Central banks don’t want their leased gold back
February 28, 2009 by goldguru · Leave a Comment
11:12p ET Friday, February 27, 2009
Dear Friend of GATA and Gold:
Tonight your secretary/treasurer had an exchange about gold leasing with a participant in the wonderful USAGold.com forum sponsored by Centennial Precious Metals in Denver (http://www.usagold.com/cpmforum/). Since gold leasing is at the center of the gold suppression scheme and is a bit complicated, the exchange might be worth sharing, so it’s appended.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
Gold Leasing by Government — A Question
“How long can the U.S. government protect the dollar’s value by leasing its gold to bullion dealers who sell it, thereby holding down the gold price?”
– Former Assistant U.S. Treasury Secretary Paul Craig Roberts in a recent essay (http://www.counterpunch.org/roberts02242009.html)
I am hoping someone can provide me with an explanation of how this machination works. The government leases gold to a dealer. This means, I presume, that the dealer gets to take physical possession of the gold for a period of time and pays a fee for the privilege. What happens when that time expires? The gold must be returned to the government, and unless the price of gold has fallen, the dealer takes a bath. What am I missing?
– Tahoma.
*
Tahoma, to reply to your question about gold leasing. …
It works this way.
While central banks traditionally have said they lease gold to earn a little money on a supposedly dead asset, in 1998 Federal Reserve Chairman Alan Greenspan told Congress that this was not true. Central banks lease gold, Greenspan admitted, to suppress its price:
http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm
read more