A couple of common assertions that are frequently
made to dismiss complaints of manipulation of the gold market have come up
again in recent days and may deserve rebuttal.
First, interviewed in part about gold market
manipulation last week by Max Keiser on Russia Today's "The Keiser
Report," Charteris Treasury Portfolio Managers
CEO Ian Williams remarked, "We've always worked on the theory that the
market is bigger than any one particular player":
This claim that the market is bigger than anyone and
always wins in the end may often be true. But exactly when is
the end, and is there not a question of justice in the intervening time?
And is the market always bigger than any one particular player? Would
such an assertion always be true even when one particular player has the
power to create infinite amounts of the world's reserve currency?
Would it always be true not only when one particular player has such
power but also when players allied with it have the power to create infinite
amounts of the currencies of their own countries?
Would such a claim always be true when, in
addition to the money-creation powers of the reserve currency-issuing player
and its allies, those players were also the dominant participants in a
particular market, as central banks are the dominant participants in the gold
Might not the power of infinite money creation tend
to create a force bigger than any market?
Second, in his latest gold market commentary,
financial letter writer Clive Maund says: "The
long-term chart for gold also makes clear that all the talk about it being
manipulated and suppressed is arrant nonsense. With it having risen from
about $250 at its low at the start of the bull market to its latest peak
around $1,900 last year, it doesn't look like the manipulators have had much
success, does it? The fact of the matter is this: If currencies get debased,
and they are being debased at an ever-increasing rate, then gold, which is
real money, is going to go up to compensate":
And yet the enduring disparagement about gold is
that, despite its steady rise over the last decade, it has not kept up even
closely with standard measures of inflation and money creation. Gold's
disparagers and deniers of market manipulation never seem to pose the obvious
question. That is: Why has gold, almost alone among commodities,
Since central banks are the biggest participants in
the gold market and since they impose greater secrecy on their gold trading
than their governments impose on their nuclear weapons, and since, within
living memory, central banks rigged the gold market in the open, having
perceived their great interest in doing so --
-- might that interest continue today and might its
pursuit be facilitated by secrecy? Might gold's price be substantially higher
in a free and transparent market, in a world where the absolute power of
central banking had at least to operate entirely in the open?
And if it is acknowledged, as it generally seems to
be, that the world long has been operating with a fractional-reserve gold
banking system -- that there are many more claims to gold than can be covered
by actual metal -- might there be still another powerful interest to restrain
the gold price, the interest of the big financial houses dealing in gold?
Might gold's ascent actually be a controlled retreat
by the issuers of currencies that compete with gold?
In any case, those who maintain that there is no
manipulation of the monetary metals markets should remember that they are, in
effect, purporting to prove a negative. Maybe it can be done, but it is hard.
And can it be done in this case without knowing exactly what central banks
and their agents are doing in the markets? Have those who deny gold market
manipulation ever tried asking a central bank about its market interventions?
Are the deniers aware of the secrecy on which central banks insist, and has
this secrecy ever prompted the deniers to get a little curious?
Having gotten quite curious -- curious
enough even to bring lawsuits -- GATA has obtained over the years grudging
admissions from the Federal Reserve, Bank of England, Bank for International
Settlements, and German Bundesbank that they are
secretly active in the gold market and that they will be damned if they let
the world know exactly how and why they are active. If Williams, Maund, and others who contend that the gold market is
completely free of surreptitious controls are so confident in their
assertions because they have been made privvy to
the great secrets of central banking, it would be awful nice of them to let
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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