About the Author:
    Henry Mark Holzer is a Professor of Law. He teaches constitutional law, administrative law, and other courses. His practice is limited to appeals and constitutional litigation.
    Prof. Holzer has lectured widely on a variety of legal and law-related topics, and his articles have appeared in newspapers, popular and professional magazines, and academic journals. His most recent books are The Gold Clause (1980) and
Government's Money Monopoly (1981).

Introduction
    For the first time since [James] Bond had known Goldfinger, the big, bland face, always empty of expression. showed a trace of life . . . . "Mr. Bond, all my life I have been in love. I have been in love with gold. I love its colour, its brilliance, its divine heaviness . . . .I have worked all my life for gold . . . .I ask you . . . . is there any other substance on
earth that so rewards its owner?"1
    For centuries, most people have shared the fictional Mr. Goldfinger?s attitude about gold, though not necessarily for the same reasons. While gold has been much sought after, both for ornamental and industrial purposes, modern times?or, more
specifically, modern governments?have taught men to value it for one purpose above all others: as a hedge against the debasement of paper money. Monetary economist Charles Rist acknowledged this phenomenon when he wrote: ?[I]n the absence of governments capable of maintaining stable money, private individuals seek to assure it for themselves, hoarding a purchasing power [gold] more stable than that of any other merchandise . . . stable money is one of the last arms that remains at the disposal of the individual to direct his own affairs, whether it be an enterprise or a simple household.?2
    Indeed, during the monetary crisis of the last several years, the price of gold soared in free world markets as more and more individuals around the world acquired gold as a hedge against actual and potential currency devaluations.3 Unfortunately, while
others scrambled to protect themselves from the instability of paper money, Americans had to watch from the sidelines. For them, owning gold has long been a criminal offense, punishable by up to ten years in jail and/or up to a $10,000 fine; they
also risk confiscation of the gold and a penalty of twice its value.4
    Most Americans are unaware of the existence of these harsh criminal sanctions. Fewer still, including the legal community, are aware of how?and why?Americans lost their right to own gold in the first place. The facts, which should startle layman
and lawyer alike, expose the shaky legal foundation on which the gold prohibition rests: an unconstitutional arrogation of congressional power and the improper delegation of that power to the President, leading to what can be called the ?endless
emergency? rationale.

World War I: The Seeds Are Sown
    The existence of a state of war between the United States and Germany in 1917 had prompted the passage of the Trading with the Enemy Act,5 one purpose of which was to make unlawful all dealings between Americans and the enemies of the United States.6 However, an obscure subsection of the Act7 authorized the President to regulate, investigate, and prohibit ?under such rules and regulations as he may prescribe . . . any transactions in foreign exchange, export or earmarkings of gold or silver coin or bullion or currency . . . by any person within the United States . . . ?8 These sweeping new presidential powers had teeth in them: elsewhere the Act provided for severe criminal sanctions of up to ten years in prison and/or up to a $10,000 fine for violation of any decrees which the President might make under the Act.9. The net result of the Act, vis-à-vis transactions in gold, was the arrogation by the Sixty-Fifth Congress of a money power not granted by the Constitution10-and further: the delegation of that power to the Executive branch of the Government.
    The war emergency and the President's duty to fight the war provided Congress with a convenient rationale for the Act. The fact is, however, that the Constitution nowhere empowers Congress to prohibit dealing in gold-much less authorizes Congress to delegate that power to a coordinate branch of government.
    Worst of all, the power which Congress delegated to the President enabled him to make criminals out of honest American citizens whose crime would consist only of trying to protect themselves from official debasement of their money. In more fundamental terms, Americans henceforth would be ?under the gun? for exercising a fundamental, inalienable right: the right to deal with their own property as they saw fit. Gold, no matter what its special characteristics, is, after all, just another form of
property.
    If there were those who feared that Congress had more in mind than merely prohibiting transactions in gold during the World War I emergency, their concern would have been justified. On September 24, 1918, less than a year after its original enactment, and virtually on the eve of the War?s end, the Trading with the Enemy Act was amended in two important respects: not only was the wartime Act extended ?[u]ntil the expiration of two years after the date of the termination of the war between the United States and the Imperial German Government. . . ,?11 but the amendment actually enlarged the Executive?s power to control private gold. Now, President Woodrow Wilson could also ?[i]nvestigate, regulate, or prohibit any hoarding . . . of gold . . . by any person within the United States.?12 Less than two months later, on November 11, 1918, the war ended, and two years later Wilson?s power over private gold expired. Once again, Americans were under no restraints with regard to what they did with their gold. Presumably, the emergency was over.

The New Deal and the New ?Emergency?
    Franklin D. Roosevelt was inaugurated as President on March 4, 1933. Throughout the country, banks were slamming their doors on depositors clamoring to withdraw their own money, preferably in gold. For people who were seeking to exchange soft paper currency for the more stable metal?as existing law allowed, and as the Government had solemnly pledged?the new President had other ideas. On March 5, 1933, one day after taking office, Roosevelt issued a Proclamation convening Congress in Extra Session at noon on March 9, 1933, a decision allegedly necessitated by what the Chief Executive referred to vaguely as ?public interests.?13
    But March 9 was still four days away, and Roosevelt apparently was impatient to stop bank depositors from withdrawing their paper money or converting it to gold. Accordingly, the next day, March 6,1933, he took an unprecedented step. For the first time in United States history, an American president closed the nation?s banks. By Proclamation,14 he stated the following: the recent gold and currency withdrawals had been ?unwarranted? and for the purpose of ?hoarding?; speculation
abroad had caused ?severe drains? on the ?Nation?s? gold stocks; the result was to create a national ?emergency?; further ?hoarding?; and ?speculation? must be prevented and ?appropriate measures? taken ?to protect the interests of our people?;
the Trading with the Enemy Act, as amended, had given the President certain powers over private gold; and therefore, ?to prevent the export, hoarding, or earmarking of gold,? the banks would take a ?holiday? from Monday, March 6, 1933, to and
including Thursday, March 9, 1933, and that during the holiday no bank would ?pay out, export, earmark, or permit the withdrawal or transfer in any manner or by any device whatsoever of any gold . . . or take any other action which might facilitate . . . hoarding.?15 Roosevelt?s action was devoid of even arguable legal justification.
    Nowhere in the Constitution is any branch of government, let alone the Executive, given the power to close privately owned banking institutions. Nor did the Proclamation even purport to invoke constitutional authority. And despite the Proclamation?s passing reference to an alleged ?national emergency,? no war conditions were present which could have enabled Roosevelt to argue that, under the Commander-in-Chief?s ?war powers,?16 he had the authority to place in suspended animation a huge, crucially important part of America?s commercial establishment.
    The Proclamation?s reference to the World War I Trading with the Enemy Act, which had long since expired, was a strained attempt to find some semblance of legal support for Roosevelt?s unprecedented assumption of complete control over
America?s banking system.
    It is no wonder that Roosevelt immediately sent to a docile and compliant 73rd Congress, a hastily drawn but comprehensive bill to amend the moribund Trading with the Enemy Act and to attempt to secure a legal basis for the unilateral action hehad already taken.17

Retroactive Rubberstamping: The Emergency Banking Act
    The House of Representatives convened at noon on March 9, 1933. After the customary opening prayer and the disposing of certain routine ?housekeeping? matters,18 a message was received from the President19 which requested passage of
H.R. 1491.
    The bill?s preamble dramatizes the haste with which the President?s minions sought to railroad the bill through both Houses of Congress: ?An Act to provide relief in the existing national emergency in banking, and for other purposes. Be it enacted . . . that the Congress hereby declares that a serious emergency exists and that it is imperatively necessary speedily to put into effect remedies of uniform national application.?20
    In the House, Majority Leader Joseph W. Byrns, Democrat of Tennessee, asked for immediate consideration of the bill and that debate be limited to forty minutes, twenty minutes for each party. Mr. Byrns expressed the hope that under the peculiar
circumstances and under the serious circumstances which confront the country, we agree to take this bill up now, pass it, send it to the Senate so it may become a law this evening, and thus enable the President of the United States to open the banks tomorrow.21
    Next rose House Minority Leader Bertrand H. Snell, Republican of New York. After noting that ?it is entirely out of the ordinary to pass legislation in this House that, as far as I know, is not even in print at the time it is offered,? Mr. Snell, in a burst
of bipartisanship, observed: The house is burning down, and the President of the United States says this is the way to put out the fire. [Applause.] And to me at this time there is only one answer to this question, and that is to give the President what he demands and says is necessary to meet the situation. I do not know that I am in favor of all the details carried in this bill,22 but whether I am or not, I am going to give the President of the United States today his way. He is the man responsible, and we
must at this time follow his lead. I hope no one on this side of the aisle will object to the consideration of the request. [Applause]23
    Someone then produced a copy of the bill, and it was read by the Clerk of the House.24 The bill was passed.25 After a short discussion, the spectacle of what had just transpired in the House in that hour-and-a-half session was best expressed by
Congressman Lundeen:
    Mr. LUNDEEN. Mr. Speaker, today the Chief Executive sent to this House of Representatives a banking bill for immediate enactment. The author of this bill seems to be unknown. No one has told us who drafted the bill. There appears to be a printed copy at the speakers desk, but no printed copies are available for the House Members. The bill has been driven through the House with cyclonic speed after 40 minutes debate, 20 minutes for the minority and 20 minutes for the majority.
    I have demanded a roll call, but have been unable to get the attention of the Chair. Others have done the same, notably Congressman SINCLAIR of North Dakota, and Congressman BILL LEMKE, of North Dakota, as well as some of our other
Farmer Labor Members. Fifteen men were standing, demanding a roll call, but that number is not sufficient; we therefore have the spectacle of the great House of Representatives of the United States of America passing, after a 40-minute debate, a bill its Members never read and never saw, a bill whose author is unknown. The great majority of the Members have been unable to get a minute?s time to discuss this bill; we have been refused a roll call; and we have been refused recognition by the Chair. I do not mean to say that the Speaker of the House of Representatives intended to ignore us, but everything was in such a turmoil and there was so much excitement that we simply were not recognized.
    I want to put myself on record against procedure of this kind and against the use of such methods in passing legislation affecting millions of lives and billions of dollars. It seems to me that under this bill thousands of small banks will be crushed and wiped out of existence, and that money and credit control will be still further concentrated in the hands of those who now hold the power.
    It is safe to say that in normal times, after careful study of a printed copy and after careful debate and consideration, this bill would never have passed this House or any other House. Its passage could be accomplished only by rapid procedure, hurried and hectic debate, and a general rush for voting without roll call.
    I believe in the House of Representatives. I believe in the power that was given us by the people. I believe that Congress is the greatest and most powerful body in America, and I believe that the people have vested in Congress their ultimate and final power in every great, vital question, and the Constitution bears me out in that.
    I am suspicious of this railroading of bills through our House of Representatives, and I refuse to vote for a measure unseen and unknown.
    I want the RECORD to show that I was, and am, against this bill and this method of procedure; and I believe no good will come out of it for America. We must not abdicate our power to exercise judgment. We must not allow ourselves to be swept off our feet by hysteria, and we must not let the power of the Executive paralyze our legislative action. If we do, it would be better for us to resign and go home?and save the people the salary they are paying us.
    I look forward to that day when we shall read the bill we are considering, and see the author of the bill stand before the House and explain it, and then, after calm deliberation and sober judgment?after full and free debate?I hope to see sane
and sensible legislation passed which will lift America out of this panic and disaster into which we were plunged by the World War.26
    Neither ?calm deliberation and sober judgment, nor ?full and free debate? characterized what took place next in the Senate,27 where H.R. 1491?which affected ?millions of lives and billions of dollars??spent the afternoon with at least eighty
United States Senators. Seventy-three of them voted ?yea?28 and the bill, which had originated in the House at noon, passed the Senate by 7:30 P.M. Later that same night, Roosevelt approved it and H.R. 1491 became the Emergency Banking Act.29
    Fundamentally, the Act accomplished three things. First, it retroactively approved the President?s illegal action of March 6, 1933.30 (If Roosevelt had thought himself to be on solid legal ground when he closed the banks, one could ask why he thought it necessary to go to Congress in the first place. This legislative ?rubber stamp? approach to past and future executive action would be used more than once in themonths ahead.)
    Second, it amended section 5(b) of the Trading with the Enemy Act, to provide that: During time of war or during any other period of national emergency declared bythe President, the President may, through any agency that he may designate, or
otherwise, investigate, regulate, or prohibit, under such rules and regulations as he may prescribe, by means of licenses or otherwise, any transactions in foreignexchange, transfers of credit between or payments by banking institutions as defined by the President, and exporting, hoarding, melting, or earmarking of gold or silver coin or bullion or currency, by any person within the United States or any place subject to the jurisdiction thereof; and the President may require any person engaged in any transaction referred to in this subdivision to furnish under oath, complete information relative thereto, including the production of any books of account, contracts, letters or other papers, in connection therewith in the custody or control of such person, either before or after such transaction is completed. Whoever willfully violates any of the provisions of this subdivision or of any license, order, rule of regulation issued thereunder, shall, upon conviction, be fined not more than $10,000, or, if a natural person, may be imprisoned for not more than ten years, or both, and any officer, director, or agent of any corporation who knowingly participates in such violation may be punished by a like fine, imprisonment, or both. As used in this subdivision the term ?person? means an individual, partnership, association, or corporation.31
    Finally, it added a new subsection (n) to the Federal Reserve Act, giving the Secretary of the Treasury virtually unfettered discretion to compel holders of gold coin, gold bullion, and gold certificates to surrender them to the Treasurer of the United States, and to accept paper money instead.32
    Ironically, while the Act ostensibly reflected Congress? alleged concern with gold withdrawals, Congress itself took no action at all. Instead, consonant with the remarks on the floor of each House, Congress gave the President sole authority to regulate all banks and financial transactions in general, and everything concerning gold in particular (with the Secretary of the Treasury acting as his ?Requisitioner-in-Waiting?). And more: Roosevelt?s new powers far surpassed those granted President
Wilson by the World War I Trading with the Enemy Act; Roosevelt?s authority extended beyond ?time of war? to ?any other period of national emergency declared by the President.? Needless to say, just as the Act contained no elaboration as to what
the current ?emergency? was, neither did it establish any criteria by which thePresident was to ascertain the existence of any emergency?an omission which was to prove crucially important to future presidents?and to future owners of gold.

Cashing In on the ?Emergency?: Confiscation
    Passage of the Emergency Banking Act on March 9, 1933 did not end that day?s hectic activities. Still later that night, under the authority given him only several hours earlier, Roosevelt issued a new Proclamation. This one continued, in full force and
effect, ?until further proclamation by the President,? the provisions of his March 6, 1933 bank holiday Proclamation33 and the regulations and orders which had been issued thereunder.34 However, a last loophole remained to be plugged: many individuals still had gold in their possession and no requisition had yet been made by the Government. Something had to be done to keep the gold where the Government could get at it when the time came.
    Accordingly, the next day, March 10, under the authority of the Emergency Banking Act and ?all other authority vested in me,? Roosevelt issued Executive Order No. 6073.31 In addition to authorizing the Secretary of the Treasury to decide which of the nation?s banks could open, the order prohibited owners of gold from exporting or otherwise removing it ?from the United States or any place subject to the jurisdiction thereof. . . except in accordance with regulations prescribed by or under license issued by the Secretary of the Treasury.?36
    Given this frozen state of financial affairs, the President could now turn his attention to what earlier he had deprecatingly referred to as ?hoarding??i.e., the holding of gold by the people who owned it. It took Roosevelt a month. Acting under
the authority he thought had been given him by the Emergency Banking Act, the President, on April 5, 1933, issued Executive Order No. 6l02.37 Its title clearly discloses how Roosevelt intended to deal with ?hoarding?: ?Executive Order Forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates.?
    There were exceptions to this general prohibition: every American could retain a maximum of one hundred dollars in gold coin and gold certificates, rare coins were excepted altogether, and reasonable amounts of gold could be retained for use in
industry and the arts. Banks, however, were required to turn over gold coin, gold bullion, and gold certificates ?owned or received by them,? to the Federal Reserve Bank. This included not only gold owned by the banks, but also gold owned by their depositors. In short, on or before May 1, 1933, all privately owned gold in the United States (subject to a few minor exceptions) was to be confiscated by the Government.
    As compensation, the owners were to receive paper money, whether they liked it or not.38 Willful failure to submit to the confiscation was punishable by up to ten years in jail and/or up to a $10,000 fine.39
    During the next two months, additional steps were taken to implement the government?s confiscatory policy. On April 19, the Secretary of the Treasury advised that, until further notice, no further licenses would be granted to export gold for the
purpose of supporting the dollar in foreign exchange.40 On April 20, the President went one giant step further: he issued an Executive Order prohibiting the earmarking for foreign account, and the export, of gold coin, gold bullion, or gold certificates,
while, at the same time, authorizing the Secretary of the Treasury to issue licenses permitting such export under certain conditions.41 On April 29, the Secretary of the Treasury issued supplementary regulations relating to the Executive Orders of April 5 and 20, with respect to gold hoarding and the gold export embargo.42 Article 5, section 1, of those regulations provided that:
    any person showing the need for gold coin or gold bullion for a proper transaction not involving hoarding, or for gold coin or gold bullion for purposes specified in the Executive Order of April 5 1933, and not covered by the foregoing Articles of these regulations may make application to the Secretary of the Treasury for a license to purchase, or if such coin or bullion is already in his possession to retain such coin or bullion.43
    However, just the day before, on April 28, Acting Secretary of the Treasury Ballantine had established a precondition for all applicants: first, the gold had to be turned in. This precondition was, of course, couched in more legalistic terminology:
Until further notice the Secretary of the Treasury will grant no licenses for the acquisition of gold, gold coin, or bullion by persons making application for the same under the Executive order of April 5, 1933, for the purpose of meeting maturing obligations calling for payment in gold coin or bullion, within the United States or elsewhere, except where such applicants have surrendered gold coin, gold bullion, or gold certificates in obedience to the Executive order of April 5, l933.44
(full text in pdf format)

L'or de l'OAS refait parler de lui dans le JuraAFFAIRE - Pierre-Alain Blum voulait recycler l'or des partisans d'une Algérie française. Le gouvernement est prié de s'expliquer JuraIvan VecchiLes 33 millions de francs accordés en 1990 par la Banque Cantonale du Jura à l'entreprise Varinor SA à Delémont auraient dû servir à financer un projet concocté par son partenaire, la firme EBEL SA - et plus particulièrement par son actionnaire principal, Pierre-Alain Blum. Le projet en question: recycler 450 tonnes d'or appartenant à l'OAS (Organisation armée secrète), les partisans d'une Algérie française. Ni plus ni moins que son trésor de guerre de près de 7 milliards de francs suisses constitués de lingots d'or entreposés au port franc de Zurich. Révélée en mai 1998 par L'Impartial cette affaire nous avait été confirmée par un ancien associé de l'entreprise, André Varin («Le Matin» du 21 mai 1998). Puis le 22 novembre dernier encore par un courrier de son frère, Jean Varin, établi aux Philippines.Hier, c'est le groupe socialiste au Parlement qui est revenu à la charge, déposant une intervention demandant au gouvernement de divulguer les informations qu'il détient sur cette affaire. Pour étayer ses propos, le député et président du PSJ, Gilles Froidevaux, a montré une copie d'un courrier d'un expert-comptable qui mettait en garde à l'époque Pierre-Alain Blum contre les nouvelles dispositions pénales relatives au blanchiment d'argent, arguant même que l'activité prévue à Varinor paraissait «suffisamment proche» de ces dispositions pénales pour attirer son attention. Selon le PSJ, c'est à réception de ce courrier par M. Blum que les difficultés ont alors commencé pour Varinor et par voie de conséquence pour la BCJ. Sans parler du contribuable jurassien, dont les impôts servent encore à éponger les pertes engendrées par toute cette affaire.Les socialistes, qui veulent savoir si les anciens dirigeants de la BCJ étaient au courant de ce projet, ont encore montré une copie de lettre de crédit de la BCJ à Varinor, dans laquelle Robert Salvadé, directeur général adjoint de la Banque, évoque ce «projet ambitieux pour le développement de l'économie jurassienne». S'ils étaient au courant, pourquoi n'en ont-ils rien dit lors de la procédure de recapitalisation de l'établissement bancaire? S'interrogeant sur la nature délictueuse de ces pratiques, le groupe socialiste suggère au gouvernement de rouvrir l'enquête pour faire la lumière sur les aspects touchant le recyclage de l'or d'une organisation terroriste et sur l'implication de M. Blum et des anciens dirigeants de la BCJ.

The 30th anniversary of Richard Nixon's closing of the gold window was hardly mentioned in the financial press.

In one article posted on August 12 at Miningweb.com, a mining trade publication, Nixon's dastardly act is described by writer Tim Wood: The Executive Order "unplugged the U.S. dollar from its gold life support," bringing about "the longest period a gold standard has been absent from the international system."

In effect, Nixon’s dictatorial Executive Order cancelled the dollar/gold exchange rate established 27 years earlier, when foreign central banks were allowed to claim an ounce of American gold for US$35. By his single stroke, Tricky Dick cut any relationship the US dollar had to gold.

Mr. Wood pines for those good old days when (allegedly) the Fed respected gold: "A central bank exists for no other (or better) reason than to keep the national unit of account stable."

I'm a bit surprised Mr. Wood didn't apply even a bit of his tortured nostalgia to the earthshaking event that occurred on April 5, 1933, when gold was demonetized, and Americans lost the right to hold "real" money.

I'm sympathetic with Mr. Wood's depressed state, but there's another date in gold's history that should be celebrated: January 1, 1975, when all restrictions on owning gold were lifted.

Why no mention of April 5, 1933, and January 1, 1975?

I have a theory: Mr. Wood's reverence for gold is pragmatic. He is more concerned with enlightening central bankers and reminding them of their proper relationship to gold than the freedom of the individual.

If this sounds like the wisdom of Jude Wanniski, you are correct. Mr. Wood gives full credit to Wanniski and the other supply siders for his views on gold.

Mr. Wanniski is one of my heroes, and there is no more courageous commentator on the passing scene. He buckles to no pressure, but I disagree with his recommended path to a gold standard. The Fed cannot be trusted. But that debate is for another time.

For now, I thank Mr. Wood and, indirectly, Mr. Wanniski, for prompting me to reflect on my 40 years plus as a gold dealer.

If ever there was a day of infamy, April 5, 1933, qualifies. For the first time, gold was demonetized and Americans were forced to surrender their gold coins to the government. You received a $20 bill in exchange for your $20 gold coin. Later that year, gold was revalued from $20.67 per ounce to $35. The citizen was first plundered, then humiliated, by the monster Roosevelt.

On January 1, 1975, the beleaguered US citizen had a bit of freedom restored when the draconian laws denying Americans the right to own and trade gold were eliminated. No, a gold standard was not restored, but January 1, 1975, was a day freedom lovers celebrate.

Back to 1971: Nixon's action was more than symbolic. It had real impact. And to conservatives of the day, the anguish caused by the closing of the gold window was dwarfed by the shock of wage and price controls simultaneously imposed by Executive Order. (Some contend that several key Southern Californian Nixon supporters never forgave him for that betrayal, and quietly swung their financial support to Ronald Reagan.)

In 1971, Nixon was preparing for his reelection campaign. He was tidying up potentially troublesome areas. Consumer and wholesale price indices were bubbling up although the increases were miniscule as compared with inflation rates nine years later. Nixon's brain trust believed controls would be politically palatable, and could head off future price increases long enough to ensure his reelection.

The closing of the gold window meant little to most Americans as citizens had been legally barred from holding the precious metal since 1933.

As part of his reelection campaign, Nixon also wanted to punish French president Charles DeGaulle. In compliance to federal direction, the US media caricaturized the elegant, aloof French hero as unappreciative. After all, American conscripts had saved the French from the Hun in two world wars. This comic opera general was greedily using American dollars to plunder our gold reserves. Putting this ingrate in his place would resonate well with US voters.

Where was the dissent? Well, there wasn't much.

The equity markets had little interest in the closing of the gold window, but wage and price controls set the stock market off to record-high percentile increases the day following the announcement. Only a few old-fashioned economists, like Murray Rothbard and Hans Senholz, shook their heads in disbelief. The failed ghost of controls had arisen once more.

And by 1971 most Americans had little first-hand memory of gold. The Depression and WW II were indelibly imprinted on their psyches and if they thought about gold at all, it was as a murky link to the hard times of the 1930s. Silver was a different story. The dimes, quarters, and half dollars minted almost continually from 1796 through 1964 were 90% silver. Most folks simply took it for granted that the coinage was silver.

Not one in a thousand reflected that one dollar's face value in silver coins contained 72 parts of a pure ounce and that at $1.29 an ounce, the price fixed by the Treasury Department, the intrinsic value was precisely one dollar. This magnificent reality went unnoticed.

That all came to an end several months after JFK's death in 1963.The new "LBJ" non-silver, 10 and 25-cent sandwich coinage appeared on the scene amidst a barrage of propaganda.

The experts said the "sandwiches" would circulate side-by-side with the silver coins for eternity. Speculator-hoarders would find slim profit in pulling the silver coinage from circulation. This obvious deceit provided me with early evidence that public opinion was being manipulated and the manipulators knew the truth.

Shortly thereafter the US Treasury announced that August 16, 1968, would be the last day to redeem the $1, $5 and $10 silver certificates. In effect, the government had created an expiring option, and as the days passed, silver's time as money was passing as well. The silver coinage quickly disappeared, of course.

Your local coin shop was the place where you purchased or sold silver coinage, or liquidated your silver certificates. This activity honed the coin industry for the onslaught that was to soon follow in the gold market.

In 1962 US Treasury Department policy toward gold ownership was little changed since 1933. Gold for jewelry was legal. Gold coins dated 1932 and older could be legally held, but ONLY if physically in the US and as collectibles, not investments. All gold imports were forbidden, except by special license which was rarely granted.

So, a US $20 St. Gaudens gold piece was available in Switzerland for US $50, but, due to a shortage of supply in the US, it was worth $60 plus.

Hmmm…US gold coins minted prior to 1933 were legal if already here? You couldn't legally bring them in. But, if you were able to get them here, there was a nice profit. Interesting. Sounds like an invitation to the bootlegger.

My company, Camino Coin, was founded in 1959. Although our primary business was numismatics, we soon were deeply involved in buying and selling precious metals. In Europe, these services were provided by banks.

US government policy was harsh, and the gold coin bootleggers reign existed through the early 1960s. The process was simple: the bootlegger purchased the US gold coins in Europe where most of them had resided since 1933, and had them shipped to Canada. So far, everything was legal. Getting the gold safely across the border was the problem.

