Skeptiker
Anbei ein Fundstück zu unserem Lieblingsthema, der ruchlosen Goldpreismanipulation.
Eine Konversation mit Jimmy Rogers zu diesem Thema von letztem Jahr.
Das Anliegen von Thaiguru, hier möglichst viele Leute mit der Gold-Story vertraut zu machen, finde ich ja sehr löblich. Leider wird das Thema Goldpreismanipulation dabei aber dermaßen überstrapaziert, dass es auf unbefangene Leute eher abschreckend wirken dürfte (die beiden Comdirect-Charts waren wirklich zum Piepen….). Schade eigentlich.
Eigentlich wollte ich ja nicht mehr posten, aber nach dem heutigen Schrecken muss ich etwas Konversation machen. Gold ist noch schwächer als der Euro und Silber ist noch schwächer als Gold, es ist zum Heulen. Die astronomischen Kursziele der Edelmetallmafia von 480 USD sind damit wohl in weite Ferne gerückt…. Habe gerade technische Analyse von JP Morgan gelesen, die sehen Silber weiter fallen auf 5,20/10 bis 4,80 USD. Wichtige charttechnische Unterstützung bei 5,80. Sehe nicht, dass die halten wird, zumal der Dollar immer noch durch die bevorstehende Zinssenkung gestützt wird.
Ich wünsche trotzdem allen viel Glück und weiterhin gute Nerven.
Grüsse
Ein unglücklicher Pfannkuchen
Taylor: Before we leave the issue of currency relationships, it is my strongly held view, based on the work of GATA (http://www.gata.org.), Frank Veneroso, Reginald Howe, (http://www.goldensextent.com) James Turk (http://www.goldmoney.com) and others that the dollar has been highly overvalued by intervention in the markets by the Exchange Stabilization Fund, The Fed, co-operating western central banks who have been dishording gold all through the 1990’s and by the IMF, controlled by the U.S., that makes it illegal for countries to use gold as a medium of exchange. The reason for this intervention I believe is related to a desire to keep the dollar as the world’s uncontested reserve currency and medium of exchange.
I believe there is compelling circumstantial evidence that top-level policy makers have clandestinely been rigging the gold prices to a lower and lower level. In fact, I think there is very strong evidence that suppressing the gold price even as the Fed began to print money like mad starting with the Mexican bailout in 1994-95, was the key measure by which the Clinton Administration implemented its strong dollar policy of the second half of the 1990’s. Indeed, in a 1988 paper titled, "Gibson's Paradox and the Gold Standard," which was co-authored by Lawrence H. Summers, then Nathaniel Ropes professor of political economy at Harvard, and Robert B. Barsky, explained that in an environment of declining real interest rates, the gold price must be “capped” or else the currency would decline. The article which was published in the Journal of Political Economy, is available online at http://www.gata.org/gibson.pdf. The article noted that when an expansion in the money supply reduces real interest rates, the price of gold must be “capped” or else the currency will tank and bailouts will be ineffective. Implementation of this gold “capping” exercise occurred in the view of the GATA supporters, myself included, by the U.S. Treasury through the Exchange Stabilization Fund and that economic signals were given to participants by Alan Greenspan who said not once but twice on Capital hill in 1998 that “Central banks stand ready to lease gold in increasing quantities should the price begin to rise.” That statement clearly was a signal to bullion banks that the only smart thing for them to do was to continue on with the “gold carry trade” because according to Greenspan, a supply of gold would continue to cap the gold price and thus negate the need to worry about covering their short positions. These bullion banks did not need to care about monetary policy. They only knew they could continue the trade indefinitely without concern of getting caught short. In our first interviews, I began to touch on this issue briefly, but because the focus of our interview was mostly on The Rogers Raw Materials Index Fund, I didn’t want to waste too much time on the gold conspiracy issue. At that time, you indicated that if these allegations were true, it would be a very serious issue. Have you given any more thought to these gold price manipulation charges since we last spoke? If so, what are your thoughts now?
Rogers: First of all you said that the Fed was cooperating with western central banks during the 1990’s to dishord gold. You would have to think the central banks of the world are mad if they are trying to hold down the price of gold when they are selling it. I can’t imagine they don’t want to get the highest price possible. The reason they are selling gold is because they think rightly or wrongly, that they can do better than owning gold. I’ve never heard anybody in his right mind who is trying to sell something who tries to keep the price down. When you are selling your house you don’t go around telling people there is a poison pit in the back yard do you? You talk it up.
Taylor: Which by the way Jim was one of the strange things about the way the Bank of England went about selling gold. They pre-announced to the world that they would be selling gold well in advance of their dishording of ½ of their gold over the next several years.
Rogers: That was because the government made them do it. You can’t sell that stuff in secret because then you would really be in trouble. Can you imagine what would happen if the U.S. government sold all the gold in Ft. Knox and didn’t tell anybody? They would be hanged!
