Diplomatic cables disclose more conspiring by Western governments to rig gold market

Two U.S. State Department diplomatic cables from 1974 obtained by GATA researcher R.M. show Western central bank and treasury officials engaged in secret discussions — that is, conspiring — to control the price of gold and prevent any increase in its recognition as money.

The first cable was sent in May 1974 by then-Treasury Undersecretary Paul Volcker, who went on to become chairman of the Federal Reserve Board, from the U.S. embassy in Paris to the U.S. secretary of state in Washington for forwarding to another treasury undersecretary. The cable conveys a report by Netherlands Treasurer-General C.J. Oort about a meeting of European Community finance ministers in the Dutch city of Zeist on April 22 and 23.

Two proposals for controlling the gold price were discussed in Zeist, Oort wrote, according to Volcker’s cable: “One is that monetary authorities periodically fix a minimum and a maximum price below or above which they would not sell or buy on the market. The other consists in creating a buffer stock to be managed by an agent who would be charged by the monetary authorities to intervene on the market such as to ensure orderly conditions on the free market for gold.” …

The second State Department cable is dated July 1974 and appears to have been sent by the U.S. financial attache in Bonn, then West Germany’s capital, to the secretary of state in Washington with copies meant for the Treasury Department and Federal Reserve. The cable reports the financial attache’s conversation with Otmar Emminger, then vice president of the West German central bank, the Bundesbank, who went on to become the Bundesbank’s president as well. …

“Emminger said that in connection with gold he wanted to bring up one small point. Some German periodicals, particularly the Wirtschaftswoche, had reported that the recent U.S./Saudi Arabian agreement for investments in U.S. Treasury bills contained a gold clause. He knew this was not true, but if we could find occasion to make this clear it would be helpful since the supposed fact was used to argue that even the U.S. had to agree to this ‘comeback’ for gold.” …

http://www.gata.org/node/12076

This is all being done in the name of national interests and “modern” economic theory, but a gold standard would probably be preferable to debt-based fiat currency, which is a recipe for endless concentration of wealth.  It’s clear whose interests the suppression of the gold price serves.  But in any case a gold standard would be nearly as bad as the present system.  What we need is sovereign currency, controlled by democratic government.  See monetary.org

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