Central banks caught in gold squeeze may crush dollar

[zengrifter]

Investors warned of post-election disaster
Central banks caught in gold squeeze may crush dollar

October 30, 2006
By David Bradshaw
© 2006 WorldNetDaily.com

The founder the Gold Anti-Trust Action Committee says the U.S. government's so-called "Plunge Protection Team" is helping prop up the U.S. economy, dollar and stock market – until Election Day.

Then, says Bill Murphy, "all hell could break loose" as the government's "strong-dollar policy" completely breaks down and is exposed as nothing more than a "keep-gold-weak policy."

For the last seven years, Murphy says, GATA has pounded the table, insisting to the world the gold market is manipulated, but government leaders, the banking establishment and their captive financial press have refused to debate the issue, dismissing it as "conspiratorial" nonsense.

But Murphy contends "GATA has proof on the public record that central bank gold reserves on deposit are only half of the 32,000 tons they officially claim to hold and are now starting to hit the wall as gold prices keep rising."

Murphy sees a "convergence" coming in the gold market between the rising physical demand for gold and shrinking mining output and supply – with the gold price "management" by central banks caught in the squeeze.

The Wall Street Journal reports, "Treasury Secretary Henry Paulson, a Wall Street veteran has reinvigorated the President's 'Working Group on Financial Markets' (PPT), which includes heads of the Fed, SEC and Commodity Futures Trading Commission."

"Gold prices could double to $1,200 per ounce in the short term to then run up as high as $3,000 per ounce over the next five years."

[Brutus]

"the govt can only hold the gold price down for so long"

[zengrifter]

Originally Posted by Brutus

"the govt can only hold the gold price down for so long"

And then once they cannot we move to this scenario -

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OUR POINT OF VIEW:
First, Eminent Domain, and now Gold, Silver…
AND EVERYTHING ELSE!

Marcus K. Dalton / Las Vegas Tribune / August 25, 2005

The U.S. Government has the authority to prohibit the private possession of gold and silver coin and bullion by U.S. citizens during wartime, and, during wartime and declared emergencies, to freeze their ownership of shares of mining companies, the Treasury Department has told the Gold Anti-Trust Action Committee.

But gold and silver owners aren't alone in such jeopardy. For the U.S. Government claims the authority in declared emergencies to seize or freeze just about everything else that might be considered a financial instrument.
The Treasury Department's assertions came in a letter to GATA dated August 12 and written by Sean M. Thornton, chief counsel for the department's Office of Foreign Assets Control, who replied to questions GATA posed to the department in January. It took GATA six months and some prodding to get answers from the Treasury, but the Treasury's reply, when it came, was remarkably comprehensive and candid.

The government's authority to interfere with the ownership of gold, silver, and mining shares arises, Thornton wrote, from the Trading With the Enemy Act, which became law in 1917 during World War I and applies during declared wars, and from 1977's International Emergency Economic Powers Act, which can be applied without declared wars.

Further, there is no requirement in the law that the targets of the government's interference must have some connection to the declared enemies of the United States, nor even some connection to foreign ownership. Anything that can be construed as a financial instrument, no matter how innocently it has been used, is subject to seizure under the Trading With the Enemy Act and the International Emergency Economic Powers Act.

Having just gone through a controversy about a Supreme Court decision about government's power of eminent domain, most Americans may be surprised to learn that the Trading With the Enemy Act and the International Emergency Economic Powers Act could expropriate them instantly and far more broadly without any of the due process extended to parties in eminent domain cases. All that is needed is a presidential proclamation of an emergency of some kind -- and of course Americans lately have been living in a state of perpetual emergency.

Economist and Tax Patriot, Irwin Schiff responds:

"It they get away with this, then it's really all over for this country. If they can seize "gold shares" and other "financial instruments" on this basis, and without hearings, by just declaring an "emergency", than this, coupled with the recent Supreme Court decision involving the government's "right" to take private property and sell it to another private party - means all individual rights to property have been wiped out and we are, plain and simple, just another fascist state. - but without any industry left to support it.

