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The Grand LBMA Exposé: A Collective-Mind Analysis

Part - 3

September 22, 1997


This writer will present the entire situation via a chronicle of all the news publications about the subject, providing dates sources and authors - where possible. Nearly all available information was researched from Internet sources. Most comments are verbatim from respective authors. Occasionally, this writer added comments of clarification and/or conclusions where the research leaves off.

Internet Commentary #12 -

Posted on the Internet February 6, 1997 by Cmax

([email protected]):

The most important factor facing the goldbugs (indeed, world economy) is the enigma of the LBMA, who's discovery is not yet been digested by the analysts, let alone the general public. I am no market analyst, but I am a connoisseur of common sense.

Orapailleur, thanks for the summarization yesterday. To add to it (and being that tonight looks pretty boring anyhow), this is what I see:

THE SCENARIO: The world has been brainwashed into believing gold is not money, so Central Banks (managed by those in power) can print (steal) the money they need in order to obtain the vote (to remain in power) via the socialistic expedience machine ("democratic" elections). To maintain the lie, the public must trust the fiscal policies of the their government. The governments have sold off all the tomorrows available, to live the fiscal lie of today. There are no more tomorrows left to be borrowed against, and what was borrowed can never be repaid. All that is left is public trust, thanks to a well manipulated propaganda machine. The budgets are not any nearer to being balanced (contrary to what the press headlines say), nor can they ever be balanced, under the debt load present. Default would mean instant elimination from the game by foreign investors, who are the one's who are really paying the bill. Gold must be maintained at bay (and has been, up to now) in order to perpetuate the myth, such as: "I can't really say what it would take to bring gold back," admits Scott Mehlman, chief dealer for Credit Lyonnais Rouse. "We have had a sea-change in sentiment by the markets and by the biggest holders of gold in the world -- the central banks. While gold isn't on its way out, it's evident that its price hasn't bottomed out yet, either."

Now governments are against the wall, and just about not able to pay their bills in the event of any "hiccup" in the world that shakes the faith; and they cannot either:

a. tax (steal) more. The economies cannot tolerate more taxes, because this will result in less revenues

b. raise interest rates to attract more "tomorrow" buyers... this would raise pre-existing debt payments to a short term point of diminishing returns

c. Print more money (maybe), which would also raise interest rates due to inflation. As this is not so direct, this will be their only alternative.

$$$$Enter press release of London Bullion Market Association$$$$$

A heretofore unknown entity (for all practical reasons) reveals the existence of a 10 BILLION DOLLAR a day gold market (930 tons), that has always existed (albeit, not always at this level). But remember that this is only the LBMA. World gold market has been estimated at 3 to 5 times this volume. Let's use a factor of 4 as an average. This means 40 billion dollars per day! And who says gold is not money? As REB said, they have been keeping a pet elephant hidden from the neighbors (and all the neighbors make their living studying elephants "SELBY"). The fundamental perspective of gold is changing right NOW.



Whether it is physical transfer, or exchange of paper is the volume of a tangible asset. THEY (whoever they are) say that gold's downtrend was catalyzed by the Dutch CB sale of 300 tons of their gold last year, and further stimulated by further CB rumors of more sales. Holland's measly 300 tons (for 1996) is chicken feed alongside the WORLD gold volume at 3,720 tons PER DAY! Whatever the Central Bank's decide, it isn't enough to manipulate the gold that the CAT IS OUT OF THE BAG. They won't even be able to cause a ripple, when the markets REALIZE the SIZE of this NEWLY DISCOVERED gold market. And don't forget silver....LBMA alone is moving a BILLION dollars a day of this stuff too.......and multiply that by 4 for world volume.

Anyway, it appears that the Euro CB's have banned the selling of their gold to meet the EURO monetary requirements.

Who says gold isn't money? Interesting to look at, was the comment that all existing gold only represents 1/2 ounce or less per capita for the world's population. An increase in population would automatically mean more demand and long term REAL increase in gold's intrinsic value. (But as a corollary, if AIDS wipes out most of the population, in which case, would be deflationary to the value of gold). But then, 90% of aids is limited to "lesser able" (and less cautious) who would not likely accumulate wealth anyhow, and this might not have a proportional effect on gold value vs population.

??Consider this....Gold prices have dropped roughly 13% in the last 9 months....and daily gold volume on the LBMA has more than tripled in volume in the same period. It appears that, when gold is used as a currency (and not a store of value) it is not important what LEVEL the monetary (i.e. gold price to the dollar ) unit has......only that it maintains a reasonable amount of it's value in the short run; long enough to make your next transaction.

Having lived in a society with 10% inflation per day and constant additions of zeros to the currency, I can vouch for this theory. But someone would only buy into a losing currency if it were TEMPORARY, and their was more profit to be made for the delivery of your products or services.

Remember, these huge volumes on the LBMA

are NOT from hoarders....these are the

numbers of merchants using gold as a

CURRENCY. Who says gold is not money?

??Consider this: Gold production to demand ratios are no longer important.........the LBMA moves the world's entire yearly production in ONE day.

