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Chris Powell: Gold price suppression — why, how, and how long?

by Chris Powell, GATA:

Dear Friend of GATA and Gold:

Most financial journalism and academic teaching maintains that gold is at best a quaint antique. I’m here to argue that gold not only remains money but may again be the best and most important money — to argue that, even more than this, gold is in fact the secret knowledge of the financial universe.

Gold already is so important that Western central banks — particularly the U.S. Treasury and its Exchange Stabilization Fund, the Federal Reserve, and allied central banks — rig the gold market every day, even hour by hour, to control and usually suppress gold’s price.

Why do Western central banks rig the gold market?

It’s because gold is a powerful competitive international currency that, if allowed to function in a free market, will determine the value of other currencies, the level of interest rates, and the value of government bonds. Gold’s performance is usually the opposite of the performance of government currencies and bonds. Hence central banks fight gold to defend their currencies and bonds.

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1 comment to Chris Powell: Gold price suppression — why, how, and how long?

  • rich

    Gillian Tett has a talk with Alan Greenspan

    The ‘Maestro’ admits he didn’t understand derivatives he touted; calls for bank breakups

    The Financial Times’s Gillian Tett sits down with Alan Greenspan for a two-hour interview and gets some eye-opening admissions from the fallen “Maestro”:

    What also worries Greenspan is that this swelling size has gone hand in hand with rising complexity – and opacity. He now admits that even (or especially) when he was Fed chairman, he struggled to track the development of complex instruments during the credit bubble. “I am not a neophyte – I have been trading derivatives and things and I am a fairly good mathematician,” he observes. “But when I was sitting there at the Fed, I would say, ‘Does anyone know what is going on?’ And the answer was, ‘Only in part’. I would ask someone about synthetic derivatives, say, and I would get detailed analysis. But I couldn’t tell what was really happening.”

    This is simply outrageous. As Tett notes, Greenspan, who we now know didn’t understand them at all, touted the risk-dispersing benefits of derivatives as Fed chairman and fought those who would regulate them.

    http://www.cjr.org/the_audit/gillian_tett_talks_to_alan_gre.php

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