"The central bank gold lending market, centered in London, is probably the most secretive financial market in the world, with very little known about its transactions and market structure. The gold lending market’s opacity is further supported by regulators who protect the secrecy of the central banks, and mainstream financial news agencies whose editorial policies seem to forbid any market investigations, in-depth or otherwise.
It is in the gold lending market that the central banks of the world lend out their gold holdings to commercial bullion banks, where the physical gold is sold and shipped out, and where the central banks then claim to hold interest-earning ‘gold deposits’ with the bullion banks. These gold-deposits (which are merely a claim on a bullion bank) then mostly roll over short-term, passed around indefinitely between the clubby LBMA cartel of bullion banks, in a totally opaque behind the scenes network.
The physical gold bars lent out are long gone to Switzerland and the Far East, and the central banks then deceptively claim that they still hold the gold on their balance sheets when in fact all they have is a liability to the bullion banks. In the middle of this market sits the Bank of England, offering gold custody and storage to other central banks (in the vaults under the Bank of England headquarters in London) and offering gold accounts to the bullion banks concerned..."
Ronan Manly, French central bank and JP Morgan team up to boost Gold Lending
"We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake.
Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K."
Eddie George, Governor Bank of England, in a conversation with the CEO of Lonmin, September 1999
"What is most offensive is not their lying— one can always forgive lying— lying can be a delightful thing, for it leads to truth. What is offensive is that they lie, and worship their own lying."
Fyodor Dostoevsky, Crime and Punishment
Stocks caught a little bounce today.It cheered up the spokesmodels, and gave the commentariat a chance to run banal pieces like 'Is Volatility the New Normal?'
Let's see if it will stick.
Gold and silver gave back a little of their recent gains.
The shell game that has been extending the current gold pool is running thin.
When this latest attempt to shape economic reality with hot money and words blows up, as it surely will, the resultant concussions will catch many by surprise.
But realistically, how can anyone in a position of authority see it coming, when their eyes are averted and their ears are closed?
“There are three things all wise men fear: the sea in storm, a night with no moon, and the anger of a gentle man. Words can light fires in the minds of men. Words can wring tears from the hardest hearts.”Have a pleasant evening.
Patrick Rothfuss
Killard House School is a co-educational Controlled School providing for children and young people with additional special educational needs. These include Moderate Learning Difficulties, Autistic Spectrum Disorder and associated Emotional barriers.
