It may appear a waste of time, debating the issue of using a gold standard for international trade but the topic, which the free-spending/free trade maniacs thought they buried, forever, keeps popping back up again.  This is due to the terribly warped international trade regime run by the US dollar.  Since both China and Russia and even OPEC have been loudly grumbling about the need to reform the present, rotted, system, it pays to visit the past, again.  The Federal Reserve just released more secret documents!  All about manipulating gold markets…in the 1960’s.

To find these documents, I have to go finger thorough lots and lots of paperwork.  But patience does pay off!  So, here is yet another story about how the Fed struggled to fund US wars while trying to keep the international trade settlements from going totally haywire.  Of course, it did go haywire and is still very much, haywire.




The Problem:

The two-tier gold system, established at the Washington meeting of March 16-17, is threatened in two ways: (1) by South Africa’s offer to sell gold to the International Monetary Fund and (2) by the desire of some European central banks to purchase gold
from South Africa for addition to monetary gold stocks.

Sounds kind of like today’s news, only in reverse!  The IMF is talking about selling its gold.  The US needed to increase its imports due to running red hot, providing equipment and drafting younger workers for its increasing wars in Vietnam and Cold War stations around the entire planet.  


The US was basically trying to have its cake and eat it too, in Asia.  The bloated military spending was a key element in our local economies so there was no desire to stop making more and more things ship to Asia where it could be destroyed.  Since we were building bombs, Japan was supposed to help us by making consumer stuff we could use in lieu of our own factories, making consumer goods.

The U. S. response to this problem ought to preserve the essential character of the two-tier system as the U.S. views it, while avoiding either a breakdown of international monetary cooperation or a divisive battle in the IMF over its legal obligation to purchase gold from members.

So, the IMF was legally obligated to buy gold from members?  Time to look this up!

Factsheet – Gold in the IMF:


The IMF holds 103.4 million ounces (3,217 metric tons) of gold at designated depositories. The IMF’s total gold holdings are valued on its balance sheet at SDR 5.9 billion (about $8.7 billion) on the basis of historical cost. As of March 31, 2009, the IMF’s holdings amounted to $94.8 billion (at then current market prices). A portion of these holdings were acquired since the Second Amendment of the IMF’s Articles of Agreement in April 1978, amounting to 12.97 million ounces (403.3 metric tons), with a market value of $11.9 billion as of March 31, 2009. As noted below, this part of the Fund’s gold holdings is not subject to restitution to members.

The IMF acquired the majority of its gold holdings prior to the Second Amendment through four main types of transactions. First, it was then prescribed that 25 percent of initial quota subscriptions and subsequent quota increases were to be paid in gold. This refers to the business of this SECRET Fed Reserve memo!  This represented the largest source of the IMF’s gold. Second, all payments of charges (i.e., interest on members’ use of IMF credit) were normally made in gold. Aha!  This is all about having an agreed basis for SETTLING INTERNATIONAL DEBTS AND CHARGES!  Third, a member wishing to purchase the currency of another member could acquire it by selling gold to the IMF. See?  Back then, dollars were NOT used to acquire other currencies, this was done in the international settlements markets run by both the IMF and the Bank for International Settlements!  The major use of this provision was sales of gold to the IMF by South Africa in 1970-71. The secret memo here is from two years earlier and it is the same topic!  And finally, members could use gold to repay the IMF for credit previously extended.

The IMF’s policy on gold today

The Second Amendment to the Articles of Agreement in April 1978 eliminated the use of gold —a full 7 years after Nixon repudiated gold as part of a set US currency value system! —-as the common denominator of the post-World War II exchange rate system and as the basis of the value of the Special Drawing Right (SDR). It also abolished the official price of gold and brought to an end the obligatory use of gold in transactions between the IMF and its members. It furthermore required that the IMF, when dealing in gold, avoid managing its price or establishing a fixed price.