Treasury Department enforcement against the smugglers was sporadic. Most of the gold coins arrived safely, but occasionally the feds would "send a message to the coin community" by making midnight raids and confiscating gold as if they were dealing with dangerous drugs.

In one instance, I saw the process close up. A smuggler carried gold coins from Canada to the state of Washington, packaged them, and mailed the parcel from a Seattle post office to a US dealer. (This fellow was selling them to me.) When the dealer's sister sought to pick them up at her California post office, the Secret Service confiscated the coins.

The dealer, desperate to recover his merchandise, argued that since the coins were mailed from Seattle, they were physically in the US, thereby not subject to confiscation. The government held that these coins were never "here," but rather in transit from Canada, hence, contraband. The case finally went to a US Circuit Court and the government prevailed.

Near the end of JFK's presidency, the Treasury Department modified its restrictions on gold coins minted 1932 and earlier. US and foreign coinage could now be legally imported by Americans. This led to an avalanche of European gold coins like the British Sovereign, the French and Swiss 20 Franc, and all the American gold coins coming into the US.

In 1973, with the government in disarray, and a president near impeachment, a small but energetic movement to eliminate all remaining restrictions on gold ownership won a shocking victory and for the first time in over 40 years, Americans could freely own and trade gold without restriction.

The late, great coin dealer and conference entrepreneur James U. Blanchard III was the main force behind the struggle.

For the first time since 1932 gold coins, bars, and gold certificates could be freely imported. Items that, prior to January 1, 1974, were almost as dangerous to handle as heroin were part of everyday commerce.

But it took a while for a dealer to hold a Krugerrand or a Credit Suisse gold kilo bar in his hand without looking over his shoulder to see if a Secret Service agent was lurking in the shadows.

Burt Blumert [send him mail] is publisher of LewRockwell.com and president of the Center for Libertarian Studies.

 
There has always been an element of madness to gold's allure.

For thousands of years, something in the eternally lustrous metal has driven people to the outer edges of desire - to have it and hoard it, to kill or conquer for it, to possess it like a lover.

In the early 1500's, King Ferdinand of Spain laid down the priorities as his conquistadors set out for the New World. "Get gold," he told them, "Humanely if possible, but at all costs, get gold."

In that long and tortuous history, gold has now arrived at a new moment of opportunity and peril.

The price of gold is higher than it has been in 17 years - pushing $500 an ounce. But much of the gold left to be mined is microscopic and is being wrung from the earth at enormous environmental cost, often in some of the poorest corners of the world.

And unlike past gold manias, from the time of the pharoahs to the forty-niners, this one has little to do with girding empires, economies or currencies. It is almost all about the soaring demand for jewelry, which consumes 80 percent or more of the gold mined today.

The extravagance of the moment is provoking a storm among environmental groups and communities near the mines, and forcing even some at Tiffany & Company and the world's largest mining companies to confront uncomfortable questions about the real costs of mining gold.

"The biggest challenge we face is the absence of a set of clearly defined, broadly accepted standards for environmentally and socially responsible mining," said Tiffany's chairman, Michael Kowalski. He took out a full-page advertisement last year urging miners to make "urgently needed" reforms.

Consider a ring. For that one ounce of gold, miners dig up and haul away 30 tons of rock and sprinkle it with diluted cyanide, which separates the gold from the rock. Before they are through, miners at some of the largest mines move a half million tons of earth a day, pile it in mounds that can rival the Great Pyramids, and drizzle the ore with the poisonous solution for years.

The scars of open-pit mining on this scale endure.

A months-long examination by The New York Times, including tours of gold mines in the American West, Latin America, Africa and Europe, provided a rare look inside an insular industry with a troubled environmental legacy and an uncertain future.

Some metal mines, including gold mines, have become the near-equivalent of nuclear waste dumps that must be tended in perpetuity. Hard-rock mining generates more toxic waste than any other industry in the United States, according to the Environmental Protection Agency. The agency estimated last year that the cost of cleaning up metal mines could reach $54 billion.

A recent report from the Government Accountability Office chastised the agency and said legal loopholes, corporate shells and weak federal oversight had compounded the costs and increased the chances that mining companies could walk away without paying for cleanups and pass the bill to taxpayers.

"Mining problems weren't considered a very high priority" in past decades, Thomas P. Dunne, the agency's acting assistant administrator for solid waste and emergency response, said in an interview. "But they are a concern now."

With the costs and scrutiny of mining on the rise in rich countries, where the best ores have been depleted, 70 percent of gold is now mined in developing countries like Guatemala and Ghana. It is there, miners and critics agree, that the real battle over gold's future is being waged.

Gold companies say they are bringing good jobs, tighter environmental rules and time-tested technologies to their new frontiers. With the help of the World Bank, they have opened huge mines promising development. Governments have welcomed the investment.

But environmental groups say companies are mining in ways that would never be tolerated in wealthier nations, such as dumping tons of waste into rivers, bays and oceans. People who live closest to the mines say they see too few of mining's benefits and bear too much of its burden. In Guatemala and Peru, people have mounted protests to push miners out. Other communities are taking companies to court.

This month a Philippine province sued the world's fifth-largest gold company, Canada-based Placer Dome, charging that it had ruined a river, bay and coral reef by dumping enough waste to fill a convoy of trucks that would circle the globe three times.

Placer Dome, which also runs three major mines in Nevada, answered by saying that it had "contained the problem" and already spent $70 million in remediation and another $1.5 million in compensation.

Some in the industry have paused to consider whether it is worth the cost - to the environment, their bottom line or their reputations - to mine gold, which generates more waste per ounce than any other metal and yet has few industrial uses.

The world's biggest mining company, Australia-based BHP Billiton, sold its profitable Ok Tedi mine in Papua New Guinea in 2001 after having destroyed more than 2,400 acres of rainforest. Upon leaving, the company said the mine was "not compatible with our environmental values."

After tough lessons, other companies, like Newmont Mining, the world's largest gold producer, are paying for more schools and housing, trying harder to ease social problems around its mines.

"I don't think any of our members want to be associated with a bad operation - notwithstanding it would hurt their ability to open new facilities," said Carol L. Raulston, spokeswoman for the National Mining Association. "News goes around the world quickly now and there is no place to hide."

Critics say corporate miners have been cloistered from scrutiny because of their anonymity to consumers, unlike, say, oil companies, which also extract resources but hang their name over the pump.

Last year the mine watchdog group Earthworks began a "No Dirty Gold" campaign, marching protesters in front of fashionable Fifth Avenue storefronts, trying to change gold mining by lobbying gold consumers.

"They just said to ask where the gold was coming from and whether it caused social or environmental damage," said Michael E. Conroy, senior lecturer and research scholar at the Yale University School of Forestry and Environmental Studies. "The repercussions in the mining media were huge - some said it was all lies, but retailers began to realize what their vulnerability was."

Mr. Kowalski, Tiffany's chairman, has tried to stay ahead of the controversy. He has broken new ground by buying Tiffany's gold from a mine in Utah that does not use cyanide.

But the largest sellers of gold are not luxury outlets like his, but rather Wal-Mart stores, and even Mr. Kowalski, a trustee of the Wildlife Conservation Society, hesitated to call any gold entirely "clean."

Asia's Insatiable Appetite

Amrita Raj, a 25-year-old bride, was shopping for her wedding trousseau on a recent Saturday in New Delhi. There was a "wedding set" to be bought that day, with its requisite gold necklace, matching earrings and two sets of bangles.

For the sake of family honor, the new in-laws would have to receive gold gifts as well - a "light set" for the mother-in-law, plus a gold ring or a watch for the bridegroom, and earrings for a sister-in-law.

"Without gold, it's not a wedding - at least not for Indians," Ms. Raj said.

For thousands of years, gold has lent itself to ceremony and celebration. But now old ways have met new prosperity. The newly moneyed consumers who line the malls of Shanghai and the bazaars of Mumbai sent jewelry sales shooting to a record $38 billion this year, according to the World Gold Council, the industry trade group.

Over the last year, sales surged 11 percent in China and 47 percent in India, a country of a billion people whose seemingly insatiable appetite for gold - for jewelry, temples and dowries - has traditionally made it gold's largest consumer.

That kind of demand leads many in and out of the industry to argue that gold's value is cultural and should not be questioned. The desire to hoard gold is not limited to households in India or the Middle East, either.

The United States, the world's second-largest consumer of gold, is also the world's largest holder of gold reserves. The government has 8,134 tons secured in vaults, about $122 billion worth. The Federal Reserve and other major central banks renewed an agreement last year to severely restrict sales from their reserves, offering, in effect, a price support to gold.

That price is not simply a matter of supply and demand, but of market psychology. Gold is bought by anxious investors when the dollar is weak and the economy uncertain. That is a big reason for gold's high price today.

For miners that price determines virtually everything - where gold is mined, how much is mined, and how tiny are the flecks worth going after.

"You can mine gold ore at a lower grade than any other metal," said Mike Wireman, a mine specialist at the Denver office of the E.P.A. "That means big open pits. But it must also be easy and cheap to be profitable, and that means cyanide."

That kind of massive operation can be seen at Yanacocha, a sprawling mine in northern Peru run by Newmont. In a region of pastures and peasants, the rolling green hills have been carved into sandy-colored mesas, looking more like the American West than the Andean highlands.

Mountains have been systematically blasted, carted off by groaning trucks the size of houses and restacked into ziggurats of chunky ore. These new man-made mountains are lined with irrigation hoses that silently trickle millions of gallons of cyanide solution over the rock for years. The cyanide dissolves the gold so it can be separated and smelted.

At sites like Yanacocha, one ounce of gold is sprinkled in 30 tons of ore. But to get at that ore, many more tons of earth have to be moved, then left as waste. At some mines in Nevada, 100 tons or more of earth have to be excavated for a single ounce of gold, said Ann Maest, a geochemist who consults on mining issues.

Mining companies say they are meeting a demand and that this kind of gold mining, called cyanide heap leaching, is as good a use of the land as any, or better.

Cyanide is not the only option. But it is considered the most cost-effective way to retrieve microscopic bits of "invisible gold." Profit margins are too thin, miners say, and the gold left in the world too scarce to mine it any other way.

"The heap is cheaper," said Shannon W. Dunlap, an environmental manager with Placer Dome. "Our ore wouldn't work without the heap."

But much of those masses of disturbed rock, exposed to the rain and air for the first time, are also the source of mining's multibillion-dollar environmental time bomb. Sulfides in that rock will react with oxygen, making sulfuric acid.

That acid pollutes and it also frees heavy metals like cadmium, lead and mercury, which are harmful to people and fish even at low concentrations. The chain reaction can go on for centuries.

Many industry officials, reluctant to utter the word pollution, protest that much of what they leave behind is not waste at all but ground-up rock. The best-run mines reclaim land along the way, they say, "capping" the rock piles with soil and using lime to try to forestall acid generation.

But stopping pollution forever is difficult. Even rock piles that are capped, in an attempt to keep out air and rain, can release pollutants, particularly in wet climates.

Cyanide can present long-term problems, too. Most scientists agree that cyanide decomposes in sunlight and is not dangerous if greatly diluted. But a study by the United States Geological Survey in 2000 said that cyanide can convert to other toxic forms and persist, particularly in cold climates.

And just as cyanide dissolves gold out of the rock, it releases harmful metals, too.

There have also been significant accidents involving cyanide. From 1985 to 2000, more than a dozen reservoirs containing cyanide-laden mine waste collapsed, the United Nations Environment Program reported.

The most severe disaster occurred in Romania in 2000, when mine waste spilled into a tributary of the Danube River, killing more than a thousand tons of fish and issuing a plume of cyanide that reached 1,600 miles to the Black Sea.

That spill led to calls for the gold industry to improve its handling of cyanide. After five years of discussion, the industry unveiled a new code this month. It sets standards for transporting and storing cyanide and calls on companies to submit to inspections by a new industry body.

But the cyanide code is voluntary and not enforced by government. And Glenn Miller, a professor of environmental science at the University of Nevada, says it does not adequately deal with one of mining's most important, unattended questions: What happens when the mine closes?

A Rocky Mountain Disaster

One answer can be found in a rural, rugged area of northeastern Montana called the Little Rocky Mountains.

There, Dale Ployhar often comes to the high bare slopes around the abandoned Zortman-Landusky gold mine to plant pine seedlings on a silent hillside that has been reclaimed by little more than grasses.

"I bring lodgepole seeds and scatter them around, hoping they'll come back," he said, looking out over the tiny town of Zortman, population 50.

Zortman-Landusky was the first large-scale, open-pit cyanide operation in the United States when it opened in 1979. The imprint it left on the environment, psyche and politics of Montana continues today.

What happened there - a cacophonous, multilayered disaster involving bankruptcy, bad science, environmental havoc and regulatory gaps - foreshadowed the risky road that gold has taken in the years since, mining experts, government regulators and environmentalists say.

"There's a lot of bitterness left," said Mr. Ployhar, 65, a heavy equipment operator, whose son bought some of the mine lands at a bankruptcy auction four years ago.

Some mining experts say that Zortman-Landusky - a combination of two open pits near Zortman and the neighboring village of Landusky - offered a steep learning curve on how chemical mining worked, and didn't.

Others say that overly ambitious production schedules by the mine's owner, Pegasus Gold, based in Canada, were to blame. A bonus package of more than $5 million for top executives, announced after the company filed for bankruptcy protection in 1998, did not help.

Mining with cyanide can be tricky even in the best conditions. At Zortman, the company made the mistake of building their cyanide heaps atop rock that turned acidic. The cyanide and the acid mixed in a toxic cocktail that seeped from the mounds.

Mining stopped in 1996, and company officials insisted in their public comments over the next year that they wanted to be responsible corporate citizens and stay to clean up the property. But the price of gold was falling, then below $280 an ounce, and Pegasus closed its doors.

"This became one of the worst cases in Montana," said Wayne E. Jepson, manager of the Zortman project at the Montana Department of Environmental Quality. "But even as late as 1990, one of the last studies for Landusky predicted no acid in any significant amounts."

Environmental risks from hard-rock mines often turn out to be understated and underreported, according to two recent studies.

Robert Repetto, an economist at the University of Colorado, examined 10 mines in the United States and abroad run by publicly traded companies. All but one, he wrote in a June report, had failed to fully disclose "risks and liabilities" to investors.

The environmental group Earthworks examined 22 mines for a report it will publish in November. Almost all of them had water problems, leading it to conclude that "water quality impacts are almost always underestimated" before mining begins.

"The combination of the regulatory approach and the science is what creates inaccurate predictions," said James R. Kuipers, a consultant and former mining engineer, one of the authors of the study.

At Zortman-Landusky, the state wrote the environmental impact study itself, based primarily on information from the company, Mr. Kuipers said.

Montana and other big mining states still often depend on mining companies for much of the scientific data about environmental impact, or the money to pay for the studies, state and federal regulators say, mainly because government agencies generally lack the resources to do expensive, in-depth research themselves.

Some mine regulators defend the practice, saying that having scientific data supplied by companies with a financial interest in the outcome is not necessarily bad if the review is stringent.

"What is important to make the system work is that state and federal agencies have the wherewithal and expertise to look at the information," said Mr. Wireman of the Denver E.P.A. office.

But one lesson of Zortman is that good information is sometimes ignored.

In the early 1990's, an E.P.A. consultant and former mining engineer, Orville Kiehn, warned in a memo to his bosses that not enough money was being set aside by the mine for water treatment.

Mr. Kiehn's opinion, vindicated today, went nowhere. The environmental agency had little legal authority then - and no more today - to protect the public from an operating mine except by filing a lawsuit, as it did in 1995 after Pegasus had already violated federal clean water standards.

The company settled the suit in 1996 and agreed to pay $32.3 million mostly to upgrade and expand water treatment.

At the time, state officials rejected the idea of squeezing Pegasus to put up more money. This spring, Montana's legislature created a special fund for water treatment to make up for it, for the next 120 years, at a cost of more than $19 million.

Washington is also coming to grips with the failure to plan for the cost of mining. The Government Accountability Office, the investigative arm of Congress, sharply criticized the E.P.A. in August for not requiring metal mines to provide assurances that they can pay for cleanups, a failure that it said had exposed taxpayers to potentially billions of dollars in liabilities.

For Montana, the Zortman experience was chilling. In 1998, as the catastrophe was making headlines across the state, voters approved the nation's first statewide ban on cyanide mining, halting any new gold projects. They renewed the ban last year.

Profit and Poverty

Today gold companies are striking out to remote corners of the globe led by a powerful guide: the World Bank.

The bank, the pre-eminent institution for alleviating world poverty, has argued that multinational mining companies would bring investment, as well as roads, schools and jobs, to countries with little else to offer than their natural resources. For the bank, which tries to draw private investment to underdeveloped lands, the logic was simple.

"We invest to help reduce poverty and help improve people's lives," said Rashad-Rudolf Kaldany, head of oil, gas and mining at the bank's profit-making arm, the International Finance Corporation.

The bank has worked both ends of the equation. At its urging, more than 100 cash-strapped governments have agreed to cut taxes and royalties to lure big mining companies, said James Otto, an adjunct professor at the University of Denver law school.

At the same time, the bank put up money for or insured more than 30 gold-mining projects, looking for profits.

Though mining was a small part of the bank's portfolio, it was not without controversy as accidents mounted. In one of the worst disasters, in 1995, a mine in Guyana insured by the bank spilled more than 790,000 gallons of cyanide-laced mine waste into a tributary of the Essequibo River, the country's main water source.

By 2001, the World Bank president, James D. Wolfensohn, imposed a two-year moratorium on mining investments and ordered a review of its involvement in the industry.

Emil Salim, a former minister of environment of Indonesia, led the study. "I said, up to now the International Finance Corporation was only listening to business," he said in an interview in Jakarta. "I said, so now let's give some voice to civil society."

Mr. Salim recommended reducing the use of cyanide, banning the disposal of waste in rivers and oceans, and giving communities veto power over mining company plans.

But the industry complained. And developing country governments said they liked the bank's loans to gold mines. In the end, the bank settled on more modest goals.

It pledged to make environmental impact statements understandable to villagers and to back only projects with broad community support. It also urged governments to spend mining companies' taxes and royalties in the communities near the mines.

But critics and environmental groups say the bank demands little from the mining companies in return for its money and its seal of approval.

The bank's guidelines for arsenic in drinking water are less stringent than those of the World Health Organization, and mercury contamination levels are more lenient than those permitted by the E.P.A., said Andrea Durbin, a consultant to nongovernmental groups pressing for tougher standards.

The International Finance Corporation is drafting new guidelines that will clarify what it expects from miners, said Rachel Kyte, its director of environment and social development.

But the draft rules give mining companies even more latitude, said Manish Bapna, the executive director of the Bank Information Center, a group that monitors the bank. They will make it easier for companies to evict indigenous people and to mine in some of the globe's most treasured habitats, he said.

Despite the World Bank's two-year review, little has changed, said Robert Goodland, a former director of environment at the bank who was an adviser on the study. "The bank insists on business as usual," he said.

Resistance in Guatemala

The first piece of new mining business the bank invested in after its review can be found today in the humid, green hills of western Guatemala.

Bishop Alvaro Ramazzini, a big burly man who mixes politics and religion with ease, doesn't understand why the World Bank lent $45 million to a rich multinational company for a gold mine in his impoverished region of Mayan farmers.

"Why not spend the money directly to help the people?" he asked.

Sprawled across a deep wooded valley, a new mine built by Glamis Gold, a Canadian company, was chosen by the World Bank last year as a new model for how gold mining could help poor people.

But the mine has faced protest at every turn.

At the June 2004 board meeting of the International Finance Corporation, there was considerable skepticism about its $45 million loan to Glamis.

Members questioned why a $261 million project was creating only 160 long-term jobs and giving money to a "well capitalized" company like Glamis at all, according to minutes of the meeting provided to The Times by a nongovernmental group opposed to the project.

Others were worried that the I.F.C. was relying too heavily on information from Glamis about the potential for pollution.

The World Bank had pledged to back only mines with broad local support. But on the ground in Guatemala, opposition boiled over last December.

Angry farmers set up a roadblock to stop trailers carrying huge grinding machines for the mine. After 40 days, and battles between police and protesters, the equipment had to be escorted by soldiers.

To persuade the villagers of the mine's benefits, Glamis flew 19 planeloads of farmers to a mine it runs in Honduras.

But the villagers of Sipicapa still wanted their voices heard. On a cool Saturday morning in June, more than 2,600 men and women dressed in their weekend best, with children in tow, crowded into the community's yards, churches and verandas to vote in a nonbinding referendum.

"We are already regretting that our forefathers allowed the Spaniards to buy our land for trinkets and mirrors," said Fructuoso López Pérez, a local mayor. "So we should vote so our children will thank us for doing right."

At that, a church full of local people raised their hands in a unanimous show of opposition to the mine.

Much of the peasants' fury was informed by Robert E. Moran, an American hydrogeologist, who was asked by Madre Selva, a Guatemalan nongovernmental organization, to visit the mine and review its environmental impact statement.

Mr. Moran, who was on the advisory board of the bank's mining study, found it badly lacking. It did not address the "very large quantities of water" the mine would use, or give basic information on the "massive volumes" of waste the mine would produce, he said.

Tim Miller, vice president of Central American operations for Glamis, said the environmental impact statement had been a "working document."

In Guatemala City, the Vice Minister of Mining, Jorge Antonio García Chiu, defended approval of the mine, saying it followed four months of consultation.

Mr. Kaldany, the I.F.C. official, said the investment and the environmental impact statement were both sound. "We are a bank," he said. "We go on the basis of a business development project. Then, as well, the bank asks: Are we needed? Are we adding any value?"

Glamis had already spent $1.3 million on social programs in the villages as part of the bank's requirements, Mr. Kaldany said.

At the mine, the grinding and churning of new machinery being tested already echoes across the valley. Production could begin as early as November.

Mr. Miller, of Glamis, said the mine was a winner for the people, and his company. In fact, he said, Glamis didn't need the bank, the bank came to Glamis.

Bank officials "were anxious to make some investments" in the region, he said. The company is expecting to gross $1 billion over the life of the mine, with profits of $200 to $300 million.

"That's a return of about 25 to 30 percent," he said.

Ghana: The Social Costs

The men of Binsre on Ghana's ancient Gold Coast carry on their own hunt for gold. Nearly naked, their arms and legs slathered in gray ooze, they sift through the muck in a large pit, using buckets and hard hats, looking for any last scrap.

So far industrial mining has not lived up to its promise for these men and their families. They are illegal miners who find work not inside the highly mechanized mines of Ghana's first-world investors, but on the fringes, scavenging the waste left behind by AngloGold Ashanti, the world's second-largest gold company, based in South Africa.

Six miners have died in the last several years, most of them overcome by fumes when waste from the mine gushed into the pit, said Hannah Owusu-Koranteng, an advocate for the illegal miners. The mine tried to keep the men out.

"We used to use dogs," said AngloGold Ashanti's chief financial officer, Kwaku Akosah-Bempah. "Then they said we were using dogs to bite them." So the mine stopped using the dogs and the men returned.

In the nearby village of Sanso, a few men said they had lost their land to the mine. Now they carve shafts into a mountain of waste rock, where they haul, hammer, chip and sift.

"You wake up one day and you realize your farm is destroyed," said Assemblyman Benjamin Annan, a local politician. "They say they will compensate but it takes one or two years. So people are compelled to go to illegal mining, the way our ancestors did."

Industrial-size shaft mining has existed in Ghana for 100 years, but with the price of gold soaring, more companies are arriving now, this time bringing open-pit cyanide mines. The investment has been greeted warmly by the government.

Newmont is set to spend a billion dollars on a new mine next year and on a second mine - in one of the badly deforested country's last remaining forest preserves - in 2007.

The World Bank is here, too, preparing to lend the company $75 million. Together, the bank and Newmont say, they aim to show how social development and gold mining can be married.

Newmont compensated the farmers who were moved off their land. It is offering training for new jobs, like growing edible snails and making soap. It built new concrete and tin-roofed houses to replace homes made of mud.

But the mine will create just 450 full-time jobs. More than 8,000 people will be displaced.

"The house is O.K.," said Gyinabu Ali, 35, a divorced mother of five children, who recently moved into her gaily painted two-room house, with a toilet out back, that overlooks several dozen similar units resembling a poor man's Levittown. "I miss my land where I could grow my own food."

Near the mine of Newmont's competitor, AngloGold Ashanti, in Obuasi, only half of the homes have an indoor bathroom, and 20 percent have running water. With the exception of the brick villas of the company executives, Obuasi today looks like a vast and squalid shanty town.

The chief financial officer, Mr. Akosah-Bempah, said he was offended by the poor conditions. Most of the company's taxes and royalties had stayed in the capital, he said, leaving the ramshackle town bereft of the benefits of gold mining.

"Sometimes we feel embarrassed by going to Obuasi," he said. "Not enough has gone back into the community."

Somini Sengupta contributed reporting from New Delhi for this article.

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October 25, 2005

 

The Cost of Gold | Treasure of Yanacocha
Tangled Strands in Fight Over Peru Gold Mine

By JANE PERLEZ and LOWELL BERGMAN

 
SAN CERILLO, Peru - The Rev. Marco Arana drove his beige pickup over the curves of a dirt road 13,000 feet high in the Andes. Spread out below lay the Yanacocha gold mine, an American-run operation of mammoth open pits and towering heaps of cyanide-laced ore. Ahead loomed the pristine green of untouched hills.

Then, an unmistakable sign that this land, too, may soon be devoured: Policemen with black masks and automatic rifles guarding workers exploring ground that the mine's owner, Newmont Mining Corporation, has deemed the next best hope.

"This is the Roman peace the company has with the people: They put in an army and say we have peace," said Father Arana as he surveyed the land where gold lies beneath the surface like tiny beads on a string.

Yanacocha is Newmont's prize possession, the most productive gold mine in the world. But if history holds one lesson, it is that where there is gold, there is conflict, and the more gold, the more conflict.

Newmont, which has pulled more than 19 million ounces of gold from these gently sloping Peruvian hills - over $7 billion worth - believes that they hold several million ounces more. But where Newmont sees a new reserve of wealth - to keep Yanacocha profitable and to stay ahead of its competitors - the local farmers and cattle grazers see sacred mountains, cradles of the water that sustains their highland lives.

The armed guards are here because of what happened in the fall of 2004 at a nearby mountain called Cerro Quilish. For two weeks, fearing that the company's plans to expand Yanacocha would mean Quilish's desecration and destruction, thousands of local people laid siege to the mine. Women and children were arrested, tear gas was thrown, the wounded hospitalized after clashes with the police.

