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Declass'd St Dept Data Highlights Global High-Level Arrangement to "Remain Masters Of Gold*
• Zero HedgeA recently declassified telegram to the Secretary of State sent in 1968, has some very distrubring revelations to gold "conspiracy theorists" who believe there could be an international arrangement to maintain a control over gold prices in the international arena. This is especially true as the G-20 meets currently in Pittsburgh behind closed doors. Could gold be one of the issues discussed?
We particularly bring readers' attention to paragraph 13 in the telegram below, which present some troubling revelations (emphasis ours):
If we want to have a chance to remain the masters of gold an international agreement on the rules of the game as outlined above seems to be a matter of urgency. We would fool ourselves in thinking that we have time enough to wait and see how the S.D.R.'s will develop. In fact, the challenge really seems to be to achieve by international agreement within a very short period of time what otherwise could only have been the outcome of a gradual development of many years.
Furthermore, apparently 41 years ago the Plunge Protection Team had a more affectionate name (paragraph 11)
Special attention has to be given to the extent of the membership of the reshuffle club. A simple and effective rule probably would be that countries with asset holdings that are higher in relation to their gold holdings than the relation that is obtained amongst reshuffling countries are free not to participate in the reshuffles. On the other hand, countries whose asset holdings are relatively low (and whose gold holdings, therefore, are relatively high) should be obliged to submit themselves to the reshuffles. Indeed, this obligation seems so essential that it would have to become part and parcel of the new reserve asset scheme.
Also notable is the following disclosure (paragraph 3):
It is unlikely that the international monetary system could stand one or two more speculative crises like we have had last November and December during which gold losses were more than $1600 million. This is so because the point may be reached at which the speculation would reinforce itself in a cumulative way. Apart from this it is uncertain that members of the pool would be willing to go on supporting the market for such big amounts.
Oh really? "Go on supporting" presumably means they currently are supporting it? With the push for Fed transparency, could this one point get some additional insight, since if over 40 years ago the Fed, and the members of the gold "Pool" were openly intervening in the gold market, one can only imagine what the situation is now, especially with hundreds of trillions of new assets having been built on top of the Gold core of the inverted liquidity triangle?
In a nutshell - gold as an asset class is critical as it lies at the foundation of the entire credit/liquidity inverse expansion pyramid as presented by John Exter:
Control the gold, and you control the entire monetary system. For some historical Zero Hedge observations on gold, liquidity, and the dollar interplay, please see here.
Entire declassified telegram presented below:
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2 Comments in Response to Declass'd St Dept Data Highlights Global High-Level Arrangement to "Remain Masters Of Gold*
I urge everyone to read the actual report no wonder China wants to buy more Gold! http://www.scribd.com/doc/20215562/Gold-Telegram
More importantly - something that the author didn't catch - even than these "disclosures" - is that the government sees conversion of soverign notes into bullion as "speculation", in other words something that is negative and potentially meriting regulation or prohibition.
What if I like to just buy bullion coins because I think they're pretty and/or I value them more than the FRNs I exchanged for them? I would not consider myself to be a speculator.
The government doesn't care. That's "speculation". Ask yourself why the government sees it that way?
Essentially, whatever the government says take the 180 degree INVERSE of to find the truth.
It is the government that is speculating with the currency system, attempting to find the "right amount" of money and the "right amount" inflation. They have no idea - as Murry Rothbard,, Ludwig von Mises and the Soviet Model proved. The government CANNOT KNOW economically, by definition. It's an impossibility. So what can the government DO? The government can SPECULATE as to what the "right amount" is.
Me purchasing a bullion coin, by definition, is NOT speculation for I know PRECISELY how much that coin is worth to ME as measured in FRNs - the polar OPPOSITE of speculation.
On the flip side, the government continually tries to peg the dollar to a certain gold value, by SPECULATING how much M1, M2 or M3 is "right" or how much inflation is "right."