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Mix-Ansicht- Larry Parks: THE MANIPULATION OF THE PRICE OF GOLD - CRASH_GURU, 14.11.2004, 08:39
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Larry Parks: THE MANIPULATION OF THE PRICE OF GOLD
-->THE MANIPULATION OF THE PRICE OF GOLD
November 5, 2004
There is myriad historical, anecdotal and circumstantial evidence that the price of gold has been, and continues to be, manipulated by official institutions. Perhaps as part of the legacy of it being a felony for Americans to own fungible gold for 40 years -- what was the public policy justification for that? -- along with the loss of historical memory of currency collapse (the last time in the U.S. was during the Revolution), very few own it. As a result, there is no great public outcry. The overall sentiment in the U.S. is reflected by author Peter Bernstein in his virtual diatribe against gold, The Power of Gold, that people own it out of"cupidity and stupidity." [One wonders why the World Gold Council would help promote a book that is hostile to gold.] The late Harry Oppenheimer, when he was the controlling shareholder of Anglogold, weighed in with his observation that people"buy gold because they are too stupid to think of any other monetary system which will work."
One might expect gold producer management to object. They don't, mostly because: (1) As a group, they have no knowledge of monetary theory. Mostly, they went to the Colorado School of Mines, or its equivalent, and are engineers. Even those who studied finance or economics, along with everyone else, were not taught about the role of gold in our monetary system. The relevant concepts have been excised from the curricula -- there's a big story about how and why this happened; (2) They have embraced the gold-as-jewelry model for the primary use of gold, with a slight bow to gold-as-"investment," whatever that means, even though the model is contradicted by empirical evidence; and, (3) In some cases, they recognize the role of banks in suppressing gold, but to complain and possibly alienate bankers might imperil their ability to obtain financing for merger and acquisition activities as well as to fund exploration and development.
This is very frustrating for those who own gold or who trade it. GATA, a gold advocacy group, compiled voluminous data indicating manipulation. Both the World Gold Council as well as mainstream media have largely ignored it. Various lawsuits, e.g., Reg Howe's effort against the Bank for International Settlements et. al., have gone nowhere. Constitutional challenges, such as those raised by Dr. Edwin Vieira, have also gone nowhere. Nevertheless, because of the unfathomable leverage financial players have built into the monetary structure, gold will soon be seen as the worldwide financial asset of choice for those who want to preserve wealth.
In years past, when President Roosevelt seized the nation's gold, he, in effect, bought off the producers by increasing the ratio of"dollars" to gold from $20 per ounce to $35 per ounce. During the Great Depression, Homestake Mining stock increased ten-fold. Even if the producers at that time objected, which they did not, they would very likely have been seen as obstructionist. Years later, gold manipulation led to the London Gold Pool, and IMF and U.S. Treasury gold"auctions." Where did they get the gold to auction? As author Howard Katz pointed out, in three words,"they stole it." Professor Antal Fekete observed that whenever there is plunder, there is the ability to affect supply and price. Most important, the combination of legal tender laws, which U.S. Supreme Court Chief Justice Chase wrote are"necessary only for the purpose of dishonesty," and IMF restrictions that member nations not link their currencies to gold, and only to gold, have effectively shattered any"free market" for gold.
If folks understood how the monetary system works against their interests, they would object. Hence, there has been an ongoing effort to distort and disguise the CPI, interest rates, and, especially, the price of gold. The benefits to financial players have been stunningly successful. While creating an additional $7 trillion flat out of nothing since 1980, they have seen the market capitalization of their sector grow from $50 billion to more than $2.3 trillion. Further, financial sector profits are now more than 40% of all corporate profits - just for moving paper (and electronic blips) around.
This massive malfeasance, bought and paid for - called"lobbying" - by financial sector principals, is strikingly ubiquitous. The consequence will be staggeringly devastating as the"dollar's" purchasing power approaches that of every other fiat money since Marco Polo went to China: zero! The most efficient way for one to protect oneself is to allocate to gold and/or gold-related investments.
Larry Parks
Executive Director
FAME
Foundation for the Advancement of Monetary Education
Box 625, FDR Station
New York, NY 10150-0625
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