???Consider this: Bob estimated 1.3 billion ounces held by CB's. The government claimed 4 billion oz above ground in 1994 = 4.3 bil oz in Jan 1997. Take the LBMA x 4 for world volume (30 million x 4 = 120 million oz) = that every 10.8 working days the world gold markets clear the amount of gold equivalent to all Central Bank holdings..........who says gold is not money?

Now, world gold trade has been exposed as being 3% of ALL FOREX CONTRACTS on a DAILY BASIS! And remember that this volume is being traded with FOREX contracts at 189 times the amount of available means the gold (or it's ownership certificate) is NOT just sitting in some vault gathering dust........IT IS BEING CIRCULATED. Sounds kinda like....

Gold IS money. Gold is now the only money that is also a nice. (Reality, what a concept!) The CB's will not sell a significant amount of their gold...maybe only small amounts to keep up the lip service of it's "only a commodity"....and lord keeeeeeyne's other doublespeak. Remember, CB's want THEIR hedges too (er ah,...just in case). Anyway, CB any gold sales would be INSIGNIFICANT in resolving their deficit problems. Central banks cannot now control the perception of is currency.

And enter digital (profound thanks GFD) encrypted GOLD DEPOSIT CERTIFICATES! Silly idea....I think NOT. Say bye-bye to paper money?? GOLD..........the on-line currency. .... ..coming soon to YOUR ATM. How soon? When people discover what bb fisher has been saying all along: "money is debt....and debt is money....ya can't have one without the other". (God I love how that just rolllls off the tongue) .

Is all this a "power play" by the LBMA?? In light of the preceding paragraph.....what would YOU do in their shoes?? The LBMA press release undermines ALL CB's propaganda....they are bitter enemies........... but just don't know it YET. The LBMA is that infamous voice that first screamed in an audible tone the king has no clothes. Period.

The LBMA change to "transparency" is a definite power play. This could be their move to push gold into a de facto currency.

Even SCARIER.... (or maybe exciting?) is that if all U.S. money in circulation was re-monetized (backed by gold) once would be around $34,000 an ounce! (Gee...did I really say that? There's gonna be hell to pay tomorrow....Maybe I better just hide for a few days)

Forget your Elliott waves, Mike and Bob waves, radio waves, and they are all microwaves.........LBMA is SOUNDWAVES.....and they are booming all around us NOW!

The LBMA press release.......Pandora's box

just HOW LONG????????

Internet Commentary #13 -

Posted on the Internet February 6, 1997 by Cmax

(@last minute?)

LBMA questions left to be answered:

Why does the LBMA let COMEX dictate gold price (which apparently is what happens in their very archaic clearing procedures) .............or maybe they don't. (maybe it is the boy who has an elephant on the leash, thinking that he is taking the elephant out for a walk).

I don't have this number handy, but just how many days of exchange in the LBMA....ALONE......are necessary to equal ALL gold in the EC central banks.......two......maybe three days worth of transactions??

Gold has been acting (considering the LBMA information now available) EXTREMELY illogical. Paradoxical. We must review our premises. If they are RIGHT......even in light of this paradox.......we are in for one hell of a correction when the LBMA information is digested.

Internet Commentary #14 -

Posted on the Internet February 9, 1997 by Cmax


Wish I knew. Obviously nobody does. The Euro governments still continue giving a lot of lip service to a common monetary unit, but frankly, it would be against all logic and common sense to see this really implemented on anything more than a superficial level. As any sailor would know, a chain is only as strong as it's weakest link. Do you REALLY think that Germany would foot the bill very long for Italy, Spain, or Portugal?; or England allow Germany to dictate it's fiscal policy?; or worse yet, France allow ANYONE to take the slightest control away from their incredible socialistic machine? I don't think the Euro, as a common unit that will control the fiscal regimes of countries that are so different in their needs and cultures, will ever come to pass. If it does, it would be on a level no more important than commemorative coin. At least the Brits are strong enough of character not to give so much lip service. As to LBMA, it would be something only guided by their institution; no government would knowingly give their blessings to what they are attempting, that is (indirectly) saying that the king has no clothes (er...ah....gee, your Majesty, isn't it a little breezy around your knickers today?).

Internet Commentary #16 -

Posted on the Internet February 18, 1997 by arden

LBMA announced today that it cleared gold deals worth $13 BILLION a day in January up from only $11 BILLION in December. This involved 37.2 million ounces or 1,157 tons per DAY. As Sen Proxmire used to say "A billion dollars here, a billion dollars there, sooner or later that's going to add up to some real money!"

So why is the price set on Comex?

Internet Commentary #17 -

Posted on the Internet February 1, 1997 by GFD

I am surprised that no one has bothered to comment on the LBMA volume numbers - "37.2 million ounces in January compared to 29.80 million ounces in December." I seem to recall an earlier post that said that trading early last year was around 7 (11?) million. This type of surge in volume is indicative of the type of massive blowout that one might expect at a secular (or religious) bottom. Everyone should keep their stops tight and their shorts loose because this market may have a couple of whipsaws left.

It is interesting to speculate who exactly is on the other side of the trades the silly shorts and hedgers are making. John N's comment about rickety trucks going along the silk road may be smack on the money. Doom on them all if someone wants physical delivery of the gold they bought from the shorts.....



(September 22, 1997)

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