014.

In that time frame the EUR went from a high of 1.39 to 1.20 against the USD. The EUR was a basket case in 2014 and the SNB was in trader terms “killing it!”

But something has happened in the markets the past several weeks. Gold started to break out as we detailed in previous writings. Gold in Euros led the way and exploded out of a base.


Next we have gold in Yen.


And of course gold in dollars broke out of the bullish broadening wedge and has made the big move we showed was imminent due to the BB pinch.


That leaves me to the chart of gold in Swiss Francs, but first a few notes. Koos Jansen has done an amazing job in deciphering the physical flow of gold from West to East. In a recent piece he noted that amount of gold that is imported into Switzerland, refined and then exported. If any country knows about the flow of gold it is Switzerland. They are the refining hub. Did the SNB look at the data and realize that the physical offtake was reaching levels where it could no longer be ignored?

Lastly, there is the issue of technical analysis. Why I would not consider myself an expert I have watched the charts of the metals for over fourteen years and I do have an idea of patterns and how they play out. What I am looking for from the gold community is the following. Can anyone show me a chart of gold priced in any currency at any time that saw a clearly defined breakout after a lengthy consolidation fail and fail so spectacularly?

The chart shows a period of eighteen months where the price of gold denoted in Francs went sideways. And, it followed every other chart of gold and broke out convincingly. What happened next is a failure and for gold, which is about as technical a trade as there is in the markets, this was rare, very rare. Is it unprecedented? It could very well be.


How technical? Look where the price stopped on the plunge. Amidst all the chaos I am supposed to believe that those two lines which are very close to parallel are a random occurrence? You may choose to believe that but in my experience they are nothing of the sort.


It could all be one giant coincidence but I don’t believe it for a second. In my humble opinion the SNB was short gold and they needed to cover and cover they did.

Written by: It’s a Mystery

Guest Post: Gold the $ and the FED

The incessant commentary about the FED hiking rates is supported only by government data. Retail sales appear great as does the employment situation. Everyone is entitled to their opinion and mine is the data is fabricated.

The rationale is simple. The FED is out of bullets. They cannot be zero bound when the next downturn comes. They cannot be zero bound when the equity market goes into a bear market. There is however a very big problem with the rate hike camp. The yield curve is collapsing and the FED has never raised rates in any environment other than a rising yield curve. The other elephant in the room is obviously the dollar and the effect it has on “inflation mandates.” With the Western World desperately trying to create inflation by crushing their respective currencies, the FED is supposedly going in the other direction.

The gold market is tracking the Yen/$, although the correlation is definitely weakening, as absolute levels suggest gold should be much lower. So, where does this leave us heading into the FED meeting?

Going back six months we see a bullish broadening wedge. Refer to Bulkowski for the odds of a breakout and the measured move.

Gold fed 1

In a shorter time frame the view is a little less sanguine.

Gold fed 2

Gold is most likely going to fall out of this short term rising wedge. The FED meeting and the Japanese election will have great influence on what it does from there.

In the longer term the only thing that matters is gold de-coupling from the dollar trade. The spark that will make this happen is without a doubt one of two things. Either there is a military confrontation of extreme significance or we start to see massive stress in global sovereign debt.

Once either or both of these occur, the pair trades that everyone seems to have on, along with hedges that have worked for years will all go up in smoke. That period of time is coming and when it does I believe volatility in gold will reach unprecedented levels. Until that time, gold will continue to trade irrespective of supply and demand fundamentals and simply mirror FX.

Written by: It’s a Mystery

Screen Shot 2014-12-11 at 4.34.51 PM

The Need For China To Buy Gold

The other day Zero Hedge posted an image from a quarterly financial report from the Chinese central bank, the PBOC. When I first looked at it I thought for a minute the PBOC had announced a raise in their official gold holdings. Then I woke up and realized their gold holdings are disclosed in the second row from below, still stuck at 33.89 million ounces. I asked my friend in the mainland to translate the headers to get a better view on this summary. He was so kind to do so.

China Gold


China Gold translated

We can see Chinese FX reserves expressed in US dollars (which is still the most commonly used reserve currency and unit of account worldwide) having a total value of $3,821,315,000,000 (or $3.8 trillion) at the end of December. At least 34 % of these assets are denominated in US dollars in the form of US treasuries ($1.3 trillion). Only 1 % is held in physical gold according to the PBOC; 33.89 million ounces (1054 tons) was worth  $41,5 billion in December. Let’s compare these numbers with the a few other countries. From The World Gold Council:

World official gold holdings, January 2014

The Need For China To Buy Gold

China is in the top ten in terms of gold holdings, but only holds a fraction of gold relative to its total FX reserves.

