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XMFSinchiruna (27.46)

ZeroHedge: The (Historical) Smoking Gun on Gold Manipulation

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September 30, 2009 – Comments (2)

From Tyler Durden on ZeroHedge.com:

Exclusive Smoking Gun: The Fed On Gold Manipulation

Excerpt:

"On June 3, 1975, Fed Chairman Arthur Burns, sent a "Memorandum For The President" to Gerald Ford, which among others CC:ed Secretary of State Henry Kissinger and future Fed Chairman Alan Greenspan, discussing gold, and specifically its fair value, a topic whose prominence, despite former president Nixon's actions, had only managed to grow in the four short years since the abandonment of the gold standard in 1971. In a nutshell Burns' entire argument revolves around the equivalency of gold and money, and furthermore points out that if the Fed does not control this core relationship, it would "easily frustrate our efforts to control world liquidity" but also "dangerously prejudge the shape of the future monetary system." Furthermore, the memo goes on to highlight the extensive level of gold price manipulation by central banks even after the gold standard has been formally abolished. The problem with accounting for gold at fair market value: the risk of massive liquidity creation, which in those long-gone days of 1975 "could result in the addition of up to $150 billion to the nominal value of countries' reserves." One only wonders what would happen today if gold was allowed to attain its fair price status. And the threat, according to Burns: "liquidity creation of such extraordinary magnitude would seriously endanger, perhaps even frustrate, out efforts and those of other prudent nations to get inflation under reasonable control." Aside from the gratuitous observation that even 34 years ago it was painfully obvious how "massive" liquidity could and would result in runaway inflation and the Fed actually cared about this potential danger, what highlights the hypocrisy of the Fed is that when it comes to drowning the world in excess pieces of paper, only the United States should have the right to do so."

Definitely worth a read, as is the declassified memo contained therein. This evidence should be considered alongside this evidence, and the truly enormous volumes of evidence compiled by GATA and freely available on their website.

Fool on, but don't play the Fed's fool.

2 Comments – Post Your Own

#1) On September 30, 2009 at 10:35 AM, ChrisGraley (29.75) wrote:

They seem to admit what most of us knew already in that GATA article.

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#2) On September 30, 2009 at 11:51 AM, XMFSinchiruna (27.46) wrote:

This is my article out today on Yamana. Enjoy!

http://www.fool.com/investing/general/2009/09/30/yamanas-golden-age.aspx

 

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