Written by Bryan Lutz, Editor at Dollarcollapse.com:
SuperTexts are books that seem to “cover it all.”
Here’s where I checked off SuperText number six.
It is the original book that outlines “the definitive history of central bank gold manipulation.”
Every serious gold writer of the past two decades has cited it.
So I figured I should probably read it.
Today’s Supertext is…
Gold Wars by Ferdinand Lips. (Not an affiliate link.)
The book was first published in 2001, which is partly why you may not have heard of it. Lips was a Swiss private banker, a co-founder of Rothschild Bank AG in Zurich, and he spent the last decade of his life writing Gold Wars as testimony.
That’s the angle. He wasn’t a journalist or an academic. He was a Zurich banker writing about decisions he watched colleagues make.
He was in the rooms.
I won’t summarize the whole book, but I will tell you about the moment that has stuck in my head ever since.
July 24 and July 30, 1998.
Federal Reserve Chairman Alan Greenspan testifies before the House Banking Committee, then again before a Senate Agricultural Committee. In both appearances, he says the same thing on the record:
“Central banks stand ready to lease gold in increasing quantities should the price rise.”
Lips’ line on this is unforgettable. That single declaration “laid the foundation for the biggest money game in history.”
Here is what it set off. Bullion banks borrowed gold from central banks at lease rates of around 1%, sold the borrowed gold into the physical market (which flooded supply and pushed the price down), and used the proceeds to buy U.S. Treasuries yielding 5%. They earned the spread, gold stayed suppressed, and the central banks lent the metal that backed nothing they could redeem against.
That was the gold carry trade, and Greenspan blessed it from the witness stand.
Ever since I read it, the same pattern keeps showing up.
Central banks bought more gold than U.S. Treasuries last year for the first time in three decades.
None of those headlines surprise the reader of Gold Wars. Lips wrote the framework for what we are watching unfold in real time. The mechanisms are the same. Only the prices have changed.
A few honest notes. The book is about 300 pages. Lips was a Swiss banker, not a stylist, and the middle third on specific European central bank transactions is dense. The opening chapters and the closing argument are the parts worth reading twice. The book is also out of print in English, which is its own kind of testimony. Used copies on AbeBooks run $40 to $80 when you can find them.
If you find one mechanism in this book that sticks in your memory the way Greenspan’s 1998 testimony stuck in mine, then the search and the price are both worth it.
Gold Wars is the SuperText for today.
Read it, and you will never look at the gold price the same way again.
It’s SuperText #6.
