MINING, MERGERS, MONOPOLY, AND “PERFECTING THE ...

Last week I blogged about two odd stories from Australia. The first story was about the Australian Reserve Bank's gold, and the second was about a strange "island-prison" that the Australian taxpayer paid money to fund, only to find out that the contractor hired was the Paladin Group, Nazi commando Otto Skorzeny's postwar private "security" company. In conjunction with my very speculative hypothesis that there has been a hidden system of finance in existence since shortly after the end of the Second World War, I speculated with respect to the latter story that perhaps the human trafficking networks were a component of that system, and that "gold", which was originally a code name among the international criminal underground for "drugs", might now be code for humans themselves.

But the real gold itself is what interests me today, because another component of my very speculative "hidden system of finance" hypothesis is the secret recovery by the USA of Axis loot, and specifically, Japanese bullion plundered from Asia during the war, and then (much of it) buried around the Philippine archipelago. This, following the suggestion of Sterling Seagrave and his wife Peggy, who first researched the matter in their book Gold Warriors, was made a component of an entirely-off-the-books bullion reserve, to fund postwar covert operations. I've argued a somewhat different idea, namely, that the amount of money acquired vastly exceeded any funding requirements for covert operations, and therefore that in addition to that purpose, there must have been some other purpose for the hidden system. That, I think, was a long-term and very secret black project research "infrastructure."

Which brings us to gold, and that hidden system. A hidden system of bullion reserves in essence makes three things possible, each essential to the smooth functioning of any such hidden system: (1) as a reserve, it can be used to inject liquidity into that system, as needed, but that means (2)since it is a hidden system and a hidden reserve, it can be rehypothecated over and over again, thus driving the liquidity, but because of that rehypothecation, can gradually emerge from its hidden status and into the public realm, especially if the physical bullion itself is transferred in the process of that hypothecation. This in turn requires (3) the control of the information about bullion reserves, for if there is no reliable information, the pricing mechanism of bullion can be more easily manipulated, and with that manipulation, the effects of the hidden system on the public one can be damped and cloaked.

And that brings us to today's article that was shared by Mr. E.G. The article was actually from September of last year, but with so many stories about gold out there, it's now time to talk about it, and give it our usual "High Octane Speculation" treatment:

Randgold And Barrick To Merge In $18BN Deal, Creating World's Largest Gold Miner

The story - and implications - of this merger is captured in the first paragraphs:

As gold prices cling stubbornly to the lowest levels in a year as US stocks continue their record-breaking tear, two of the world's biggest gold miners are sensing an opportunity. As the Financial Times reports, Canada’s Barrick Gold (the world's largest miner) is preparing to merge with Randgold Resources (its UK-listed rival) in an all-share deal that will create the world's biggest gold miner, with an $18 billion valuation and a dominant mining position in Africa.

Per the Wall Street Journal, Barrick shareholders will own 67% of Randgold, and Randgold investors will own 33% of Barrick. Put another way, Randgold shareholders will own 33.4% of the combined company, with the rest controlled by investors in Toronto-based Barrick. The deal still needs to be approved by shareholders.

More than the mining synergies (Barrick runs massive mines in Nevada and throughout South American while Randgold ha extensive operations in Mali and the Democratic Republic of Congo), WSJ and FT points out that the merger will bring together two outsize personalities in Barrick’s John Thornton, a former Goldman Sachs executive, and Randgold's Mark Bristow. Bristow and Thornton reportedly recently spent a month together hashing out the terms of the deal, though talks began all the way back in 2015. Should the deal close, Thornton will serve as chairman of the combined company while Bristow will take over as CEO.

Now, there's a catch, or rather, two catches, in this story, and we'll get back to that, but first our High Octane Speculation: if one wants to maintain that hidden system's viable function, one simply has to obfuscate the information about the actual amount of bullion, and particularly gold, is "out there." This I pointed out in a lengthy chapter in Covert Wars and Breakaway Civilizations, and as most regular readers of this website are probably aware, such "intentional inaccuracies" are part and parcel of the operating procedure of central banks vis-a-vis their gold holdings. But one must also control another source of information, and that's the mining companies producing the bullion.  In other words, I view these mergers as being as much if not more about controlling the information about gold, in addition to being about the mining of the substance itself. Not for nothing does the article mention that the CEO of Barrick, John Thornton, as a former Goldman Sachs executive.

Ok, so what are the two "catches" I mentioned? The first is this, mentioned a little later in the article:

Toward the bottom of its story, the FT revealed that China-based Shandong Gold was essentially acting as a silent partner in the deal, buying $300 million of shares in Barrick, while Barrick will also buy the equivalent amount of shares in Shandong Mining.

Once again, the merger-to-control-information pattern is evident (if my High Octane Speculation be true), but the "catch" is that this to some extent is an admission of the Chinese into the hidden financial system that I have hypothesized. The question is, why? For that, we'll have to wait for Part Two, tomorrow...

See you on the flip side...