After yesterday we highlighted a declassified document by the Department of State, in which it was made clear just how critical it is for the US to remain "Masters of Gold", today we present a comparable memorandum from the same time period (December 1968) this time by the CIA, which presents comparable key high-level gold-related deliberations by the then-administration.
Some of the key points:
We lose influence in world affairs whenever:
* The dollar is weak in exchange markets
* There is a major outflow of gold; and/or
* We are obliged to pressure countries into holding dollars or giving us payments assistance
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
With $33 billion of foreign dollar holdings ($16 billion in official hands) and only $10.7 billion of gold in the U.S. reserve, the risk is clear. To contain these pressures our strategy is:
* To isolate official from private gold markets by obtaining a pledge from central banks that they will neither buy nor sell gold except to each other;
* To bring South Africa to sell its current production of gold in the private market, and thus keep the private price down.
A recently declassified telegram to the Secretary of State sent in 1968, has some very distrubring revelations to gold "conspiracy theorists" who believe there could be an international arrangement to maintain a control over gold prices in the international arena. This is especially true as the G-20 meets currently in Pittsburgh behind closed doors. Could gold be one of the issues discussed?
We particularly bring readers' attention to paragraph 13 in the telegram below, which present some troubling revelations (emphasis ours):
If we want to have a chance to remain the masters of gold an international agreement on the rules of the game as outlined above seems to be a matter of urgency. We would fool ourselves in thinking that we have time enough to wait and see how the S.D.R.'s will develop. In fact, the challenge really seems to be to achieve by international agreement within a very short period of time what otherwise could only have been the outcome of a gradual development of many years.
Furthermore, apparently 41 years ago the Plunge Protection Team had a more affectionate name ...
The truth is stranger than fiction.