The bulk of China’s FX reserves are extremely vulnerable for a devaluation of the US dollar. At the same time a devaluation of the US dollar is imminent, as Yu Yongding, a prominent Chinese economist and former member of the monetary policy committee of the People’s Bank of China, has expressed in numerous presentations. This is why China has a strong incentive to hedge against the USD by increasing their official gold holdings. From Yu Yongding at the LBMA conference 2012:

..Before taking over the Presidency of the Fed, Bernanke was very open in talking about the possibility of using inflation to solve the debt problem. He gained the very apt nickname ‘Helicopter Ben’, and I think he will rule out this option, but of course he will not say so openly.

..To push down the value of the dollar is another very important objective of QE, even though Bernanke refused to admit that this is the policy, I think Greenspan is more honest, because he is no longer the governor.

Essentially, the policy of QE is to shift the debt burden away from borrowers at the expense of creditors and I think this is basically the situation that China is facing.

Yu Yongding on QE

A big problem for China has been buying large quantities of physical gold without increasing the price. For this reason China’s strategy has always been to be as secretive as possible about its gold purchases. They don’t disclose their gold import numbers, nor any interim changes in official gold holdings. They hide their dire hunger for the yellow metal to simply bargain a better price. But sometimes their craving to buy gold (without affecting the market) slips through the media: 

Yu Yonding:

Yu Yongding on gold QE RMB

Li Yining:

China should increase its gold reserves appropriately, and China must take every chance to buy, especially when gold prices fall.


Want China Times:

China should now rapidly increase its gold reserves, without pushing up prices of the precious metal excessively.


Sun Zhaoxue:

It’s especially true that as global gold prices make new highs, increasing gold reserves also become more difficult.

So China’s main objective is to buy as much gold for as little dollars. The main objective of the US is to devalue the dollar.

A Summary Of Potentially Coherent Facts

  • The US debt problem has created the necessity to devalue the dollar in order to shrink their debt (and boost export).
  • China holds at least $1.3 trillion in FX exchange which will be wiped out by a US dollar devaluation.
  • The US and China have a strong trade relationship; Both benefit from China exporting cheap goods to the US.
  • The US and China share a mutual interest in holding the value of the dollar in check for trading.

Can it be these two mighty countries agreed in early 2013 to support the value of the dollar for the time being, while heavily suppressing the price of gold in the paper markets to allow China to accumulate as much of the yellow metal as needed? This would surely provide the best outcome for both after what inevitably will happen: a devaluation of the US dollar and a revaluation of gold.

Week 3, 2014 Withdrawals From SGE Vaults 60 Tons, YTD 159 Tons

Again an astounding trading week on the SGE; from January 13 – 17, 2014 physical withdrawals from the SGE vaults accounted for 60 tons of gold, year to date 159 tons. Although withdrawals are down 25 % from the previous week, the amount is still well above weekly global mine production.

This strong demand could be related to the Chinese Lunar year, which is celebrated on January 31, 2014. SGE withdrawals in the first three weeks were up 60 % compared to the same period in 2013.

A friend of mine who is traveling through Asia at the moment sent me a text message yesterday, it stated:

On three separate occasions I met with Chinese men who told me with a big smile China is buying A LOT of physical gold with printed dollars, they don’t understand why the rest of the world is just watching this happening. These people are positive the price of gold is going to rise substantially.

Overview SGE data 2014 week 3

– 60 metric tonnes withdrawn in week 3, 13-01-2014/17-01-2014
– w/w  – 25 %, y/y + 98 %
– 159 metric tonnes withdrawn year to date

Sources: SGE, USGS

My research indicates that SGE withdrawals equal total Chinese gold demand. For more information read thisthisthis and this.

Shanghai Gold Exchange withdrawals 2014 week 3

This is a screen dump from Chinese SGE trade report; the second number from the left (本周交割量) is weekly gold withdrawn from the vault, the second number from the right (累计交割量) is the total YTD.

Shanghai Gold Exchange gold withdrawals week 3 2014

This chart shows SGE gold premiums based on data from the Chinese SGE weekly reports (it’s the difference between the SGE gold price in yuan and the international gold price in yuan).

