Tag Archives: Russian gold

Central Banks Care about the Gold Price – Enough to Manipulate it!

In early March, RT.com, the Russian based media network, asked me for comments and opinion on the subject of central bank manipulation of gold prices.

The comments and opinion that I supplied to RT became the article that RT then exclusively published on its website on 18 March under the title “Central banks manipulating & suppressing gold prices – industry expert to RT“.

This article is now transcribed below, here on the BullionStar website.

Central bank gold price suppression is a well-documented fact. Central banks have a long and colorful history of manipulating the gold price. This manipulation has taken many shapes and forms over the years. It also shouldn’t be surprising that central banks intervene in the gold market given that they also intervene in all other financial markets. It would be naive to think that the gold market should be any different.

n fact, gold is a special case. Gold to central bankers is like the sun to vampires. They are terrified of it, yet in some ways they are in awe of it. Terrified since gold is an inflation barometer and an indicator of the relative strength of fiat currencies. The gold price influences interest rates and bond prices. But central bankers (who know their job) are also in awe of gold since they respect and understand gold’s value and power within the international monetary system and the importance of gold as a reserve asset.

So central banks are keenly aware of gold, they hold large quantities of it in their vaults as a store of value and as financial insurance, but they are also permanently on guard against allowing a fully free market for gold in which they would not have at least some form of influence over price direction and market sentiment.

The Central Bankers’ Central Bank

The Bank for International Settlements (BIS) crops up frequently in gold price manipulation as the central coordination venue and the guiding hand behind a lot of the gold price suppression plans. This is true in all decades from the 1960s right the way through to the 2000s. If you want to know about central bank gold price manipulation, the BIS is a good place to start. Unfortunately the BIS is a law onto itself and does not answer to anyone, except its central banks members.

In the 1960s, central bank manipulation of the gold price was conducted in the public domain, predominantly through the London Gold Pool. This was in the era of a fixed official gold price of $35 an ounce. Here the US Treasury and a consortium of central banks from Western Europe explicitly kept the gold price near $35 an ounce, coordinating their operation from the Bank for International Settlements (BIS) in Basel, Switzerland, while using the Bank of England in London as a transaction agent. This price manipulation broke down in March 1968 when the US Treasury ran out of good delivery gold, which triggered the move to a “free market” gold price.

Central banks continued to suppress gold prices in the 1970s both through efforts to demonetize gold and also dump physical gold into the market to dampen price action. These sales were unilateral e.g. US Treasury gold sales in 1975 and over 1978-1979, and also coordinated (and orchestrated by the US) e.g. IMF gold sales across 1976-1980.

Gold Pool 2.0 – Force it Down Quick and Hard

Collusion to manipulate the price also went underground, for example in late 1979 and early 1980 when the gold price was rocketing higher, the same central banks from the London Gold Pool again met at the opaque BIS in Switzerland at the behest of the US Treasury and Federal Reserve in an attempt to launch a new and secretive Gold Pool to reign in the gold price. This was essentially a revival of the old gold pool, or Gold Pool 2.0.

These meetings, which are not very well known about, were of the G10 central bank governors, i.e. at the highest levels of world finance. All of the discussions are documented in black and white in the Bank of England archives and can be read on the BullionStar website.

Gold for Oil: A Novel Twist to the Gold Pool Operation

The wording in these discussions is very revealing and show the contempt which central bankers feel about a freely functioning gold market.

Phrases used in these meetings include:

there is a need to break the psychology of the market” and “no question of any permanent stabilisation of the gold price, merely at a critical time holding it within a target area” and  “to stabilise the price within a moving band” and “it would be easy and nice for central banks to force the price down hard and quickly“.

And these meetings of top central bankers were in early 1980, 11 years after the London Gold Pool and 8 years after the US Treasury reneged on its commitment in August 1971 to convert foreign holdings of US dollars into gold.

Whether this new BIS gold pool was rolled out in the 1980s is open to debate, but it was discussed across the board for months by the Governors at the BIS, and may have been introduced in a form which would provide physical gold to the oil producers (gold for oil trades) without putting a rocket under the gold price. Their main worry was to allow the Middle Eastern oil producers to acquire some gold for oil without pushing the gold price up.

