-- Posted Friday, 10 February 2012 | | Disqus
Dear Friend of GATA and Gold:
In his commentary this week, "Gold Cars and Gas Stations," posted at GoldSeek --
http://news.goldseek.com/GoldSeek/1328632354.php
-- financial letter writer Stewart Thompson remarks that "banks likely are manipulating gold, and manipulating it higher, with central bank buy programs" and that gold investors should take a break along with the gold price rather than keep "screaming that you're being manipulated to death."
That Western central banks may be working the gold price higher is not a new idea to readers of these dispatches and followers of market analysts like GATA Chairman Bill Murphy and GATA consultant James Turk, founder of GoldMoney.
Our camp has often asserted that the Western central banks long have been undertaking a "controlled retreat" with gold, using derivatives and leases (not so much sales anymore) to keep the price from exploding after years of essentially short selling the metal or backstopping such short selling by bullion banks. Federal Reserve Chairman Alan Greenspan confirmed as much in his testimony to Congress in July 1998 when he said that "central banks stand ready to lease gold in increasing quantities should the price rise":
http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm
And GATA long has been calling attention to the scholarly study written in 2006 by the Scottish economist Peter Millar, who showed how central banks use the upward revaluation of gold to avert catastrophic debt deflation at the end of an economic cycle:
http://www.gata.org/node/4843
From time to time GATA also has called attention to Thompson's own speculation that central banks want the gold price higher now as a mechanism of economic stimulus and devaluation:
http://www.gata.org/node/9005
http://www.gata.org/node/9955
http://www.gata.org/node/7090
But GATA's complaint about gold market manipulation and price suppression is no less valid for all this. For while some central banks now may want to devalue their currencies, they want to do it on their own schedule and with their favored bullion bank agents preferentially positioned to profit from it rather than leave devaluation to free markets. Central banks certainly don't want a true free-market price of gold discovered any time soon, if ever.
For such a gold price would prove terribly inconvenient to central banks and their bullion bank agents, as it might result from wider realization that most of what the world imagines to be its gold supply doesn't exist -- that, as CPM Group director Jeff Christian acknowledged at the hearing of the U.S. Commodity Futures Trading Commission on March 25, 2010, as he had acknowledged in a report written a decade earlier, there is no metal at all behind most gold contracts and depository receipts:
http://www.gata.org/node/8627
Free markets in the monetary metals, markets that discipline governments and their currencies and protect individuals against expropriation, markets that enforce limited government, are GATA's objective, and we're not going to be mollified by 10 or 20 percent increases over the course of another year of "controlled retreat." To the contrary, we want to rout the bad guys, and that's likely to involve a lot more screaming that the markets are being "manipulated to death."
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
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-- Posted Friday, 10 February 2012 | Digg This Article
| Source: GoldSeek.com