In the end, the world's No. 1 gold-mining company backed down. Father Arana, who runs a local group formed to challenge the mine, helped negotiate the terms of surrender. Newmont withdrew its drilling equipment from Quilish - and the promised reserves from its books. Now, in large part because of the loss of Quilish, the company says production at Yanacocha may fall 35 percent or more in two years.

The forced retreat, a culmination of years of distrust between the peasants and the mine, was a chastening blow for an industry in the midst of a boom. It underscored the environmental and social costs of the technologies needed to extract the ever-more-valuable ore from modern mines. And it showed how a rising global backlash against those costs was forcing mining companies to negotiate what has come to be known as "social license" if that boom was to go on.

But the history of Yanacocha, pieced together in a six-month examination by The New York Times and the PBS television program "FrontlineWorld," is also an excursion into the moral ambiguities that often attend when a first-world company does business in a third-world land.

Gold miners say they have no choice but to go where the ore is; they cannot choose the governments they deal with. Yanacocha shows how one company maneuvered in a country, Peru, dominated by a secret web of power under a corrupt autocracy.

Newmont gained undisputed control of Yanacocha in 2000 after years of back-room legal wrangling. Behind the scenes, Newmont and its adversaries - a French company and its Australian ally - reached into the upper levels of the American, French and Peruvian governments, employing a cast of former and active intelligence officials, including Peru's ruthless secret police chief, Vladimiro Montesinos.

Much of that arm-twisting has been dragged into the light, in secret recordings by the spy chief. The tapes, apparently intended to blackmail and manipulate Peru's powerbrokers, surfaced in 2000 and led to the downfall of Mr. Montesinos and the president he served, Alberto K. Fujimori.

The tapes captured everything from plotting to fix elections to shopping bags of money being unloaded for payoffs in Mr. Montesinos's office at the Peruvian National Intelligence Agency.

They captured Newmont's maneuverings, too. In one audio recording, the No. 3 Newmont executive at the time, Lawrence T. Kurlander, is heard offering to do a favor for Mr. Montesinos.

"Now you have a friend for life," Mr. Kurlander tells the spy chief.

"You have a friend for life also," Mr. Montesinos replies.

Last year, a Justice Department investigation into whether Newmont's victory resulted from bribing foreign officials was dropped after the Peruvian government failed to cooperate fully and the statute of limitations expired, according to law enforcement officials familiar with the case. The Peruvian government investigated the Yanacocha affair without bringing charges.

Mr. Kurlander has agreed to speak out publicly about his meeting for the first time. He says he regrets seeking out Mr. Montesinos, now in jail charged with everything from corruption to gun running and drug trafficking. But Mr. Kurlander and Newmont are adamant that no bribes were paid, nothing illicit done, at least not by them or their allies.

"Everybody involved on the American side, in the American government, that went to see him or spoke to him, asked for a level playing field," said Mr. Kurlander, who retired in 2002. "Not a single person asked for him to influence the outcome of the case."

Newmont's senior executives declined repeated requests for interviews for this article, though they did allow Times reporters to make an extensive visit to the Yanacocha mine. But in a written statement, Newmont said of its legal battle for the mine, "We are satisfied that the company complied in all respects with applicable laws."

Whatever the past environmental problems, Newmont says Yanacocha now meets all Peruvian and international standards. And the company says it is committed to gaining and maintaining the approval of the community.

Still, to many of the local people, the continuing struggle for Yanacocha evokes a tale of treachery nearly any Peruvian school child can recite.

In 1532, the Spanish conquistador Francisco Pizarro captured the last Inca emperor, Atahualpa, in Cajamarca, the provincial capital 28 miles from Yanacocha. The young Inca, a god to his people, was held for months while he scrambled to amass a ransom: enough gold to fill a room as high as his arm could reach.

He turned over his gold, expecting to be freed. But Pizarro killed him anyway.

Living on Water

At first, people here saw possibility in the mine. Yanacocha - "black lake" in the indigenous Quechua tongue - sits in one of the poorest agricultural regions of Peru.

"When Yanacocha began its operations, we would only hear about how everyone was happy," Father Arana said. "The mine was going to bring jobs, improve roads." No one thought much, he said, about the inevitable collisions.

The collisions began almost immediately.

In the Andean peasants' universe, water is the heart of the land. The people depend on it - for their animals, for drinking, for bathing. Community life is organized around it.

But the mine lives on water, too. The bits of gold here, so small they are called "invisible gold," can be mined profitably only by blasting mountains, then culling the gold with vast quantities of cyanide diluted with similarly vast quantities of water.

It was not long before the peasants began to complain. Streams and canals were drying up, they said. They were filled with murky sediment. The water smelled foul.

But on the ledger books, Yanacocha was a fast success.

The mine had started with 1.3 million ounces of reserves in the ground. Within a year, it claimed over 3 million. It was the biggest foreign investment in Peru.

"Everywhere we drilled and looked, there was gold," said Len Harris, Yanacocha's first general manager.

Dueling Companies

Celebration soon gave way to strife.

A year before, a partnership had been formed to develop the mine: Newmont; a Peruvian partner, Buenaventura; and a French government-owned company, Bureau de Recherches Géologiques et Minières (BRGM). No partner had a controlling interest. The World Bank's investment arm, the International Finance Corporation, later took a 5 percent stake, hoping to promote development in a country plagued by economic chaos and roiled by a Maoist insurgent group, Shining Path.

With the mine expanding and the guerrilla leader captured, BRGM announced plans to sell a large part of its increasingly valuable stake to an Australia-based company, Normandy Poseidon. Newmont, considering the involvement of another major mining company unacceptable, sued, arguing that the partnership agreement gave it and Buenaventura first right of refusal on any sale.

Twice, Peruvian courts agreed. Then, in September of 1997, the Peruvian Supreme Court issued a startling ruling, agreeing to review a case Newmont thought it had definitively won. Stunned and suspicious, the company called in Mr. Kurlander.

Mr. Kurlander, then 56, had spent most of his life in government, as a prosecutor and as chief criminal-justice adviser to Gov. Mario M. Cuomo in New York. He later moved to corporate work and was recruited by Newmont in 1994. He had no experience in mining, but in an industry known for its rough edges, he became a top Newmont executive, valued for his political contacts and easy ability to walk between the halls of government and the corporate suite.

On his arrival in Peru, Mr. Kurlander says, he was told by Newmont's lawyers and security chief that the French were "behaving inappropriately in the litigation."

"The mere fact that they were doing this," he said in an interview, "was unseemly at best and corrupt at worst."

Newmont, he said, was at a distinct disadvantage: the Foreign Corrupt Practices Act forbids American companies to pay anything of value to a foreign official in exchange for a "result." By contrast, in 1997, most European countries, France included, did not prohibit paying bribes.

The French ambassador to Peru at the time, Antoine Blanca, said in an interview that no one connected to the embassy had ever offered bribes or otherwise acted improperly.

Still, what emerges from documents and interviews with participants is a picture of three years of increasing pressure and intimated threats by Normandy and the government of France.

In the Peruvian press, the French ambassador insinuated corruption of the judiciary; French government emissaries suggested to Peruvian officials that there would be consequences if Newmont was awarded the disputed shares.

Normandy recruited Patrick Maugein, a well-connected French businessman. By phone, fax and letter, Mr. Maugein placed Newmont and Buenaventura on notice that the dispute had become a "matter of state"; the French, he warned, "had every intention of fighting it to the bitter end." Mr. Maugein had ties to the French president, Jacques Chirac, and soon Mr. Chirac wrote to President Fujimori, urging a Supreme Court review and his personal intervention.

Mr. Maugein declined to be interviewed for this article, but in a letter wrote that any allegations of illicit activity "come from people who have been paid to make them."

From Lima, in the days after the Supreme Court agreed to take the case, Mr. Kurlander headed to Washington to enlist help on the American side. By the end of October 1997, Stuart E. Eizenstat, under secretary of state for economic affairs, wrote Peru's prime minister to press for "a fair and impartial hearing," according to documents released under the Freedom of Information Act.

"A politically tainted decision would adversely affect U.S. investment in Peru," he wrote

On Jan. 5, 1998, Peru's Supreme Court came back with a preliminary decision; 3 to 2 for the French, one vote shy of victory.

As the Peruvians prepared to assign two more judges to the case, Mr. Kurlander says, he and Buenaventura's chief, Alberto Benavides, appealed to Mr. Fujimori.

Soon after, Mr. Kurlander said, the president's office sent word about the man to see.

Spy Chief's Favor Bank

Vladimiro Montesinos's titles never matched his stature. Officially, he was "counselor" to Mr. Fujimori and de facto head of the National Intelligence Service. In reality, he was the second-most-powerful man in Peru - "Rasputin, Darth Vadar, Torquemada and Cardinal Richelieu" rolled into one, according to an American Army intelligence report.

The National Intelligence Service was also on the payroll of the C.I.A., which gave Mr. Montesinos a million dollars a year for his supposed help in combating the narcotics trade, according to former C.I.A. officials who approved the payments.

This was the man Mr. Kurlander headed to see alone on Feb. 26, 1998. While he says he knew that Mr. Montesinos was "an extremely bad man," he maintains that the extent of the government's corruption and human rights abuses were not well known at the time. There was, however, one case he was aware of.

Not long before, the Fujimori government had seized the television station of a Peruvian-Israeli businessman, Baruch Ivcher, after it began broadcasting reports tying the intelligence chief to drug trafficking and corruption. Mr. Kurlander knew that publicity about the case was threatening to become a headache for Peru's government.

As the secret tape rolls, Mr. Montesinos says he is aware of Mr. Kurlander's problems and is "very glad to do whatever I can for you."

Mr. Kurlander describes his own links to the intelligence community and how he has enlisted "friends" - two former C.I.A. officials - to assist him, because the French side "has been acting quite strangely."

Their conversation is interpreted by Grace Riggs, a lawyer and former lover of the spy chief who had a child with him.

Soon Mr. Kurlander raises the Ivcher case. Mr. Montesinos assures him that the pursuit of Mr. Ivcher is not an anti-Semitic "persecution," and Mr. Kurlander offers to help by lobbying his fellow Jews in the United States and abroad.

"Tell him I going to help him with the voting," Mr. Montesinos directs his translator. He is well aware of the "tricky practices of the French government," he says, making a joke about "The French Connection."

The reference, in English, gets the men laughing. Soon spy chief and executive are pledging friendship for life.

The spy chief then proceeds to discuss with another man, who has never been identified, the lawyers and judges who may need to be influenced. The conversation is in Spanish, which Ms. Riggs does not translate.

Finally, she tells Mr. Kurlander that because he helps Mr. Montesinos "without expecting anything in return," the spy chef "wants to do the same thing for you."

"I appreciate that," Mr. Kurlander replies.

"Amor con amor se paga," Mr. Montesinos exclaims.

Love is repaid with love.

Washington Is Heard From

Still, Mr. Kurlander says, he had doubts. In the following weeks, "nothing happened," he said. "I was very worried that we were lost." In fact, the channel between Mr. Montesinos and the Americans was open and bustling.

Peter Romero, then assistant secretary of state for Western Hemisphere affairs, acknowledged in an interview that he had twice called Mr. Montesinos to show that the case was being "monitored" in Washington.

"He seemed to be a nice enough fellow," he recalled.

The "compelling reason" to get involved, he said, came from Peruvian and American Embassy officials who confirmed the direct involvement of President Chirac and others at the top of the French government.

"We wanted to ensure that that was neutralized," Mr. Romero said.

Two and a half years later, Mr. Romero left government and was hired by Mr. Kurlander as a consultant on Peru for Newmont, where he remained for 18 months.

On April 14, six weeks after the Montesinos-Kurlander meeting, the video cameras were rolling for a visit from the C.I.A. station chief, Don Arabian.

As the meeting nears its end, Mr. Montesinos says he has been collecting information on the French attempt to influence the case and will not let them use "extortion, blackmail and other gangster" methods.

"I'm not working with the telephones, but we will if necessary," Mr. Montesinos says, an apparent reference to wiretapping. "We'll sort out the technical support." The men laugh.

Mr. Arabian, who recently retired, declined a request for an interview.

On May 8, the sixth Supreme Court justice voted in favor of Newmont and Buenaventura. With the vote deadlocked, 3-3, the court administrator appointed a final judge, Jaime Beltrán Quiroga. He was summoned the next day by Mr. Montesinos.

A videotape shows the justice settled on the couch as Mr. Montesinos talks about how, as a lawyer he, too, would normally "keep a distance" from events. But "in these cases," he says, "one has to intervene directly."

Mr. Montesinos avoids direct pressure - "as if we are imposing on you" - but reminds the judge that the case is a matter of national interest: the United States is a key guarantor of coming deliberations over Peru's border conflict with Ecuador.

There is no discussion of payoffs, but the spy chief does question the judge about his professional ambitions. The men reminisce.

"Well, doctor, you have a friend here," Judge Beltrán says.

"My dear, Jaime, then, a pleasure to see you, brother," Mr. Montesinos replies, assuring his guest that he will soon be transferred to Peru's Constitutional Court.

Judge Beltrán's vote was announced two weeks later: Newmont and Buenaventura were awarded BRGM's share - at the purchase price set in 1993: $109.7 million.

When the final transfer was negotiated a year later, the stake was valued at more than five times that.

Today Mr. Kurlander says that whatever his reservations at the time about meeting Mr. Montesinos, he went ahead because nearly everyone told him, "If the French were to be stopped, he was the only one in Peru who would dare to do it."

The transcript is "terribly unfair," Mr. Kurlander says, and leaves out a number of his statements that all he wanted was a "level playing field."

Mr. Kurlander's name has been attached to the meeting and his reputation harmed, he says, though he insists the meeting was no secret. He says his Newmont superiors and his partners in the Benavides family were thoroughly briefed.

"It was my government who recommended - strongly - that we speak with him," Mr. Kurlander said at his home outside Denver. "Tell me what my option is at that point. Do I lay down and just fold, fold up and go home? Or do I fight for what I think is right and fair and just?"

In an interview at his Lima offices, Mr. Benavides, now Buenaventura's chief executive, insisted, "We didn't know what Mr. Kurlander was doing," and added that he did not learn about the Montesinos meeting until the tape was made public several years later.

The Mercury Spill

At Yanacocha, year after year, the mine's geologists had kept striking gold. And with every ton of earth sifted, it became ever clearer that the mine had not just ripped up the landscape; it had remade the social architecture, too.

There were growing class divisions, between the many campesinos who had received well-paying jobs - Yanacocha would eventually employ as many as 2,200 people, two-thirds locals, full time, and up to 6,000 on shorter-term contracts - and the tens of thousands more who had not. People migrating to the region in pursuit of work brought overcrowding and rising crime.

In June 2000, a truck contracted to carry canisters of mercury, a byproduct of mining, spilled 330 pounds of the poisonous metal over 25 miles of road around Choropampa, 53 miles from the mine.

The villagers believed that the mercury was mixed with gold. They scooped it up. Some took it home to cook on their stoves. A World Bank report later said the mine delayed reporting the accident to the national authorities and initially played down its seriousness to the bank.

In the end, the Peruvian government fined the mine $500,000; the company says it has paid $18 million more. A class-action suit has been filed against Newmont in Denver, charging that more than 1,000 people were harmed, some for life.

The extent of that damage has been in dispute from the start. Even so, the spill left deep psychic scars. It became common mythology that mercury had killed newborn babies and caused cancer and other diseases, Dante Vera, a former Peruvian Interior Ministry official hired in 2004 as an adviser to Newmont, wrote in a report to company executives.

At Newmont, it was becoming increasingly clear that the social turmoil was a business problem. The spill, Mr. Kurlander said in a speech a year later, "served as a wake-up call for us."

Soon, he was headed back to Peru, to lead an environmental audit of the mine.

Newmont kept the audit's results within the company, never acknowledging them publicly - either to its shareholders or to the local people. Mr. Kurlander found "a high level of mistrust" of the mine.

But the 44 findings of Mr. Kurlander's audit, which was given to The Times, also confirmed many of the villagers' specific complaints: that fish were disappearing and that lakes, streams and canals were being contaminated, at least one with cyanide.

One stream, Quebrada Honda, had 13 fish per kilometer in 1997, but none by 2000, the audit said. Thousand of tons of rock not processed for gold recovery were generating dangerous acidic runoffs.

In a letter after the audit, Mr. Kurlander says that as the mine expanded, "we eliminated many environmental safeguards that were in the construction and environmental management plans." In all, he wrote to Newmont's new chief executive, Wayne Murdy, the findings were so serious that they could jeopardize the mine's continued operation and leave senior executives subject to "criminal prosecution and imprisonment."

Mr. Kurlander's tough words came on the heels of another memo to Mr. Murdy about the spill: On Jan. 18, 2001, Mr. Kurlander recommended that all the top executives, including himself and his boss, take cuts in their bonuses, of 50 to 100 percent, and that the punishment be made public. Mr. Kurlander singled out the company's environmental team, saying that despite public pledges, Newmont had failed to adhere to American environmental standards.

To his disappointment, Mr. Kurlander said, some bonuses were indeed reduced, but without public notice and much more modestly than he had recommended.

In a letter to Mr. Kurlander three years later, Mr. Murdy said the company had learned from the accident and the audit. Newmont, he said, spent $100 million to fix the environmental problems, including $50 million for a water-treatment plant and $20 million on two dams to prevent sediment from clogging streams and canals. Mercury is now shipped inside triple-sealed, stainless-steel containers and escorted by a convoy of cars.

To Mr. Kurlander, the spill showed the folly of a company ignoring the people, particularly the people most set against the mine. In a memo, he warned that with the mine sunk so low in the peasants' esteem, Newmont would never be able to mine Quilish.

"We have come to this because we have been in denial," he wrote. "We have not heeded the voices of those most intimate with our mine - those who live and work nearby."

It was less than a year after the audit that he retired.

The Peasants Protest

The protests began not long after people began seeing the drilling machines up on the cone-shaped hill above Cajamarca.

Quilish had long been on Newmont's drawing boards. Last year, Newmont mined three million ounces at Yanacocha, its most profitable single source of gold. But the more it pulls from the ground, the more it must replace to remain No. 1.

Back in 2000, the local government had passed an ordinance declaring Quilish and its watershed a protected natural reserve. But Newmont had persuaded a Peruvian court that it had the right to mine because it had acquired the concession years before. In August 2004, the machines moved in.

To many people, that was the final betrayal, said Mr. Vera, the former Newmont consultant. He quit this summer, saying his advice had been ignored.

On Sept. 2, deploying boulders, vehicles, anything they could find, hundreds of campesinos blockaded the narrow mountain road that runs from Cajamarca to the mine.

Several hundred armed officers, including 150 special operations police officers from Lima, were sent in to guard the mine.

The first day was the most violent; protesters were arrested, many of them women and old people, according to Father Arana's colleague, Jorge Camacho. At times during the siege, the police used tear gas. One man was shot in the leg. The company kept the gold coming out of Yanacocha, but only by helicoptering the workers in.

On Sept. 15, there was a regionwide strike, with street demonstrations in Cajamarca. The message, on one of the blizzard of placards in town, was: "Listen Yanacocha. Cajamarca is to be respected."

The protests were organized by the peasants themselves, Mr. Camacho and others say. But the 43-year-old Father Arana, son of teachers from Cajamarca, had been nurturing the movement for many years, even before he founded his group, Grufides, in the late 1990's. (These days, it receives financial assistance from Oxfam.)

The campesinos call him Father Marco, and he is a devoted adherent of liberation theology and its doctrine of social activism for the poor.

He is not the easiest of men. Last spring, he met Newmont's chief, Mr. Murdy, on the sidelines of the company's annual general meeting in Denver. As the priest recalls it, Mr. Murdy tried to be conciliatory, saying he lived by his mother's motto: "We are given one mouth but two ears to listen with." Father Marco says he rebuffed the overture, replying, "In the Bible, there is a saying about some people have eyes that don't see and ears that don't hear."

As the siege ran on at Yanacocha, the priest became a key negotiator between Newmont, the peasants and the Ministry of Mines. It was not long after the demonstrations in Cajamarca that the company surrendered. The machines came down from Quilish. At Newmont's request, the ministry withdrew its permit, too.

What remains up on the mountain is a symbolic wall of mud and straw that the campesinos built to keep the miners at bay.

More Gold Needed

Standing down at Quilish, with its 3.8 million ounces of reserves, has only intensified the need for new reserves.

"The pressure feels like you're laying track and knowing there's a locomotive right behind you," said the mine's exploration manager, Lewis Teal.

So Newmont is looking elsewhere, in the highlands near San Cerillo, where the jade-green lagoons and peaty grasses act as a store of water for the peasants below.

Many people there worry about the effects of a new mine. Which is why, after Quilish, Newmont is paying for the Peruvian police units protecting the drilling team, said the mine's manager, Brant Hinze.

Even so, Mr. Hinze said, leaving Quilish was the right thing to do. "The thing that the company did - both Newmont and Buenaventura - is listen to the communities, and they said this is something we want you to stay away from," he said.

Newmont's Peruvian partner, Mr. Benavides, argued that exploration of Quilish had not been abandoned, simply suspended.

"We have the concession, and we have the land," he said. He added: "I do not understand what social license means. I expect a license from the authorities, from the minister of mines. I expect a license from the regional government. I don't expect a license from the whole community."

Still, the idea of social license is at the heart of the agreement that ended the siege: If Newmont hopes ever to mine Quilish, it first must win the community's consent.

So to promote Yanacocha's well-being and expansion, Mr. Hinze has become the kind of mine manager he never imagined being. He says he had asked for the job running Yanacocha because of its sheer scale - "it's big, it's profitable," is how he puts it. Fifty years old, silver-haired and steely eyed, 6 foot 3 and 255 pounds, he is a man of scale himself. His idea of recreation, he says, is riding his Harley or swimming with hammerhead sharks.

Now, he says, he spends 70 to 80 percent of his working time on social issues. On a recent day, he ate roasted guinea pig at a lunch with a peasant group. A few days later, he attended a ceremony celebrating a gift of $500,000 for a new road around San Cerillo.

"Modern mining can coexist with cattle, agriculture and tourism," he told one gathering. "Today we begin a new history for communities around here."

Newmont says that it paid $180 million in taxes to Peru's government last year, and that under a new law, half was returned to the Cajamarca region. But to its frustration, the company says, the local government has largely been unable to use the money to benefit the people - and most of the people here remain achingly poor.

So the company, albeit ambivalently, has become something of a surrogate government. It is contributing money for schools and clinics and building some small water treatment plants in the villages. In all, the company says it will spend nearly $20 million this year on social programs.

Water remains a divisive issue: Father Arana and his allies argue that a new, every-three-weeks testing protocol is insufficiently independent. The peasants continue to complain.

But company and local officials say there have been no environmental accidents at Yanacocha in more than two years, and the mine says it manages its water to ensure there is enough for the community.

But the biggest issue is the one looming over every modern industrial gold mine: What happens when the ore that lured the miners here is gone?

Over 13 years, Newmont has moved mountains for gold - 30 tons of rock and earth for every ounce. By the time it is through, the company will have dug up a billion tons of earth. Much of it will be laced with acids and heavy metals.

Three years ago, after Newmont acknowledged that 36,700 fish were missing from a river contaminated by the mine, the World Bank hired an American geochemist, Ann Maest, to study the streams and canals flowing from the mine.

In the short term, she concluded, the water was safe for human use. But long term, she said in an interview, the company's own tests show that all the components are in place for the huge piles of rock to leak acids that will pollute surface and groundwater.

The only preventive, she said, would be "perpetual treatment."

Mr. Hinze, who was recently appointed head of Newmont's North American operations, insists that the company's plan for closing the mine will take care of long-term treatment and cleanup.

"We plan on being here a very long time," he said.

Newmont has yet to put aside money for long-term treatment, though it says it will comply with a Peruvian government requirement due to take effect in 2007. But to pay for cleanups, the company needs to keep profits high. To keep profits high, it needs to keep finding and mining more gold. Yet increasingly, the unmovable reality is that to keep mining more gold, it has to make peace with the people who will be here long after the miners leave.

Mr. Hinze and Newmont insist that that can - in fact, must - be done, even if some people may never be won over. "There will always be a level of mistrust," he said. "Unfortunately, we can't please everyone."

Mr. Vera, the former Newmont consultant, is not so confident. He says he sometimes thinks that the clash between the mine and the peasants is so fundamental as to be beyond even the best intentions.

"Mining negatively affects the Andean cosmic vision of the unity of nature," he said. "The conflict cannot be settled with money. Mining generates resentments that are difficult to heal."

Marlena Telvick and Natasha Del Toro contributed reporting for this article.

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Citizen-State Relations in Review
Dear Henry Mark Holzer,

    25 December 2005  -  I just discovered your most informative, eye-opening & in many ways saddening study "How Americans Lost Their Right To Own Gold And Became Criminals in the Process". This while doing background research on the evolution - from ancient time to now - of the citizens/state relationship as reflected in their abilities to effectively challenge each other (i.e. citizen vs state) for acquiring, holding onto, and utilizing such private property as gold, land, information, etc.

