WHEN IRISH EYES ARE
At 8:00 p.m. Eastern Standard Time on December 11, 1979 the
Honourable John Crosbie, the newly minted Finance Minister in Prime Minister Joe
Clark’s minority Progressive Conservative government of Canada, rose from his seat in
the House of Commons in Ottawa to give his first (and last) budget speech.
The Conservatives had just come to power in May when the Liberal
government under Prime Minister Pierre Elliott Trudeau was forced to call an election
because its five-year mandate was nearly up. The Liberals had been in power since
1968 and the country (especially western Canada) had had belly full of them (and
him). Trudeau (like the U.S.S.R. at the time) was a mystery, wrapped in an
enigma. A lawyer, he was intellectual, aloof, and arrogant. It took another
Quebecer, Rene Levesque, the Premier of Quebec, to describe him best…. “As for
P.E.T., how can one define the indefinable? He was extremely cultivated, certainly,
but almost exclusively only in matters of jurisprudence and politics. I had the
impression that, except for show, the additional baggage he had accumulated from studies
in the humanities left him supremely indifferent, like seed fallen on rock.”…Rene
Levesque/Memoirs, McClelland and Stewart, 1986…Page 150.
The Conservative government picked up the reigns of power and tried
to govern as if they had a majority government instead of something less that the Canadian
voter had given them. John Crosbie was appointed Finance Minister and tried to
salvage the mess left behind after more than a decade of Liberal mismanagement.
Without question, John Crosbie was one of the most well liked and
well-respected parliamentarians that ever served this country, at least in my
lifetime. A sharp mind, a sharp tongue...and never lost for words or the turn of a
phrase, he was not what you would call in today’s vernacular… “politically
correct”. But he was totally dedicated to serving the people of Newfoundland
and Labrador in particular…and the people of Canada in general. And he was an
honest man to boot. How could one ask for any more from their political
representative than that?
The Honourable member for St. John’s West (Newfoundland &
Labrador) was never one to mince words or suffer fools gladly. The “hoary
parliamentary tradition that the Minister of Finance must buy and wear a new pair of shoes
when he presents his Budget Speech” went out the window. John showed up in the
Commons “in a new pair of grey and black sealskin mukluks made by an aboriginal woman
in Happy Valley-Goose Bay, Labrador. I thought it would add a bit of interest
to the occasion if I wore something other than the conventional black wing tips.
Besides, the mukluks demonstrated support for the seal hunt and for
Newfoundland.”…No Holds Barred/My Life in Politics, John C. Crosbie,
McClelland & Stewart, 1997…Page 178.
This was the first time that the sale of Canada’s gold was ever
mentioned in a budget speech. At the bottom of page eight in his speech, Mr. Crosbie
had this to say: “At this point I wish to make an announcement with respect to
Canada’s gold holdings. The great rise in the price of gold in the last three
years, at a time when the other components of our official international reserves have
been declining, has led to a substantial shift in the composition of our reserves
portfolio. At the current market price, the 22 million ounces of gold held by
the Exchange Fund now constitutes almost 75% of our reserves. This is a far higher
proportion than we have held in the past. It is also higher than the proportion now
held by other industrial countries, with the exception of the United States, which holds
only small amounts of foreign currencies. From the standpoint of the efficient
management of our reserve assets, I think it would be more appropriate if this proportion
were reduced somewhat. This would provide a more balanced portfolio and allow us to
invest more funds in interest-earning assets. Accordingly, I plan to sell up to one
million ounces of gold in the relatively near future if the market for gold continues to
be firm. Part of this may be purchase by the Mint in connection with its “Maple
Leaf” program. The balance will be sold in the market.”
John’s plan to sell some of Canada’s gold never came to
fruition. The Conservative government fell when the budget went down to defeat just
two days later. In the next election on February 18, 1980, Trudeau and Liberals were
returned to power with a majority government, and Trudeau’s “Welcome to the
1980’s” speech infuriated Progressive Conservatives from one end of the
country to the other.
But it would take another leader, Brian Mulroney, as head of the
Progressive Conservatives party to finally bury the Liberals once and for all…four
years later…and the real story of Canada’s gold begins there.
Back in 1980, when John Crosbie gave this speech, and when gold and
silver were in their final speculative blow-off phase, the Hunt Brothers tried to corner
the silver market, and got their heads handed to them when the NYMEX/COMEX changed the
rules. I was part of the speculative fury that was trying to cash in on high silver
prices at the time. I think I made about $3,000, which was a lot of money back in
those days. I had no interest in politics, and little interest in either gold or
silver, for that matter. But I do remember there being a furor in parliament during
the Mulroney years about Canada selling its gold reserves.
