Misc Due Diligence and Information

The following is simply information to help you do your own due diligence as far as the reality of gold being buried where it is and being recovered as well. This is not about our dig site, but about other sites that have been successful, historical background, some political information etc.

HIROHITO'S GOLD

Explosive Japanese WW11 Secrets Revealed

 By David Guyatt

The history of the war in the Pacific is epitomized by Japanese forces engaged in work so secret that it has remained concealed, until now.

Operating under the command of a Royal prince of the Imperial household, a highly secret unit was tasked with the methodical plunder of Southeast Asia.  The project was called "Golden Lily" ‑ named after a poem written by Emperor Hirohito.  The unit plundered such profoundly large quantities of loot from China and Southeast Asia that, following the end of the war, the west determined to keep its activities secret.  A mixture of fear, greed, an impending cold war and a vast complex of international corruption sat behind this decision.

Cynically forgotten were the Allied POW's who were forced to build complex tunnel systems and other underground depositories.  One reason, perhaps, why history will record this as one of the most explosive stories of World War Two ever to be told.

American author, Sterling Seagrave, has previously received international acclaim for his penetrating investigative books: "The Soong Dynasty," and "The Marcos Dynasty."  Now, in his latest work, The Yamato Dynasty, Seagrave unveils some of the most enduring secrets of the war in the Pacific.  The revelations are certain to cause uproar in London, Washington & Tokyo and will, in all likelihood, contribute to a number of major class action lawsuits against the US & Japanese governments.

Bearing the sub‑title: "The Secret History of Japan's Imperial Family," Seagrave's book sets out to expose numerous aspects of the Japanese imperial family and their way of life that, even today, remains eclipsed from the general Japanese public.  Some of this information came from memoirs written by members of the imperial family but also includes "fragments" extracted from Emperor Hirohito's own diaries that the Imperial Household has tried to suppress.  Other information has been gathered over nearly twenty years of intense investigation.  What was learned dispels the accepted view of history, replacing it with a reality that is both shocking and absorbing for the reader.

The first myth to be exploded is the claim that the current imperial family has ruled as part of a single dynasty that has "reined unbroken since time memorial."  The facts are quite different.  The present Meiji family was installed on the throne in the mid 18th century as part of a coup rchestrated by the powerful Satsuma, Choshu, Hizen and Tosa clans.  In consolidating the coup, the plotters plundered the vast assets of the previous imperial family ‑ a fact that should not be overlooked as this story unfolds.

Nor is the word "rule" at all accurate.  As Sterling and Peggy Seagrave make clear, the ruling family of Japan has always been governed by others more powerful than themselves.  The emperor and imperial family are figureheads used to conceal from the public the real power brokers who lurk behind the "black curtain."  These are the family owned and managed businesses or Zaibatsu that include such trans‑national corporations as Mitsubishi, Mitsui and Sumitomo amongst others.

The authors say this corporate power has grown stronger, not weaker and that the "postwar financial cliques share power with nobody.  Not with the emperor, who is only a magic wand, and not with elected politicians, who are only hand‑puppets.  Financial cliques are the most powerful forces in modern Japan."  Moreover, Japan's post‑war business structure is unlike any other modern industrial society for the simple reason that organised crime are openly factored into it.  Hence the zaibatsu include not only financiers, bankers and heads of corporations, but underworld bosses" ‑ the so‑called Yakuza crime clans.

The financial elite maintain their positions of power by paying bribes.  In the same way that Japanese society is rigidly structured in certain key ways, it should come as no surprise that political bribery and large scale corruption are also disciplined art‑forms.  Political bribes are paid in "Bullets" with each shot amounting to 100 million Yen equivalent to US$800,000.  This enables the most powerful families to govern from a position of invisibility ‑ a feature that has dominated the thoughts of Japan's ruling elite throughout recent history.

The most powerful man in Japan today is virtually unknown in the west, and is only rarely mentioned at home because of his connections with international sporting events.  As head of the Seibu group, Tsutsumi Yoshiaki's power snakes out to over 100 Japanese corporations and numerous international businesses.  Yet, the authors say that Tsutsumi Yoshiaki is probably the richest man in the world with declared assets greater than those of Bill Gates before the American computer whiz‑kids bank balance hit $50 billion.  Meanwhile, Tsumtimi's undeclared assets are greater still, the authors believe.

