Who is Buying all the Gold that has been Sold in the Past Three Years ????

June 18, 1998

With the continual drop in the price of gold the question as to WHO IS BUYING ALL THE GOLD has to be raised yet again, I would like you to consider the following hypothesis:

IT WOULD APPEAR THAT THE MOST OBVIOUS PLACE IS WHERE NOBODY IS LOOKING ~THAT IS THE U.S. OF A

You may think that the U.S. GOVERNMENT condemns gold at every opportunity, however that in fact may be a plan to manipulate the world's perception in order to cloak their real intentions (and keep money pouring into U.S. Treasuries) which is to lower the Price of Gold so that they (USG) can buy it up at bargain basement prices.

THE U.S. FED + BANK OF ENGLAND AND THE UBS

Let us assume that the U.S. Government has a secret objective to grab as much of the world's Gold as they can at the lowest possible price.

The first task would be do push gold to the lowest price which would require the use of derivatives/ to draw in the producers and commercial users to get the Short sales ball under way which would in turn bring in the speculators and encourage short sellers.

As soon as technical analysis says a GOLD bottom is near, bring in Euro gold sales and any other stories for a scare…….

AND WHEN YET ANOTHER GOLD BOTTOM IS DECLARED BRING ON THE SWISS…..

However for there to be a modicum of belief in the Swiss Claims to be selling gold, referenda aside, (a bit Like Warren Buffet announcing last July he was planning to buy and hold Silver) there must be a reason that could be believed.

~ The Nazi Gold Saga ~ , why has it taken so long for payments to be considered I was told about the Swiss and their Nazi Gold dealings in 1966 by a Swiss who did give me the name of a book written by a Swiss on the subject ( the name long since forgotten) when I lived in Switzerland.

On re-reading Japan between a Rock and a Hard Spot ORACLE (14 July 1997), it made me think that somebody in the U.S. Government must also have read this ~ since then the price of Gold has fallen even faster - remember, the longer the price is kept low the more gold can be bought by the U.S. (and others in cahoots). See following URL: (http://www.gold-eagle.com/gold_digest/oracle714.html )

If you will accept the above for a moment, the Swiss would make a lot of money (GOLD) for their part, and the further the price of GOLD drops and the longer it goes on the more they make.

Any further comments on GOLD bottoms and it should get easier with gold holders having burnt fingers/wallets - Drag out the Swiss Gold sales once again. Ever wonder why the Swiss appear to be more cooperative with the U.S. Government with regard to banking secrecy laws of late?

Why the bank of England involvement? For large transactions to go unnoticed the loco LBM would be used for purchases executed by the UBS.

What are the benefits to the U.S. Government?

They need some form of Insurance

  1. The binge of dollar creation will not go on forever - the 15 trillion US$ debt (please ignore the U.S. debt to the penny site). Insurance in the form of much greater Gold holdings would give the U.S. Government more control over the Gold price - something they would hate to relinquish.
     
  2. There will be a time when the US$ will not be the major reserve currency of the world and that may not be too far away. I do not think Asia will want to go through its current problems yet again without using hindsight to try and avoid a repetition of their current debacle - and therefore, they will see the advantages of holding gold rather than U.S. ~ IOU's.
     
  3. Once the US$ is no longer the major reserve currency the problem of servicing U.S. Debt will really begin and require high interest rates. (look what happened to the £ sterling)
     
  4. The U.S. probably does not like the thought that Europe at least officially owns more GOLD than the U.S.A. And would like to redress the balance in its own favor.
     
  5. By vastly increasing U.S. Gold reserves at current low prices they will still have hard assets and be able to do " deals."
     

This hypotheses removes the Question of WHO is buying gold, but adds a new question if it is the US of A buying GOLD:
How much have they accumulated?

Anyone care to speculate on how much they could have bought?

The table below shows what this author believes might be occurring. It contemplates two hypothetical cases of possible gold accumulation by the U.S. Government (USG): One Billion ounces and 750 million ounces.

In the event the USG had as its goal to increase gold reserves to One Billion Ounces, it might cost as little as $236 billion IF DISCREET COVERT BUYING CONTINUED. This would represent an average price of a mere $320 per ounce.

USA stated gold reserves 261.8 Million ounces  
Target A 1000 Million
Ounces ( Billion)
 
  Buy @ Average oz Cost US $
Shortfall 738.2 Million ounces $320.00 $236.224 Billion
Target B 750 Million
Ounces ( Billion)
 
  Buy @ Average oz Cost US $
Shortfall 488.2 Million ounces $320.00 $156.224 Billion

One might understandably ask WHAT MONETARY IMPORTANCE THIS MIGHT HAVE? Let's consider the following hypothetical.

The U.S National Debt is rapidly approaching $6 Trillion. Via control of One Billion gold ounces, the U.S. Fed is in a leveraged position to REVALUE the price of gold to $3,000 per ounce. At the new price U.S. gold reserves would be valued at $3 Trillion. Consequently, this would provide a 50% gold backing to the record burgeoning National Debt of $6 Trillion. Confidence in Uncle Sam's ability to pay his IOUs would be restored - thus allowing the USG to further increase the National Debt to resolve many looming problems. Moreover, creditors (i.e. many foreign governments) would be persuaded NOT to dump U.S. Treasuries - as the greenback now enjoys intrinsic worth via the gold backing.

Needless to say many positive political ramifications would abound (depending on which side of the "fence" you are on).

U.S. ranks third in world gold production with 240 tons per year