Wednesday 5 December 2012

Austrian central bank refuses to answer gold leasing questions



By: Lars Schall


-- Posted Tuesday, 4 December 2012 | Share this article | Source: GoldSeek.com


A GATA Dispatch on November 26 was headlined "Austrian Press Agency Cites GATA in Report on Possible Audit of Austria's Gold":

http://www.gata.org/node/11961.

Four days later I sent by e-mail this interview request to Christian Gutlederer, spokesman for the Austrian central bank, the Oesterreichische Nationalbank:

"Dear Mr. Gutlederer:

"My name is Lars Schall. I'm a freelance journalist for finance from Germany. I'm copying this note to Chris Powell, secretary of the U.S.-based Gold Anti-Trust Action Committee, GATA.
 "My question: would it be possible to talk with you as the person who's taking care of the press at Austria's central bank about this topic -- http://www.gata.org/node/11961 -- during next week via telephone in an English interview that would be published at GATA's Internet site?
 "All the best, Lars Schall."

The following day I wrote to Gutlederer again after I watched programming on the Russia Today television network:

"Dear Mr. Gutlederer:
"You may be interested to watch the beginning of this current 'Keiser Report' (until 6:06):
http://www.youtube.com/watch?v=1KTaka00MDU&feature=youtu.be
"Please be aware and take into consideration that Stacy Herbert and Max Keiser are informed about this inquiry of mine.
"Best regards, Lars Schall."
The following Monday saw a certain consultation of mine, after I which I again directed an e-mail to Mr. Gutlederer:

"Dear Mr. Gutlederer:

"One question that I would have for you would be: Over what time frame did the Oesterreichische Nationalbank lease some of its gold out?
"Here's the context. Based on this information -- http://www.gata.org/node/11961 -- I've asked the Canadian financial analyst and consultant to GATA, Rob Kirby, the following question:
"Since the Austrian central bank released a figure of earnings attached to a certain amount of gold leased out, could you reverse-engineer the earnings figure to find the percentage of the gold reserve leased out? The lease rates, the gold prices over the period, and the size of Austria’s alleged gold holdings can be found in official data, right? The Austrians say 16 percent is leased out, but is this correct?

"Mr. Kirby answered:

"'I understand what you are getting at – and here is my feedback:
"'Precious metals lease-rate nomenclature is [intentionally] deceptive.
"'Description: http://goldseek.com/news/2009/5-13rk/image002.jpg
"'The above diagram illustrates how lease rates really reflect the return of the bullion bank that 'arranges' the loan, not the 'return' of the lender of bullion that is depicted by GOFO.
"'So what you really want to examine to calculate the Austrian central bank claims is GOFO rates.
"'I believe I read that the Austrian central bank claims they made E300 million from leasing gold. My question now is: Over what time frame?
"'When you have the GOFO rates and the relevant time frame, you can ascertain how much gold must have been leased.'
"Although I don't expect a response from you anymore, Mr. Gutlederer, I assume that the Austrian public will ask this question as well.
"Best regards, Lars Schall."

I thought it could be helpful to show Mr. Gutlederer more of the questions I had in mind, and so I wrote him on the same day one more time:

"Dear Mr. Gutlederer:
"Here are the other questions I would have. On Wednesday we will publish them, adding most likely the statement that you have declined to make a comment, as this is the state of affairs.
"Best regards, Lars Schall.
"-- Does the OeNB do business related to option transactions in the gold market?
"-- What guarantees, if any, did the bank have for the return of its gold? What risk guidelines exist for the leasing? Who set
them up?

"-- When the claim is uncollectible, what will happen on your balance sheet and when will that be communicated to whom?
"-- How high was the average lease rate?
"-- How and why did the OeNB's gold leasing come about?
"-- Who proposed gold leasing to the bank or what gave the bank the idea for it?
"-- What did the bank think would be done with the gold it leased? Did the bank have any idea that the leasing might be undertaken for currency market intervention generally or gold price suppression particularly? If so, did the bank approve of that? What DID the bank think would be accomplished by whoever borrowed its gold?
"Are the bank's gold records, including its communications with other central banks and financial institutions, including the Bank for International Settlements, fully public? Can people inspect them? If not, why not? Why does the OeNB oppose transparency in its operations?"
Today Mr. Gutlederer finally responded to my four e-mails. He wrote:
"Dear Mr. Schall:
"Thank you for your mail. Please understand that we are not able to provide further detailed information. But we assure you that the Oesterreichische Nationalbank acts extremely responsibly with regard to its currency reserves, including the management of our gold positions.
"Best regards, Christian Gutlederer, press spokesman,
Communications Division, Oesterreichische Nationalbank."


That's too bad, as a candid account of the OeNB's gold policy might have been interesting, particularly to the people of Austria. Maybe their representatives in Parliament can press these questions.

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