Apr 22, 2008

Alex Stanczyk: GATA went to Washington


Alex Stanczyk
21 Apr, 2008

As many of you know, the Gold Anti-Trust Action Committee (GATA) just had a conference in Washington DC. For those of you who follow GATA’s work, you know that they have accumulated an overwhelming body of evidence that points to the ‘management’ of the gold price.

I have had mixed feelings over the likelihood of such a conspiracy, and until I can prove something or at least be able to use available evidence to form an educated opinion I tend to dis-believe such things. However, one thing I can say after attending the conference this weekend, is that there are some very suspicious interactions on the part of the Fed, the Treasury, and the IMF when dealing with GATA. Specifically, GATA has requested through the Freedom of Information Act, information that supports the governments’ claims of the current physical gold reserve of the United States. One thing that I find very curious is that to date the Fed, and Treasury have failed to produce any materials in response to this request. Now, maybe I am just being cynical here, but I think most folks who have any common sense would agree that if the government does not want the public to have transparency into an issue, it is usually because it is being naughty, and there is something that they don’t want the public to know. For the life of me I cant see why there would be anything to keep secret, even if it is a National Security issue, unless of course the gold isn’t there anymore, in which case it would very well indeed be a National Security issue. Now of course if the gold IS gone, then it just supports GATA’s assertion that it has been used to suppress the gold price for decades.

I will recap what I got from each speaker in brief:

Dr. Edwin Vieira Jr., The Foremost Authority in the United States on Constitutional Money –

* Only a return to Gold and Silver can stabilize our currency.
* Desperate people start to ask questions, and shortly thereafter that, assign blame. If our politicians want a long and successful career ( or life ) they should be aware of this.

Reginald Howe, Golden Sextant Advisors LLC –

* Out of all commodities, gold is the one best suited for use as money
* The ‘gold price’, should actually be termed ‘exchange rate’ as with all currencies
* Central Banks are now lending gold at negative lease rates, effectively paying institutions to sell gold into the market
* Since the day the gold window has been closed, the Supreme Court has refused to hear any case challenging the current monetary system


James Turk, Goldmoney –

* The Chinese are indeed buying gold, using intermediaries and proxies to do so
* Chinese Proverb: Wisdom begins by calling a thing its proper name. Gold is not an investment, it is money.
* Do not put dollars into gold expecting a return, expect preservation of purchasing power. To get a return, it implies there must be a risk, and gold has held its purchasing power better than anything else in history.
* We are looking at huge problems, possibly as soon as this summer.
* Be prepared for Capital Controls in the US soon.

Peter George, Trinity Asset Management -

* Many hedge funds are having liquidity issues right now, when they see a bid, they are hitting it.
* It will take 10 years to bring new ultra-deep mining operations at 5000meters or deeper online.
* Since 1994 virtually all commodities have gone vertical and pulled away from gold.
* Goldfields has the largest un-hedged position in the WITS Basin, which holds an approximately 40,000 more tons of gold.
* Anglogold Ashanti is hedged $7Billion
* Barrick is hedged $9Billion
* Oil will go to $500 a barrel in time


Adrian Douglas, Market Force Analysis

* Gold is the investment opportunity of a lifetime.


John Embry, Sprott Asset Management –

* This is the best opportunity I have seen in 45 years in the investment business


In summary, by hearing views from almost every sector that touches the gold and silver markets such as mining, fund managers, analysts, attorneys, constitutional law experts, private bullion custodians, it appears obvious that there is indeed something fishy going on with the price of gold. The only players that affect the gold markets who didn’t have anything to say was the Fed, the Treasury, and the CFTC. How curious.

This is all fine and good of course, because I own gold and silver, so when this whole thing does come unglued and make the Enron scandal look like romper room on Paxil in comparison, some of us will be getting quite rich.

Got gold yet?

***

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