Shanghai Gold Exchnage gold premiums

Below is a screen dump of the premium section of the SGE weekly report; the first column is the date, the third is the international gold price in yuan, the fourth is the SGE price in yuan, and the last is the difference.

Shanghai Gold Exchange premiums week 2 & 3 2014


SGE foreign exchange gold system

Minutes Of Kissinger Meeting On Gold, 1974

After Nixon “temporarily” suspended the convertibility of dollars into gold in 1971, because evil international speculators were attacking the US dollar, some of the European countries were not amused the US broke its promise. In the years that followed a diplomatic battle ensued; the US wanted to completely phase out gold from the monetary system in order to preserve the US dollar hegemony, while other countries wanted a comeback and revalue their gold holdings. In the following minutes we can read how Henry Kissinger, National Security Advisor and Secretary Of State at the time, was discussing the matter with his team. Teaser:

 Mr. Enders: I think we should look very hard then at very substantial sales of gold—U.S. gold on the market—to raid the gold market once and for all.

Nixon kissinger


63. Minutes of Secretary of State Kissinger’s Principals and Regionals Staff Meeting 1

Washington, April 25, 1974, 3:13–4:16 p.m.

[Omitted here is discussion unrelated to international monetary policy.]

Secretary Kissinger: Now we’ve got Enders, Lord and Hartman. They’ll speak separately or together. (Laughter.)

Mr. Hartman: A trio.

Mr. Lord: I can exhaust my knowledge of gold fairly quickly, I think.

Secretary Kissinger: Now, I had one deal with Shultz—never to discuss gold at this staff meeting—because his estimate of what would appear in the newspapers from staff meetings is about the same as mine.

Are you going to discuss something—is this now in the public discussion, what we’re discussing here?

Mr. Enders: It’s been very close to it. It’s been in the newspapers now—the EC proposal2

Secretary Kissinger: On what—revaluing their gold?

Mr. Enders: Revaluing their gold—in the individual transaction between the central banks. That’s been in the newspaper. The subject is, obviously, sensitive; but it’s not, I think, more than the usual degree of sensitivity about gold.

Secretary Kissinger: Now, what is our position?

Mr. Enders: You know what the EC proposal is.

Secretary Kissinger: Yes.

Mr. Enders: It does not involve a change in the official price of gold. It would allow purchases and sales to the private market, provided there was no net purchase from the private market by an individual central banker in a year. And then there would be individual sales between the central banks on—

Secretary Kissinger: How can they permit sale to the private market? Oh, and then they would buy from the private market?

Mr. Enders: Then they would buy.

Secretary Kissinger: But they wouldn’t buy more than they sold.

Mr. Enders: They wouldn’t buy more than they sold. There would be no net increase in gold held by the central banks that was held by the EEC. It could be held by others.

I’ve got two things to say about this, Mr. Secretary. One is: If it happens, as they proposed, it would be against our interests in these ways.

Secretary Kissinger: Have you accepted it or is this just a French proposal?

Mr. Enders: It’s an informal consensus that they’ve reached among themselves.

Secretary Kissinger: Were they discussed with us at all?

Mr. Enders: Not in a systematic way. They’re proposing to send over to Washington the Dutch Finance Minister and the Dutch Central Governor would talk to the Treasury.

Secretary Kissinger: What’s Arthur Burns’ view?

Mr. Enders: Arthur Burns—I talked to him last night on it, and he didn’t define a general view yet. He was unwilling to do so. He said he wanted to look more closely on the proposal. Henry Wallich, the international affairs man, this morning indicated he would probably adopt the traditional position that we should be for phasing gold out of the international monetary system; but he wanted to have another look at it. So Henry Wallich indicated that they would probably come down opposing this. But he was not prepared to do so until he got a further look at it.

Secretary Kissinger: But the practical consequence of this is to revalue their gold supply.

Mr. Enders: Precisely.

Secretary Kissinger: Their gold reserves.

Mr. Enders: That’s right. And it would be followed quite closely by a proposal within a year to have an official price of gold—

Secretary Kissinger: It doesn’t make any difference anyway. If they pass gold at the market price, that in effect establishes a new official price.

Mr. Enders: Very close to it—although their—

Secretary Kissinger: But if they ask what they’re doing—let me just say economics is not my forte. But my understanding of this proposal would be that they—by opening it up to other countries, they’re in effect putting gold back into the system at a higher price.

