Is the Price of Gold Manipulated?

Many of our more naïve readers may be shocked to learn that gold is so important that it is the most heavily manipulated currency in the world. But why and how is such manipulation done?

We felt vindicated when Zero Hedge reported a couple of years ago that CIA documents revealed focused and wide spread manipulation of gold. The revelations came as a dividend of the ground breaking work which the Gold Anti Trust Association has done, since its inception in 1998, to demand the government to free the gold and silver markets from deliberate manipulation by government proxy banks.

The documents revealed that not only did the Federal Reserve actively monitor and intervene in gold markets, but it did so in consultation with the CIA. We weren’t too surprised by this disclosure which gave us comfort to know that the agency was not 100% devoted to murdering people.

Ever since John Keynes ridiculed gold as that “barbaric relic,” Americans have paid scant attention to its value in either commerce or their portfolios. Following the economic pied pipers, most investors think that gold is a useless commodity interchangeable with a boat anchor. The savvy investors have loved these bimbos as their absences from the markets have created better buying opportunities for them.

However, the uninterrupted upward price action of the past 10-12 years has caused some to give gold strange new respect. Why would this be so? The primary cause is the loss of value and respect of the fiat money system weighed down with trashy debt and imminent default.

Regardless of the public opinion of gold, it has always played a singularly important role in supporting the mountain range of debt accumulated under the fraudulent fiat money systems which have run amok since the establishment of the Federal Reserve in 1913. The links are not direct but are tangible nonetheless.

In a classic Brer Rabbit scheme, one of the biggest liars in America, Federal Reserve chairman Ben Bernanke, has taken a one man tour of America’s schools to demean gold while defending the indispensability of central banking. Unfortunately for the chairsatan, the facts of history show nothing but a debased currency and more volatile economy since the dawn of central banking in America – and only more so since the men running the financial world are ever more corrupt.

Now all of this talk of conspiracy has been derided with utmost contempt by the Bernankes of this world, but as Elvis Presley said, you can hide the sun for a while but you can’t make it go away, a citation Paul Mylchreest made in a seminal discussion on the manipulation of gold prices in Thunder Road Report of March 28, 2012.

Mylchreest documents the patterns and algorithms the banksters use to control the price of gold using daily and intraday gold price charts to illustrate the inteventions. He shows that finger print type trading actions occur like clockwork at specific times of the days and days of the week. Although the gold cartel cannot ultimately control the long term trend, it can fight a very effective rear guard action to obstruct free price discovery and keep potential buyers on the side lines.

It is thus an open secret among insiders that the physical price of gold is at least 25% higher than the paper price of gold. For those new to the topic, derivative products such as electronically traded funds do not keep a physical supply of gold matching their obligations for gold. In fact their prospectuses state that they do not have to maintain any purity or reserves of gold. Any redeemer of shares can be easily turned away with cash.

But why do the highest levels of government fret over the gold price so much? The main reason is that the price of gold signals the distrust and vulnerability of the fiat regime. Gold rises in price when the market supply of dollars grows, signaling that the central bank is debasing the currency. Since 1913, the Federal Reserve has destroyed 99% of the value of the dollar, leaving it with a constant dollar value of less than 1 cent.

The American government has one other fear of competition from gold - the loss of the exorbitant privileges it enjoys as the issuer of the world's reserve currency, a privilege it has used to menace the world with war and inflation.

It is a well hidden fact that most of the largest banks are functionally insolvent, many having negative common tangible equity – Regions Bank being one such example. If that weren’t bad enough, the Federal Reserve is itself insolvent, with many of the crapulent securities it has bought since 2008 having less market value than book value. However, with the politically motivated FASB, financial institutions no longer need maintain mark to market on securities, thus enabling them to deceive the government, investors, and the public about the true financial states of their organizations.

Some say that all is well with the gold situation, because the government could utilize its vast hoard of gold to moderate its price. It could, but the problem is that the USA pissed away its stolen gold (FDR 1934) through the London Gold Pool during the 1960s and beyond. Even then, the fiat currencies were under stress due in large measure to the massive expansion of US government debt during the 1960s in its imperial war of aggression against Viet Nam.

Ironically enough, the government did use its gold stocks to keep a lid on the price of gold – something essential with inflation indexed bonds and entitlement programs. When the gold reserves were exhausted, ETFs were established to take the role of allowing the gold cartel to sell naked, thus applying immense downward pressure on the price of gold.

If any doubt exists that gold is a barbaric relic, let us recount the story of current Commodities Futures Trading Commission chairman Gary Gensler who, though a bankster’s puppet, was pushed violently against a corrider wall at a Washington hearing by a New York bankster executive who warned him that any continued investigation into commodities price manipulation would result in serious consequences which we interpreted as a death threat. Gensler, according to our source, attempted to report the incident to Congress, but Congressional leadership showed no interest in getting involved.

The above story illustrates that the only barbarity associated with the relic is the behavior of its opponents seeking desperately to uphold the debt based fiat system under which we are enslaved. The best way to fight your overlords is to take physical possession of gold. However, have it assayed since USA banking and government sources are major purveyors of gold plated tungsten.

The major reason for fiat currencies is that they can expand without constraint, thus making wars and colonial conquest nearly risk free for the aggressors. Now you know the other reason the barbarians consider gold a barbaric relic.

Reference
Thunder Road Report, Paul Mylchreest
Copyright 2010-12 Tony Bonn. All rights reserved.