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GOLD SALES AND THE US DOLLAR

Over the past months and years a number of informative reports have been published at Gold-Eagle. Each of these contributed to the understanding of some aspects of the world economy. In the article below I have tried to pull together some of the ideas which are connected to the relationship of gold and the US dollar. Using this relationship we can attempt to interpret some of our recent financial history.

Let's now consider the question, 'Who benefited from the policy of massive gold sales?' The policy has been well described by a number of analysts here at GOLD-EAGLE, particularly J.N. Tlaga , in Euro And Gold Price Manipulation.

With inflation hidden or kept at bay through massive gold sales (as explained by J.N. Tlaga,) the US appeared to have a strong dollar. This permitted it to import 'cheap' oil. This 'cheap' oil was possible as it was bought with public dollars plus gold sales. This is also the view of Oracle of Alberta: ' as both ANOTHER and Allen have noted, the real currency "oil" is being transacted in the form of $USXXX+XXounces of physical gold.' Demystifying Gold and Oil Trading through the LBMA

There is another editorial here at Gold-Eagle that outlines this view.
The Covert Gold Cost of Oil

And at another editorial we read, from Steve Hickel:

"The paper gold market or gold leasing scheme that developed after the Jamaica Accords in the late 70's was a way for gold and oil to remain inexpensive for the cheap-production oil countries, while keeping the dollar from defaulting a third time. The time would appear to be drawing near in which the dollar may default a third time against the very paper-gold scheme that saved it after the second default. The implications to the US are immense because it purchases most all its goods, including oil in dollars. Were the Euro to become the world reserve currency in place of the dollar then the US would compete with the rest of the world for Euro's. Should that happen, the cost of defense just rose dramatically."
An Open Letter to Congress on the Euro, the Gold Market, and the Dollar

What combination of private and public policies would lead to massive gold bullion, then paper gold sales? In other words, who benefited from these actions?

Leaving aside for the moment the foreign policy questions that directed policy after WWII, can a case be made to suggest that the strong dollar was needed to fulfill another purpose? And what would that purpose be?

If the internal dollar was weakening, but the gold-backed dollar was not, then those in the US were losing value in their US dollar holdings in the US (their homes, savings etc.) Inflation was hidden from them.

While it appeared that American citizens' wealth was increasing (as measured by increasing real estate values, increasing stock valuations, etc.) in reality their wealth was being invisibly eroded by inflation.

As increasingly more dollars were needed to finance government programs, income taxes rose. These taxes were used to pay interest on the national debt (in the richest country in the world!) Where did these interest payments go? To those who were owed money by the US government. And who were the largest claimants?

Why the Federal Reserve Bank of course and commercial banks (according to the J.C. Lyons editorial, Money and Debt, here at Gold-Eagle. "How does a government get in debt to the central bank?

When government expenditures exceed revenues they must sell bonds. The bonds that are not purchased by the public are purchased by the Fed. The Fed and commercial banks own over 1.25 trillion dollars in U.S. government securities." (J.C. Lyons)

To finance the deficit the US government sells bonds to The Fed and commercial banks. To purchase this money the US government issues bonds to acknowledge that it owes the money plus interest to the Federal Reserve Bank and commercial banks.

Thus the free citizens of the US have had their financial impoverishment hidden from them by the charade of a strong dollar and the myth of rising prosperity.

When a loan is called and the debtor cannot pay, collateral can sell for pennies on the dollar. Once we know how much US government debt the US Federal Reserve Bank and the commercial banks control, we know who owns a claim on the assets of the US government. Since the major owners of the US Federal Reserve Bank are known in the public record (see: The Dollar (FED), The Euro and Gold ), we can know who owns a claim on the assets belonging to US government.

In the analysis by Oracle of Alberta we see also the suggestion that the 'that the LBMA has become the world's de facto CENTRAL BANK, at least for the transaction of oil, the world's second most strategic commodity. It is as if those who run the LBMA (including one N.M. Rothschild) are sending warning "flares" to all of us that an iceberg lies ahead of this stupendous market ship "Titanic",' (referring to its publication of its statistics documenting the massive daily paper gold trade.)

Is all this connected to the creator of the Euro? Are we facing: American Revolution, 1776 – nullified?

All of this has been masked by the low price of gold, which has been sold to 'protect' the dollar. In my opinion, gold has been sold to finance the purchase of America.

Robert Bird

12 December 2000

Copyright 2000