Last week we reported on the fact that a Fed economist, Mr Dale Henderson, had trotted out a "revision" of an idea he first talked about back in mid 1997, namely that all the Central Banks really should sell ALL their Gold. As in his first report, Mr Henderson was careful to claim that his views did NOT necessarily reflect those of the Fed itself.
OK, let's say that Mr Henderson had decided to speak about something else. Let's say that he discoursed on the desirability for world Central Banks to begin to take the steps necessary to go back to a Classical Gold standard, under which all circulating national currencies were backed by and REDEEMABLE IN Gold at a fixed ratio. He could go on to claim that the present system of fiat currencies was backed by nothing but debt which in turn was backed by nothing but the legal tender status of the currency and the taxing powers of the government. Mr Henderson could and almost certainly would claim that his views did NOT necessarily reflect the views of the Fed. We think that the Fed would repudiate such statements very quickly. We don't think Mr Henderson would be FED economist for long after airing such views.
The Fed has made no comment on what Mr Henderson DID say. And as far as we know, Mr Henderson is still a Fed economist.
"I, WILLIAM J. CLINTON, President of the United States of America ...hereby declare a national emergency."
Great Horny Toads! Pass the popcorn, will you, the Pres is at it again.
When a President of the United States wants to do something without involving either the people or Congress, other than by informing them that the deed is done, he makes use of what are called "Executive Orders". Mr Clinton is fond of such Orders, and makes use of them frequently. But while Mr Clinton often issues Executive Orders, they do NOT always come complete with the emphasised phrase quoted in this one. Mr Clinton has declared a "national emergency" - which gives him the power (should he choose to accept it) to do literally ANYTHING, regardless of any provisions extant in either the Constitution or the law of the land. This does not mean that Mr Clinton WILL make use of these extraordinary powers, it simply means that he CAN.
The issue which provides the reason for this Executive Order has, according to Mr Clinton's own explanation, been simmering since May 5, When the Minister of Atomic Energy of the Russian Federation informed his U.S. counterpart (Mr. Richardson) that Russia would no longer be shipping "highly enriched uranium" to the U.S. under what is known as the HEU Agreement. This agreement, extant since 1993, provides for the Russian Federation to ship "highly enriched uranium" - HEU (found in atomic warheads) to the U.S. for conversion into low enriched uranium - LEU, suitable for commercial nuclear reactors and the generation of electricity.
We are not going to go into details here - the links above provide full details. We simply point out that Mr Clinton has decided to invoke an Executive Order and declare a NATIONAL EMERGENCY in response to an issue that has been on his table for the past SIX WEEKS.
Last week, we rhetorically asked why we were taking a rehashed report from a Fed economist seriously. This week, we have a Presidential declaration of a NATIONAL EMERGENCY. We cannot see how anyone, inside or outside the U.S., could NOT take it seriously. We repeat: "Mr Clinton has declared a "national emergency" - which gives him the power (should he choose to accept it) to do literally ANYTHING, regardless of any provisions extant in either the Constitution or the law of the land. This does not mean that Mr Clinton WILL make use of these extraordinary powers, it simply means that he CAN."
Last week, a trial balloon was sent aloft regarding concerted Central Bank Gold selling. Any credible plan for concerted Central Bank Gold selling is a non-starter without the co-operation of the Europeans, who hold more Official Gold than the U.S. does. This week, The President of the United States has declared a National Emergency in regard to Russia, a nation on the periphery of Europe which very much wants to become part of what is slowly becoming a United Europe.
In this regard (and as Privateer subscibers already know), Mr Clinton recently shocked the European Union (EU) by actually offering Russian President Putin membership in the EU - a boon which it was not within his power to grant. Now, he has invoked a National Emergency in regard to that same nation, under a situation which was already known about when he made that offer to Mr Putin.
A very large political fissure, as yet invisible, must have opened. Suffice it to say here that the Captain and Crew of The Privateer are keeping a VERY close watch on this situation. We have expanded this analysis for subscribers on our Subscribers pages (username/password required).
The final battle was and is always going to be between the Dollar and Gold. We think Mr Clinton has just raised the stakes - dramatically.