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How and Why Governments Suppress the Price of Gold
Gold is crucial and Western central banks – especially the US Treasury and its Federal Reserve, the Exchange Stabilization Fund, and allied central banks – find themselves rigging the gold market just to control and even suppress the price of Gold.
Gold and silver prices are generally forced artificially low to typically create the illusion that they (metals) have little value, and the volatility would scare off potential new buyers. Ideally, the US government and its like-minded allies on Wall Street commonly play this dirty and dangerous game to re-engineer artificial confidence the US dollar.
While governments and central banks have depressed the prices of gold and silver in the past years by sending voluminous amounts of these metals to market, the current scheme closely follows by flooding the market with the metals, but most of it is non-existent. It is only a gold and silver mirage pegged on nothing more than paper contracts.
Acting as government’s complicit brokers, bullion banks sell their mix of physical and pretend paper through exchange traded funds, contracted futures, and options. Banks still display a few bars of actual real gold and silver in their showroom window, but stock their warehouse with paper promises, knowing very well that they cannot deliver.
Incidentally, the leverage in gold and silver (and precious metals in general) is more extreme than the fractional reserve banking system. In 2010, a testimony in federal hearings confirmed only an ounce of real gold truly exists for every hundred of paper gold available for sale, and the silver market is no different. Anyone who sold imaginary metal would be prosecuted, but the government and its banker friend exempt themselves from the laws.
Why Central Banks Rig the Gold Market
Gold is both a powerful and competitive international currency. If gold is allowed to function in a free market, it will not only determine the value of other currencies, but also the level of interest rates, as well as the value of government bonds, as its performance is normally the opposite of those of government currencies and bonds. So it is clear why central banks usually fight gold to defend their bonds and currencies.
In this fight, however, central bank tactics affect far much more than gold; they affect and eventually destroy markets in general. This destruction of markets is currently known as “financial repression“. Treasurer/Secretary of the GATA (Gold Anti-Trust Action Committee) Chris Powell broadly cover several aspects of the Western gold price suppression scheme on “The Larry Parks Show“. The aspects discussed include the US government authorizing itself to rig all markets in secret.
A recent disclosure of the US government documents showed central banks secretly trading in practically all major futures markets in the US. Other documents compiled by GATA prove the gold price suppression scheme, and the reasons for the mining industry’s refusal to take any action against it. Additionally, it includes why the scheme will continue to succeed until gold investors avoid “paper gold” and the treason committed by developing countries’ central bankers.
In this scheme, most participants bet strictly on price direction. Apparently, they neither accumulate nor care about long-term ownership of physical precious metals. They pocket the profits in cash. In reference to all previous manipulations, the Achilles Heel is the lack of physical real gold for the market that demands it. The day is fast approaching, as real gold for sale continues to disappear. As global economies falter, the demand for real metal will escalate.
For the past 3 years, depressed prices have sped up the sweep of massive wealth from the hands of the Western world into Eastern vaults, with no signs of returning to market for decades. A majority of knowledgeable experts with good background knowledge in gold believe Western vaults, the major London Bulliion Market (LBMA) and COMEX warehouses included, have experienced enormous outflows of physical gold. The US has stored other nations’ gold since the 1930’s, supposedly for purposes of security during World War II, as well as the Cold War.
What Might Happen If This Continues
Perhaps someone may wonder why this is important and how it will end. Simply put, the rigging of the gold market is critical because it facilitates the rigging of virtually all markets – a section of a much bigger scheme through which a secretive, un-elected US elite controls the value of all labor, capital, goods, and services across the world – impairing or destroying all markets everywhere and hindering the progress of humanity.
This is an utterly parasitic and totalitarian system, and a manifestation of the never-ending war of the oppressive financial class against the hardworking producing class, except it is hidden so well that the latter has not yet realized it.
The system could end chaotically as the 1968’s London Gold Pool when the gold that the Western central banks were ready to lose just ran out even before they were prepared with another gold price control system. Even though the system could end through education and publicity, it is a question of whether investors and central banks that do not participate in the gold suppression scheme will ever figure out that up to 90% of the world’s investment gold – supposedly held in trust for the owners – may not exist after all.
But if there is no such realization of the “paper gold” fraud, gold price suppression, as well as the destruction of markets in general, may continue indefinitely. The scheme works because of deception, misunderstanding, and surreptitiousness.
To overthrow this scheme, it needs to be exposed so that people can realize that the market is rigged to help them avoid taking the losing side of the dirty trade. Therefore, the central banks have to rely on the complicity of the financial news media, including the gold mining itself rather than their money and debt creation power, so that financial journalists will not press the critical questions or report the inadequate answers. That way, the gold mining industry, quite unaware of its product’s monetary nature and its suppressed price, won’t do much to defend itself.
Unless we do something to change things, and as long as the “paper gold” is considered as valuable as a piece of precious metal, the future of the gold mining industry is blurry. Additionally, until something is done to restore free markets, humanity itself has nothing much of a future either.