The Bank of England was also involved in the 1980s in influencing prices in the London Gold Fix auctions, in what an ex Bank of England staffer described euphemistically as ‘helping the fixes’. And the Bank of England has even at times used terminology in the 1980s such as “smoothing operations” and “stabilisation operations” when referring to coordinated central bank efforts to control the gold price.

This article first appeared on RT.com on 18 March 2018

Paper Gold Ponzi

Probably two of the most influential changes on the gold market in the modern era are structural changes to the gold market which channel gold demand away from physical gold and into paper gold. These two changes were the introduction of unallocated accounts and fractionally backed gold holdings in the London Gold market from the 1980s onwards, and the introduction of gold futures trading in the US in January 1975.

In unallocated gold trading in the London OTC market, gold trades are cash-settled and there is rarely any physical delivery of gold. The trading positions are merely claims against bullion banks who don’t hold anywhere near the amount of gold to back up the claims. Unallocated bullion is therefore just a synthetic paper gold position that provides exposure to the gold price but doesn’t drive demand for physical gold.

When gold futures were launched in the US in January 1975, the primary reason for their introduction, according to a US State Department cable at the time, was to create an alternative to the physical market that would syphon off demand for gold, creating trading that would dwarf the physical market, and which would also ramp up volatility which in turn would deter investors from investing in physical gold. Gold futures are also fractionally backed and overwhelmingly cash-settled, and their trading volumes are astronomical multiples of actual delivery volumes.

Central banks as regulators of financial markets are therefore ultimately responsible for allowing the emergence of fractional reserve gold trading in London and New York. This trading undermines the demand for physical gold and allows the world gold price to be formed in these synthetic gold trading venues. Price discovery is not happening in physical gold markets. Its is happening in the London OTC (unallocated) and COMEX derivative markets. So this is also a form of gold price manipulation since the central banks know how these markets function, but they do nothing to crack down on what are essentially gold ponzi schemes.

Imagine, for example, that central banks were as tough on paper gold as they seem to be now on crypto currency markets. Now imagine if central banks outlawed fractional gold trading or scare-mongered about it in the same way that they do about crypto currencies? What would happen is that the gold market participants would panic and unwind their paper positions, precipitating a disconnect between paper gold and physical gold markets. So by being lenient on the fractional structure of trading in the gold markets, central banks and their regulators are implicitly encouraging activities that have a dampening effect on the gold price.

Gold Lending – A Riddle wrapped in a Mystery inside an Enigma

The gold lending market, mostly centred in London, is another area in which central banks have the ability to cap the gold price. Here central banks transfer their physical gold holdings to bullion banks and this physical gold then enters the market. These transactions can either be in the form of gold loans or gold swaps. This extra supply of gold through the loans and swaps disturbs the existing supply demand balance, and so has a depressing effect on the gold price.

The gold lending market is totally opaque and secretive with no obligatory or voluntary reporting by either central bank lenders or bullion bank borrowers. The Bank of England has a major role in the gold lending market as the gold used in lending is almost all sourced from the central bank custody holding in the Bank of England’s vaults.

There is therefore zero informational efficiency in gold lending, and that’s the way the central banks like it. furthermore, freedom of information requests about gold lending are almost always shot down by central banks, even sometimes on ‘national security’ grounds.

Many central banks have lent out their gold long ago, and just hold a ‘gold receivable’ on their balance sheet, which is a claim against a bullion bank or bullion banks. These bullion banks roll over the liability to the central bank for years on end and the original gold is long gone. Since central bank gold is never independently audited, there is no independent confirmation of any of the gold that any central banks claim they have.

Gold receivables are another fiction that allows central banks to fly under the radar in the gold lending market, and central banks go to great lengths to make sure the market does not know the size and existence of outstanding gold lending and swapped gold positions.

In Febuary 1999, the BIS was again the nexus for secretive discussions about the gold market when a number of the large powerful central banks basically ordered the IMF to drop an accounting change that would have split out gold and gold receivables into two separate line items on central bank balance sheets and accounting statements. These discussions are documented in the IMF document which is available to see here.

This accounting change would have shone a light on to the scale of central bank gold lending around the world, information which would have moved gold prices far higher.