Taylor: But traditionally, central banks have sold their gold first and then announced after the fact that they have done so. The British pre-announcement was a departure from that practice and so the question is why would they do it that way when the effect was to suppress the price of gold?
Rogers: The way the government runs in England, they could not do something like that. The holdings of gold are too important and the Chancellor of the Exchequer would be sacked if he sold all the gold. I’m not saying if it (selling gold) is right or wrong. I’m just saying do you think the Portuguese, the Belgians, all these central banks are nuts? Most of them are nuts by the way but they are not that nuts. In my view most central banks should be abolished too. People running them are dregs on society. But be that as it may, they do have enough sense to know that if they are selling something, they won’t try to drive the price down. They will try to get it up. So I find that on its face, I find it hard for me to accept the notion that these guys would all get together to drive the gold price down. And besides even if that were their plan, eventually they would run out of gold and then what’s going to happen. They don’t own all the gold in the world. They would know that somebody in the back of the room would stand up and say, “Wait a minute, if we all sell our gold, and there is no gold left, what happens next?
Taylor: Well the central bankers and politicians might reason that that could be someone else’s problem in the future because they still have quite a lot of gold left.
Rogers: Ok, that may be the answer. But I don’t quite buy that either. I don’t think they are smart enough. In fact I think they are dumb. I don’t think they could get away with a conspiracy like that. You would have to have twenty or thirty central banks around the world. The personnel turn over all the time. By now, somebody would have told us. “Guess what, we’ve got a problem with our gold.” So this could not have been kept a secret for the last ten or fifteen years with 30 central banks where all the central bank heads have turned over, the bureaucrats have turned over. Somebody would have leaked it by now.
Taylor: Fair enough. I understand your point.
Rogers: But I don’t quite understand your last point about Summers and Greenspan and the gold carry trade.
Taylor: Essentially, Lawrence Summers wrote a paper on Gibson’s Paradox.
Rogers: Well, forget Summers. I don’t have much respect for him. But it is the last sentence that I am trying to figure out.
Taylor: What the paper said was that if the banks print a lot of money causing the real interest rates to decline, the gold price has to be capped or else your currency will be weakened. And in fact we started to see an explosion in the money supply corresponding with the Mexican crisis in about 1994 and 1995, which is about the time when, as the GATA people noticed, some strange things started to happen in the gold markets. And that is when the “gold carry trade” began to grow dramatically, essentially we believe with the Exchange Stabilization Fund, managed by the U.S. Treasury Secretary, allowing the bullion banks to have access to a cheap source of funding by borrowing gold at 1% or less and then selling it and reinvesting in U.S. Treasuries or other investments that were paying 6% or 7% at the time.
Rogers: Wait a minute. You’re getting away from that last sentence. You said the price of gold had to be capped or the bailouts would be ineffective. What does that mean? What bailouts?
Taylor: Well these would have been the country bailouts such as Mexico, Asia, Russia, and Long Term Capital Management, etc. In other words, the dollar would begin to tank unless you capped the gold price.
Rogers: O.K., let’s just say that is correct. I mean, Summers is not so smart but lets go forward. I have not read the paper. I don’t know the paper. I don’t know when it was published. Lets say that you had a bad man in Washington doing everything he could to keep the price of gold down. The price of everything else would go through the roof. The price of oil. The price of rubber. The price of silk. The price of cotton. I mean usually if you are putting all your efforts into driving one thing down, there would be so much money flooding into the world that the price of everything else would go to the moon.
Taylor: I think that is exactly what happened in the equity markets. Even though Greenspan caused the money supply to explode starting with the Mexican crisis, the dollar got stronger which put downward pressure on commodities, but the rising dollar helped suck enormous amounts of foreign money into the U.S. financial markets, which provided considerable energy to expand the various financial bubbles that we have experienced. So I would argue that what you suggest is exactly what happened though more so in financial assets than in commodities. The stronger dollar even as we printed more and more of it made the public feel the U.S. is invincible. And to justify this defiance of the natural laws of nature, Greenspan and the Clinton boys had to come up with the notion of a “new paradigm.”
Rogers: I find all of this extremely farfetched. It just doesn’t make sense to me. But just one more thought. You say there that Greenspan said central banks stood ready to lease gold if the prices go up. But that is usually the case. When anything goes up, people make a lot of money lending when something goes higher.
Taylor: O.K. Fair enough. Let’s move on then to another topic.
Rogers: But Greenspan can’t sell the gold without permission.
Taylor: He made the statement that central banks stand ready to sell gold in increasing quantities should the price to rise. He denied the Fed was doing it, but he said other central banks stand ready to lease gold in increasing quantities should the price begin to rise.
Rogers: But when you lease, you have to get it back.
Taylor: But if you lease more each year than you get back, you drain your treasury over time and you can have quite an impact on the price of gold.
