Dear Friend of GATA and Gold:

Grant Williams' latest "Things that Make You Go Hmmm" market letter examines the potential for Venezuela's gold repatriation demand to blow up the Western central bank and bullion bank fractional-reserve gold banking system, and with it the gold price suppression scheme.

Williams quotes GATA board member Adrian Douglas and GATA consultants Rob Kirby and James Turk at length, and indeed his whole thesis is also GATA's. It's reminiscent of GATA's full-page ad in The Wall Street Journal on January 31, 2008, which was headlined: "Anybody Seen Our Gold?":

http://www.gata.org/node/wallstreetjournal

GATA's conference in Washington in May that year was titled the same way.

Williams summarizes:

"-- It is common practce for most central banks to hold part of their gold reserves overseas in 'gold trading centres' (read London and New York).

"-- One of those central banks -- that of Venezuela -- wants its gold back.

"-- That means that a group of banks (mainly in the UK and the United States) that are supposed to have that gold in their vaults need to give it back ...

"-- ... which in turn could potentally trigger a race to repatriate national gold holdings.

"-- Neither Fort Knox nor the Federal Reserve (the world's two biggest gold depositories) have been independently audited in recent times.

"-- The status of the gold held in the Bundesbank (home to the world's third-largest hoard) is somewhat unclear.

"-- The practice of leasing gold by central banks has been going on so long that it predates even the time when Alan Greenspan advocated sound money.

"-- The gold 'physical market' is approximately 100 times the size of the amount of actual underlying metal by which it is purportedly backed.

"-- The top four bullion banks, or 'commercials' on the COMEX, continue to run what we shall politely call 'significant' short positions."

Williams also speculates:

"If there is any delay in repatriating Venezuela's gold, it could potentially start a frantic scramble by central banks to claim their physical gold, and, if that happens, you can be assured that a fire will be lit under the gold price the likes of which we haven't yet seen -- even as gold has appreciated from $250 to $1,850 over the past 11 years."

Looks like GATA's message is finally getting around and being acted upon.

You can find Williams' letter at Scribd here:

http://www.scribd.com/doc/62765636/Hmmm-August-20-2011

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.