Wednesday, January 22, 2014

The Hows and Whys of Gold Price Manipulation

A somewhat lengthy essay by Dr. Paul Craig Roberts, but well worth your time:

http://www.paulcraigroberts.org/2014/01/17/hows-whys-gold-price-manipulation/

Quantitative Easing is a threat to the dollar’s exchange value. The Federal Reserve, fearful that the falling value of the dollar in terms of gold would spread into the currency markets and depreciate the dollar, decided to employ more extreme methods of gold price manipulation.

When gold hit $1,900, the Federal Reserve panicked. The manipulation of the gold price became more intense. It became more imperative to drive down the price, but the lower price resulted in higher Asian demand for which scant supplies of gold were available to meet.

Having created more paper gold claims than there is gold to satisfy, the Fed has used its dependent bullion banks to loot the gold exchange traded funds (ETFs) of gold in order to avoid default on Asian deliveries. Default would collapse the fractional bullion system that allows the Fed to drive down the gold price and protect the dollar from QE.

What we are witnessing is our central bank pulling out all stops on integrity and lawfulness in order to serve a small handful of banks that financial deregulation allowed to become “too big to fail” at the expense of our economy and our currency. When the Fed runs out of gold to borrow, to rehypothecate, and to loot from ETFs, the Fed will have to abandon QE or the US dollar will collapse and with it Washington’s power to exercise hegemony over the world.

This is very much like what Kelly Mitchell reported in his recent book Gold Wars.

The bottom line ... the US dollar is on the verge of crashing, while the Chinese and other big players are preparing for the day when it does. Get ready for your financial world to collapse, and with it the rest of your world.

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