|Gold Price Manipulation|
Gold price manipulation is not new and has frequently been noted
by the Gold Anti-Trust Action Committee (GATA).
As the instability of world economies grows the intensity
and proliferation of gold price manipulation grows.
This nefarious activity has been around since at least 1934
when the Gold Reserve Act was instituted to set up the Exchange Stabilization
Fund within the Treasury Department. It
was authorized to trade in gold and other financial instruments.
Since then the Gold Reserve Act has been amended to allow
the Exchange Stabilization Fund to trade in an expanded range of financial
instruments and to do that in secret, away from the prying eyes of Congress AND
Jo Blow public.*
As well as a historical record of gold price manipulation
which can be found at the GATA website, a recent report originated by the German
Government’s auditors was critical of the German Central bank, Bundesbank for
its lack of diligence in custodianship of Germanys Gold Reserves.
According to GATA, “The auditors report disclosed that the
Bundesbank had secretly sold some of the German gold reserves vaulted at the
Bank of England in London. But since the sale of Germany's gold in London
apparently did not reduce the total official holdings in Germany's gold
reserve, the sale was probably part of a gold swap with another central bank.
That is, it probably was a transaction in which Germany sold its gold in London
on behalf of that other central bank and in exchange took title to gold owned
by the other central bank and vaulted elsewhere.”**
Although GATA have been in front of the investigation into
the deliberate gold price manipulation by Central banks, they are not the only
ones to observe and, indeed, take advantage of this.
The Chinese Government, for example, has been well aware of
the price of gold firmly held down and has taken advantage of that with extraordinary
highest ever buying of gold over recent years.
U.S. State Department cables obtained and published by
Wikileaks last year exposed the Chinese Government awareness of the gold
suppression scheme and china wisely, for them, did not expose it since it
enabled them to buy gold, and even gold mines, at a fire sale price.
In an interview with, Zhou Qiren, Dean of Peking
University’s National School of Development, he said, “… a global system in
which the values of currencies were pegged to gold would make “an excellent
monetary system.” He went on, “if the currency of each major country is bound
to gold, financial headaches would of course be reduced ... it would be
impossible for [U.S. Federal Reserve Chairman Ben] Bernanke to print 600
billion USD to purchase long-term debt ... (and) the gold standard would
effectively prevent each country’s government from recklessly levying
‘inflation taxes’ domestically and passing troubles to others by manipulating
currency exchange internationally.”
In December 2011, Zhang Jianhua, research director of the
People’s Bank of China, also observed that “no asset is safe now. The only
choice to hedge risks is to hold hard currency — gold.”
So China knows all about the gold price suppression scheme, and
may be a jolly good indication why China is accumulating gold so furiously.
As financier Christopher Potter points out in a column for
the Lehrman Institute’s TheGoldStandardNow.org,
“China is preparing for a world
beyond the inconvertible paper dollar, a world in which the renminbi,
buttressed by gold, becomes the dominant reserve currency.” Potter’s article,
“China’s Preparing for the End Game — Are We Paying Attention?” points out that
the Chinese government is expected to own more gold than the U.S. government in
What will happen to gold price manipulation then? More, what will happen to the gold price
Perhaps now is the time to buy gold while the price is still
at fire sale levels.