Is Gold Price Manipulated? The “London Gold Pool” and how the Soviet Union was Defeated

Is Gold Price Manipulated? The “London Gold Pool” and how the Soviet Union was Defeated

September 19, 2014 By Julian D. W. Phillips         By the beginning of the 1960s, the U.S.$ 35 = 1 oz. Gold price was becoming more and more difficult to sustain. Gold demand was rising and U.S. Gold reserves were falling, both as a result of the ever increasing trade deficits which the U.S. continued to run with the rest of the world.

Shortly after President Kennedy was Inaugurated in January 1961, and to combat this situation, newly-appointed Undersecretary of the Treasury Robert Roosa suggested that the U.S. and Europe should pool their Gold resources to prevent the private market price for Gold from exceeding the mandated rate of U.S.$ 35 per ounce. Acting on this suggestion, the Central Banks of the U.S., Britain, West Germany, France, Switzerland, Italy, Belgium, the Netherlands, and Luxembourg set up the “London Gold Pool” in early 1961. One wonders why they were so cooperative with the U.S. Granted the gold that left these nations ahead of the war was still in the U.S. and slowly but surely they felt it necessary to get it back. What happened in occupied Europe was that U.S. dollars became more abundant there and a market in ‘Eurodollars’ sprang up derived in part from U.S. soldiers still in Europe. But the volumes grew more and more as the U.S. established a perpetual Trade deficit feeding the rest of the world with them. The ‘Pool’ came apart as Europe, under Charles de Gaulle, decided enough was enough and began to send the Dollars earned by Europe back to the U.S. back and exchanged these for their gold. Then they were unwilling to continue accepting U.S. Treasury Bills & Bonds in return. Under the terms of the ‘Bretton Woods Agreement’ signed in 1944, Europe was legally entitled to do this. It would appear that by the time the gold sent to the U.S. before the war had returned to Europe, the U.S. pulled the plug on exchanging gold for dollars letting the London Gold Pool fold in April 1968. But the demand for gold from Europe did not abate.


By the end of the 1960s, the U.S. once again, [see 1935 dollar devaluation against gold] faced the stark choice of eliminating their trade deficits or revaluing the Dollar downwards against Gold to reflect the actual situation. President Nixon decided to do neither. Instead, he repudiated the international obligation of the U.S. to redeem its Dollar in Gold just as President Roosevelt had repudiated the domestic obligation in 1933. On August 15, 1971, President Nixon closed the “Gold Window”.  Read More:


A more recent example of gold price manipulation is part of how the Cold War was won.  Sir John Browne, Margret Thatcher’s foreign policy advisory gave a speech at a party I attended in Palm Beach in 1999.  The speech was about how we won the Cold War.  John said the CIA manipulated the price of gold down (and Oil) to reduce the income of the USSR.    The Gold Anti Trust Association got wind of this and asked me to write a story about it, which I did.  It is reprinted below.

How the Soviet Empire’s Fall was Engineered

By: Dana Allen

August 17, 2001


In March 1999 I was privileged to hear from John Browne, Margaret Thatcher’s Foreign Policy Advisor the story of how a plan was developed to end the Soviet Empire. Before that story, some background.

I have been a Silicon Valley software executive and entrepreneur most of my career having founded Sequoia Data, the first pure Ecommerce company in 1987. Later I merged it to go public with TMS to form TMSSequoia. At the same time as an American I was concerned about news censorship in America and its effect on out country. As I investigated more stories I found out that outfits like CNN and CBS were heavily censoring stories, if they endangered their political favorites.

So I helped people like Reed Irvine at Accuracy in Media and reporters like Chris Ruddy that were fighting the news censorship. In the summer of 1998 Chris founded with my assistance and I became Chairman of NewsMax. It is now a well-known major Internet news service and has a major magazine as well. In March of 1999 we had a party in Palm Beach, Florida. A supporter, Sofia Casey, the widow of the former CIA head Bill Casey, hosted it as she wanted to introduce us to investors in that area (we were raising money). I flew in for the event of about 50 people.


Sofia was an exceptionally graceful hostess. At the party she charmed everyone with her conversation and twinkly eyes. I remember thinking that Bill Casey, whom I have never met, was lucky to have a wife like Sofia. She has since passed on this year.

Chris Ruddy with his trademark public speaking skill started it off by introduced three people. First he introduced John Browne, who as mentioned already was Margaret Thatcher’s Foreign Policy Advisor, then he introduced me as the Chairman of NewsMax and TMSSequoia, and then he introduced Former Whitehouse Chief of Staff General Alexander Haig. Sure enough I looked over and there was Al Haig. After that John Browne was given the floor to give a speech.  The topic was How the Soviet Empire was Toppled.  John is an excellent public speaker, but what made his speech possibly the most fascinating I have ever heard, is that it was so historic, intriguing and from an insider. John Browne had met with Gorbechev before Thatcher did. He then set up the first meeting between Thatcher and Gorbechev. That started the ball rolling on Russia’s new “openness” policy and Thatcher made her famous phrase “I can work with this man” after that meeting.

