GATA: More Fed minutes document gold market manipulation

The Federal Reserve's Federal Open Market Committee (FOMC) meets eight times per year to discuss and set interest rate policy. The minutes of these meetings are not released for five years. This ensures that few people will ever read them. Furthermore, the minutes are heavily redacted and edited.

In his 2008 book "Deception and Abuse at the Fed", Robert Auerbach documents how Fed officials perjured themselves when they lied to Congress about the existence of verbatim transcripts of FOMC meetings. The Sunshine Act of 1976 required all "agencies" to promptly make available to the public any transcripts, recordings, or minutes of discussions in official meetings. For 17 years Fed officials misled Congress in denying that verbatim transcripts or tape recordings existed. They claimed that recordings were taped over and transcripts were destroyed, leaving only the redacted and edited minutes in their archives. However, because of direct questioning by U.S. Rep. Henry Gonzalez before the House Banking Committee in 1993, it became clear the Fed had been lying. Shortly thereafter Fed Chairman Alan Greenspan ordered tapes and transcripts to be destroyed.

It is clear from such actions that the information contained in those transcripts must be very damaging or incriminating to the Federal Reserve.

After reading Auerbach's book I was inspired to dredge through published FOMC minutes. My thinking was that if an organization is so inept at covering up that detailed transcripts were retained, then perhaps it is also inept at completely redacting sensitive and incriminating information. What I found is quite astounding and serves as documented evidence by the Federal Reserve itself that it manipulates the gold market.

Continue reading - More Fed minutes document gold market manipulation

What can be concluded from these insights into the deliberations of the FOMC?

-- On several occasions the Fed discussed targeting gold prices with its policies.

-- The Fed admits that propaganda is effective against gold investors, insofar as just mentioning the possibility of selling gold can drive down the gold price.

-- The Fed at least contemplated interfering in the gold market, and on a massive scale. The Fed admits that the U.S. government has sold gold with the intention of reducing gold's price.

-- The record shows that the Fed opined that the statutes of the Exchange Stabilization Fund have legitimized "the gold swaps." Despite claims that this statement has been inaccurately transcribed or garbled, recent information suggests otherwise. In response to GATA's request to the Fed last year under the Freedom of Information Act for access to Fed documents about gold swaps, Fed Governor Kevin M. Warsh confirmed that the Fed does indeed have gold swap agreements with foreign banks:

http://www.gata.org/node/7819

-- The Fed does not want it to be known that the external debt of the United States could be substantially reduced by revaluing official gold at the market price, lest someone wants to do that. This is an admission that the official U.S. price of gold of $42.22 per ounce is a matter of smoke and mirrors. The ability of the Fed and Treasury to create money is linked to the only liquid collateral they have, gold. The gold price that is required to make the value of U.S. gold equal to the dollars issued is multiples of the current price, and is heavily dependent on how much unencumbered gold the Treasury still holds.

-- The Fed expressed the utility of having the virtues of a gold standard without using gold itself. Greenspan later confirmed that the Fed was behaving as if it was on a gold standard, as if there were "real reserves" underneath the system. This supports GATA's claims that the gold price has been suppressed by an increase in the supply of "paper gold" -- gold that investors believe they have bought and own but is really no more than a certificate saying they own the gold. This is the case with the London Bullion Market Association's unallocated gold accounts, unbacked exchange-trade funds, pool accounts, and gold derivatives.

The demand for real physical gold bullion is surging in the face of an impending daisy-chain of sovereign debt defaults. This threatens to expose the confidence trick -- that much more gold has been sold than exists. I have explained this in a previous essay, "The Tiny Market that is the World's Biggest":

http://www.gata.org/node/8248

The Federal Reserve can "behave" as if there are real reserves under the U.S. dollar, but there are none. A study of the heavily redacted and edited minutes of the Federal Open Market Committee reveal a penchant for targeting and manipulating gold prices, and deceiving Congress and the public.

The words of Alan Greenspan from "Gold and Economic Freedom" could not be more relevant:

"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

Like clowns at a rodeo, there are too many academics creating a distraction discussing whether we will have deflation or inflation. We are now in an era of unprecedented deficit spending -- which means that confiscation of wealth will also be unprecedented. One of the most prolific money creators of all time has told us what to do to prevent it: Buy gold. But buy real physical gold, not a gold receivable.