    Seen from this peculiar perspective, the history of man takes on a look, dimension and content which in many ways are different from what we ordinarily discuss. It may be summarized as a history of ego-, gut- or intelligence-driven resources redistribution by conquest, looting or imposed sharing, i.e. of endlessly changing fortunes - for both the citizens and the community they live in and adhere to. And it seems to offer rare insights into the mechanics of mankind and its component parts, from the individual human as an integral part of the devine creation, to their combinations in the current form of national states which are organized and governed in line with the current dominent understanding of devine design, be it - as in pharaonic times - by devine birth, or by way of the current, more or less "vox populi, vox dei".  To wit:
-    The Pharao who introduced monotheism may not have done so for "religious", but primarily for political & economic reasons. For that may have been the most effective, if not the only way to overcome the resistance of his economy-controlling priests - i.e. the thus powerful earthly representatives of a plethora of gods. I.e. resistance to his plans to effectively prepare for and provide for the upcoming 7 lean years by raising from the traditional 10 to the temporarily elevated 20% the harvest contributions the thus "nationalized" religious estates were to deliver to Pharao's national graneries. By no longer recognizing their gods, he thus drew the carpet from under his egocentric priests and freed his hands to successfully execute his visionary plans (www.solami.com/a1.htm).
-    The French kings - and their more recent republican successors - may have regranted their citizens the right to anonymous gold possession only when their war-depleated treasuries could be filled again by amnesties for past & current gold hoardings.
-    Some - particularly Western - U.S. States, as well as Turkey, Tajikistan and other countries are known to have adopted the Swiss Civil Code of 1907, where the first ten articles reflect fundamental principles and achievements of civilized society, perhaps drawing inspiration from the Avesta, the Ten Commandments and other ancient writings. Also, the universally postulated presumption of innocence until proven guilty, provides a helpful guideline when considering the above question of citizen/state relation - not least in fiscal matters. Yet, when looking around, I find myself to travel on the wrong train, and perhaps even to live in the wrong time period with my view that taxmen here and there, preposterously, have managed over the last decades to stealthily shove the burden of proof from their office onto the taxpayers' shoulders. For a Swiss employee, e.g., it isn't sufficient anymore to turn in his tax declaration in time and, with his signature, to engage his penal responsibility for false declarations; the law now obliges him to attach the salary certificate (.../lohnausweis.htm) as proof of what he declares, thus not only diminishing his signature but also - in law and effect - submitting him to state tutelage. This is seen to be in direct contradiction to article 8 of the Swiss Civil Code, which explicitly provides that it is incombant on each party to prove the facts from which it deducts its claims. And it is all but clear why, of all entities, the relatively much more powerful state should be exempted from this fundamental rule, particularly in fiscal matters.
-    Of course, I am not sure what, if any influence a more benevolant reception of Silvio Gesell's monetary ideas might have had on the course of events leading up to and beyond the demise of the Weimar Republic. But neither can I rule out a link between both academia's and the national monetary authorities' manifest failure to-date to explore and develop those ideas and such watershed events as the 1929 Crash (.../1929.htm), Roosevelt's 1933 bank holiday & gold criminalization, Hitler's comprehensive looting of Jewish properties culminating in the Holocaust, Nixon's 1971 closing of the gold window, Bush's disaster-prone flat-earth "policies" on Iraq and elsewhere, and the forthcoming financial tsunamis & the ensuing political upheavals.

    As of now, I have little to offer in the way of ready-made solutions. And I am in no position to really make a dent anywhere - even if some of the ideas taking shape in my mind were of any current use to anybody. Nevertheless, I'd appreciate your comments on some related observations, as summarized: .../costbenefit.htm ¦ .../swissbanks.htm#Titanic ¦ .../1929.htm ¦ .../bubbles.htm ¦ .../hedge.htm ¦ .../warfare.htm ¦ .../swift.htm. While looking forward to hearing from you at your earliest convenience, I remain, with Season's Greetings

Anton Keller, Geneva - 0114122-7400362 - swissbit@solami.com ¦ url: www.solami.com/goldies.htm
.../capitalism.htm ¦ .../buccaneers.htm¦ .../1929.htm ¦ .../hedge.htm ¦ .../bubbles.htm ¦ .../swissbanks.htm ¦ .../warfare.htm ¦ .../oecdmandate.htm ¦ .../costbenefit.htm ¦ .../crime.htm

Roosevelt Quote: "The United States Constitution has proved itself the most marvelously elastic compilation of rules of government ever written."

---

    Editorial

January 9, 2006

Recklessness in Indonesia

    Freeport-McMoRan, an American company that operates a giant open-pit copper and gold mine in Papua, is a major contributor to Indonesia's economy. The company is also one of Indonesia's most reckless polluters and a source of hard cash - cash the company concedes is protection money - for the Indonesian military, which has one of the worst human rights records anywhere.

    A recent report in The Times by Jane Perlez and Raymond Bonner described Freeport's activities in great detail. The report was part of a series of articles over the past year detailing environmental and other abuses by American mining companies at home and abroad.

    Several of these companies are being sued by local governments that argue that these companies' environmental practices would never be tolerated in America and that local citizens are seeing too few of mining's benefits while paying too heavy a price. Newmont Mining, based in Denver, has been sued by the Indonesian government for dumping poisoned wastes in local waters, and Placer Dome, based in Canada, has been sued by a Philippine province for similar infractions.

    Freeport's activities are particularly disheartening. Over the past decade, the company has built what amounts to an industrial city in Indonesia's easternmost province. On the plus side, the company provides jobs for 18,000 people and, according to company estimates, has provided Indonesia with $33 billion in direct and indirect benefits from 1992 to 2004, almost 2 percent of the country's gross domestic product.

    The environmental damage, however, has been breathtaking. So far, the company has produced about one billion tons of waste, with five billion more tons to come before the operation shuts down. Some of this waste has been dumped into the mountains surrounding the mine, and some into a system of rivers that descend steeply into the island's low-lying wetlands and coastal estuaries. The damage has been enough to render the rivers, wetlands and parts of the estuaries - all critical to the food chain - unsuitable for aquatic life.

    Meanwhile, records show that between 1998 and 2004, Freeport gave officers in the police and military nearly $20 million in direct payments in addition to tens of millions more for military infrastructure like barracks and roads. The company told The Times that the payments were necessary to provide a secure working environment for its employees, and that "there is no alternative to our reliance on the Indonesian military and police."

    Papua has long been home to a low-level, separatist insurgency against the central government, which made the company nervous. Yet what is missing from the company's response is any recognition that its environmental practices contributed to the unrest and allowed the military to establish a strong presence in a region where it had barely a toehold before Freeport arrived.

    Freeport's environmental record and its support for the Indonesian military have caused rumbles in Washington, particularly among human rights advocates like Patrick Leahy, a Democratic senator from Vermont. Citing human rights abuses, Congress in 1992 restricted arms sales and most American training for Indonesian officers, and it enacted new prohibitions in 1999 after a rampage by army-backed militia in what was then East Timor Province. Mr. Leahy sharply criticized Secretary of State Condoleezza Rice's decision to resume aid last year, which the administration described as a reward for Indonesia's improved human rights record and its cooperation with the post-Sept. 11 counterterrorism campaign.

    Indonesia's critics say that the present government is an improvement over the authoritarian rule of President Suharto, who ran the country for three decades ending in 1998. Yet the military continues its abusive practices. Setting aside for the moment Freeport's environmental horror show, the company is not doing Indonesia's civilian authorities any favors by underwriting the generals. Freeport describes its payments as an essential cost of doing business. But it appears not to have measured the costs to democracy.

Anton Keller, Genf 022-7400362swissbit@solami.com ¦ url: www.solami.com/cvgold.htm ¦ .../a2.htm (3.1.06, update 17.6.07)
 
 

Chronologie

09.5165 – Fragestunde. Frage. Stamm Luzi
Prüfung, ob die Goldreserven physisch vorhanden sind
"Wie lauten die zwei letzten Prüfungsdaten, an denen die von der Schweizerischen Nationalbank (SNB) in ihrer Bilanz ausgewiesenen Goldreserven von einer unabhängigen Drittstelle ausserhalb der SNB (z. B. Revisionsstelle oder parlamentarische Kommission) auf ihr vollständiges physisches Vorhandensein überprüft wurden?"

08.491 – Parlamentarische Initiative. Stamm Luzi
Stopp weiterer Goldverkäufe durch die Nationalbank
"Gestützt auf Artikel 160 Absatz 1 der Bundesverfassung und Artikel 107 des Parlamentsgesetzes reiche ich folgende parlamentarische Initiative ein:
Artikel 99 Absatz 3 der Bundesverfassung sei folgendermassen zu ergänzen:
'... wird in Gold gehalten. Die Goldreserven sind unverkäuflich.'"

08.489 – Parlamentarische Initiative. Stamm Luzi
Goldwährungsreserven der Nationalbank schrittweise erhöhen
"Gestützt auf Artikel 160 Absatz 1 der Bundesverfassung und Artikel 107 des Parlamentsgesetzes reiche ich folgende parlamentarische Initiative ein:
Artikel 99 der Bundesverfassung ist im geeigneten Absatz in folgendem Sinne zu ergänzen: Bei einer Erhöhung der Währungsreserven ist der Goldanteil mindestens beizubehalten."

08.3718 - Motion. Freysinger Oskar
Bretton Woods-Nachfolgekonferenz, Währungs-Selbstschutz, SNB-Goldverkäufe
"Der Bundesrat wird beauftragt, die Einberufung einer Bretton Woods-Nachfolgekonferenz zu prüfen, und in Absprache mit interessierten ausländischen Regierungen vorzubereiten. Im Interesse der Schweizer Wirtschaft ist die Nationalbank anzuhalten, die von ihr gepflegte Praxis der faktischen Anbindung des Schweizer Frankens an den amerikanischen Dollar unverzüglich aufzuheben. Und es sind alle Abklärungen und Vorbereitungsmassnahmen zu treffen, welche für eine allfällige Rückkehr zu einer beständigen schweizerischen Realwert-Währung geeignet sein mögen, inklusive sofortige Unterbindung aller Goldverkäufe der Nationalbank zur Stützung der amerikanischen Währung."

08.1143 – Anfrage. Freysinger Oskar
Undurchsichtige Swap-Bedingungen zur UBS-Entlastung
"Gemäss Nationalbank-Angaben vom 16. November 2008 gewährt die SNB der UBS einen Kredit von 54 Milliarden US-Dollar mit einer Laufzeit von 8 bis 12 Jahren (www.snb.ch/de/mmr/reference/pre_20081016_1/source/pre_20081016_1.de.pdf). "Sie wird sich die notwendigen Devisen anfänglich bei der US-Federal Reserve über einen Dollar-Franken-Swap beschaffen. Danach wird die Nationalbank die entsprechenden US-Dollar-Beträge am Markt refinanzieren. Die Verwendung von Währungsreserven ist nicht vorgesehen."
1. Trifft es zu, dass die auch jeder parlamentarischen Kontrolle entzogenen Bedingungen dieses amerikanisch-schweizerischen Swap-Geschäftes unter jedem Titel unbedenklich sind, insbesondere dass zur Absicherung dieser amerikanischen Hilfestellung die verbliebenen Schweizer Goldreserven von 1040 Tonnen in keiner Art und Weise belastet worden sind oder werden könnten, auch nicht bezüglich der freien Verfügbarkeit der allenfalls noch in amerikanischen Depots liegenden Schweizer Goldreserven?
2. Kann der Bundesrat ausschliessen, dass die SNB weniger im nationalen, als im vorwiegend fremden Interesse von ihren vermeintlichen oder tatsächlichen Vorrechten und ausschliesslichen Kompetenzen zur Stützung fremder Währungen und zur Abbremsung der Goldpreisentwicklung Gebrauch gemacht hat oder machen wird, wobei letzteres amerikanischerseits angeblich von der SNB als diskrete Gegenleistung für das obige Swap-Geschäft erwartet werde und auch bereits zugesagt worden sei?
3. Bestätigt er die Gültigkeit von Artikel 267 des Strafgesetzbuches für die SNB-Verantwortlichen?"

07.3709 – Interpellation. Stamm Luzi
Wo liegt das Nationalbankgold?
"Der Bundesrat wird beauftragt mitzuteilen, wo die Goldreserven der Nationalbank gelagert sind. Zumindest sei mitzuteilen, wie viel davon sich in der Schweiz befindet."

07.3708 – Postulat. Stamm Luzi
Hintergründe des Goldverkaufs der Nationalbank
"Der Bundesrat wird beauftragt, dem Parlament einen Bericht über die Hintergründe des Goldverkaufs der Nationalbank vorzulegen. Wer hat wann - und aus welchen Gründen - die verschiedenen Goldverkäufe vorgeschlagen? Im Speziellen ist die Frage zu beantworten, ob es Abmachungen mit ausländischen Nationalbanken zum koordinierten Verkauf von Gold gibt."

07.481 – Parlamentarische Initiative. Stamm Luzi
Wahrung von Goldbeständen in der Schweiz
"Gestützt auf Artikel 160 Absatz 1 der Bundesverfassung und Artikel 107 des Parlamentsgesetzes reiche ich folgende parlamentarische Initiative ein:
Durch geeignete Gesetzesbestimmungen sei sicherzustellen, dass die Schweizerische Eidgenossenschaft fortlaufend verpflichtet ist, das Gold zu kaufen, das jeweils durch die Schweizerische Nationalbank verkauft wird; dies zum jeweils geltenden durchschnittlichen Marktpreis. Ausser in schweren Krisenzeiten ist gleichzeitig dem Bund zu verbieten, die angeschafften Goldbestände wieder zu verkaufen."

06.5115 - Fragestunde. Frage. Bührer Gerold
Will die Nationalbank weitere Goldreserven verteilen?
"Gemessen an der Grösse und an der Bedeutung des Schweizer Finanzsystems sind die Währungsreserven unseres Landes sogar knapp dotiert. Es besteht daher kein Spielraum für eine weitere Reduktion der Währungsreserven beziehungsweise für weitere ausserordentliche Goldverkäufe der Nationalbank." Bundesrat H.R.Merz (AB 2006 N 865)
05.5117 - Fragestunde. Frage. Kaufmann Hans
Verfügungsgewalt über SNB-Gold im Ausland
05.3172 - Postulat.Freysinger Oskar
Strategische Rohölreserven im Ausland
Der Bundesrat wird aufgefordert zu prüfen:
    1. ob Rohöl sich eignet, ähnlich wie Gold, zur Sicherung und Förderung nationaler Interessen als strategische Reserven allenfalls auch im Ausland eingelagert zu werden,
    2. ob, gegebenenfalls, ein Teil der nationalen Goldreserven zur Einrichtung solcher strategischer Reserven im Ausland verwendet werden könnten, z. B. durch staatsvertraglichen Erwerb von in geeigneten Partnerstaaten liegenden Erdölfeldern, welche, wie die dagegen ausgetauschten und weiterhin in der Schweiz liegenden Golddepots, als "jure imperii"-Güter dem entsprechenden völkerrechtlichen Schutz zu unterstellen wären, und
    3. welche gesetzgeberischen Vorkehren zur Verwirklichung dieser Mehrzweckbewirtschaftung der nationalen Goldreserven zu treffen wären.
Antwort des Bundesrates vom 18.05.2005
    1. Rohöl eignet sich aus folgenden Gründen nicht, um als strategische Reserve von nennenswertem Nutzen zu sein:
-     Die vorhandenen Lagerkapazitäten für Rohöl bei den beiden schweizerischen Raffinerien sind für den laufenden Bedarf, nicht aber für die Lagerung von zusätzlichen strategischen Reserven an Rohöl ausgelegt. Die Erstellung von zusätzlichen Tanklagern für Rohöl wäre sowohl aus finanziellen als auch aus raumplanerischen sowie umweltschutzrechtlichen Gründen kaum möglich und gegebenenfalls nur mit unverhältnismässig hohem Aufwand überhaupt realisierbar.
-     Der überwiegende Teil des schweizerischen Bedarfes an Erdöl wird heute zuverlässig mittels Importen an Fertigprodukten sichergestellt. Die aktuellen Raffineriekapazitäten sind nicht darauf ausgerichtet, um in einer Krise strategische Rohölreserven innert nützlicher Frist zu Fertigprodukten zu verarbeiten. Die Kapazitäten reichen lediglich aus, um rund die Hälfte des schweizerischen Bedarfes an Erdölprodukten abzudecken.
-     Aufgrund der aktuellen Bedrohungslage wurden mit der Pflichtlagerpolitik 2004 bis 2007, welche im Oktober 2003 vom Bundesrat zur Kenntnis genommen worden ist, die Pflichtlager an Erdölprodukten auf 4,5 Monaten Durchschnittsverbrauch belassen. Gegen die Haltung strategischer Rohölreserven im Ausland sprechen die Unsicherheit politischer und wirtschaftlicher Entwicklungen in den möglichen, erdölfördernden Partnerstaaten. Es ist auch zu beachten, dass die Versorgungslogistik und -infrastruktur im Ausland als auch im Inland immer stärker optimiert wird. Dies führt aber dazu, dass die logistischen Kapazitäten zusehends knapper werden und die Anfälligkeit auf Störungen steigt.
    2. Das Nationalbankgold erfüllt einen anderen Zweck als die im Postulat vorgeschlagene strategische Reserve in Form von allenfalls auch im Ausland gelagertem Rohöl.
-     Das Gold bildet zusammen mit den Devisenreserven die Währungsreserven der Schweizerischen Nationalbank (SNB). Diese Aktiven der Nationalbank erfüllen wichtige geld- und währungspolitische Funktionen. Die Nationalbank kann jederzeit Devisenreserven gegen Franken verkaufen, um den Aussenwert des Frankens zu stützen. Der monetäre Goldbestand der Nationalbank trägt dazu bei, dass die Schweiz in Notlagen gegenüber dem Ausland zahlungsfähig bleibt. Aus Diversifikationsgründen lagert die SNB das Gold im In- und Ausland.
-     Der Abbau der Goldbestände der Nationalbank zugunsten einer Ölreserve würde die Notenbank in ihrer geld- und währungspolitischen Aufgabe behindern. Der Bankrat der SNB hat die Höhe der Währungsreserven am 22. Oktober 2004 überprüft und kam dabei zum Schluss, dass die SNB nach der Ausgliederung der 1300 Tonnen Gold und nach dem Abbau der Glättungsreserve insgesamt über angemessene Währungsreserven verfügt, um ihren gesetzlichen Auftrag heute und in Zukunft erfüllen zu können.
3. Infolge der Ablehnung des Postulates wird Punkt 3 gegenstandslos.
Erklärung des Bundesrates vom 18.05.2005    Der Bundesrat beantragt die Ablehnung des Postulates.

05.3166 - Interpellation.    Freysinger Oskar (Abgeschrieben, weil seit mehr als zwei Jahren hängig.)
Primat der Politik beim Verwalten der Goldreserven
"Das Nationalbankgesetz (SR 951.11) bestimmt die Aufgaben, Kompetenzen und Vorrechte der Nationalbank. Im Gesamtinteresse des Landes führt sie die Geld- und Währungspolitik und gewährleistet die Preisstabilität unter Berücksichtigung der konjunkturellen Entwicklung (Art. 5 Abs. 1 NBG).
In den auswärtigen Beziehungen, deren Handhabung gemäss Bundesverfassung dem Bundesrat untersteht (Art. 54 Abs. 1, 174, 184, 185, 187 Abs. 1a), ist die Nationalbank in der Wahrnehmung ihrer Aufgaben gehalten, mit dem Bundesrat zusammenzuarbeiten (Art. 5 Abs. 3 NBG). Zur Wirtschaftslage, zur Geld- und Währungspolitik sowie zu aktuellen Fragen der Wirtschaftspolitik des Bundes erfüllt die Nationalbank ihre Pflicht zur Rechenschaftsablegung und Information durch regelmässige Kontakte mit dem Bundesrat. Und "vor Entscheidungen von wesentlicher wirtschaftspolitischer und monetärer Bedeutung" unterrichten sich der Bundesrat und die Nationalbank gegenseitig (Art. 7 NBG).
Die in Artikel 6 NBG umschriebene Unabhängigkeit der Nationalbank beschränkt sich demnach auf innerstaatliche technische Fragen. Im Sinne des verfassungsmässigen Gesetzgebers vermindert diese technische Unabhängigkeit keineswegs die Informations- und Konsultationspflichten der Nationalbank gegenüber dem Bundesrat in einschlägigen politischen, vor allem aussenpolitischen Fragen. Dazu gehören nicht zuletzt die Wahl, die fortlaufende Beobachtung und die politische Einschätzung der ausländischen Standorte, sich daraus allenfalls ergebende Standortwechsel sowie insgesamt die Verwaltung und Aufteilung der Goldreserven auf die in- und ausländischen Depotorte.
Die bundesrätliche Antwort auf meine Frage vom 7. März scheint die Auskunft eines Nationalbanksprechers zu bestätigen, wonach sowohl der derzeitige Vorsteher des Eidgenössischen Finanzdepartementes als auch sein Vorgänger nicht einmal informiert worden sei, geschweige denn seine Zustimmung dazu gegeben habe, wo welche Teile der im Ausland liegenden Schweizer Goldreserven wann aufzustocken oder abzubauen sind. Daraus erhellt, dass die Nationalbank es bisher offenbar unterliess, den Bundesrat in Sachen ausländischer Golddepots pflichtgemäss zu informieren und zu konsultieren. Und dass sodann Handlungsbedarf besteht zur Wahrnehmung des politischen Primates des Bundesrates, auch und nicht zuletzt in der Frage der Beurteilung und Handhabung der Risiken, welche angesichts erhöhter Terrorismus- und politischer Erpressungsgefahren mit der treuhänderischen Lagerung von Teilen des schweizerischen Volksvermögens im Ausland verbunden sind.
Teilt der Bundesrat die Erkenntnis, dass der verfassungsmässige Gesetzgeber der Nationalbank weitestgehende Unabhängigkeit einräumte in technischen Fragen der Geld- und Währungspolitik, jedoch ohne Einschränkung des Primates der Politik und der besonderen Verantwortung des Bundesrates in einschlägigen aussenpolitischen Belangen, Risikoabwägungen und besonders in Fragen der Bewirtschaftung der im Ausland unterhaltenen Goldreserven?" NR Freysinger (AB 2005 N 964)
04.5154 - Fragestunde. Frage. Günter Paul
Wo ist unser Gold?
04.3283 - Postulat. Grüne Fraktion
Begrenzte Ölvorräte. Szenarien
03.5101 - Fragestunde. Frage. Scherer Marcel
Stopp des Goldverkaufes aus den Währungsreserven der SNB
03.5038 - Fragestunde. Frage.    Günter Paul
Schweizer Gold in den USA
03.3213 - Interpellation. Abate Fabio
Nationalbankgold für Eisenbahn-Grossprojekte?
03.2004 - Petition. Hirt Walter
Goldverkäufe der SNB sind einzustellen
02.447 - Parlamentarische Initiative. Dupraz John
Goldreserven der Nationalbank. Ausgewogene Verteilung
02.3593 - Interpellation. Steiner Rudolf
Fehlende Depeschen im EDA
02.3452 - Motion. Merz Hans-Rudolf
Verwendung der veräusserten Goldreserven
02.3089 - Interpellation.    Merz Hans-Rudolf
Verwendung der Goldreserven nach dem 22. September 2002
02.1159 - Einfache Anfrage. Baumann J. Alexander
Verunstaltung des schweizerischen Hoheitszeichens
00.3560 - Motion. Riklin Kathy
100 Millionen Franken zur Beschleunigung der Bildungsoffensive im Jahre 2001
00.3298 - Motion. Freisinnig-demokratische Fraktion
E-Switzerland. Gesetzesänderungen, Zeitplan und Mittel
00.3293 - Motion. Zisyadis Josef
Eidgenössische Pensionskasse für die Landwirtschaft
00.3149- Interpellation. Guisan Yves
Stiftung solidarische Schweiz. Wie weiter?
98.3495 - Interpellation. Stamm Luzi
Kritik an der Bergier-Kommission
98.3476 - Interpellation. Gusset Wilfried Ernest
Goldreserven der SNB in den USA
98.3244 - Interpellation. Schlüer Ulrich
Der Bundesrat und das Völkerrecht
98.3137 - Interpellation. Hollenstein Pia
Aufklärung bezüglich Mobutugelder
98.2016  - Petition. Wahl Edouard
Revision aller Todesurteile sowie Revision aller weiteren existenzbrechenden Strafurteile wegen Landesverrat sowie Petition für die Revision des Washingtoner Abkommens von 1946
98.1145 - Einfache Anfrage.    Gusset Wilfried Ernest
Einsatz der Nationalbank-Währungsreserven für die Grossbanken
97.5037 - Fra. Schmied Walter.
Golddeckung des Frankens
97.3629 - Interpellation. Sozialdemokratische Fraktion
Raubgold und die Schweiz
97.3364 - Interpellation. Felten Margrith
Nabelschnurblut
97.3073 - Interpellation. Spielmann Jean
Nutzung des Nationalbankvermögens
97.3027 - Interpellation. Aguet Pierre
Verschlechterung des Image der Schweiz und der Schweizer Wirtschaft. Rolle der Banken
97.1148 - Einfache Anfrage. Dardel Jean-Nils
Gestohlenes Gold aus Südafrika
97.1116 - Dringliche Einfache Anfrage. Rechsteiner Paul
Die Schweiz und das Raubgold
96.3016 - Interpellation. Tschopp Peter
Währungsreserven. Änderung der Politik
91.5033 - Fra. Ziegler Jean.
Kriegskasse der P-26
90.5157 - Fra. Hafner Rudolf.
Einlösungspflicht für Banknoten
88.1078 - Einfache Anfrage. Weder Hansjürg
Amerikanisches Abhörzentrum Shakarchi?
86.928 - Interpellation. Salvioni Sergio
Entgegennahme von Geldern zweifelhafter Herkunft
86.568 - Interpellation. Oehen Valentin
Wiedereinführung des Goldstandards
85.512 - Motion. Bürgi Jakob
Finanzplatz Schweiz. Förderung

url: www.solami.com/cvgold.htm  (3.1.06)

Zuerst die schlechte Nachricht: Die Goldreserven der Schweiz werden zu einem fast lächerlichen Preis verkauft. Und nun die noch schlechtere: 300 Tonnen sollen nicht mehr dort sein, wo sie sein müssten. Von Claude Baumann (Text) und Dirk Fellenberg (Bild)

Den Schatz in der Heimat hüten
    Viele Schweizerinnen und Schweizer gehen davon aus, dass unser Gold noch immer im amerikanischen Fort Knox im Bundesstaat Kentucky gelagert sei, wo während des Zweiten Weltkriegs zahlreiche europäische Staaten ihre Goldvorräte in Sicherheit brachten. Andere Vermutungen gehen dahin, dass das Gold in einem unterirdischen Bunker in New York liegt. Doch die Nationalbank, so haben Recherchen der Weltwoche ergeben, baute in den letzten Jahren ihre Goldbestände in jenen Ländern ab, wo der Schutz von Staatsguthaben nicht mehr gesichert ist. Dazu zählen auch die USA. Das dortige Rechtsverständnis wird wegen seiner Unwägbarkeiten als Risikofaktor betrachtet - «weil es eine Realität des amerikanischen Systems ist, dass ein Richter einfach kommen und aufgrund einer Klage irgendwelche Vermögenswerte konfiszieren kann», sagt ein hoher Mitarbeiter der SNB. Mehrheitlich repatriierten die Notenbanker das Gold, wie inoffiziell eingeräumt wird: «Der grosse Teil unseres Goldvolumens lagert nun an verschiedenen Orten in der Schweiz.» Und: «Von den informierten Kreisen geht niemand mehr davon aus, dass Schweizer Gold in den USA liegt.» Den kleinen Teil, der sich noch im Ausland befindet, hat die SNB in sogenannte Triple-A-Länder transferiert. Gemeint sind damit Länder, in denen ein historisch gewachsenes Rechtsverständnis existiert, das Staatsguthaben zuverlässig schützt. Dazu zählen vor allem Kanada und Grossbritannien, wie es bei der SNB intern heisst.
    Das ist ein Paradigmenwechsel: Über Jahrzehnte hinweg verliess sich die Schweiz auf die Dienste der USA. Heute, in einer Welt mit veränderten geopolitischen Akzenten, ist das nicht länger der Fall. «Wenn irgendwo auf der Welt etwas passiert, das unsere Goldbestände tangiert, rufen wir die Vorräte ab, schicken sie anderswohin oder bringen sie heim», lautet nun die Devise der SNB. Oder mit anderen Worten: Die Schweiz will ihren Goldschatz nicht länger dem latenten Zugriffsrisiko amerikanischer Richter aussetzen.
    Offiziell macht die SNB dazu keine Angaben - «aus Sicherheitsgründen», wie Nationalbank-Sprecher Werner Abegg anfügt. Ein Staatsgeheimnis? Selbst dem eher besonnenen früheren Bundesrat Kaspar Villiger platzte einmal im Nationalrat deswegen der Kragen. Entnervt erklärte er: «Wo diese Goldbarren nun genau liegen, kann ich Ihnen leider nicht sagen, weil ich es auch nicht weiss, es nicht wissen muss und es nicht wissen will.»
    Wie gross der Schweizer Goldschatz nun tatsächlich ist, darüber gehen die Meinungen auseinander. Offiziell besitzt die Schweiz 1290 Tonnen. Mit einem Wert von rund dreissig Milliarden Franken machen sie einen Drittel der SNB-Aktiven aus. Ob das Gold aber auch physisch vorhanden ist, bleibt umstritten. «Zwischen den ausgewiesenen und den tatsächlich vorhandenen Goldbeständen besteht keine Differenz», sagt Werner Abegg. Manche bezweifeln dies. In der Vergangenheit waren das vor allem die sogenannten Goldbugs. Jene Leute also, die das gelbe Edelmetall seit Jahr und Tag vergöttern, viele Goldbarren in ihren Tresoren horten und sich an die Zeiten erinnern, als die Welt noch in Ordnung war, weil alle wichtigen Währungen mit Gold gedeckt sein müssten und die Notenbanken nur so viel Papiergeld drucken konnten, wie sie dafür Gold zur Deckung hatten.
    Heute ist das passe; selbst die Schweiz hob mit einem Parlamentsbeschluss von 1999 die Goldbindung des Frankens auf. Der im vergangenen Jahr verstorbene Zürcher Privatbankier Ferdinand Lips zählte bis zu seinem Tod zu den Verfechtern des Goldstandards, weil er davon ausging, dass das Papiergeld dereinst wertlos werden würde. Umso wichtiger seien daher hohe und gesicherte Goldbestände. Lips' Publikationen gelten heute als Offenbarung für viele Goldbugs, die davon besessen sind, dass ein Grossteil der Reserven der Zentralbanken gar nicht mehr vorhanden ist.

