The Hows and Whys of Gold Price Manipulation

Institute for Political Economy ^ | 1/17/2014 | Paul Craig Roberts and Dave Kranzler

[logi_cal869]

Any guesses on how much gold we have left and what the stack of IOUs amounts to?

Chart below:

[Publius]

Ping. The unified field theory of what is going on.

[Popman]

I watched a show today on the History channel 2 about this...highly interesting and disturbing...

[familyop]

"...the Fed will have to abandon QE or the US dollar will collapse"

After QE is abandoned, the U.S. dollar will collapse even faster with the ensuing bond collapse. The U.S. dollar is going to fall either way. It has more to do with the debt pileup from balance of payments deficits from trade deficits.

[familyop]

The process (more or less):

Rising yields, risk, bond prices fall, interest rates skyrocket, business activities slow, markets fall, layoffs...vicious cycle starts again, and eventually, bond investor and pension haircuts with each cycle. The Fed is propping up a debt regime, because we’re not exporting as much as we’re importing. To simplify much, we’re borrowing enormously to buy imports. At this late point in the game, QE buys time.

[logi_cal869]

The Federal Reserve seems to be trapped. The Fed is creating approximately 1,000 billion new US dollars annually in order to support the prices of debt related derivatives on the books of the few banks that have been declared to be “to big to fail” and in order to finance the large federal budget deficit that is now too large to be financed by the recycling of Chinese and OPEC trade surpluses into US Treasury debt. The problem with Quantitative Easing is that the annual creation of an enormous supply of new dollars is raising questions among American and foreign holders of vast amounts of US dollar-denominated financial instruments. They see their dollar holdings being diluted by the creation of new dollars that are not the result of an increase in wealth or GDP and for which there is no demand.

I was going to add this to my comment but got distracted: I had lunch with a friend that is in 'the financial market' and works for a major player (one of the stable ones). We were discussing the 'stock market bubble', fake housing 'rebound', Fannie Mae pumping etc. and he was doing his best to spin it positive, referencing the profits of all the major players on the market & every other spin point. Of course I shot back that the market gains have mirrored Fed pumping in QE, he shot back with something else and I mentioned the interest rate manipulation that, when it ends, the Fed Budget will be consumed in entirety by interest to service the debt, & on & on (parry/counter-parry).

We both agreed that everyone has an opinion on this but almost everyone agrees that the #1 problem is the deficit spending CONTINUING and that it cannot continue.

He suggested his own analysis is that he gives it 10 years; I said that was overly optimistic I asked him when he developed a problem with gambling...

And some people wonder why at every turn we seem to be saber-rattling, almost looking for a fight; almost sounds like a bomb-threat on finals day, doesn't it? /s

[Popman]

I wonder how many gold hawks are holding "paper" gold and don't even know it...

Part of the US collapse will be when people want their gold in physical form and find out it isn't there...

Fort Knox has not be audited since 1954 and Congress has refused efforts to do one...

[logi_cal869]

If we could get back to just worrying about 'trade deficits' it would be one giant leap in the right direction...

(that brass teapot is around here somewhere...)

[Teflonic]

How Germany’s Request for Gold Could Affect the US Dollar
http://www.freerepublic.com/focus/f-religion/3110231/posts

[M Kehoe]

Bttt.

5.56mm

[RC one]

I haven’t felt any kind of need to sell off my physical gold. When this house if cards falls, I’m going to be laughing at the bank all the way.

[Jet Jaguar]

Goldbug ping.

[Popman]

Do you have physical gold or just a piece of paper that says you do ...?

[familyop]

Well said.

[Toddsterpatriot]

This manipulation by the Fed involves the short-selling of uncovered Comex gold futures. “Uncovered” means that these are contracts that are sold without any underlying physical gold to deliver if the buyer on the other side decides to ask for delivery. This is also known as “naked short selling.”

Wrong. Naked short selling is when you sell shares of stock, without first borrowing them or arranging to borrow them.

It has never been associated with futures contracts.

It's good to see that Paul Craig Robert's hasn't changed, still crazy.

[Arlis]

Don’t be so confident. Obama would outlaw gold in a heartbeat, making the penalties 100x worse than Roosevelt did.

But guess what? How many people were prosecuted after the 1933 outlawing of gold? ONE!

How many fools turned their gold in as demanded? Many.

How many intelligent people kept their gold in hiding? Only God knows......

Only diff now is that today the gov. and NSA can probably trace every sale of gold in the last 5 years, and has the technology to find who owns it.......so we are no where as safe owning gold as they were in the 30’s and later.......

[1rudeboy]

OH, jeepers. Paul Craig Roberts? Do I have to go read it now? Is there a section about how Bush brought down the Twin Towers?

[Arlis]

THANK YOU for this excellent post - the most thorough and detailed explanation I have yet seen on exactly why and how the price of gold has been manipulated.

Your friend is a dupe, and has drunk the cool-aid of his industry.

10 years? less than 2, I am almost certain.........

Then again, I’ve been wrong before.......

[ChildOfThe60s]

PCR is something of a wingnut, but that doesn’t make him incorrect on this point. IMHO, is that based on the evidence, it’s a when rather than if. I’m pretty impressed that the government(s) have managed to keep it going this long. Which is why I make no predictions as to when the dam breaks.

[Gipper08]

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