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[Frank Pembleton]

'Conspiracy is hurting gold' - SG
By: Ken Gooding
Posted: 2002/11/19 Tue 12:52 ZE2 / © Mineweb 1997-2002


LONDON - Those who loudly proclaim there is a conspiracy by some governments and investment banks to hold down the price of gold are doing more harm than good.
This suggestion comes from Frederic Lasserre, Paris-based economist at SG Securities, part of the Society Generale banking group.

He points out in SG’s latest Precious Metals paper from the economics team that gold is the only asset that “has inspired so many tomes, reports and websites developing the wildest of theories.” He says the proponents of these theories claim to be “defending gold from the powers that be who seek to banish it from the economic sphere.”

This is misguided, he suggests. “The future of gold lies in the capacity to attract investors - that is to maintain its appeal for new generations that are neither familiar with the gold standard system, nor any situation in which gold can perform its role as an asset of last resort. The rumours peddled by these ‘defenders’ will hardly contribute to this enterprise.”

Lasserre’s comments were sparked by last week’s rumour that a major US investment bank had suffered heavy losses on proprietary gold positions. He recalls: “It included some spicy details, one of which claimed that trucks were spotted loading gold into safes at the New York Federal Reserve. Not only is this rumour evidently unfounded, the details supporting it are staggeringly naïve. That said, they do reveal the fantasies surrounding gold. Behind the supposed trucks that were discretely loading gold at the Federal Reserve lie not only the makings of a successful film but the bank’s losses were apparently so great that the Fed had to lend it gold, raising once again the notion of a plot against gold.”

The SG economist also rubbishes what he describes as “one of the most widely known wild theories about US gold.” This theory has gained currency, he suggests, because it includes seemingly rigorous accounting arguments. The theory “claims that the Fed sold its gold reserves (8,149 tonnes) a long time ago and the stocks declared to the FMI are the result of clever accounting work.”

Lasserre says this is “a simple reinterpretation of the lost treasure myth that has been handed down throughout the history of civilisations and empires.”

http://www.mips1.net/MGGold.nsf/UNID/LCLY-5G2ERZ