Dear Friend of GATA and Gold:
Who is more negligent here -- Ray Dalio's Bridgewater Associates for recommending investment in gold because "it's wise to hold some of what central banks can't create more of," or Anna Golubova of Kitco News for failing to challenge that premise by noting that central banks long have created vast amounts of imaginary gold by leasing it and swapping it with other central banks and their agent bullion banks?
Have the Bridgewater people and Golubova really never taken a look at the secret March 1999 report of the staff of the International Monetary Fund, published by GATA eight years ago? The report dislcoses that IMF-member central banks couldn't bear to publicize their gold swaps and leases because doing so would expose their interventions in the gold and currency markets and be "highly market-sensitive."
That is, disclosure of swaps and leases might reveal just how much central banks already had rigged the gold and currency markets with imaginary metal and how much ammunition they had left for their rigging.
The secret IMF staff report is here:
http://www.gata.org/node/12016
And don't the Bridgewater people and Golubova remember the March 2010 hearing of the U.S. Commodity Futures Trading Commission at which it was disclosed that bullion banks commonly trade as much as a hundred times more gold than they actually possess? With the help of metal consultancy CPM Group's Jeffrey Christian, the late GATA board member Adrian Douglas explained it here:
And have the Bridgewater people and Golubova never heard of Federal Reserve Chairman Alan Greenspan's testimony to Congress in July 1998? That's when Greenspan explained that central banks were not leasing gold according to their cover story -- to earn a little income on a supposedly dead asset -- but rather to push the gold price down. "Central banks," Greenspan said, "stand ready to lease gold in increasing quantities should the price rise":
https://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm
That is, for all practical purposes central banks long have been "creating" gold -- imaginary gold, unbacked certificate gold -- precisely to prevent the old monetary metal from gaining too much value against their own currencies. That's why the great disparagement of gold in the last two decades has been that even as it has risen in price, it has not kept up with inflation.
Bridgewater Associates, an investment company, is a fiduciary and so is obliged not to mislead its investors. As a news organization Kitco News is obliged not to mislead its readers and viewers, and obliged to question misinformation like Bridgewater's before reporting it.
But nothing could be more misleading than to tell people that central banks can't "create" gold when "creating" imaginary gold has been their desperate work for decades.
Golubova's credulous report on Bridgewater's pious nonsense can be found at Kitco News here:
https://www.kitco.com/news/2020-10-01/Ray-Dalio-s-Bridgewater-on-gold-It...
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
* * *
Join GATA here:
New Orleans Investment Conference
Wednesday-Saturday, October 14-17, 2020
https://neworleansconference.com/wp-content/uploads/2020/09/NOICChrisPow...
About the author