Abnehmende Bestände
    Anfang Jahr nun erhielten sie überraschend Sukkurs vom französischen Finanzkonzern Credit Agricole, der mit einer 56-seitigen Studie für Aufsehen sorgte: Darin heisst es, dass die westlichen Zentralbanken - und damit auch die schweizerische - heute nachweislich 10 000 bis 15 000 Tonnen Gold weniger besitzen als die offiziell gemeldeten 31 000 Tonnen. Autor der Studie ist der britische Metall- und Minenexperte Paul Mylchreest von Cheuvreux, einem Brokerhaus, das zum Credit Agricole gehört. Für seine Berechnungen stützte er sich auf historische Daten, er untersuchte die Aktivitäten mit Derivaten aus den Berichten der Bank für Internationalen Zahlungsausgleich (BIZ), und er besorgte sich Ein- und Ausfuhrzahlen von Goldtransfers von und nach Grossbritannien, einer der wichtigsten Drehscheiben für das gelbe Metall. Tiefere Goldbestände hätten die Zentralbanken deshalb, weil sie einen Teil davon fahrlässig ausgeliehen haben, sagt Mylchreest. Als der Goldpreis zwischen 1980 und 1999 von 850 auf 250 Dollar pro Unze absackte, hätten zahlreiche westliche Notenbanken einen Teil ihrer Reserven gegen eine bescheidene Kommission (rund ein Prozent) an grosse Geschäftsbanken wie JP Morgan, UBS, Goldman Sachs oder die Deutsche Bank ausgeliehen. So Hesse sich das Gold rentabler bewirtschaften, als wenn es in den Tresoren lag, argumentierten die Zentralbanker. Die Geschäftsbanken verkauften das Gold weiter an andere Finanzinstitute oder an Schmuckhersteller und legten den Erlös in besser rentierende Staatsanleihen zu etwa vier Prozent an. Das war leicht verdientes Geld, solange der Goldpreis tief blieb oder sank. Sobald die Finanzinstitute ihren Verbindlichkeiten gegenüber den Zentralbanken nachkommen mussten, beschafften sie sich das benötigte Gold zu tieferen Preisen am Markt. So funktionierte der Gold-Carry-Trade, wie Experten diese Transaktion nennen.
    Nach dem Börsenkrach von 2001 und 2002 veränderte sich die Ausgangslage jedoch drastisch, da der Goldpreis nachhaltig zu steigen begann. Viele Investoren entdeckten im Gold eine Anlagealternative zu den Aktien. Gleichzeitig begannen asiatische Zentralbanken, Edelmetall zu kaufen, um ihre Währungsreserven aus der Abhängigkeit des Dollars zu befreien. Für die im Gold-Carry-Trade involvierten Banken hatte das ungeahnte Folgen. Sie konnten sich nicht mehr am Markt zu günstigeren Preisen mit dem benötigten Gold eindecken. Und das effektiv ausgeliehene Gold hatten die Schmuckhersteller längst zu Ringen und Halsketten verarbeitet, oder es lagerte in den Tresoren der Käufer. Mit dem weiteren Anstieg des Goldpreises in den letzten drei Jahren hat sich die Situation so zugespitzt, dass die Geschäftsbanken den Zentralbanken bis zu 15 000 Tonnen Gold schulden. Zu viel, als dass sie es jemals physisch wieder zurückbezahlen könnten, resümiert Paul Mylchreest.
    Zu ähnlichen Schlussfolgerungen kommt auch der Zürcher Publizist und Finanzexperte Walter Hirt in Bezug auf die Schweizerische Nationalbank. Er geht davon aus, dass die physischen Goldreserven der SNB nicht 1290 Tonnen betragen, sondern bis zu 300 Tonnen tiefer sein könnten - was immerhin einer Differenz von aktuell 7,5 Milliarden Franken entspräche. Walter Hirt stützt seine Annahmen auf Hinweise in den Geschäftsberichten der SNB, wonach mehrere hundert Tonnen Gold ausgeliehen seien.
    Selbst heute, nachdem die Gold-Carry-Trades aller Zentralbanken aufgrund des gestiegenen Goldpreises massiv rückläufig sind, weist die SNB per Ende 2005 immer noch 135 Tonnen Gold aus, das physisch an in- und ausländische Finanzinstitute ausgeliehen ist. Ein Risiko? Als Sicherheit habe die SNB dafür «Effekten» - gemeint sind erstklassige Obligationen - erhalten, sagt Nationalbank-Sprecher Werner Abegg.

Tiefere Reserven, explodierende Preise
    Walter Hirt, der bereits 2002 mit einer Petition das Parlament in Bern auch dazu aufrief, die Goldverkäufe der SNB einzustellen, weist indessen daraufhin, dass sowohl die deutsche wie auch die britische Zentralbank als Folge von Carry-Trades in den letzten Jahren die Höhe ihres ausgeliehenen Goldes nachträglich korrigieren mussten. Das ist brisant. «Wenn sich die Erkenntnis weiter durchsetzt, dass die Goldreserven westlicher Zentralbanken tatsächlich tiefer sind, wird der Preis explodieren», sagt Marc Gugerli. Der vierzigjährige Zürcher zählt in der Schweiz zu den profundesten Kennern der Materie. Mit seinem Know-how berät er so renommierte Finanzhäuser wie die Bank Julius Bär, die Zürcher Kantonalbank oder Lombard Odier Darier Hentsch. Daneben betreibt er mit einigen Partnern einen eigenen Goldfonds. Insgesamt verwaltet er eine Milliarde Franken, die in physisches Gold (Barren) und in Goldminenaktien investiert ist.
    Als sich Marc Gugerli vor bald zehn Jahren «aus einem Bauchgefühl heraus» für das Edelmetall zu interessieren begann, kostete die Unze 250 Dollar. In den Neunzigern habe sich niemand für Gold interessiert, erinnert er sich. Die Welt stand im Bann der New Economy und des Aktienbooms. Er fand aber, dass eine Anlageklasse wie Gold, die jahrhundertelang als Gegenwert für Papiergeld gedient hatte, nicht einfach verschwinden konnte. Darum machte sich der UBS-Banker selbständig. Inzwischen ist Gugerli überzeugt, dass der Preis für eine Unze Gold in den nächsten Jahren «auf 1000, 2000, möglicherweise sogar auf 5000 Dollar» steigen wird. Wenn er das sagt, wirkt er so gelassen, dass seinen Projektionen etwas Selbstverständliches anmutet. Derzeit kostet die Unze Gold knapp 600 Dollar, umgerechnet etwa 750 Franken.
    «Gold ist extrem knapp», sagt Gugerli. «Der globalen Nachfrage von jährlich knapp 4000 Tonnen steht ein Angebot von 2500 Tonnen gegenüber. Bisher konnte die Lücke durch die Ausleihungen und Verkäufe der Zentralbanken grösstenteils ausgeglichen werden. Doch je stärker die Nachfrage zunimmt, desto weniger wird das möglich sein.» Von der Angebotsseite ist auch nicht viel zu erwarten, da viele Explorationsfirmen es versäumten, neue Vorkommen zu fördern. Aufgrund des tiefen Preises lohnte sich das gar nicht mehr. «Das Fehlen neuer grösserer Goldfunde wird darum auch künftig den Preis stark beeinflussen», bestätigt SNB-Direktor Philipp Hildebrand.
    Gold, lange verschmäht, avanciert damit vom Rohstoff zum hochlukrativen Investment. An der Börse hat sich das noch kaum niedergeschlagen. Die existierenden Reserven, inklusive offizieller Bestände der Zentralbanken (31 000 Tonnen), machen heute 1,4 Prozent der globalen Marktkapitalisierung aller Finanzprodukte aus. Zum Vergleich: Im Jahr 1934 machte das Gold gut 20 Prozent der weltweiten Börsenkapitalisierung aus, 1982 waren es sogar 25 Prozent. Auch der Wert aller Goldminenfirmen ist mit rund 200 Milliarden Dollar ein Klacks. Er entspricht gerade einmal jenem eines Blue-Chip-Unternehmens wie Shell oder Toyota.
    Gold als heisseste Anlage der Zukunft? Selbst wenn die Volatilität wie bei allen anderen Rohstoffen überdurchschnittlich hoch ist und es dadurch auch immer wieder zu Kurseinbrüchen kommt, zweifeln die Experten kaum am langfristigen Kurspotenzial des Edelmetalls. Der Amerikaner Jim Rogers, der in den siebziger Jahren als Finanzpartner von Investor George Soros ein Vermögen machte, geht davon aus, dass sich die Welt erst am Anfang einer fünfzehn- bis zwanzigjährigen Rohstoffhausse befindet. Einmal mit dem Motorrad und später mit einem umgebauten Mercedes reiste er um die Welt und verschaffte sich einen Eindruck vom riesigen Rohstoffbedarf in den Schwellenländern. Weil der Aufbau neuer Förderanlagen noch Jahre in Anspruch nehme, dauere der Rohstoffboom länger als jede andere Hausse, betont Rogers. «Dass sich der Ölpreis wieder abschwächt, erwartet ja auch niemand.»
    Der Amerikaner John C. Hathaway von der Firma Tocqueville Asset Management zählt zu jenen Menschen, die als Fondsmanager täglich grösste Mengen Gold bewegen. Auch er geht von einem Unzenpreis in vierstelliger Höhe aus. Seine Gründe für den Anstieg: «Im globalen Finanzsystem mit seinen vielen Derivaten stecken mittlerweile enorme Risiken. Auch die Höhe der Verschuldung amerikanischer Haushalte und die Blase im Immobiliensektor beunruhigt», sagt Hathaway. Als weiteren Unsicherheitsfaktor wertet er die Tatsache, dass mehr als vierzig Prozent der amerikanischen Staatsanleihen von ausländischen Schuldnern, darunter zahlreiche asiatische Zentralbanken, gehalten werden. Besinnen sich nur wenige Notenbanker darauf, dieses Dollar-Engagement zu reduzieren und stattdessen in Gold zu investieren, wie das in den vergangenen Jahren der Fall war, steigt der Unzenpreis weiter.
    Als das Gold im vergangenen Mai auf 730 Dollar kletterte, verglichen zahlreiche Auguren diese Entwicklung mit dem Höchststand von 1980, als es bis auf 850 Dollar gestiegen war - auch damals in einer Zeit, die von Inflationsängsten, politischen Konflikten und einem hohen Ölpreis geprägt war. Was allerdings viele Marktbeobachter vor Monatsfrist nicht berücksichtigten: Relativ gesehen entsprächen die 850 Dollar von damals einem heutigen Wert von 1700 Dollar. So besehen hat der Goldpreis noch viel Potenzial. Darum erstaunt es kaum, wenn Analyst Paul Mylchreest seinem Goldreport den Titel gab: «Start Hoarding!» - (Fangt an zu horten!)
    Angesichts steigender Preise hat auch die Finanzwelt in den letzten Jahren reagiert und eine Unmenge von Produkten und Indizes lanciert. Weit verbreitet sind sogenannte Exchange-Traded-Funds (ETF). Dabei werden mehrere Goldminenaktien zusammengefasst und gemäss einem Börsenindex angelegt. Bezogen sich solche ETF Ende 2003 noch auf rund zwanzig Tonnen Gold, haben sie heute die Grenze von fünfhundert Tonnen überschritten. Das belegt, welcher Nachfrage sich das Edelmetall bei Anlegern bereits erfreut.

Verkaufen? Reines Wunschdenken
    Nachdem die Schweizerische Nationalbank die Hälfte ihres Goldes verkauft hat, kommt den verbliebenen Reserven eine umso grössere Bedeutung zu. Schliesslich geht es bei den Goldreserven um eine Art Notgroschen unseres Landes, selbst wenn der Schweizer Franken heute nicht mehr durch das Edelmetall gedeckt sein muss. Die 1290 Tonnen entsprechen einem Anteil am Bruttoinlandprodukt von 12,5 Prozent. Im internationalen Vergleich liegt die Schweiz damit im Mittelfeld, gemeinsam mit Dänemark etwa. Allerdings besitzt der skandinavische Staat keinen bedeutenden Finanzplatz wie die Schweiz. «Deshalb entbehrt die Auffassung jeglicher Grundlage, wir verfügten noch über <überschüssige> Währungsreserven», sagt Hansueli Raggenbass, Präsident des Bankrats der SNB. Umso unverständlicher ist es, wenn Politiker von SP bis SVP weitere Gold verkaufe suggerieren. Der Bundesrat und die SNB haben sich davon distanziert. «Weitere Verkäufe sind reines Wunschdenken», sagt SNB-Direktor Philipp Hildebrand.
    Mehr Sorge bereitet den Währungshütern die im September zur Abstimmung gelangende Kosa-Volksinitiative. Sie fordert, dass Gewinne der Nationalbank der AHV zugeführt werden. Allerdings gehen die Initianten von einem gleichbleibenden Gewinn der SNB aus, der in den letzten Jahren gerade dank der Goldverkäufe überdurchschnittlich hoch ausfiel. Um solch einen weiterhin zu garantieren, müsste die SNB ihre Aktiven riskanter bewirtschaften. Damit verlöre sie aber ihre Unabhängigkeit und würde zum Spielball politischer Begehrlichkeiten. In einer Zeit, in der sich geopolitische Akzente verschieben und sich manche Staaten veranlasst sehen könnten, Restriktionen beim Goldbesitz zu erlassen, weil kein anderer Rohstoff in der Menschheitsgeschichte eine längere Beständigkeit besitzt, kann sich die SNB das nicht leisten. Wie haushälterisch man mittlerweile mit dem Gold umgeht, beweist die Zürcher Kantonalbank (ZKB). Vor kurzem lancierte sie einen ETF, der sich darauf beschränkt, in physisches Gold zu investieren. Mit anderen Worten: Jede Einzahlung in den Fonds wird mit Goldbarren unterlegt, so dass der Investor sein Investment jederzeit in Bargeld oder auch in physischem Gold zurückfordern kann. Damit hat der Anleger die Gewähr, dass er seine Einlage, selbst wenn es weltweit zu einschneidenden Restriktionen im Goldhandel käme, zurückfordern kann.
    Für die ZKB setzt das voraus, dass sie für den finanziellen Gegen wert des Fonds laufend neues Gold am Markt, namentlich in Zürich, London und New York, beschaffen muss. Darum fährt auch regelmässig ein gepanzerter Lieferwagen am Hauptsitz der ZKB an der Zürcher Bahnhofstrasse vor und liefert neue Barren ein. So stapelt sich das Gold in den Tresoranlagen der Zürcher Staatsbank. Bleibt zu hoffen, dass dafür nicht bei der Schweizerischen Nationalbank auf der anderen Strassenseite einige Tonnen im Tresor fehlen.

Literatur:
Peter L. Bernstein: Die Macht des Goldes. Finanzbuch, 2005.454 S., Fr. 69.40
Ferdinand Lips: Die Gold-Verschwörung. Kopp, 2003.382 S., Fr. 33.60
Robert Nef, Walter Hirt: Eigenständig. Die Schweiz - ein Sonderfall. Moderne Industrie, 2002. 362 S., Fr. 45.60
Jim Rogers: Investment Biker. Börsenmedien, 1998.497 S., Fr. 74.50
Petition gegen Goldverkäufe:www.walterhirt.ch/gold—snb.html
Gold-Studie von Cheuvreu im Internet: www.gata.org/CheuvreuxGoldReport.pdf

Sehr geehrtes Ratsmitglied,

    "Die Schweizerische Nationalbank passt die Struktur ihrer Währungsreserven an. Sie wird bis Ende September 2009 250 Tonnen Gold verkaufen und ihre Devisenreserven entsprechend aufstocken."  So gemäss SNB-Direktionsmitglied Thomas Jordan anlässlich des SNB-Pressegsprächs vom 14.Juni 2007.

Cher Membre des Chambres fédérales,

    "La Banque nationale suisse adaptera la structure de ses réserves monétaires. Jusqu'à fin septembre 2009, elle vendra 250 tonnes d'or et accroîtra ainsi ses réserves de devises." (spns). Décision communiquée à l'occasion de la Conférence de presse de la BNS du 14 juin 2007 par Thomas Jordan, Membre de la direction.

    Der hierzulande gemäss Verfassung und SNB-Gesetz für solche Verfügungsentscheidungen über das Eingemachte allein zuständige Bundesrat hat vor einem Jahr - also noch vorder erhöhten Einstufung der Gefahr von systemischen Riskikenals Folge von Hedge Funds- & anderen prädatorischen Operationen - in der Fragestunde vom 12.6.06 Herrn NR Bührer wie folgt geantwortet:
"Gemessen an der Grösse und an der Bedeutung des Schweizer Finanzsystems sind die Währungsreserven unseres Landes sogar knapp dotiert. Es besteht daher kein Spielraum für eine weitere Reduktion der Währungsreserven beziehungsweise für weitere ausserordentliche Goldverkäufe der Nationalbank."
Bundesrat H.R.Merz (AB 2006 N 865)

    Inzwischen sind im Mittleren Osten mehrer Krisenherde in bürgerkriegsähnliche Wirrnisse umgekippt, und weist einiges darauf hin, dass wir mit einem grösseren und unmittelbar vorausstehenden (Nuklear-)Waffengang gegen den Iran rechnen müssen. Allen voran die USA, aber auch Russland, China, Japan und die arabischen Staaten sind dementsprechend daran, ihre Papierwerte in Goldreserven umzuwandeln. Fehlte also nur noch, dass die Nationalbank von einem Hedge Fund übernommen werden könnte, und auch deren blauäugige Manager gegen die Attraktivitätskraft von goldenen Fallschirmen sich als zuwenig wiederstandfähig erweisen würden.

    Bei dieser bedenklichen Sachlage gebietet sich ein unverzügliches Machtwort seitens der verfassungsmässigen Hüter der nationalen Goldreserven, sowie eine Überprüfung der einschlägigen Praktiken, Strukturen und Kompetenzen der Nationalbank.

    Mit freundlichen Grüssen und besten Wünschen für eine erholsame Sommerpause.

Anton Keller, Sekretär, Schweiz. Investorenschutz-Vereinigung
022-7400362    swissbit@solami.com

PS:  Zum CH/USA-Rechtshilfeabkommen (06.069) empfehle ich Ihnen angemessene begleitende Massnahmen zu beschliessen, z.B. in Form der Reaktivierung der "Beratenden Kommission" zum verlässlicheren Schutz der "Souveränität, Sicherheit oder ähnlicher wesentlicher Interessen" der Schweiz. Dies in Anlehnung an die entsprechende Formulierung im CH-USA Vertrag von 1850, wonach Rechtshilfegesuchen in Strafsachen u.a. nur dann stattgegeben werden mögen, wenn sie "genügend begründet und durch die nöthigen Aktenstücke unterstüzt" sind. Womit auch endlich der PUK-Kritik einer selbstschädigenden und "willfährigen Haltung" unserer Behörden insbesondere gegenüber den USA Nachachtung verschafft, und die Lehren aus den Aerospatiale-, Marc Rich-, und CIA-Überflugs-Affairen gezogen würden. Und womit den mahnenden Worten von Carlo Schmid nachgelebt würde:
 "die USA sind im Moment kein Rechtsstaat nach unserem Standard. Von daher muss man aufpassen, was man macht. Es ist ein heikles Thema, ein heikles Gebiet. Die USA dehnen ihre Kompetenzen enorm aus und fahren die Rechte der Betroffenen enorm zurück. Hier sind wir mit unserer Auffassung natürlich noch 'altmodisch', und daher ist die Aufsicht über dieses ganze Thema von extremer Bedeutung."
(AB 2004 S 174: .../owa.htm#Schmid).

Let's go back to the gold standard. If the very idea seems at odds with what is currently happening in our country -- with Congress preparing to pass a massive economic stimulus bill that will push the fiscal deficit to triple the size of last year's record budget gap -- it's because a gold standard stands in the way of runaway government spending.

Under a gold standard, if people think the paper money printed by government is losing value, they have the right to switch to gold. Fiat money -- i.e., currency with no intrinsic worth that government has decreed legal tender -- loses its value when government creates more than can be absorbed by the productive real economy. Too much fiat money results in inflation -- which pools in certain sectors at first, such as housing or financial assets, but ultimately raises prices in general.

Inflation is the enemy of capitalism, chiseling away at the foundation of free markets and the laws of supply and demand. It distorts price signals, making retailers look like profiteers and deceiving workers into thinking their wages have gone up. It pushes families into higher income tax brackets without increasing their real consumption opportunities.

In short, inflation undermines capitalism by destroying the rationale for dedicating a portion of today's earnings to savings. Accumulated savings provide the capital that finances projects that generate higher future returns; it's how an economy grows, how a society reaches higher levels of prosperity. But inflation makes suckers out of savers.

If capitalism is to be preserved, it can't be through the con game of diluting the value of money. People see through such tactics; they recognize the signs of impending inflation. When we see Congress getting ready to pay for 40% of 2009 federal budget expenditures with money created from thin air, there's no getting around it. Our money will lose its capacity to serve as an honest measure, a meaningful unit of account. Our paper currency cannot provide a reliable store of value.

So we must first establish a sound foundation for capitalism by permitting people to use a form of money they trust. Gold and silver have traditionally served as currencies -- and for good reason. A study by two economists at the Federal Reserve Bank of Minneapolis, Arthur Rolnick and Warren Weber, concluded that gold and silver standards consistently outperform fiat standards. Analyzing data over many decades for a large sample of countries, they found that "every country in our sample experienced a higher rate of inflation in the period during which it was operating under a fiat standard than in the period during which it was operating under a commodity standard."

Given that the driving force of free-market capitalism is competition, it stands to reason that the best way to improve money is through currency competition. Individuals should be able to choose whether they wish to carry out their personal economic transactions using the paper currency offered by the government, or to conduct their affairs using voluntary private contracts linked to payment in gold or silver.

Legal tender laws currently favor government-issued money, putting private contracts in gold or silver at a distinct disadvantage. Contracts denominated in Federal Reserve notes are enforced by the courts, whereas contracts denominated in gold are not. Gold purchases are subject to taxes, both sales and capital gains. And while the Constitution specifies that only commodity standards are lawful -- "No state shall coin money, emit bills of credit, or make anything but gold and silver coin a tender in payment of debts" (Art. I, Sec. 10) -- it is fiat money that enjoys legal tender status and its protections.

Now is the time to challenge the exclusive monopoly of Federal Reserve notes as currency. Buyers and sellers, by mutual consent, should have access to an alternate means for settling accounts; they should be able to do business using a monetary unit of account defined in terms of gold. The existence of parallel currencies operating side-by-side on an equal legal footing would make it clear whether people had more confidence in fiat money or money redeemable in gold. If the gold-based system is preferred, it means that people fully understand that the purpose of money is to facilitate commerce, not to camouflage fiscal mismanagement.

Private gold currencies have served as the medium of exchange throughout history -- long before kings and governments took over the franchise. The initial justification for government involvement in money was to certify the weight and fineness of private gold coins. That rulers found it all too tempting to debase the money and defraud its users testifies more to the corruptive aspects of sovereign authority than to the viability of gold-based money.

Which is why government officials should not now have the last word in determining the monetary measure, especially when they have abused the privilege.

The same values that will help America regain its economic footing and get back on the path to productive growth -- honesty, reliability, accountability -- should be reflected in our money. Economists who promote the government-knows-best approach of Keynesian economics fail to comprehend the damaging consequences of spurring economic activity through a money illusion. Fiscal "stimulus" at the expense of monetary stability may accommodate the principles of the childless British economist who famously quipped, "In the long run, we're all dead." But it shortchanges future generations by saddling them with undeserved debt obligations.

There is also the argument that gold-linked money deprives the government of needed "flexibility" and could lead to falling prices. But contrary to fears of harmful deflation, the big problem is not that nominal prices might go down as production declines, but rather that dollar prices artificially pumped up by government deficit spending merely paper over the real economic situation. When the output of goods grows faster than the stock of money, benign deflation can occur -- it happened from 1880 to 1900 while the U.S. was on a gold standard. But the total price-level decline was 10% stretched over 20 years. Meanwhile, the gross domestic product more than doubled.