When I was a small child, I had been introduced to gold and silver
coins by my Grandfather, who, from time to time, would show me his small collection that
he’d accumulated during WWI, while he fought in France and Belgium. He sold it
long before he died, and (except for 1980) my interest in precious metals, or the specie
that sprang from them, came to an end.
In 1999 however, I discovered that my interest in gold and silver had
not died, but had only been laying in wait to strike again when the time was right.
It occurred when my stockbroker faxed me a copy of John Hathaway’s famous essay
For at least a year prior, my broker had been trying to talk me out
of buying mutual funds, or any stocks of any kind, because he felt that the market was
terribly overvalued, and that bad things were about to happen. So I asked him what
he would recommend in the place of buying tech stocks, and he sent me “The
Essay”…and the rest, as they say, is history.
From a technical standpoint, I had virtually no understanding of what
Hathaway was saying. But in the broad strokes, it was abundantly clear that bullion
banks (whatever or whoever they were) were never going to pay back their gold loans made
to them by the Central Banks. This looked liked an investment opportunity
extraordinaire. At that time, I had no idea of the vast conspiracy by the central
banks, governments, and other powerful organizations that had lined themselves up against
that “ancient metal of Kings”.
Being of the old school, the computer age arrived late in our
household, and our IBM Aptiva had been set up in the basement family room for about six
months prior to “The Essay” arriving on the scene. Kids being what they
are nowadays were doing their thing with it, while Dad watched with deep suspicion from
But with the Gold Bug biting hard, it was only a matter of time
before I had mastered some of the rudimentary skills of surfing the net. What I
found was revolutionary. There was a whole world out there full of the most
incredible knowledge sources available. The term “World Wide Web” is
exactly correct, and it didn’t take me long to put this knowledge to good use.
I was always a news junkie, and knowledge that I didn’t know
existed was everywhere for the taking, either for free, or very close to it. It was
heaven. Since then, I’ve cancelled all my magazines, business newspapers and
the like. What mankind needs to know to survive, comprehend, and prosper is on the
By January 2000 I had sent my first donation off to an organization
called GATA (http://www.gata.org/) that was attempting
to expose the rigging of the gold market by what is now known as “the gold
cartel”. I’ve now been a member for almost three years, and my knowledge
of how the world works and who runs it, has totally changed. I’ve learned more
on the Internet in three years than I have in the rest of my life combined.
As I’ve followed along in the footsteps of some of the giants of
the financial world, I have, from time to time (and only recently), put forth my own views
on what I see happening. I’m a voracious reader. I consume vast
amounts of material from many different web sites on a daily and weekly basis. And
it was reading one article in particular, that got me started on the search for what
happened to Canada’s huge gold reserves.
As luck would have it, the essay showed up on http://www.lemetropolecafe.com/. The
essay was entitled “How the Soviet Empire’s Fall was Engineered”.
It was written by Dana Allen, President of American Media Revolution… www.NewsRevolt.com on August 17, 2001. Let me
quote one of the key paragraphs… “Remember the 2nd prong in bankrupting the
Soviets, reducing their Foreign Exchange income? The first step on that was to determine
where the Soviets income mostly 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
Before progressing further with this essay of mine, you must
read Dana Allen’s entire essay, which is hyperlinked here. I have
no doubt as to the veracity of this work, as it was written from personal
experience. This is not hearsay…he was there. It might also be
useful to print a hard copy, as you will find yourself referring back to it as my essay
So the C.I.A went all over the world and engineered a fall in the
price of oil. I can believe that. George Bush Sr., Reagan’s handpicked Vice
Presidential running mate, was Director of the C.I.A. from 1976 to 1980, so Ron
didn’t have to go far to find someone qualified for that kind of work.
They also managed to manipulate the price of gold. Knowing what
I know now, that works for me too. But where did they get the gold to sell? It
would take huge sales over an extended period of time to bring about the desired
results. The effort between gold and oil was obviously co-ordinated at the highest
levels. Gold sales could have come from more than one country or central bank,
however my first thought was Canada’s gold…but was there any proof?
I made a list of information that I would have to get if I was going
to be able to even come remotely close to linking Canada’s gold sales to “The
Fall of the Soviet Empire”. Remember that when I started this essay (more than
a year ago) I was not sure that there was any proof, or that any evidence would still be
available. So, starting in the fall of 2001, I went to work.
