Federal Reserve manipulating gold prices: Ron Paul

[bobbyw24]

WASHINGTON (Commodity Online): Politicians in the United States are coming out in the open demanding constitutional remedies to curb manipulation and rampant speculation in gold prices. Congressman Ron Paul said that the US Federal Reserve and the Treasury department have been manipulating gold prices to deflate the price of gold.

Congressman Ron Paul of Texas this week introduced legislation designed to curb the ability of the President or the Treasury Secretary to manipulate worldwide gold prices. The "Monetary Freedom and Accountability Act" restores proper congressional authority over gold policy by requiring that body to vote its approval before the President or Secretary buys or sells gold.

"The Constitution grants authority over monetary policy specifically to Congress alone, not to the executive or the administration," Paul stated. "Yet Congress has neglected its duty for decades, and now our foolish fiat money system is run without challenge exclusively by unelected Treasury and Fed bureaucrats. As a result, the Treasury has been able to engage in the buying and selling of gold to manipulate the worldwide market price. Gold is very important to markets and investors in America and across the globe, and Congress should not allow the administration to interfere in the gold market behind closed doors."

The private Gold Antitrust Action Committee held a press conference this week to discuss federal manipulation of gold markets. The group has uncovered evidence suggesting that the Federal Reserve and the Treasury department, operating through the Exchange-Stabilization fund and in cooperation with the International Monetary Fund, have been systematically working to deflate the price of gold.

Because rising gold prices are seen by investors as a barometer of inflation, the Fed has purportedly suppressed prices to disguise the true nature of the financial bubble of the 1990s.

"The Fed wants all of us to think the stock market is not overvalued, and that credit and monetary expansion can create lasting prosperity," Paul concluded. "My bill will make it harder for the Fed and the Treasury to manipulate gold prices, which should always serve as an unbiased indicator of the true health of world markets."

http://www.commodityonline.com/news/Federal-Reserve-manipulating-gold-prices-Ron-Paul-23803-3-1.html

[Zippyjuan]

Does Dr. Paul or anybody have any indications of how much gold the Fed and or Treasury are selling- if any? I have not heard of any such sales. Sure the Treasury does sell gold coins through the mint but those levels have not changed in any manner enough to effect the global price of gold. They have actually periodically stopped the sale of gold coins which again is not going to cause the price of gold to go down.

The price of gold has been going UP directly due to Fed and Treasury actions- they have been allowing the international value of the dollar to decline slowly which has led to in increase in commodity prices including gold and oil. What sort of actions are they making which would cause the price of gold to go down? I was not aware that they were selling large quantities of gold on the market (which is the other way aside from the value of the dollar they can change the price of gold).

[tangent4ronpaul]

Russia's central bank apparently just bought 500 tons of gold from somebody, and other countries have been buying it up too.

http://finance.yahoo.com/news/Federal-Reserve-Admits-Hiding-bw-2550373789.html?x=0&.v=1

Federal Reserve Admits Hiding Gold Swap Arrangements, GATA Says

* Press Release
* Source: Gold Anti-Trust Action Committee Inc.
* On 9:30 am EDT, Wednesday September 23, 2009

MANCHESTER, Conn.--(BUSINESS WIRE)--The Federal Reserve System has disclosed to the Gold Anti-Trust Action Committee Inc. that it has gold swap arrangements with foreign banks that it does not want the public to know about.

The disclosure, GATA says, contradicts denials provided by the Fed to GATA in 2001 and suggests that the Fed is indeed very much involved in the surreptitious international central bank manipulation of the gold price particularly and the currency markets generally.

The Fed's disclosure came this week in a letter to GATA's Washington-area lawyer, William J. Olson of Vienna, Virginia (http://www.lawandfreedom.com/), denying GATA's administrative appeal of a freedom-of-information request to the Fed for information about gold swaps, transactions in which monetary gold is temporarily exchanged between central banks or between central banks and bullion banks. (See the International Monetary Fund's treatise on gold swaps here: http://www.imf.org/external/bopage/pdf/99-10.pdf.)

