It’s only a matter of a couple of months since we reported on the strange affair of Germany’s huge gold reserves held in a Federal bank vault beneath New York, or to be more precise, the reluctance of the US Federal Reserve to return it (other than in 50 ton annual shipments) to its rightful owners in Frankfurt. A curious development made even more curious by the apparent silence of the mainstream financial media to explain why the Germans cannot have their 1000 tons, or so, returned immediately and in a single transfer. The Americans, after all, had no problem in relocating Libya’s considerable gold reserves into their custody in the recent past.
Yet the mystery continues – with no official source yet satisfactorily explaining why the neatly stacked piles of hugely expensive German metal cannot be transported from a secure vault in New York to an equally secure vault in Frankfurt.
We have also this week seen the price of gold plummet for no (officially) obvious reason.
Can the two events be linked? Some believe they can as the video below explains.
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Wikipedia has a very telling description of how the unallocated gold scam works: “The total quantity of unallocated gold is estimated to be 15,000 tonnes at the end of 2008 which supports the 2,134 tonnes on average of spot gold trade through London every day representing 14.2% of the pool. This compares to average daily turnover in UK equities of between 0.34% and 0.63% for the 12 months ending September 2009. While members of the LBMA (London Bullion MArket) provide no information on the backing for unallocated gold the improbably high turnover is suggestive they are operating a fractional reserve system where unallocated accounts are only partially backed by physical gold. Similarly to a bank run this makes LBMA unallocated gold accounts susceptible to loss if a sufficient number of market participants request delivery of physical bullion.” In other words the sharks are selling and reselling gold bullion they simply do not have – the scam works fine until there is a run on gold and they don’t have nearly enough to cover withdrawal requests. Hence the need to crash the market to reduce the $ value of the shortfall whilst allowing them to buy replacement gold from sellers at knock down prices. Its fraud clear and simple but the media, politicians and regulators do absolutely nothing about it. The City = Organised Crime!
Defies logic when you take into account all the”fiat” paper money being printed at present.Here in SA many invest heavily in gold and resources in general given the nature of our economy. Earlier this year predictions were being made of gold price rising above $2,000.I have lost big time but as they say until you sell it is a paper loss! Gold has to make a comeback.
All that’s happened is that a quantity of gold has been transfered by trickery and fraud into the vaults of the bullion banks. The price of gold will resume its upward trend again simply because no one with any sense trusts paper money, nothing fundamental has changed.
The IMF can draw on the Federal Reserve’s gold at far below market value using a mechanism called “Special drawing rights (SDRs)”. It would not suprise me if these right were either used to manipulate the market value, or contribute to the apparent shortfall in gold reserves.