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CPM Group's Christian touts central bank gold data even though it's often false
4:56p ET Monday, November 4, 2024
Dear Friend of GATA and Gold:
In his review of the gold market today, metals consultancy CPM Group's Managing Partner Jeffrey Christian suggests that central banks always tell the International Monetary Fund the truth about their gold reserves and the IMF always tells the truth to the World Gold Council and the public.
Thus Christian would have his audience believe that when the People's Bank of China issues a monthly report showing no new acquisitions of gold, the bank and China's government have not acquired any gold in the month. Christian seems to believe that China's government and other governments would never dissemble or obfuscate about their gold.
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But in July gold researcher Jan Nieuwenhuijs reported that United Kingdom customs data showed that China had continued buying gold even as the People's Bank of China was reporting that it had suspended its gold purchases:
Fifteen years ago China already had made a habit of dissembling about its gold reserves. In April 2009 China caused a sensation by announcing that its gold reserves had increased by 76%, from 600 tonnes to 1,054 tonnes. For the previous six years China had been reporting to the IMF only 600 tonnes.
Had China acquired those 454 new tonnes only in the first few months of 2009? Very unlikely. It is far more likely that China acquired those 454 new tonnes over at least several years, largely by purchasing the production of its own fast-growing gold-mining industry. So for as many as six years the official gold reserve data about China was way off.
In 2010 the Saudi Arabian Monetary Authority was caught concealing gold reserves from the IMF, with much Saudi gold having long been kept in unreported accounts:
https://www.gata.org/node/9070
https://www.gata.org/node/9094
In September this year, citing customs data, Nieuwenhuijs reported that Saudi Arabia has been covertly buying gold in Switzerland for two years:
Even when offical gold reserve data is reported promptly to the IMF, the IMF may falsify it as a matter of policy.
For the March 1999 secret report of the IMF's staff to the agency's Executive Board showed that central banks could report gold reserves that had been swapped or leased as if the metal remained unimpaired by any such obligations.
The secret report said: "Central bank officials indicated that they considered information on gold loans and swaps to be highly market-sensitive, in view of the limited number of participants in such transactions. Thus, they considered that the Special Data Dissemination Standard reserves template should not require the separate disclosure of such information but should instead treat all monetary gold assets, including gold on loan or subject to swap agreements, as a single data item."
That is, under IMF rules a central bank's entire gold reserve might be swapped or leased, and even to have left the country, and the IMF would happily continue to report the reserve as intact:
https://www.gata.org/node/12016
https://www.gata.org/files/IMFGoldDataMemo--3-10-1999.pdf
In short, no official central bank and IMF gold data is reliable. Indeed, the true location and disposition of central bank gold reserves are national secrets far more sensitive than the true location and disposition of nuclear weapons. For nuclear weapons can only destroy the world, while gold, by determining all financial valuations in all currencies, can control it.
Christian makes a living trying to get others to believe official government gold data. Since he admits that CPM Group is a consultant to governments and central banks --
https://cpmgroup.com/cpmgroup-our-services/consulting/market-analysis-2/
-- his audience should remember that it might be bad for business if he ever told the truth about them.
His report today is nine minutes long and can be seen at YouTube here:
https://www.youtube.com/watch?v=FpyNS_gfSX4
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
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