Revaluation Rumblings: Does Gold’s Big Run-Up Mean Manipulation Is Failing?

Mike Maharrey: Greetings. I'm Mike Maharrey, an analyst and reporter here at Money Metals, and I'm joined today with my good friend Chris Powell, who is a veteran journalist and has served both as a reporter and a managing editor. He's also the secretary and treasurer of the Gold Antitrust Action Committee, better known as gata, which he co-founded back in 1999 to help expose and oppose the rigging of gold markets by Western central banks and their investment bank agents. He edits the Gada Dispatch, which is the organization's Daily electronic newsletter, which is fantastic if you're not on that mailing list, you need to be. And he also speaks on behalf of the organization at many financial conferences across the United States and even abroad. How are you doing today, Chris?

Chris Powell: Oh, I'm very good, Mike, and I'm very glad to be with

Mike Maharrey: You. Well, it's always a pleasure to talk to you and kind of an exciting time for bullion investors and people who follow gold and silver both, I guess. And that's because on Friday of last week, we hit a pretty big milestone, $3,000 an ounce gold and didn't hold it on Friday, but it regained that level on Monday. And last I checked, we're still above $3,000 an ounce. So I thought we just kind of start off the show. I would love to get your thoughts on $3,000 Gold. What's your initial reaction?

Chris Powell: Well, I think it's a lovely start. I don't think that all the imaginary gold that has been used to suppress the price over the years has been covered yet, and when it's covered, I think the gold price will be a lot higher. I think the central banks that have been involved with the bullion banks for decades and restraining the increase of the gold price by creating imaginary supply are struggling to cover now and they've got a long way to go, and I think that will push the price up higher as long as some vast new discovery of gold doesn't turn up or some new mechanism of cheating people isn't discovered. But we see a lot of estimates now coming out as to what the gold price would be if normal financial ratios of the last 50 years were restored ratios of the gold price to gross national product or to national debt, things like that. And some of those estimates of return to normal have five zeroes behind the gold price, and I'm not sure we will ever return to normal, but like I said, I think $3,000 is a good start. When I got into this business, the gold price was $250 an ounce back in 1998, 1999. Gold seems to be outperforming every other financial asset over the last couple of years. I think over the long term it tends to do that as well. The question is can we ever get the public to understand this?

Mike Maharrey: Yeah, that's the $3,000 question right now. I think a lot of people, even in the mainstream were eyeballing $3,000 gold for this year, but it happened really quite quickly. And one of the things that I thought was interesting is it took just over 200 days, I want to say 210 to get from 2,500 to 3000, which is really fast in kind of the historical context. Usually you've looked at a thousand days or so between those $500 increments. Are you surprised at the speed at which this bull market seems to be picking up pace?

Chris Powell: Well, I'm surprised Mike, whenever anything good happens and I feel that, so I think the speed here indicates that central bank rigging to the market is falling apart pretty fast. Jim Rickards, who is pretty good analyst he is, had US security clearance. I think he said something very true that central banks don't mind markets going up and down. They don't mind gold going up as long as the changes are not what Rickards called disorderly.

Now the gold price is rising now, I'd say a rate that's approaching disorderly, and I think that is an indication that central banks that have been involved in controlling the price are losing control and they're losing control. I think because the central bank world is now divided very much about gold, not all central banks are cooperating with gold price suppression as they used to. Not all central banks knew, say 15, 20, 25 years ago how the Western central banks were controlling the price. But I think now all central banks know how it has been done and they have realized how it is against the interest of developing countries, how it maintains dollar imperialism, how it exploits the world and favoring the United States, and they're not playing along anymore. And I think that is a reason why the gold price seems to be going up so much faster than it did.

The central banks are no longer united on price suppression policy, and indeed there's speculation that they have determined that they're going to need a much higher gold price. The US economist Paul Brodsky and Lee Acquaintance wrote I think 15 years ago a paper speculating that the real central bank scheme was to keep the gold price down long enough so that central banks could redistribute official reserves among themselves. So they would all be prepared and hedged against the devaluation of the dollar and the other currencies. They'd lose money on their own currencies, but they'd be covered through an increase in the gold price. The researcher who's writing for Money Metals Exchange now, Jan Neen house in recent months has pointed out that many central banks have what they call gold revaluation accounts. The US financial writer, Luke Groman, Groman has pointed out that even the Federal Reserve has a gold revaluation account. I think gold revaluation maybe part of the central Bank plan down the road.

