“We’ve Got To Start Rigging The Gold Market”

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold [FDR1934]If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.  – Alan Greenspan, “Gold and Economic Freedom” 1966

GATA has sourced a speech given in 1981 by the President of the BIS, Jelle Ziljstra, at the IMF headquarters in 1981 in Washington, DC in which he advocated Central Bank intervention in the gold market in order to control the price and prevent gold from competing with a global system which was based on paper fiat currency:

“I feel it is necessary for us, within the Group of Ten and Switzerland,consider
ways to regulate the price of gold…”  – Jelle Zijlstra

The “Group of Ten” are the Central Banks of France, Germany, Belgium, Italy, Japan, the Netherlands, Sweden, the United Kingdom, the United States and Canada plus Switzerland.  As everyone knows, the BIS is the Central Banks of global Central Banks and therefore controls – de facto – global monetary policy.  Here’s a link  to the speech – there can be no questions that Central Banks – through their agent “bullion” banks (primarily JP Morgan, HSBC, Scotia, Deutsche Bank, Goldman Sachs, Citibank, Barclays and UBS) – make a concerted effort to limit the upward price movement of gold.

That day the U.S. announced that the dollar would be devalued by 10 percent. By switching the yen to a floating exchange rate, the Japanese currency appreciated, and a sufficient realignment in exchange rates was realized. Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake. – Paul Volcker, “Nikkei Weekly” Nov. 15, 2004 (original incident on February 12, 1973)

Below are couple graphs from the St. Louis Fed website, with my commentary, to put Zijlstra’s speech context.

ControlGold

The Fed discontinued reporting M3 in March 2006.  The excuse was that M3 was too expensive to compile and report.  This is in the context of the Fed spending millions to fight all attempts by Congress to authorize a full audit of the Fed.  The U.S. is the ONLY industrialized country which does not report M3.  Make no mistake, M3 is the most accurate – though not completely accurate – measure of the money supply.   Any honest economist will admit that.

Note the difference in the level of M3 vs M2 when M3 was discontinued.  M3 shows that the money supply was nearly $4 trillion higher using M3 at the time M3 was discontinued.  Nothing happens by accident and it’s no coincidence that M3 reporting was discontinued a little more than 2 years before the Great Financial Crisis and the advent of Bernanke’s “QE.”  Many of us saw the financial collapse coming in the early 2000’s – certainly the price of gold “saw” it.  If we did, I can guarantee that the BIS and the Fed saw the collapse coming and the need to flood the system with dollars to keep it from collapsing and destroy the elitists’ ability to confiscate wealth and control the western world.

IF the Fed were to report M3 now, how high would the U.S. money supply truly be?

ControlGold1

This second chart above shows the parabolic, hyperinflating growth of U.S. Government debt.  Note that the growth in Treasury debt did not start taking off until after Nixon closed the gold window.  It started to rise a little more quickly after 1981, when Volker began to ease up on monetary policy.  The rest is history, but note that issuance of Treasury debt goes parabolic after Bernanke began to flood the banking system with money.

It was shortly after the Bernanke Money Floodgate opened that gold almost broke through $2,000 per ounce before the BIS/Fed was able to get control of the price and push it lower using Comex and LBMA paper gold, which can be printed in unlimited quantities as long as counterparties  do not demand delivery of the underlying gold.

In other words, the U.S. dollar-based global monetary system is one massive paper fraud and gold is the arch-enemy of a system based on fiat paper currency.  The only way it has been perpetuated this long is through the outright intervention in the gold market by the BIS and western Central Banks.

Like ALL Government interventions in history, this too shall come to an end – an end that will be painful for all of us.

12 thoughts on ““We’ve Got To Start Rigging The Gold Market”

  1. How in the world do we get out of this mess ? I’ve said for years that QE is all about the barbarians being inside the gate and looting the country and the planet. Great insight Dave. When one uses one’s imagination just a wee bit the repercussions of this are frightening. The results could make the Third World look attractive compared to the alternative.

    1. Thanks for the feedback! Huxley wrote the playbook in 1931 and Orwell expanded it in 1945 and Ayn Rand expanded it even more in 1957

  2. Keep it simple …. Just add debt-free assets and stir …. gently.

    Debt-free assets that circulate allow debt to be naturally purged by way of conventional debt repayment.
    In this “Yin-Yang” hybrid, the addition of assets frees up debt based fiat to “return to its nothingness”, while the debt-free liquidity acts as a
    supplement to support economic activity.

