Fabrice Drouin Ristori:How long can the manipulation of the precious metal markets last ?
Chris Powell: It can last as long as gold investors buy “paper” gold rather than real metal. The primary article of faith about gold is that it can’t be printed, but it CAN, insofar as “paper” gold can be printed to infinity. Gold investors who buy “paper” gold with the hope of price appreciation would do better to flush their money down the toilet. At least that way they’ll avoid commissions.
FDR: What will put an end to it –
CP: Probably only the discrediting of “paper” gold, or a futures market default.
FDR: What will be the signs proving that the manipulation is ending ?
CP: I doubt that we’ll get any signs, though maybe the decline in price of “paper” gold relative to the price of real metal is a sign of trouble for the manipulation. More likely the gold price suddenly will be reset to a much higher level that is more sustainable for manipulation by central banks with less drain on their gold reserves, at which point manipulation will resume at the higher level. I doubt that the manipulation will ever end, since, to preserve their power, governments probably always will try to rig the currency markets, and they’ll probably get away with it until investors around the world are far more informed than they are now.
FDR: Do you anticipate an overnight ending of the manipulation or a progressive process ?
CP: I think an overnight revaluation is more likely now. Of course currency revaluations are always done suddenly, aiming for surprise. No central banks are going to call us a few days in advance so we can arrange our portfolios for the greatest benefit. Only the investment banks that function as agents for central banks will get such calls.
FDR: Is the gold/silver paper spot price still relevant to value physical gold and silver ?
CP: It is if people really can find metal for purchase at the paper spot price. But the paper spot price may be losing some relevance as more shortages have been reported and there is rationing of gold and silver coins from government mints. Shortages and rationing are forms of higher pricing that don’t get included in nominal prices. Nominal prices are little use if the product isn’t available. But indeed, most gold-related assets are still taking their cues from the paper spot price and futures prices.
FDR: What direct consequences would a free gold/silver market have on people worldwide — not investors, people in general ?
CP: Free markets in the monetary metals would liberate markets and peoples generally, and reduce the power of governments and central banks, especially their power to control in secret the prices of all capital, labor, goods, and services in the world. Such liberation is really the objective of those who would expose the Western central bank gold price suppression scheme. We don’t really care what people use as money. We just want them to have options of valuation that are beyond the control of government. Here’s how von Mises put it: “It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments. Ideologically it belongs in the same class with political constitutions and bills of rights.”
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GoldMoney Mulls Bitcoin Integration.
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Also on the speaker line-up is Keith Neumeyer, President of First Majestic Silver and Jeff Berwick of The Dollar Vigilante.
The Sovereign Exchange is asking for a donation to GATA of two ounces of silver or $100 fiat dollars. Hor d’euvres will be served along with a refreshment. The event will be limited to 75 people, giving everyone a chance to meet and mingle with Bill, Chris, Keith and Jeff. Jay Taylor, Al Korlein and Peter Spina are also scheduled to attend.
If you will be in Vancouver and wish to join in, please email [email protected]
]]>In a recent appearance on RT’s Capital Account GATA’s Chris Powell gave an excellent explanation of why market manipulation is an important issue.
“What they are doing is really [trying] to seize control of everything economic in the world. And really surreptitiously behind peoples backs. It’s an essentially tyrannical system, that is what we are trying to expose. “
Mr Powell believes the precious metals market to be key to this economic control “Because the central banks themselves say so.” He sites paper by Harvard economists “explaining the traditional historic relationship between the gold price and interest rates.”
“Basically they found that gold is a determinant of interest rates. It’s a determinant of the price of government bonds and that is what the gold price repression scheme is really about. It’s a mechanism of supporting government currencies, of suppressing interest rates and supporting government bond prices. “
“As Allen Greenspan testified to congress in 1998, ‘central banks stand ready to lease gold in increasing quantities should the price rise.’”
“gold leasing is not what central banks sometimes pretend it is, a way for them to make a little money on what they call a dead asset, it is a mechanism of market control. It is a mechanism of defeating a potentially competitive currency, it’s a mechanism of suppressing interest rates, and it’s a mechanism of supporting government bond prices. “
Mr Powell and Mr Murphy go on to discuss silver market manipulation saying “it’s a government operation.”
“you can look it up it’s on the Treasury Departments internet site, the law authorizes the Exchange Stabilization Fund to trade secretly in the gold market and any other market that the Treasury Secretary wants to get into.”
They review their resent discovery of IMF reports on gold leasing, comment on the recent tours of the Bank of England’s gold vault and examine the nature of conspiracies.
It’s an excellent interview and well worth watching.
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Prices rise and supply shrinks ahead of Vietnam’s gold ban. http://vietnamnews.vnagency.com.vn/Economy/230122/gold-supplies-dwindle-ahead-of-ban.html
http://www.livetradingnews.com/gold-price-in-vietnam-rises-to-12-month-high-86080.htm#.UFz_u1EpqA5
Stories of ‘ghost inventories’ in China’s steel industry makes GATA wonder if LBMA and gold and silver ETFs are next in line for inventory verification. http://www.gata.org/node/11751
A talk by Mike Hearn at the London Bitcoin conference discusses how the Bitcoin protocol can be modified to include exotic new transaction types. These could include a micro-Payment channel, assurance contracts, smart property, lock times and cross-chain trading. Fascinating stuff.