Gold Price Manipulation Hub at the BIS: the Central Banker’s Central Bank

Gold Loans and Gold Swaps – Highly Market Sensitive

However, a group of the large central banks in Europe comprising the Bank of England, the Bundesbank, the Bank de France and the European Central Bank (ECB) applied pressure to torpedo this plan as they said that “information on gold loans and swaps was highly market sensitive” and that the IMF should “not require the separate disclosure of such information but should instead treat all monetary gold assets including gold on loan or subject to swap agreements, as a single data item.” 

Central banks also at times sell large quantities of gold, such as the Swiss gold sales in the early the 2000s, and the Bank of England gold sales in the late 1990s.While the details of such gold sales are always shrouded in secrecy, and the motivations may be varied, such as bullion bank bailouts or redistribution of holdings to other central banks, the impact of these gold sales announcements usually has a negative impact on the gold price. So gold sales announcements are another tactic that central banks use to at times keep the pressure on the price.

There are many examples of central bankers discussing interventions in the gold market. In July 1998, former Federal Reserve chairman Alan Greenspan testified before the US Congress saying that “central banks stand ready to lease gold in increasing quantities should the price rise.

In June 2005, William R. White of the BIS in Switzerland, said that one of the aims of central bank cooperation was to “joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful.

In 2008, the BIS at its headquarters in Switzerland even stated in a presentation to central bankers that one of the services it offers is interventions in the gold market.

In 2011, one of the gold traders from the BIS even stated on his LinkedIn profile that one of his responsibilities was managing the liquidity for interventions. After this was published, he quickly changed his LinkedIn profile.

US National Archives web site releases diplomatic cables from 1978

The US National Archives and Records Administration (NARA) has just released a new batch of diplomatic cables from the year 1978, which can be searched and browsed via the Access to Archival Databases (AAD) website at http://aad.archives.gov/aad/.

These batches of cables are variously known as “State Department Cables“, “Diplomatic Records” or “Central Foreign Policy Files“, and are now on-line (in electronic format) for the years 1973 -1978 inclusive.

These are the same sets of cables that WikiLeaks uploaded to its web site (https://search.wikileaks.org/plusd/), and which WikiLeaks refers to as “The Kissinger Cables” (1973 -1976) and “The Carter Cables” (1977). However, WikiLeaks has not yet added the 1978 batch of cables to its database, but presumably is in the process of doing so. Take your pick about whether you want to search NARA’s AAD front-end or the WikiLeaks front-end. Both have their advantages.

The State Department Cables from the 1970s contain a lot of material about the role of gold in the international monetary system, and the US Government’s behind the scenes views on gold’s role, so these cables are always worth browsing for anyone who is interested in these topics.

For the 1978 batch, the US National Archives states that:

“We have added the 1978 fully releasable permanent electronic telegram records and withdrawal card records of this series to AAD, for an additional 406,265 new records. The series, popularly known as the State Department Cables or the State Department Telegrams, consists of telegrams between the Department of State and Foreign Service posts.”

Withdrawal cards are records which contain some ‘message attributes’ such as subject, date, from, to, and tag words, but that haven’t been released for various reasons such as the record “may violate the privacy of an individual”.

In addition to the electronic telegrams, the NARA has also added 1978 “P-Reel Index records and withdrawal card records of this series to AAD, for an additional 94,312 new records.” These P-Reel Index records are “an index to microfilmed documents”.

Overall, the Department of State’s Central Foreign Policy Files comprises five types of record, namely, a) electronic telegrams, b) electronic P-Reel indices, c) electronic withdrawal cards, d) microfilmed documents, and e) paper documents. In addition to electronic telegrams, a AAD web site search query can return withdrawal card records and records of indexes to microfilm, but these will not be very useful, unless you want to see brief details of what hasn’t been released, or else identify some microfilm before a visit to the National Archives.

When the 1977 batch of cables was released in March 2014, there was some coverage of the release such as an article by the National Security Archive. For the 1978 batch released this year, I cannot see any coverage of the release so far. Maybe there has been coverage. I just haven’t seen any. The 1977 batch of telegrams consisted of 367,175 records, so the 1978 batch, at 406,265 records, is about 10% larger.

Where are the records prior to 1973?

The National Archives  states that the “Central Foreign Policy Files, created, 7/1/1973 – 12/31/1976” series is “a successor to the following earlier series: “Subject-Numeric Files, 02/01/1963 – 06/30/1973” (ARC Identifier 580618)”,and “Central Decimal Files, 1910 – 1963” (ARC Identifier 302021)”.

