NYSE Runs Out of Gold Bars: What Happens Next?

[David Guyatt]

Peter, it seems to me that there have been imminent expectations that the "shorts" will be caught duly short and will have to deliver or buy back their positions for the last decade. This has been the "daily vespers" of GATA since its formation in 1999 (I remember it being founded).

David, I know there is no real way to know, but if anyone has an educated hunch, it might be you. Can you or will you speculate (sic) on what % of world gold is 'black' v. % 'kosher'?

Far greater quantities than in the white Pete.

The historical records have no real foundation to them. They are just artificial guesses that proved useful to Her Majesty's Empire and those wealthy and powerful elite who sailed in her. For example, the figures do not include Russian nor Chinese/Southeast Asia production. And Russia is the second largest producer after South Africa. China and the far east have lusted after gold for thousands of years. The historical figures are also useless when it comes to, say, ancient Egyptian production. Gold was more available in ancient Egypt than silver and silver production is vast compared to official AU production. Producers also place a percentage of their annual "crop" directly into the black and always have done it seems.

It's the same for diamonds - little sparkly stones that aren't all that rare and the market is, more or less, controlled by the same people who control the precious metals market.

The best book on the subject of diamonds is Jani Robert "Glitter & Greed". There is a lot in that book worth reading, including the way the British government during WWII declined to stop De Beers providing industrial diamonds to Nazi Germany without which their war effort would've ground to a halt. But also for a peek at the sheer volume of stones available for harvest.

However, whereas I used to think it likely that black gold would eventually be magically transformed into official metal I am no sure that this is the case. The argument is that if the CIA have grabbed a large quantity of AU, and the US Army another quantity (via, for arguments sake, their Engineering Corp that was active in the Philippines) and the Air Force some more, the Navy too --- etc etc etc., would these amounts be handed over to the entity we know as the United States government? Imo, the answer is almost certainly no. I don't see a General or a DCI turning over vast sums of money that could be used in deep black budgets, just so the prevailing politician in charge of the nation could squander them on helping out his oil buddies or for his reelection war chest etc.

I suspect (but don't know) that this is the same underlying motivation that the late General Erle Cocke had in mind when he stated in his "Project Hammer" affidavit that:

Cocke was then asked who would have been behind the Hammer project. Would it, the questioner asked, have involved "various agencies of the US Government"?

"Yes. Obviously the CIA, the FBI, the national security agencies of all types, Pentagon in the broadest sense of it and as such, and the Treasury, Federal Reserve. Nobody got out of the act, everybody wanted to get in the act." But there were numerous other entities involved in Project Hammer.

The "repatriation" of the dollars referenced in Project Hammer was probably narcotics revenue. Warehouses full of various used banknotes from around the world waiting to be repatriated, I was told. How true this is I don't know, but there was a sense that it felt correct. I was also told that this related to those pesky Showa 57 series certificates of the M-fund (see: http://www.jpri.org/publications/critiqu...ecial.html. I also have no way of knowing how true this statement was either, but again it resonated as being quite reasonable. This is, of course, the problem with the deep black world. Penetrating it and coming away again with actual evidence is mighty difficult.

But there is an interesting side fact to Project Hammer. Citibank, HSBC etc were completely broke at the end of the 1980's. Bankrupt as a result of the western banks disastrous lending exposure to Brazil, Poland, Russia, Egypt and numerous other Lesser Developed nations. But within approx. 3 years their balance sheets were bountiful in the land of milk and honey. Just how do you turn around multi-billion dollar liabilities to multi-billion dollar assets in just a few short years? Beats me.