At a moment when the world is questioning the virtues of democratic capitalism, our nation should provide global leadership by focusing on the need for monetary integrity. One of the most serious threats to global economic recovery -- aside from inadequate savings -- is protectionism. An important benefit of developing a parallel currency linked to gold is that other countries could likewise permit their own citizens to utilize it. To the extent they did so, a common currency area would be created not subject to the insidious protectionism of sliding exchange rates.

The fiasco of the G-20 meeting in Washington last November -- it was supposed to usher in "the next Bretton Woods" -- suggests that any move toward a new international monetary system based on gold will more likely take place through the grass-roots efforts of Americans. It may already be happening at the state level. Last month, Indiana state Sen. Greg Walker introduced a bill -- "The Indiana Honest Money Act" -- which would, if enacted, allow citizens the option of paying in or receiving back gold, silver or the equivalent electronic receipt as an alternative to Federal Reserve notes for all transactions conducted with the state of Indiana.

It may turn out to be a bellwether. Certainly, it's a sign of a growing feeling in the heartland that we need to go back to sound money. We need money that works for the legitimate producers and consumers of the world -- the savers and borrowers, the entrepreneurs. Not money that works for the chiselers.

Ms. Shelton, an economist, is author of "Money Meltdown: Restoring Order to the Global Currency System" (Free Press, 1994).

Europe's central banks are $40bn (£26.4bn) poorer than they might have been after they followed a British move taken 10 years ago todayto shrink the Bank of England's gold reserves, analysis by the Financial Times has shown.

London's announcement on May 7 1999 that it would sell a large share of the Bank's gold reserves in favour of assets offering a return, such as government bonds, was the high water mark of so-called "anti-gold" sentiment among European central banks.

Many of these banks, such as those in France, Spain, the Netherlands and Portugal, decided later in 1999 to follow Britain and sell off their reserves. At that time, gold was worth about $280 an ounce, less than a third of its current level of more than $900.

European banks eventually sold about 3,800 tonnes of gold, reaping about $56bn, according to calculations from official sales data and bullion prices.

Taking into account the likely returns from the investments in bonds, the banks have gained another $12bn. But because today's gold prices are far higher, they are about $40bn poorer than if they had kept their reserves.

The biggest loser is the Swiss National Bank, which sold 1,550 tonnes over the decade and at today's gold prices is $19bn poorer, followed by the Bank of England, which is $5bn poorer.

The Treasury yesterday defended its decision to sell gold as a way to diversify reserves and cut risk. "As a result of the programme, a one-off reduction in risk of approximately 30 per cent was achieved," it said. The Swiss National Bank declined to comment other than to say that it did not plan to sell
more gold.

However, central bankers are confident that over the long run their move out of gold and into bonds will pay off and reduce the volatility of their portfolios, people familiar with their thinking said. Analysts also argue that because some banks had more than 90 per cent of their assets in gold, some
disposals were warranted.

The proportion of European reserves held as gold remains extremely large even after years of sales, at an average of about 60 per cent, compared with the world average of 10.5 per cent.

After 10 years of steady sales, Europe's gold sales are set to slowto their lowest levels since 1999, while central banks outside Europe have already become net buyers of gold. The US, the world's biggest holder of gold, decided not to follow Europe's move. Germany and Italy are the only two big
European central banks that did not follow the UK, mostly because of domestic disputes about what to do with the proceeds.

Die Krise nach dem Schwarzen Freitag im Oktober 1929 war vermeidbar. Damals wurden schwerwiegende Fehler gemacht. Dazu gehörten auch die Bindung der wichtigen Währungen an das Gold – so Ökonom Liaquat Ahamed bei WELT ONLINE. Doch die Saat für die damalige Krise wurde viel früher gelegt.

In fast schon konspirativer Art lenkten die vier die Geschicke der Weltwirtschaft und der Finanzmärkte. Mit fatalen Folgen. Denn am Ende lösten ihre Entscheidungen den Crash von 1929 und die Große Depression aus. In "Lords of Finance" schildert Liaquat Ahamed, Ökonom und Investmentmanager, das Wirken der vier Notenbanker, die die Welt "in die Pleite trieben" (wie es im englischen Titel hieß). Das 534-seitige Werk über die Macht und Ohnmacht der Geldhüter gehört zu den klügsten Wirtschaftsbüchern des Jahres.

WELT ONLINE: Herr Ahamed, Sie haben vier Jahre an einem Buch über Protagonisten und Hintergründe der Großen Depression geschrieben und das Werk just zu dem Zeitpunkt auf den Markt gebracht, als sich eine neue Weltwirtschaftskrise anzubahnen schien. Das nennen wir tolles Timing. Hatten Sie eine Vorahnung?

Liaquat Ahamed: Dass das Buch mitten in der Finanzkrise herauskam, war Glück. Kein Glück hingegen war die Wahl des Themas. Mir war schon lange bewusst, dass uns so etwas bevorsteht, und seit der Asien- und Russlandkrise vor elf Jahren habe ich mich intensiv mit weltwirtschaftlichen Verwerfungen und ihren Gründen auseinandergesetzt. Mich hat fasziniert, warum die Katastrophe 1998 abgewendet werden konnte, 1929 aber nicht - mit verheerenden Folgen. So fiel mein Blick unweigerlich auf das Krisenmanagement.

WELT ONLINE: Wie lautet Ihr Verdikt über die aktuelle Krise?

Ahamed: Die Parallelen zu 1929 waren wirklich groß. Nach der Lehman-Pleite im Herbst standen wir am Abgrund. Aber die Entscheider haben die richtigen Lehren gezogen. Damals wie heute gab es eine riesige Spekulationsblase, ausgelöst durch lockere Geldpolitik und Verschuldung, und dann eine großflächige Bankenkrise, die durch Ungleichgewichte in der Weltwirtschaft verschärft wurde. Vom Handel über die Industrie bis hin zum Aktienmarkt war der Absturz ebenso dramatisch wie damals.

WELT ONLINE: Menschen machen den Unterschied?

Ahamed: Definitiv. Von den handelnden Personen an der Spitze hängt enorm viel ab, die Entscheidungen von Notenbankern und Politikern können das Schlimmste abwenden oder die Welt in eine Depression stürzen. Der Chef der Federal Reserve, Ben Bernanke, hat nach anfänglichem Zögern schnell und beherzt die Zinsen gesenkt und dann zu weiteren kreativen Mitteln gegriffen, um den Bankensektor zu stabilisieren. Bernanke kam zugute, dass er sich als Wissenschaftler intensiv mit der Großen Depression auseinandergesetzt hat.

WELT ONLINE: Welche Fehler wurden vor 80 Jahren gemacht?

Ahamed: Damals verordneten die Notenbanker einem stark geschwächten Patienten einen Aderlass: Zum Beispiel ließen die Regierungen angeschlagene Kreditinstitute zu Hunderten pleite gehen, noch mitten im Abschwung erhöhten die Notenbanken bereits wieder die Leitzinsen, gleichzeitig wurden die Verbraucher auch noch mit höheren Steuern belastet.

WELT ONLINE: Wohl eher ein Giftcocktail als Medizin für den Patienten?

Ahamed: Damals galten unter Ökonomen andere Glaubenssätze. Eine unheilvolle Rolle spielte der Goldstandard, dem sich vor allem Montagu Norman von der Bank of England verschrieb. Diesen hatten sich die Notenbanken ursprünglich selbst auferlegt, um den Wert des Geldes zu sichern. Vor dem Ersten Weltkrieg hatte die Edelmetall-Bindung der Währung auch gut funktioniert. Doch Ende der Zwanzigerjahre erwies sich der Goldstandard als geldpolitische Zwangsjacke. Die amerikanische Zentralbank musste 1930 die Zinsen erhöhen, um Goldabflüsse zu verhindern.

WELT ONLINE: Das müssen Sie erklären ...

Ahamed: Wenn Anleger das Vertrauen in Dollar, Pfund oder Mark verloren, ließen sie sich den Gegenwert in Gold auszahlen. Damit schmolzen die Edelmetall-Reserven dahin. Um die Abflüsse zu vermeiden, musste das Land höhere Zinsen bieten. Doch mitten in der Depression belastete das die Wirtschaft zusätzlich.

WELT ONLINE: Sie schreiben, dass der Goldstandard eine internationale Kooperation verhinderte, anstatt sie zu unterstützen.

Ahamed: Ja, das ist ein Aspekt. Statt das internationale Währungssystem damit zu stabilisieren, nutzten die Notenbanker ihr Gold für politische Zwecke. Für Emile Moreau waren die großen Edelmetallreserven der Banque de France eine Art Druckmittel gegen die Bank of England. Den Franzosen behagte die ganze Finanzarchitektur nicht, weil sie sie als angelsächsische Verschwörung gegen ihr Land ansahen.

WELT ONLINE: Waren das die Nachwirkungen des Ersten Weltkriegs?

Ahamed: Die Saat für Dauerkonflikte war durch den Versailler Vertrag gelegt worden: Darin waren Deutschland immense Reparationen von den Alliierten auferlegt worden. In heutigem Geld wären das 1,6 Billionen Euro. Engländern und Franzosen wiederum pochten kompromisslos auf deren Erfüllung, weil sie aus der Zeit von 1914 bis 1918 ihrerseits hoch bei den USA verschuldet waren. Und die Amerikaner zeigten keine Bereitschaft, auf ihre Forderung zu verzichten. Das sollte in den ganzen Zwanzigerjahren das politische Klima vergiftet und das internationale Finanzsystem extrem krisenanfällig machen.

WELT ONLINE: Aber dafür konnten doch die Notenbanker nichts.

Ahamed: Die Reparationsforderungen waren nur der erste der schwerwiegenden Fehler, die in die Große Depression mündeten. Vieles hing an den Notenbankern. Der Brite Montagu Norman etwa wollte das Pfund unbedingt zum alten, nunmehr viel zu hohen Umtauschkurs ans Gold koppeln. Der Amerikaner Benjamin Strong verstarb 1928, ein Jahr vor dem Börsencrash. Seine Nachfolger hatten nicht seine Statur. Hätte Strong noch gelebt und hätte er das Krisenmanagement an sich gerissen, wäre die Große Depression möglicherweise abgewendet worden. In Deutschland trat Hjalmar Schacht 1930 zurück, weil er an seine Reputation dachte und nicht für die schmerzlichen Entscheidungen, die nötig waren, verantwortlich gemacht werden wollte.

WELT ONLINE: Wenn Notenbanker einen solchen Einfluss auf die Weltwirtschaft haben, sollte man sie dann nicht besser kontrollieren?

Ahamed: Ich bin entschieden dafür, dass die Geldpolitik transparenter wird. Wir müssen stets wissen, was die Währungshüter tun und welche Ziele sie verfolgen. Allerdings bin ich strikt dagegen, dass sich die Notenbanker jede Entscheidung von einem Parlament absegnen lassen müssen. Sie brauchen den Handlungsspielraum, um in brenzligen Situationen rasch eingreifen zu können.

1929 und 2008 - Ökonomen erklären Krisen | Der Crash war der Anfang - Der Schwarze Freitag und seine Folgen

The gold standard: from Newton to a floating world
    Since 1717, when Sir Isaac Newton almost by accident created the first gold standard in the UK – as master of the Mint, he gave the guinea a statutory valuation of 21 shillings – bullion has been closely linked to central banks, writes Javier Blas.
    The link was refined in 1816 when the Coinage Act declared the new gold sovereign, valued at £1, to be the sole standard of value and unlimited legal tender, according to a study by Timothy Green, a gold market historian.
    From 1870-1900, all main countries other than China switched to the gold standard, linking their fiat currencies to the price of bullion. Bimetallism – the gold-and-silver standards that some had used – were all but abandoned. Soon afterwards, in 1919, the UK dropped the gold standard after the first world war ravaged Europe. The country would not return until 1925 and would drop out again in 1931.
    But after 1944, the gold standard returned to the UK and the rest of the world as a result of the Bretton Woods conference. The meeting set the basis of the postwar monetary system, linking gold to the US dollar at $35 per troy ounce. The system came under extreme pressure from 1968 and on August 15 1971 Washington suspended the convertibility of gold into dollars, in effect ending the gold standard.
    By 1973, most industrialised countries adopted floating exchange rates, breaking more than 300 years of formal links to gold.

It was a gold rush – but in reverse. For nearly 20 years the world’s central banks, from Canada to Switzerland and Belgium to Australia, were hustling to sell their once prized gold bars. Around the turn of the millennium the selling became so intense that traders joked about “the new miners”, comparing central banks with the Californian prospectors whose 19th century gold rush flooded the market.

EDITOR’S CHOICE
 Interactive: What’s driving gold? - Sep-24
.Europe’s central banks halt gold sales - Sep-26
.FTfm: ETFs - Gold shines among the favoured - Sep-12
.In depth: Gold - Sep-28
.Ingot we trust for that element of insurance - Aug-07.

.Bullion, which for centuries enjoyed a near-mythical importance as a symbol of monetary stability, had become deeply unfashionable, considered a non-yielding relic. Central bankers wanted sovereign debt with its steady returns rather than coffers full of 400-ounce bars, which incur storage and insurance costs and carry no promise of a reliable yield.

Fast forward 10 years, add the financial crisis and growing concerns about rising sovereign debt levels, and that anti-gold philosophy has been turned on its head. “For two decades, the only question for central banks was how much and how soon should they sell their gold,” says George Milling-Stanley of the World Gold Council, a producers’ lobby group. “Increasingly, the question is how much and how soon should they buy.”

The policy about-face from central banks – not only the most cautious of market participants but also those in command of the most information – underscores how the crisis has transformed the global market landscape.

Interactive guide: behind the gold price
The key moments in gold’s history, plus: what’s driving the recent price-spike?

..Amid a broad loss of confidence in the financial system, from Wall Street titans to governments, gold has gained traction for a simple reason that has afforded it a central place as a store of value for more than 2,000 years: it is nobody’s liability. At the same time, the metal’s ascent reflects widespread fears that the central banks’ own unprecedented monetary policy moves will lead to the debasement of paper currencies and runaway inflation, making hard assets the only reliable store of value.

For the gold market, the reversal of the trend of central bank selling is one of the most important developments in recent history. As a vote of confidence in gold, it has given investors, from billionaires with Swiss vaults to pensioners with a few coins, the confidence to buy bullion. More importantly, it has removed a large source of supply from the market.

Evy Hambro, manager of BlackRock’s Gold & General fund, says the change in central banks’ behaviour is “one major factor supporting” prices. John Levin, head of precious metals sales at HSBC, simply calls the shift a “game changer”. It has propelled gold prices to an all-time high of $1,300 a troy ounce, touched last Friday. Adjusted for inflation, however, the yellow metal is a long way from its 1980 peak of more than $2,300.

The change – which today will be a main topic of discussion at the London Bullion Market Association annual conference in Berlin, the industry’s main gathering – is partly the result of a natural end to European sales after all the years of large disposals. But it also reflects the shifting global power map: as Asian economies’ might grows, their central banks and sovereign wealth funds are stocking up on bullion.

The clearest sign of the new trend is Beijing’s announcement last year that it had almost doubled its gold reserves: with 1,054 tonnes, it has become the world’s fifth-biggest holder of the metal. More recently, India, Saudi Arabia, Russia and the Philippines have announced big additions to their official gold reserves, while others, from Sri Lanka to Bangladesh, have made smaller purchases. Traders and bankers say further countries and their sovereign wealth funds are also quietly buying gold.
 

GFMS, a consultancy, estimates that central banks as a group will be buyers of gold this year for the first time since 1988. On a net basis, the purchases are forecast to be small, at around 15 tonnes. Large official purchases of gold – in the hundreds of tonnes – have not been seen since 1965, prior to the collapse of the Bretton Woods system of fixed exchange rates linked to the gold price.

But since the early 1990s, a steady flow of unco-ordinated sales from central banks contributed to a relentless drop in gold prices. The final blow for the market – and the credibility of bullion as an asset – came when the UK Treasury in May 1999 publicly announced that it would be selling half of Britain’s gold reserves. The shock sent prices to a 23-year low, at just above $250 an ounce.

The move by London was profoundly symbolic. The Bank of England had for centuries supported the development of the bullion market; the first gold standard was set in 1717. Even though it abandoned that mechanism decades ago, London remained then, as now, the centre of the industry. Investors worried that if Britain was selling, others would soon join in.
..
They were right. Countries such as Spain halved their gold holdings in a new rush to sell; France started a programme of large disposals. From 1990 until last year, central banks around the world sold about 7,500 tonnes of gold. Over the last decade, they have dumped 442 tonnes each year on average, more than the annual output of China, the world’s biggest producer, and equal to about 10 per cent of annual demand, according to GFMS.

The effect on the market was such that, in order to halt the precipitous slide, Europe’s central banks from 1999 have capped their annual gold sales. The agreement was renewed last year, but selling from European central banks has all but dried up. In the first year of the new agreement, which ended on Sunday, the 19 signatories sold less than 10 tonnes.

Will the new buying trend continue, or even accelerate? The gold industry is split. Some argue that gold accumulation by Asian central banks will escalate, but others see this year’s purchases as an aberration, with a return to the net selling that characterised the last 20 years.

Among those who see an escalation, in demand, one statistic in particular has the “gold bugs” rubbing their hands. The proportion of bullion as a percentage of official reserves in the Bric countries – Brazil, Russia, India and China – averages just 5 per cent, compared with more than 50 per cent in the US and most European countries. That means developing nations are thought likely to buy gold to diversify the risk in their reserves. Recent buying by India and Russia, which is purchasing its entire domestic mine output, and suspected purchases by China in its domestic market indicate that the theory could be proved right.

But there are reasons for caution. The gold market cannot accommodate large buying by central banks without sending prices through the roof: the entire global gold supply is worth less than $200bn a year, compared with global foreign exchange reserves of $8,500bn. Central bankers joke that gold is similar to what the Norwegian krone is on the foreign exchange market: too small for diversification.

At best, developing countries may therefore increase the proportion of bullion in their official reserves over time by a few percentage points.

Take China. After a decade of strong accumulation of assets, Beijing holds 1.6 per cent of its $2,500bn reserves in gold, with the rest mostly in US Treasuries, sovereign debt and other foreign exchange instruments. If the country was to increase the proportion of gold in its reserves to the world average of 10.7 per cent, it would need to buy some 7,000 tonnes – equal to three times last year’s global mine output.

Yi Gang, the head of the State Administration of Foreign Exchange, the entity that manages China’s reserves, has all but ruled out such a large-scale market purchase.

Philip Klapwijk of GFMS says that on-market purchases by China would immediately push the gold price too high. “As such, it is more likely that some discreet buying could take place quietly in the domestic market via purchasing either local mine production or scrap available in the market,” he says.

But he cautions against dismissing potential buying because of its difficulty, noting that by buying for instance 100-150 tonnes from the domestic market each year, central banks in certain emerging nations could in due course achieve a meaningful adjustment.

While there are good reasons why developing countries’ central banks may continue buying gold in the future, there is a strong rationale, too, for anticipating further selling by developed countries, particularly in continental Europe.

Even after two decades of heavy selling, the proportion of gold in some countries’ reserves is way too high, according to some consultants and bankers. Portugal is one of the most extreme cases – Lisbon holds more than 80 per cent of its reserves in gold. On average, the member states of the eurozone hold 58 per cent of their official reserves in gold, according to official statistics.

The proportion is well above the de facto target set by the European Central Bank of about 15 per cent of its reserves in bullion. As soon as the financial crisis ends, bankers and advisers believe European central banks that are overweight in gold will start selling again, profiting from current record prices. “I would be willing to bet that in the next five years central banks on a net basis will be gold sellers again,” says Terrence Keeley of Sovereign Trends, an advisory firm.

All the same, the universal rush to dump bullion of the late 1990s is unlikely to be repeated any time soon. With nerves still jangling in Europe, the region’s central bankers are leery of appearing to be forced sellers. In the near term, bankers and analysts see little prospect of any gold sales from the official sector once the International Monetary Fund completes a 400-tonne disposal at some point next year. In general, most believe that the next decade would not see much buying or selling.

Mr Keeley says that central bankers have been stung by criticism for poor market timing on gold. The UK, for example, sold its gold at the bottom of the market in 1999 and other European central banks have disposed of it at prices below $500 an ounce.

“Central bankers abhor controversial headlines. When it comes to gold especially, they’d rather do nothing than stand accused of doing something wrong,” he says.

This is one case, though, where the effect of doing nothing is profound.

When it meets next week, the Federal Open Market Committee (FOMC) is widely expected to signal its desire to increase the rate of inflation by providing additional monetary stimulus. This policy is based on a false -- and dangerous -- premise: that manipulating the dollar's buying power will lead to higher employment and economic growth. But the experience of the past 40 years points to the opposite conclusion: that guaranteeing a stable value for the dollar by restoring dollar-gold convertibility would be the surest way for the Federal Reserve to achieve its dual mandate of maximum employment and price stability.

From 1947 through 1967, the year before the U.S. began to weasel out of its commitment to dollar-gold convertibility, unemployment averaged only 4.7% and never rose above 7%. Real growth averaged 4% a year. Low unemployment and high growth coincided with low inflation. During the 21 years ending in 1967, consumer-price inflation averaged just 1.9% a year. Interest rates, too, were low and stable -- the yield on triple-A corporate bonds averaged less than 4% and never rose above 6%.

What has happened since 1971, when President Nixon formally broke the link between the dollar and gold?

Higher average unemployment, slower growth, greater instability, and a decline in the economy's resilience. For the period 1971 through 2009, unemployment averaged 6.2%, a full 1.5 percentage points above the 1947-67 average, and real growth rates averaged less than 3%. We have since experienced the three worst recessions since the end of World War II, with the unemployment rate averaging 8.5% in 1975, 9.7% in 1982, and above 9.5% for the past 14 months. During these 39 years in which the Fed was free to manipulate the value of the dollar, the consumer-price index rose, on average, 4.4% a year. That means that a dollar today buys only about one-sixth of the consumer goods it purchased in 1971.

Interest rates, too, have been high and highly volatile, with the yield on triple-A corporate bonds averaging more than 8% and, until 2003, never falling below 6%. High and highly volatile interest rates are symptomatic of the monetary uncertainty that has reduced the economy's ability to recover from external shocks and led directly to one financial crisis after another. During these four decades of discretionary monetary policies, the world suffered no fewer than 10 major financial crises, beginning with the oil crisis of 1973 and culminating in the financial crisis of 2008-09, and now the sovereign debt crisis and potential currency war of 2010. There were no world-wide financial crises of similar magnitude between 1947 and 1971.

At the center of each of these crises were gyrating currency values—either on foreign-exchange markets or in terms of real goods and services. As the dollar's value gyrates it produces windfall profits and losses, feeding speculation and poor judgment. The housing bubble was fed in part by 40 years of experience with a dollar that lost purchasing power every year. Today, individual investors are piling into gold and other commodities in hopes of finding a safe haven from the FOMC's intention to decrease the buying power of the dollar and reduce the value of our savings.

And what of the seductive promise that a floating dollar would make American labor more competitive and improve the nation's trade balance? In 1967, one dollar could buy the equivalent of approximately 2.4 euros (based on the pre-euro German mark) and 362 yen. Over the succeeding 42 years, the dollar has been devalued by 72% against the euro and 75% against the yen. Yet net exports have fallen from a modest surplus in 1967 to a $390 billion deficit equivalent to 2.7% of GDP today.

The members of the FOMC, like their predecessors, are trying to do the best they can, but they are not really sure what it is that needs to be done. They have kept the federal-funds rate near zero for almost two years, but small businesses find it difficult to get loans and savers suffer from the lost income brought by artificially low interest rates. Now they're about to advocate higher inflation—i.e., less price stability—in hopes of spurring economic growth.

Economists and pundits may disagree on why the gold standard delivered such superior results compared to the recurrent crises, instability and overall inferior economic performance delivered by the current system. But the data are clear: A gold-based system delivers higher employment and more price stability. The time has come to begin the serious work of building a 21st-century gold standard for the benefit of American workers, investors, and businesses.

Mr. Kadlec is a member of the Economic Advisory Board of the American Principles Project, an author, and founder of the Community of Liberty.

Update: This post was written before Robert Zoellick, World Bank president, argued that leading economies should consider readopting a modified global gold standard to guide currency movements.

During any period of monetary disorder — the 1970s, for example, or today — a host of people calls for a return to the gold standard. This is not the only free-market response to the current system of fiat (or government-made) money. Other proposals are for privatising the creation of money altogether. (See, on this, Leland Yeager, professor emeritus at the University of Virginia and Auburn University, in the latest issue of the Cato Journal.) But the gold standard is the classic alternative to fiat money.

It is not hard to understand the attractions of a gold standard. Money is a social convention. The advantage of a link to gold (or some other commodity) is that the value of money would apparently be free from manipulation by the government. The aim, then, would be to “de-politicise” money.

The argument in favour of doing so is that in the long-run governments will always abuse the right to create money at will. Historical experience suggests that this is indeed the case.

So why choose gold? It is, after all, an impossibly inconvenient means of exchange. But gold has a lengthy history as a widely-accepted store of value. If one is looking to reinstate a pre-modern monetary, gold is the obvious place to start.

After the experience of the last three decades the monetarism of Milton Friedman is no longer a credible alternative. It was abandoned for two simple reasons: first, it proved impossible for monetarists to agree on what money is; and, second, the relation between any given monetary aggregate and nominal income proved unstable.

Again, recent experience suggests that we can no longer be so confident that delegation to independent central banks protects against severe monetary instability. That system permitted a gigantic increase in credit, relative to gross domestic product. It is equally clear that governments do not wish to see this edifice collapse, for understandable reasons. This being so, the ultimate solution may be to increase nominal incomes, via inflation. Indeed, several economists recommend this. If that did happen, it would support those who argue for abandonment of the modern experiment with fiat money.

So would the gold standard be the answer? We would need to start by asking what a return to the “gold standard” might mean.

The most limited reform would be for the central bank to adjust interest rates in light of the gold price. But that would just be a form of price-level targeting. I can see no reason why one would want to target the gold price, rather than the price of goods and services, in aggregate.

The opposite extreme would be a move back into a world of metallic currency. But money in circulation will continue to be predominantly electronic, with a small quantity of paper, as today. That is the only convenient way to run a modern economy.

Finally, a return to the Bretton Woods system, in which the US promised to convert dollars into gold, at a fixed price, but only for other governments, would lack any credibility, since there would then be no direct link between gold stocks and the domestic money supply.

