Chris Powell Replies to Jeffrey M. Christian
by Chris Powell, Secretary/Treasurer, Gold Anti-Trust Action Committee Inc. April 26, 2010
Editor's Note: This article by Chris Powell (GATA) will be the last editorial comment of the March 25,2010 Post-CFTC meeting. Any further discussion will be communicated privately among the affected parties and/or appearance on FSN show to settle any outstanding issues.
With his April 23rd essay, "Jeffrey M. Christian Replies to Chris Powell", Christian insists that there was no news in what he told the March 25 hearing of the U.S. Commodity Futures Trading Commission in regard to the London gold market, nor in what Erik Townsend wrote at Financial Sense about that market on April 19 -- that the London gold market is mostly a market of promissory trading rather than what it calls itself, a market of physical trading. But if this was common knowledge, why did Christian describe it at such length at the CFTC hearing, why did commission members question him about it, and, indeed, why did the commission invite him to testify in the first place?
Christian writes of officers of the Gold Anti-Trust Action Committee Inc., of which I'm secretary/treasurer: "They have expressed great surprise that the 20 million ounces or so of gold that clears through London bullion banks each day includes forwards and other gold derivative contracts, and does not consist solely of physical gold trading on a spot basis."
Actually, the only surprise GATA has expressed was at Christian's candor at the CFTC hearing. In fact, five months prior to the CFTC hearing GATA board member Adrian Douglas began writing at length about the likelihood that the London gold market was selling gold it couldn't possibly have or even obtain. See:
-- October 16, 2009, "How Much Imaginary Gold Has Been Sold?"
(http://www.gata.org/node/7908)
-- October 18, 2009," How Much Imaginary Gold Has Been Sold? Part 2."
(http://www.gata.org/node/7911)
-- March 1, 2010, "If Your Gold Is at an LBMA Bank, You May Be Just an Unsecured Creditor." (http://www.gata.org/node/8388)
Christian complains about a seeming lack of official and news media pursuit of some of GATA's disclosures and demands that GATA explain this. Of course Christian should address himself to regulatory agencies and financial news organizations instead. GATA can't answer for them; it can only complain about their inaction. And even Christian might acknowledge that those agencies and financial news organizations have not performed well amid the financial scandals of recent years.
Christian writes that GATA has presented "six pieces of evidence" of gold price suppression and that he has refuted them. In fact, GATA has presented much more evidence than that -- about two dozen documents -- many of them consisting of Federal Reserve records and the speeches of government and international agency officials. Christian has ignored these. But they have been posted at GATA's Internet site and GATA invites people to review them and compare them against Christian's characterizations of them. They can be found here:
http://www.gata.org/taxonomy/term/21
Christian seems especially agitated about what he calls GATA's distortion of former Fed Chairman Alan Greenspan's famous comment that "central banks stand ready to lease gold in increasing quantities should the price rise."
But GATA often has placed Greenspan's comment in its full context, providing the Federal Reserve Internet site's link to the congressional testimony from which Greenspan's comment was excerpted and noting that his testimony was important for far more than its reference to gold -- that it was the Fed's attempt to dissuade Congress from regulating derivatives:
Greenspan was successful in this and thereby shattered the world economy.
Christian writes: "GATA was founded by people who were long and wrong at the wrong time in the gold market. They soon discovered that they could have a better living standard by scaring investors into donating money to them to wage a campaign to reveal conspiracies all over the place, compared to the losses they were racking up trading gold. In this way, GATA is like the NRA. The last thing the NRA wants is for a government to unequivocally say people can own guns and flaunt them however they want. If that were to happen, the NRA would lose its reason for existence, and all of those lobbyists that work for it would need to find jobs for which they are qualified. So too with GATA. GATA's existence depends solely on keeping investors frightened enough to support them in the lifestyles to which they have become accustomed. If GATA ever proved anything, it would be out of business."
Actually, GATA was founded in January 1999 and that was close to the right time to start buying gold. Gold's price then was about $286. It remained around that level for about two years and then began rising steadily. Prior to GATA's incorporation its founders were not racking up losses trading gold. Rather, they were studying the gold market and responding to evidence of market rigging. Yes, if the precious metals markets were ever reliably liberated from surreptitious price suppression GATA well might lose its reason for being. But then GATA is a small non-profit, federally tax-exempt civil rights and educational organization and its officers don't make their livings from it. Rather, they all have full-time jobs elsewhere and their work for GATA involves substantial personal sacrifice. Some of GATA's officers have families they have neglected for what they consider a worthy cause. Some of them enjoy gardening and playing softball. They might be glad of the success that put the organization out of business, for then they would get their lives back, and in a better world.
By contrast, in his essay Christian discloses that he makes his living by working for "central banks, governments, and other entities that have a large financial exposure to commodities, including gold and silver." If those central banks, governments, and other entities have a SHORT exposure to commodities, including gold and silver, and are participating in a fractional-reserve gold banking system aimed at price suppression, any more candor from Christian like his candor at the CFTC hearing might put HIM out of business.
© 2010 Chris Powell
Chris Powell is secretary/treasurer of the Gold Anti-Trust Action Committee Inc.
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