Sunday, July 6, 2014
Strategic Gold Buying And Selling By The Federal Reserve Is Possible But Not Without A Master Of Finance Running The Organization.
The US Federal Reserve May Have a Golden Secret: it May Be Panic Buying Gold to Fill or Replace 'Lost' Strategic Gold Reserves Lex Loeb Contributor Network . The Federal Reserve of The USA may have joined the international gold buying panic of other central banks. The announcement that the fed needs 600 billion dollars or more for their secret operations seems to point to a gold buying spree. It could be one of the biggest folly's in history or maybe it has some real lasting value as an investment in America? There are questions of whether the US actually still holds the gold reserves it is supposed to have and there are new people like Ron Paul in Washington DC who are looking to investigate these allegations. If the Gold that is supposed to be in reserve is not there then the Fed and the treasury are running a criminal enterprise which explains why a huge gold reserve purchase maybe what the Fed is really up to. The Fed really does need some oversight. This 600 billion dollar money printing scheme may even be twice as much. No one knows how the US Treasury is involved because the details are a secret. The horrible thing that is happening now is ...central banks are panicking and buying gold themselves. I am afraid that Bernake may actually be printing dollars in these huge quantities to put gold reserves back into Fort Knox. There are people saying that Fort Knox was robbed by insiders over the past 50 years and there maybe little actual gold left. I know i can't trust the government nor its accounting practices. I can only say ," I don't know." What does 600 billion to 1.2 trillion dollars worth of Gold buy for the federal reserve bank? It is hard to say. The fed could get Gold at production cost of less than $400 an once if the US Treasury made it a tax free transaction to companies like Newmont mining...or gave them advance tax credits into future years ahead. It is hard to imagine the US government not giving itself the ultimate market advantage that way . It is very unlikely they would buy at spot where anyone gets a 50% mark up on a basic commodity? Well government is often really stupid so they could buy retail... I actually called that over advertised rosland capital to find out about them yesterday once i got wind of the Bernake plans to see what exactly they are selling. They are retail spot market price plus a big commission and it seems to be a full scale boiler room operation. Once i hear that new jersey mob like accent on the phone I can tell a boiler room operation from just listening to a few words on the phone or the answering machine where the message was recorded. Thats bad news. It tells me that gold is way out in bubble trouble land and Bernake if he really is thinking of a secret re-introduction of the gold standard following other central banks since the crash then this could be one of the most colossal financial fiasco's in world history. Ron Paul spooks the fed like no one else because he consistently calls for a review of what has been going on at the fed and it won't be the ordinary Q and A session in front of congress but an actual investigation that would be made public. Full public disclosure. Coupled with the possible investigation that others have call for on what happened to gold reserves at fort Knox which are supposed to still be the world's most substantial reserves of gold you can see why Bernake and the US Treasury may be in panic mode right now. The figures given by the fed seems to match the amount of money that would take to re-deposit gold reserves that may already be missing. That is where I got my unsavory sniff test results that show something may really stink in Denmark that is not danish cheese. Now if this 600 billion plus is a gold buying binge by the fed it means that 1. the re-installment of the gold standard is supposed to come as a shock to almost everyone except insiders. 2. that there is much more that the fed has been hiding over the years including vacant gold vaults that are supposed to be full and may soon be so and 3. A very offensive posture on the part of the fed against foreign reserve banks. 4. It means the suckering of everyone holding us dollars in a way that proves Glen Beck is a financial genius which would only be the case if the Fed once discovered buying such massive amounts of gold kicked off a world buying spree that would push gold up to stratospheric levels. $5000 an once plus or minus. This is science fiction still because the fed appears to be trying to buy up reserves very quietly. I had suspected the federal gov may have depleted its emergency oil reserves back in the gulf war because of some funny things happening with price on world markets as the dollar declined. Then i saw the full page ad in the wall street journal demanding an accounting of US reserve gold. And now this 600 plus billion...For what? Where is the fed going to invest it once it prints it? It only took a moment to realize it was going to buy gold reserves after getting word from Mario Gabellii that central banks were again going crazy buying gold went he price is outrageous. In a way...the traditional gold reserve system the fed actually has to do this immediately if the other central banks are moving in that direction . They have no choice. You can't believe the junk in the financial papers then about what Bernake is doing with the cash he wants to work with the Treasury to print. You also can't believe the feds will be paying spot sucker retail prices which means the Treasury will be giving up present and future taxes to get gold cheaper now. Now remember all of this is secret. It is classified as top secret if true and therefore knowing what i know about real live central baking it probably is true. Now the federal reserve could be making a horrible blunder doing this as already discussed because the price of gold can actually break and even if they pay wholesale prices the prices of a market overly flooded with gold could be catastrophic . The fed could do a better job cornering silver as the Chinese claim they are trying to corner the market for trace heavy element/ rare earth metals instead of