THE GERMAN GOLD PROBLEMS CONTINUE: NEW QUESTIONS, NEW OBFUSCATIONSNovember 16, 2012
In spite of assurances from the Bundesbank to the Federal Reserve that the gold audit questions Germans and the German government are raising will eventually go away, it doesn't look that that will be happening any time soon, as new questions continue to be asked on the internet. Here, for example, are two crucial articles, and they deserve a very close look and analysis. Indeed, in the latter article - long but crucial - there is a detail that connects a great many dots, if you know what dots there are:
Let's begin with a few quotation from the first article and note what they mean:
"1. Thiele says:"By 1956, the gold reserves had risen to DM 6.2 billion, or 1,328 tonnes; upon its foundation in 1957, the Bundesbank took over these reserves. No further gold was added until the 1970s"
"This is factually incorrect. From a documented source such as Timothy Green's gold reserves report from 1999 (source), we find that German gold reserves were 1,328 tonnes in 1956 and contined to rise every year until 1969 when they hit 4034 tonnes, an increase of 200% since 1956! Offical German gold in 1970 was 3,537 tonnes and declined to 2,963 by 1979. Since then it has increased by just 400 tonnes."
In other words, Thiele is confirming - from the mouth of a central banker - that theme which i have hypothesized here over and over: either the central banks do not know the actual amount of gold, or those amounts are being deliberately obfuscated to cover up a massive fraud. This seems to be confirmed by the next statement:
"2. Thiele says:"At the beginning of the last decade, we brought 930 tonnes of gold to Frankfurt from London and subjected it to a painstaking inspection. Part of the gold was melted down in order to create new bars which conform with the “Good Delivery Standard”.
"Fact: All gold stored at the Bank of England has to be London Good Delivery Standard. Bars that do not conform are not accepted. That is how the LBMA system works. There is an accepted refiner list. There would be no need to melt down anything from the Bank of England unless the Bundesbank had been duped with coin bars or similar and/or does not have faith in the BOE in the first place." (Emphasis in the original)
Bingo! Ding ding ding ding ding! "Tyler Durden" at Zero Hedge is correct: what Thiele's admission in fact means is that the Bundesbank had been defrauded and that the fraud included the Bank of England as either the transhipment point, or point of origin. For reasons I won't get into here, I believe it to have been the transmission point. I submit that it is right here that we have the real reason for the concern about the gold reserves in Germany: someone in the German government - someone perhaps even familiar with the 1928 story of Hjalmar Schacht - knew of this fraud and what it portends, and what it portends is nothing less than massive.
Now let's turn to the second, and much more lengthy article. And I will simply present a few quotations, and for your benefit, the ESF refers to Exchange Stabilization Fund, which is, as the author of this article avers, one of the smoking guns:
"James Turk 2001 - This past December in "The Smoking Gun" I provided substantive proof that the Exchange Stabilization Fund was intervening in the gold market. From publicly available reports prepared by the Federal Reserve, I established that the weight of gold held as a component of the US Reserve Assets has been changing, and that these changes – some of which are of significant size – result from activity by the ESF. These Federal Reserve reports conclusively demonstrate that the ESF has been intervening in the gold market since at least 1996.
"Though these Federal Reserve reports make clear that the ESF is involved in the gold market up to its 'earmarks', a lot of people remain skeptical. I don't know why that is. It is worth noting that many of the most obstinate skeptics who deny US government involvement in the gold market live overseas and have little, if any, experience or understanding of the way the US government really works. But even Americans find it difficult to accept that the US government intervenes in the gold market. Ironically though, they readily admit that the government intervenes in the debt markets, foreign currency markets, and according to a growing number of people, even in the US stock market. It is therefore most baffling that they do not concede the ESF's involvement in the gold market."
Now consider this:
"CHAIRMAN GREENSPAN. Could I just formally respond to Governor Lindsey? There is a question here of whether or not the amount the United States Treasury gives us has to be appropriated funds, which I think is really where our examination of the issue has to be. In examining the take-out, we ought to make certain that we talk to them with respect to the question of what happens if they do not get the appropriated funds.
"MR. TRUMAN. Mr. Chairman, the Exchange Stabilization Fund does not have appropriated funds.
CHAIRMAN GREENSPAN. Are we going to be getting a take-out from the Exchange Stabilization Fund?
MR. TRUMAN. I think that is what is in the program.
CHAIRMAN GREENSPAN. Okay.
SPEAKER(?). That is not the same as the Treasury.
MR. TRUMAN. Even if we didn't, the precedent in the 196Os – I think there was a question then about whether the Treasury could engage in foreign exchange operations outside of the ESF – was the use of Roosa bonds in the 1960s. The Treasury floated Roosa bonds to obtain foreign currencies and used some of those currencies to take us out. That did not involve appropriated funds. That was treated as a debt-management operation.
"The above passage confirms what we already know, but many people refuse to admit. The ESF is a slush fund beyond Congressional oversight." (Emphasis added)
Just in case you want to know, the Exchange Stabilization Fund was established in 1934 as a result of - you guessed it - FDR's confiscation of US gold, and thus, as the author correctly deduces, this is a slush fund directly beholden to the American executive and to the financial oligarchy.
In short, you're looking at part of a financial mechanism that is completely off the books... you're looking at something that has the potential for massive fraud, and you're looking at something that could fund a lot of covert activity... and indeed, may have been doing so for a very long time...
... see you on the flip side.