However, the Department of State’s central foreign policy file records prior to 1973 are not in electronic format. This is simply because, as NARA confirmed to me a few years ago, “the Department of State did not create records in electronic format before then.”

Where are the records later than 1978?

Before publicly releasing a batch of cables in the AAD database, NARA has to get ‘custody’ of the electronic telegrams and withdrawal cards for a particular year, and then they have to process and screen them. So for example, NARA is probably working on the 1979 cables right now, and possibly also working on the 1980 cables. They probably also have the 1981 cables in the pipeline somewhere, but may or may not have custody of them yet, which is done through something called an ‘accessioning process’.

Carter

The 1978 Cables – A quick look

Here’s a quick look at four of the 1978 State Department cables that relate to gold. All the AAD cables are formatted in capital letters, so likewise, the extracts below are in capital letters. I have added bold and underline to highlight various phases and sentences.

 

CABLE 1. RUSSIAN GOLD SALES VIA SWISS BANKS LIKELY TO TOP 350 TONS

This September 1978 cable was from ‘Warner’ in the US Embassy in Bern, Switzerland, to the Secretary of State in Washington DC, and copied to the Treasury. It discusses Russian gold sales via Zürich and that one European central bank holds gold with Swiss commercial banks.

1. SUMMARY: RUSSIAN GOLD SALES VIA SWISS BANKS EXPECTED TO SURPASS 350 TONS FOR 1978. ALL GOLD DELIVERED BY RUSSIANS IN ZURICH IS 999.9 PURITY. ONE EUROPEAN CENTRAL BANK CURRENTLY HOLDS 27 TONS WITH INDIVIDUAL SWISS BANKS. END SUMMARY

2. SENIOR SWISS BANKER RESPONSIBLE FOR HIS BANK’S GOLD DEPT TOLD FINATT THAT RUSSIAN GOLD DELIVERY VIA KLOTEN AIRPORT ZURICH REACHED 65 TONS IN AUGUST, INDICATING RUSSIAN SALES FOR 1978 WILL LIKELY SURPASS 350 TONS, THE FIGURE HE IDENTIFIED AS RUSSIAN SALES DURING 1977. THE AUGUST FIGURE REPRESENTS AN UPTURN IN SALES FOLLOWING A PERIOD IN EARLY 1978 WHEN RUSSIANS WERE OUT OF THE MARKET. ALL GOLD DELIVERED BY RUSSIANS IN ZURICH IS 999.9 PURITY. HE SAID MARKET ‘SATURATED’ WITH THIS QUALITY GOLD AND IMPLIED THERE IS AND WOULD BE LITTLE MARKET RECEPTIVITY TO GOLD OF LOWER PURITY

3. BANKER SAID IT IS COMMON PRACTICE FOR ALL RUSSIAN GOLD FOR SALE IN THE WEST TO BE PHYSICALLY DELIVERED IN ZURICH, PARTLY OUT OF TRADITION AND PARTLY OUT OF CONVENIENCE OF WORKING SALES THROUGH SWISS BANKS. FOR RUSSIAN GOLD SOLD FOR DELIVERY IN LONDON OR ELSEWHERE THE SWISS BANKS WORK OUT A SWAP WITH THEIR HOLDINGS THERE AND CHARGE THE RUSSIANS A PREMIUM PER OUNCE. BANKER SAID HE HAD ONE FLIGHT PER WEEK TO LONDON TO RE-STOCK BANK’S STORE OF GOLD THERE

4. BANKS ALSO SAID THAT ONE EUROPEAN CENTRAL BANK HAD JUST PURCHASED FROM HIS BANK AN ADDITIONAL SUPPLY OF GOLD, BRINGING THIS PARTICULAR CENTRAL BANK’S HOLDINGS WITH HIM TO 27 TONS

Source: http://aad.archives.gov/aad/createpdf?rid=238006&dt=2694&dl=2009

 

 

CABLE 2. UTAYBA (ABU DHABI) SUGGESTS CURRENCY BASKET FOR OIL PRICING….to include Gold

This March 1978 cable was from ‘Dickman’ in the US Embassy in Abu Dhabi to the Secretary of State in Washington DC, and cc’ed lots of other US embassies in OPEC member countries and US embassies in G-5 industrial nations.