Rogers: But you could have leased all the Cisco you wanted. And you wouldn’t need to cover your short positions?
Taylor: Well, not for a while.
Rogers: But I just can’t believe the central banks would be that dumb. I mean you could borrow all the Cisco you wanted in 1997, 1998, 1999. It didn’t keep the price of Cisco down. It went through the roof. Cisco had 7 billion shares. Are you saying that because people kept lending shares of Cisco that there was some kind of manipulation in the price of Cisco? Just because Dreyfus or Fidelity were lending out Cisco, it didn’t mean the brokers who lent the stock wanted its price to go down. Quite the contrary, they wanted the price to go up. As you know if there are a lot of shorts in a stock, it makes it all the more easy to go up because the shorts can get squeezed. So this just doesn’t make sense to me. A big short position should make gold go higher.
Taylor: Ultimately if they cover, that is for sure.
Rogers: They have to cover some day.
Taylor: Perhaps they don’t.
Rogers: If I’m lending out gold when I call my loan back in, that will make the price go higher and I will squeeze the shorts. I mean this just isn’t logical.
Taylor: If you assume the government is playing by the same rules citizens are required to play by I would agree with you. But governments can and do get away with all kinds of things we mere mortals cannot get away with. My good friend, London-based Marshall Auerback who does some work for Frank Veneroso and the Prudent Bear Fund, believes that in fact the central banks will ultimately agree to simply turn the gold loans into gold sales because the amount of gold that has been lent out is simply too large to be repaid without triggering an enormous rise in the price of gold and a major derivative crisis.
Rogers: But Jay that’s’ against the law! Besides they would all look like fools as well as being criminals for having lent the gold and now saying they are not going to ask for it back. Saying we will not ask for the gold back while it is going up in price would bring down any government that tried to explain to the people that they are going to let financiers get rich at the expense of the “good, honest citizens of our country”.
Taylor: But can’t politicians violate the law?
Rogers: Well politicians can change the law. But bureaucrats can’t do something like that. If they get caught they go to jail. The bureaucrats may go to the politicians and say, “look, we don’t want to squeeze the shorts, we don’t want to call the gold back in because we sold our gold. Would you change the law?” Any prime minister who did that would be hounded out of office.
Taylor: I would hope so.
Rogers: These things do not make logical sense to me and I am one who has been in markets for a long time. It doesn’t make any sense to me.
Taylor: Well perhaps some of us just enjoy a good conspiracy.
Rogers: Well but again, suppose this was a conspiracy in Washington. By now Jay, somebody would have nuked it! You have had democratic and Republican administrations. Somebody would have made a name for himself by coming forward and saying, “guess what the Democrats were doing. Or guess what the Republicans were doing. Over the past 15 years, on this theory would, at least scores of people and probably hundreds of people would know this was going on. Do you think none of them would say something? I mean some of these people hate Bill Clinton. If this were happening, the first thing George Bush would have said is “Gosh you won’t believe what the Democrats have been doing.” They sold all your gold.
Taylor: It was exactly these charges that were filed in a court case by Reginald Howe in front of Judge Lindsey in a Federal District Court in Boston. Judge Lindsey dismissed the case against all the defendants (the big bullion banks, the Fed, the New York Fed, the U.S. Treasury, the BIS), not on the basis that the case had no merit but based on the fact that plaintiff Reginald Howe lacked standing. That is, the judge ruled that Reggie’s $50,000 or $60,000 investment wasn’t large enough for him to permit the discovery phase of the trial to begin. By that rationale, if someone like Newmont Mining were to bring about a suit, a plaintiff like that would have been substantial enough for the case to move into the discovery phase. So the case was dropped. But it certainly seems logical that if the judge felt it was without merit, he would have dismissed it on those grounds or at least said that in his decision.
Rogers: Don’t you think that if Newmont Mining had a shred of evidence, they would have brought on the case?
Taylor: That’s the logic that the judge used and apparently there is precedent in the law to allow him to use that logic to dismiss the case. In any event, I try to examine my soul to see if I am guilty of simply enjoying some conspiracy fantasies or if there really is something to this thing. I believe there is, but I try to keep an open mind on this and I certainly respect your views on this matter.
Rogers: You don’t have to respect my views on this Jay, but I don’t think they are smart enough and even if they were I don’t think they could keep it hidden this long. I do say in my book by the way that I find it interesting that there has not been an audit of Ft. Knox for at least 50 years. Plenty of people have called for an audit. We would certainly like to know why they wouldn’t give us an audit.
Taylor: Excellent point. But they won’t answer that question, not even when Congressman Paul asks that question. Seems strange doesn’t it? Nor does Congressman Paul get an answer to his question about why the IMF forbids countries to use gold as their currency or to use it as a medium of exchange for trade.
Rogers: Well they use SDR’s, special drawing rights. That’s the way they move gold around instead of gold itself.
