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The Euro Impacted Everything Including Gold

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When I was invited by the Central Bank of China to Beijing after the 1997 Asian Currency Crisis, I was told to please continue to try to explain what was taking place in the world economy because I was the only independent analyst with worldwide experience. For you see, had you been able to ask “real” traders on dealing desks around the globe, they would have said what I was saying about the Euro. But they cannot speak for if they did, any comment would have been attributed to the bank that they worked for. Here is a communication from July 1999 as gold was making its major low. Every time so many default to the CONSPIRACY theory to try to explain current events and this greatly misinforms everyone of what is really taking place and the true risks that we face in the world economy. This December 1 & 2, I will be delivering our WEC in Berlin and it is already shaping up to be a political event since I am the guy that warned the commission it would fail. Since that is on record, you can imagine the vortex shaping up around the Berlin WEC with TV and newspaper requests for interviews already. It was the formation of the Euro that caused capital to pull out of Asia and head to Europe for the birth of the Euro in 1998. But it was also the cause of the low in gold in 1999 as nations dumped gold to boost their balance sheets for the Euro entry. Here is correspondence of the period that shows the atmosphere and why so many remain in the dark about international capital flows being the key to correct global forecasting. There is no giant long-term CONSPIRACY in anything. Yes there are market manipulations and conspiracies to accomplish that. But these are short-term events based upon immediate profits. There is no grand design to manipulate the world economy. It has always been isolated manipulations to make guaranteed trades not to control the trend of markets over decades. That does not produce instant profits.


>From:             ——–

>Sent: Friday, July 09, 1999 10:03 AM

>To:     Martin Armstrong

>Subject:         FW: Attn: Martin Armstrong

>Dear Mr Armstrong,


>So you think there is no gold price manipulation …


>Just as an example, let’s look at the Bank of England (BOE) gold sales:

>1. BOE announces the gold sale in advance, decimating the higher price

>it would have obtained if it had kept quiet (like most countries do).

>These losses far outway any future interest earned.

>2. The sellers at the auction were by invitation only (ie LBMA only) 3.

>We still don’t know exactly the name of the buyer(s) 4. The auction was

>over-subscribed 5-fold, but gold price still falls $5 after the “sale”

>5. Galyn Davies is a Goldman Sachs partner and is also Tony Blair’s

>economist. Davies is Goldman Sach’s international economist and

>operates out of the UK. Davies just also happens to be the chief

>financial advisor to Gordon Brown, who is Britain’s Chancellor of the

>Exchequer. The well circulated rumor is that Goldman Sachs is short

>1.000 tons of gold and that Davies was the influence behind the English

>decision to sell gold. It would appear there is a big conflict of

>interest here, to say the least. Or yet another coincidence.


>Very, very suspicious


>Yours faithfully




Indeed, a very nice string of facts. The problem is that everyone on the street knowns that GS was LONG and trying to go for the stops of the public funds, which were short. When BOE made its announcement, it was GS dumping gold all over the place. They lost a bundle and every dealer knows it.

The CBs are not manipulating gold, they are dumping gold. Why in the world would they be concerned about trying to force gold prices down and at the same time continue to liquidate? This Conspiracy makes no sense.

The CBs of Europe started to sell gold to reduce their deficits to meet the EMU criteria. When Australia learned about what was going on, they too sold. Everyone is front running everyone else. It’s not a conspiracy, because that implies coordination and some end motive.

BOE would NEVER do anything to help bailout a US bank. It is total nonsense.

All this bull is really an excuse for those who have been dead wrong on the direction of gold. It implies that they would not have been wrong if this manipulation was not taking place. They were wrong and should simply admit the truth. The longer they deny the truth, the long the bear market will continue. It is right on time. A 19 year bear market is normal.

Because there has been an increase in other central bank selling without public announcement, there has been no bounce in gold whatsoever. Nevertheless, this is just the prelude to the Euro that will fail in the end as debt simply replaces currency. As long as a trader can isolate a country with some instrument, there can be no single currency.

M. Armstrong