The cable discusses a suggestion by the Abu Dhabi oil minister on an oil price calculation methodology that included gold as well as currencies of industrialised and OPEC members.

SUMMARY: OIL MINISTER UTAYBA HAS PUBLICLY PROPOSED ADOPTION OF NEW BASIS FOR CALCULATING PRICE OF OIL BASED ON WEIGHTED AVERAGE CURRENCIES OF SEVERAL KEY INDUSTRIALIZED STATES, CURRENCIES OF OPEC COUNTRIES WITH LARGE BALANCE OF PAYMENTS SURPLUSES, AND PRICE OF GOLD. US DOLLAR WOULD CONTINUE TO BE CURRENCY IN WHICH OIL PAYMENTS ARE MADE. END SUMMARY.

 1. IN AN INTERVIEW WITH LOCAL NEWSPAPER AL WAHDA OF MARCH 6, UAE OIL MINISTER MANA SAID AL UTAYBA HAS PROPOSED THE FORMATION OF A NEW BASKET OF CURRENCIES TO DETERMINE THE BASE PRICE FOR MARKER CRUDE AND THEREBY PROTECT THE PURCHASING POWER OF OIL REVENUES FOR OIL EXPORTING COUNTRIES WHOSE PRODUCTION EXCEEDS THEIR REVENUE REQUIREMENTS. WHILE STATING THAT IT WAS NECESSARY TO KEEP THE DOLLAR AS UNIT OF PAYMENT, UTAYBA SAID “WE MUST SEPARATE BETWEEN STANDARDIZATION OF OIL PRICES AND MAINTENANCE OF THE PURCHASING POWER OF RETURNS FROM OIL”.

2. ON MARCH 7, I HAD AN OPPORTUNITY TO DISCUSS WITH UTAYBA HIS IDEA OF FOUNDING A NEW BASKET OF CURRENCIES FOR CALCULATING THE PRICE OF MARKER CRUDE. THE IDEA OF A BASKET, OF COURSE, IS NOT NEW AND HAS BEEN DISCUSSED WITHIN OPEC FOR A LONG PERIOD OF TIME. UTAYBA FELT, HOWEVER, THAT GIVEN THE CONTINUED SLIDE OF THE DOLLAR IN RELATION TO CERTAIN OTHER CURRENCIES, HIS PROPOSAL SHOULD BE ENTERTAINED.

3. BASICALLY WHAT UTAYBA HAS PROPOSED IS A COMPOSITE BASKET COMPOSED OF THREE PARTS. THE FIRST PART WOULD BE THE CURRENT VALUE OF CURRENCIES OF MAJOR INDUSTRIALIZED COUNTRIES. HE HAS SUGGESTED THAT THEY WOULD ACCOUNT FOR 70 PERCENT OF THE WEIGHT WITH US DOLLAR ACCOUNTING FOR 15 PER CENT, THE DEUTCHMARK 12 PER CENT, THE BRITISH POUND 10 PER CENT, SWISS FRANC 10 PER CENT, THE JAPANESE YEN 10 PERCENT, THE CANADIAN DOLLAR 7 PER CENT, AND THE AUSTRALIAN DOLLAR 6 PER CENT. THE SECOND PART WITH A WEIGHT OF 20 PER CENT WOULD CONSIST OF THE CURRENT VALUE OF THE SAUDI RIYAL 10 PER CENT, THE KUWAITI DINAR 5 PER CENT, AND THE UAE DIRHAM 5 PER CENT. THE LAST 10 PER CENT WOULD BE CURRENT VALUE OF GOLD IN DOLLARS. UTAYBA SAID HE WAS NOT WEDDED TO THESE PERCENTAGES BUT HAD PROPOSED THEM FOR CONCEPTUAL PURPOSES. CALCULATIONS OF OIL PRICES BASED ON THESE WEIGHTED AVERAGES WOULD BE DONE AT SPECIFIED PERIODS WITHIN CERTAIN RANGES ESTABLISHED FOR EACH ELEMENT TO AVOID RECALCULATION FOR MINOR FLUCTUATIONS.

