People talk about supply and demand driving prices – low supply and high demand should equal high prices. Even though gold has increased in price in the last year, many people claim the price per ounce should be even higher than it is.
This week, gold dropped back under $1100 per troy ounce. Many of the main stream media claim this is due to the dollar, the euro and the trials and tribulations of the European Union along with our economy.
But, people much less frequently heard claim the volatility is due to the central banks attempting to control the gold market prices.
Though long, an article – actually a speech – by Chris Powell, the Secretary/Treasurer of the Gold Anti-Trust Action Committee, provides insights into the gold market: Gold suppression is public policy and public record, not ‘conspiracy theory’
Early in his speech, Mr. Powell quotes Jim Rickards, Director of Market Intelligence at Omnis, “When you own gold you’re fighting every central bank in the world.”
That comment was made at the end of an interesting 6+ minutes on CNBC in September 2009:
Not to be so Negative Nellie, but those comments are scary, especially when Washington continues to add to the deficit.
But back to the earlier point of central banks controlling the prices, Mr. Powell stated,
“The problem with central banking has been mainly the old problem of power — it corrupts.
“Central bankers are supposed to be more capable of restraint than ordinary politicians, and maybe some are, but they are not always or even often capable of the necessary restraint. One market intervention encourages another and another and increases the political pressure to keep intervening to benefit special interests rather than the general interest — to benefit especially the financial interests, the banking and investment banking industries. These interventions, subsidies to special interests, increasingly are needed to prevent the previous imbalances from imploding.
“And so we have come to an era of daily market interventions by central banks — so much so that the main purpose of central banking now is to prevent ordinary markets from happening at all.
“By manipulating the value of money, central banking controls the value of all labor, services, and real goods, and yet it is conducted almost entirely in secret — because, in choosing winners and losers in the economy, advancing infinite amounts of money to some participants in the markets but not to others, administering the ultimate patronage, central banking cannot survive scrutiny.
“Yet the secrecy of central banking now is taken for granted even in nominally democratic countries.”
Furthermore, he provides comments from various authorities and the reference documentation to show the Federal Reserve, the IMF and central banks are in collusion controlling gold prices.
In his speech in November 2009, Mr. Powell continues, “The gold price suppression story is important despite this week’s dramatic rise in the gold price. For even as the price of gold has been rising, we really don’t yet know what a fair price, a free-market price, for gold is, since gold has not traded in a free market for many years and is not trading in a free market now.”
He concludes his speech with comments that gold and silver continue to be great investments, but they require significantly more time to gain the appropriate knowledge.
“And you have to remember the remarkable properties of gold and silver. It’s not just that gold is the most malleable and lustrous of metals, or that silver is the most conductive and reflective, but also that, once they get into the hands of central banks, bullion banks, and exchange-traded funds, gold and silver can become invisible.”
This article was highly informative with his many points even more valid four months later.
But, as with any information, you need to investigate and read more details to draw your own conclusions. Everyone has a frame of reference in developing their point of view, and to a certain extent, an ulterior motive can hide behind people’s viewpoints.
Take a moment to read and develop your own.