A significant proportion of the current financial power of the zaibatsu and, indeed, that of the imperial family, has its origin in WW11.  For instance Seagrave reveals that "Most zaibatsu had participated in the looting of conquered countries and helped in running the wartime drug trade on the mainland.  An estimated $3 billion was made in the heroin trade alone…"  After the war, the vast wealth that had been ccumulated from the heroin trade and from plundering China and other Southeast Asian nations magically disappeared.  The result was that Allied military Supremo, General Douglas MacArthur accepted the position that Japan was technically bankrupt.  This minimised the amount Japan was ordered to pay in war reparations to a meagre $1 billion.  From this, Allied Prisoners of War were paid trivial amounts in recompense for the inhumanities inflicted upon them during their internment.  British POW's were paid a miserable £48 each, for example.

 As part of his duties as Supreme Commander Allied Powers, General Douglas MacArthur was ordered by Washington, to conduct a meticulous audit of the imperial family's entire wealth.  MacArthur silently demurred and, instead, instructed Hirohito's own accountants and advisers to prepare a "self‑audit listing only the emperor's domestic holdings as of late October 1945."  Hirohito's team set about their task with relish, latching on to numerous, ingenious ploys to minimise the emperor's wealth. 

The figure they eventually presented to MacArthur totalled about $100 million.  This led to the bizarre announcement by Supreme Commander Allied Powers that the emperor, after paying taxes and other 'penalties" only possessed the paltry sum of $42,000 in cash.

The reality was, as ever, quite different.  Experts who have investigated these matters now conclude that the emperor's domestic wealth, excluding art treasures, land, palaces and other items, was closer to $4 billion.  This huge sum had accumulated over many decades and represented the throne's percentage of zaibatsu company profits and shareholdings that formed the historical arrangements to keep the emperor "above" bribes.

Yet this sum was just part of an even greater hoard of wealth that was hidden at the end of the war.  In January 1944, when it became clear that the Allies would win the war, Privy Seal Kido called a meeting of Japan's leading investment bankers to advise the throne on how best to preserve the wealth of the imperial family.  The authors go on to reveal that in addition to large foreign investments and shareholdings, the emperor's large portfolio of gold, silver and platinum was "held under various covers in the vaults of banks in Switzerland, Sweden, the Vatican, Portugal, Argentina, Spain, Britain and the United States."  The bullion that could not be laundered in time was trucked to a vast underground imperial "bunker" where it was stashed in secret.  This was at Nagano, north of Tokyo, a backwater town artfully developed by Tsutsumi Yoshiaki in time for the 1998 Winter Olympics.  Tsutsumi, as head of Japan's Olympic Committee, had earlier courted Juan Antonio Samaranch, chairman of the International Olympic Committee.  This would later lead to sensational press stories that huge bribes had changed hands.

The Nagona bullion bunker was only one of numerous treasure sites where loot from all over Asia was buried before the war's end.  On the Philippines alone, there were 172 locations used to stash booty plundered by the imperial Golden Lily treasure teams.  The author's reproduce one of Prince Chichibu's burial maps showing a complex tunnel system dug by POW's under the army base at Teresa, near Rizal, southeast of Manilla.  Here, bullion, platinum diamonds and valuable religious artefacts ‑ including a golden Buddha figurine weighing one tonne ‑ and collectively valued by Golden Lily accountants at $190 billion ‑ were buried.

Part of the Teresa site was later recovered by Philippine President Ferdinand Marcos ‑ lending real weight to tales of "Marcos gold" that have been treated more as fantasy than fact by the international media.  Press interest has been limited, until now, to the 1971 recovery of a Burmese Golden Buddha figurine by amateur treasure hunter Rogelio "Roger" Roxas.  The figurine had a detachable head that when removed left a small cavity stuffed full of diamonds.  The figurine was later stolen from Roxas by President Marcos.  Roxas was later murdered before he could give evidence in a US court in Hawaii that awarded Marcos victims a total of $25 billion in damages.

The sheer quantity and value of plunder gathered by the Golden Lily was mind numbing.  The whole of Asia under Japanese control had been combed for treasure.  Most of it was shipped to Prince Chichibu's headquarters in the Philippines.  By 1943, American submarine activity had cut the sea lanes making gold shipments less certain.  To circumvent Allied air and naval attacks, Prince Chichibu had a fleet of four vessels painted with a Red Cross.  These continued to ply their way back and forth between Japanese controlled territories and the Philippines carrying huge amounts of plunder.

