The Grand LBMA Exposé: A Collective-Mind Analysis

This writer will present the entire situation via a chronicle of all the news publications about the subject, providing dates sources and authors - where possible. Nearly all available information was researched from Internet sources. Most comments are verbatim from respective authors. Occasionally, this writer added comments of clarification and/or conclusions where the research leaves off.

Internet Commentary #46 -

Posted on the Internet October 18, 1997 by "ANOTHER"

THOUGHTS!

I ask you now: "Is it hard to believe or hard to understand"? When it comes to money it's usually both. Know this: "gold transcends human valuations thru time and life".

Take your time on this one!

Gold is now caught in a crossfire of world thought. The traders are viewing it as a commodity and trying to make money on it's moves using various paper trading vehicles. Their opinion of the market is flawed because the "real value buyers" would never deal with these people or let anyone in that circle know they are buying gold as "money"! The major buying and selling is between CBs, nations, merchant banks, "the super rich" and the hordes of small buyers in forgotten places. That is one of the small many reasons wall street hates gold, they are not part of the real action. Comex is a side show!

Let me fill in the Xs.

First a reprint;

"You see the trading medium changed. Oil went from $30++ to $19 + X amount of gold! Today it costs $19 + XXX amount of gold! "

If you owned a commodity in the ground that had to be sold for paper currency in order to realize value what would do? Yes, the oil in the ground may last another 50+ years but will the bonds and currencies of other governments last that long? One thing you don't do is buy gold outright, it would cause it to stop trading as a commodity and start trading as money! You learned that in the late 70s. Nor do you acquire "real gold money" in any fashion that would allow a comparison of price trends (graphs)! There must be a way to convert the true wealth of oil into the outright wealth of gold. We know that oil is a consumed wealth of a momentary value that is lost in the heat of fire. The stars blink and it is oil wealth no more! It has become "the debt of nations" now owed to you. Gold on the other hand is not a commodity as many assume, as it is truly "the wealth of nations" meant to last thru the ages! A wise oil nation can strike a deal with the paper printers and in doing so come out on top. Go back a few years to the early 90s. Oil is very high, you offer to lower the US$ price in return for X amount of gold purchasing power. You don't care what the current commodity price of gold is, your future generations will keep it as real wealth to replace the oil that is lost. Before the future arrives gold will be, once again valued as money and can be truly counted on to appropriately represent all oil wealth!

The Deal:

We (an oil state) now value gold in trade far higher than currencies. We are willing to use gold as a partial payment for the future use of "all oil" & value it at $1,000 US. (only a small amount of oil is in this deal)

And take a very small amount of gold out of circulation each month using it's present commodity price. If the world price can be maintained in the $300s it would be a small price for the west to pay for cheap oil and monetary stability.

The battle is now between CBs trying to keep gold in the $300s and the "others" buying it up. In effect the governments are selling gold in any form to "KEEP IT" being used as "REAL MONEY" in oil deals! Some people know this, that is why they aren't trading it, they are buying it.

Not all oil producers can take advantage of this deal as it is done "where no one can see". And, they know not what has happened for gold does not change in price! But I tell you, gold has been moved and it's price has changed in terms of oil! For the monthly amount to be taken off the market has changed from $10 in gold (valued at $1,000) /per barrel to the current $30 in gold /per barrel still valued at $1,000!

Much of this gold was in the form of deals in London to launder it's movement. Because of some Asians, these deals are no longer being rolled over as paper!

What is happening now is far, far larger than the interest of a few traders or mining companies. They will be stepped on!

more on US$ and T-bills.

Internet Commentary #47 -

Posted on the Internet October 18, 1997 by "Cmax"

WOW! Talk about "ask and ye shall recieve".........that was fast. As usual, you have completly blown me off my chair, and my eyes out of my head. (If you could see it, you would think it is quite comical.

         Thank you.

You, Mr., have answered one of my oldest questions, in that WHY would the Arabs be so short-sighted as to sell all their re-valued oil (after the OPEC oil crisis) and deposit all that money it into Western banks, only for the same bankers to reloan it out to sooooo freely as they did to developing countries (as local economy could not absorb such huge quantities/inflation etc), not ever to be returned. This circle just did not make any sense. Their oil is very finite, and I always though that their new found wealth would escape them as easily as they discovered it. (as per axiom: a fool and his money are soon parted ) Now if they have been trading oil for cash plus an amount equivalent to their "net profit" in gold, now THAT does make sense. These intricate workings, which can now be seen in hindsight, are interesting indeed!

