This argument was served by overnight express mail upon all the attorneys of record in Howe vs BIS et al., and submitted to the US District Court in Boston on October 23, 2001, with motion for leave to have it filed. Because of its size, it is presented here in three parts.
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31. The Special Data Dissemination Standard (SDDS) was established by the International Monetary Fund (IMF) in order to provide uniform bulletin board so to speak for member countries to disseminate their financial data, such as consumer prices, interest rates, international reserves, etc, to their fellow members, based on rules and definitions in the 5th edition of the Balance of Payments Manual (BPM5), published by the IMF in 1993. SDDS was not meant to be imposed on the entire IMF membership. It is a proposed high standard of conduct to which member countries may subscribe voluntarily. Subscription to the SDDS was opened in early April 1996 by a letter from the IMF Managing Director to all IMF Members and Governors. To date, there have been 49 subscriptions. (http://dsbb.imf.org/overview.htm)
32. Independently from the IMF, a Committee on the Global Financial System (CGFS) began to develop an improvement, entitled Data Template on International Reserves and Foreign Currency Liquidity, intended to be a prescribed component of the SDDS.
33. CGFS is harbored by the Bank for International Settlements, and it takes its marching orders from G-10 central banks, whose membership list includes eleven countries: The United States, Canada, Japan, Germany, France, The United Kingdom, Italy, The Netherlands, Belgium, Sweden and Switzerland. This means that Messrs Alan Greenspan and William J. McDonough along with the Bank for International Settlements, the defendants herein, not only knew that this Data Template was being developed, but may have actually approved it. Any doubt about it can be easily dispelled in the course of discovery proceedings, if the complaint is not dismissed.
34. CGFS is an offshoot of Euro-Currency Standing Committee (ECSC) which became redundant when eurodollars became redundant. It would therefore stand to reason that searching for means to salvage those redundant eurodollars would be within this organization's natural sphere of interest.
35. On March 23, 1999, the IMF Executive Board approved the incorporation of the Data Template on International Reserves and Foreign Currency Liquidity into the SDDS as a prescribed component with a transition period to run through March 31, 2000. (http://www.imf.org/external/np/sta/ir/index.htm) To assist the subscribing governments in preparation of the Template data, Operational Guidelines were developed by the IMF Statistics Department in consultation with the CGFS, the European Central Bank (ECB) and IMF member governments, and issued in October 1999. (http://dsbb.imf.org/opguide.pdf)
36. Then came a great surprise. Seven governments out of the forty nine governments subscribing to SDDS - Brazil, Ecuador, India, Indonesia, Israel, Korea and Mexico - elected not to subscribe to this Data Template.
37. As a result, the Data Template on International Reserves and Foreign Currency Liquidity is now "redisseminated" on the IMF external site with the following disclaimer in bold print: (http://www.imf.org/external/np/sta/ir/index.htm)
"Please note that re-dissemination of the template data by the Fund does not constitute endorsement of the quality of the data by the Fund.
38. And so, if this Court would like to access the United States international reserves data through the IMF, two separate presentations are available:
39. To grasp the real meaning of this Data Template on International Reserves and Foreign Currency Liquidity it is necessary to understand what its Operational Guidelines say about gold. The paragraphs 98, 99, 100 and 101 of these Guidelines are quoted here verbatim ... [omitted here; see http://dsbb.imf.org/opguide.pdf] The purpose of these Guidelines is to convince the officials of the subscribing governments to embrace openly irrational system of accounting in order to make the resulting statistics completely opaque to the public in general and US Congress in particular, namely, to report gold bullion reserves as unchanged when in reality they are gone forever. This Court's special attention is respectfully directed to the peculiar distinction between "economic ownership" and "legal ownership" in a gold swap that is advanced in footnote 35 to paragraph 100. It is a downright feudal concept, which suggests that the whole thing is of English provenience.
40. The European Central Bank, which served as a consultant to the IMF in developing its Operational Guidelines to CGFS Data Template on International Reserves, released in October 2000 its own guidelines - entitled Statistical Treatment of the Eurosystem's International Reserves - http://www.ecb.int/pub/pdf/statintreserves.pdf - which adopt all CGFS innovations with disarming sincerity. In a highlighted paragraph, they state inter alia:
"... reversible transactions in gold do not have any effect on the level of monetary gold regardless of the type of transaction (i.e. gold swaps, repos, deposits or loans), in line with the recommendations contained in the IMF guidelines."
While IMF guidelines say:
"To minimize risks of default, monetary authorities can require adequate collateral (such as securities) from the bullion bank."
ECB leaves little room for national central bank's discretion:
"Generally, high quality collateral is required by the NCB, which is returned to the gold borrower once the agreed term of the contract expires. At that time, the arranged revenue of the gold loan/deposit is paid to the NCB by the borrower."
