- DALLAS (Business Wire) --
A study published by a research foundation in Dubai has endorsed the Gold
Anti-Trust Action Committee's findings that Western central and commercial
banks have rigged the gold market but have much less gold than they claim
to have and so are vulnerable to rising demand for gold. The study recommends
that the oil-producing countries of the Middle East diversify their ever-depreciating
U.S. dollar holdings into gold.
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- The study, "The Role of Gold in the Unified Gulf
Cooperation Council Currency," was written by Eckart Woertz, vice
president of CFC Securities in Dubai, for the Gulf Research Center. It
quotes the work of GATA's consultants, including Frank Veneroso, and predicts
that the gold price suppression scheme of the Western banks will fail just
as their similar scheme of the 1960s, the so-called London Gold Pool, failed
when the drain on Western gold reserves became too great. Once the scheme
fails, the study says, "it will be highly difficult and expensive
to accumulate a gold reserve. This is especially true for central banks
that have low gold reserves like those in the Gulf Cooperation Council
countries."
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- The study concludes: "The paper dollar standard
is a dead man walking. Its debt, accumulated over the recent decades, is
too high to be effectively repaid. It will either default or be inflated
to such an extent that it will not 'hurt' to pay it back. Therefore, the
accrued imbalances in global finance and the inherent weakness of worldwide
growth models that rely on a continuance of U.S. deficit spending are likely
to usher in a serious crisis of currency systems in coming years.
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- "Gold will be a suitable means of asset protection
and ultimate payment in such a scenario. It will preserve the wealth of
individuals and central banks alike and will ensure important maneuverability
for the latter."
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- GATA believes that the study is likely to have a profound
influence on governments, banks, and investors in the Middle East and may
accomplish there what the similar report by Sprott Asset Management of
Toronto -- "Not Free, Not Fair: The Long-Term Manipulation of the
Gold Price" -- is accomplishing in the West.
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- The Middle East's oil-producing countries are especially
obliged to heed the Gulf Research Center's study because their economies
are based on a wasting asset, oil, whose depletion will leave them with
little more than sand if the payment they receive is substantially depreciated
or defaulted upon. In exchanging a real asset for paper assets that represent
only unpayable debts, oil-producing countries are at imminent risk of massive
expropriation.
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- The study has been posted at the GATA Internet site here:
http://www.gata.org/The%20Role%20of%20Gold%20Digital.pdf
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- GATA urges its supporters to publicize the study around
the Internet and in communications with mining companies, investment houses,
and news organizations.
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- © Business Wire 2005
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- http://home.businesswire.com/portal/g=en
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