“CONSPIRACY THEORY” GAINS NEW CREDIBILITY Leaked Gold Report Reveals Trouble Ahead. . .

nationalinvestor.com ^ | 8/6/2002 | nationalinvestor.com

[mindprism.com]

You didn

[Free the USA]

Index Bump

[Amerigomag]

Oh contraire.

The potential for these problems have been reported by all three major, broadcast network's nightly news.

Admittedly they were mentioned only as generic derivatives but they have been the topic of speculation (excuse the pun) on more than a few broadcasts.

[arete]

People do not understand derivatives and other complex financial transactions. They are more likely to worry about a shark attack.

Richard W.

[arthurus]

The price of gold is, indeed, manipulated by governments because of the fact that governments control the money. The price of gold rises and falls with the supply of liquidity that is provided to the market by the buying and selling of government bonds by the Federal Reserve. The PoG rises when liquidity is increased- when more money than is demanded is pushed into the system. PoG decreases when less liquidity is injected than is demanded by the market. Gold is The Money. It is basic to all money, whatever might be its legal status in any given system. If there is more liquidity than is required to maintain prices at a stable level then much of it goes to buy gold raising the price. The rest goes into increasing the prices of just about everything else.

The price of gold has for millenia been the result of government "conspiracy", at least since King Ogh took it upon himself to coin money and his heir King Oggha debased the coins just a teensy bit in order to keep some more wealth in his own coffers. That is inflation.

Inflation is traditionally, though not honorably , used to reduce the debts of the ruler by reducing the value of the unit of currency with which the ruler must repay those debts. The creditors suffer thereby perhaps unto bankruptcy. Deflation- the withdrawing of liquidity from the system- imposes hardship on the debtor, requiring him to repay a debt with currency of higher value than that which he borrowed.

The ideal for society and the Market in a system in which the government defines the money and controls its volume is to maintain the PoG unchanging. Market actors' costs of calculation are much reduced and prices are stable, responding to supply and demand without the sabotage of fluctuating money rates.

However, rulers can seldom resist tinkering with or jackhammering on the money for short term gain (for the rulers) or wrongly perceived long term benefits.

Whole schools of economics have arisen whose primary purpose seems to be to justify self enrichment by the ruler at the expense of the population. The best known of these are Keynesianism and Monetarism. They provide a false but pleasing justification for government tinkering and chicanery.

Alas, W has chosen Keynesians as his economics advisors.They are "conservative" Keynesians but they are still Keynesians. Tinkering by conservatives is every bit as damaging as is tinkering by liberals. Tinkering, being a political act, is always for short term gain but the actual effects are almost all long term and have their influence on situations very different from those the tinkering was meant to ameliorate.

The Bushes learned NOTHING from Reagan, that rare species- a president who understood economics.

[arthurus]

Misjudged short positions and gains and losses by speculators and great financial houses are all but effects of the American government's tinkering with the money supply for short term political gain.

The government economists largely do not know what they are doing, or worse, they do know and are currently engaged in reducing the debt by inflation- reducing the value of the defined units of money with which they must repay that debt. In a private milieu this sort of thing is called fraud.

[arthurus]

The " Consortiums of Central Bankers" that maintains the price of gold is wasting resources and only succeeds in spreading one country's economic crimes to the rest of the world. Those errors must multiply until the system collapses and gold finds its own level relative to the supply of liquidity in the market. This is not instant. Excepting the wholesale rapid destruction of war and Communism, economic changes are pretty slow.

All the Gold Pools and gold swaps and bank sales can do is delay the inevitible and make the price sudden and severe. The chart, insteading of showing a relatively evenly sloping rise or fall shows a steady price that ends in a leap or a plummet.

[arthurus]

In a private milieu this sort of thing is called fraud.

or embezzlement.

[Vince Ferrer]

People do not understand derivatives and other complex financial transactions. They are more likely to worry about a shark attack.

Its all psychological. You yell "derivatives," and everyone says, "Huh? What?" You yell "shark," and we've got a panic on the fourth of July.

[Dog Gone]

Alas, W has chosen Keynesians as his economics advisors.

What do you base that on?

[razorback-bert]

Lining my tinfoil hard hat with gold foil for this one.

[Amerigomag]

People do not understand derivatives

Yes they do. It's just that the average person has never bothered to investigate the term.

The average person probably has a common savings account at a finacial institution and doesn't know he has entered into a derivative contract with the bank. All he knows is that if the bank does well the interest rate on his savings account rises and if times are tough the interest rate may fall a little.

[Dukie]

Thanks for the bump, bert. See you at the market wrapup thread.

[philman_36]

A Change Is Gonna Come by Tina Turner
It's been a long time coming
But I know a change is gonna come, oh yes it will

[boris]

"Oh contraire."

Oh indeed.

If you're gonna inflict fake french upon us in order to sound erudite, you might take a moment to spell it correctly. Just a thought.

[Amerigomag]

If you're gonna inflict fake french upon us in order to sound erudite, you might take a moment to spell it correctly. Just a thought.

I thought I was using broken English. It was the favorite phrase of my German born grandmother. When she used it she meant "Oh yea a$$hole!". Thanks for the tip.