By Patrick A. Heller
Commentary on Precious Metals Prepared for CoinWeek.com …..
When you examine the growing mountain of direct and indirect evidence, it is obvious that the US government, its trading partners, and allies have been blatantly suppressing gold prices for decades. All of the tactics used thus far involve deception, misinformation, and misdirection.
Yet, in all these years, why has the US government never used what would be the most effective tactic to push down gold’s price?
The most effective tactic would be—TO TELL THE TRUTH!
As people have been clamoring for years for America’s gold reserves to have a competent and honest audit, the US government could eliminate all the mistrust and suspicion simply by undergoing such an audit! Instead, the Federal Reserve has pulled out all the stops to oppose any attempts for perform such an audit.
In January, when the German Bundesbank demanded the return of almost 10 million ounces of gold that the Federal Reserve claims is being stored in the vaults of the Federal Reserve Bank of New York, it would have been least costly for insurance, security, and other expenses for the US to immediately return every ounce demanded. Well, that isn’t what happened. Germany’s request to view the holdings was rejected. The US has promised that this gold will be returned over the course of seven years!?
At the end of March, the huge Dutch bank ABN Amro notified customers that, as of April 1, no customers would be able to withdraw the physical precious metals that they had deposited into the bank for safekeeping. In the months since, multiple Swiss banks have also erected obstacles against customers being able to withdraw gold that they had stored with those banks. If the banks really did have the gold, the least expensive option for them would be to release the gold upon customer request.
Further, if Swiss banks really did have all the gold they claimed, there would be no reasons why the Zuger Kantonalbank would offer customers precious metals services, and claim they were holding the physical metals for customers, but prohibit customers from establishing allocated or segregated accounts.
If customers want to take delivery of their contracts for physical gold that is theoretically stored in the vaults of the London Bullion Market Association (LBMA), it would be least expensive for the seller of the contract to turn over the gold two days after confirmation of the transaction as formerly required by the LBMA. If the gold were really there, the LBMA would not need to change its rules, as it did on May 22, to make the delivery deadline five days after confirmation.
If all the gold reported as being in COMEX warehouses were really there, it would not be necessary for the COMEX to add, beginning on June 3, a disclaimer on its daily gold and silver warehouse stock (inventory) reports stating, “The information on this report is taken from sources believed to be reliable; however the Commodity Exchange, Inc. disclaims all liability whatsoever with regard to its accuracy and completeness. This report is produced for information purposes only.”
If the London Bullion Market Association and New York COMEX really did have all the gold they claimed, it would not be necessary to settle mature contracts for cash—against the wishes of the owners of such contracts.
All the gold exchanged traded funds and products have seen their holdings decline by 595 tons thus far in 2013. So, where are the 19 million ounces of physical gold that have supposedly flooded the market?
I could go on with more examples, but I think you get the idea. The perfect way for the US government to knock down gold’s price is to prove to the world that it really has in physical custody and good title to every ounce of gold it claims in its reserves. The US government’s trading partners and allies, which include all the major banks that gold trading as well as the LBMA and COMEX, cold cooperate in this effort by enforcing stringent rules and practices that physical gold is delivered promptly. Further, the whereabouts of the 19 million ounces of physical gold from the exchange traded funds and products should be made public. If all of these measures were implemented, I guarantee that the price of gold would plunge.
Of course, my supposition that the truth shall set the US government free of all accusations of manipulating the gold market is that the government really does have custody and title to all the gold that it claims.
However, just in case the US government perhaps does not have all custody and title to all the gold that it claims, then the truth shall not cause the price of gold to plummet. If, in fact, the US government did not have all the gold reserves it reports, it, along with its trading partners and allies, would take actions that are almost exactly what has been happening for years and years.
Once you realize this, the only question you should have is— “Where’s the gold?”
Patrick A. Heller was honored with the American Numismatic Association 2012 Harry J. Forman Numismatic Dealer of the Year Award. He owns Liberty Coin Service in Lansing, Michigan and writes Liberty’s Outlook, a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Numismaster (under “News & Articles) . His award-winning radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 AM Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com