After the war had finished, Japanese led groups began to recover large amounts treasure hidden in the Philippines.  They were not alone.  Seagrave reveals that American OSS (forerunner of the CIA) agents watched as Japanese troops buried treasure at Luzon in the Philippines and began a clandestine recovery operation between 1945 and 1948.  This was headed by a Filipino‑American OSS ‑ and later CIA ‑officer, Severino Garcia Santa Romana.  Romana, in turn, worked under the watchful eye of the late and now infamous CIA operative, General Edward Lansdale ‑ who was embroiled in Operation Mongoose and the abortive CIA invasion of Cuba during the Kennedy administration.

There was no intention on the part of the OSS/CIA to return any of the plunder to the rightful owners.  Instead, Santa Romana set up numerous front companies to launder the gold bullion secretly recovered.  In all OSS/CIA gold bullion was secretly deposited in a total of 176 bank accounts located in 42 countries.

Nor was this a rogue operation conducted by a knowing few.  The authors reveal that General William Donovan, head of the OSS, knew of the Lansdale‑Romana recoveries, as did General Douglas MacArthur, and former US President Herbert Hoover.  Knowledge also extended to cold war warrior and later head of the CIA Allen Dulles.  Seagrave also believes it likely that President Truman was in the charmed circle of those who were informed.

The twice‑looted gold became "the basis of the CIA's 'off the books' operational funds during the immediate postwar years, to create a worldwide anti‑communist network."  To ensure loyalty to the cause, the CIA distributed Gold Bullion Certificates to influential and well‑known people throughout the world.  The authors hold documents showing that "one of the big gold bullion accounts set up by Santa Romana was in the name of General Douglas MacArthur."  Other documents indicate that gold bullion worth $100 million was placed in an account in the name of Herbert Hoover, former President of the United States.

Meanwhile, Allied veterans of the war in the Pacific continue to fight for meaningful compensation for the barbarous treatment they experienced.  The $1 billion reparations paid by Japan, once it had been divided among the many millions entitled to compensation, amounted to a pittance.  As late as November 1998 a Tokyo court rejected an appeal from 20,000 British, Australian, New Zealand and American former internees who had asked for compensation of $22,000 each.

In contrast to this miserly sum paid to Allied POW's, leading Japanese zaibatsu submitted their own claims for compensation after the war, arguing that the damage inflicted on their armaments factories by Allied air raids required restitution.  These claims totalled $5 billion and many were paid.

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The Gold Is Gone

Gold. It's been called a barbarous relic, and those who focus on its historic role as a standard of value frequently are labeled "lunatic fringe." Given the recent highs in the gold market, it looks like the crazies have been having a hell of a year. With the stock market taking its third yearly loss, gold returned nearly 30 percent to investors, moving from $255 an ounce to six year highs of $380.          

                                                    
Just about every analyst and "expert" on Wall Street willing to mention any of this has been quick to explain that the increase in the price of gold is due to impending war with Iraq. But hard-money analysts are arguing that should the United States go to war it will be of very little consequence to the price of gold – a momentary blip – because gold is a commodity and its price a matter of supply and demand.                                                                                  

The "lunatic fringe" long has argued that the price of gold was being manipulated by a "gold cartel" involving J.P. Morgan Chase, Citigroup, Deutsche Bank, Goldman Sachs, the Bank for International Settlements (BIS), the U.S. Treasury and the Federal Reserve, but that the manipulation had been sufficiently exposed to require that it be abandoned, producing the steady upward increase in the price of the shiny, yellow metal.                                      

In fact the "gold bugs," as they're known, are so sure of their research that not only do they believe the price of gold will continue to climb, but many are expecting to see prices of $800 to $1,000 an ounce. Until recently, most in the gold and financial worlds scoffed at such a prediction, but last month the Bank of Portugal made an announcement that shocked those who credit official gold-reserve data and added fuel to the contention of the gold bugs that the "gold-cartel" manipulation is in meltdown.                                                               

What the Bank of Portugal revealed in its 2001 annual report is that 433 tonnes [metric tons] of gold – some 70 percent of its gold reserve – either have been lent or swapped into the market. According to Bill Murphy, chairman of the Gold Anti-Trust Action Committee (GATA), a nonprofit organization that researches and studies the gold market and reports its findings at www.LeMetropoleCafe.com: "This gold is gone – and it lends support to our years of research that the central banks do not have the 32,000 tonnes of gold in reserve that they claim. The big question is: How many other central banks are in the same predicament as the Portuguese?"               