Never doubt Arab wisdom.

Now the Asians were the kings of paper money and it's consequences 5,000 years ago, they know very well what the final outcome of this fraud will be; and they do not fall into westerners mindless mindtraps so easily. They Oriental is an excellent student of history, the average Westerner doesnt even know the mechanics of the second world war (particularly Americans). If as you imply, that they have caught on to what is happening in this shell game, THEY have forced paper's hand, which has forced the Arab's hand, which MUST now force the CB's hand to either put up, or shut up ( expose and sell their REAL physical supply).

My oh my oh my.

          Please continue....

Internet Commentary #48 -

Posted on the Internet October 18, 1997 by "Cmax"

ANOTHER: Your posts have answered my questions to that first LBMA announcement back in January, and my subsequent posts..... and no one really paid attention then. (except Vronsky)

Internet Commentary #49 -

Posted on the Internet October 19, 1997 by "JTF"

I find ANOTHER's post more puzzling than any previous one. Are we expected to believe that gold is actually being traded at $1000/oz rather than the current approx $324/oz for gold? If one repeats the calculation of how much gold would needs to be sold to subsidize that $10 per barrel of oil to keep oil at approx $20/barrel, but now gold is sold at $1000/oz, then this would reduce the amount of gold needed by nearly 1/3. What does not make sense is that if this is so, why not just state that one is reducing the price of oil by $3, and not $10? Are we to believe that the price of oil is say actually $27/oz, but we are only paying $20/oz?

This most recent post makes no sense to me. Do you really believe this, Cmax?

Internet Commentary #50 -

Posted on the Internet October 19, 1997 by "JTF"

@LBMA

All: Is there anyone out there? Aurator? the Nicks? anyone? Unless I am missing something, we will have to find other sources of information than ANOTHER to unravel the mystery of the LBMA. We have the essentials anyway from the annals of history: Gold is sold by the central banks of countries who are inflating their currencies to the CB's of countries who are not inflating their currencies. The question of the role of the LBMA in all of this is that complex derivatives trading of some kind could give the illusion that a particular currency such as the dollar is stronger than it really is -- for a period of time. But eventually, those countries who are supporting the dollar would eventually be forced to sell their gold reserves. So the eventual outcome is the same. As gold investors, all of the mystery about this is really not that important to us. All we need to know is when the current charade ends. Technical analysis is sufficient for this if other usefulinformation is not forthcoming.

Internet Commentary #51 -

Posted on the Internet October 19, 1997 by "Donald"

JTF, CMAX: I just did some quick calculations using random dates and that coincide with oil crisis periods in recent history and non-crisis dates.

These are prices of oil per barrel, expressed in ounces of gold. 1929 = .005, Sept. 1973 = .029, Oct., 1973 = .051, Jan. 1974 = .090, 1980 = .059, Today = .055.

Sept. 1973 is non-crisis time, October, 1973 was the Yom Kippur War, January, 1974, was the Second Oil Shock, 1980 was the gold peak.

Oil prices I used per barrel are 1929 10c, 9/73 $3.00, 10/73 $5.11, 1/74 $11.65, 1980 $40.00

Gold prices were from the Kitco London fix tables.

Internet Commentary #52 -

Posted on the Internet October 19, 1997 by "ANOTHER"

THOUGHTS!

There is only one oil state that counts! ONLY one! They have made it very clear how important gold is to them. If they had started buying outright, gold would have gone to $5,000+ in days. And only a very few million ozs. would have been purchased! The message has been for some years, "we will accumulate thru the back door, using paper deals if you keep the price at or below the cost of production". Do this and oil will remain THE driving force of the world economy! FAIL THIS AND WE WILL PRICE GOLD IN DOLLARS AT THE TRUE VALUE OF OIL TO THE WORLD!

You see, gold is not a commodity. The CBs have used every weapon to keep it's price low . Understand me, Gold is now, today, a devalued currency being used in world trade! Do you think the CBs are selling gold to keep the dollar strong? They don't have to sell to accomplish that feat! CB gold ( one billion ozs.? ) valued at it's current commodity price is only worth 300 billion, it's nothing in that price range! They know what it's US$ price is worth in terms of oil! They are not stupid as they show.

You should not think they are dumb! Invest in gold mines, will you? Notice how quick the Australian CB hinted at taking "gold in the ground" if needed. This was said after their sale! The nature of the coming crisis will make the taking of investor property a piece of cake. You see, because gold is a commodity, you will be compensated at the commodity price of return + a fair profit, of course.