Mr. Enders: Correct.

Secretary Kissinger: Now, that’s what we have consistently opposed.

Mr. Enders: Yes, we have. You have convertibility if they—

Secretary Kissinger: Yes.

Mr. Enders: Both parties have to agree to this. But it slides towards and would result, within two or three years, in putting gold back into the centerpiece of the system—one. Two—at a much higher price. Three—at a price that could be determined by a few central bankers in deals among themselves.

So, in effect, I think what you’ve got here is you’ve got a small group of bankers getting together to obtain a money printing machine for themselves. They would determine the value of their reserves in a very small group.

There are two things wrong with this.

Secretary Kissinger: And we would be on the outside.

Mr. Enders: We could join this too, but there are only very few countries in the world that hold large amounts of gold—United States and Continentals being most of them. The LDC’s and most of the other countries—to include Japan—have relatively small amounts of gold. So it would be highly inflationary, on the one hand—and, on the other hand, a very inequitable means of increasing reserves.

Secretary Kissinger: Why did the Germans agree to it?

Mr. Enders: The Germans agreed to it, we’ve been told, on the basis that it would be discussed with the United States—conditional on United States approval.

Secretary Kissinger: They would be penalized for having held dollars.

Mr. Enders: They would be penalized for having held dollars. That probably doesn’t make very much difference to the Germans at the present time, given their very high reserves. However, I think that they may have come around to it on the basis that either we would oppose it—one—or, two, that they would have to pay up and finance the deficits of France and Italy by some means anyway; so why not let them try this proposal first?

The EC is potentially divided on this, however, and if enough pressure is put on them, these differences should reappear.

Secretary Kissinger: Then what’s our policy?

Mr. Enders: The policy we would suggest to you is that, (1), we refuse to go along with this—

Secretary Kissinger: I am just totally allergic to unilateral European decisions that fundamentally affect American interests—taken without consultation of the United States. And my tendency is to smash any attempt in which they do it until they learn that they can’t do it without talking to us.

That would be my basic instinct, apart from the merits of the issue.

Mr. Enders: Well, it seems to me there are two things here. One is that we can’t let them get away with this proposal because it’s for the reasons you stated. Also, it’s bad economic policy and it’s against our fundamental interests.

Secretary Kissinger: There’s also a fundamental change of our policy that we pursued over recent years—or am I wrong there?

Mr. Enders: Yes.

Secondly, Mr. Secretary, it does present an opportunity though—and we should try to negotiate for this—to move towards a demonetization of gold, to begin to get gold moving out of the system.

Secretary Kissinger: But how do you do that?

Mr. Enders: Well, there are several ways. One way is we could say to them that they would accept this kind of arrangement, provided that the gold were channelled out through an international agency—either in the IMF or a special pool—and sold into the market, so there would be gradual increases.

Secretary Kissinger: But the French would never go for this.

Mr. Enders: We can have a counter-proposal. There’s a further proposal—and that is that the IMF begin selling its gold—which is now 7 billion—to the world market, and we should try to negotiate that. That would begin the demonetization of gold.

Secretary Kissinger: Why are we so eager to get gold out of the system?

Mr. Enders: We were eager to get it out of the system—get started—because it’s a typical balancing of either forward or back. If this proposal goes back, it will go back into the centerpiece system.

Secretary Kissinger: But why is it against our interests? I understand the argument that it’s against our interest that the Europeans take a unilateral decision contrary to our policy. Why is it against our interest to have gold in the system?

Mr. Enders: It’s against our interest to have gold in the system because for it to remain there it would result in it being evaluated periodically. Although we have still some substantial gold holdings—about 11 billion—a larger part of the official gold in the world is concentrated in Western Europe. This gives them the dominant position in world reserves and the dominant means of creating reserves. We’ve been trying to get away from that into a system in which we can control—

Secretary Kissinger: But that’s a balance of payments problem.

Mr. Enders: Yes, but it’s a question of who has the most leverage internationally. If they have the reserve-creating instrument, by having the largest amount of gold and the ability to change its price periodically, they have a position relative to ours of considerable power. For a long time we had a position relative to theirs of considerable power because we could change gold almost at will. This is no longer possible—no longer acceptable. Therefore, we have gone to special drawing rights, which is also equitable and could take account of some of the LDC interests and which spreads the power away from Europe. And it’s more rational in—

Secretary Kissinger: “More rational” being defined as being more in our interests or what?

