Feds accused of gold-price manipulation
Alleged objective to 'conceal the mismanagement
of the U.S. dollar'
By Jerome R. Corsi
The Wall Street
Journal has agreed to publish a full-page ad in
which the Gold Anti-Trust Action Committee
charges the U.S. government surreptitiously
utilizes gold reserves to engage in
international swaps and other market
"Anybody Seen Our Gold?" is the title of the ad,
which alleges U.S. gold reserves held at
depositories such as Fort Knox and West Point
may have been seriously depleted. GATA asserts
U.S. gold reserves are being shipped overseas to
settle complex transactions utilized by the
Federal Reserve and the U.S. Treasury to
suppress the price of the precious metal.
"The objective of this manipulation is to
conceal the mismanagement of the U.S. dollar so
that it might retain its function as the world's
reserve currency," the ad copy reads in a
pre-publication version GATA provided to WND.
The U.S. Treasury denies the claim, insisting
the stock is accounted for regularly.
GATA's chairman, William J. Murphy III, told WND
his group was willing to pay the Wall Street
Journal's cost of $264,000 to run the ad "to get
the message out that the U.S. enters world
markets without public disclosure to prop up the
dollar and depress the price of gold."
GATA cites as evidence the Federal Reserve Open
Market Committee reports dating back to Jan. 31,
1995, showing the U.S. Treasury Department's
Exchange Stabilization Fund had undertaken gold
GATA, a non-profit 501 headquartered in
Manchester, Conn., further asserts the federal
government strategy to manipulate the price of
gold has begun to fail.
"Gold's recent rise toward $900 per ounce shows
that the price suppression scheme is faltering,"
the GATA ad reads. "When it is widely understood
how central banks have been suppressing gold,
its price may rise to $3,000 or $5,000 an ounce
"The gold reserves of the United States have not
been independently audited for half a century,"
the ad charges.
The U.S. Treasury disagrees.
"While the entire gold stock is not physically
re-counted in any one year, over a period of
years, by our continuous sampling process, the
entire stock has been counted, and is
effectively re-inventoried," Rich Delmar,
counsel to Treasury's inspector general, told
WND in an e-mail.
Delmar explained that the annual Office of
Inspector General audits of mint facilities
involves a physical inspection of certain
vaults, which are subject to a 100-percent bar
count and assaying. At the end of the
inspection, each vault is sealed.
"During each visit, all previously sealed vaults
are checked to ensure that the seals have not
been compromised or tampered with," he wrote.
"This process is the basis for the conclusion
that there has been a complete physical
Delmar said the OIG's work consists of more than
"Our auditors physically observe the inventory
work done at the mint facilities, and we are
responsible for the assay sampling process," he
WND asked the Treasury if there is a
comprehensive listing and accounting of any
encumbrances or other restrictions on the gold
in the U.S. Mint that may affect ownership.
"This is not within OIG's purview," Delmar
responded. "You may want to ask the mint
'Dodging the question'
Murphy called the response "ridiculous."
"The mint does not make complex gold
transactions with other countries," he said.
"That is the role for the U.S. Treasury. The
mint just houses the gold. The Treasury is
dodging the question."
GATA has filed a Freedom of Information Request
asking the Fed and Treasury to disclose
information on encumbrances and swapping or
leasing of U.S. gold.
"The Fed and Treasury have not even acknowledged
receiving our FOIA request," Murphy said. "It's
idiotic to tell you that the mint would have
Murphy asked, "Is the gold in the mint truly
U.S. gold reserves or is it just 'custodial
gold' held for some other country? That's why we
need to know what encumbrances there are on the
gold as well as whether any U.S. gold has been
shipped overseas to fulfill swap obligations."
The 2006 annual report published on the website
of the U.S. Mint lists KPMG as outside auditor.
The KPMG signed audit report in the 2006 Annual
Report of the U.S. Mint takes full
responsibility for auditing the balance sheets
and includes a statement of the custodial
activity of U.S. gold reserves.
According to the balance sheets, custodial gold
and silver reserves make up 90 percent of the
U.S. Mint's total assets.
Still, there is no specific statement in the
U.S. Mint's annual report or the KPMG audit
report describing any KPMG involvement in a
physical inspection of the gold reserves.
KPMG's role as independent auditor for the U.S.
Mint is also confirmed in the 2006 audit report
prepared by the Office of Inspector General of
Dan Ginsburg, a KPMG spokesman, declined to
provide any detail to WND concerning his
company's audit procedures for the U.S. Mint,
citing client confidentiality.
Craig R. Smith, founder of Swiss America Trading
Corp., told WND he accepts the GATA arguments
because "there has to be a force greater than
normal market conditions that has repressed the
price of gold."
Smith noted any number of financial crises since
the late 1980s that "should have propelled gold
way beyond the 1980 high of $850," including the
savings and loan debacle and the birth of the
Resolution Trust Corporation, as well as the
on-going devaluation of the U.S. dollar against
virtually all major foreign currencies.
"Gold has been playing catch-up with current
world economic conditions," Smith told WND in an
e-mail, "and future movements should easily
prove gold to be a great value at $900 an ounce.
That price will look cheap going forward as the
world starts to turn its back on debt-laden
currencies and returns to money with a real
But the U.S. Treasury, in a statement on its
website, denies the Exchange Stabilization Fund
has been used to manipulate gold prices.
"The ESF does not engage in any transactions in
the market for any metal such as gold, either in
spot markets or in any of its derivative forms,"
the Treasury statement declares. "We would like
to emphasize that the Treasury Department does
not seek to manipulate the price of gold or any
other metal by intervening in or otherwise
interfering with the market."
Yvanka Wallner, advertising sales representative
for the Wall Street Journal in New York City,
confirmed to WND the GATA ad has been approved
by the Journal's lawyers and is being prepared
to be run next week.
Swiss America, a WND advertiser, specializes in
investment-quality numismatic gold coins.