With these possibilities eliminated, the obvious form of a contemporary gold standard would be a direct link between base money and gold. Base money — the note issue, plus reserves of commercial banks at the central bank (if any such institution survives) — would be 100 per cent gold-backed. The central bank would then become a currency board in gold, with the unit of account (the dollar, say) defined in terms of a given weight of gold.

In a less rigid version of such a system, the central bank might keep an excess gold reserve, which would allow it to act as lender of last resort to the financial system in times of crisis. That is how the Bank of England behaved during the 19th century, as explained by Walter Bagehot in his classic book, Lombard Street.

So what would be the objections to such a system? There are three: difficulties with the transition; instability; and lack of credibility.
The biggest transition problem is the mismatch between the value of official gold holdings and the size of the monetary system. The value of gold held by central banks is apparently about $1,300bn, while global deposits of the banking system were about $61,000bn in 2008, according to the McKinsey Global Institute. To survive the slightest financial panic, the ratio of gold to bank money would need to be perhaps an order of magnitude higher.

One obvious objection is that this would generate huge windfall gains to holders of gold. More important, if policymakers set this initial price wrong, as they certainly would, they could unleash either deflation or inflation: the latter is far more likely, in fact, because private holders would start selling their gold to the central banks at such a high price. Apparently, about 90 per cent of gold is now privately held. So the expansion in the monetary base could be enormous.

Moreover, gold reserves are distributed quite erratically around the world. So some currencies would have to experience inflation and others severe deflation. A similar problem explains why it was impossible to recreate the gold standard after the First World War: too much of the world’s gold reserves were then held by the US.

What, then, about the problems of the steady state? One obvious point is that we would be back to the world in which the balance of payments would be settled by physical shipment of gold or, as it was later, by movements within central bank vaults. That would, at the least, be absurd.

A far more important problem is that of financial stability. Economists of the Austrian school wish to abolish fractional reserve banking. But we know that this is a natural consequence of market forces. It is wasteful to hold a 100 per cent reserve in a bank, if depositors do not need their money almost all of the time. Banks have a strong incentive to lend some of the money deposited with them, so expanding the aggregate supply of money and credit.

The government might seek to impose narrow banking: banks would have to back any deposits with notes or reserves at the central bank. But entrepreneurs could then create quasi-banks (let us call them “shadow banks”). These would hold deposits in the safe narrow banks and offer higher returns to customers, because they lend out surplus reserves for profit.

Such a system is unstable. In good times, credit, deposit money and the ratio of deposit money to the monetary base expands. In bad times, this pyramid collapses. The result is financial crises, as happened repeatedly in the 19th century. To prevent this one would have to move into the world of limited purpose banking recommended by Larry Kotlikoff, in which no financial institution would be allowed to promise redemption at par unless it held matching assets.* If so, the pure gold standard would require abandonment of the current banking system altogether.

A further danger is that the response to all shocks would have to come via nominal wage and price flexibility. A less obvious point is that the gold standard does not guarantee price stability. Depending on the supply conditions for gold, the price level might move up or down. In the long-run, however, the price level would probably tend to fall (because the supply of gold fails to keep pace with global activity). Such a world of trend deflation is liable to depressions if or when the equilibrium real rate of interest is less than the rate of deflation.

Another and, in my view, even more serious, threat to the stability of any gold standard regime is international. A peg to gold may prove radically destabilising for any currency if other significant countries failed to sustain domestic monetary and financial stability. There could then be floods of gold into or out of a currency that is well managed. The monetary and financial consequences could be dramatic, with severe deflation one obvious threat. This is precisely what happened in the interwar years, with the chaos emanating mainly from the US.

Finally, there is the fundamental problem of credibility - or rather lack of it. As Bennett McCallum of Carnegie Mellon University also notes in the Cato Journal, the forces that now demand inflation from time-to-time would demand a change in the gold weight of the currency as happened in the 1930s. “Historically”, he notes, “the gold standard provided a reasonable degree of price level stability over long spans of time because the population at large had at that time a semi-religious belief that the price of gold should not be varied but should be maintained ‘forever’.”

That faith has perished. Moreover, everybody knows it has perished. So whenever the economy was in difficulty, the only question would be how soon the gold price would be changed or the link abandoned.

In short, we cannot and will not go back to the gold standard. As L.P. Hartley wrote, “The past is a foreign country: they do things differently there.” We cannot live in the 19th century. It is foolish to pretend that we can.

* Jimmy Stewart Is Dead: Ending the World’s Ongoing Financial Plague with Limited Purpose Banking (Wiley 2010)

The G20 Must Look Beyond Bretton Woods II
By Robert Zoellick
..
With talk of currency wars and disagreements over the US Federal Reserve's policy of quantitative easing, the summit of the Group of 20 leading economies in Seoul this week is shaping up as the latest test of international co-operation. So we should ask: co-operation to what end?

When the G7 experimented with economic co-ordination in the 1980s, the Plaza and Louvre Accords focused attention on exchange rates. Yet the policy underpinnings ran deeper. The Reagan administration, guided by James Baker, the then Treasury secretary, wanted to resist a protectionist upsurge from Congress, like the one we see today. It therefore combined currency co-ordination with the launch of the Uruguay Round that created the World Trade Organisation and a push for free trade that led to agreements with Canada and Mexico. International leadership worked with domestic policies to boost competitiveness.

As part of this "package approach," G7 countries were supposed to address the fundamentals of growth -- today's structural reform agenda. For example, the 1986 Tax Reform Act broadened the revenue base while slashing marginal income tax rates. Mr Baker worked with his G7 colleagues and central bankers to orchestrate international co-operation to build private-sector confidence. History moved on after the huge changes of 1989 and the experience of the 1980s is still being debated, but this package approach was significant for its combination of pro-growth reforms, open trade and exchange rate co-ordination.
What might such an approach look like today?

First, to focus on fundamentals, a key group of G20 countries should agree on parallel agendas of structural reforms, not just to rebalance demand but to spur growth. For example, China's next five-year plan is supposed to transfer attention from export industries to new domestic businesses and the service sector, provide more social services, and shift financing from oligopolistic state-owned enterprises to ventures that will boost productivity and domestic demand.

With a new Congress, the US will need to address structural spending and ballooning debt that will tax future growth. President Barack Obama has also spoken of plans to boost competitiveness and revive free-trade agreements.
The US and China could agree on specific, mutually reinforcing steps to boost growth. Based on this, the two might also agree on a course for renminbi appreciation, or a move to wide bands for exchange rates. The US, in turn, could commit to resist tit-for-tat trade actions; or better, to advance agreements to open markets.

Second, other major economies, starting with the G7, should agree to forego currency intervention, except in rare circumstances agreed to by others. Other G7 countries may wish to boost confidence by committing to structural growth plans as well.

Third, these steps would assist emerging economies to adjust to asymmetries in recoveries by relying on flexible exchange rates and independent monetary policies. Some may need tools to cope with short-term hot money flows. The G20 could develop norms to guide these measures.

Fourth, the G20 should support growth by focusing on supply-side bottlenecks in developing countries. These economies are already contributing to half of global growth, and their import demand is rising twice as fast as that of advanced economies. The G20 should give special support to infrastructure, agriculture and developing healthy, skilled labour forces. The World Bank Group and the regional development banks could be the instruments of building multiple poles of future growth based on private sector development.

Fifth, the G20 should complement this growth recovery programme with a plan to build a co-operative monetary system that reflects emerging economic conditions. This new system is likely to need to involve the dollar, the euro, the yen, the pound, and a renminbi that moves toward internationalisation and then an open capital account.

The system should also consider employing gold as an international reference point of market expectations about inflation, deflation, and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.

The development of a monetary system to succeed "Bretton Woods II," launched in 1971, will take time. But we need to begin. The scope of the changes since 1971 certainly matches those between 1945 and 1971 that prompted the shift from Bretton Woods I to II. Serious work should include possible changes in International Monetary Fund rules to review capital as well as current account policies, and connect IMF monetary assessments with WTO obligations not to use currency policies to remove trade concessions.

This package approach to economic co-operation reaches beyond the recent G20 dialogue, but the ideas are practical and feasible, not radical. And it has clear advantages. It supplies a growth and monetary agenda that parallels the G20 financial sector reforms. It could be built upon prompt incremental actions, combined with credible steps to be pursued over time, allowing for political dialogue at home. And it could help rebuild public and market confidence, which will remain under stress in 2011. Perhaps most importantly, this package could get governments ahead of problems instead of reacting to economic, political and social storms.

Drive or drift? How the G20 decides could determine whether multilateral co-operation can achieve a strong economic recovery.

Leading economies should consider readopting a modified global gold standard to guide currency movements, argues the president of the World Bank.

Writing in the Financial Times, Robert Zoellick, the bank’s president since 2007, says a successor is needed to what he calls the “Bretton Woods II” system of floating currencies that has held since the Bretton Woods fixed exchange rate regime broke down in 1971.

Mr Zoellick, a former US Treasury official, calls for a system that “is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi that moves towards internationalisation and then an open capital account”. He adds: “The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values.”

His views reflect disquiet with the international system, where persistent Chinese intervention to hold down the renminbi is blamed by the US and others for contributing to global current account imbalances and creating capital markets distortions.

This week’s meeting of government heads in South Korea is likely to see yet more exchange rate conflict. A US plan for countries to sign up to current account targets has run into widespread opposition.

Wolfgang Schäuble, Germany’s finance minister, has raised the temperature by describing the US economic model as being in “deep crisis” and criticising the US Federal Reserve’s decision to pump an extra $600bn into financial markets. “It is not consistent when the Americans accuse the Chinese of exchange rate manipulation and then steer the dollar exchange rate artificially lower with the help of their [central bank’s] printing press.”

Currency wars
FT In depth: Unilateral currency interventions and manipulation threaten to raise tensions
..Although there are occasional calls for a return to using gold as an anchor for currency values, most policymakers and economists regard the idea as liable to lead to overly tight monetary policy with growth and unemployment taking the brunt of economic shocks.

The original Bretton Woods system, instituted in 1945 and administered by the International Monetary Fund, the World Bank’s sister institution, comprised fixed but adjustable exchange rates linked to the value of gold. Controls to restrict destabilising shifts of capital from one economy to another buttressed it.

“The scope of the changes since 1971 certainly matches those between 1945 and 1971 that prompted the shift from Bretton Woods I to II,” Mr Zoellick writes. “Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.”

Reactions to World Bank president Robert Zoellick’s suggestion that gold might be used as part of a package of measures to reconstruct the international system ranged from the lukewarm to the bewildered.

Writing in the Financial Times on Monday, Mr Zoellick called for a “co-operative monetary system that reflects emerging economic conditions”. He said that system “should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values”.

“Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today,” Mr Zoellick wrote.

Fred Bergsten, director of the Peterson Institute for International Economics in Washington, said that Mr Zoellick’s overall approach was “very sensible” but that the idea of using gold was “minor and really irrelevant”.

The world does need new international “rules of the game” as it evolves towards a system that uses multiple reserve currencies rather than just the dollar, Mr Bergsten said, but gold should not be part of it.

“I happen to think that gold is a very poor reference point because it fluctuates so widely,” he said.

Gold prices have risen from close to $200 a decade ago to almost $1,400 today. The rapid rise in recent years reflects fears that unconventional central bank policies – such as last week’s move by the US Federal Reserve to expand its balance sheet by another $600bn – could lead to inflation.

But inflation rates in most industrialised countries have fallen since the start of the financial crisis. Other measures of inflation expectations, such as surveys and the yields on inflation-protected bonds, do not suggest a surge in inflation is likely.

“I think [Mr Zoellick] is living in the past, in particular in the period from 1980-92, when there was a periodic flirtation with gold,” said Edwin Truman, senior fellow at the Peterson Institute. “It’s not constructive and it’s inappropriate.”

Jean-Claude Trichet, president of the European Central Bank, said that central bankers meeting in Basel had not discussed the use of gold. “We did not discuss the gold standard,” he said. “In my memory such an idea was mentioned a long time ago by Jim Baker when he was a [US] secretary of the Treasury in the 1980s. I have no particular comment.”

A return to the use of gold as a backing for money has support from some economists and investors who particularly fear inflation, because a central bank cannot create more of it. But Mr Zoellick’s comments brought out a host of criticisms of the gold standard that have rarely been aired since the 1930s.

“The last thing that the world economy needs right now is another source of deflation in a financial crisis,” wrote Bradford DeLong, professor of economics at the University of California, Berkeley, on his blog. “Attaching the world economy’s price level to an anchor that central banks cannot augment at need is another source of deflation – we learned that in the 15 years after world war one.”

Edel Tully, an analyst at UBS, reprised a 19th century argument about the gold standard. “Any reserve currency needs a supply that can grow as rapidly as global trade. Gold supply falls significantly short of this basic requirement,” she wrote in a report.
.

Long before he helped set up the World Bank, John Maynard Keynes pronounced the gold standard “a barbarous relic”. Relics rarely cease to inspire devotion. Expect a revival in gold worship after Robert Zoellick, World Bank president, gave a nod in its direction.

In a comment piece in Monday’s FT, Mr Zoellick called for a new, co-operative monetary system, which should “consider employing gold as a reference point of market expectations about inflation, deflation and future currency values”. It is beyond doubt that the world’s current monetary arrangement is not serving us as well as it should. What should replace it – and what exactly Mr Zoellick envisages in its place – is less clear. The World Bank has been coy about giving more detail, preferring instead to emphasise that Mr Zoellick’s gold teaser belongs to a package of proposals for the Group of 20 to lift growth rates and thereby make the “currency wars” more tractable.

EDITOR’S CHOICE
 Gold digging at the World Bank - Nov-08
.Lex: Price of gold - Nov-08
.Zoellick’s call on gold standard dismissed - Nov-08
.Q&A: Changing standards - Nov-08
.Short View: Debate on a gold standard - Nov-08
.Martin Wolf: Return to gold standard? - Nov-01

..Still, it is instructive to ask what useful role gold can play in today’s world economy. The answer is probably none at all.

In monetary policy, pegging the monetary base to gold would be a (very impractical) way to target prices. But the gold price is hardly the most useful price to fix. Unlike a broad price index, it is unrepresentative of the economy. Buffeted as its price is by private demand and supply, gold’s stabilising properties are also largely mythical.

Could a gold standard help international currency co-ordination? In theory it could, if states were willing to accept the restrictions on national monetary policy and the current account adjustments that a gold standard entails. But if such political will can be found, there are better anchors than gold; until then, gold will not work.

Mr Zoellick points out that “markets are using gold as an alternative monetary asset”. But there is no sign that confidence in central banks is about to collapse: bond prices show that inflation expectations remain well-anchored. The challenge is to find tools that countries will agree to use to rebalance the world economy. Fascination with gold should not eclipse more practical ideas, such as US Treasury secretary Tim Geithner’s ill-fated proposal to target current account balances directly.

Maybe Mr Zoellick just wants to draw the G20’s attention to policies helpful for the other 167 members of the World Bank. Or perhaps he hopes to open the space for a discussion of radical global monetary reform. Both are excellent goals – so long as his questions are not mistaken for answers.
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HERE, in a corner of Switzerland where Italian is spoken and roughly one-third of the world’s gold is refined into bars and ingots, business is booming. Every day, bangles, bracelets and necklaces arrive in plastic bags — from souks in the Middle East, from pawn shops in Asia and from corner jewelers in Europe and North America.

“It could be your grandmother’s gold or the gift of an ex-boyfriend,” said Erhard Oberli, the chief executive of Argor-Heraeus, a major refiner here that processes roughly 400 tons of gold a year. “Gold doesn’t disappear.”

Amid a global frenzy fed by multibillion-dollar hedge funds, wealthy speculators and governments all rushing to stock up on the precious yellow metal, the price of gold briefly surpassed $1,100 an ounce on Friday, a record high.

Long considered the ultimate refuge for nervous investors, gold has climbed as the dollar has steadily weakened, budget deficits have expanded in the United States and Europe, and central banks have continued to pump trillions of dollars into weak economies, creating fears of another asset bubble that will ultimately pop.

“It’s not that gold has changed, but gold buyers have changed,” said Suki Cooper, a precious-metals strategist for Barclays Capital. “It’s a structural shift we’re seeing on the investing side, from Asian central banks right down to individual investors buying ingots and coins.”

“Gold’s appeal has broadened,” added Ms. Cooper, who predicts that it will hit $1,140 an ounce by the second quarter of next year.

Indeed, last month, Harrods, the 160-year-old London department store, began selling coins as well as gold bullion ranging from tiny 1-gram ingots to the hefty, 12.5-kilogram, 400-Troy-ounce bricks that are so often featured in movies and stocked inside the vaults of Fort Knox. Harrods’s lower ground floor, where the gold is peddled, has been packed with interested shoppers.

“The response has been astounding,” said Chris Hall, head of Harrods Gold Bullion. “Bars are definitely more popular than coins. The 100-gram is the most popular.”

IN the United States, ads promising high prices for gold are regular fodder for late-night television spots, while buyers are setting up tables at shopping malls or hosting gold-buying gatherings at private homes — like recession-era Tupperware parties.

“Everyone and their grandmother has a sign out saying, ‘We buy gold,’ ” said Ron Lieberman, the owner of Palisade Jewelers in Englewood, N.J. He estimates that 10 times as many people come into his store to sell gold now as when the metal was selling for $300 an ounce at the beginning of the decade. “I hear people come in and say gold is going to $2,000.”

Jewelry store shoppers aren’t the only ones forecasting lofty prices. Jim Rogers, an investor who has made his name investing overseas and in commodities, predicted to Bloomberg Television last week that gold might reach $2,000 an ounce — prompting a rebuke from Nouriel Roubini, an economist who gained attention for his early warnings about the global economic crisis. At a conference in New York on Wednesday, Mr. Roubini described Mr. Rogers’s forecast as “utter nonsense,” saying that there aren’t any inflationary or economic pressures that would drive the price of gold to $2,000 an ounce.

Even the most bullish of gold lovers were surprised last week when the Reserve Bank of India stepped in and bought 220 tons of gold from the International Monetary Fund for $6.7 billion, a sign that other central banks might move away from dollar-denominated assets like Treasury bonds in favor of the precious metal. India’s huge purchase means that gold will now account for about 6 percent of India’s $285.5 billion of foreign exchange reserves — up from the previous level of about 4 percent.

“We have money to buy gold,” said Pranab Mukherjee, India’s finance minister. “We have enough foreign exchange reserves.”

On Thursday, Sri Lanka’s central bank disclosed that it, too, was buying gold, in a trend that could hurt the United States over time because it needs foreign bond buyers, especially central banks, to finance its growing debt. Gold closed at $1,095.10 an ounce on Friday, down from its intraday high but up nearly 5 percent for the week.

Adjusting for inflation, gold would have to top $1,885 to set an all-time record.

China has already doubled its gold reserves over the last six years, but the Indian move underscored how even the most traditional investors are shifting a portion of their assets into bullion.

“I have never been a gold bug,” Paul Tudor Jones, the prominent hedge fund manager, told his investors last month. “It is just an asset that, like everything else in life, has its time and place. And now is that time.”

Over all, in the second quarter of 2009, consumption of gold for jewelry plunged 20 percent, while investor demand for gold increased 51 percent, according to the World Gold Council.

THE Harrods gold line is made by PAMP, a rival Swiss refiner down the road here from Argor-Heraeus, in the nearby town of Castel San Pietro. And demand for bars weighing 100 ounces or less for individual investors is up 80 percent, said Marwan Shakarchi, the chairman of MKS Finance, a Geneva company that owns PAMP.

Inflows of old gold jewelry and individual investor sales are especially strong in the United States and Western Europe, a new phenomenon for MKS, Mr. Shakarchi said. In the past, hoarding gold as an investment was much more popular in the Middle East and Asia. “Europe and the United States are our emerging markets,” Mr. Shakarchi said.

In addition to high anxiety about the future, recent political trends may also be playing a part in the global gold fever. With a crackdown on tax havens worldwide and Swiss bankers handing over the names of wealthy American clients to authorities, some experts say rich people now prefer an investment that can easily be hidden from the prying eyes of tax collectors.

“In Europe, people want physical gold to store themselves, with no documents,” said Bernhard Schnellmann, director for precious-metal services at Argor-Heraeus. Often, the company doesn’t know the ultimate destination of the bars it makes, only the identity of the bank in Zurich or London that is handling the order.

The region surrounding Mendrisio has dominated gold refining for decades, profiting from its close proximity to northern Italy — which has a long tradition of jewelry-making and cheap labor — as well as from Switzerland’s own reputation for financial stability and discretion. The Swiss government has also nurtured the business, guaranteeing gold assays for purity and carefully regulating the industry.

One of the 100-gram bars that is produced here just about fits in the palm of your hand, with a satisfying metallic coldness that belies its $3,500 price tag. The standard 12.5-kilo, 400-ounce brick, on the other hand, is a monster, straining the wrist as well as the imagination: just one of these thick bars commands a higher price than a studio apartment in Manhattan.

Although India is now a far bigger consumer than Italy of gold for jewelry, the region around here has retained its distinctive status as the gold workshop of the world, with ore arriving from South Africa along with the old bracelets and necklaces destined for the crucible.

“If you give somebody a ton of gold, you don’t have to worry about it in Switzerland,” said Mr. Oberli, the Argor-Heraeus chief executive. Efficiency, another Swiss virtue, and speed are of the essence in the gold business, because prices change quickly and buyer and seller want to lock in their order quickly, Mr. Oberli explained.

“Everything that comes in has to go out,” he said. “It’s not our material.”

Perhaps as a result, the gold-refining fraternity is secretive, with verbal discretion as much a part of the culture as the high concrete walls that surround Argor-Heraeus and the metal detectors workers pass through when they go home for the day.

“Everybody is afraid someone else is chasing their customers,” said Mr. Oberli. “The banks don’t want us to know.”

Mr. Oberli is wary of walk-in clients and accepts orders from mines only when he can vouch for the origin of the ore, fearing “conflict gold” from rebel-held areas in Africa and elsewhere.

ARGOR-HERAEUS makes sure that even the tiniest amount of the precious metal doesn’t disappear during refining. Gold dust from the soles of workers’ and visitors’ shoes is scooped up on special mats when they leave. And, annually, the overalls that employees wear during manufacturing are burned to recover the smallest fleck.

At the airport in Zurich, where there are special vaults to hold gold, shipments of jewelry arrive daily on early morning flights before making their way here via a twisty, three-hour journey through the mountains on tightly guarded trucks. After the jewelry is unloaded, gold ingots, bars and other forms of bullion — already stacked like cordwood along the sooty corridors of Argor-Heraeus — are sent back to Zurich in the same trucks.

“The truck never drives back empty,” said Mr. Oberli. “Time is so important because the value of the material is so high.”

Mr. Oberli is also confident that he is running a business that, even in the middle of one of the worst economic downturns of the last century, is relatively recession-proof and always of interest to investors.

“Gold has been around as an investment for 6,000 years,” Mr. Oberli said. “When there is no alternative, it’s there.”

It would be hard to find two more unlikely intellectual comrades than Robert Zoellick, the World Bank technocrat, and Sarah Palin, the populist conservative politician. But in separate interventions yesterday, the pair roiled the global monetary debate in complementary and timely fashion.

The former Alaskan Governor showed sound political and economic instincts by inveighing forcefully against the Federal Reserve's latest round of quantitative easing. According to the prepared text of remarks that she released to National Review online, Mrs. Palin also exhibited a more sophisticated knowledge of monetary policy than any major Republican this side of Wisconsin Representative Paul Ryan.

Stressing the risks of Fed "pump priming," Mrs. Palin zeroed in on the connection between a "weak dollar—a direct result of the Fed's decision to dump more dollars onto the market"—and rising oil and food prices. She also noted the rising world alarm about the Fed's actions, which by now includes blunt comments by Germany, Brazil, China and most of Asia, among many others.

"We don't want temporary, artificial economic growth brought at the expense of permanently higher inflation which will erode the value of our incomes and our savings," the former GOP Vice Presidential nominee said. "We want a stable dollar combined with real economic reform. It's the only way we can get our economy back on the right track."

Mrs. Palin's remarks may have the beneficial effect of bringing the dollar back to the center of the American political debate, not to mention of the GOP economic platform. Republican economic reformers of the 1970s and 1980s—especially Ronald Reagan and Jack Kemp—understood the importance of stable money to U.S. prosperity.

On the other hand, the Bush Administration was clueless. Its succession of Treasury Secretaries promoted dollar devaluation little different from that of the current Administration, while the White House ignored or applauded an over-easy Fed policy that created the credit boom and housing bubble that led to financial panic.

Misguided monetary policy can ruin an Administration as thoroughly as higher taxes and destructive regulation, and the new GOP majority in the House and especially the next GOP President need to be alert to the dangers. Mrs. Palin is way ahead of her potential Presidential competitors on this policy point, and she shows a talent for putting a technical subject in language that average Americans can understand.

Which brings us to Mr. Zoellick, who exceeded even Mrs. Palin's daring yesterday by mentioning the word "gold" in the orthodox Keynesian company of the Financial Times. This is like mentioning the name "Palin" in the Princeton faculty lounge.

Mr. Zoellick, who worked at the Treasury under James Baker in the 1980s, laid out an agenda for a new global monetary regime to reduce currency turmoil and spur growth: "This new system is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi that moves toward internalization and then an open capital account," he wrote, in an echo of what we've been saying for some time.

And here's Mr. Zoellick's sound-money kicker: "The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today." Mr. Zoellick's last observation will not be news to investors, who have traded gold up to $1,400 an ounce, its highest level in real terms since the 1970s, as a hedge against the risk of future inflation.

However, his point will shock many of the world's financial policy makers, who still think of gold as a barbarous relic rather than as an important price signal. Lest they faint in the halls of the International Monetary Fund, we don't think Mr. Zoellick is calling for a return to a full-fledged gold standard. His nonetheless useful point is that a system of global monetary cooperation needs a North Star to judge when it is running off course. The Bretton Woods accord used gold as such a reference until the U.S. failed to heed its discipline in the late 1960s and in 1971 revoked the pledge to sell other central banks gold at $35 an ounce.

One big problem in the world economy today is the frequent and sharp movement in exchange rates, especially between the euro and dollar. This distorts trade and investment flows and leads to a misallocation of capital and trade tensions. A second and related problem is the desire of the Obama Administration and Federal Reserve Chairman Ben Bernanke to devalue the dollar to boost exports as a way to compensate for the failed spending stimulus.

As recently as this week in India, Mr. Obama said that "We can't continue situations where some countries maintain massive [trade] surpluses, other countries have massive deficits and never is there an adjustment with respect to currency that would lead to a more balanced growth pattern."