The list included the following key facts:
chronology of world events (involving the Soviet Union) from Ronald Reagan’s election
as President, right up to where the Berlin Wall fell...or maybe even later.
price of oil from 1980 to 2000
price of gold from 1980 to 2000
gold inventory from 1980 to 2000
chain of events that started Canada down the road to selling it’s gold.
Item one was a lot of work. Thank heavens for search
engines. Thanks to Adam Hamilton at www.zealllc.com
items two and three were a snap. The good folks in the public relations department
at the Bank of Canada in Ottawa www.bankofcanada.ca
were more than delighted to provide me with the answer to item four.
Then there was item five.
I was kind of hoping that the friendly folks at the Bank of Canada
were going to have the answers to #5 for me as well, but that was not to be. Any
questions of this nature had to be directed to The Department of Finance of the Federal
Two e-mail enquiries spaced over two weeks only received the
obligatory automatic answer that “they would look into the matter and contact
me”. After a month of hearing nothing, I picked up the phone and called
them. Yes, they had received my e-mails and were investigating, but it had been such
a long time ago that they didn’t have any records available that went that far
back. That was a pretty good answer, and there was probably a lot of truth in
it. Another month went by.
The second time I called, and after talking to the public relations
department again, I ended up talking to a person in foreign exchange who said that the
Department of Finance did not need any authorization from the government to sell gold, as
it was just another part of Canada’s reserve assets.
I was then transferred to someone in “risk management” who
said they would get back to me.
It took more than three months of constant prodding, ten different
people, and four different departments, to find out that the first record of any gold
sales by the government was on page eight of John Crosbie’s budget speech in
1980. They could not provide a copy of that speech, but suggested that my local
library here in Edmonton might have one.
But in the dying seconds of that last phone conversation with the
“risk management” department, the person I was speaking to dropped a
bombshell! We had spoken twice before, and he was a real decent and honourable
fellow. This is what I remember him saying; “Well Ed, you may not be
happy with the answer you got, but I can tell you that your enquiries regarding what
happened to Canada’s gold, set off alarm bells all over the Department of
Finance. There are two things that this department is extremely sensitive about, and
that is one of them.” If he hadn’t said that, this article would never
have been written.
From that point on, I knew I was on to something. I was also
curious as to what the “other thing” was that the Finance Department was so
touchy about. I’ll probably never know, but it’s painfully obvious that
they’ve got another skeleton in their closet somewhere that they don’t want the
rest of the world (or the Canadian tax payers) to know anything about.
The fine staff at the Edmonton Public Library were even more
astonished than I was, that they had a copy of the speech. The next day it was in my
hands, and true to their word, right at the bottom of page eight were the magic
words. The golden trail that started with John Crosbie would end there. I knew
that former Prime Minister Trudeau (who defeated the Clark government after John
Crosbie’s budget) was never a fan of the United States at the best of times.
Giving away Canada’s gold would not be something that he would he would consider even
briefly, no matter what the cause.
But Brian Mulroney, the man who replaced Joe Clark as the new leader
of the Progressive Conservative Party, and who became the Prime Minister of Canada on
September 17, 1984 was a horse of an entirely different colour.
Before becoming a politician, Mulroney started life as a lawyer, and
was President of the Iron Ore Company of Canada when he first ran for the leadership of
the Progressive Conservative party. After many years of Trudeau, Mulroney was a
pleasant change for all Canadians, including myself. Within the Conservative
government, Mulroney worked hard to be a good leader, and for the most part he was.
But when he failed at it, it was more to do with the kind of people who associated with
him and worked in the Prime Minister’s Office that caused him the most
problems. The liberal press did not help him or his party either. Where they
would forgive Trudeau, they were all over Mulroney and the Tories like a cheap suit.
Into his second term as Prime Minister it was obvious that his popularity was coming to an
Mulroney, like Trudeau, was an enigma. Trudeau was a brooding
intellectual…not afraid to speak his mind, and would take anyone on…and never
lose. Mulroney was smooth, a charmer, a glad hander…too clever by
half…wanted to be liked. John Crosbie, on page 232 of his book says this about
Mulroney… “Many Progressive Conservatives---most of them, probably---had
serious misgivings about Brian Mulroney. We’d heard all the stories.
