why would the fed worry about the price of gold. the US has one of the world’s biggest gold reserves. so if the dollar declines in value against gold—the US gold reserves increase in value. isn’t this a wash?
Has anyone seen it lately???
No, we live in a global market. The $$ is subject to the revaluation of all currencies against gold.
There is going to be inflation
Have YOU personally verified this? What, except blind faith, makes you think that this is true? Are there any audits available?
The US dollar is inevitably going to decline against everything -- because the Federal Government has doubled the number of dollars in circulation in order to pay for it's astronomical excess spending.
Why would they worry about the price of gold? Because there is only about half enough gold available to back all the contracts that they have out. If things crash and you have gold futures or contracts, and you go to cash them for gold in hand, there is little chance that you can get half of what you bought. It does not exist. They manipulated the market and oversold the supply. That was posted on FR recently.
"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
"This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard."
-- "Gold and Economic Freedom", by Alan Greenspan (1987)
http://www.freerepublic.com/focus/news/2490376/posts?page=22#20
Short answer is that they would not. IMO, gold and silver are high right now considering the current risks of Inflation in the U.S. and globally. Inflation cannot occur in a environment were there is a glut of goods to buy. Wage inflation cannot occur where there is high unemployment.
As to levered sales, this is how it is currently done in the forex markets. It's always been levered. The concerns noted are more about the exchange traded funds or ETF's that are sometimes suspiciously levered when purchasers appear to believe erroneously that they actually hold a 100% ratio of physical gold or silver. This is not always or even often the case IMO, which is why I stay away from them.
As far as I am concerned, gold and silver are too high right now and due for a pullback.
No, because it's a fractional reserve banking system and the fraction or ratio of assets to green paper has continuously been on the decline.
Nam Vet
The better gold looks the worse the fiat money US Dollar looks. The worse other fiat currencies look. The Fed issues these Federal Reserve Notes which are backed up by debt. Gold has an intrinsic value, not some value from being able to theoretically cash it in for a debt note (TBill). Fiat money is a profitable scam and gold busts it wide open. Fiat money is now digital and a computer notation making it more ephemeral than ever. Those who profit from the fiat money racket despise gold because it exposes them as scamsters same as Goldman Sachs and other Wall Street creeps
Worth of gold held by USG is roughly 300 billion dollars which is not that much in the great scheme of things....so those holdings do not figure into the Feds policy to suppress the gold price
Lotta folks been questioning exactly how much Gold the Government really has...might not be as much as they are saying...