View Full Version : Federal Reserve Admits Hiding Gold Swap Arrangements, GATA Says

09-24-2009, 02:44 AM
http://l.yimg.com/a/i/us/fi/gr/business_wire1_106x27.gif (http://www.businesswire.com/) Federal Reserve Admits Hiding Gold Swap Arrangements, GATA Says

Press Release
Source: Gold Anti-Trust Action Committee Inc.
On Wednesday September 23, 2009, 9:30 am EDT

Buzz up! 48
Print (http://finance.yahoo.com/news/Federal-Reserve-Admits-Hiding-bw-2550373789.html/print?x=0)

MANCHESTER, Conn.--(BUSINESS WIRE)--The Federal Reserve System has disclosed to the Gold Anti-Trust Action Committee Inc. that it has gold swap arrangements with foreign banks that it does not want the public to know about.

The disclosure, GATA says, contradicts denials provided by the Fed to GATA in 2001 and suggests that the Fed is indeed very much involved in the surreptitious international central bank manipulation of the gold price particularly and the currency markets generally.
The Fed's disclosure came this week in a letter to GATA's Washington-area lawyer, William J. Olson of Vienna, Virginia (http://www.lawandfreedom.com/ (http://us.lrd.yahoo.com/_ylt=Aijibgdy3VKUBwTaE.40rSvjba9_;_ylu=X3oDMTE2Mmp vdWhnBHBvcwMxBHNlYwNuZXdzQXJ0Qm9keQRzbGsDaHR0cHd3d 2xhd2Fu/SIG=16734fvrp/**http%3A//cts.businesswire.com/ct/CT%3Fid=smartlink%26url=http%253A%252F%252Fwww.law andfreedom.com%252F%26esheet=6056812%26lan=en_US%2 6anchor=http%253A%252F%252Fwww.lawandfreedom.com%2 52F%26index=1)), denying GATA's administrative appeal of a freedom-of-information request to the Fed for information about gold swaps, transactions in which monetary gold is temporarily exchanged between central banks or between central banks and bullion banks. (See the International Monetary Fund's treatise on gold swaps here: http://www.imf.org/external/bopage/pdf/99-10.pdf (http://us.lrd.yahoo.com/_ylt=Atn5KTOWfB5.JV6zwBBsUzbjba9_;_ylu=X3oDMTE2dmg 3YzRuBHBvcwMyBHNlYwNuZXdzQXJ0Qm9keQRzbGsDaHR0cHd3d 2ltZm9y/SIG=1859qv6u3/**http%3A//cts.businesswire.com/ct/CT%3Fid=smartlink%26url=http%253A%252F%252Fwww.imf .org%252Fexternal%252Fbopage%252Fpdf%252F99-10.pdf%26esheet=6056812%26lan=en_US%26anchor=http% 253A%252F%252Fwww.imf.org%252Fexternal%252Fbopage% 252Fpdf%252F99-10.pdf%26index=2).)
The letter, dated September 17 and written by Federal Reserve Board member Kevin M. Warsh (see http://www.federalreserve.gov/aboutthefed/bios/board/warsh.htm (http://us.lrd.yahoo.com/_ylt=AhvhBZq_GMA42Xv6Cn8pnjXjba9_;_ylu=X3oDMTE2YTR vamFiBHBvcwMzBHNlYwNuZXdzQXJ0Qm9keQRzbGsDaHR0cHd3d 2ZlZGVy/SIG=191rphgme/**http%3A//cts.businesswire.com/ct/CT%3Fid=smartlink%26url=http%253A%252F%252Fwww.fed eralreserve.gov%252Faboutthefed%252Fbios%252Fboard %252Fwarsh.htm%26esheet=6056812%26lan=en_US%26anch or=http%253A%252F%252Fwww.federalreserve.gov%252Fa boutthefed%252Fbios%252Fboard%252Fwarsh.htm%26inde x=3)), formerly a member of the President's Working Group on Financial Markets, detailed the Fed's position that the gold swap records sought by GATA are exempt from disclosure under the U.S. Freedom of Information Act.
Warsh wrote in part: "In connection with your appeal, I have confirmed that the information withheld under Exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of Exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you."
When, in 2001, GATA discovered a reference to gold swaps in the minutes of the January 31-February 1, 1995, meeting of the Federal Reserve's Federal Open Market Committee and pressed the Fed, through two U.S. senators, for an explanation, Fed Chairman Alan Greenspan denied that the Fed was involved in gold swaps in any way. Greenspan also produced a memorandum written by the Fed official who had been quoted about gold swaps in the FOMC minutes, FOMC General Counsel J. Virgil Mattingly, in which Mattingly denied making any such comments. (See http://www.gata.org/node/1181 (http://us.lrd.yahoo.com/_ylt=AsNKUDsjtNEcaCB.zzd_9.Djba9_;_ylu=X3oDMTE2MnF yMHRzBHBvcwM0BHNlYwNuZXdzQXJ0Qm9keQRzbGsDaHR0cHd3d 2dhdGFv/SIG=16frbalcc/**http%3A//cts.businesswire.com/ct/CT%3Fid=smartlink%26url=http%253A%252F%252Fwww.gat a.org%252Fnode%252F1181%26esheet=6056812%26lan=en_ US%26anchor=http%253A%252F%252Fwww.gata.org%252Fno de%252F1181%26index=4).)