Mr. Enders: More rational in the sense of more responsive to worldwide needs—but also more in our interest by letting—

Secretary Kissinger: Would it shock you? I’ve forgotten how SDR’s are generated. By agreement?

Mr. Enders: By agreement.

Secretary Kissinger: There’s no automatic way?

Mr. Enders: There’s no automatic way.

Mr. Lord: Maybe some of the Europeans—but the LDC’s are on our side and would not support them.

Mr. Enders: I don’t think anybody would support them.

Secretary Kissinger: But could they do it anyway?

Mr. Enders: Yes. But in order for them to do it anyway, they would have to be in violation of important articles of the IMF. So this would not be a total departure. (Laughter.) But there would be reluctance on the part of some Europeans to do this. We could also make it less interesting for them by beginning to sell our own gold in the market, and this would put pressure on them.

Mr. Maw: Why wouldn’t that fit if we start to sell our own gold at a price?

Secretary Kissinger: But how the hell could this happen without our knowing about it ahead of time?

Mr. Hartman: We’ve had consultations on it ahead of time. Several of them have come to ask us to express our views. And I think the reason they’re coming now to ask about it is because they know we have a generally negative view.

Mr. Enders: So I think we should try to break it, I think, as a first position—unless they’re willing to assign some form of demonetizing arrangement.

Secretary Kissinger: But, first of all, that’s impossible for the French.

Mr. Enders: Well, it’s impossible for the French under the Pompidou Government. Would it be necessarily under a future French Government? We should test that. 

Secretary Kissinger: If they have gold to settle current accounts, we’ll be faced, sooner or later, with the same proposition again. Then others will be asked to join this settlement thing.

Isn’t this what they’re doing?

Mr. Enders: It seems to me, Mr. Secretary, that we should try—not rule out, a priori, a demonetizing scenario, because we can both gain by this. That liberates gold at a higher price. We have gold, and some of the Europeans have gold. Our interests join theirs. This would be helpful; and it would also, on the other hand, gradually remove this dominant position that the Europeans have had in economic terms.

Secretary Kissinger: Who’s with us on demonetizing gold?

Mr. Enders: I think we could get the Germans with us on demonetizing gold, the Dutch and the British, over a very long period of time.

Secretary Kissinger: How about the Japs?

Mr. Enders: Yes. The Arabs have shown no great interest in gold.

Secretary Kissinger: We could stick them with a lot of gold.

Mr. Sisco: Yes. (Laughter.)

Mr. Sonnenfeldt: At those high-dollar prices. I don’t know why they’d want to take it.

Secretary Kissinger: For the bathroom fixtures in the Guest House in Rio. (Laughter.)

Mr. McCloskey: That’d never work.

Secretary Kissinger: That’d never work. Why it could never get the bathtub filled—it probably takes two weeks to fill it.

Mr. Sisco: Three years ago, when Jean 3 was in one of those large bathtubs, two of those guys with speakers at that time walked right on through. She wasn’t quite used to it. (Laughter.)

Secretary Kissinger: They don’t have guards with speakers in that house.

Mr. Sisco: Well, they did in ’71.

Mr. Brown: Usually they’ve been fixed in other directions.

Mr. Sisco: Sure. (Laughter.)

Secretary Kissinger: O.K. My instinct is to oppose it. What’s your view, Art?

Mr. Hartman: Yes. I think for the present time, in terms of the kind of system that we’re going for, it would be very hard to defend in terms of how.

Secretary Kissinger: Ken?

Mr. Rush: Well, I think probably I do. The question is: Suppose they go ahead on their own anyway. What then?

Secretary Kissinger: We’ll bust them.

Mr. Enders: I think we should look very hard then, Ken, at very substantial sales of gold—U.S. gold on the market—to raid the gold market once and for all.

Mr. Rush: I’m not sure we could do it.

Secretary Kissinger: If they go ahead on their own against our position on something that we consider central to our interests, we’ve got to show them that that they can’t get away with it. Hopefully, we should have the right position. But we just cannot let them get away with these unilateral steps all the time.

Mr. Lord: Does the Treasury agree with us on this? I mean, if this guy comes when the Secretary is out of the country—

Secretary Kissinger: Who’s coming?

Mr. Enders: The Dutch Finance Minister—Duisenberg—and Zijlstra. I think it will take about two weeks to work through a hard position on this. The Treasury will want our leadership on the hardness of it. They will accept our leadership on this. It will take, I would think, some time to talk it through or talk it around Arthur Burns, and we’ll have to see what his reaction is.

