The owners of this website may be paid to recommend Regal Assets. The content on this website, including the positive review of Regal Assets, the negative review of its competitors, and other information, may not be independent or neutral.
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 market just to control and even suppress its price.
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 these precious metals 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 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 precious metals 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
This precious metal is both a powerful and competitive international currency. If it 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 price suppression scheme in Western countries on “The Larry Parks Show“. The aspects discussed include the US government authorizing itself to rig all markets in secret.