Gold and bureaucracy, Conspiracy theories, government secrets, federal cover ups, believe it or not, these go hand in hand with our present economic situation, which looks dire, at the least. The Media plays a role in making the monetary system a hush-hush topic. People who have a lot of power and those who want more power are in the running to let us, the ordinary mass of people, accept what they force feed us on a daily basis. What they don’t realize is, like them, we are intelligent human beings, who have the sense to put two and two together, and who won’t keep on buying what they have to sell us. So, however they may lead us to believe otherwise, and the more they mislead us with false reports and misinformation, the more their lies come bursting out of the seams of the thin fabrications that they are spinning.
Gold has been a long time controversy in the financial sector and in the world in general. Some people say it is a good investment, others think its a risky asset. Engaging in the gold business is another one of those immensely covered up industries. Authorities are highly secretive about its gold trade and movement. Why you may ask? In this article, you will learn of proofs, confessions, evidences and answers why officials are running amok by the mere mention of gold.
Chris Powell, Secretary/Treasurer of Gold Antitrust Action Committee Inc has this comment on recent conferences by the Standard Chartered’s “Earth’s Resources” Conference, The Henley Group Client Seminar and the Hong Kong Gold Investment Forum is concerning this precious yellow metal that we all yearn to acquire.
“This conference is important because gold long has been money and may again be the best and most important money. Most investment houses don’t understand this; some of the few that do understand it fear to acknowledge it. But far from being a quaint antique, gold is actually the secret knowledge of the financial universe.
Gold 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. Why do they do this?
It’s because gold is a powerful competitive currency that, if allowed to function in a free market, determines the value of other currencies and influences interest rates and the value of government bonds.”
Powell goes on to site different evidences of gold manipulation in the present financial organizations.
“There is much academic literature supporting gold’s influence over currencies, interest rates, and government bonds throughout history. Prominent in this literature is the study written by Harvard economics professor Lawrence Summers and University of Michigan economics professor Robert Barsky in the June 1988 edition of the Journal of Political Economy, a study titled “Gibson’s Paradox and the Gold Standard.” As with all the documents I’ll cite today, the Summers and Barsky study is posted at my organization’s Internet site, GATA.org:
Summers went on to become treasury secretary of the United States, so his study of gold’s influence on currencies, interest rates, and bond prices is pretty good authority. The Summers and Barsky study implied that governments could achieve their ideal of low interest rates and strong government bond prices by getting control of the price of gold.”
Even throughout history, gold manipulation is an efficient way of controlling the masses. The repression and suppression of gold have been the instrument of many historical events to influence, if not dominate society in its growth.
“As it turns out, controlling the currency markets generally by rigging the gold market particularly is the most efficient mechanism of imperialism. There is much history of this. Indeed, rigging the currency markets was the primary mechanism by which Nazi Germany expropriated occupied Europe during World War II. Expropriation by force of arms was actually only a small part of the Nazi conquest. The rigging of the currency markets turned every citizen of an occupied country into an agent of the occupation every time he used money. This currency market rigging directed all production in the occupied countries into Nazi Germany and blocked any return flow. It enabled Nazi Germany to run without consequence the same sort of fantastic trade deficit lately run by the United States. The United States learned all about the Nazi expropriation of Europe through currency market rigging because it was documented by the November 1943 edition of the U.S. War Department monthly intelligence letter, Tactical and Technical Trends:
While history repeats itself, the manipulation of gold is constant even in our society today. Modernization is only a means to the suppression of gold. There maybe new players, but the game stays the same. Today’s Western central banks are rigging the gold industry, even the European system is rigged. It is amazing how they do this just under our noses. They even have laws to make these sort of activities legal.
“Exactly how do Western central banks and particularly the U.S. Government rig the gold market?