Mr. Rush: We have about 45 billion dollars at the present value—

Mr. Enders: That’s correct.

Mr. Rush: And there’s about 100 billion dollars of gold.

Mr. Enders: That’s correct. And the annual turnover in the gold market is about 120 billion.

Secretary Kissinger: The gold market is generally in cahoots with Arthur Burns.

Mr. Enders: Yes. That’s been my experience. So I think we’ve got to bring Arthur around.

Secretary Kissinger: Arthur is a reasonable man. Let me talk to him. It takes him a maddening long time to make a point, but he’s a reasonable man.

Mr. Enders: He hasn’t had a chance to look at the proposal yet.

Secretary Kissinger: I’ll talk to him before I leave. 4

Mr. Enders: Good.

Mr. Boeker: It seems to me that gold sales is perhaps Stage 2 in a strategy that might break up the European move—that Stage 1 should be formulating a counterproposal U.S. design to isolate those who are opposing it the hardest—the French and the Italians. That would attract considerable support. It would appeal to the Japanese and others. I think this could fairly easily be done. And that, in itself, should put considerable pressure on the EEC for a tentative consensus.

Mr. Hartman: It isn’t a confrontation. That is, it seems to me we can discuss the various aspects of this thing.

Secretary Kissinger: Oh, no. We should discuss it—obviously. But I don’t like the proposition of their doing something and then inviting other countries to join them.

Mr. Hartman: I agree. That’s not what they’ve done.

Mr. Sonnenfeldt: Can we get them to come after the French election 5 so we don’t get kicked in the head?

Mr. Rush: I would think so.

Secretary Kissinger: I would think it would be a lot better to discuss it after the French election. Also, it would give us a better chance. Why don’t you tell Simonthis?

Mr. Enders: Good.

Secretary Kissinger: Let them come after the French election.

Mr. Enders: Good. I will be back—I can talk to Simon. I guess Shultz will be out then. 6

Mr. Sonnenfeldt: He’ll be out the 4th of May.

Mr. Enders: Yes. Meanwhile, we’ll go ahead and develop a position on the basis of this discussion.

Secretary Kissinger: Yes.

Mr. Enders: Good.

Secretary Kissinger: I agree we shouldn’t get a consultation—as long as we’re talking Treasury, I keep getting pressed for Treasury chair-manship of a policy committee. You’re opposed to that? 7

[Omitted here is discussion unrelated to international monetary policy.]

1 Source: National Archives, RG 59, Transcripts of Secretary of State Kissinger’s Staff Meetings, 1973–1977, Entry 5177, Box 3, Secretary’s Staff Meeting, April 25, 1974. Secret. According to an attached list, the following people attended the meeting: Kissinger, Rush, Sisco, Ingersoll,Hartman, Maw, Ambassador at Large Robert Mc-Closkey, Assistant Secretary of State for African Affairs Donald Easum, Hyland, Atherton, Lord, Policy Planning Staff member Paul Boeker,Eagleburger, Springsteen, Special Assistant to the Secretary of State for Press Relations Robert Anderson, Enders, Assistant Secretary of State for Inter-American Affairs Jack Kubisch, andSonnenfeldt.

2 Meeting in Zeist, the Netherlands, on April 22 and 23, EC Finance Ministers and central bankers agreed on a common position on gold, which they authorized the Dutch Minister of Finance, Willem Frederik Duisenberg, and the President of the Dutch central bank, Jelle Zijlstra, to discuss with Treasury and Federal Reserve Board officials in Washington. (Telegram 2042 from The Hague, April 24, and telegram 2457 from USEC Brussels, April 25; ibid., Central Foreign Policy Files)

3 Jean Sisco was Joseph Sisco’s wife.

4 From April 28 to 29, Kissinger was in Geneva for talks with Soviet Foreign Minister Andrei Gromyko.

5 France held a Presidential election on May 19.

6 George Shultz’s tenure as Secretary of the Treasury ended on May 8, when he was replaced byWilliam Simon.

7 The summary attached to the front page of the minutes notes that “The Secretary is inclined to oppose the proposal on grounds of non consultation by the Europeans as well as on the proposal’s merits. The Secretary agreed to talk to Arthur Burns in this sense.”

(h/t Goudstudieforum)