LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Wealth Accumulation Is Becoming Impossible
By: Keith Weiner, Monetary Metals

Gold Market Reaction: Tactics For Exhilaration
By: Stewart Thomson

Yes, Gold “Just Sits There” and That’s Quite a Feat
By: Clint Siegner

Precious Metals Update Video: Gold is stuck in a sideways market
By: Ira Epstein

Effect of QE4 on the Stockmarket and Gold...
By: Clive Maund

SWOT Analysis: The Dutch National Bank Is Bullish on Gold
By: Frank Holmes, US Funds

Quick Recap of the Fed’s Foundering Follies and Our Descent into Economic Madness
By: David Haggith

The Gold Stock Correction and What Lay Ahead
By: Gary Tanashian, NFTRH

Precious Metals Update Video: Gold strong support below
By: Ira Epstein

Dollar Update (video)
By: Gary Savage

 
Search

GoldSeek Web

 
Why fiat currency requires gold price suppression forever

By: Chris Powell, GATA

 -- Published: Monday, 7 October 2019 | Print  | Disqus 

Dear Friend of GATA and Gold:

Our friend C.W. wrote this week:

"After reading recent commentaries noting that the U.S. Justice Department and Commodity Futures Trading Commission are overlooking the long-term suppression of the gold price while indicting individual traders for spoofing the gold and silver futures markets, I wondered why the authors did not acknowledge a simple likely explanation.

"That is, one or two bullion banks may be trading on behalf of the U.S. government to suppress gold and silver prices, either at a profit or at the lowest possible loss. Such trading by or at the behest of the U.S. government appears to be legal, so the Justice Department and CFTC do not pursue it.

"The bullion banks executing the government's trades may trade simultaneously for their own accounts and to some extent front-run the trading they do for the government, and this is where spoofing has gotten traders in trouble.

"This explanation is of the Occam's razor variety, and it accords with the claims of JPMorganChase that it trades the monetary metals only for clients.

"I noted David Stockman's theory recently posted at King World News --

http://www.gata.org/node/19496

-- that because gold at its current price is a tiny fraction of the trillions of investment assets worldwide, the price of gold will rise if investors reallocate any assets to physical gold. I suppose that's true, but it shows why it is so important for governments to continue to suppress gold.

"Consider that the value of the entire U.S. gold reserve (assuming it is still intact) is equal only to about five months of the federal government deficit. In other words, the gold reserve is almost insignificant and irrelevant in the long term. So the real value of the gold reserve -- and in fact its only point -- is to be used to suppress the gold price, thereby maintaining faith in the fiat currency. The alternative -- a rapidly increasing gold price -- would destroy faith in the U.S. dollar and the resulting turmoil would end the dollar system.

"That's why official suppression of the price of gold can never end. While the gold price must be allowed to rise to reflect the cost of production, so as not to put the miners out of business, which would cause the gold price to go parabolic, official policy otherwise must be to suppress the price and restrain gold investor sentiment at whatever level is possible, and by any means. It is hard to see why or how gold price suppression will end without Venezuelan-style hyperinflation.

"Investor demand may cause an increase in the gold price, but official suppression will continue at whatever price level is possible."

* * *

Your secretary/treasurer would reply:

Yes, I too have long thought that the real offense of the bullion bank traders now under indictment has been only to front-run the government trades being executed by their own banks. But I still am baffled by the prosecutions undertaken by the Justice Department, since the bullion bankers surely have just as much dirt on their government clients as the government has on them, and the bullion banks and their indicted traders could hurt the government badly by coming clean.

"And yes, whatever gold's price, governments -- and especially the United States government, issuer of the reserve currency -- will have a strong interest in keeping gold out of the world financial system, though governments may revalue gold collectively from time to time to rebalance international trade, devalue excessive debt, and reliquefy themselves, as the economists Paul Brodsky, Lee Quaintance, and Peter Millar wrote years ago --

http://www.gata.org/node/11373

http://www.gata.org/node/4843

-- or may revalue gold separately to gain political and economic advantage over each other.

My guess long has been that when the gold that governments are prepared to lose in price suppression is nearly exhausted, as it was upon the failure of the London Gold Pool in 1968, they will close the major gold exchanges, arrange another international currency revaluation that pegs gold much higher and devalues the world's ravenous debt, buy back the gold they have lost through decades of sales and leases, and begin another half century of gold suppression at a more sustainable price.

When that happens it will require much of mainstream financial news organizations, market analysts, and gold mining companies to overlook what is really being done, but their obliviousness, cowardice, and venality have never failed them yet.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

* * *

Join GATA here:

New Orleans Investment Conference
Hilton New Orleans Riverside Hotel
Friday-Monday, November 1-4, 2019

https://neworleansconference.com/noic-promo/powellgata/

* * *

Help keep GATA going:

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16


| Digg This Article
 -- Published: Monday, 7 October 2019 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.