Gold Investing News sat down with Chris Powell of the Gold Anti-Trust Committee to discuss what is going on in the gold market in terms of manipulation
GIN: Can you outline how the gold manipulation scheme works?
CP: Sure. Central banks that want to support their currencies — and support the US dollar in particular — want to control interest rates and government bond prices, so they intervene in the gold market by selling their gold outright, by leasing it into the market through bullion banks and the Bank for International Settlements (BIS) and by swapping it to other central banks that will be doing these sales or leases. They also sell gold options and futures contracts through the BIS. They do a lot of shorting of gold to control the price.
GIN: Who is involved in this manipulation scheme?
CP: I think all the major western central banks are at least aware of it and are cooperating, if not participating. I think all of the western central banks that were identified openly as being part of the London gold pool in the 1960s are certainly cooperating with it. Though I think the major ones lately have been the US, the Bank of England and the Bundesbank. But I think any central bank that has been identified as having swapped or leased gold is a participant.
GIN: So, you’d say that the gold cartel is composed of central banks?
CP: It is a central bank scheme, but they operate very often through agents like bullion banks, JPMorgan Chase & Company (NYSE:JPM) and HSBC. The BIS in Basel, Switzerland conducts much of the gold trading for the western central banks. So certainly the BIS is an agent as much as the bullion banks are. ...