Libor Rigging: The Tip of the Iceberg
By Rob Kirby
Friday, 13 July 2012
GATA was born in the late 1990’s – primarily on the back of fundamental research by Frank Veneroso regarding Central Bank Gold Leasing. Veneroso’s intellectual curiosity was aroused after being fed detailed data re: gold leasing by the Bank of England’s Terry Smeeton.
The fact that gold prices and interest rates were so highly “inter-related” was first publicized in the alternative media by Reg Howe in 2001. Howe alerted the world to academic accounts of the special relationship between gold and interest rates. He highlighted the body of economic law and observation associated with “Gibson’s Paradox” – something Lawrence Summers [later, U.S. Treasury Secretary and current senior economic advisor to Obama] wrote about with Robert Barsky while he was a professor at Harvard in the 1980’s.
The upshot of this Gibson’s Paradox economic theory goes something like this: real interest rates and the gold price are causal and inter-related with each other.
This is why Professor Lawrence Summers was summoned to Washington as assistant Secretary of Treasury under Robert Rubin [Clinton Admin. / 1993]. It was to implement HIS THEORETICAL WORK under the auspices of Treasury Secretary Robert Rubin’s mythical “Strong Dollar Policy”.
Conclusion: since 1994, the mythical Strong Dollar Policy had necessitated a two prong strategy: that of keeping rates low because weak currencies are typified by high interest rates; and the price of gold must be suppressed as it stands as an historical alternative settlement currency – and they don’t want the alternative to appear “strong”.