Mike Maharrey: Do you think this division that you mentioned and this kind of split in the world of central banks is being reflected in the recent surge and by recent, I mean over the last three years or so of Central Bank Gold buying, particularly those banks that would be considered more toward the emerging market. And so you're talking about India, some of the Eastern European central banks. Is that kind of gobbling up of gold reflecting this division or like we're going to go ahead and buy this or is that something different? How do you see that fitting into this? Well,

Chris Powell: I think it's absolutely part of this division. I mean, look, for more than 50 years, US policy has been to drive gold out of the world financial system that was very candidly admitted in all these documents that we've collected over the years. Well, central banks buying gold, they're effectively monetizing it, which is very much contrary to the policy of the 1970s and eighties and nineties, which was to drive gold out of the system. Central banks were selling and leasing gold and now they've turned to net buyers of gold in the last decade. I mean, that's very much a change of policy, whether they articulate it as such or they just demonstrate it by their actions. Gold is the ultimate money. It's the secret knowledge of the world financial system. It is money without counterparty risk. It's money that can't be printed away unless the people getting screwed by the printing go along with it.

This is very much a change of policy, and we're going back to the future gold, perfectly good money. The complaint against gold is, oh, well, there's not enough gold to support the world economy. It's nonsense At a higher price, gold can support any economy and you don't need to back every single cent of your currency to gold. Countries can do very well if they have a gold reserve that is adequate to fund their trade deficits, they can trade in their own currencies and when they have deficits, they can cover the deficits in gold. If you've got a reasonable gold reserve and you're going to balance your trade eventually, well, gold is very useful. It's the ultimate money. It is the guarantor of national sovereignty, just it's the guarantor of human sovereignty, human liberty.

Mike Maharrey: Yeah, it's interesting. The governor of the Central Bank of Poland, and I'm not going to attempt to pronounce his name off the top of my head, but he made very similar comments. That's one of the countries that has been buying a lot of gold, and he recently said that their goal is to hold at least 20% of their reserves in gold. And he talked about that that gold represents financial independence for Poland and it represents a strong economy. So even the Central Bank Gold or the Central Bank governor is reiterating the point that you're making. And for folks that may not be aware of just how much central banks are buying gold right now, over the last three years, we've seen over a thousand tons of net global purchases and the years prior to that, 500 tons was kind of the average when they started buying again. So it's double.

Chris Powell: That's only the amount of gold they acknowledge buying.

Mike Maharrey: That's a good point.

Chris Powell: There's a lot of reason to believe that China has bought thousands and thousands of tons of gold. We know from news stories in the last 10 years or so, that both China and Saudi Arabia were caught buying gold for their reserves secretly and not reporting it as they're supposed to do to the International monetary fund. So the official purchases that we learn about, it's just a fraction of the official gold that's being purchased.

Mike Maharrey: Yeah, that's a really good point. And you mentioned Jan, our investigative reporter, and he's done some really good journalism on just that very fact and dug into the numbers and pointed out he can show where this gold China is buying off the books is coming from. So yeah,

Chris Powell: He studies the customs reports from Switzerland and the United Kingdom and he can see that gold is moving out to places suggesting that it's sending up in official Chinese accounts.

Mike Maharrey: Yeah, yeah, absolutely. So those are definitely important things to look at since we're talking about official gold holdings. The United States supposedly has 8,000 plus tons of gold sitting in Fort Knox property of I guess the US Treasury technically, and we're starting to hear a little bit of talk out there with Doge and all of the things that are going on with the Trump administration about the possibility of actually auditing the Golden Fort Knox. Now skeptics that will say, oh, it's been audited, there's no problem, nothing to see here, but is there's definitely some impetus in this direction, and I'm curious in your mind, if they were to actually do an audit, they go into the vaults and they find out, whoa, there's not as much gold here as we've been told that there is, that there was some kind of malfeasance. What do you think the ramifications of missing gold would be on the United States and more generally on the world?

