Fed Govt Gold Manipulation 101

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The following is an excerpt from Tracy R Twyman's forthcoming book, Ex Nihilo.

Who Stole My Cheese? IMF looting of US gold reserves, Fed’s illegal manipulation of gold market

When the International Monetary Fund was created at the Bretton Woods international conference in 1944, the member nations were asked to chip in a certain quota of money, related to the assessed size of that nation’s economy. This contribution was to be made 75% in that nation’s own currency, and 25% in gold, or in “currency redeemable in gold”—in other words, the dollar. This is how the US dollar became the “reserve currency of the world,” held in great volume by the central banks of the other participating countries. We agreed to redeem these dollars for gold for the other central banks upon demand, at the fixed price of $35 per ounce.

This became quite a problem over the years. The problem was that in order for the system to actually work, the US would need t very strictly control the value of its currency. This would meant that America couldn't go printing money willy-nilly whenever they needed to pay for more social programs, or for military adventures. But of course, that was exactly what the US Congress proceeded to do over the next three decades. By 1971, the dollar had inflated considerably, and foreign central banks had looted the US gold reserves, so the Federal Reserve were only enough to cover 22% of the dollars in existence. West Germany and Switzerland pulled out of the Bretton-Woods system, and the demand for gold payment from other central banks increased even more, because those banks could then turn around and sell this gold on the open market at tremendous profit. The US dollar was standing on a precipice.

This was what motivated President Nixon to make a unilateral decision, without consulting the IMF, to close the “gold window” and stop redeeming dollars in gold. This was the final nail in the coffin of the Bretton Woods system, and unhinged the value of the dollar from gold completely. The international banking elite was enraged. Nonetheless, while it did not stop inflation, it did slow down the looting of Fort Knox and put the dollar on life support for a few more decades.

But “life support” is exactly what has been required ever since then. Because the US still does redeem dollars for gold for foreign central banks, via the IMF’s own currency, SDRs (Special Drawing Rights). Since 1975, gold has again been a legally traded commodity in the United States. And while the price of gold has fluctuated considerably, it has since then always been much higher than $35 an ounce. Presently the market value of an ounce of gold is inching towards $1000 an ounce. Yet the US is still redeeming SDRs for a mere $42.50 per ounce of gold so that they can be sold to large bullion banks and dumped onto the open market (a process technically called “dishoarding”). Our gold reserves are still being looted by the banksters.

But they are doing this for a specific reason. They need to dump gold on the market at below market value to keep the price of gold artificially suppressed, or else the fiat currencies of the world would collapse, and businessmen would begin to insist on doing business only in real money: gold and silver coin. To hide what they are doing, IMF-controlled central banks are allowed to report their gold certificates (paper that represents the gold that they have “leased out” or dishoarded) in the same column on their balance sheets where the gold reserves themselves are reported. So nobody actually knows how much gold is in reserve anymore. The last independent audit of Fort Knox happened in 1955. One was attempted during the Reagan administration, but the Federal Reserve thumbed its nose at the President, and the audit was never completed.

The evidence of dishoarding being used to suppress the price of gold (and thus prop up the fiat currencies) is overwhelming. In fact, Alan Greenspan actually admitted it in front of Congress on July 24, 1998 when he said: “Central banks stand ready to lease gold in increasing quantities should the price rise.” An international organization called the Gold Anti-Trust Association (GATA) has been formed, consisting of gold investors who resent their market being manipulated secretly and illegally by banks with the collusion of government. They even took out a full-page ad in the Wall Street Journal in recent years informing investors of what was going on. Strangely the ad, and all other public pronouncements from the group, have been ignored by the financial press so far. More...