As the Troika’s (IMF, ECB, EU) decision to tax Cypriot depositors has started a generalised panic movement among European savers, the Fed is, at the same time, orchestrating a downward manipulation of gold and silver spot prices in order to maintain trust in the dollar and, more globally, in the whole monetary system.
The Fed and the central bankers are trying to prevent a massive outflow toward physical gold from the savers/depositors.
Can anyone decently and logically explain this downward movement in the spot price of gold and silver when, at the same time, we are seeing a bank run in the making in Europe? It’s impossible to understand, unless one recognizes that, as GATA (Gold Anti Trust Action Committee) has been demonstrating for many years, a manipulation is actually taking place.
How long will the media and the regulatory bodies keep ignoring this scandal of gold and silver manipulation?
The LIBOR scandal has already shown the insane amount of collusion at the highest level. This gold price manipulation will in time be revealed, but certainly too late for the majority of savers to protect themselves accordingly.
Inflation, which is caused by a monetary system perpetually printing money, has already silently, but significantly, destroyed the savers’ purchasing power.
- The dollar has lost 90% of its purchasing power since 1913.
- The price of gold has been multiplied by more than 44 since the end of the dollar’s convertibility to gold decided by President Nixon, August 15, 1971. In reality, it’s the dollar’s purchasing power that has crumbled as much since 1971.
Global amnesia and widespread ignorance of the workings of the actual monetary system keep people from understanding how to rightly protect themselves from inflation and from this new confiscation movement that is about to be viewed as a bank bailout model.
Gold price manipulation actually blurs the possible means of rightly protecting one’s savings.
Cyprus is not an isolated case : this « bailout » plan, that Sen. Ron Paul is calling « The Great Cypriot Theft », will be applied to other Eurozone countries and to the West, including the USA and Canada, as has been confirmed by a common resolution from the Bank of England and the FDIC.
Paul Craig Roberts, former State Undersecretary to the Treasury under Reagan, whom I had interviewed a few months ago, clearly explains what the Fed is doing :
« The Fed is manipulating the price of gold and silver in order to protect the value of the dollar. It creates a trillion new dollars every year but, at the same time, the world is abandoning the use of the dollar as an international exchange and reserve currency. »
To explain the relation between the dollar and gold and understand why it’s in the interest of the Fed to manipulate the price of gold, one must understand that the value of the dollar is fixed by the law of supply and demand and by the trust in it, or the fiat.
Any loss in the value of the dollar should systematically translate to a higher gold price. Gold acts as an indicator of the loss of value of the dollar and other fiat currencies.
Those billions of dollars « printed » by the Fed each month represent a colossal amount of new dollars. Yet, at the same time, the fact that, progressively, countries like China, Russia, India and Brazil are letting go of the dollar in their bi-lateral trades brings a massive diminution in the demand for dollars.
Those countries do not have to buy dollars (lower demand) to trade together.
The supply of dollars is rapidly surpassing the demand for them.
The gold price should reflect the loss of value of the dollar but, since it’s being manipulated by the Fed, using different techniques, most people keep trusting the dollar.
The BRICS countries, for their part, have known for a long time how this system operates. Every month, those countries accumulate tons of physical gold. They don’t care about the spot price of « paper » gold, and they’re profiting from these artificially low prices to accumulate some more.
When the dollar collapses, the Fed will no longer be able to finance the US budget deficit by printing more money. It will then dip into pension funds and depositors’ accounts. In any case, this is one of Paul Craig Roberts’ predictions in a recent interview.
With a dollar crashing, the Fed won’t be able to control interest rates and, thus, the value of Treasury bonds, mostly held by the banks (which are perceived as solvent due to the high yield on those bonds).
The bursting of the bond bubble will bring down with it the financial and banking sectors.
So the Fed is in a desperate situation.
It is stuck between :
- Having to print billions of dollars to finance the US deficit.
- Having to print to keep interest rates low and to avoid the bursting of the US Treasury bond bubble.
- Rapid depreciation of the dollar.
- Many countries abandoning the dollar for their bi-lateral trades. One of the most revealing facts of this trend that we haven’t heard a lot about is the creation of a central bank by the BRICS. Its objective is not simply to finance small development projects, but rather to progressively get out of a system dominated by the dollar.
The manipulation of gold and silver prices amounts to a desperate attempt by Western central bankers to maintain trust in the world’s reserve currency and in other currencies, like the euro.
This recent attack on the prices is part of a strategy to stop the masses from going to gold or silver. But, at every dip or correction, the BRICS, high-end investors and emerging countries’ central banks, who have tremendous financial power, are hoarding physical gold in anticipation of the major crisis that will come with the collapse of the dollar.
