There has been a great deal of commotion of late, and over these past few months, about China and their growing influence in the gold market. It is coverage well deserved and very important. It got me thinking it would be a good time to go a bit retro re the GATA story as it revolves around gold, the Chinese, and the Russians … and why it is so important for gold investors to know what they know … as well as what GATA knows.
It is very simple. The Gold Anti-Trust Action Committee was formed in January of 1999 to expose the manipulation of the gold market. At the time we thought it centered around various bullion banks, such as JP Morgan, Chase Bank, Goldman Sachs, etc. It wasn’t too long after that we realized the manipulation was far more vast … that it included our Fed, US Treasury, Exchange Stabilization Fund, and other central banks such as The Bank of England.
After GATA was formed, the price of gold spent a couple of years below $300 an ounce. Oh how people forget the real deal as time goes by. Back then GATA railed against the hedging practices of the likes of AngloGold, Barrick, etc. At the advice of The Gold Cartel bullion banks, or in cooperation with them, they sold their forward gold production years in advance. GATA POUNDED the table about the absurdity of it all … that it was not only sinister, but a fool’s game. We were attacked/mocked by the gold establishment for vilifying the hedging producers and the bullion banks for their role in the gold price suppression scheme.
Long story short…
*AngloGold and Barrick eventually closed out their hedge books, taking something like $8 to $10 billion in LOSSES apiece.
*GATA is still around and thriving, Goldman "Hannibal Lecter" Sachs let its hedging guru, Don McConvey, go as JP Morgan did to its guru, Kevin Crisp. While The Gold Cartel’s initial ringleader, Goldman Sachs, disappeared from the gold rigging scam a few years ago.
*The price of gold rose to $1900+ per ounce, corrected, and is now on its way to $3,000 to $5,000 per ounce … which is the price I jumped up and down about at our Gold Rush 21 Yukon Conference in August of 2005 … a price (in my opinion at the time) that would eventually be needed to clear the market. The price of gold back then was $436 per ounce!
How could GATA get it so right and the bullion banker big shots get it so wrong? Simple again … GATA knew that the supply/demand situation was far more bullish than acknowledged by EVERYONE in the mainstream gold world. We KNEW that a 1500 tonne demand deficit at the time was being met by surreptitious central bank/Gold Cartel selling. We also knew The Gold Cartel could not maintain that sort of central bank gold drain. This was not acknowledged by the gold world establishment, as it would have revealed the gold price suppression scheme.
I could go on and on, so let’s get to the nitty gritty of what ought to be of investment interest to you right now. While the US will not give GATA the time of day (CNBC’s Ron Insana interviewed me in February of 1999. Once CNBC heard what GATA had to say, we have been banned from CNBC US ever since.), the Russians and Chinese have been all over what GATA has overtly laid out, and quietly positioned themselves accordingly as to their accumulation of gold reserves.
This is no braggadocio on GATA’s part. They found out some time ago that the gold price was artificially suppressed. This is what GATA knew so long ago and explained/documented. The Gold Cartel was secretly using up their available central bank gold supply in order to suppress the price. This was UNSUSTAINABLE and was obvious to GATA. We KNEW that The Gold Cartel could not continue to suppress the price, only MANAGE its price on the upside … which is why the price has now risen 12 years in a row. My term, for umpteen years now, has been to call it a "managed retreat." The Gold Cartel can only play their pitiful games to win battles, on their way to losing The Gold War … as the price goes UP, and UP, and UP, year after year.
The bottom line is the Russians and Chinese know this Gold Cartel is artificially suppressing the price of gold to suit their own agenda. On a bigger picture basis, the gold price is ALWAYS too cheap, year in and year out. For example, it is commonly stated that if the price of gold kept up with the acknowledged US inflation numbers, the price would already be $2500 per ounce. AND, that is without taking into account all the money printing going on in the US and Europe at the moment.
The Chinese and Russians have known for YEARS that gold has been way too cheap and why, which is a main factor in their buying. GATA was first clued in the Russians, who are major gold producers, were paying attention to GATA in 2004…
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