Interviewed this week at
the Freedom Fest conference in Las Vegas by Daniela Cambone of Kitco News,
Casey Research founder Doug Casey called complaints of gold price suppression
"ridiculous."
Governments can't be
suppressing the price of gold, Casey maintained, because gold has done rather
well for four decades, because governments own a smaller share of the world's
gold than they used to, and because all governments are bankrupt.
These are hardly persuasive arguments if they are even arguments at all.
As for gold's having done
rather well since it was completely delinked from currencies in 1971, the
great disparagement about gold today remains that even with its nominal price
increase since then, it has greatly underperformed inflation. Casey has not
addressed and explained that.
It's not clear how the
government sector's diminished share of the world's gold diminishes
government's incentive to suppress its price. To the contrary, the diminished
government share of the world's gold would seem to increase
government's incentive to suppress gold's price, since, held more widely and
independently, gold then would have increased its potential to become a
currency competing with government currencies.
The same with the
insolvency of governments. Wouldn't a rising gold price call attention to
such insolvency and scare investors away from government currencies and
bonds?
But all that is merely
reason and speculation. To be settled, what the gold price suppression issue
needs, as any issue does, is facts, and facts can be obtained only by
inquiry, not by mere pontification.
That's why the questions GATA has proposed for presentation to former
Federal Reserve Chairman Alan Greenspan during his appearance at the New
Orleans Investment Conference in October --
http://www.gata.org/node/14148
-- should be put to those who, like Casey, deny any possibility of gold
price suppression by central banks.
Those questions include:
-- Are central banks surreptitiously involved in the gold market, secretly
trading gold, gold derivatives, and related financial instruments, as reports
from the International Monetary Fund and Bank for International Settlements
say? See:
http://www.gata.org/node/12016
http://www.gata.org/node/12717
-- If central banks are involved in the gold market, why? Is it
just for fun -- for example, are central banks running contests among their
foreign-exchange desks to see which can out-trade the other? Or is profit the
objective of such trading, as central banks use their great heft, the power
of infinite money creation, to move markets in their favor and thereby fleece
lesser participants? Or are central banks secretly trading gold, gold
derivatives, and related financial instruments for more serious policy
purposes, like controlling the currency, bond, and equity markets to support
their currencies and government bonds, with the fleecing of ordinary
investors being merely an incidental consequence?
-- Are the many official records and admissions of gold price suppression
by central banks, like those compiled by GATA here --
http://www.gata.org/taxonomy/term/21
-- of any value in discerning the purposes of gold-related trading by
central banks?
-- Is there a fractional-reserve gold banking system in which the credit
of central banks and bullion banks replaces actual gold deposits and thereby
vastly increases what the world considers its gold supply, thereby
suppressing gold's price? If so, do central banks underwrite and sustain this
system with gold sales, swaps, and leases involving bullion banks? If central
banks do underwrite and sustain this system, why? Central banks apparently do
not underwrite and sustain such a system in soybeans, pork bellies, and other
commodity markets, do they? Do gold's competition with central bank-issued
money and gold's influence on interest rates and the value of government
bonds have anything to do with central bank involvement with the gold market
and the fractional-reserve gold banking system?
-- Have those people who disparage complaints of gold price suppression by
central banks ever put to central banks any questions about their involvement
in the gold market? Have those who disparage complaints of gold price
suppression ever sought to obtain access to central bank records of that
involvement? If not, how can they be sure that central banks don't seek to
control the gold price through surreptitious market intervention?
-- Are the many documents that GATA has compiled involving gold price
suppression --
http://www.gata.org/taxonomy/term/21
-- forgeries or have they been misconstrued?
Along with Greenspan, Casey also is scheduled to speak at the New Orleans
conference. He'll be a lot more interesting if he skips some of the
pontificating and tries addressing the documentation and the facts. But he
needn't wait until then to try answering the questions above. GATA would be
glad to publish his answers at any time.
Of course Cambone's interviews would be a lot more interesting too if she
ever tried posing critical and fact-based questions.
Her interview with Casey is 6 1/2 minutes long and is posted at Kitco's
Internet site here:
http://www.kitco.com/news/video/show/FreedomF...14-07-11/Gol...
