The Phaserl


Gold & The CIA Go Back A Long Time – Nico Simons

by Nico Simons, Sprott Money:


Is the CIA involved with the world gold market?

About the CIA (1)

The Central Intelligence Agency (CIA) was established by the National Security Act of 1947 as an independent agency under the direction of the National Security Council. Its principal mission was to “correlate and evaluate intelligence (from around the world) relating to the national security, and provide for the appropriate dissemination of such intelligence within the Government.”

One of the main objectives in creating the CIA was to prevent a repeat of the Pearl Harbor intelligence failure where bits of information that might have provided warning of the Japanese attack were not woven together as they should have been. The National Security Act permitted departments and agencies to continue to collect and disseminate “departmental” intelligence, but CIA was given the responsibility for coordinating and evaluating all intelligence relevant to more than one department of agency.

Unlike the Federal Bureau of Intelligence (FBI), which is a domestic security service, the CIA has no law enforcement function and is mainly focused on overseas intelligence gathering, with only limited domestic intelligence collection.

The involvement of the CIA with the world gold market emerges clearly out of recent declassified documents. The first document we describe is the most important. This document makes the connection between losing influence in world affairs and the price of gold. The information of the CIA about the world gold market seems to be mostly on a strategic level, like

lose influence world affairs and gold
controlled sell and buy official gold
controlled sell South Africa production
analyze violations Washington Agreement
approach to report virtually unchanged gold reserve by sell of official gold
analyze gold price movements and manipulation thereof
positioning London as focal point of the world gold market
research regarding (future) gold production and financial position of a country

Declassified secret memorandum CIA dated 1968-04-12

Re International Monetary Problems

…CIA…US lose influence in world affairs whenever…vulnerability to confidence crises…gold is a basic problem…

In this memorandum, it is literally mentioned:

“We (writer: The US) lose influence in world affairs whenever:

The dollar is weak in exchange markets;
There is a major outflow of gold; and/or
We are obligated to pressure countries into holding dollars or giving us payments assistance.

Small payments deficits permit us (writer: The US) greater freedom to act. But our position can also be improved by action on the international monetary system itself to:

Decrease vulnerability to confidence crises;
Increase world monetary reserves (liquidity); and
Improve tools for adjusting payments surpluses and deficits.

Vulnerability to Confidence Crises

Gold is a basic problem. Whenever the price of gold in private markets rises significantly above $ 35 (writer: 1968) an ounce there can be pressure on foreign central banks to replace dollars and sterling with gold. They worry that the US will not be able to meet the demand for converting dollars into gold and either suspend conversion or revalue gold, thus penalizing those who hold a large part of their reserves in foreign exchange rather than gold.

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