HAHAHA…ah, yes, the open market for gold sales that isn’t manipulated by anyone.  Yes, there is reason for some degree of paranoia here because of the history of actions we are only now being allowed to see, this year, long, long after the events the secret memo mentions.

The Articles of Agreement now limit the use of gold in the IMF’s operations and transactions. The US was desperate to kill it and since we mainly run the IMF for our own ends, we killed it pretty good, didn’t we?  The IMF may sell gold outright on the basis of prevailing market prices, and may accept gold in the discharge of a member’s obligations at an agreed price, based on market prices at the time of acceptance. These transactions in gold require an 85 percent majority of total voting power.This is so the G7, working with the US, can avoid having the gold system reemerge.  The IMF does not have the authority to engage in any other gold transactions—such as loans, leases, swaps, or use of gold as collateral—nor does it have the authority to buy gold.


When this memo was written, the complete destruction of the gold/money system was barely a dark gleam in the eyes of the Federal Reserve and the US government.  Both were definitely trying to figure out some scheme whereby we would have no more gold restrictions on what we did in credit or trade markets.  Now, back to July, 1968.  I was still in Europe and more trouble was brewing there: the Russian invasion of Czechoslovakia was being prepared and I was heading to Prague to give a rousing speech at the University there.

The two-tier system may be said to have both a short-term and a long-term significance.  No kidding!  For the short-run, it was intended to discourage upward pressures on the market price of gold, by saying to the market that central banks would not be contributing to the demand for gold.  HAHAHA.  And they claim, to this day, they don’t manipulate gold markets?  HAHAHA.  All the participants in the Washington meeting were in agreement that the smaller the margin by which the market price of gold exceeded the official price, the greater were the prospects for international monetary stability. And so…they manipulated the markets to get this result.  NO WONDER THIS MEMO WAS KEPT SECRET!  If the market price of gold remained relatively low, it was less likely (1) that central banks would convert foreign exchange into gold out of fear of a rise in the official price of gold and (2) that private parties would speculate on a change in relative exchange rates by moving their funds into what they regard as strong currencies.

See how we have evolved?  Today, one of the biggest speculative markets are connected to interest rate changes and variables and the effervescent, shifting changes in the FX markets!  

The longer-term significance of the Washington Agreement–and on this there is less than full unanimity among the participants–is that the two-tier system represents an important step toward diminishing the role of gold in the international monetary system.

HAHAHA.  In  1968, the true nature of the US/UK [France was VERY pro-gold, 100%] scheme for a ‘two tier system’ was clearly, to destroy the use of gold as the basis for INTERNATIONAL SETTLEMENTS.  

In particular, if monetary authorities would act upon the statement that, in view of the prospective creation of the SDR facility, the amount of gold in monetary stocks is sufficient, gold would play no significant role in the future growth of monetary reserves. OK:  Martin Jr makes it crystal clear: the goal is to have gold play NO role in the growth rate of monetary reserves!  In effect, gold would have been demonetized at the margin.

THIS LAST SENTENCE IS WHY THIS MEMO HAD TO BE KEPT SECRET UNTIL MARTIN JR DIED!  The effect of the IMF negotiations for the ‘Washington Agreement was not to balance world trade or make resolutions of fiduciary differences easier.  It was made in order to KILL GOLD AS MONEY!!!!


Whew. Soon, I should write about gold’s history and how the US Treasury and Federal Reserve plotted and schemed to kill gold as money.

This interpretation of the two-tier system has not been accepted by some European central banks and it is not possible at present to persuade them to accept it. I can imagine how loud the French screamed!  They had one big scare during the spring uprisings.  The last thing they wanted was inflation and a dying currency!  They were in for the gold.  In fact a public airing of this interpretation by U.S. officials’ would probably lead some European central bank officials to disagree publicly.

No kidding!  Switzerland, France: both would howl like starving wolves on the Siberian tundra!

The best the United States can do in present circumstances is to avoid an open breakdown of the Washington Agreement while seeing to it that any new policy agreements are not inconsistent with our preferred interpretation of its longer-term significance.