Listen to it here, http://vocaroo.com/i/s0rbwBRBSKxn (audio not so great.) Or read about it here, http://codinginmysleep.com/exotic-transaction-types-with-bitcoin/
Bitfloor thieves have yet to spend their stolen hoard. http://www.bbc.com/news/technology-19633980
BitInstant’s Charlie Shrem and Erik Voorhees went to Rio de Janeiro for the annual Global Payments Forum held by the North American Payments Association (NACHA) to speak about Bitcoin. A long but entertaining account of their trip can be found here, http://blog.bitinstant.com/blog/2012/9/15/brazil-and-the-global-payments-forum.html
What I found the most interesting about story is Mr Voorhees take on a presentation by a senior legal counsel to the Federal Reserve.
“The last presentation of the whole event was by far the most intriguing. On the surface it sounded quite dull, “The Implications of Dodd-Frank Section 1073”, and it was delivered by a conservative, senior legal counsel to the Federal Reserve, but in fact it became a perfect demonstration of two things:
a) How crippling regulation is going to drive business toward Bitcoin, inevitably
b) How this same regulation will be unable to cripple Bitcoin itself, inevitably
… My take away from this last session was the revelation that Bitcoin eviscerates entire statutes of law. Bitcoin will result in a number of “legal impotencies,” while simultaneously offering an alternative to the business and money that is being stifled by these same laws in the normal economy. I think Barney Frank may just be, inadvertently, Bitcoin’s new VIP star player. Perhaps he should be BitInstant’s Employee of the Month. Such laws will continue to weigh down Bitcoin’s competitors, inadvertently strengthening the use case for a system which undermines their entire apparatus of monetary control. The irony is beautiful.”
Another community currency, the Bristol Pound. http://bristolpound.org/
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Attention digital currency providers, start advertising in Argentina. http://www.forbes.com/sites/jonmatonis/2012/09/04/argentina-begins-tracking-all-credit-cards/
BitInstant’s Charlie Shrem wants Bitcoiners to “get together and get a SuperBowl ad” adding that “I want this commercial to be a statement to the banks and governments of the world and say ‘Look, your people don’t like your fiscal policies, you’ve put us in a recession, you’re screwing us up so much. We’re taking control of our own money, the way we’re doing it is Bitcoin.’ I want to scare them.”
Also, in the next few weeks BitInstant should be open for business in Canada, 3,700 people have already signed up to get the new Bitcoin debit card, and loads more Bitcoin debit card details here http://codinginmysleep.com/bitcoin-mastercard-followup-interview-with-charlie-shrem/
GATA Chairman Bill Murphy is appearing on Russia Today’s “Capital Account” program at 4:30 p.m. ET Wednesday. http://www.gata.org/node/11714
And yet another community currency in Spain http://www.guardian.co.uk/world/2012/sep/04/spain-euro-free-economy?newsfeed=true
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The Vietnam government continues its ‘war on gold’ as it attempts to push the use of its own currency, the Dong, on a population that stubbornly continues to view gold as money. http://therealasset.co.uk/vietnams-war-gold/
GATA secretary scheduled to appear on Russia Today’s ‘Capital Account’ program on Tuesday. The video should be posted here, http://rt.com/programs/capital-account/, shortly after the broadcast.
Bitcoin Magazine discusses how the Bitcoin community should police itself in the wake of a recent large Bitcoin theft. “What this ultimately boils down to is that the Bitcoin community needs to have a serious conversation about the way that it handles the judicial process. So far, everyone involved has been very unwilling to make any overtures to established police authorities, presumably wishing instead to establish an alternate extralegal “lex mercatoria” to handle Bitcoin-related cases in an ad-hoc fashion.” http://bitcoinmagazine.net/the-july-13-bitcoinica-investigation-and-sound-justice/
London Bitcoin Conference http://www.bitcoin2012.com/
During his appearance in front of the House Subcommittee on Financial Services, Mr Grey of the American Open Currency Standard questioned Representative Paul understanding of legal tender laws and stated that he is in favor of leaving them in place. He explains is stance on the issue in a blog post along with a few interesting notes on his experiences at the House hearing. http://www.opencurrency.com/5-things-i-learned-from-d-c/
James Fayed, former owner of e-billion, has withdrawn claims to $22mil+ in seized bank funds and precious metals. The funds will be forfeited to the US and Australian governments. A few more details can be found here. http://www.laht.com/article.asp?ArticleId=550982&CategoryId=12396
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The fed would be feeling a bit of pressure as its management of the US’s gold has come under some scrutiny lately. Not only because of the ‘audit the fed’ bills recent success in the house but also because of increased news coverage of GATA’s concerns of gold market manipulations, and the recent ‘Gold Action’ campaign out of Germany, which is supported by some German legislators and calls for the repatriation of the countries gold reserves held at the Fed.
The LA Times is reporting that the audit began in January and is being conducted by employees of the Mint, the Treasury inspector general’s office and the New York Fed and monitored by employees of the Government Accountability Office. Ron Paul’s ‘Audit the Fed’ bill calls for an audit that would also be conducted by the Government Accountability Office. However, Paul’s bill would require a review of policy decisions as well.
While there has been some concern about the actual amount of physical gold in the Fed possession, Representative Paul, GATA and many others, are equally concerned that the gold is been used in secret or ‘un-disclosed’ transactions.
GATA has commented on the audit on their website, noting that the audit is only “confirming the gold content of the bars kept there, and not touching on issues of ownership impairment, like swapping and leasing, the issues raised by GATA and others aggrieved by manipulation of the gold market.”
There are big concerns that the ‘paper claims’ on the physical gold held at the NY Fed’s location are far greater than the actual physical gold present. And while this audit may produce some nice headlines at the end of the year, until the Fed allows an audit of the gold’s paper trail the ‘conspiracy theorists’ will remain far from satisfied.