Murphy explains: "The essence of the rigging of the gold market is that the bullion banks borrowed central-bank gold from various vaults and flooded the market with supply, keeping the price down. The GATA camp has uncovered information that shows that around 15,000 to 16,000 tonnes of gold have left the central banks, leaving the central-bank reserves with about half of what is officially reported."                                                                               

This is why those who follow such arcana are predicting an explosion in the price of gold. According to Murphy, "The gold establishment says that the gold loans from the central banks are only 4,600 to 5,000 tonnes," but his information is that these loans are more than three times that number, which means "they're running out of physical gold to continue the scheme."

                       
According to Murphy, "The cartel has been able to get away with lying about the amount of gold in reserve because the International Monetary Fund [IMF]is the Arthur Andersen of the gold world." He has provided to Insight documents from central banks confirming that the IMF instructed them to count both lent and swapped gold as a reserve. "In other words, the IMF told the central banks to deceive the investment and gold world[s]. Once this gold is lent [or] swapped, it's gone until such time as it can be repurchased. And with the skyrocketing price of gold we're now seeing, it would be incredibly expensive, let alone nearly physically impossible, to get it back."                             

What is important to understand, says Murphy, "is that there is a mine and scrap supply deficit of 1,500 tonnes, which is an enormous deficit when yearly mine supply is only 2,500 tonnes and going down. On top of that, there are these under-reported gold loans and other derivatives that are on the short side. There is no way to pay this gold back to the central banks without the price of gold going up hundreds of dollars per ounce. So the peasants and women of the world will have to sell their jewelry at say $800 an ounce to bail out these short positions or someone is going to have to tell the world that they don't have the gold that they have reported," shaking the world's financial system to its core.

 
The gold bugs appear to be basing their identification of a world gold shortage on industry data, much of which has been summarized in two papers prepared by four different gold analysts at different times using separate methods. The first paper was written by governmental investment adviser Frank Veneroso and his associate, mining analyst Declan Costelloe. Titled "Gold Derivatives, Gold Lending: Official Management of the Gold Price and the Current State of the Gold Market", it was presented at the 2002 International Gold Symposium in Lima, Peru, and estimates the gold deficit of the central banks at between 10,000 and 15,000 tonnes. The second paper, "Gold Derivatives: Moving Towards Checkmate", by Mike Bolser, a retired businessman, and Reginald H. Howe, a private investor and proprietor of the Website estimates the alleged shortage of central-bank gold at between 15,000 and 16,000 tonnes – nearly a decade's worth of mine production.                                                                                                                     

George Milling-Stanley, manager of gold- market analysis for the World Gold Council (WGC), a private organization made up of leading gold-mining companies that promotes the acquisition and retention of gold, is aware of these papers and shortage numbers but tells Insight that "there are no official [gold-reserve] reports." That is, "The central banks are under no obligation to report what they lend into the market, what they place on deposit and what they do with their swaps, so there's a conventional-wisdom view, and a couple of different bodies have done some fairly serious research in[to] this and have come up with a figure [of] around 4,500 to 5,000 tonnes."                                    

Stanley's estimate is based on data provided by so-called "serious" researchers, including London-based Gold Fields Mineral Services (GFMS), one of the world's foremost precious- metals consultants, and a report titled Gold Derivatives: The Market View, commissioned by the WGC to London-based Virtual Metals Consultancy. While these two groups appear to be the research choice of the official gold world, there are in fact no "official" figures, and both studies, like the Veneroso/Costelloe and Bolser/Howe reports, are based on interviews, data analysis and other research generally available to the industry.                                                  

Those who believe the central banks to have misrepresented their actual gold holdings place much of the blame for the lack of transparency on the shoulders of the IMF, which presents itself as being responsible for ensuring the stability of the international financial system. Although the IMF would not respond to questions about its gold-loan/swap requirements, what information has been made public appears to support GATA's understanding of how central-bank reserves are reported.   