HAHAHA!  So, they conspired…yes, it is OK to be very paranoid here…to avoid letting DeGaulle or anyone speaking German, not to let them know the REAL purpose of US measures!  No, the LONGER-TERM SIGNIFICANCE was to be carefully AVOIDED.  But was the true goal.

Solution to Problem
It is believed, within the U.S. Government, that the best way to meet the present challenge to the two-tier system is to agree to provide through the IMF a floor price at $35 per ounce for newly-mined gold that South Africa (and other gold producers) need to sell to meet their balance of payments requirements. As another concession, South Africa would be permitted to count its gold holdings as of July 1, 1968 as monetary gold.

The US was forced to allow South Africa to pay the IMF in MONETARY gold but this was a concession.  

In exchange for these concessions —See? I didn’t even read this paragraph before commenting above and lo and behold, they use the word, ‘concession’!—, South Africa would be expected to sell newly-mined gold in the market, as its payments position requires, and to avoid special efforts to withhold such sales.

South Africa would not offer monetary gold to central banks or the IMF unless it had disposed of all of its supplies of newly-mined gold.

OK: here is another example of the increasingly desperate US trying to stop  SA from selling gold to OTHER CENTRAL BANKS.  This would cause us endless TRADE resolution problems!

Finally, South Africa would withdraw its present offer to sell gold to the Fund.

Advantages of this Solution

1. This solution provides for an accommodation with South Africa and makes it possible to end the existing uncertainties in South Africa’s dealings with the market, monetary authorities, and the IMF. The alternative proposal for ending these uncertainties—agreement on central bank purchases of some amount of newly-mined gold even when the market price is above $35–would constitute an open break with the Washington Agreement and would make it much less likely that the longer-term significance of that Agreement would be realized.
2. The proposed solution assures the market of a resumption of South African sales and prevents South Africa from choosing between market sales and sales to monetary authorities or the Fund as a way of maximizing the market price.

BINGO!!!!  The result was….NO FREE MARKETS.  Only a US-controlled market that would keep the price of gold where WE wanted it!

3. Central bank purchases of newly-mined gold continue to be precluded. Additional gold can enter the monetary system only if and when the market price falls to $35 per ounce or below. An opening of the system to additional gold in these circumstances would
clearly be consistent with the short-run significance of the Washington Agreement.

What is the meaning of #3 here?  They can sell newly minted gold only when the price is FALLING???  

Purchases by the Fund when the price is at $35 or below would not be in conflict with the objective of minimizing the margin between the official and market prices, since such purchases would occur only when this margin were zero (or negative). (It should be
noted that while the proposal would provide a floor price for sales of gold by South Africa as its payments position requires, the proposal would not put an institutional floor under the market price and would not therefore assure speculators that there is no risk at all of the
market price falling below $35.)

Additions to IMF gold holdings (and the possibility that the Fund would sell such gold to members) under this proposed solution would not be inconsistent with the desire to see a diminished emphasis on gold in the long run. HERE IT IS AGAIN!  The secret part of this secret memo!  The goal is to kill gold.  Gold would enter the official reserve circuit only if and when the market is placing a valuation on gold equal to or less than the official price. In the longer run, present expectations are that the market price is likely to rise above $35, as private non-speculative demand grows relative to supply. Thus, little gold would be bought by the Fund over the years.

See?  They expected inflation in 1968.  We already had quarters and dimes being debased with the introduction of ‘sandwich coins’. 

As time goes on, the market price will have less and less significance for the monetary system, assuming the U.S. balance of payments improves —AND THIS NEVER, EVER HAPPENED SINCE 1968!!!!—-and the SDR facility is activated. But during the present transition period, it is vital to avoid any sort of shock that would give the market price an upward push.

Sneaky chaps, eh?  Indeed!  I hope that everyone realizes, this is what real ‘research’ is: finding serious clues and then making the correct connections, tying the past with the present and figuring the future out.  There is a lot of CHAOS in the systems: for example, the Viral Kingdom is always at war with humans and indeed, all living things.  It is very clever in an evolutionary way, sneaky and difficult to control or manipulate since it is manipulating us, all the time.


