-- Published: Friday, 13 June 2014 | Print | Disqus
Dear Friend of GATA and Gold:
In an interview today with King World News, Hinde Capital CEO Ben Davies cites as a likely contrarian indicator a story published this week on the front page of the Financial Times noting the collapse of market volatility. The FT story, whose first two paragraphs are appended, said the decline of market volatility is a matter of suppression of interest rates by central banks and acknowledged that this is a consequence of their "intervention."
While acknowledging "intervention" by central banks is unusual for the FT, this acknowledgment is terribly understated and implies that interest rate suppression is the extent of it. But what good would interest rate suppression do central banks if it came at the expense of the collapse of their currencies, or at least resulted in more devaluation than they wanted at the moment?
And what has become of the historic inverse relationship of real interest rates and the gold price, a relationship in which, when real interest rates go down, gold is supposed to go up?:
In a free market, when real and even nominal interest rates go negative, as they have been going lately, shouldn't gold be going to the moon?
Extensive proof of longstanding and current surreptitious intervention by central banks in the gold market has been compiled by GATA here --
-- and it has been delivered to the FT many times, sometimes in person. But the newspaper has been unable to put "intervention" and "gold" in the same sentence in a news report or to put even one question about gold market intervention to a single central bank.
If the FT could ever do that much, its story this week about the death of volatility might become almost instantly the contrarian indicator Davies suspects it will become, even as the FT thereby in effect would be repudiating years of its own misleading journalism.
Davies' interview with KWN, accompanied by an image of the FT front page carrying the volatility story, is posted here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
Volatility 'Extinguished' by Moves from Central Banks
By Ralph Atkins and Michael MacKenzie
Financial Times, London
Monday, June 9, 2014
Global markets are less volatile than at any time in almost a decade as central bank intervention has sent share prices to record highs and interest rates to historic lows.
Gauges of market volatility for currencies, equities, bonds, and oil have all plummeted, with analysts attributing the falls to the widespread view that official interest rates will remain exceptionally low for a long time. ...
... For the rest of the story:
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-- Published: Friday, 13 June 2014 | E-Mail | Print | Source: GoldSeek.com