Congressman investigates China gold intervention
- Published: Aug 1, 2018, 8 AM
Rep. Alex Mooney, R-W.Va., suggests that China is surreptitiously manipulating the U.S. currency market and intervening in the gold market.
Mooney, who is a member of the House Financial Services Committee, also claims the Federal Reserve and the Department of the Treasury are evading his questions about the agencies’ activities involving America’s gold reserves.
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Rep. Mooney is one of the most vocal members of the U.S. House of Representatives on issues such as inflation and the central role of gold in restoring sound money, stable prices, and fiscal discipline.
“The purchasing power of our currency has fallen some 97 percent since Congress passed the Federal Reserve Act in 1913, with an acceleration in the rate of decline occurring since the early 1970s when the final link to gold was severed,” according to Mooney.
In a letter dated July 27, 2018, sent jointly to Jerome Powell, chairman of the Federal Reserve, and Treasury Secretary Steven Mnuchin, after receiving perfunctory July responses to his April 24 letter, Mooney noted “a few questions were either not addressed at all or not fully addressed.”
Mooney’s letter stated that the Fed and Treasury would not provide details on U.S. policy toward gold and had refused to comment on historical U.S. State Department documents pointing to a U.S. policy of “driving gold out of the world financial system in favor of the Federal Reserve Note or Special Drawing Rights issued by the International Monetary Fund.”
In his follow-up letter, Rep. Mooney also contributed evidence of past involvement by the Exchange Stabilization Fund in the gold market and called attention to “the recent correlation of the gold price with the price of the Chinese yuan and the valuation of the IMF’s [International Monetary Fund] Special Drawing Rights.”
“Do these correlations reflect surreptitious intervention in the U.S. currency markets by China and currency manipulation by China?” Mooney asked.
Mooney also provided a 2009 letter from then Fed Governor Kevin M. Warsh acknowledging the existence of Fed documents on gold swaps while simultaneously refusing to provide them in response to a Freedom of Information Act request filed by the Gold Anti-Trust Action Committee.
Mooney asked Powell to reconcile the Warsh acknowledgment with Powell's July 12, 2018, letter, wherein Powell states, “The Fed does not engage, nor has it ever engaged, in gold swaps.”
Rep. Mooney asserted that the Treasury did not appropriately answer his question regarding prior audits of America’s gold reserves. In his July 11, 2018, response, Acting Assistant Treasury Secretary Brad Bailey only referenced audits of gold compartment seals.
Mooney further asserted that an examination of seals is “neither an inventory nor an audit of our nation’s gold.”
Mooney’s July 27 and April 24 letters, as well as some associated documents and the responses from the Fed and Treasury to Mooney’s first letter, can be accessed through the website of Money Metals Exchange, a national precious metals investment company and news service.
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