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Stewart Thompson, who writes the Graceland Updates letter, is among
the few gold market analysts who fully understand and acknowledge gold's
centrality to the world financial system and the life-and-death interest
central bankers have in controlling gold's price. It would be nice if a few
investment conferences invited Thompson to speak instead of, say, Kitco senior gold market analyst Jon Nadler, who
continues to insist that central banks have no interest in interfering
in the gold market.
Thompson's new commentary, "Gold's Controllers: They Want It
Higher," explains how "gold is a control mechanism used to
increase/decrease the amount of debt outstanding and to increase/decrease the
value of paper money." Gold revaluation has been undertaken by
governments before, and, Thompson writes, it may happen again to ease the
worldwide debt burden.
Others have made this point over the years, like the economist Peter
Millar of Valu-Trac Investment Research Ltd. in
Scotland, whose important 2007 study of gold's role in the world financial
system noted the periodic upward revaluation of gold by central banks as the
mechanism for defeating a deflationary debt depression at the end of an
economic cycle. A preface to Millar's study along with the study itself can
be found at GATA's Internet site here:
http://www.gata.org/node/4843
Of course GATA always has maintained that central banks have been suppressing
gold's price to support their currencies and government bonds and to keep
interest rates low, gold being a competitive currency and a determinant of
the value of other currencies, bonds, and financial instruments generally.
Now Thompson writes -- as he has written before -- that central banks want
gold to rise in price.
But if central banks do want gold to rise now -- and it has
been rising pretty steadily for a decade in what GATA has characterized as
the central banks' "controlled retreat" -- even Thompson
acknowledges that they continue to manipulate the gold market
surreptitiously. As much as GATA believes that the gold price should be
higher, this is not because of any particular love for the precious metal but
because our objective always has been free and transparent markets in the
precious metals as the prerequisites for free and transparent markets in
everything else and, indeed, the prerequisites for democratic, limited, and
accountable government, that kind of government being utterly incompatible
with central banking as currently practiced.
Anyway, Thompson's new commentary acknowledging central banking's interest in controlling the gold price can be
found here:
Chris
Powell
Secretary / Treasurer
Gold Anti-Trust Action Committee
www.GATA.org
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