from Jesse’s Café Américain:
Although I have heard this line of reasoning before, it was interesting to see it coming from the economist Marshall Auerback.
There is not much doubt in my mind that the markets are being ‘managed’ here. By whom, for what reasons, and for how long is another question. But the trades and the tape are telling their tale.
I am wondering if this is a new phase of the Fed’s interference in the markets in lieu of genuine economic reform. They have used indirect means to pump equities as a means of wealth transmission before. This was a favorite ploy of Robert Rubin when he was Treasury Secretary.
It would not surprise me if the gold price was being held around 1600 in order to give the banks an opportunity to redeem their leased gold IOU’s to avoid embarrassment before things get ‘messy’ in Europe. The people in Germany, Italy, Spain, England, and Portugal will be angry enough, and to find out that their irresponsible banks had sold off their gold to their cronies in the bullion banks on the cheap might be a bit much. As for the US, that is a murky situation indeed.