The Fed's September 17 letter to GATA confirming that the Fed has gold swap arrangements can be found here:
http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf (http://us.lrd.yahoo.com/_ylt=AtyQ9SuMxMOZRg8daaFVARrjba9_;_ylu=X3oDMTE2NnZ 1bzg3BHBvcwM1BHNlYwNuZXdzQXJ0Qm9keQRzbGsDaHR0cHd3d 2dhdGFv/SIG=185bhplc7/**http%3A//cts.businesswire.com/ct/CT%3Fid=smartlink%26url=http%253A%252F%252Fwww.gat a.org%252Ffiles%252FGATAFedResponse-09-17-2009.pdf%26esheet=6056812%26lan=en_US%26anchor=htt p%253A%252F%252Fwww.gata.org%252Ffiles%252FGATAFed Response-09-17-2009.pdf%26index=5)
While the letter, GATA says, is far from the first official admission of central bank scheming to suppress the price of gold (for documentation of some of these admissions, see http://www.gata.org/node/6242 (http://us.lrd.yahoo.com/_ylt=AmnxhiDMZomMg_aNeuwVXDzjba9_;_ylu=X3oDMTE2c2l vam4wBHBvcwM2BHNlYwNuZXdzQXJ0Qm9keQRzbGsDaHR0cHd3d 2dhdGFv/SIG=16fvttbj8/**http%3A//cts.businesswire.com/ct/CT%3Fid=smartlink%26url=http%253A%252F%252Fwww.gat a.org%252Fnode%252F6242%26esheet=6056812%26lan=en_ US%26anchor=http%253A%252F%252Fwww.gata.org%252Fno de%252F6242%26index=6) and http://www.gata.org/node/7096 (http://us.lrd.yahoo.com/_ylt=AoTvRF1L_Au_9e7NWyrzHovjba9_;_ylu=X3oDMTE2NXM 0dGh2BHBvcwM3BHNlYwNuZXdzQXJ0Qm9keQRzbGsDaHR0cHd3d 2dhdGFv/SIG=16f30bkte/**http%3A//cts.businesswire.com/ct/CT%3Fid=smartlink%26url=http%253A%252F%252Fwww.gat a.org%252Fnode%252F7096%26esheet=6056812%26lan=en_ US%26anchor=http%253A%252F%252Fwww.gata.org%252Fno de%252F7096%26index=7)), it comes at a sensitive time in the currency and gold markets. The U.S. dollar is showing unprecedented weakness, the gold price is showing unprecedented strength, Western European central banks appear to be withdrawing from gold sales and leasing, and the International Monetary Fund is being pressed to take the lead in the gold price suppression scheme by selling gold from its own supposed reserves in the guise of providing financial support for poor nations.
GATA will seek to bring a lawsuit in federal court to appeal the Fed's denial of our freedom-of-information request. While this will require many thousands of dollars, the Fed's admission that it aims to conceal documentation of its gold swap arrangements establishes that such a lawsuit would have a distinct target and not be just a fishing expedition.
In pursuit of such a lawsuit and its general objective of liberating the precious metals markets and making them fair and transparent, GATA again asks for financial support from the public and from all gold and silver mining companies that are not at the mercy of market-manipulating governments and banks. GATA is recognized by the U.S. Internal Revenue Service as a non-profit educational and civil rights organization and contributions to it are federally tax-exempt in the United States. For information on donating to GATA, please visit here:
http://www.gata.org/node/16 (http://us.lrd.yahoo.com/_ylt=Ai8B1WRZIMNw3WK_vb.Cb2vjba9_;_ylu=X3oDMTE2aDM xZmZxBHBvcwM4BHNlYwNuZXdzQXJ0Qm9keQRzbGsDaHR0cHd3d 2dhdGFv/SIG=16b55csj4/**http%3A//cts.businesswire.com/ct/CT%3Fid=smartlink%26url=http%253A%252F%252Fwww.gat a.org%252Fnode%252F16%26esheet=6056812%26lan=en_US %26anchor=http%253A%252F%252Fwww.gata.org%252Fnode %252F16%26index=8)
People also can help GATA by bringing this information to the attention of financial news organizations and urging them to investigate the Fed's involvement in gold swaps particularly and the gold (and silver) price suppression generally.

