- Question: Why do Central Banks and Governments hate gold?
- Answer: Because they can’t print it
“An almost hysterical antagonism toward the gold standard is one
issue which unites statists of all persuasions. They seem to sense –
perhaps more clearly and subtly than many consistent defenders of
laissez-faire – that
gold and economic freedom are inseparable,
that the gold standard is an instrument of laissez-faire and that each
implies and requires the other.”
– Alan Greenspan, “Gold and Economic Freedom”
Just like everything else in the western financial system, the paper
trading markets are leveraged beyond redemption. The amount of paper
“claims” on actual physical gold was estimated to be 100:1 in 2010. We
can assure you that ratio is much higher now. On the Comex alone, for
instance, if more than 9% of the April open interest in gold futures
were to stand for delivery – based on the currently declared 1.4 million
ounces of gold reported as being “available for delivery” (registered) –
the Comex would default. The entire open interest in gold futures is
60x greater than the amount of gold available for delivery.
This is just the publicly traded paper gold derivatives. There’s
also the shady world of OTC gold derivatives. We have no idea what kind
of leverage is embedded in these contracts. But the total notional
amount of OTC “precious metals” derivatives according to the OCC’s
latest quarterly report on OTC derivatives (Office of the Comptroller of
the Currency) is over $28 billion. Just to highlight the degree to
which the Government goes in order to hide the facts about the gold and
silver market, the OCC used to break out OTC precious metals derivatives
into the categories of “gold” and “silver and other.” Now the OCC
reports just “precious metals.” What is it that the Government and
banks are hiding?
The amount of leverage embedded in a Comex futures contract, based on
the current amount of margin required, is about 25:1. There’s no
telling how much leverage is embedded in the OTC derivatives agreements.
All we know is that the disclosure requirements are becoming
increasingly more opaque.
Silver futures began trading on the CBOT in 1969. But gold futures
were not around until 1974, three years after the U.S. closed the gold
window, completely disconnecting the dollar from gold. Gold futures
were developed to enable the Fed and the U.S. Treasury to control the
price of gold as a means of reinforcing the legitimacy of the dollar as a
fiat currency used as the world’s reserve currency.
While the price of gold has been heavily manipulated since at least
the 1960’s, when the U.S. was running out of enough gold to fulfill its
obligations under Bretton Woods, the manipulation and “shock and awe”
price attacks are used as a form of propaganda that is designed to
discourage investors from converting fiat dollars into gold and silver.
It’s a powerful weapon used by the Deep State against gold and economic
In today’s episode of the Shadow of Truth, we discuss the manipulation
of gold and silver and how it’s used by the Deep State to increase the
Government’s control over the population:
Dave Kranzler spent many years working in various Wall Street jobs. After business school, he traded junk bonds for a large bank. He has an MBA from the University of Chicago, with a concentration in accounting and finance, and graduated Oberlin College with majors in Economics and English. Dave has nearly thirty years of experience in studying, researching, analyzing and investing in the financial markets. Currently he co-manages a precious metals and mining stock investment fund in Denver and publishes the Mining Stock and Short Seller Journals. Contact Dave at firstname.lastname@example.org.
Rory Hall, Editor-in-Chief of The Daily Coin, has written over 700 articles and produced more than 200 videos about the precious metals market, economic and monetary policies as well as geopolitical events since 1987. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver and Silver Doctors, SGTReport, just to name a few. Rory has contributed daily to SGTReport since 2012. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Gerald Celente and Peter Schiff, to name but a few. Visit The Daily Coin website and The Daily Coin YouTube channels to enjoy original and some of the best economic, precious metals, geopolitical and preparedness news from around the world.
The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.