In May 2006 the economist R. Peter W. Millar of Value-Trac Research in
Scotland published a study, "The Relevance and Importance of Gold in the
World Monetary System," arguing that central banks would need to revalue
gold upward by from seven to 20 times "to raise the monetary value of
the world monetary base and hence reduce the burden of debt" and avert a
deflationary depression. GATA published that study here:
http://www.gata.org/node/4843
In May 2012 the U.S. economists and fund managers Paul Brodsky and Lee
Quaintance postulated that central banks were suppressing the gold price
while surreptitously redistributing the world's gold among themselves in
preparation for a resetting of the world financial system and a substantial
upward revaluation of the monetary metal.
Brodsky and Quaintance wrote: "The key to a successful transition is a
credible monetary reset. Gold is the default collateral for money because it
has a long and established precedent in this role.
"All that would be needed would be a fairly equitable distribution of
gold among global monetary authorities (taking place now?), and an
agreed-upon exchange rate vis-a-vis baseless paper. It would have to be an
exchange rate at which central banks could successfully monetize assets by
tendering for physical gold with newly manufactured paper money, an exchange
rate high enough to attract enough gold to cover unreserved credit held in
the banking system. It's a high figure.
"The relative cost of holding physical gold today is minimal
(above-ground bullion or in-ground bullion through mining shares), against
the negative real returns offered by the preponderance of financial assets in
float.
"We suggest that one keep identities straight; invest with
central banks, not against them; and consider as a gift the hollow rhetoric
of the establishment that may temporarily suppress gold's paper price. They
are working for physical gold holders, not against them."
GATA published the Brodsky-Quaintance study here:
http://www.gata.org/node/11373
In November 2013 your secretary/treasurer speculated that China and the
United States were probably working together to control the gold price so
China could gradually hedge its insane U.S. dollar surplus against the
dollar's inevitable devaluation, and that China was almost certainly
complicit in the gold price smash of April 2013:
http://www.gata.org/node/13256
Now investment banker and geopolitical strategist James G. Rickards,
writing for the Daily Reckoning, comes to a similar conclusion as he promotes
his new financial letter, "Strategic Intelligence."
Rickards writes: "If you took the lid off and ended the gold price manipulation
and let gold find its level, China would be left in the dust. It wouldn't
have enough gold relative to the other countries, and because their economy
is growing faster and because the price of gold would be skyrocketing, they
could never acquire it fast enough. They could never catch up. All the other
countries would be on the bus. The Chinese would be off the bus. ...
"So the global effort is to keep the lid on the price through
manipulation, which is very obvious. I tell people, if I were running the
manipulation, I'd be embarrassed because it's so obvious at this point.
"So the price is being suppressed until China gets the gold they
need. Once China gets the right amount of gold, then you can take the cap
off. It doesn't matter where gold is because all the countries will be in the
same boat. But right now they're not, so China has this catch-up."
Rickards' commentary is headlined "Gold Price Manipulation Is Now a
Global Effort" and it's posted at the Daily Reckoning here:
http://dailyreckoning.com/fix-gold-price-mani...-global-effort/
