GATA (The Gold Anti Trust Action Committee, the leading gold activist group that charges gold market manipulation) has just forced an admission from the Federal Reserve that it engaged in gold swaps.
In that context, I wanted to repost this old article of mine from three years ago, where I highlighted a news item that the media in the US had not bothered to cover:

Golden Goose Down: Was the IMF Involved in Gold Price Manipulation (Dissident Voice, June 8, 2006)

“The latest evidence is an IMF report that shows how IMF rules wink — if they do not actually blow kisses — at central banks which double count gold reserves they have actually lent out for sale in the open market.

Apparently, being a central bank means never having to say you’re short.

Aha, says GATA, which has charged all along that the IMF along with the US Federal Reserve and other government banks have done a financial two-step that has kept down gold prices until recently. The shady rules suggest that when they lent gold out for cash, the banks actually got to double their reserves by counting the leased gold as an asset too. Which means they got to lend, or sell, more gold than showed up on their books. That was pretty sweet both for the lenders — the central banks, who got a small return for their gold — and for the borrowers, the bullion banks that got to sell and reinvest the proceeds for a higher return in what’s called a carry trade.

Of course, it’s dollar holders who’ve done the real carry trade — carrying water for the lucky sods at both ends of the deal by clutching the ever diminishing paper that allows the lucrative game to go on at their expense. Sort of as if you or I or the rest of the peons who supply the tax funds for this financial musical chairs were to blow our money at Las Vegas and then write our losses down as collateral when we asked for a loan at the local credit union. Sounds good, huh?

Or as the IMF report admits delicately, IMF rules have encouraged overstating reserve assets because both the funds received from the gold swap and the gold are included in reserve assets.”