call the bis at 1-800-rig-mkts, page-10

Chuckey

I will only address no.3 (because I had occasion to read the testimony last year and it was easy to find):

Regarding the testimony of Fed Chairman Alan Greenspan Before the Committee on Banking and Financial Services, U.S. House of Representatives on July 24, 1998. The context was the regulation of OTC Deriviatives:

Subject: Potential Application of the CEA to OTC Derivatives.

“The vast majority of privately negotiated OTC contracts are settled in cash rather than through delivery. Cash settlement typically is based on a rate or price in a highly liquid market with a very large or virtually unlimited deliverable supply, for example, LIBOR or the spot dollar-yen exchange rate. To be sure, there are a limited number of OTC derivative contracts that apply to nonfinancial underlying assets. There is a significant business in oil-based derivatives, for example. But unlike farm crops, especially near the end of a crop season, private counterparties in oil contracts have virtually no ability to restrict the worldwide supply of this commodity. (Even OPEC has been less than successful over the years.) Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise.”

For the complete testimony: http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm

GATA removes it from it’s context:

“Fed Chairman Alan Greenspan’s comment before a Senate committee on July 30, 1998; "Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise."

Greenspan was arguing against further regulation of derivatives. His point is that physical delivery on OTC contracts is not likely to be the cause of price disruption because most transactions are settled by cash. If there was a problem with delivery, then central banks can intervene to ensure price stability. This is consistent with the Fed's mission statement:

http://www.federalreserve.gov/aboutthefed/mission.htm

GATA takes these comments as evidence of a systematic program to suppress the price of gold!

I have read the famous declassified 1975 declassified letter to President Ford. GATA's analysis demonstrates similar "quote mining". They start with a theory and select quotes that seem to confirm it.

This is the quality of GATA scholarship! It would be laughable if people didn’t take it seriously.