Then there are other chaos systems like bin Laden turning on the CIA and going to war with it and winning nearly every round due to US weaknesses [Presidents wanting us to be attacked, etc].  Then there is the chaos of intergroup conspiracies.  The CIA, for example, is a continuous, secret conspiracy.  The Bilderberg group is a conspiracy too and equally addicted to secrecy.


Then there is AIPAC: nearly all of our ‘representatives’ bowed to the Jews running AIPAC and kissed their rings and NOT ONE BIT OF THIS IS IN THE NEWS TODAY!!!!  HAHAHA.  Yes, keeping the biggest lobbying group’s biggest meeting in DC totally out of the news, is a conspiracy and an obvious one.  By the way, Code Pink stormed the stage today and had a very visible protest.  And didn’t make the news anywhere, at all, whatsoever!  This is a conspiracy!


So it is with this secret memo: the parties are conspiring to LIE about our intentions concerning gold.  Knowing that the G10 nations mostly would be very pissed off if they  knew these secret schemes.  So much for trust.


Here, below, is a public report from the US Treasury one year earlier.  I was preparing to go the Germany when this was published:




September 1967 


During the past 16 years, the fact that world imports have grown three times as fast as global reserves has been made possible to a large extent by the willingness of the United States to experience a decline in its reserves while its imports grew, as did those of other countries.

I.e.: We were draining Fort Knox of all our gold.

For the rest of the world, import trade has grown at the rate of 7.8 percent per annum and reserves at the rate of 5.4 percent per annum.

See? Gold reserves were growing slower than trade and thus, since the US was importing more than exporting, it was on the losing side of the equation. Not a good thing.

While there have been wide short-term variations in the relationship between these two growth curves, there is no period of several years in the time interval examined when the world, excluding the United States, has seen its reserves grow at less than half the rate of growth in its imports.

Post-WWII saw great commerce shifts as the US was now the global trade engine. And we wanted Germany and Japan to become very strong so we could win the Cold War. US policies, by the way, were NOT popular in Germany in 1968.

The substantial decline in U.S. reserves also explains the fact that global reserves grew at an annual rate of 2.4 percent, while outside the United States the corresponding figure was much higher, at 5.4 percent. Even at this rate, the more rapid growth in imports has meant that outside the United States reserves are equal to only about 35 percent of annual imports, and thus cover only about 4 months’ imports…

This is the data that matters! All monetary business concerning gold was all about import/export balance of trade! Gold is not a way of regulating trade. Tariffs and barriers are supposed to do this. Gold is supposed PUNISH anyone daring to run bigger and bigger trade deficits!!!! This is why it collapsed, as a system in the Great Depression, for example. When global trade collapsed, gold fell apart as a valuation system due to DECLINING PRICES. While gold was being kept stable. And the declining prices were due to monetary collapses. For example, the US dollar versus gold dropped dramatically during the Great Depression.

If it is reasonable to assume that at least half of the reserve gains should be covered by reserve losses, a very rough guide emerges to the total new reserves of all types that might be desirable: $2.5-$3.75 billion in 1970 and $3.75-$5.25 billion in 1975…

These numbers are so tiny! Our population was 100 million back then, it is 300 million today. So, the reserves should be $15 billion today? HAHAHA. But the dollar lost 90% of its value since then. Even so, the trade figures are horrific today and on top of that, our reserves have been stagnant since 1994. Even as our trade deficit soared.However, some criteria are suggested that might apply to the first activation. One of these is a tapering off in the rate of growth in international trade. Moves to tighten restraints on capital and current international transactions are other indications that new reserves might provide a useful antidote to these pressures.