    It’s all up to the market. The stage is set now that we have (and can circulate) real-time bullion with scalable liquidity (thanks to scalable market price)

    You cannot pour new wine into old wineskins.

      1. A Bri 3d …. almost like JFK, indeed. Two major differences however, not so much in spirit or intention , but in practical implementation.

        1) Kennedy’s attempt to monetize assets(debt-free currency) took place before the bullion price was set free in 1971. There was still a price peg. A close examination of bullion for the purpose of monetary circulation will tell you that you must circulate “weight” as the unit of account and therefore that weight has to be able to fluctuate in value for the sake of circulatory liquidity. Liquidity = (weight x trade value /unit weight) —-> Weight x USD/oz . You can raise either element to scale up liquidity. The price peg had to be severed given that bullion is a limited and finite resource.

        We have to wonder if a FIXED peg ($35/oz) may have endeared the American public to the FIX. The short term viewpoint and analysis may have prevailed, politically. That would have been a huge problem, going forward. We’ll never know.

        Note that legal bullion ownership and possession came back to Americans in Jan/75, not too long after the end of Bretton Woods. Technically, gold was a form of market currency, again, at that time …. but that’s something that had to seep into consciousness slowly as the USD (floating) did its “apprenticeship” as a currency.

        2) Aside from the pricing/price-peg issue, Kennedy’s approach was top-down. That’s not so dangerous on the basis of the value of bullion being pegged, but if done as suggested above, where bullion weight is free to float, a top-down approach in real-time would prove to be devastating to the legacy system of the USD and might likely cause a fiat crash ! Not good ! Now that we are in real-time , bullion introduction, for the purpose of circulation, in order to prevent a fiat crash, has to be tempered, organic and market driven, bottom-up. Each will come to it in his/her own time.

        You cannot pour new wine into old wineskins.

    1. You are ! Decentralization will always recognize that. There are no geopolitical boundaries in market law ……

      Bullion is now a real-time market currency with fully scalable liquidity.

  3. As a Dutchman I feel ashamed that a Dutchman Jelle Zijlstra as a BiS-president, central banker and a professor in economics at the Amsterdam university seems to have initiated such as stupid regulation as the rigging of the gold price (quote: “feeling that it is necessary for us, within the Group of Ten and Switzerland, to consider ways to regulate the price of gold”) in order to prolong a dying criminal monetary system and cause a catastrophic escalation of economical global deterioration and degeneration of formerly intact social structures, leading to another world war and/or an equivalent conglomerate series of civil wars.
    Of course I checked your important investigative report at http://www.jcaschipper.nl/the-zijlstra-notes/ which seems to confirm your statements. Thank you for the documentation!

    1. In consideration of ” prolong a dying criminal monetary system “, have you considered that it is not dying but simply incomplete ? A hybrid model yin-yang can provide a wonderful blend of debt-currency & debt-free asset currency that come together to form a symbiotic solution. In that case, neither paradigm within the yin-yang can be permitted to fail or crash.

      It is light that comes from darkness in the order of creation …. nothing new.

      Just add assets and stir …. gently.

      1. @therooster,
        You are right. Of course even the criminal monetary system will not stop the physical world from turning. The incompleteness will be filled by insight. Unfortunately insight is to last only a few decades and will return in an even bigger bubbling phase.
        Politicians and bankers never learn and economy is an everlasting cargo cult science.

        1. The elite class have not overlooked the forming of the referenced yin-yang , IMO. Consider the following . Regardless of how you settle a purchase, whether it be with fiat currency “payment” or a complete close-out using bullion weight (unit of account), fiat currency plays a role in the latter because of our pricing habits. We price things in fiat. We have to have a bridge. In the debt-free bullion-as-currency paradigm (yang), fiat “numbers” still have a very important role in determining the fair market bullion weight to make settlement with. The “fiat numbers” do not act as a currency in this paradigm (yang) like they do in the debt paradigm (yin), but they still provide a vital measurement service as private intellectual property, which claims space in any off-the-top transaction fees.

          This goes a long way in supporting debt-free trades, while not cutting the banks out of the revenue picture, particularly, the USD. 😉

          Free floating fiat currency values have been precursors to an evolution that allows “fiat numbers” to double as measures within the debt-free paradigm, in what eventually reveals itself as a symbiotic relationship of oneness.

          Just add assets and stir …. gently.

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