Andrew Maguire's disclosure via King World News today that the Pan Asia Gold Exchange has been killed because of pressure brought in China by a New York financial house --
http://www.gata.org/node/11060
-- signifies that as much as gold advocates have seen China as an ally against the gold price suppression scheme, the Chinese government is cooperating with price suppression insofar as it serves the Chinese government's interests as well.
That is, while the Chinese government appears to be purchasing the full output of the nation's gold mines, is buying up natural resources around the world, and reducing its dollar-denominated assets --
http://www.gata.org/node/11050
-- it is far from fully hedged against dollar devaluation. That hedging may be best achieved by slow and steady acquisition of gold and other natural resources rather than by moves that spike prices one way or the other. And if China wants gold as badly as it seems to, price spikes can only get in the way and engender competition by drawing other investors to the monetary metal.
Thus China may put a certain rising floor under the gold price, but a ceiling on top of it too.
Of course other governments and their central banks know what is going on in the gold market and are not likely to leave China without competition, and there is always the chance that this competition will cause a conflict that will spike the price. But as long as private investors -- from hedge funds to ordinary investment houses to retail investors -- are satisfied that a certificate with "gold" printed on it really is gold, and as long as precious metals mining companies have no clue about the true monetary nature of their product and refrain from the necessary political and educational activism, the gold price suppression scheme probably can go on forever.
For gold is simply power, political as well as economic, and no government will surrender it easily.
