GOVERNMENT TO WHICH YOU ARE ACCREDITED EITHER PARTICIPATED IN
OR WAS FULLY INFORMED AT THAT TIME OF DECISION LAST WEEKEND AT
BASLE TO TERMINATE THE MARCH 1968 AGREEMENT ON THE TWO-TIER
GOLD SYSTEM. WE HAVE SENT A CIRCULAR MESSAGE TO OTHER
LIMITED OFFICIAL USE
LIMITED OFFICIAL USE
PAGE 02 STATE 227277
DIPLOMATIC POSTS TEXT OF WHICH IS REPEATED BELOW FOR YOUR
INFORMATION AND IN YOUR DISCRETION THAT OF HOST GOVERNMENT.
QUOTE: 1. YOU MAY WISH TO INFORM APPROPRIATE FINANCIAL
OFFICIALS OF HOST GOVERNMENT -- CENTRAL BANK AND MINISTRY OF
FINANCE -- OF DECISION, IN THE LIGHT OF CHANGED CONDITIONS, TO
TERMINATE THE TWO-TIER GOLD SYSTEM ESTABLISHED IN MARCH 1968.
THIS DECISION WAS TAKEN BY THOSE CENTRAL BANKS WHICH HAD
INITIATED THE ORIGINAL COMMUNIQUE ON THIS SUBJECT TO WHICH
OTHER IMF MEMBERS HAD SINCE ADHERED.
2. THIS MEANS THAT THERE IS NO LONGER ANY INHIBITION ON
SALES OF GOLD FROM MONETARY STOCKS TO THE PRIVATE GOLD
MARKET WHEN THE PRICE THERE IS ABOVE THE MONETARY PRICE.
THE IMF ARTICLES HAVE NOT BEEN CHANGED, HOWEVER, AND
ARTICLE IV, SECTION 2 CONTINUES TO PROHIBIT GOLD PURCHASES
AT A PRICE ABOVE THE MARGIN AROUND PAR VALUES OR SALES AT A
PRICE BELOW SUCH MARGIN. PURCHASES ARE THUS CURRENTLY
PROHIBITED. THE UNITED STATES EXPECTS THE ARTICLES TO BE
OBSERVED BY CENTRAL BANKS ALTHOUGH THE FRENCH, WHO WERE
NOT PARTIES TO THE ORIGINAL 1968 COMMUNIQUE OR THE RECENT
CHANGE, HAVE QUESTIONED THE APPLICABILITY OF THIS ARTICLE
IN PRESENT CIRCUMSTANCES.
3. THE UNITED STATES HAS NOT ITSELF DECLARED IN WHAT
CIRCUMSTANCES OR MANNER IT MIGHT SELL GOLD TO THE MARKET
BUT, IN THE LIGHT OF THE NEW AGREEMENT, MAY NOW MAKE SALES
WHEN IT CONSIDERS IT DESIRABLE TO DO SO IN SUCH AMOUNTS AND
WAYS AS IT FEELS APPROPRIATE, AS MAY OTHER COUNTRIES. UNQUOTE.
KISSINGER
Source: https://www.wikileaks.org/plusd/cables/1973STATE227277_b.html
[Mrt: Hat tip to Jeff]
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