How much further can they take this? The world private stockpiles that could be sold have been. The CBs are heavy into their own stuff now and are over their heads if they had to make good on all the private deals ( read my other posts ) . The economic game is ending now and has been from the start of 1997! Watch closely as the world currencies and markets fall one by one. Watch in absolute wonder as the demand for oil plunges and it's price goes thru the roof. Yes, oil stocks will crash with the markets. And gold? You will never know it's price. It will stop all trading as it slices thru $10,000+.

Who am I? As I will not be around for long so I am noone. But , follow with me as all of this takes place in your time!

Internet Commentary #53 -

Posted on the Internet October 19, 1997 by "ANOTHER"

THOUGHTS!

If you are searching for facts you will find them, but the items you find will not be true! Did you think that the high powered world of the LBMA would operate in a fishbowl for all to see? We cannot take what is on the outside as evidence for what is on the inside. To find the answer work with inside assumptions and extrapolate them to the outside!

Think now:

Would the world CBs really have kept gold this long if they only valued it at it's ongoing commodity price? Cannot only the offer of gold have some value in a deal? Can paper gold that has a commodity face value of, say $300 be traded for it's true value of many thousands? Indeed, if your worldly investments (US stock market?) are valued in the long run by a full supply of oil, would not future gold in a Swiss acct. make a good trade?

Do the oil states think our military is there to protect them or protect oil?

Fact: If the world bids up the price of gold, all deals will be off! It would be every nation for themselves.Oil would explode in price!

Internet Commentary #54 -

Posted on the Internet October 19, 1997 by George S. Cole

CB selling

Another: Your argument that the CBs are striving mightily to keep gold down but will not be able to do so much longer makes sense. But I find your gold/oil pricing argument hard to believe. Seems to me that gold will follow oil higher, not visa versa. My understanding is that the Saudis have much more invested in global financial markets than they do in gold bullion, even if the latter is valued at $1,000 per ounce. Still think the primary motive for CB sales and leasing is to support the global financial bubble, or at least to prevent its too rapid deflation.

BTW, would be interested in you opinion of the argument made by some here that there has been heavy gold selling of late from one or more European CBs, and the price will collapse as soon as this is made public.

Internet Commentary #55 -

Posted on the Internet October 19, 1997 by "Jack"

The opening line "Their is only one oil state that counts, only one", seems to indicate that he refers to Saudi Arabia who I understand produces about 8 million barrels per day (If my figure is correct it would total about 2.88 billion barrels annually over 360 days). From there one would have to use a gold premium of $X or $XXX, whatever that means. If I use X = XXX = $10 per barrel and gold at $326, it works out to about 88.34 million ounces.

Problem is that the world leaders have created an ENIGMA in the numbers, and we can only search for them.

Internet Commentary #56 -

Posted on the Internet October 19, 1997 by "ANOTHER"

THOUGHTS!

Where are my THOUGHTS leading?

Yes, Mr. Cole you are correct. The Central Banks have known for quite some time the true value of gold in today's paper world. In a very real sense they are on our side. Let's take their side if you will. They are not dumb or stupid, in fact many of them are the best of the best! You see, the world grew up and ran away from them, totally out of control. It has left in it's wake a money system of colossal debt and political mismanagement.

They know it is over.

We are all at a giant poker table and the CBs act as the dealer. One day soon the game will end and the players will try to cash in the chips. In that day the dealer will act in our own best interest. They will not pay out gold for the chips. The money system will start over, from scratch.

Also:

It is easy to know that gold could not have been traded for all oil sold. This was never the intent. They only wanted to pull a small amount out of circulation on a regular basis. Using a small amount of oil as a partial trading vehicle gold could be purchased in an all paper deal to hide it's price. As I said before, if they walked up to the plate and started buying outright it would run the price. It is working. They only need 200 million ozs. When the system breaks that gold would be worth all the oil in Arabia and then some. The Asians are the problem, by buying up bullion worldwide and thru South Africa they created a default situation on all the paper for the oil/gold trade! Now the CBs are selling in the open to calm nerves but it's known that they will never sell enough. It was never their intent to provide the gold, only the backing until new mining technology could increase production. Over time the forward sales, such as ABX's should have worked. But LBMA went nuts with the game and the whole mess has now accelerated.

 

THE RED BARON

(October 26, 1997)

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