We’d see the way he’d used drifters and homeless people to pack
delegate-selection meetings, and we’d noted (unhappily) all the fawning cronies who
hung around him, flattering him, waiting for scraps from the banquet tables of the
“I’d known Brian years earlier, when I was in the
Newfoundland cabinet and he was president of the Iron Ore Company of Canada. He
would come to Newfoundland fairly regularly to deal with our government. He
wasn’t my type---too smooth, too suave, too much the mover and shaker. He
wasn’t someone I would naturally cotton to, and I was on guard whenever I met
him. I didn’t trust him. I didn’t support him when he ran for the
leadership the first time in 1976. The people around him struck me as
“fixer” types, and there’s not much those types won’t stoop to if they
think it’s to their advantage.”
As I said before, Mulroney and his Tories had their share of
problems, which was not helped by the press. They were there to make sure that any
open wound was constantly picked at, and never allowed to heal. This wore on him and
his government after a while.
John Crosbie continues his comments on Mulroney: “Then
there’s the fact that Mulroney started out as a working man’s son and he
obviously came to enjoy the good life. He liked good clothes, good food, and having
multi-millionaire friends. Mila, his wife, liked these things too, and she loved
shopping. So what!”
Crosbie, of course, was absolutely right. We Canadians, living
next door to the ultra-rich Americans have the world’s largest inferiority
complex…penis envy on a national scale.
As Crosbie says…the Mulroney’s “were friendly and
decent people with a lovely family. Their three children were magnificent, well
brought up and well mannered. But the public couldn’t see all this. They
got a very different impression from the media.”
But, like all of us (including this writer), Brian had his
faults. To start with, he was not a forgiving type; and in the first few years of
his term, “his problems stemmed from the fact that the traditional British-style,
decentralized cabinet government that Canada practices, did not coincide with the American
style of centralized “executive government” favoured by Mulroney and practiced
(zealously) by his cohorts in the Prime Minister’s Office. They believed that
all power flowed from the centre, from the office of the prime minister, and that the PMO
could (and should) be directly involved in all activities of the government, with (or
without) reference to the minister responsible. They regarded cabinet ministers as
impotent appendages.”…John Crosbie “No Holds Barred” Page 249.
The people surround Brian Mulroney were “control
freaks”. “The staff of the PMO treated the staffs of ordinary ministers as
aristocrats used to treat servants---they were there, but they weren’t there.
The PMO people were arrogant, heavy-handed, seldom thoughtful, and not particularly
insightful.”…Crosbie adds, Page 255.
Being a loyal member of the Progressive Conservative party myself, I
have met both Joe Clark and Brian Mulroney. I’d been to a couple of big
fund-raising dinners for Brian when he was in Edmonton…still have the
invitations…plus the Christmas cards that Brian and Mila (and Joe and Maureen Clark)
sent out every year.
From personal experience, I would have to agree with Mr.
Crosbie’s comments on Brian Mulroney when they first met in Newfoundland when Brian
was still running the Iron Ore Company of Canada. But Mulroney was a very personable
guy, and really wanted people to like him. He loved power, and he loved the
limelight. I won’t fault the guy for that.
You may wonder why I’m giving you all this information about
Canadian Prime Ministers from 1979 to 1988. Well, I’m trying to set the stage
for something. It’s important that you know a fair amount about former Prime
Minister Mulroney before I lay out the evidence I have collected. Canadians now hate
this man with a passion. A great deal of this is totally undeserved, but
history has already judged him, and found him guilty as charged. Too bad…he
deserved better than that.
With the stage set, and your printed copy of “How the
Soviet Empire’s Fall was Engineered” beside you, let’s rewind the
clock back to March 1985.
What happened in March of 1985? There was a conference in
Quebec City between our newly minted Prime Minister and President Ronald
Reagan. Here’s what John Crosbie had to say about it on page 307 of his
book; “I don’t know when Mulroney came to embrace free trade, but his support
for the concept was revealed at his so-called Shamrock Summit with President Ronald
Reagan in March 1985 in Quebec City, where the two leaders declared they would seek
“a more secure climate for our mutual trade.” We’d been in office for
six months by then, and there had been no discussion in cabinet or in the Conservative
caucus about pursuing a free-trade deal with the Americans. As far as any of us
knew, Mulroney was still opposed to free trade, as he was during the 1983 Tory leadership
That’s John’s version. Here’s another written by
John Lawrence of Southam News in 1999, fourteen years after the fact. Like I said
before, search engines are the most wonderful things.
“The Praises of Mulroney - Memos just
released by the White House show the election of Mulroney marked a big change in relations
between the two countries. The Reagan administration was delighted with Brian
Mulroney when he was Prime Minister of Canada, describing him as “ideologically on
our wave length”, and said that he should be thrown a bone or two to ensure he
didn’t look like a “lackey” on his own turf.