The letter, dated September 17 and written by Federal Reserve Board member Kevin M. Warsh (see http://www.federalreserve.gov/aboutthefed/bios/board/warsh.htm), formerly a member of the President's Working Group on Financial Markets, detailed the Fed's position that the gold swap records sought by GATA are exempt from disclosure under the U.S. Freedom of Information Act.

Warsh wrote in part: "In connection with your appeal, I have confirmed that the information withheld under Exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of Exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you."

When, in 2001, GATA discovered a reference to gold swaps in the minutes of the January 31-February 1, 1995, meeting of the Federal Reserve's Federal Open Market Committee and pressed the Fed, through two U.S. senators, for an explanation, Fed Chairman Alan Greenspan denied that the Fed was involved in gold swaps in any way. Greenspan also produced a memorandum written by the Fed official who had been quoted about gold swaps in the FOMC minutes, FOMC General Counsel J. Virgil Mattingly, in which Mattingly denied making any such comments. (See http://www.gata.org/node/1181.)

The Fed's September 17 letter to GATA confirming that the Fed has gold swap arrangements can be found here:

http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf

While the letter, GATA says, is far from the first official admission of central bank scheming to suppress the price of gold (for documentation of some of these admissions, see http://www.gata.org/node/6242 and http://www.gata.org/node/7096), it comes at a sensitive time in the currency and gold markets. The U.S. dollar is showing unprecedented weakness, the gold price is showing unprecedented strength, Western European central banks appear to be withdrawing from gold sales and leasing, and the International Monetary Fund is being pressed to take the lead in the gold price suppression scheme by selling gold from its own supposed reserves in the guise of providing financial support for poor nations.

GATA will seek to bring a lawsuit in federal court to appeal the Fed's denial of our freedom-of-information request. While this will require many thousands of dollars, the Fed's admission that it aims to conceal documentation of its gold swap arrangements establishes that such a lawsuit would have a distinct target and not be just a fishing expedition.

In pursuit of such a lawsuit and its general objective of liberating the precious metals markets and making them fair and transparent, GATA again asks for financial support from the public and from all gold and silver mining companies that are not at the mercy of market-manipulating governments and banks. GATA is recognized by the U.S. Internal Revenue Service as a non-profit educational and civil rights organization and contributions to it are federally tax-exempt in the United States. For information on donating to GATA, please visit here:

http://www.gata.org/node/16

People also can help GATA by bringing this information to the attention of financial news organizations and urging them to investigate the Fed's involvement in gold swaps particularly and the gold (and silver) price suppression generally.

============

http://www.safehaven.com/article-10662.htm

The Federal Reserve
&
Central Bank Gold Sales

-t

[Rekonn]

WASHINGTON (Commodity Online):
The private Gold Antitrust Action Committee held a press conference this week to discuss federal manipulation of gold markets.


Would like to see a youtube of this.

[tangent4ronpaul]

Would like to see a youtube of this.

settle for this?

GATA Chairman Bill Murphy's appearance last night on Bernie Lo's "Asia Confidential" program on Bloomberg Television has been posted at YouTube in three parts here:

YouTube - Asia Confidential - Part 1/3 - NOV 2009 - Bernie Lo interviews Bill Murphy, Chairman of GATA (http://www.youtube.com/watch?v=rw4T6IdHJ3w)

YouTube - Asia Confidential - NOV 2009 Part 2 - Bernie Lo interviews Bill Murphy, Chairman of GATA (http://www.youtube.com/watch?v=06_NMci4xnw)

YouTube - Asia Confidential - November 2009 Part 3 Bernie Lo interviews Bill Murphy, Chairman of GATA (http://www.youtube.com/watch?v=OYiQZzbzeXo)

Nov 2009

-t

[Matthew Zak]

Ron Paul is the Muhammad Ali of taking on the Fed. Very strategic. And right now he's pummeling the Fed with a flurry while the crowd chants "End The Fed! End The Fed!" Love it.

