Thursday, March 26, 2009
There Are No Markets Anymore; Only Interventions
Gold is the barometer of the economy. People nervous, gold goes up; people relaxed: gold goes down.
Except for the last 30 years when governments and central banks decided to manipulate the gold price.
Why? Gold is a currency and if you want to protect the fluctuations of your own currency (US$, GBP, €, etc), gold is an easy target. Especially as central banks own app 25% of the total gold stock.
And how do central banks do this? By leasing gold to Wall street banks at a low price. In turn Wall street bank play the trading game in which there will be only one winner. And that is not you. If these banks can manipulate the price, can you imagine the (illegally made) profits?
Yes it is illegal as market manipulation is against the law. If this would have happened with another commodity like oil, the fury would be enormous. The watch dog (SEC) in the USA has been asleep at the wheel as they are more or less owned by big banks (Think: Madoff)
So everybody happy: governments switch off the barometer; banks makes nice profits and you are in the dark.
In 10 years time gold price manipulation will be regarded as the crime of the century. Big talk? No, as we not would have been in this economic predicament if we would have a gold market without interference.
Note: it is claimed that app. 50% of all physical gold on the books of central banks is gone because of this scheme. That's your money! Oh yes, it is on the balance sheet all right, but there hasn't been a proper independent accounting procedure for a long, long time, making people even more suspicious.
Learn more (or better, support) www.gata.org (Gold Anti Trust Action Committee) or look at the video from Bloomberg (video).
Posted by Troy Ounce at 8:20:00 AM