Chris Powell: Well, I think there would be some reaction. On the other hand, how surprised would you be if somebody told you the US government lies? I think that's fair. I wouldn't be shocked. But the thing about the Fort Knox Gold, Mike GA has addressed that many times over the years. I'm inclined to believe that there is gold there, and there may even be the 8,133 tons, not just at Fort Knox, but at the Denver Mint and at the West Point depository. But I don't think that's the real point here, and I have to heartily thank Jim Rickards for remark he made in an interview the other day about auditing the Fort Knox Gold. He said really something [inaudible] has been saying for a long time, that is, the real point is not how much real metal is in Fort Knox. The point is how many claims are there to it? That is, has it been swapped? Has it been leased? God has a letter from a member of the Federal Reserve Board of Governors acknowledging that among the gold related documents the Fed was keeping secret from GATA were records of gold swap arrangements the Fed has with foreign banks. So we know that the Fed has been involved in and gold swaps. We suspect that the Fed's been involved with gold leases as well. Jim Rickards said in that interview the other day that the real question to be asked in an audit of Fort Knox is how much of that gold has been leased? And then he added, but if you ask about gold leasing, you were tampering with the primal forces, which I thought was exactly right. If you ask about how much gold leasing in the United States and its allied central banks have been doing, you're getting to the heart of the matter and the falsification of the currency markets and the rigging basically of all the markets. I am not sure I'm going to live long enough to see anybody in authority asking the question about gold leasing because the primal forces will come down on him in about 10 seconds.

Mike Maharrey: Yeah, that's a good point too. When we talk about audits, we're not really just talking about going in and counting gold bars. We are talking about in a true audit process, tracing the paperwork as you say, where is this gold encumbered? What deals and arrangements have been made? How have things been moved on the books? This is all part of the audit process, and a lot of times when you talk about auditing the gold at Fort Knox, you'll get that pushback. Well, they counted it back in whatever, and they've been sealed and even though there's some questions about that as well, but it goes beyond that and good auditing policy. You do it every year, you do it constantly, and it's not just a one and done kind of deal as some people try to make it out. Why do you think that there is so, I mean this is kind of, I'm throwing you a softball here. Why do you think there is so much resistance to being transparent and opening up the book, so to speak?

Chris Powell: Because it will explode rigging of the world economy in the currency markets by the United States to maintain the dollar as the world reserve currency. See, look, if you use somebody else's money, you're a slave to that person. The dollar is the world reserve currency and keeping it the world reserve currency is the objective of the US government has been for years. All the documents show this because this gives the United States great power over the rest of the world. One of the documents that GA has on its internet site is the March, 1999 secret staff report of the International Monetary Fund, which says that the IMF cannot agree to some requests that were made to be more candid and forthcoming and accurate about its gold reserve figures. Because if the IMF required member central banks to specify in their reports gold in the vault and distinguish it from gold out on loan, this is market sensitive information, then the markets would find out just how encumbered official gold reserves were, just how scarce gold really was as opposed to plentiful and that would change everything in the currency markets. And so the IMF decided, no, we're not going to require our member central banks to be accurate in their gold reserve reporting. We will let them report gold in the vault and gold out on loan as if it's the same thing and they just give you a single number.

This is the primal forces in action here. If you let the world know how much gold official gold is out on lease and how little gold is unencumbered, you're going to explode the currency markets. And that's exactly what the secret March 99 IMF staff report says.

Mike Maharrey: Yeah, it's so fascinating to me. It's interesting though, when you talk about something like this, not a lot, but there are some people out there that will use these facts as a reason to avoid investing in precious metals. They'll say, oh, the whole market's rigged. Why would I buy gold? Why would I buy silver? It's not something that is really a free market kind of thing, so why would I bother? What would you say to somebody that is reluctant to plunge into precious metals because they're worried about this manipulation and that it may impact their investment?

Chris Powell: Well, it's a fair concern for somebody in old age like me, but fortunately I got interested in this sector 25, 26 years ago. I point out over the long term, gold has done just fine against other investments. We can point out the price today, we can point out the price rise of the last year. Now, cherry picking your time periods can be very deceptive,

But you want to take a 20-year period, a 30-year period, 40-year period, and then you're being a little more reasonable. In any case, forget the history. Gold in hand is money without counterparty risk. Government money always has counterparty risk. You can have a devaluation of any currency tomorrow. They're not going to tell you, we in advance get out of our currency. We're going to devalue it in a week. Gold is a perfectly good hedge. Alan Greenspan said that in extremists, gold is always accepted as money. It is the ultimate money. And if you look at the government documents, the governments themselves know that gold is the ultimate money. That's why they've been striving for so long to put it back in the box because if gold gets out of the box, it's going to lay waste to all modern central banking.

Mike Maharrey: Yeah, it's interesting. A few weeks back, or maybe a couple of months ago now, they found a whole cash or cash, forget how you say that word, a big pile of gold coins that dated back from right around the birth of Christ. And there were a lot of Roman coins, gold and silver, and it occurred to me they pulled these out of the ground. They'd been buried for some 2,000 years. You could still take that gold coin and unquote spend it, right? I mean that gold coin will still buy stuff Now, good luck digging up a box of $1 bills in 2,000 years and doing anything with that, right? So it goes to your point, gold is money. It has been money for 5,000 years and it will continue to be money because of its very nature. So, I think that's always an important point for folks to wrap their heads around.

