There is no greater scam than that being perpetuated by fiat money.
It is plausible that the gold market might be manipulated because of its critical importance to the current economic crisis. Gold is to Central Bankers and governments as The Cross was to Dracula. It threatens their existence.
Before governments got into the state of bankruptcy, gold hindered them from spending money they did not have. To truly increase spending and power, it was necessary for governments to remove the constraints gold imposed. Once that was accomplished the welfare/warfare state was off to the races.
Now, after almost forty years or nothing but fiat money, many governments are so bloated that they are no longer sustainable. Their key to survival (at least for some period) depends upon maintenance of the myth that fiat money is real. Gold is a huge threat to this scam.
Gold has been an alternate currency for thousands of years. It is the only currency that is not someone’s liability. It is not dependent upon the performance of some government. It stands on its own and always has.
Governments do not go bankrupt in the manner that businesses or individuals do. They do so by dishonoring their debts and obligations. The default can come as an outright refusal to honor claims or it can come via inflation. Most governments prefer the latter.
The soundest government in the world, until recently, was the United States. In spite of its enormous wealth and economic growth, its government has engaged in continuous default since the formation of the Federal Reserve. Since formation (1913), the United States government has “reneged” on 96% of its obligations. That is the amount that the dollar has depreciated. Those who hold dollars or dollar-denominated assets are having their their purchasing power stolen year after year. In the simplest of terms, this governmental behavior is outright fraud.
Gold has powerful enemies whose survival depends upon the metal being discredited. Some of these enemies are supposed to regulate markets to prevent fraud. Others are the biggest names in finance. Why would they not do everything they could to discredit gold? It is literally a threat to their existence. Governments must mask gold’s real value by keeping its price suppressed. Otherwise the myth of fiat money is exposed. It is difficult to determine what the price of an asset should be in a market that is manipulated. It is not difficult to determine that manipulation eventually becomes impossible.
My impression is that we are near the end game. Government options to manipulate gold are running out faster than government’s options to remain solvent. It will be interesting to see what moves are forthcoming. Expect anything! Government has now reached the status of a cornered, wounded animal that will do anything to survive.
Adrian Douglas has an interesting piece on gold and its current state of manipulation. It is his opinion that governments and their henchmen have created a “fractional-reserve” gold market. For those who own gold or those who are thinking of adding it to their portfolio, Douglas provides some interesting information and cautions.