[Zippyjuan]

The Russian central bank bought the gold from the Russian State. That gold was never on the market. http://www.businessinsider.com/russian-central-bank-buys-30-tons-of-gold-from-state-repository-2009-12

All of the articles and links about the Fed engaging in gold swaps (which is not selling gold on the market and thus changing the international price of gold) comes from one source- the GATA. Any others?

Wiki on the group: http://en.wikipedia.org/wiki/Gold_Anti-Trust_Action_Committee

The Gold Anti-Trust Action Committee, or GATA, is an organization dedicated to publicizing their belief that the quantity of physical gold ostensibly held by the world's central banks is significantly overstated,[1] and that the price of gold is manipulated by governments and large central banks.[2][3] Their beliefs have been called 'fringe' and 'conspiracy theories' by some analysts, and the conclusions 'far fetched'.[4][1][3] GATA was founded by Bill Murphy, former commodities trader and wide receiver for the Boston Patriots. Its board includes Catherine Austin Fitts, president of Solari Inc. and former assistant secretary of the U.S. Department of Housing and Urban Development.[5] According to the New York Times in 2006, GATA "for the most part is a one-man show", referring to Murphy.[1] According to the Wall Street Journal, GATA receives part of its funding from gold companies.[4]

As of 2009, GATA was attempting to force the U.S. government to reveal exactly how much gold is held in the United States Bullion Depository at Fort Knox through the United States Freedom of Information Act. GATA has also claimed that large borrowers of gold have manipulated the price in order to use their leased gold to make other investments, and then repay the gold later at a cheaper price.[4]

In 2002 GATA filed a lawsuit against a "cartel" of bullion banks (Goldman Sachs, J.P. Morgan Chase, etc.), the International Monetary Fund, the Exchange Stabilization Fund, and the Bank for International Settlements. GATA was denied standing by the judge, since the United States has sovereign immunity against prosecution. GATA believes that the gold cartel systematically feeds central bank gold into the market place to suppress its price.[6]



From the US Treasury Department:
http://www.ustreas.gov/education/faq/international/goldsilver.shtml

I have heard about allegations that the Treasury Department manipulated the price of gold. What can you tell me about this?



On March 15, 2001, in response to a lawsuit initiated by Mr.Reginald Howe, the U.S. Attorney's office in Boston filed a motion to dismiss. Mr. Howe's complaint alleges that the Exchange Stabilization Fund (ESF) has been used over the past several years to manipulate the price of gold.

The ESF has not been used to manipulate gold prices. In fact, the ESF has not held gold since 1978. It does not engage in any transactions in the market for any metal such as gold, either in spot markets or in any of its various derivative forms. These assets are reflected in weekly press releases that are indexed in the Press Release section. The press release also reports information about Federal Reserve holdings of foreign exchange, Treasury holdings of gold and the U.S. reserve position in the IMF, none of which are ESF assets. The press release also reports information about Federal Reserve holdings of foreign exchange, Treasury holdings of gold and the U.S. reserve position in the IMF, none of which are ESF assets. The ESF is audited annually and its financial statements are provided monthly to the Congress. We would like to emphasize that the Treasury Department does not seek to manipulate the price of gold or any other metal by intervening in or otherwise interfering with the market.


The Exchange Stablization Fund is said to be the instrument for this gold manipulation.
Their holdings:
http://www.treas.gov/offices/international-affairs/esf/finances.shtml
(you can read a PDF of their latest monthly statement through a link on that page)
They have $105 billion in asssets- none in gold.

How The ESF Operates.

The ESF can undertake three main types of operations -- the purchase or sale of foreign currency, the acquisition or use of SDRs, and loans or credits to foreign governments or entities. Also, the ESF can also enter into "warehouse" swaps with the Federal Reserve System, but there have been no warehouse swaps outstanding since 1992. Each of the types of operations is described below.



The "swaps" they refer to are currency swaps, not gold swaps.

Loans or Credits.
The ESF can make loans or credits through temporary swap lines pre-negotiated with a prospective borrower. The ESF maintains a standing $3 billion short-term swap line, the Exchange Stabilization Agreement, with Mexico under the 1994 North American Framework Agreement.