They used to do it conventionally and in the open by dishoarding their gold reserves at strategic moments, and then by dishoarding their gold reserves regularly, every day, as the United States, United Kingdom, and seven of their Western European allies did during the 1960s through a public operation called the London Gold Pool. The London Gold Pool held the gold price at $35 per ounce until it collapsed in March 1968 under rising demand that drained the U.S. Gold reserve from 25,000 tonnes down to just more than the 8,000 tonnes officially reported today:
After the collapse of the London Gold Pool the United States and its allies regrouped to figure out how to rig the gold market surreptitiously — not just with dishoarding but also with the so-called leasing of gold; the issuance of gold derivatives, including futures and options; and, more recently, high-frequency trading undertaken through investment houses that were happy to serve as government’s intermediaries in the gold market as they could front-run government trades. When the rigging is done surreptitiously like this, much less central bank gold has to be dishoarded and the dishoarding that is done has far more suppressive influence on the price.
But Western central bank market rigging goes far beyond gold. In an essay published in 2001 and titled “The Debasement of World Currency — It Is Inflation, But Not as We Know It” –
– the British economist Peter Warburton discerned that central banks were using investment banks to issue derivatives throughout the commodity futures markets to siphon away money that was looking for a hedge against inflation — to siphon money away from the hoarding of real goods, hoarding that would have driven up consumer price indexes and made inflation plain to the markets and the public. These derivatives are essentially naked short positions that cannot be covered. Warburton concluded that the prerequisite of a hedge against monetary debasement would have to be some asset that was not associated with a futures market, like good farmland or clean water supplies. For as the saying goes: “The futures markets are not manipulated; the futures markets are the manipulation.”
Imagine if people find out that all these central banks are conducting in a make believe business? No wonder why this has been one of the best kept secrets they have ever fabricated. It would mean the end of the world as we know it, financial or otherwise.
With all these relentless criticisms going around in finance and politics, one can only face the facts. Powell states the facts:
“First, much if not most institutional investment gold and even central bank gold is only “paper gold,” only imaginary, a claim against financial institutions that do not have on deposit all the gold to which they have issued claims. So there is a huge naked short position in the investment forms of gold around the world. If you don’t have physical possession of your gold, or if it is not kept for you in “allocated” form outside the fractional-reserve gold banking system, your gold probably doesn’t exist and may not be available to you when you really want it.
Second, despite the silence in the West about gold market rigging, it is no secret in the East. Both the Russian and Chinese governments have issued public statements about it. That is, the Russian and Chinese governments know all about the Western gold market rigging scheme and are positioning themselves to profit from its end:
Third, gold investing is surrounded by political risk, including the risk of confiscation of both gold bullion and mining properties by desperate governments, the risk of prohibitive mining royalty requirements, and the risk of prohibitive capital gains taxes. Thus diversification in gold investing and gold location is vital.
And fourth, gold investing also offers the prospect of great reward upon a sudden official upward revaluation of gold. For example, a 2006 study by the Scottish economist Peter Millar concluded that central banks would need to raise the gold price by a factor of seven to 20 times in order to re-liquefy themselves, devalue their currencies, and avert the sort of catastrophic debt deflation that is occurring today:
And the U.S. Economists and investment fund managers Lee Quaintance and Paul Brodsky last month published a report asserting that central banks now likely are engaged in redistributing gold reserves among themselves in preparation for just such an upward revaluation of gold and for gold’s return as formal backing for currencies:
But the purpose of all this market rigging is to suppress not only the price of gold but to suppress commodity prices generally. It is just the latest manifestation of the everlasting war of the highest levels of the financial class against the producing class, only this time the producing class hasn’t yet figured out what’s going on. Most tragically, much of the gold mining industry itself doesn’t understand what is being done to it — doesn’t understand that it’s not just digging metal out of the ground but minting money and competing with all other issuers of money and that this competition is far more cutthroat than imagined.
GATA hopes to change that.”
Armed with this information, Gold and Bureaucracy, and with the effects of inflation clearly visible today, we should act on our own interest because no one else will do it for us. Financial predators are lurking in every corner of the world, but we can keep them at bay with the right knowledge and tool in investing.
For more of Chris Powell’s article, please visit here.