------ Forwarded Message > From: "dasg...@aol.com" <dasg...@aol.com> > Date: Thu, 8 Apr 2010 04:22:01 EDT > To: Robert Millegan <ramille...@aol.com> > Cc: <ema...@aol.com>, <j...@aol.com>, <jim6...@cwnet.com>, > <christian.r...@gmail.com> > Subject: Peculiar Gold Transfers between US & UK Marked by Reduction in > Metal's PURITY >
> UK Treasury Releases FOIA on Gordon Brown's 1998 Gold Sale, Catches Tony Blair > Lying, Questions US Treasury's Good Delivery Standards > Tyler Durden <http://www.zerohedge.com/users/tyler-durden> > 03/31/2010 > http://www.zerohedge.com/article/uk-treasury-relases-foia-gordon-browns-1998-g > old-sale-catches-tony-blair-lying-questions-us- > > > One of the bigger stories in the UK over the past several days, has been the > increasing pressure on Prime Minister Gordon Brown to justify his sale of 395 > tons of gold in 17 auctions in the period from 1998 through 2002, when Brown > was Chancellor of the Exchequer, a role identical to the one Tim Geithner now > performs in the US as Treasury Secretary. The issue is that in the > abovementioned period, gold was trading at the rock bottom prices of the past > two decades, and as such, his rush to sell is estimated to have cost UK > taxpayers £6 billion. > > One reason previously given to Parliament, to explain the transactions from > Treasury ministers and Tony Blair was that the sale was made 'on the technical > advice of the Bank of England.' Today the UK Treasury has released > long-withheld FOIA documents which disprove this claim, and indicate that in > fact the BOE was, if not completely against selling the bullion, then > certainly waiting until the price improved. > > Furthermore, as the Daily Mail reports, "A source close to the Bank of England > said last night: 'It was not our decision. It was their decision and we simply > provided technical advice. Then it was up to them.'" Yet, in light of recent > LBMA manipulation revelations by GATA, it was most likely the association > itself and its member banks which pressed the then relatively new Chancellor > to do something against the interest of his people, potentially with promises > of further rank extension in the "public services" arena. So far, they have > not disappointed. > > As part of the FOIA, (Full document attached below) it becomes clear that > Brown attempted at least 4 tried to persuade the BOE to proffer a joint > proposal from the Treasury and the Bank Of England as pertains to English gold > sales in the late 1998 period. And even as the FOIA submission is now making > the round, there is still a critical redaction. To wit, from the Daily Mail: >> >> >> >> >> >> >> Two days before Christmas 1998 - just a month before the sale was >> announced - a senior Treasury official wrote to the department's then >> permanent secretary Gus O'Donnell: 'The Chancellor is keen that officials at >> the Treasury and the Bank work together to produce a joint proposal. As I >> understand it the latest proposal is not a joint one. >> >> >> 'The Chancellor needs to know the status of the proposal, what the >> difficulties are in drawing up a joint proposal, how you think we can move >> forward in achieving a joint proposal.' >> >> >> Three weeks later Mr Brown met the then Bank Governor Lord George for lunch >> to discuss the plan. But the outcome of the talks is unclear because the >> Treasury has blacked out a key section of the only note referring to it. >> >> >> Lord George offered only the most lukewarm endorsement of the decision at >> the time, telling MPs it was a 'perfectly reasonable portfolio decision'. >> >> >> If he had refused to agree to the sale he would almost certainly have had to >> resign. > > Surely, Gordon Brown, facing with some very daunting poll numbers ahead of > upcoming elections, will now have even more explaining to do. > > Yet what mostly caught our attention was Annex #29 to a Bank Of England paper > from September 28, 1998, in which the following was said: >> >> >> >> >> >> >> The US treasury sold gold in two spells, two auctions of 23 and 15 tonnes in >> 1975, which were not continued in 1976 as the IMF auctions were announced >> and the spot price fell; a larger programme of 491 tonnes during 1978-1979 as >> the gold price rose sharply. Indeed the second programme was extended three >> times as demand for gold continued to push up the spot price. The US Treasury >> used a multi-price auction system initially with open bids, but switched to >> closed bigs by the end because open bids were causing market disruption >> <can't have a transparent market now, can we?