bothering with gold. Unfortunately the other central banks are moving faster than the fed to do this. can you imagine the fed buying euros or yen or yuan and not gold to keep up with the other reserve banks? They think they have to buy gold now there is some kind of animal magnetism that gold has that no one can explain. How to know it is happening? The price of gold should continue to spike in the present bubble mode it is and the spike will seem totally illogical and not related to the dollar or euro because remember printed dollars or non printed digital dollars on computer accounts only will be used to pay for these stocks. World mining companies stocks of gold on reserve will go below zero then suddenly and their profits will explode because the government will actually be buying futures contracts and options with set delivery times. It is not like the delivery will be to fort Knox or the dept of the treasury or the fed . The contracts will be in personal sounding names like Joe Smith Chicago because they don't want any attention. The markets already seem to be showing this with gold because we see gold going up where there is no reason yet for anyone to panic and unload dollars on a wholesale basis . Gold is going up not even as fast as the stock market in sync with it. So we do have central bank buying going on. Not just China. But every central bank has virtually quit buying printed foreign currencies for reserves and switched to gold. The boiler room outfits selling gold the public are going to go on the ride of their lives soon along with their customers. Other questions remain if the fed can just print up depository receipts for gold they plan to take possession of or if they have to have it on physical reserve for it to count. The old gold reserve system was never totally forgotten it is about to be reborn or so it seems. Some think that the Fed should be abolished. It can't be abolished without some substitute. Some think gold and silver reserves by themselves are enough to replace the fed but in the crash we just had the fed saved the country from what might have been a worse situation although they... could have done a lot better with a new charter that opened emergency fed bank lending to all citizens instead of just the big banks. The fed and the treasury could have also cut tax liabilities in an emergency but would not go there. One reason we absolutely needed the fed was in the crash was that with Freddie Mac and Fannie Mae controlling the whole darn home mortgage market was that we faced something even worse than the south sea bubble collapsing had it not been there. The south sea bubble was government chartered. The tulip craze was an example of a non government chartered bubble. Gold is now in a tulip craze and our banks are still coming down from a government chartered high. The next problem for why it cannot be abolished is that the fed is a central bank among federal banks. If we abolish it George Soros will make us pay dearly by joining with central banks in Europe and Asia to pull the financial rug out from under America. The reason the fed may be in a panic now to refresh gold reserves is because it is a great big stick against foreign credit claims if the gold reserve system takes the place of the fiat currency reserves. We don't need the fed then to have the gold reserves but we do need companies as big as Chase Manhattan or Microsoft to have Gold reserves and play the same role. The folly of the fed comes in if they buy gold and gold completely collapses in value to below production costs after a continued industry production build out and the ongoing boiler room retail bubble in progress pops. Believe it or not a collapse in the price of gold now can actually lead to the great depression that Bernake is trying to avoid because by some metrics decline in gold prices is actual deflation. Most people who watch gold against currencies see the rise as at least in part as a sign of underlying inflation . Too much gold hits the market and we have gold deflation. Anyone owning gold as a hedge having paid high prices instantly has less purchasing power and that could include the federal reserve. But not to worry it can go on printing dollars to bail itself out. We maybe watching one of the great folly's of all time if the central banks all go nuts buying up gold reserves only to see the price of gold collapse. Being governments they will proclaim success even when they fail nd especially when they fail. One good thing for gold bugs is that if the fed re-establishes the gold reserve they will hoard it on a longer time scale than individuals can who might need some to pay for their living expenses. Once gold reserves grow the federal reserve puts it in vaults or they just pretend it is in vaults and issue paper based on the gold that is supposed to be there because transporting gold is a big ordeal. shipping is expensive as one excuse. This history of gold reserves is that Kings tended to run company towns where they paid troops in gold and then hoped to get it back in the treasury. When foreigners wanted payment in gold sometimes they found they just had to go to war , one king against another, to open the treasury of the other to get payment. The point is that the US armed forces and gold reserves together make a long term investment that could last centuries. Cortes raided the Aztec Gold Vaults in a similar fashion as had been done for centuries in European conquests. It is not just gold in the reserve vaults of a government but the power to keep the gold in the vault and to issue paper based on the gold in the vault as opposed to having to relocate the actual gold to creditors. China may think it has a claim on US gold if gold were to become the reserve currency but it does not. China has a claim to dollars at the moment in federal notes. That won't really change short of China being able to overpower the US Military and to go in and physical open and raid the vaults or to do to the us what Britain and the allies did to Germany after the first world war which proved catastrophic to everyone involved because it led to world war 2 being an even worse war. The central banking system with paper arrangements and transitions is much to be preferred to economic warfare. . Close