Forum Archive Index - February 2002

["Paul & Jo-Anne" <brookvill@xtra.co.nz>]

Thought this may be interesting reading from the Hot Copper forum

 

 

4:55a ET Friday, February 8, 2002

Dear L.W.:

Thanks so much for your inquiry about what is likely
to happen if spot gold reaches $320. That is, are the
bullion bank shorts likely to default?

GATA has no inside information on this point, but I
long have argued that, if, as we think, the bullion
banks have been encouraged and even underwritten
by governments, and particularly by the U.S.
government, in the gold carry trade, and if some
bullion banks, particularly Morgan/Chase and Goldman
Sachs, are considered by the U.S. government to be
"too big to fail," then they will be rescued from a
gold run by the U.S. government's allowing them or
arranging for them to buy the leased gold at prices
well below spot, or by the government's greatly
extending the terms of the leases, thereby preventing
the worst of a short squeeze in gold.

That is, in case of a gold run, the U.S. government
effectively will expropriate the American public of its
gold reserves, and expropriate the gold reserves of
the other peoples of the world, for the private benefit
of the bullion banks.

As the Enron scandal has indicated, that's pretty much
how Wall Street and the U.S. government have been
working together all along: crony capitalism fleecing
the world behind the mask of free markets, when those
markets aren't really free at all.

With good wishes.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc

 

Cheers

Paul