4. UTAYBA SAID HIS PROPOSAL WAS NOW BEING STUDIED BY UAE FOREIGN MINISTRY AND UAE CURRENCY BOARD SO THAT IT WAS STILL NOT A FORMAL UAE POSITION. HE INDICATED THAT HE WAS NOT SUGGESTING THAT OPEC TAKE ANY PRECIPATE ACTION WHICH COULD HAVE HARMFUL EFFECTS BUT HE THOUGHT HIS PROPOSAL MIGHT IN LONG RUN TURN OUT TO BE A BETTER AND MORE REALISTIC METHOD OF CALCULATING PRICE OF MARKER CRUDE AS CURRENCIES THAT ARE NOW WEAK STRENGTHEN AND CURRENCIES THAT ARE NOW STRONG WEAKEN.

 Source: http://aad.archives.gov/aad/createpdf?rid=82162&dt=2694&dl=2009

 

 

CABLE 3. PRESS CONFERENCE ON US / FRG (FED REP OF GERMANY) MONETARY MEASURES

This March 1978 cable was from ‘Meehan’ in the US Embassy in Bonn, Germany, to the Secretary of State in Washington DC, and the Treasury Department, and also for the attention of the US embassies in London, Brussels, Paris, Tokyo and Rome, as well as the OECD and EEC.

It discusses a press conference that the Germans gave which addresses US dollar weakness at that time and measures to support the US dollar.

 

1. IN A PRESS CONFERENCE ON MARCH 13 FINANCE MINISTER MATTHOEFER AND BUNDESBANK PRESIDENT EMMINGER CONVEYED THE JOINT US/FRG STATEMENT ON MONETARY MEASURES AND REPLIED TO QUESTIONS OF ASSEMBLED JOURNALISTS. IN REPLY TO A QUESTION ON U.S. BORROWING FUNDS ABROAD, FINANCE MINISTER MATTHOEFER SAID THAT THE FRG NEVER REQUESTED THAT THE US BORROW LONG-TERM FUNDS ABROAD TO COUNTERACT THE DOLLAR’S DECLINE. WITH REGARD TO US LOANS DENOMINATED IN DEUTSCHEMARKS MATTHOEFER ADDED THAT SUCH LOANS “WERE NEVER ANTICIPATED AND WERE NOT ASKED FOR FROM OUR SIDE”. HE CONTINUED THAT ”THE QUESTION OF WHETHER GOLD SHOULD BE SOLD OR PURCHASED IS ALWAYS UNDER CONSIDERATION. HOWEVER, UP TO THE PRESENT THERE HAS BEEN NO INSTANCE WHEN GOLD SALES WOULD HAVE BEEN CONSIDERED APPROPRIATE, BUT GOLD SALES ARE A DEVICE AMONG OTHERS WHICH IS BEING HELD IN RESERVE”.

Point 2 not included here.

3. EMMINGER POINTED OUT THAT THERE WERE NO DIFFERENCES OF OPINION BETWEEN THE GERMANS AND THE FEDERAL RESERVE IN DETERMINING WHETHER EXCHANGE MARKET DEVELOPMENTS WERE “CLEARLY DISORDERLY”. EMMINGER WHEN ASKED REFRAINED FROM QUOTING A DEFINITE AMOUNT ON THE USE OF THE SWAP AGREEMENT BY THE U.S. HE SAID, HOWEVER, THAT THE FEDERAL RESERVE HAS USED ABOUT THREE QUARTERS OF ITS LINE AND THAT, IN ADDITION, THERE ARE UNUTILIZED FUNDS IN THE SWAP LINE OF THE TREASURY

Point 4 not included here.

Source: http://aad.archives.gov/aad/createpdf?rid=59591&dt=2694&dl=2009

 

 

CABLE 4. STATEMENT ON MEASURES TO STRENGTHEN DOLLAR

This November 1978 cable was from the Secretary of State in Washington DC to all Diplomatic and Consular Posts.  The cable says, drafted by ‘WIDMAN’ from Treasury, and approved by ‘HORMATS’ from ‘EB’ and also approved by ‘AMSOLOMON’ (Tony Solomon) from Treasury.

The introduction to this cable states that it contains verbatim texts for a statement by Jimmy Carter on 1st November concerning action been taken in the US and abroad to strengthen the dollar. The cable also includes a joint statement by W Michael Blumenthal, Secretary of the Treasury, and William Miller, chairman of the Federal Reserve Board, as well as a FRB press release.

