Many believe that there is a conspiracy to hold down the price of gold. This alternate money is said to reflect the true deterioration in the value of the dollar. It is presumed that the Federal Government has an interest in hiding the theft of citizen purchasing power.
Gold markets are easy to manipulate because supplies are limited and the leverage to control large quantities in the futures market is large. Whether this market is is actually being manipulated or not is moot. Suffice to say that it would be very convenient for a government debasing its currency to engage in such acts.
Here is an article that deals with the possibility:
However, the actual amount of physical gold and silver available is small. The futures markets are fractional reserve systems running at very low reserve ratios, something like 45 to 100 ounces of electronic gold and silver obligations for every unencumbered ounce of physical gold or silver. The day is coming when the physical price of gold and silver disconnect from the electronic price and they can not be brought back together again except through a massive devaluation of the dollar in terms of gold and silver. On this day the future’s markets in gold and silver will be stopped. There will be secret meetings. Those holding electronic gold tickets will be paid in be paid in dollars at the price of gold before the disconnect. And then I believe that there will be an explicit devaluation of the dollar with respect to gold on the order of 20 to 40 times.
[...] thanks again to Monty Pelerin, I’ve read Vincent Bressler’s “Empire of Fraud“, saying: The futures [...]
I keep hearing this story over and over again. The last time was on the Peter Schiff Show in an interview with Adrian Douglas, who says that gold should be selling at $56,000 per ounce. Even Peter Schiff was incredulous about it (see http://www.schiffradio.com/pg/jsp/charts/audioMaster.jsp?dispid=301&pid=51169 ). Recently you featured an interview with Jim Willie. I’ve decided to own shares of Sprott Physical Gold (PHY.U Toronto), which claims that all the actual physical gold is kept safe in the Royal Canadian Mint. I bought 200 shares today.