When a loan in the form of a "swap agreement" is drawn upon by the borrower, an agreed amount of ESF dollars is exchanged for an equivalent amount of the borrower's currency at an agreed exchange rate (generally, the current spot exchange rate) with a commitment to reverse the transaction at the same exchange rate at maturity. Treasury has the right at any time to terminate the swap agreement and require immediate repayment of the total amount drawn.



As for the alleged "proof" of gold swaps, the letter which denies the request for information does mention swaps, but not gold swaps (from the post above):

"In connection with your appeal, I have confirmed that the information withheld under Exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of Exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you."


Gold swaps are not mentioned at all. This is no proof of any gold swaps ever occuring. Not saying they cannot have occured, just that this does not show it.

[YumYum]

Gold swaps are not mentioned at all. This is no proof of any gold swaps ever occuring. Not saying they cannot have occured, just that this does not show it.

In the mid twenties there was a secret meeting between the Governors of the Federal Reserve Board and the heads of the European central banks. It was held to discuss the best way of getting the gold held in the United States by the System back to Europe to force the nations of that continent back on the gold standard. The League of Nations had not yet succeeded in doing that, the objective for which that body was set up in the first place, because the Senate of the United States had refused to let Woodrow Wilson betray us to an international monetary authority. It took the Second World War and Franklin D. Roosevelt to do that. Meanwhile, Europe had to have our gold and the Federal Reserve System gave it to them, five hundred million dollars worth. The movement of that gold out of the United States caused the deflation of the stock boom, the end of the business prosperity of the 1920s and the Great Depression of 1929-31, the worst calamity which has ever befallen this nation.

It is entirely logical to say that the American people suffered that depression as a punishment for not joining the League of Nations. The bankers knew what would happen when that five hundred million dollars worth of gold was sent to Europe. They wanted the Depression because it put the business and finance of the United States in their hands.

[Zippyjuan]

So how does that effect the price of gold today?

[bobbyw24]

Submitted by cpowell on Sat, 2009-12-12 19:26. Section: Daily Dispatches

2:17p ET Saturday, December 12, 2009

Dear Friend of GATA and Gold:

Martin Hutchinson, business and economics editor for United Press International and regular contributor to PrudentBear.com, writes in his new commentary there, headlined "Sliding Back Towards a Gold Standard," that the Federal Reserve could regulate the dollar's value by buying and selling gold.

Hutchinson might have added that currency intervention also could be accomplished by leasing gold or by buying and selling gold futures, options, and gold derivatives.

Hutchinson's commentary is encouraging for acknowledging gold's centrality to currency intervention, and discouraging for failing to acknowledge that for years gold has been used largely surreptitiously by Western central banks for this purpose and indeed is being used for this purpose even now. But maybe he's just not yet aware of a few things -- like, for starters, the Fed's recent admission to GATA that it has gold swap agreements with foreign banks and that these agreements must be kept secret:

http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf

[sratiug]

...
The "swaps" they refer to are currency swaps, not gold swaps.
...

Why would you imply there is no gold currency?

[YumYum]

So how does that effect the price of gold today?

The point is the central banks buy gold and swap gold without anybody knowing. Look what the central bank of Russia has just done. We don't know what the Fed is doing, that is why we need to audit the Fed.

What the Fed did in the twenties was take gold from the Treasury and they gave it to the Bank of England. This is theft. Why wouldn't they be doing this today?

[squarepusher]

im a little scared to be in metals knowing that the Fed may be manipulating o_O

[Zippyjuan]

Why would you imply there is no gold currency?

These are what they hold and may swap- which of these are gold currencies: (from my previous link)? Are there any gold currencies in the world? I don't know of any.


Assets

Special Drawing Rights
U.S. Government Securities
Euros
Yen
Liabilities

SDR Allocations
SDR Certificates

Every link on this story comes from the exact same source- the GATA. Any other information to support it?
And I would also like to ask again if the Fed and Treasury are trying to supress the price of gold, how come it is going up? If they wanted the price of gold to go up they would strengthen not weaken the value of the dollar vs other currencies.