The Powers That Be in the US and its allies seem to be committed to
keeping the price of gold below $1320US/oz.
Is the US control of the price of gold bad for China? It would appear that
since China is purchasing large amounts of gold, keeping the price from
rising is in the interest of the Chinese.
Is the US control of the price of gold bad for Russia? It would appear
that Russia has no urgent reason to see a higher price of gold.
Is control of the price of gold considered as a damaging policy by the
Rest of the World? The Rest of the World does not seem to be particularly
upset by the control of the price of gold.
Who is upset that the price of gold is so clearly kept down below
$1320US/oz? Answer: the gold miners of the world and those who own gold as
financial protection, as well as those who have long positions in the futures
markets. All of these actors are limited in number, as contrasted with a
world population of some 7.5 billion humans.
So it is evident that in reality there are relatively few parties
� individuals and corporations - who care about the price of gold. For the
vast majority of people in The West, the price of gold is of no concern
whatsoever. Wealthy Chinese are buying gold, but they know better than to say
anything about it, let alone complain about the low price.
Gold has been banished from everyday use, and can only be hoarded
unproductively. Gold is going into hiding, as Professor Antal E. Fekete has
pointed out. (See www.professorfekete.com)
This is not the first time gold has gone into hiding; gold went into
hiding in the days of the collapse of the Roman Empire of the West. It is
going into hiding again, in the present slow-motion financial collapse of the
world.
The price of gold will enter a rising trend, no matter how violent the
official interventions to control its price, because at the present low
prices it will be impossible for the gold market to satisfy demand for gold
from a largely silent minority of mankind that wants to own gold. When this
happens, we can expect the criminalization of gold ownership, at least in
some quarters of the world.
At some point, impossible to predict, the demand for physical gold will
only be satisfied at increasingly higher prices.
Gold today has really only one enemy: the Federal Reserve of the US.
At about $1307US/oz, one US Dollar is worth 0.0238 grams of gold. That is
to say, a little more than two-hundredths of a gram: 2.38/100 of a gram. At
0.02 gram per Dollar, the price of gold would be $1,555US/oz. (31.103 gr per
ounce/0.02 = $1,555.15US/oz)
The Federal Reserve � and the US Establishment � are naturally worried
that as the dollar becomes worth less gold, there may be a loss of confidence
in the dollar in the world�s financial markets. That is a horrifying prospect
for the Federal Reserve and the US Government, as the American Empire rests
on two pillars, each of which supports the other: the Military and the
Dollar.
If the Dollar loses prestige in the world and declines in value against
other currencies, the Military loses force. If the Military loses force, the
Dollar loses acceptance. If they go, the American Empire is over.
Russia and China are ambivalent about the Dollar. The health of their
economies � such as they are � depends on a Dollar which maintains its value.
So they are not going to challenge the Dollar by fiddling with the price of
gold.
On the other hand, the American Empire is not behaving towards them in a
friendly manner. For that reason, they will not be collaborating actively to
suppress the price of gold.
Russia will not demand gold for its oil and gas; Russia does not wish to
upset the apple-cart. China will not push for a higher price of gold, because
it owns over $4 trillion in Bonds denominated in both Dollars and Euros (with
minor amounts in other currencies.) China wants to use those Bonds to buy up
resources all over the world, and has no interest in destroying their value.
So Russia and China are just going to sit back and watch the gold markets
do their work, which will be inexorable.
Will Russia and China collaborate to establish a new Gold Standard for the
world? Highly unlikely. The structure of their economies is built upon
banking systems which carry out fractional banking and which are loaded to
the gills with maturity imbalances: short massive amounts of deposits and
long massive amounts of long-term loans. They will not change this system
until it suffers a total collapse, and then they will strive to resurrect the
same flawed system, because that is all they know how to do.
Russia and China are attempting to set up a rival to the IMF. To the IMF
mess will be added the BRICS mess, with all the same wasteful �development
loans�. I repeat: that is all they know how to do.
Gold and silver will never lose the powerful attraction which they hold
for humans.
However, the use of gold and silver in a productive, free society based on
property rights, and in its financial system, is a body of theory which is
unknown to today�s rulers. The necessary knowledge was put aside to deal with
the exigencies of WW I, which started just 100 years ago, and was never put
to work again when that war was over.
At this point, it is as impossible to recover that knowledge and the
spirit what went with it, as it is impossible to recover the spirit which
created the Parthenon and the other marvels of antiquity.
�You are lost and gone forever,
Oh my darling, Clementine!�
I bid you welcome to The New Dark Age.
