If there's ever journalism about gold, ask central banks these questions
Submitted by cpowell on Mon, 2012-08-13 19:27. Section: Documentation
3:40p ET Monday, August 13, 2012
Dear Friend of GATA and Gold:
For years GATA has been glad to respond to questions about the gold market from financial journalists in the mainstream news media but we have always urged them to question the primary actors in the market, central banks, particularly in light of the documentation we have amassed showing or suggesting their often-surreptitious intervention in the market:
As far as we know, no such journalists have yet tried to question central banks about gold and reported the answers or refusals to answer, even as the efforts to question Germany's central bank, the Bundesbank, by the Canadian market analyst Rob Kirby in 2009 and the German freelance journalist Lars Schall in 2010 extracted some sensational confirmations in the form of denials:
2) What are the other parties to these gold swap arrangements?
3) Have such arrangements ever been implemented? If so, when, how, and why?
4) What are the other gold-related documents the Fed succeeded in withholding from disclosure in GATA's freedom-of-information lawsuit against the Fed in February 2011? Will the Fed disclose them now? If not, why?
For former Federal Reserve Board of Governors member Kevin M. Warsh
1) In your commentary in The Wall Street Journal on December 6, 2011, you wrote that "policy makers are finding it tempting to pursue 'financial repression' -- suppressing market prices that they don't like." You added, "Efforts to manage and manipulate asset prices are not new."
Which prices did you mean as being subject to "financial repression"?
2) Which previous "efforts to manage and manipulate asset prices" did you mean?
3) Did you learn about "financial repression" during and because of your service at the Fed?
For the U.S. Treasury Department
1) In the last 20 years has the U.S. government tried to influence the price of gold, openly or surreptitiously, directly or through intermediaries? If so, when, how, and for what purpose?
2) Has the Treasury Department or any other agency of the U.S. government, including the Exchange Stabalization Fund, undertaken gold swaps or gold swap arrangements or other gold transactions in the last 20 years?
3) Are the gold-related records of the U.S. government, including those of the Treasury Department and the Exchange Stabilization Fund, fully available to the public? If not, why?
For the Bank of England and the United Kingdom Treasury
1) In December 2011 the Bank of England acknowledged that it had been active surreptitiously in the gold market prior to 2007 and did not want its gold transactions known to the market generally:
With whom were these transactions undertaken and what were their purposes?
2) Will the Bank of England and the U.K. Treasury fully disclose their gold-related records? If not, why?
For the Deutsche Bundesbank
1) In August 2009 the Bundesbank replied to an inquiry from the Canadian financial writer Rob Kirby about the Bundesbank's handling of Germany's gold reserves. The Bundesbank wrote: "The Deutsche Bundesbank keeps a large part of its gold holdings in its own vaults in Germany, while some of its gold is also stored with the central banks located at major gold trading centres. This has historical and market-related reasons, the gold having been transferred to the Bundesbank at these trading centres. Moreover, the Bundesbank needs to hold gold at the various trading centres in order to conduct its gold activities. It is common practice for central banks to keep part of their gold reserves abroad."
In December 2010 the Bundesbank replied to an inquiry from the German freelance journalist Lars Schall. The Bundesbank wrote: "In managing foreign reserves, the Bundesbank fulfils one of its mandated tasks as an integral part of the European System of Central Banks. We trust you will understand that we are not able to divulge any further information regarding this activity. Particularly with respect to the confidential nature of information about where gold holdings are kept, we are unable to go into any greater detail concerning exact locations and the quantities stored at each of these. Likewise, owing to the strategic nature of the activity, we are not at liberty to provide you with more detailed information about gold transactions."
What are the "gold activities" cited in the reply to Kirby? What is the "strategic ... activity" cited in the reply to Schall?
2) Has the Bundesbank undertaken any gold swaps or gold swap arrangements with the U.S. Federal Reserve, U.S. Treasury Department, or any agency of the U.S. government or other government? If so, when, and what were the purposes of the swaps?
3) Will the Bundesbank make its gold records fully available for public inspection? If not, why?
For the International Monetary Fund
1) Where is the IMF's gold kept? Is it kept in the IMF's own vaults, in the vaults of IMF member nations, or elsewhere?
2) Is the IMF's gold actually in the IMF's possession or is it essentially just a claim on the gold reserves of its member nations?
3) When during the last 20 years the IMF said it was selling gold, did any gold actually leave any vault? If so, how much, and from which vaults did it leave and to which vaults was it delivered?
4) Will the IMF make its gold records fully available for public inspection? If not, why?
For the Bank for International Settlements
1) What is the "gold pool" cited by BIS President Karl Otto Pohl in his interview with the financial journalist Edward Jay Epstein published in the November 1983 edition of Harper's magazine?
-- includes, among a list of BIS services, interventions in the gold market. What are these interventions and their purposes and exactly how are they undertaken? Are they public or secret? If they are secret, why?
4) In a speech delivered at a conference at BIS headquarters in Basel in June 2005 --
-- William S. White, head of the BIS' Monetary and Economic Department, said that among the major purposes of international central bank cooperation is "the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful."
In the last 20 years what efforts has the BIS made or assisted to influence asset prices, particularly gold prices? Of which such efforts is the BIS aware?
5) Did the BIS undertake any gold transactions simultaneous with the devaluation of the Swiss franc in September 2011?
For every central bank
1) What is the central bank's policy toward gold?
2) Has the central bank loaned or swapped gold or does it have gold swap arrangements with other central banks or government agencies? If so, who are the counterparties of these swaps and swap arrangements and what is their purpose?
3) Is it the bank's policy to support the gold derivatives market by making the bank's gold available for sale, swap, lease, other exchange, or hypothecation? If so, why?
4) Are the bank's gold-related records fully available for public inspection? If not, why?
For JPMorgan Chase & Co.:
1) Are the enormous interest rate derivatives positions and the monetary metals positions on the bank's books the positions of JPMorgan Chase & Co. itself or are they essentially the positions of the U.S. government or other governments?