09-24-2009, 06:10 AM
I wouldn't be so quick to dismiss GATA.

Bill Cara, a Canadian now living in the Bahamas, has been writing a daily blog for several years in his retirement. Bill has extensive experience with the precious metals mining industry as well as financial markets in general. He built one of the well known Canadian financial powerhouses. He can walk the walk, as they say. Here is how Bill presented the story yesterday:


"Earlier this year, we were honored to be joined by GATA’s founder Bill Murphy at the Cara 2009 Bahamas Conference. Today, I’d like each of you to seriously consider the important role being played by the Gold Anti-Trust Action Committee in outing secret activities of Interventionists such as Humungous Bank & Broker (HB&B), the Fed and the US Treasury in their fraudulent manipulation of our capital markets.


Last evening GATA published the following information:

Fed Admits Hiding Gold Swap Arrangements


The idea that the Fed originally denied any type of swap arrangements, but now is hiding behind the shield of a FOIA exemption is disconcerting.

I made a few bucks on some junior gold miners that I bought a year ago....one is up 120%, the other 400% at the time I sold.....whether I made any money or not is irrelevant - the article is about the US gov't and the Fed's role in woldwide gold markets.

09-24-2009, 04:58 PM
The US fed isn't supposed to have gold swaps arrangments....so if they are doing it clandestinely, then it is wrong. Surely you've heard about Obama's pledge for transparency in Gov't?:D

One thing you generally can be certain of - a gov'ts ability to mismanage finances......picking on a different country, here is an article about England's astute moves:

$4.8bn lost in Brown's gold sell-off
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Print Page:

A correspondent in London | April 16, 2007
Article from:
The Australian

BRITISH Chancellor Gordon Brown is to face major questions in parliament after revelations that he disregarded advice from the Bank of England before he sold off more than half the country's gold reserves at the bottom of the market.
Insiders involved in the decision have broken ranks after an 18-month battle in which the Treasury has blocked attempts by The Sunday Times to make public the official advice Mr Brown received before he sold the British gold.

They have revealed that Bank of England officials had serious misgivings over the Chancellor's determination to sell 400 tonnes of bullion in a series of auctions between 1999 and 2002, when the price was at a 20-year low. Since then the price has almost trebled, meaning the decision cost the taxpayers an estimated pound stg. 2 billion ($4.8 billion).

On Tuesday, Mr Brown will face a Commons grilling over the affair as the Tories seek to undermine his reputation for economic competence.

From interviews with key Treasury, Bank of England and gold market insiders involved in the decision, The Sunday Times has established:

* The Bank of England, which has managed Britain's gold reserves for more than 300 years, was never asked for its advice on whether Britain should sell the gold. A senior bank executive said the timing of the huge bullion sale was "not debated".

* At a secret meeting with senior gold traders, Bank of England officials were warned that the proposed auctions would achieve the worst price for taxpayers. The officials are understood to have agreed with the analysis, but said they were powerless to influence the Treasury.


Ah, $4.8 billion is just a rounding error, or decimal dust in the grand scheme:D

Even better is the Swiss experience:


09-24-2009, 05:12 PM
The US fed isn't supposed to have gold swaps arrangments....so if they are doing it clandestinely, then it is wrong. Surely you've heard about Obama's pledge for tansparency in Gov't?:D

The Fed is not a government agency, therefore Mr. Obama's pledge means absolutamente nada in this.

09-24-2009, 05:15 PM
The Fed is not a government agency, therefore Mr. Obama's pledge means absolutamente nada in this.

Ya, but the backing for any gold transactions comes from the US Treasury

09-24-2009, 05:24 PM
A Federal Judge seems to think the Fed has enough quasi-governmental characteristics to apply the federal FOIA rules:


And from WIkipedia:
...President Obama's Executive Order encouraging open government

On January 21, 2009, President Barack Obama issued Executive Order 13489 that encourages openness, transparency and accountability in government records. This does not change the Presidential Records Act. It did, however, revoke Executive Order 13233 of November 1, 2001. [16]

So yes, the Fed is technically owned by its member banks, but CONgress still has its strings attached.

09-24-2009, 05:27 PM
A Federal Judge seems to think the Fed has enough quasi-governmental characteristics to apply the federal FOIA rules:


I wanna fry the bastards too.

09-24-2009, 05:57 PM
And I agree with you!:)