[Editor Note: The following referenced posts were taken from the Discussion Forum]
Mr Gresham (04/17/01; 10:33:51MT - usagold.com msg#: 52041)
ANOTHER: WA, BIS
Was the Washington Agreement the most significant event in gold
since you were last posting in 1998? Do you have any reflections
on those events?
Who were the players that made the price spike upward so quickly
in 1999, and how was it managed back down? (How
were so many "fearless" shorts recruited so quickly?)
What is the BIS' role in the "currency war"? Is it somewhat
trying to walk the middle of the road? Did the US members take
their seats recently as an attempt to manage BIS' involvement,
or does this express any measure of US control over BIS?
Randy (@
The Tower) (04/17/01; 13:37:02MT
- usagold.com msg#: 52046)
Mr Gresham, nice question
(msg#: 52041)
--- "Was the Washington Agreement the most significant event in gold since you were last posting in 1998?"---
If I may be so bold, let me
anticipate ANOTHER's answer with an answer of my own.
The most significant event in gold since the dollar's gold default
in 1971 has been the successful launch in 1999 of a long-awaited
new currency system built upon neutral (meaning, multi-national) management and, more importantly, a floating gold reserve
structure that finally abandoned
the now obsolete "fixed" gold legacy of the failed Bretton
Woods structure.
With this new reserve structure, the prevailing institutional
incentive, from '71 to the end of the millennium, need no longer
be one of "price suppression" for the perceived market
value of gold.
In this light, the most
significant element of the Washington Agreement is seen to be NOT the amount of pre-announced
gold sales, but rather, the self-imposed curb on gold lending operations
by these European central banks.
And if you think about it, this action with the Washington Agreement
was nearly just a predictable inevitability from the moment the
eurosystem committed to provide for freely floating gold reserves.
The "tools" of the prior suppression are on the outs.
Believe it. The WA simply announced the foregone conclusion in
a package suitable for newspaper headlines.
Just as the value of the post-'71 paper dollar has long been propped
by the international yet artificial "mandate" to hold
these dollars almost exclusively as reserves (acting in tandem
with the dollar settlement for oil and the overhanging debts of
the "Third World"), through this new currency structure gold (and
its price/value!) has now been "officially" set free
to replace these dollar reserves (savings).
The reason this full transition has not already occurred is that
institutional interest still exists to foster the smoothest practicable
transition until that unknowable moment where the final remaining
*SNAP* in the adjustment occurs.
Speaking for The Tower and personally, I continue to buy gold
with excess funds because I prefer the real wealth of gold over
managed paper (and digital) contract currency. As a bonus, the
real wealth value of same gold will provide a pleasant benefit
upon full completion of the transition in world currencies' reserve
structures. (An understatement, to be sure.)
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