"For years, I have been saying, "If the IRS can get away with taking property without hearings and court orders of any kind, why can't any other government agency do it? - the IRS is no different from any other government agency --with one exception: the IRS was never created by an act of Congress, so, legally, it doesn't exist. But what makes this so arbitrary and ominous is the seizure of stock. If they seize stock, what happens to the voting rights that attach to it? Does the government acquire those rights? But how can it so directly interfere and/or take over the management of a private company? What the government may be attempting to do is to deny everybody the right to protect themselves from the coming, total currency collapse (and the government's responsibility for causing it) - so the government can acquire assets that still have value, so it can pay its bills (like the salaries of our worthless Congressmen and other bureaucrats) - while denying all others the ability to do the same.

"The ability of the government to do this, or even to consider it - must be publicized and resisted to the greatest possible extent.
"Spread the message."

And ordinary citizens with no particular interest in gold and silver may want to ask their members of Congress to reconsider these statutes simply for being wildly tyrannical.

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August 22, 2005 08:45 AM US Eastern Timezone

Treasury Department Claims Power to Seize Gold, Silver-- and Everything Else, GATA Says

MANCHESTER, Conn.--(BUSINESS WIRE)--Aug. 22, 2005--The U.S. Government has the authority to prohibit the private possession of gold and silver coin and bullion by U.S. citizens during wartime, and, during wartime and declared emergencies, to freeze their ownership of shares of mining companies, the Treasury Department has told the Gold Anti-Trust Action Committee.

But gold and silver owners aren't alone in such jeopardy. For the U.S. Government claims the authority in declared emergencies to seize or freeze just about everything else that might be considered a financial instrument.

The Treasury Department's assertions came in a letter to GATA dated August 12 and written by Sean M. Thornton, chief counsel for the department's Office of Foreign Assets Control, who replied to questions GATA posed to the department in January. It took GATA six months and some prodding to get answers from the Treasury, but the Treasury's reply, when it came, was remarkably comprehensive and candid.

The government's authority to interfere with the ownership of gold, silver, and mining shares arises, Thornton wrote, from the Trading With the Enemy Act, which became law in 1917 during World War I and applies during declared wars, and from 1977's International Emergency Economic Powers Act, which can be applied without declared wars.

While the Trading With the Enemy Act authorizes the government to interfere with the ownership of gold and silver particularly, it also applies to all forms of currency and all securities. So the Treasury official stressed in his letter to GATA that the act could be applied not just to shares of gold and silver mining companies but to the shares of all companies in which there is a foreign ownership interest.

Further, there is no requirement in the law that the targets of the government's interference must have some connection to the declared enemies of the United States, nor even some connection to foreign ownership. Anything that can be construed as a financial instrument, no matter how innocently it has been used, is subject to seizure under the Trading With the Enemy Act and the International Emergency Economic Powers Act.

Having just gone through a controversy about a Supreme Court decision about government's power of eminent domain, most Americans may be surprised to learn that the Trading With the Enemy Act and the International Emergency Economic Powers Act could expropriate them instantly and far more broadly without any of the due process extended to parties in eminent domain cases. All that is needed is a presidential proclamation of an emergency of some kind -- and of course Americans lately have been living in a state of perpetual emergency.

When the Trading With the Enemy Act was passed in 1917, gold and silver formed part of the official currency of the United States and were essential to ordinary commerce, so perhaps an argument could be made then against "hoarding," even if "hoarding" could not be well defined. That is no longer the case; the United States has officially disavowed gold and silver as money and they no longer have a meaningful role in commerce. (GATA is working on that.) So gold and silver investors may want to ask their members of Congress to seek repeal of the statutes that give the government the authority to interfere with the private ownership of gold and silver, emergencies or not.

And ordinary citizens with no particular interest in gold and silver may want to ask their members of Congress to reconsider these statutes simply for being wildly tyrannical.

xxx