For example, in October 2001 the IMF responded to questions posed by GATA by saying it is not correct that the IMF insists members record swapped gold as an asset when a legal change in ownership has occurred. According to this response, "The IMF in fact recommends that swapped gold be excluded from reserve assets." Nonetheless, says GATA, there is abundant evidence that this is not the case, citing as an example the Central Bank of the Philippines (BSP).                                     

A footnote on the website of the Central Bank of the Philippines (www.bsp.gov.ph) in fact directly contradicts the IMF's claim: "Beginning January 2000, in compliance with the requirements of the IMF's reserves and foreign- currency-liquidity template under the Special Data Dissemination Standard (SDDS), gold swaps undertaken by the BSP with non central banks shall be treated as collateralized loans. Thus, gold under the swap arrangement remains to be part of reserves, and a liability is deemed incurred corresponding to the proceeds of the swap."                                         

The European Central Bank (ECB) also made it clear that the IMF policy is to include swaps and loans as reserves. The ECB responded to GATA: "Following the recommendations set out in the IMF operational guidelines of the 'Data Template on International Reserve and Foreign Currency Liquidity,' which were developed in 1999, all reversible gold transactions, including gold swaps, are recorded as collateralized loans in balance of payments and international investment- position statistics. This treatment implies that the gold account would remain unchanged on the balance sheet." The Bank of Finland and the Bank of Portugal also confirmed in writing that the swapped gold remains a reserve asset under IMF regulations.                                                                                

Although the WGC's Stanley stands by the data provided by the industry's "serious" researchers, he insists he cannot say for certain that the numbers are accurate. "There is no requirement on any country to tell the IMF how much gold it owns," says Stanley. "The requirement is to tell the IMF how much gold it has decided to place in its official reserves. Nobody knows whether that is the total of what they own or not.Obviously they can't report more than what they own, but they can certainly report less if they chose to. That gold may have been lent out, but is nevertheless still owed to them. It's a bit like any company reporting a cash position. It will report cash on hand and cash due – money owed by other people. I'm not saying this is ideal, but this is how it works."            

John Embry, the manager of last year's best-performing North American gold fund and manager of the Royal Precious Metals Fund for the Royal Bank of Canada, says he is putting his and his clients' money on the "lunatic fringe" in this dispute: "I've examined all the evidence gathered by GATA and everyone else, and I think these guys are anything but lunatics. They've done their homework and have unearthed a lot of interesting stuff. The problem, though, is that the market is sufficiently opaque that there is really no way to know who is right and who is wrong."                                    

"The fact is," continues Embry, "a lot of this stuff is based on estimations. I do however believe that, based on the evidence dug up by Veneroso and Howe, they are presenting equally if not more credible numbers than the other side. I find the campaign to undermine their credence simply bizarre. I think these guys [GATA] are right and that the number put out by Gold Fields Mineral Services as the amount of gold loaned out by the central banks is definitely wrong. Now, whether it's as much as 15,000 is up for interpretation.  The recent release by the Bank of Portugal is important. When a central bank has 70 percent of its gold loaned or swapped, I don't think it is operating  independently, and I suspect there are an awful lot of them that have loaned out much more than has been reported."                   

Embry says, "I've made a fortune for my clients investing in gold and gold stocks because I have operated on the premise that the Veneroso/Howe reports are right – that gold was significantly undervalued in the daily quote and that it was going a lot higher. The circumstantial evidence, and I bet my clients' money on it, was very much in favor of the guys who said a great deal more central-bank gold had entered the market and driven the price down far too low. GATA has had this story from day one. I think that they're right and that officialdom doesn't want this exposed. GATA is willing to have a public debate but the gold world won't debate. I think there is a tacit admission of anyone who has an IQ above that of a grapefruit that Veneroso and Howe have a pretty good point. I'm an analyst who has looked at both sides of the issue and I bet my money on GATA. So far they've been right.”

Whether the gold bugs are right about the reasons for the meteoric rise in the price of gold is uncertain, but, according to GATA's Murphy: "It's all the more reason to have the central banks come clean about the actual amount of gold that physically exists in their reserves. Either way, the price of gold will continue to rise because, as we already know and others are discovering, the gold is gone."                                      

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