Mr. Mulroney’s highly co-operative approach on trade and
investment, military spending, and American foreign policy led Tyrus Cobb, a top Canada
desk official at the National Security Council in Washington to write in 1985: “we
have what amounts to a revolution in U.S.-Canadian affairs.”
George Shultz, then Secretary of State, called it “a potential
The memos were among White House documents released under the U.S.
Freedom of Information Act, eight years (emphasis is mine)
after the request was made. They cover relations between Mr. Mulroney, Prime
Minister from 1984 to 1993, and Ronald Reagan, President from 1981 to 1989.
The documents confirm that, in American eyes, Canada’s move from
Pierre Trudeau to Mr. Mulroney was a change from the “worst of time to the best of
An internal Security Council study prepared for Mr. Reagan said that
Mr. Trudeau’s protectionist policies “led to a massive capital flight out of
Canada”. The same study accused Mr. Trudeau of overseeing “16 years of
neglect of Canada’s military structure”. As a result, Mr. Trudeau
“sharply reduced Canada’s ability to play a security role commensurate with its
In minutes of a high-level meeting, Secretary of State Shultz
described Mr. Trudeau as “particularly obstinate on North-South matters.”
Memos decry his penchant for trying to play the role of “interpreter” between
the Soviets and the U.S.
Many of the documents cover American preparations for the 1985 Quebec
City meeting between Mr. Reagan and Mr. Mulroney, dubbed the Shamrock Summit.
A declaration of intent on liberalized trade was agreed to
even before the summit took place. “The declaration on trade came
together nicely and represents a major victory for the United States,” wrote Mr.
Bill Brock, U.S. trade ambassador, expressed similar enthusiasm,
telling Mr. Reagan at a cabinet session that the trade declaration was “an
exceptional agreement” from the U.S. standpoint.
The Americans agonized about giving Mr. Mulroney something in return
so that he would look good on his home turf. The matter is raised repeatedly in the
memoranda, particularly in respect to the issue of acid rain.
“It is imperative that we demonstrate sufficient flexibility in
Quebec on this issue to permit Mr. Mulroney to claim that he can influence our
actions,” reads a memo to Robin McFarlane, National Security Council director.
“Unless we can make some accommodations, Mulroney will be seriously embarrassed,
public reaction in Canada will likely focus disproportionately on his failure, and his
ability to deliver in the future on other issues of concern to us will be damaged.”
At the same time as they recognized that Mr. Mulroney did not want to
be seen “as a ‘lackey’ of Washington,” the Americans were not exactly
prepared to trade favours. “We will also wish to disabuse the Canadians of any
expectations that recent policy changes which accommodate U.S. interest necessarily entail
corresponding reciprocity from our side,” read the National Security Council study.
At Quebec City, the two sides appointed special envoys to study the
acid rain problem. The Americans saw this as being enough to mollify Ottawa at that
time. Mr. Reagan wasn’t convinced acid rain was a problem. At a National
Security Council meeting he pointed out “we haven’t had air as clean as we now
have for decades.”
The correspondence suggests that the two overriding priorities of the
Americans were to drive Canada towards open markets and to push it towards a much larger
military and defense role.
At a meeting on February 19, 1985, Richard Darman, deputy treasury
secretary at the time, told Mr. Reagan “he should attempt to move the Canadians even
further towards a market economy.”
The National Security Council internal report recommends, “the
president may wish to put forward our view that a Canadian economy completely free and
open to outside investors is a major avenue available for improving Canada’s economic
The Americans were delighted with Mr. Mulroney’s accommodations
on military matters. They saluted him for increasing military spending and his
“courageous” effort in supporting, unlike other NATO allies, some aspects of Mr.
Regan’s Strategic Defence Initiative, or “Star Wars” program.
Minutes of a National Security Council meeting record that Mr. Reagan
pointed out that “the Prime Minister recently announced a significant increase in
Canada’s troop commitment to Europe---something on the order of 1,200 additional
troops. This is the sort of positive direction we want to encourage with
Canada. For that reason he (Reagan) indicated he was not inclined to lean too
heavily on the Prime Minister in areas where they were not as forthcoming as we would
wish, such as investment and energy.”
During the Quebec City summit, Mr. Mulroney called Mr. Reagan down on
stage for their celebrated rendition of “When Irish Eyes are Smiling”.
Briefing papers for Mr. Reagan didn’t specify the singsong would take place, but
advised him to prepare for something. “In the last act, you and Mulroney will
appear on stage with performers, so you might want to practice your ‘buck and
Mr. Mulroney had come to power only seven months prior to the
Shamrock Summit. As is indicated in a memo from Mr. McFarlane to Mr. Reagan on the
eve of the summit, the turnaround in relations was not only sudden, but also
“Your trip should open a new chapter in Canadian-American
relations, building on your excellent personal relationship with the Prime Minister.
