Nine blows against the gold price suppression scheme

[PMBug]

I haven't talked much about the issue of price suppression yet, but Chris Powell of GATA posted a nifty summary of some significant events over the last couple of years and I highly recommend reading it if you are not familiar with the story:

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This close correlation among gold, interest rates, and government bond values is why central banks long have tried to control -- usually suppress -- the price of gold. For gold is the ticket out of the central banking system, the escape from coercive central bank and government power. As an independent currency, a currency to which investors can resort when they are dissatisfied with government currencies, gold carries the enormous power to discipline governments, to call them to account for their inflation of the money supply and to warn the world against it. Because gold is the vehicle of escape from the central banking system, the manipulation of the gold market is the manipulation that makes possible all other market manipulation by government.

The gold market manipulation operates through the largely surreptitious mobilization of Western central bank gold reserves and the gold nominally held by the major exchange-traded funds. If the manipulation was done completely in the open, as governments used to manipulate the gold market, through the gold standard and then through what was called the London Gold Pool, the Western central bank gold dishoarding scheme of the 1960s, the manipulation would fail, because then the world would understand that there is not a free market in gold -- or in any currency, any more than there is a free market in government bonds.

Much has happened in GATA's campaign to expose the gold price manipulation scheme since we met here in New Orleans a year ago. I'd like to review nine important developments for you.
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Much, much more: http://www.gata.org/node/10613

[PMBug]

My interest in gold and silver was piqued only a few short years ago, so the claims about gold (and silver) price suppression have only recently appeared on my radar. I had been reading and listening but not really understanding what the deal was here. Why would anyone be suppressing the price of gold? The light bulb went off in my head when I ran across the following:

In a report on GATA titled Toby Connor: Manipulation, fact or fantasy?, the following was highlighted:

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A letter from Fed Chairman Arthur Burns to President Ford in 1975 shows that gold price suppression then was commanding the urgent interest of the highest officials of the U.S. government:

http://www.zerohedge.com/article/smo...ntrolling-gold
...

That ZH page contains the following:

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On June 3, 1975, Fed Chairman Arthur Burns, sent a "Memorandum For The President" to Gerald Ford, which among others CC:ed Secretary of State Henry Kissinger and future Fed Chairman Alan Greenspan, discussing gold, and specifically its fair value, a topic whose prominence, despite former president Nixon's actions, had only managed to grow in the four short years since the abandonment of the gold standard in 1971. In a nutshell Burns' entire argument revolves around the equivalency of gold and money, and furthermore points out that if the Fed does not control this core relationship, it would "easily frustrate our efforts to control world liquidity" but also "dangerously prejudge the shape of the future monetary system." Furthermore, the memo goes on to highlight the extensive level of gold price manipulation by central banks even after the gold standard has been formally abolished. ...

I read that memorandum and suddenly it all started to make sense - the Fed, the FRN dollar, gold, etc. We are playing out a game that started almost a century ago.

[PMBug]

With central bank intervention in gold becoming widely accepted as reality around the globe, today King World News interviewed James Turk out of Spain to get his take on central bank interference in the gold market. Turk started by giving a brief lesson on the history of these failed manipulations, “Yeah, it’s an important part of monetary history. It (the London Gold Pool) was established in 1961 by central banks around the world in order to try to make the Bretton Woods system, which had been created near the end of the Second World War in 1944, it was trying to make that system work.”
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More: http://kingworldnews.com/kingworldne...ppression.html

The audio for this interview has not been posted yet.

[DoChenRollingBearing]

I do not know anything, really, about the suppression of gold prices, but I accept that it very possible.

FOFOA is not convinced of price suppression. Yet he says that is essentially inevitable that the physical price of gold will take a HUGE quantum leap in price (his "working number" (my words not his) is $55,000 / oz). He is about the most positive about gold going to the moon.

FOFOA thinks that the paper price will diverge from the physical, at some point the 100 pieces of "paper gold" will all try to get the 1 piece of real, physical gold. His arguments are not easy to follow (for me), but IMO there is great wisdom in what he writes.

His 2010 article "The Shoeshine Boy" is perhaps the best 1 page article covering his thinking.

[PMBug]

Former Federal Reserve Chairman Paul Volcker today defended government intervention in the gold market to counter "exchange rate instability at a critical point."

Volcker's comments came in response to inquiry from the German freelance journalist Lars Schall, who noted GATA's reference to Volcker's expression of regret, recorded in his memoirs, about the failure of Western central banks to intervene to suppress gold prices during a currency revaluation in 1973. Volcker's support of gold price suppression was cited by your secretary/treasurer in his address to the Vancouver Resource Investment Conference last Saturday ...

http://gata.org/node/10926

IIRC, Schall is the journalist who spearheaded the media coverage of Germany's gold storage. He's doing good work shining a flashlight into very dark rooms.

[rblong2us]

motive ?
opportunity (ies) ?
evidence ?

big yes to all I reckon .
Turd makes his calls, based on how they operate.
Whats to discuss, apart from - will it end ? .....