If this isn't a plea for a weaker dollar in the name of balancing trade flows, what is it? The world knows the Fed can always win such a currency race to the bottom in the short run because it can print an unlimited supply of dollars. But the risks of currency war and economic instability are enormous.

The innovation that opened gold investing to the masses and helped  spur this year's record-breaking bull market was hatched in an act of  desperation by a little-known gold-mining trade group.

The World Gold Council, created to promote gold, was fighting for  survival. Its members—global gold-mining companies—were frustrated  with the council's inability to stem two decades of depressed prices  and find buyers for a growing glut of the yellow metal. Eight years ago,  they were considering withdrawing funding from the trade group, a  move that would have effectively shut it down.

World Gold Council executives Jim Ross, Aram Shishmanian and James Burton celebrated GLD's 5th anniversary in November 2009.

The revolution that opened gold investing to the masses and helped  spur a record-breaking bull market was hatched in an act of  desperation by an obscure gold-mining trade group. WSJ's Emma  Moody explains SPDR Gold Shares.

Chris Thompson, the group's chairman, figured the council needed to  expand the pool of gold buyers, particularly in the U.S. The idea of  trading gold on an exchange had been floating around for years, but  various hurdles had prevented it from taking off in America.

What the council eventually managed to create in those dark days  surpassed its wildest dreams: SPDR Gold Shares, the exchange-traded  fund launched in November 2004. The fund, known by its ticker  symbol GLD, has ballooned into a $56.7 billion behemoth.

Today, GLD is the fastest-growing major investment fund ever,  according to research company Lipper Inc., and one of the most active  gold traders in the market. Its presence has helped gold—which settled  down 0.33% in New York trading Wednesday, at $1,372.90 a troy  ounce—triple in price in recent years to fresh all-time highs this month.

As the world's largest private owner of bullion, GLD is soaking up $30  million of gold daily, stored in a London vault that now holds the  equivalent of about six months' worth of the world's entire gold-mining  production.

GLD has won fans who say it has democratized the gold market,  paving the way for investors of all stripes to get direct exposure to the  precious metal. Its nearly 1 million investors include ordinary  individuals, institutions like Northern Trust Corp. and billionaire hedge- fund managers like John Paulson.

But skeptics argue GLD could become a Godzilla-like beast if the gold  rally reverses sharply. They say its buying has already turbo-charged  gold prices, exposing the market, and legions of small investors, to a  rapid fall. Smaller copycat funds add to the risk.

"We tell our clients to watch out for it, because it's there, and it's a  real risk," said Jeffrey Christian, founder of CPM Group, which advises  major investors worldwide on gold.

The questions come as ETFs in general are coming under heightened  scrutiny about whether they distort markets. ETFs are wildly popular  and growing fast, spanning stocks, bonds and hard assets. But they  have made it possible for far more money to rush in and out of  previously illiquid markets.

GLD shares trade on the New York Stock Exchange, as well as in  Tokyo, Hong Kong, Singapore and Mexico City. Each share represents  one-tenth of an ounce of gold. That, in effect, gives shareholders the  right to their share of proceeds from selling a full bar, minus fees.  Before GLD issues new shares, it takes in the necessary gold to back  them. On days when there are more sellers than buyers of GLD  shares, the fund offloads some of its gold.
Stockpiling

SPDR Gold Shares has quickly become one of the world's biggest gold holders

Created under the auspices of the World Gold Council, the fund relies  on a number of partners. It is marketed under the banner of State  Street Global Advisors, which has fund-selling expertise. HSBC PLC  stores and protects the gold bars. Bank of New York Mellon Corp.  handles daily operations, such as calculating the fund's net asset value.  For all its size and breadth, fund managers say, it's relatively simple to  operate. BNY Mellon, for instance, needs roughly a dozen employees  to run the fund day-to-day.

That has helped make it a windfall for all involved. The gold council,  which spent $14 million developing the fund, has reaped about $150  million from its inception through Sept. 30. Its revenue is a percentage  of net asset value, set at 0.15%. State Street has the same terms  and also collected about $150 million in that time. Both are on track to  bring in more than $80 million in the coming year if GLD stays at  today's size.

The success owes much to timing. The council launched the fund as  interest in gold was picking up, first because of inflation worries and  then as a safe-haven against financial disasters. Since then gold prices  have more than tripled from $444.80, setting a record high—though  not adjusted for inflation—of $1,409.80 on Nov. 9.
[gold_p1]

The recent rally has been driven by many factors, of which GLD is just  one. The U.S. dollar has steadily lost value, so some investors have  bought gold as a hedge against the greenback. Tapping new ore veins  is getting harder. Gold has benefited at once from fears of economic  stagnation after the financial crisis and concern that government  spending on the recovery will trigger inflation. GLD, though, is widely seen as amplifying those trends.

Buying fund shares is easier and cheaper than investing in gold futures  or buying coins. And GLD has now locked up nearly 1,300 metric tons  of the world's gold supply, making the market tighter. The fund's  impact has won it a following in the gold industry. "It's got the gold price up," said Nick Holland, chief executive of Gold  Fields Ltd., a major mining company and a member of the gold  council. "That's got to be good."

Calculating the impact of GLD and its brethren is far from an exact  science. But industry observers including Mr. Christian and Philip  Klapwijk of GFMS Ltd. estimate gold-backed ETFs have probably  added about $100 to $150 an ounce to the price of gold as a result of  the incremental increase in demand.

Translated, that would mean gold-backed ETFs have increased the value of the bullion that gold miners will produce this year by up to $9  billion.

Many investors believe gold has much further to rise. But after a 10- year, one-way ride, others worry there could be a violent reversal  down the road. The gold market hasn't been severely tested since  GLD and similar, but far smaller, bullion-backed funds were launched.

And many GLD investors aren't experienced in gold investing. Between  60% and 80% of GLD investors had never bought gold before,  estimates Jason Toussaint, managing director of the council. No one  knows how those newcomers might react in a sharp downturn.

If GLD shareholders get spooked by drops in the gold price and sell en  masse, the fund would have to dump metal to meet redemptions,  possibly accelerating declines by prompting others to sell even more.  Because GLD trades on an exchange, any selloff would be immediately  visible, unlike typically opaque bullion sales.

"We are more concerned about these issues than we were initially,"  said Scott Malpass, chief investment officer for University of Notre  Dame Asset Management, which started buying GLD shares in 2005  and now has about $70 million invested. "It can turn on a dime. It can  happen very quickly." For now, Mr. Malpass thinks the advantages of  investing in gold outweigh the risks and the fund is properly managed.

In the fund's planning stages, the world's miners had modest  ambitions.

Gold prices were just starting to stir from a 20-year bear market and  many companies were struggling to break even. Hurdles to gold  abounded. It was hard to purchase, store and insure. Some investors  chose to own stocks of gold miners.

The council had long focused on gold jewelry, which represented over  80% of demand but exposed the industry to economic downturns. In  2002, after the Sept. 11 terrorist attacks, jewelry demand for gold  dropped 11%.

Attracting investors, the industry concluded, was the way to go. Mr.  Thompson, the chairman, wanted a CEO for the council who would  have credibility with American investors to help implement the vision.  He zeroed in on James Burton, who at the time headed the California  Public Employees' Retirement System, one of the biggest institutional  investors in the world. Calpers had no direct investments in gold.

In July 2002, Mr. Burton flew to meet Mr. Thompson in London. Mr.  Burton was skeptical, but curious. Their discussions lasted 12 hours— including talks over a round of golf, two rounds of beers and meals.  Mr. Thompson gave an overview of the gold market, and a pitch for  why the moment was ripe to attract retail investors. By the end, Mr.  Burton was hooked.

In August 2002, Mr. Burton, who had left Calpers, took over the gold  council and immediately slashed 60% of the 108-person staff, closed  half of the 22 offices and set about creating what became GLD.

The gold council wanted a product that ordinary investors could buy  and sell just like a stock. The challenge was to make shares track the  gold price, much like an index fund. The eventual solution was to  create a trust to serve as the legal owner of GLD's gold bars.

Products were launched in Australia and the U.K. But getting a U.S.  version took longer than the council expected.

The mining community backed the idea, but worried it might  cannibalize demand for gold-mining stocks. Since it was to be the first  U.S. fund entirely backed by a physical commodity, regulators also  sought to understand how the concept would work. The Securities and  Exchange Commission spent months seeking information about the  product and the gold market, say Mr. Burton and Mr. Thompson.

The gold council also needed to hire assorted players—a trustee, a  marketing agent and a vault operator. That process wasn't seamless,  either.

Barclays PLC worked for months on the project, then withdrew and  built its own fund, the iShares Gold Trust, which also holds bullion.  Barclays sold the iShares exchange-traded fund business to BlackRock  in June 2009, and its smaller gold fund has since become an intense  competitor.

The council also wasn't sure how successful the fund would be, and  paid UBS Securities $4 million for underwriting the first 2.3 million  shares of GLD, according to regulatory filings. UBS declined to  comment.

"I thought it would take a lot more marketing effort to convince  people to buy gold in a securitized form," said Mr. Burton.

But as GLD opened, the pent-up investor demand erupted. The fund  hit $1 billion in assets in three trading days, and $10 billion in just over  two years.

"It grew pretty quickly," said Jim Ross, head of exchange-traded funds  for State Street. The firm manages 120 exchange-traded funds, as of  Sept. 30, and the SPDR S&P 500 fund is the only one larger than GLD.  "The fact that's our second-most successful product is still surprising  to me, frankly," Mr. Ross said.

The sniping at GLD also began early. Some gold investors questioned  whether the fund held as much bullion as it said it did, eventually  prompting the council to post on its website audit reports by an  independent firm, Inspectorate International Ltd., which conducts two  counts each year of GLD's gold bars in London.

A segment of the gold-investing community still prefers to secure a  personal stash. Some want to be able to get their hands on their  bullion in a hurry, particularly in the event of a severe crisis. Gold-vault  operators are cutting fees to lure such investors.

Rivals also highlight worst-case scenarios the fund could face. Ben  Davies, chief executive of London-based Hinde Capital, which oversees  a gold fund, noted that GLD's bullion isn't insured. If the gold "is lost,  damaged, stolen or destroyed," the trust "may not have adequate  sources of recovery," according to the prospectus.

Mr. Toussaint said the council believes HSBC's security measures and  the bank's other liability coverage provide protection. "That's the  whole reason we put it in a vault in the first place," he said.

Despite GLD's success, even those involved in the fund acknowledge  the rally will eventually end. "We don't believe gold is always going to  go up," said State Street's Mr. Ross. "No investment does."

Dollar-Crash und Hyper-Inflation? Die Geldpolitik der Notenbank sorgt in den USA für Kritik. Im Bundesstaat Utah werden darum Gold und Silber als Zahlungsmittel wieder zugelassen werden. Weitere Staaten wollen folgen.

Utah ist nicht der einzige Staat, der neben dem Dollar eine eigene Währung haben will: Entsprechende Vorlagen werden auch in Colorado, Indiana, Iowa, Georgia, Missouri, Montana, New Hampshire, Oklahoma, South Carolina, Tennessee, Vermont und Washington behandelt.

Über 200 Jahre nach der Einführung des Dollars in den USA als Hauptwährung, wenden sich die Gliedstaaten nun wieder von ihm ab. Lokale Politiker nennen dafür zwei Gründe: Erstens sollen Staat und Bürger vor einem möglichen zukünftigen Kollaps des Dollar als offizielle Währung geschützt werden. Zweitens biete die Wiedereinführung von Gold und Silber als Zahlungsmittel einen Schutz vor einer möglichen Hyperinflation und der Vernichtung von Vermögenswerten.

Bernanke: "Gold ist kein Universalheilmittel"
Gold und Silber haben im Zuge der lockeren Geldpolitik von US-Notenbankchef Ben Bernanke in den letzten zwölf Monaten laufend neue Höchstnotierungen erreicht. Die Unze Feingold kostet zurzeit 1418 Dollar. Bernanke hält nichts vom Ausscheren der Gliedstaaten und von einer möglichen Wiedereinführung des Goldstandards.

"Gold ist nicht das Universalheilmittel", sagte er kürzlich. Es sei zwar richtig, dass Gold über lange Perioden für stabile Preise sorgen kann. "Kurzfristig kann es aber aufgrund Veränderungen im Gleichgewicht von Angebot und Nachfrage zu heftigen Preisschwankungen kommen". Die USA könnten gar nicht zum Goldstandard zurückkehren, da es nicht genug Gold gäbe, um den Dollar zu unterlegen.

Die USA haben den Goldstandard 1971 einseitig aufgegeben. Der damalige Präsident Richard Nixon brauchte zusätzliche Mittel, um den Vietnam-Krieg zu finanzieren. Danach war es allein an den Zentralbanken, über Zinsen und Geldvergabe zu entscheiden. Das Gold der USA schlummert seither in Fort Knox in Kentucky.

Utah will den Dollar zwar nicht aufgeben, aber seinen Bürgern die Wahl ermöglichen, auf Gold oder Silber als Zahlungsmittel umzuschwenken. Die Gesetzesvorlage erlaubt es Detailhändlern und Dienstleistern, die Edelmetalle als Zahlungsmittel anzunehmen. Auch Steuern und Gebühren könnten so bezahlt werden.

Die am 8. März dieses Jahres von Nationalrat Ulrich Schlüer eingereichte parlamentarische Initiative «Schaffung eines Goldfrankens» [11.407] könnte weitreichende Folgen haben.

Eine einfache, politisch zunächst harmlos erscheinende Idee könnte Folgen auslösen, deren Gewicht heute noch niemand wirklich abzuschätzen sich anschickt. Als Beispiel wählen wir den in der Initiative angesprochenen neuen Goldfranken mit einem Gehalt von 0,1 Gramm Gold pro Münze.

Die Umsetzung dieses Vorhabens ist problemlos denkbar. Produzieren und verkaufen dürften diese von der Schweiz offiziell garantierten Goldmünzen private Schweizer Banken und Institutionen, welche vom Bund dafür eine Lizenz bekommen. Einzige Bedingung für den Erhalt einer Lizenz ist ein guter Ruf.

Eine Goldmünze mit 0,1 Gramm Gold ist eine sogenannte Bimetallmünze, d.h. eine normale Münze mit einer entsprechenden Menge Gold im Zentrum. Eine solche Münze ist technisch problemlos machbar, die 0,1 Gramm Gold im Zentrum bleiben gut erkennbar. Eine Münze mit z.B. einem halben Gramm Gold würde ähnlich aussehen wie heute die Euros, einfach mit Gold im Zentrum. Eine Münze mit zehn Gramm Gold würde ganz aus Gold bestehen.

Das Aussehen, also die Prägung der Goldmünze, wird ebenfalls vom Bund definiert. Auf der einen Seite soll sich die Goldfranken-Münze an den heutigen Schweizer Franken anlehnen. Sie muss zeigen, welches Gewicht an Gold die Münze enthält. Auf der Hinterseite der Münze darf der lizenzierte Herausgeber der Goldmünze sein Firmenlogo zeigen. Dies sichert den lizenzierten Schweizer Banken eine einmalige Plattform für weltweite Bekanntheit.

Besondere Merkmale
Die von der Schweiz garantierte Goldmünze bringt drei wichtige Neuerungen auf den heutigen Goldmarkt.

Der Preis der Goldmünze ist gleich dem Goldpreis. Die Münze mit 0,1 Gramm Gold – z.B. als «Gold-Einfränkler» zu bezeichnen – wäre heute für rund vier Franken fünfzig zu haben. Die günstigsten heutigen Goldmünzen kosten dagegen rund hundert Franken, denn selbst die kleinste Münze enthält gut zwei Gramm Gold. Die Goldmünzen wären künftig wie Fremdwährungen bei allen Wechselstuben und selbst durch Wechselautomaten erhältlich und überall gleich teuer. Heutige Münzen dagegen sind je nach Prägung bei gleichem Gewicht verschieden teuer, der Goldkauf ist so zu einer Frage von Vertrauen und Fachwissen geworden.

«Gramm» und «Franken» sind vertraut und brauchen keine Erklärung. Der heutige Goldhandel dagegen misst in Unzen und besteht aus Sammlermünzen, Goldbarren und Zertifikaten. Diese Handelsformen erfordern Fachwissen. Das «Handelsgeld» eignet sich kaum als Tauschmittel.

Auch ist der Goldhandel heute unbehindert und steuerfrei. Das kann sich jederzeit ändern. Selbst die jüngste Geschichte gibt dazu drastische Beispiele: Als die amerikanische Regierung 1933 glaubte, dass das Volk mit privatem Goldhandel ihre Geldpolitik behindern könnte, verbot sie jeglichen Besitz von Gold durch Privatpersonen praktisch über Nacht. Die drastischen Strafen auf Goldbesitz blieben in den USA Gesetz bis 1973!

Vielseitigkeit
Die Goldmünze gibt dem Gebrauch von Gold darum völlig neue Perspektiven. Im Alltag können von der Schweiz offiziell garantierte Goldmünzen als kleines Geschenk oder auch als «Notgroschen» sowohl in der Schweiz als auch auf der ganzen Welt neue Märkte erobern. Eine Fangemeinde, aber auch Krisenregionen werden die Goldmünzen als Tauschmittel verwenden; und selbst als Fluchtwährung kann der Goldfranken den «normalen» Franken entlasten.

Der Schweizer Goldfranken wäre als Goldmünze rechtlich geschützt und von Steuern befreit. Er wird damit zur attraktivsten Form für langfristige Wertanlagen. Es wäre denkbar, einen Teil der Pensionskassen- und Altersrenten in Goldmünzen zu halten, ebenso Lebensversicherungen. Man darf spekulieren über das sich weltweit eröffnende Geschäftspotential!

Die Pionierfunktion auf diesem Gebiet wird den Schweizer Finanzinstitutionen einen Vorsprung einräumen für Innovationen wie Zahlungsverkehr, Checks und Kreditkarten in Goldmünzen. Für später ist die Schaffung selbst von Banknoten und Goldrappen-Münzen denkbar – wobei diese Noten und Münzen zu hundert Prozent durch in der Schweiz gelagerte Goldmünzen gedeckt sein müssen. Kreditschöpfung in Goldmünzen bleibt strikte verboten.

Zusammenfassend bringt die von der Schweiz garantierte Goldmünze ganz einfach die Normierung und dadurch die Vereinfachung des Goldhandels plus dessen Schutz vor Beschränkung und Besteuerung. Der Erfolg der Parlamentarischen Initiative hängt nun ab von der politischen, also publizistischen und finanziellen Unterstützung.

Zusammenhänge
Geld hat sich über Jahrtausende evolutionär entwickelt als ein Teil des freien Marktes. Autonome staatliche Geldmonopole, ohne jeden Bezug zu einem Marktgut, bestehen seit 1973. Da drängt sich die Frage auf: Ist dieser «Geldsozialismus» der Weisheit letzter Schluss – oder eine Sackgasse wie der Sozialismus in anderen Bereichen?

Geld entstand aus dem Bedürfnis der Menschen, den Tauschhandel durch indirekten Tausch zu vereinfachen. Der Markt hat schliesslich Metallmünzen gewählt als das beste bekannte Tauschgut: Haltbar, teilbar, transportfähig, wertvoll und leicht erkennbar.

Banknoten entstanden erst vor wenigen Jahrhunderten aus dem Bedürfnis, den Transport grosser Mengen von Metallgeld zu vereinfachen. Depotbanken waren zuerst ganz einfach Lagerhäuser für Geld, die ersten Banknoten waren Billette zum Bezug des deponierten Goldes («Pound Sterling»).

Eine unheilige Allianz zwischen diesen Banken und der Justiz führte im 19. Jahrhundert zur Legalisierung des sogenannten Teilreservesystems. Dieses System erlaubt den Depotbanken, mehr Lagerquittungen zu drucken, als dass sie Metallgeld gelagert haben (eine Praxis, welche überall sonst in der Wirtschaft als Betrug verfolgt wird). Dieses «aus der Luft» geschaffene Papiergeld darf die Bank gegen Zins verleihen und einen Teil der Zinsen an die Einleger verteilen. Die Profiteure kennen ihren Profit; wer die Opfer sind, ist weniger klar. Bezahlt werden die Privilegien indirekt und verzögert einerseits durch Geldentwertung und andererseits womöglich durch Fehlinvestitionen und Wirtschaftszyklen.

Verschuldungs-Irrsinn
Gleichzeitig ist das Teilreservesystem instabil. Jedesmal wenn viele Notenbesitzer gleichzeitig Metallgeld auslösen wollen, kann die davon betroffene Bank pleite gehen. Meist löst sie dabei gleich noch einen «Run» auf andere Banken aus. Angeblich zur Verhinderung solcher Krisen wurden zuerst Kartelle und Notenbanken geschaffen, und zuletzt ein weltweites System namens «Bretton Woods». Doch selbst Bretton Woods krachte 1973 zusammen, weil die ausstehenden «Eurodollars» die Goldreserven der USA bei weitem überstiegen.

Seither gibt es auf der Welt erstmals in der Geschichte der Menschheit ausschliesslich kreditbasierte Tauschmittel ohne irgendeine direkte Bindung zu Marktgütern. Notenbanken schaffen seither, wie die Finanzkrise eindrücklich illustriert, beliebig viel Geld «aus dem Nichts»: Sie decken diese Geldschöpfung durch Schuldverschreibungen von Geschäftsbanken, kaufen fremde Währungen und öffentliche Schuldscheine (euphemistisch «Währungsreserven» genannt). Geschäftsbanken wiederum schaffen Kreditgeld ebenfalls «aus dem Nichts» und decken diese Kredite durch Schulden und Hypotheken aus der Privatwirtschaft. Die einzige Limite dieser Geldschöpfung besteht in Reservevorschriften, und diese Reserven bestehen aus Nationalbankgeld und -krediten. Das Resultat ist wenig überraschend: Eine historisch einmalige Tendenz zu weltweiter Verschuldung, Geldschöpfung und Geldentwertung, gespickt mit periodischen Hyperinflationen: Das sind die «Errungenschaften» des derzeit vorherrschenden Systems.

Parallelwährung
Die neue «Goldfranken»-Münze ist im Grunde ein Warengeld aus Gold. Sie entspricht aus historischer Perspektive einer Art «Reformation» im Geldwesen. Hierin liegt gleichzeitig die grösste Herausforderung für ihre Realisierung: Das Weltbild vieler heutiger Ökonomen ist beschränkt auf das Kreditgeldsystem, und seine Hinterfragung grenzt für viele an Ketzerei.

Das Originelle am Projekt der Schweizer Goldmünze aber ist ihre Einführung als Parallelwährung, denn in dieser Form geht von ihr keinerlei Gefährdung des bestehenden Geldsystems aus, solange und soweit die Menschen dem heutigen Geld vertrauen. Sollte dies plötzlich nicht mehr der Fall sein (was wir nicht hoffen), so ist die Goldmünze die bestmögliche, sofort verfügbare, vertraute und real existierende Alternative zum Chaos, das entsteht nach einem Währungskollaps.

«Nur in Freiheit, nur durch einen Parallelstandard kann es je eine gerechte Währungsreform geben», meinte 1984 der renommierte Ökonom Hans Sennholz in einer Rede. Nationale und internationale Ökonomen sind überzeugt, dass die Schweiz einzigartige Voraussetzungen und damit geradezu eine Art moralische Verpflichtung zur Verwirklichung alltagstauglicher Goldmünzen besitzt. Gesucht sind nun visionäre Unternehmer, Stiftungen und Gönner, die sich dieses historischen Projekts annehmen, zum Wohle der Schweiz und der Menschen überhaupt, weltweit.
 

11.407 – Parlamentarische Initiative
Schaffung eines Goldfrankens
Eingereicht von  Schlüer Ulrich
Einreichungsdatum  09.03.2011
Eingereicht im  Nationalrat
Stand der Beratung  Im Plenum noch nicht behandelt

Eingereichter Text
Gestützt auf Artikel 160 Absatz 1 der Bundesverfassung und Artikel 107 des Parlamentsgesetzes reiche ich folgende parlamentarische Initiative ein:

Die Bundesverfassung sei wie folgt zu ergänzen:
Art. 99 Abs. 2 (neu) (die bisherigen Abs. 2 bis 4 werden zu den Abs. 3 bis 5)
Der Bund schafft einen offiziellen Schweizer Goldfranken mit einem Satz von Münzen mit je fixiertem Gehalt an Gold. Er regelt die Konzessionierung der zu dessen steuerfreien Herausgabe berechtigten Institute.

Begründung
1. Beim heutigen Goldpreis von rund 45 000 Franken pro Kilogramm wird es Kleinsparern ungebührlich erschwert, Teile ihres Vermögens Schritt für Schritt in Gold anzulegen und damit vor befürchteter Entwertung abzusichern. Dieser, einer Diskriminierung nahekommende Missstand muss beseitigt werden, indem ein offizieller Schweizer Goldfranken mit einem Satz von Münzen geschaffen wird, die für jedermann erschwinglich sind. Eine Münze mit 0,1 Gramm Goldgehalt würde heute rund Fr. 4.50, jene mit 1 Gramm Gold rund Fr. 45.- kosten.

2. In Zeiten internationaler Währungsturbulenzen wird der Schweizerfranken oft Fluchtwährung, woraus nicht selten eine markante Aufwertung des Frankens resultiert mit den bekannten Wettbewerbs-Erschwernissen, insbesondere für Exportwirtschaft und Tourismus. Sobald die Schweiz einen offiziellen Goldfranken schafft, bietet sich dieser Goldfranken als attraktive Fluchtwährung an - was schwer zu bewältigende Kurssteigerungen des Schweizerfrankens in Grenzen hält.

3. Wenn der Bund Konzessionen für die Ausgabe von Schweizer Goldfranken allein an Schweizer Banken vergibt, erhöht sich die Attraktivität des Finanzplatzes Schweiz markant. Der Schweizer Goldfranken hat mit den in Gold gehaltenen Währungsreserven der Nationalbank nichts zu tun. Die zur Ausgabe von Schweizer Goldfranken konzessionierten Banken beschaffen sich das für dessen Herstellung benötigte Gold auf dem freien Markt - in dem Umfang, als Nachfrage von Kunden besteht.

4. Der Bund hat im Rahmen der Konzessionierung der zur Goldfranken-Herausgabe berechtigten Banken zu überwachen, dass der Goldgehalt der Goldfrankenmünzen strikt eingehalten wird, damit der Bund den Goldgehalt der offiziellen Goldfrankenmünzen garantieren kann.
 
Mitunterzeichnende (2)
Reimann LukasStamm Luzi