Mulroney has increasingly taken a pro-U.S. stance in foreign affairs and has been more
forthcoming on many bilateral issues. The result has been the establishment of a
greater degree of harmony in our ties that ever existed before.”
Please take particular note of that last paragraph. I remember
the Quebec Conference (immediately dubbed “The Shamrock Summit”)
like it was yesterday, as I knew at the time, that it redefined our nation’s future
from what it had been under Prime Minister Trudeau, to what I thought it should be; and
our new Conservative Prime Minister was leading the way.
It may not have happened during the conference, but the groundwork
had been laid to bring Canada’s gold onto the world stage to play its part in the
downfall of the Soviet Union.
In earlier commentary it had been noted, “A declaration of
intent to liberalize trade was agreed to even before the summit book
place.” So it was either at the conference, or very shortly thereafter…and
it’s even remotely possibly that it could have happened before the
conference…the plan to bring down the Soviet Union was presented to
Mulroney. I’m only guessing at the details, but I’m sure that he
spent a fair amount of time discussing this with both Ronald Reagan and Margaret Thatcher.
At that juncture, I’m sure that the sale of Canada’s gold
would have been something that would have given Mulroney pause at the outset, especially
if it had to be done without explaining the real reason to Canada (and the world) why
Canada was selling it. These were probably the parliamentary arguments that I
remember hearing back in the 1980’s when all this transpired.
But the thought of being a major player on the international stage in
bringing down that “evil empire”…the Soviet Union, was too much to pass up
for the “boy from Baie-Comeau, Quebec”…Brian’s home town. And
even though his (and Canada’s) contribution could not be made public, “the
powers that be” in the world would be more than happy to pat him on the back and hand
out a few “attaboys” along the way.
How could he refuse? It fit his character like a hand in a
glove. The U.S. certainly knew their man. No wonder they were
“delighted” with Brian Mulroney.
But in all fairness, if it had been me in the same position, or
anyone else for that matter, would we have acted differently? Probably not. If
President Ronald Reagan (or Prime Minister Margaret Thatcher) were talking to me on the
phone or in person, or if President Reagan were to put his hand on my shoulder and say,
“Ed…Margaret and I, plus a few others in this world…including the Vatican,
have hatched this plan to bring down the Soviet Union and destroy communism forever, and
we need your help”…what would my probable response be? “You
bet…what do you need?”
That this happened between Reagan, Thatcher and Mulroney is pure
conjecture on my part. I do not have a shred of evidence that these conversations
ever happened. But I highly suspect it.
Besides Dana Allen’s essay, here are the facts that I do
have. The graph below shows three things. The black line is the price of oil
from 1980 to 2000 inclusive, and is slaved to the right axis. The gold price (in
yellow) and Canada’s gold inventory in metric tonnes (in blue), are slaved to the
As you can see, in 1980 the price of oil was well north of $30,
gold around $670, and Canada was sitting on 660 tonnes of gold.
There are eleven numbers on the graph; each coincides with an
important event in history, as it has to do with Soviet/American relations.
They are as follows:
23, 1983 Ronald Reagan introduces the “Strategic Defence Initiative”, now
commonly known as “Star Wars”.
17, 1985 Ronald Reagan and Brian Mulroney meet at the Quebec Conference, now called
the “Shamrock Summit”.
19, 1985 Ronald Reagan and Mikhail Gorbachev meet at the Geneva Summit.
11, 1986 Reagan and Gorbachev meet in Reykjavik, Iceland. Reagan says
“nyet” and walks! The world is stunned.
8, 1987 This is the Washington Summit where Reagan/Gorbachev sign the INF
(Intermediate Nuclear Force) Treaty.
29, 1988 Reagan and Gorbachev meet at the Moscow Summit
9, 1989 The Berlin Wall falls
19, 1991 Attempted coup d’etat against Gorbachev
21, 1991 The Soviet Union ceases to exist
10) October 4, 1993 The
assault on the Russian “Whitehouse”. Russian troops put down a revolt
11) December 1, 1994 The
Russian army invades Chechnya
What can we deduce from this graph? The two most obvious ones
are that the price of oil and Canada’s gold inventory head south at the end of 1985,
early 1986…especially the price of oil. The oil price cratered at virtually the
same time as the Geneva Summit. If someone wishes to check out the summit date vs.
the day oil price plunged, I would love to know. The timing appears to be beyond
The price of oil declined to just over $10/barrel, and except for the
Gulf War, was rarely over $20/barrel until the middle of 1996…a ten-year
stretch. Don’t forget, that from 1980 to 1986, oil averaged well over
$30/barrel, and was heading north of $30 again, until someone pulled the plug in late
Canada’s gold sales continued to accelerate, and by the end of
1987, began to have an effect. At that point, gold had reached a price of about
$500/ounce and then started a steady five year decline that ended at the start of 1993 at
a price of somewhere under $350/ounce.