The instructions say that diplomatic and consular posts “should make these materials available promptly to host government authorities wherever interested.

 2. POSTS SHOULD MAKE THESE MATERIALS AVAILABLE PROMPTLY TO HOST GOVERNMENT AUTHORITIES WHEREVER INTERESTED.

ACTIONS HAVE BEEN COORDINATED IN ADVANCE WITH GOVERNMENTS AND CENTRAL BANKS OF GERMANY AND JAPAN AND THE SWISS NATIONAL BANK, ALTHOUGH FULL TEXTS HAVE NOT PREVIOUSLY BEEN MADE AVAILABLE. GERMANS, JAPANESE AND SWISS ARE EXPECTED TO ISSUE CONFIRMING STATEMENTS SIMULTANEOUSLY WITH U.S.ANNOUNCEMENT.

 3. OBVIOUSLY THE WIDER THE DEGREE OF SUPPORT FOR THIS PROGRAM THE MORE SUCCESSFUL IT WILL BE.

Carter’s statement is then quoted, the last parts of which included:

6. “AS A MAJOR STEP IN THE ANTI-INFLATION PROGRAM, IT IS NOW NECESSARY TO ACT TO CORRECT THE EXCESSIVE DECLINE IN THE DOLLAR WHICH HAS RECENTLY OCCURRED. THEREFORE, PURSUANT TO MY REQUEST THAT STRONG ACTION BE TAKEN, THE DEPARTMENT OF THE TREASURY AND THE FEDERAL RESERVE BOARD ARE TODAY INITIATING MEASURES IN BOTH THE DOMESTIC AND INTERNATIONAL MONETARY FIELDS TO ASSURE THE STRENGTH OF THE DOLLAR

8. SECRETARY BLUMENTHAL AND CHAIRMAN MILLER ARE ANNOUNCING DETAILED MEASURES IMMEDIATELY.”

Blumenthal’s and Miller’s statement then follows, the beginning of which includes the following text that list what the coordinated intervention consists of, which includes an increase in US Treasury gold sales:

BEGIN TEXT OF JOINT STATEMENT BY TREASURY SECRETARY W. MICHAEL BLUMENTHAL AND FEDERAL RESERVE BOARD CHAIRMAN WILLIAM MILLER: RECENT MOVEMENT IN THE DOLLAR EXCHANGE RATE HAS NOT ONLY EXCEEDED ANY DECLINE RELATED TO FUNDAMENTAL FACTORS, BUT PLAINLY IS HAMPERING PROGRESS TOWARD PRICE STABILITY AND DAMAGING THE CLIMATE FOR INVESTMENT AND GROWTH. THE TIME HAS COME TO CALL A HALT TO THESE DEVELOPMENTS. THE TREASURY AND FEDERAL RESERVE ARE TODAY ANNOUNCING COMPREHENSIVE CORRECTIVE ACTIONS. IN ADDITION TO DOMESTIC MEASURES BEING TAKEN BY THE FEDERAL RESERVE, THE UNITED STATES WILL, IN COOPERATION WITH THE GOVERNMENTS AND CENTRAL BANKS OF GERMANY AND JAPAN, AND THE SWISS NATIONAL BANK, INTERVENE IN A FORCEFUL AND COORDINATED MANNER IN THE AMOUNTS REQUIRED TO CORRECT THE SITUATION. THE U.S. HAS ARRANGED FACILITIES TOTALLING MORE THAN 30 BILLION DOLLARS IN THE CURRENCIES OF THESE THREE COUNTRIES FOR ITS PARTICIPATION IN THE COORDINATED MARKET INTERVENTION ACTIVITIES. IN ADDITION, THE TREASURY WILL INCREASE ITS GOLD SALES TO AT LEAST 1-1/2 MILLION OUNCES MONTHLY BEGINNING IN DECEMBER

Source: http://aad.archives.gov/aad/createpdf?rid=298578&dt=2694&dl=2009

 

So, the above is just a quick sample of four Department of State cables from 1978 that have recently been released, and that are, at the moment, exclusively accessible via the AAD web site here -> http://aad.archives.gov/aad/