Reducing trade with Germany and Japan during 1968 was impossible. The youth were agitating in all the major capitals including Japan. The US wanted political supremacy.Maintenance of excessively high interest rates in important sectors of the world’s economy, after allowance for price trends and cost-of- living increases, might also suggest the existence of reserve shortages and of competitive efforts to attract and hold reserves. This report was written the same year, our own reserves began a rapid collapse due to everyone on earth turning in dollars for gold.As to more sensitive early indicators, one must probably look to deficit countries, since this is where the first indications of reserve shortage appear. #1 deficit country: the US. Unfortunately, it is difficult to disentangle the impact of a general world shortage of reserves from individual balance-of-payments problems of particular countries. Namely, the US. Perhaps some guidance could, however, be found by observing whether restraints on foreign assistance programs and private capital movements are emerging in such countries, or whether there are indications of competitive interest rate rises.

The growing use of credit facilities instead of reserves might also provide a signal. See? CREDIT was beginning to be talked about as the basis for ‘reserves’. This is part of the philosophical system of denying the principals of CAPITALISM. Namely, debt is NOT capital. Debt is a forward loss. Capital is past profits. All of these early indicators seem difficult to evaluate with precision. Fortunately, a secular approach does not call for excessively fine tuning, in the sense that the credit facilities provide some short-term flexibility to the system in both directions, by enlarging reserves temporarily when granted and shrinking them when repayments are made. Perhaps the main task of reserve creation is to find the most satisfactory rate of secular advance rather than to overemphasize timing judgments. At the same time, a mounting list of qualitative criteria pointing to global reserve shortage would accentuate the need to be prepared with an adequate collective plan for reserve creation and to activate it in good time.

Remember the last three years [HAHAHA]? We had this legendary ‘global SAVINGS glut’. And then, mysteriously, a ‘global CREDIT shortage’! We had to restart lending, and to do this, the FUTURE savings of the US, UK and Japan were thrown into the banking system in order to re-capitalize it. The banks, of course, were so bankrupt, they couldn’t lend unless they first sold all their crummy debts to someone and the only someones on earth were the central banks of the countries DEEPEST IN DEBT and in the case of the UK and US, running massive trade deficits, too!

So, let’s go to today’s news!

INTERNATIONAL MONETARY FUND Establishment of a New Framework Administered Account for Selected Fund Activities Approved by Ross Leckow, Andrew Tweedie, and Alfred Kammer March 4, 2009 I. INTRODUCTION 1. This paper proposes the approval of an instrument for the establishment of a new framework administered account to administer external financial resources for selected Fund activities (the “SFA Instrument”). The SFA Instrument is designed to provide a more flexible platform through which the Fund may attract donor resources and meet the demand for its technical assistance (TA) and other activities. It builds on the Executive Board’s endorsement of management’s proposal that the Fund take a more vigorous and systematic approach in raising external financing.2 During a transitional period, the SFA Instrument will operate in parallel with the existing Instrument for a Framework Administered Account for Technical Assistance Activities (the “FAA”), and new subaccounts will be opened exclusively under the SFA Instrument.3 It is expected that the FAA would be phased out in due course.

The IMF is changing course, yet again. We are in another major monetary crisis. The ones created by the US are the most dangerous since the dollar is the fiat currency for settling world trade values and deals.

II. WHY IS THERE A NEED FOR A NEW INSTRUMENT? 2. External financing is playing an increasingly important role in meeting the demand for the Fund’s advice. Who is this ‘external financier’? The ZIRP Bank of Japan? OPEC? Or China? It certainly is not the US. If it is, the IMF will simply flood the world with more worthless currency that makes world trade even more unbalanced. In particular, external financing has become a critical component of the Fund’s TA program and is expected to grow in importance in the years ahead. INFLATION, HERE WE COME!!!! While internal funding has declined over the last decade, external financing has increased substantially —See? The IMF is really bankrupt. It has to go ‘external’ in order to lend to the poor—-and has allowed the Fund to maintain its TA field delivery at a constant level. Internally financed TA is expected to decline as envisaged in the Fund’s FY2009-2011 Medium-Term Budget – by about 20 percent in real terms —The value of fake US dollars is at the heart of this—– but demand for Fund TA is expected to grow, as evidenced, inter alia, by the expanding list of requests for new Regional Technical Assistance Centers (RTACs); low- and lower middle-income countries seeking to build the institutions necessary to implement growth-enhancing policies; and emerging markets and developing countries seeking to put in place more effective legal and regulatory frameworks governing the operation of their financial systems.