I'm going to get you out on one more question, and this is a little bit of a shift, and it might be a little bit of a, we didn't talk about this before the show, but it just kind of occurred to me. We are hearing talk now from the Trump administration of having crypto reserves, and I'm curious if you think that that would set the stage for manipulation in that market just in the same way that we've seen it in gold or silver, or is that fundamentally different or something that is not even really on your radar?

Chris Powell: Well, I can't imagine any reason for the US government to have crypto reserves except to rig the crypto market just like it's been ringing the gold market. Look, the Reserve Bank of Australia used to have language in all its annual reports saying that the primary purpose of holding gold reserves was intervention in the foreign currency markets. They've changed that phrasing a little bit in their annual reports in recent years, but it makes the same point that a primary purpose of central bank holding gold reserves is currency market intervention. I don't know why the US government would've any other purpose for holding crypto reserves except for market market intervention. Look, I am pretty libertarian on the money issue. As you can imagine, Mike and I wish the best to anybody who wants to start an independent currency and put it out there in the market and see how it competes.

But I don't have any faith in crypto. I can't see it. I can't touch it. I can't understand the computer formula that it's based on. All I can know about it is that, well, people say that the formula says you can't issue more than a certain amount, and what happens when the electricity goes off or the internet is shut down? The comedian Remy did a wonderful music video about Bitcoin a few years ago. I'd encourage everybody to look it up on YouTube. It's called I'm a Bitcoin billionaire, and after a mass is this great wealth and Bitcoin, there's a solar flare and his computer shorts out and it's gone.

If you've got gold buried in your backyard in a box, it's probably going to still be there when the internet check gets shut down and the power goes off.

Mike Maharrey: Right? Exactly. Or in 5,000 years when archeologists show up in your backyard and start digging for that matter. I think that's a great answer. I appreciate that. So, before we go, I do want you to have an opportunity to give folks the directions on how to find data and the work that you guys are doing. We mentioned on top of the show that you do have a newsletter and folks do definitely want to get on that list. You guys put out a lot of great information on the precious metals market. It's not even necessarily all focused on the idea of manipulation. I mean, just a lot of good solid information. So where can folks go?

Chris Powell: Well, thank you, Mike. Yeah, our internet site is gata.org. We do put out some dispatches almost every day. We think of interest to people of interested in the monetary metals and free markets and accountable government. It's free to get on our email list. There's a mechanism at the top right corner of our internet site where you can sign up for the dispatches. So, you can sign up to get every dispatch individually, or you can sign up to get a summary dispatch that just lists the previous days’ dispatches so you don't get your email box too cluttered. We are a nonprofit educational and civil rights organization recognized as tax exempt by the US Internal Revenue Service under Section 501c3, the Internal Revenue Code, which means that if you care to support us financially, not only will we be grateful, but you'll have a tax exempt charitable contribution. We survive on tax exempt donations from individuals. Mostly. There's a few people in the mining industry who've helped us over the years. I'd say though, for the most part, 99% of the monetary metals mining industry is useless to us and doesn't even know that its main product is not jewelry, but is money.

So, we'd be very grateful for contributions, but we're trying to get the word out. Our internet site does have a special documentation section, and there's a section called the basics where we've attempted to summarize and link to all the documentation. So if you have any doubt about the ringing to the market and you want the documentation, it's all there. And I find that the documentation is with the press, it's like holding up a cross to a vampire because as soon as you show the documentation to mainstream news organizations, they turn and run as fast as they can.

Mike Maharrey: Yeah. Well, and that's credit to you as a veteran journalist of recognizing the importance and being involved in this very important work. It's not easy, and I'm sure that you have to fight against a lot of roadblocks as you go about the business first and foremost, even trying to get ahold of these documents that the government doesn't want you to have. I have some experience with open records requests myself, so I know the pitfalls. So, you guys are doing fantastic work and really appreciate you, appreciate the support that you give Money Metals over the years and sharing some of the work that we're doing, and happy to have you on the show. It's always great to catch up and talk to you and get your perspective of what's going on. So I really appreciate you taking a little bit of time out of your day.

Chris Powell: I'm grateful to you too, Mike.

Mike Maharrey: Alright, well we'll wrap it up with that. And we thank you again and we'll talk to you again soon.

Chris Powell: Thank you, Mike.