>. >> >> >> The auctions in 1979 offered two grades of gold: 995 fine and 900 fine. It >> is not clear whether this was a market-driven switch, or whether it >> reflected the US Treasury's preference. > > Now correct us if we are wrong, but (London) Good Delivery > <http://www.lbma.org.uk/docs/gdlvarious/GD_Rules_20100324.pdf> standards by > the LBMA <http://www.lbma.org.uk/london/mktbasics> have called for 995 and > higher fineness since time immemorial. How is it that the US Treasury decided > to dilute the content of ITS gold dispositions precisely at the time when gold > prices were surging? > > And, more relevantly, why? > > Recall that in the period January 1979 - January 1980 gold price/toz went from > $240 to $850! Did the US -- for whatever reason forced to sell into the > run-up-- need to dilute gold holdings due to a massive shortage of physical > [gold]? >> >>> >>> >>> <<TRANSLATED: When the US Treasury (Federal Reserve?) sold gold at "peak" >>> prices, it "shaved" the product and decreased its purity from 99.5% to only >>> 90% "pure" gold --a trick analogous to watering down wine or mixing zinc >>> with copper in a penny. This may account for all the tungsten-filled gold >>> bars, "made in USA," turning up now.>> > > By doing so, did the UST force buyer to sign "big boy" letters fully > acknowledging that they were getting less than Good Delivery gold? > > Was this 10% dilution merely the first step in what Adrian Douglas recently > highlighted would be the transition of gold claims holders into general > unsecured creditors? > > If a 4x run up in gold forced the US Treasury to enact a 10% real dilution in > gold, what would happen if gold surged 40x? Would the fineness of the > adjusted "good delivery" drop to 100 or lower? > > Forget the LBMA and the threat of physical dilution -- a much more relevant > question is just how much of the alleged US gold holdings of 8133.5 tonnes is > actually REAL. > > Surely, the question of just how much gold is there beneath the HSBC building > in New York's Bryant Park, > <http://online.wsj.com/article/SB125902295608261455.html?mod=googlenews_wsj> > and below the FRBNY has never been more relevant. > > ============= > > http://blogln.ning.com/profiles/blogs/2189391:BlogPost:46238 > <http://blogln.ning.com/profiles/blogs/2189391:BlogPost:46238> > > In Rome, 277 BC, the denarius was born. It was a silver coin, and for the > first 250 years its silver content declined only modestly. The modest decline > corresponded with Rome's rise to become an empire. From the original 66 grains > of silver, the value had only declined 10% to 60 grains, by the time of Julius > Caesar (49 BC). But soon afterwards monetary tumult commenced in earnest. > > The "aureus" - a gold coin - was created by Julius Caesar [around 49 BC]. It > was 125 grains of gold. Gold was used to pay the army and support the > Emperors, silver - the denarius - was used for international trade, and of > least value, the copper coins were used by the common people. > > In 54 AD Emperor Nero started to inflate (debase) the value of Rome's money. > Nero took 14.3% of the silver out of the denarius coin and 11% of the gold out > of the aureus coin, replacing the precious metals with base metals, though > Roman citizens didn¹t notice the trickery, or at least didn¹t understand the > implications of the debasement, as the debased coins looked and felt the same > as the full content gold/silver variety of their grandparents generation. > > After JFK¹s assassination, Federal Reserve monetary debasement kicks into high > gear. In 1965, we find that, in one fell swoop, all of the silver was taken > out of our coins and replaced with base metals. The post-1964 US quarters and > dimes look and feel like the 90% silver content variety contained in coins > minted up to 1964, but the 90% silver variety are no longer in circulation. > You can only buy them at coin shops and from estate sales and a pre-1964 > Washington Quarter will typically sell for $3.50- $5.00 each, reflecting the > .3631 ounce of silver contained in the coin. With a world spot price of silver > at $9.00-$12.00 per oz. each coin has an intrinsic ³melt² value, besides > their numismatic value. > > This is the reason gold and silver are insurance for the general population > as corrupt government debases the currency, in freely traded markets (and that > is a big presumption to make), the gold/silver price will act inversely to the > underlying currency being debased. > > Back to our story -- As Rome continued on its moral, political and monetary > decline, by 193 AD, the denarius had only 26 grains of silver - a 61% > devaluation from the original 66 grains. Shortly thereafter, Rome's denarius > stopped being accepted in trade by the rest of the world. By 268 AD, the > denarius was nothing but base metal with a thin silver coating. > > Our copper penny held its value (100% copper) from 1793 to 1982. Today our > "copper" penny is 97.5% zinc with a 2.5% copper coating. That's a 97.5% > debasement! > > Some of our future is quite predictable. Throughout history, civilizations and > nations have come and gone. But, if one looks at the money and monetary policy > of these nations, a clear picture emerges as to what our future holds. Since > going off the gold standard 1971, our dollar has lost over 80% of its > purchasing power. It continues to be printed in ever increasing amounts, at > the whim of politicians. > > It's safe to say, we will continue to see more irresponsible printing of > money, more inflation, and more references to Rome and its decline. Unless > there is a dramatic shift in U.S. monetary policy, the U.S. and the dollar > will suffer the same fate as Rome and its denarius. It's just a matter of > time. > > > ------ End of Forwarded Message