41. The policies disclosed in IMF Operational Guidelines and ECB Statistical Treatment indirectly explain how does the gold price manipulation really work. We don't need defendants testimonies anymore to grasp its basics. There are two keys that open the doors on the entire panorama:
42. A collateral of US Treasury securities is now required for gold borrowings. This innovation is on its face perfectly reasonable in view of the fact that Bank of Portugal lost its gold leased to Drexel Burnham Lambert when that firm filed for bankruptcy. Because the gold loans are of short durations, and are routinely rolled over, all of them must have been collateralized by now.
43. Treating all reversible transactions in gold as collateralized loans makes them opaque to the public, as IMF Operational Guidelines explain at the end of footnote 35 to paragraph 100...
44. Because of across the board collateralization of reversible gold transactions, every single ounce of central bank gold that is now swapped, on loan, or under repurchase agreement is for all practical purposes IRREVERSIBLY SOLD. Knowing this, no central bank will ever rock the boat by calling-in any gold loan or insisting on strict compliance with the terms of any swap or repurchase agreement. And to eliminate the second source of instability, Alan Greenspan and Paul H. O'Neill are now lobbying Congress for a netting legislation, which will allow to unwind derivative contracts threatened with insolvency by reducing them to a net settlement figure (with cash settlement provisions statutorily injected into gold contracts). So, if any of the defendants will try to use a specter of a worldwide financial collapse as an argument against denial of the motion to dismiss, it is respectfully submitted that no possibility of such collapse exists.
45. The Secretary of the Treasury could assert in his memorandum that the ESF has not since 1978 dealt in gold, including "gold swaps", because it was never the ESF but the Secretary himself who has been swapping US Treasury gold to the bullion banks. US gold goes to bullion banks in exchange for US Treasury securities, and its disappearance is not reported to Congress as long as the counterparty to each swap is a foreign entity, to qualify such swap as international reserve transaction, which in turn brings in the magic of the unheard of methods of accounting introduced by CGFS Data Template.
46. This is the real purpose of this openly irrational concept of accounting the Committee on the Global Financial System nearly succeeded in converting into official IMF policy. Again, this is not the official policy of the IMF. This is a failed amendment to a legitimate policy, which now functions as a different standard, parallel to SDDS, under IMF disclaimer in bold print. Its sole purpose is to throw the veil of legitimacy on a common fraud that is being perpetrated by a group of conspiring central banks. This amendment was rejected by seven governments subscribing to SDDS, that's why it was not incorporated to SDDS as originally intended. And in view of the fact that CGFS takes its orders from G-10 central banks, depositions from Messrs Alan Greenspan and William J. McDonough are indispensable for untangling this web of conspiracy. Granting their motions to dismiss would operate to keep all these shadowy machinations secret.
47. When Secretary of the Treasury swaps this nation's gold for US Treasury securities, to be sold into the market and never seen again, this only amplifies the true nature of the fiat dollar regime as administered by the Federal Reserve System. If the collateral securities were originally issued in exchange for gold coins, exchanging them now for gold bullion reserves would be a fair deal. But they were issued in exchange for de facto counterfeited money whose apparent value comes directly from diluting the value of money already in circulation. These securities represent US Treasury's solemn undertaking to repay the unearned money, created out of thin air by computer entry at the Fed, in completely different money, the earned money, earned by Regular Joe and Plain Jane in the sweat of their brows.
48. The resulting looting of this nation's gold by exchanging it for Treasury's IOUs, is not any different than looting of the available cash from the Social Security trust fund in exchange for similar IOUs. In both cases, the issuer of the IOUs does not have now, nor will have in the future, any assets other than those taken away from the taxpayers, which means that the owners of the looted assets will be asked in the future to pay for the replacement assets one more time with their new earnings. And Secretary of the Treasury does not even keep a record of Treasury's securities which are sold through the banks and Fed-anointed Primary Dealers.
49. Every business day, whenever gold price begins to build a rally momentum, somebody always dumps enough gold to bring the price down. Whose gold it is? Who can be so rich as to dump thousands of tons of gold below its inflation value over so many years?
50. It is respectfully submitted that this gold belongs to the People of these United States, and that it is up to this Court to stop this dumping, merely by denying defendants motions to dismiss.
51. On May 7, 2001, the undersigned submitted request for information under Freedom of Information Act to the US Treasury about the ownership status of US Treasury gold in West Point, New York. Follow up and de novo requests were submitted on July 10, August 6, and August 13 to the Secretary of the Treasury and to the President himself. Copies of those requests, with copies of responses, are attached hereto as consecutively marked exhibits "A" through "G". Both the Secretary and the President are now in default, but judicial enforcement order in the nature of mandamus will not be sought until this Court renders its decision on the pending motions to dismiss. If the motions are denied and this case will proceed into pretrial stage, any law suit to enforce the FOIA request will of course be redundant and unnecessary. For purposes of deciding these motions, it is submitted for this Court's judicial notice that THE SECRETARY'S AND THE PRESIDENT'S DEFAULT OPERATES TO CREATE A PRESUMPTION THEY ARE UNWILLING TO TELL THE TRUTH.
25 October 2001