Our pal D.M. conveys the
following disparagement from a friend -- call him Doofus -- and asks for a
reply:
"Central banks
manipulate far more than just gold -- interest rates, stock markets, housing
markets, etc. That's what they do. And so what? The gold price has gone up
for the last 12 years, despite the 'manipulation.' So I don't see what's the
issue. Even if Western central banks try to sell gold down, Eastern central
banks are only too happy to accumulate at lower prices."
Contrast Doofus' "so what?" argument with the contemptuous and yet
ridiculous denial given to CNBC yesterday by CPM Group Managing Director
Jeffrey Christian that there is anything surreptitious or questionable going
on in the gold market:
CNBC reported (http://www.gata.org/node/12333): "Jeffrey Christian,
founder and managing director of commodities research firm CPM Group, was a
lot more blunt about GATA, saying, 'I think they're
outright liars. ... Pretty much what they do is nonsense.' Christian added
that he believed there was no conspiracy among global central banks to
collude over gold prices and that central banks are 'very transparent' about
their monetary gold reserves."
Doofus says that what
GATA trumpets is only obvious. But Christian not only denies what Doofus
calls obvious but, in denying it, is considered an industry expert by
financial news organizations.
So are central banks
manipulating the gold market and other markets or not? Before disparaging
GATA Doofus might try putting the question to Federal Reserve Chairman Ben
Bernanke. If Doofus gets an acknowledgment of market manipulation, it will be
international news.
Then consider whether, in
democracies, governments should be lying to and misleading their people quite
so comprehensively and whether it's really a matter of indifference even to
Doofus himself whether any democracy or the world has free markets.
Yes, rigging markets is
indeed what central banks do these days. That's what a high school graduate
told GATA's Washington conference five years ago:
"Gold is only part
of it. For market intervention is exactly why central banking was invented.
Intervening in markets is what central banks do. They have no other
purpose. (See http://www.gata.org/node/6242.)
But is this intervention right?
And will the propriety of it ever be judged if the intervention itself is
covered up or denied as supposed industry experts like Christian deny it?
If this manipulation of
markets is really no big deal, then why are central banks so damned secret
about it? Why do they have to be sued to provide ordinary documentation? (See
http://www.gata.org/node/9917.)
Obviously this stuff is a
lot bigger deal to the central banks than it is to Doofus. What are the
central banks afraid of? Could it be that deception of markets and whole
populations has become a major policy tool of central banks, a tool they are
desperate not to lose?
And while, as Doofus
notes, gold has gone up from $250 to $1,600 in the 13 or so years GATA has
been complaining about market manipulation, how fair is this when, in a free
and transparent market, gold well might be priced at 10 times
$1,600?
Besides, as that high
school graduate said, gold is only part of the problem -- the central part
but a rather small part. The much bigger part is the undemocratic allocation
of political power and wealth in the world and the West's loss of the free
markets that helped make it great and propelled the ascent of man.
GATA couldn't care less
whether Doofus or anyone else invests in gold. We're pursuing far bigger
things: democracy; free and transparent markets; and limited, accountable
government, which encompasses Doofus' right to be a selfish and irrelevant
nihilist.
So what? That's
what.
As for Christian, why do
so many gold market followers get so agitated about him?
In the first place, GATA
has struck no blow exposing gold market manipulation stronger than the one
Christian himself struck with his testimony at the March 25, 2010, hearing of
the U.S. Commodity Futures Trading Commission, when he stated that the
leverage in gold trading in the London physical bullion market -- the ratio
between metal traded and metal actually existing -- was as much as 100 to 1
and that the so-called physical market really isn't so physical at all.
And second, note what
Christian, whose firm has many central bank clients, was reduced to in his
comments to CNBC: reduced to asserting that central banks are "very
transparent" about their gold reserves. Good grief -- even the pillar of
the Western financial establishment, the Financial Times, acknowledged a few
weeks ago that central banks have been far from transparent about their gold:
http://www.gata.org/node/12180
Has Christian lately
gotten a tour of Fort Knox, which hasn't been opened to the public for
decades? Has he been allowed to review the gold trading books of the Federal
Reserve, Bank of England, Bundesbank, and Bank for International Settlements?
Have those central banks given him a current list of their gold swaps and
leases? Has he been invited to attend any of the meetings of the G-10 Gold
and Foreign Exchange Committee, a committee whose very purpose is central
bank collusion about gold? If Christian has such information, will he, in
pursuit of the transparency he proclaims, share it with the world?
Of course not. But
Christian's unsupported and plainly ridiculous profession of transparency is
apparently the only defense that can be made of central banking here, making
him the Wizard of Oz of the gold world: "Pay no attention to that man
behind the curtain." How painful this might be for anyone who wasn't
already on central banking's payroll.
Christian isn't the
challenge. The challenge is to embolden financial news organizations to try
committing journalism to expose central banking's many deceptions.
Emboldening such journalism is a slow process, but Christian performs another
great service for that process when he demonstrates that, with gold, central
banking has no defense at all.