It is fairly well known that Ronald Reagan was a sincere Anti-Communist as was Thatcher. The depth of this was made apparent to me when I had lunch (also in 1999) with Michael Reagan, his son and Talk Radio host. Michael told me that upon Ron losing the 76 primaries to Gerald Ford that Michael had tried to comfort his dad. Ron told Michael that he did not particularly care whether he became President or not, instead his disappointment was in regard to not being able to topple Communism and in particular being able to walk out of an arms negotiation with the Secretary General of the Soviet Union after telling him “nyet”. This story from Michael Reagan dovetailed with what John Browne was to reveal in his talk.


John Browne

Browne said that after Reagan came to office ties were established with Thatcher on the common goal of ending the evil of Soviet Communism. Eventually this movement grew to include America, England and the Pope.

Independent to Browne’s talk other researchers have reported that the Pope, having grown up under the National Socialist’s of Hitler then the Soviet Communists in Poland, was naturally an Anti-Communist from his personal experience. But he had an extra motive. In 1917 there were those girls in Portugal (Fatima) that said they received messages from the Virgin Mary. The Catholic Church has given official credence to their prophecies.

What they said is less well reported than the event. They said they heard that a great evil would appear in Russia and would fight against the Church and almost win. Well about six months later the Communists did come to power in Russia and did later murdered millions in its quest to stamp out Christianity.  Another part of the prophecy was that the Pope would be shot (which he was in 1981 by the Communists) and that the Russian Communist atheists would fall. It was apparently believed by Pope John Paul II that the timing of that would likely fall in his term. It has been reported that he felt it was his mission to help make this happen. The official Vatican site for this prophecy is:

So the players and their motivation were in place. Browne said the key individuals in this were President Reagan, Bill Casey of the CIA, Thatcher, Browne and the Pope. Reagan thought differently than previous presidents and the State Department, who thought just containing and living with the Soviets was the best policy. Reagan wanted to actively topple them.

The participants on this mission came up with the following plan. Instead of a bloody war, the Soviets could be bankrupted into surrender. America would first build up our military, inducing the Soviets to try and keep up with us and thus spend more and at the same time we would figure out ways to reduce their foreign exchange income.

As part of the buildup America started the “Star Wars” defense program. Star Wars frightened the Soviets because technology wise they were inferior to the U.S. and knew it. Thus the KGB mounted a propaganda offensive to try and get the U.S. to drop it, and received assistance from many in our establishment media wittingly or not.

Next we applied pressure. For the first time land was reclaimed from Communists (in Grenada), a psychological blow. Then the U.S. backed the freedom fighters in Nicaragua and Afghanistan, which required massive spending by the Soviets to contend with. It also put them on notice that we would no longer concede countries, they had mostly gained control of.

Then just as Reagan had told his son he would in 1976, he walked out of the Iceland arms negotiations with Gorbechev. The American press at the time said it was a disaster for Reagan. The Soviets after their fall admitted it was a turning point in the battle and a brilliant move by Reagan. Of course the American Establishment Press always said an arms race could not be won, until after it was won.

The Pope applied moral pressure especially on his visit to Poland. That was a key event in changing the psychology in Eastern Europe. Great Britain assisted in diplomacy, intelligence and military spending.

Remember the 2nd prong in bankrupting the Soviets, reducing their Foreign Exchange income? The first step on that was to determine where the Soviet’s income came from. It turned out to be Oil and Gold. Then Browne said that this is where the CIA came in.  They in a very sophisticated manner went around the world and manipulated markets to drive down the price of both Oil and Gold. Remember where Oil and Gold were when Reagan took over? They were in the neighborhood of $30 a barrel and $500 an ounce. Both fell dramatically under Reagan. As Browne made this and other points, I would look across the patio and look at Mrs. Casey and Al Haig, and both would be nodding in agreement with Browne’s points.

The conclusion of the speech was that it worked, and the Soviets ran out of money and fell.

There are people who believe that the American government is today manipulating the price of gold downward for their own purposes. I do not know if this is true, however I do know they have the capability to do so, as they did it in the 1980s to bankrupt the Soviets. In that case I applaud what they did, it was in our countries best interest, it freed millions from Communist slavery and it may have saved millions of lives in future wars that were prevented.

It is encouraging to know that a huge problem, that went unsolved for 70 years, was solved when one person with the assistance of others decided for the first time to tackle it proactively. A lesson for all of us when someone says a problem is too big to tackle.

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