From that point, gold rose quickly to almost $400/ounce, and stayed
there until Robert Rubin showed up in Washington (with Lawrence Summer’s “Gibson’s Paradox”
in his briefcase), and was sworn in as the 70th Secretary of the Treasury
on January 10, 1995.
Oil prices continued to decline until the beginning of 1994, and rose
But the damage had been done. From an oil price averaging over
$30/barrel in the six years prior to the Geneva Summit, to an average oil price of about
$18/barrel in the ten years following that; was a huge drop. And for a cash-strapped
country that counted on oil and gold for its hard currency…in a race against
President Ronald Reagan’s “Star Wars” program…it proved fatal.
The gold price is a little harder to read then oil. But if you
look at late 1984 as a bottom for both oil and gold, it is plain to see that the recovery
in oil prices was aborted in late 1985, followed by gold in late 1987, as the trend lines
were obviously up at the time.
The co-relation of oil to gold has a long history of fact. Adam
Hamilton at his web site of www.zealllc.com has many
examples of this relationship. His two essays regarding “Gold Boiling in Oil,
Parts I & 2” shows the
graphs and tells all.
We are all keenly aware how this relationship has fallen apart in the
last number of years. But until now, there has been no explanation as to why this
relationship fell apart starting at the end of 1985. I believe that I may have a
large part of the answer here.
After the “crash” in oil prices at the end of 1985, the
gold and oil re-establish the gold/oil relationship, but with the oil price at a large
fraction less than where it was prior to that. Then from the later part of 1988 to
late 1996, there is virtually no relationship at all.
So was this “How the Soviet Empire’s Fall was Engineered”?
Remember it was John Browne, Prime Minister Margaret Thatcher’s Foreign Policy
Advisor who was giving this speech to a very select group where Dana Allen, the President
of America Media Revolution (www.NewsRevolt.com)
was present. And as Dana said… “The conclusion of the speech was
that it worked, and the Soviets ran out of money and fell.”
It should be remembered that throughout the entire chain of events
starting with the Geneva Summit in November 1985, Ronald Reagan’s presidency ended on
January 20, 1989 when Vice President (and ex CIA Director) George W. Bush Sr. became
president, and after him, Bill Clinton became president on January 20, 1993. All
during this time the price of oil averaged well under $20/barrel and Canada’s gold
inventory kept declining.
Here in Canada, the Conservative Party had changed leaders. On
June 25, 1993, Kim Campbell took over as leader of the P.C. party, and she and the
Conservatives were virtually annihilated in the following Federal election that brought
the Liberals (under Prime Minister Jean Chrétien) to power on November 4, 1993.
Both Canada’s heavy selling of its gold, and world oil price declines ended in 1994.
So there you have it. Who am I to argue with John
Browne…or Dana Allen? The “powers that be” that run this world used
oil and gold as a weapon against the former Soviet Union. I wonder if the oil
producers and gold miners of the world had any idea that their products were being used as
To this day, the price of oil and gold are still being controlled and
used as weapons of both domestic and foreign policy. Robert Rubin and Larry Summers
have seen to the gold price in support of Clinton’s “strong dollar” policy,
to hide domestic inflation at home, and to mask the upcoming collapse of the world’s
fiat-based currency system. Both times in the last couple of years that Saddam
Hussein has stopped shipping crude oil, the price has crashed. Check out Adam
Crude” for more details. This manipulation of the oil price under these
circumstances was a clear warning to Saddam and others who might try to use oil as a
weapon that this sort of behavior would blow up in their faces.
American forces going into Afghanistan after 9/11 had a lot to do
with oil…especially pipeline rights-of-way. For the moment, this didn’t
work out as well as they had hoped, so they have now concocted a new “enemy of the
state” in Saddam Hussein and Iraq. See my “War Drums”
essay for further details on that.
