GATA’s Chris Powell: The Why and How of Gold Price Suppression

June 27, 2012 By 8 Comments

GATA has released Chris Powell’s speech at the Hong Kong Gold Investment Forum titled The Why & How of Gold Price Suppression.

Gold is so important that Western central banks — particularly the U.S. Treasury and its Exchange Stabilization Fund, the Federal Reserve, and allied central banks — rig the gold market every day, even hour by hour. Why do they do this?

It’s because gold is a powerful competitive currency that, if allowed to function in a free market, determines the value of other currencies and influences interest rates and the value of government bonds.

There is much academic literature supporting gold’s influence over currencies, interest rates, and government bonds throughout history. Prominent in this literature is the study written by Harvard economics professor Lawrence Summers and University of Michigan economics professor Robert Barsky in the June 1988 edition of the Journal of Political Economy, a study titled “Gibson’s Paradox and the Gold Standard.” As with all the documents I’ll cite today, the Summers and Barsky study is posted at my organization’s Internet site, GATA.org:

http://www.gata.org/files/gibson.pdf

Summers went on to become treasury secretary of the United States, so his study of gold’s influence on currencies, interest rates, and bond prices is pretty good authority. The Summers and Barsky study implied that governments could achieve their ideal of low interest rates and strong government bond prices by getting control of the price of gold.
Click here for Powell’s full speech posted at GATA:


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Comments

  1. Avatar of Plebian Plebian says:
    June 27, 2012 at 7:20 PM

    Great work by GATA as usual.

    Shouldn’t the following be breaking news?!?!

    –6/27/2012–
    “The House Oversight Committee approved a bill Wednesday opening the Federal Reserve to a full audit.”

  2. Avatar of 4 oz 4 oz says:
    June 27, 2012 at 7:50 PM
    Now we are going to find out if Boehner has balls or not. <Excuse me
    while I tear up>
  3. Avatar of Tears of the Moon Tears of the Moon says:
    June 27, 2012 at 8:23 PM

    Just posted this on my blog of my most recent correspondence with the Central Bank of Australia. Blog link here

    The PF Keys still in working order at the RBA

    The following is a recent email conversation I had with the Reserve Bank
    of Australia (RBA). Note the RBA holds approx. 80 tonnes of Gold as
    part of its reserves (marking Australia’s the 36th largest sovereign
    gold holdings), and has done since selling 167 tonnes of Gold in 1997 at
    the bargain price of an average of US$320/oz. My previous email
    conversation (different PF key response) is here

    To: RBAInfo
    Subject: Will RBA increase gold reserves?

    I was wondering with the recent decline
    in gold prices if the RBA was considering adding to their gold reserves,
    such as other prudent central banks are currently doing (China and
    Russia come to mind)? You could swap those fiat SDRs you are holding for
    a tangible asset, wouldn’t that be prudent in this time of bank runs
    and sovereign risk?

    Thank you for your email.


    The Reserve Bank of Australia does not comment on its investment management decisions, other than in its Annual Report (please scroll down to the ‘Reserves Management’ section).

  4. Avatar of 427 427 says:
    June 27, 2012 at 8:37 PM

    Tears of the moon;

    How long have you had your blog up? it looks vary nice
  5. Avatar of Tears of the Moon Tears of the Moon says:
    June 27, 2012 at 9:27 PM

    Hi 427, my blog has been up for 2 years now, as of last few weeks. See the 2 year anniversary post here

  6. Avatar of 427 427 says:
    June 27, 2012 at 9:36 PM

    @ToM,

    I was wondering because there was no comments left on the threads. The site looks beautiful and your posting every thing everybody else dose. 
  7. Avatar of Ed_B Ed_B says:
    June 28, 2012 at 1:55 AM

    ”
    Now we are going to find out if Boehner has balls or not. <Excuse me while I tear up>”


    Yeah, lol, as if we did not already know that this guy is a nut-less wonder.  It’s pretty damned sad when the guy running the US House of Reps has less in the nuts department than Michelle Bachmann.  Dead wood like this we do not need.  This is why so many people are coming around to the idea of not re-electing anyone.  Just toss ‘em all out and start over every election.  Unfortunately, we can’t toss ‘em all at the same time because their terms are staggered.  Still, doing all we can when we can is better than nothing… for now.

  8. Avatar of silverbullion silverbullion says:
    June 28, 2012 at 3:17 AM

    Excellent speech Chris. Keep it up.

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