The US controls the IMF. This is why there is so much pious blather there. This is a classic example. If any country needs discipline, it is the US. If any country needs to ‘develop its markets’, it is the deep in red-ink trade US system. And god knows, we just screwed up the entire planet’s financial systems!

The implementation of such a broad-based strategy to attract and use external financing will effectively require the establishment of this SFA instrument. While the Fund’s existing FAA9 has served the institution well, it is outmoded. It would be possible to amend the FAA, but the consent of each contributor to the sub-accounts established under the instrument would be required, a process which is likely to be lengthy and uncertain. The more workable approach would be to establish a new instrument that embodies the necessary features and to allow the two instruments to operate in parallel for a transitional period.

Here it is, again! In 1968, they had a dual system working in tandem. I would LOVE to see the secret memos about this proposed change in the IMF. Do they talk about fooling the US public about what currency will be used in 5 years? Are there conspirators at work here? YOU BET!

III. FEATURES OF THE NEW SFA FRAMEWORK ACCOUNT 6. The SFA Instrument will build on the structure of the FAA Instrument with a number of important enhancements to address the objectives set out above. Like the FAA Instrument, the SFA Instrument will establish and set forth the terms of governance for a framework administered account (the “SFA Framework Account”). The SFA Framework Account will function as an umbrella administered account under Article V, Section 2(b) of the Fund’s Articles and will be comprised of individual subaccounts. Expand the pool of donors. The SFA will allow sub-accounts established under the instrument to receive resources from both public sector and private sector donors. PRIVATE???? This is code for ‘pirates from various tax haven islands! Again, the mixing of public and private with the privateers looting the public treasury! Under the FAA, only governments, other official agencies of countries and international organizations may contribute resources. Contributions from nongovernmental donors are not allowed. This was to prevent piracy. This limitation excludes an important source of financing that could be used to support the Fund’s work in the future, in particular foundations that are active in low income countries.

In other words, Goldman Sachs, JP Morgan and the House of Rothschild will now be able to take over the IMF using government debts, cheap government banking loans at ZIRP levels to take over the IMF and then, keep ALL nations CAPTIVE so we have to pay them all a high interest rate on loans they first got from central banks at near-zero percent interest. Wow.

Authorizing Management to specify the essential terms of subaccounts will better align donor support with the Fund’s TA priorities as set forth in Resource Allocation Plans (RAPs) and Regional Strategy Notes (RSNs) and also, in turn, allow the Fund to better highlight the link between its TA strategies and donor development strategies. This flexibility will allow for topical trust funds to be designed to foster a long-term partnership framework between the Fund and a broad pool of donors, the composition of which could evolve over time and will foster operational and administrative consistency across topical trust funds.

This is what was hammered out over the course of the last year at various secret Bilderberg gatherings, Council for Foreign Relations groups, World Trade Organization and Doha Round meetings, etc, etc.  They plotted and planned and came up with a solution whereby the Federal Reserve and Bank of England could hand over their role of planetary controllers to the Real Rulers, the clique that controls the international systems.  There, they can SET RULES ON US and claim, they have no idea, who is doing these things, it is all the rules of the bankers!  And since we are deep in debt, we have to live with it.


ONLY ONE PROBLEM: all these schemes to keep physical monetary power in the hands of the rulers, they have to figure out how to cut China out of the deal, somehow.  China, on the other hand, has an ace up their sleeves: gold.  Resurrecting gold as the basis for dealing with settling international debts is not impossible, no, not at all.  Especially if all sovereign wealth nations agree with China on this issue.





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