What we are looking at are “the powers that be” backed by
British and American (and Israeli) military might, pushing for control of the world’s
oil supply to the detriment of the people who already have legal title to it. It is
raw, naked power…ruthlessly projected. The United Nations Security Council has
just approved the plan, which means that this whole farce is now turning out to be little
more than ‘legalized’
stealing. Public opinion be damned.
We were all wondering about America’s lack of a coherent energy
policy…well, this is probably it…along with whatever plans they have for Kuwait
and Saudi Arabia…and then Iran.
It looks like George Bush and Dick Cheney have been brushing up on
Samuel P. Hungtington’s epic work “The Clash of Civilizations”
and have their action plan ready to go. After the events of 9/11…which a lot of
people feel was allowed to
happen…it didn’t take long for the drama to begin unfolding, and they are
now taking the fight right into front yard of the Islamic countries.
G. Edward Griffin in his epic work “The Creature From Jekyll Island”
describes in minute detail the “aggravate, insulate, facilitate” mechanism that
“the powers that be” have used in the past with respect to both the sinking of
the Lusitania that brought
the United States into WWI, and how they placed Japan in the untenable position where they
were forced to attack America at Pearl
Harbor…and it looks like they’ve used this mechanism again to build support
for the war on Islam.
I wonder if this is the reason that the Golden Dinar
and Silver Dirham have suddenly popped up? Just asking.
But, I digress...
Let’s get back to Canada’s gold for a moment. Even
though sales of our gold dropped off substantially after 1994, our inventory declined
every year after that, to where it is today...around 35 tonnes at the end of September
In my conversations with the good folks at the Bank of Canada earlier
this year, they advised me that Canada does not really own this gold at all (at the time
we had about 40 tonnes). What was left of it had been leased out to various bullion
banks years ago…and yes, it is being accounted for as requested by IMF accounting
rules regarding leased gold. Canada’s gold cupboard is bare…not a 400 oz.
good delivery bar in sight.
So, even with a change of government from the Conservatives to the
Liberals under Prime Minister Jean Chrétien, who came to power on November 4, 1993, the
Finance Department (and the Bank of Canada) have continued to sell off what little
remained of Canada’s gold reserves.
Former Prime Minister Brian Mulroney wasn’t looking for work for
very long. His political career came to an end in June of 1993 when the ill-fated
Kim Campbell took over as Prime Minister and leader of the Progressive
Conservatives. Very shortly thereafter, Brian was appointed to the board of Barrick
Gold. He is currently Chairman of the prestigious International Advisory Board.
The people who have come and gone on this advisory board are a real
“who’s who” of the political and financial world. To find out who is
(and has) been on the board for the last five years, check out their archives of annual
financial statements at www.barrick.com. Some
of the names are pretty well know to me, and some aren’t. I would suspect that
other readers of this essay would easily identify the names I don’t recognize.
As a “for instance”…former President George Bush (Sr.)
was appointed to Barrick’s board as “Honourary Senior Advisor” on
May 3, 1995. He held this position until sometime in 1997. Another person
appointed to Barrick’s board on that day was Bill Clinton’s personal
lawyer…Vernon Jordan. He’s still there.
As another interesting coincidence in this golden odyssey, it’s
my understanding that Barrick’s
favorite derivatives partner is that rock solid financial
institution, J.P. Morgan. Their offices in Toronto are five floors below
Barrick’s in the south tower of the Royal Bank Plaza.
The story of the price of oil and gold as related by Mr. Browne in
Dana Allen’s story certainly is enlightening. From the Geneva Summit to the
invasion of Chechnya, it is an incredible tale of international intrigue and financial
If Canada’s gold was instrumental, it is certainly
understandable why neither Brian Mulroney nor his finance minister, Michael Wilson, would
want to talk about it publicly. It would not have been helpful for our trading
relationship with our ‘Soviet comrades’, if either of these esteemed gentlemen
had risen in the House of Commons and announced that Canada was selling its gold in an
internationally co-ordinated effort to bring an end to communist regime in the U.S.S.R.
I wonder if this is the other “skeleton” in the Finance
Department’s closet. I thought it was bad enough when Reg Howe pointed out the skeleton in the new Bush
administration’s closet, but there’s a chance that we here in Canada have a
golden skeleton of our own.
Is there any truth to any of this? Is Brian…and by
extension, all of Canada…a hero/heroes, for doing his/our part back then?
Depends who you ask I guess. I’m sure that the government and citizens of both
Russia and the United States would have varying opinions.
But even more importantly, does the truth pass the duck
test, and how does it make out on the smell test? Check the facts
again…mine and Dana’s.
My decision is already made. You’ll have to draw your own