Is Gold Being Manipulated?
Considering
the erratic behavior of gold it may be a good time to ask whether the price of gold is
being manipulated.
On Monday, March 17, 2008, gold touched a record $1,025 an ounce.
On Tuesday, March 18, 2008 the Federal Reserve slashed the funds rate by three-quarters of a
point to 2.25 percent.
By March 19, 2008 gold was at $942 an ounce.
Some analysts say - For gold, a U.S. recession is likely to cool inflation, undermining
the attractiveness of gold as a hedge against inflation. A lower dollar lifts the price
dollar-denominated commodities, such as gold, as it makes them more affordable for holders
of other currencies.
One of the most vocal proponents of such a theory is Bill Murphy of the Gold Anti-Trust
Action Committee.
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GATA has gathered an inordinate amount of evidence the gold market has been managed since
1994 by a cartel consisting of bullion banks (Goldman Sachs, JP Morgan Chase, etc.), the
International Monetary Fund, the U.S. Exchange Stabilization Fund, the U.S. Federal
Reserve, and the Bank for International Settlements.
In 2002 GATA filed a lawsuit against the entire gold cartel in Boston federal court. The
judge declared the U.S. has sovereign immunity against suit and that he did not believe
GATA had proper legal standing to go forward -- that the suit should be brought by a gold
company -- which is just what happened. Blanchard Coin filed a lawsuit in New
Orleans federal court against JP Morgan Chase and Barrick Gold on gold price manipulation
charges.
Oleg Mozhayskov, deputy chairman of the Bank of Russia, brought GATA to the attention of
the mainstream gold world when he delivered the keynote address at the London bullion
dealers conference in Moscow on June 4, 2004. In his speech he claimed: "This dualism
in gold price formation distinguishes it from other commodities and makes the movements in
the price sometimes so enigmatic that market analysts need to invent fantastic intrigues
to explain price dynamics. Many have heard of the group of economists who came together in
the society known as the Gold Anti-Trust Action Committee and started a number of lawsuits
against the U.S. government, accusing it of organizing an anti-gold conspiracy.
"They believe that with the assistance of a number of major financial institutions
(they mention in particular the Bank for International Settlements, J.P. Morgan Chase,
Citigroup, Deutsche Bank, and others), some senior officials have been manipulating the
market since 1994. As a result, the price dropped below $300 an ounce at a time
when it should, if it had kept pace with inflation, reached $740-760."
The gold establishment claims that the world's central banks have 32,000 tons
of gold in their vaults, minus a few thousand tons of gold out on loan to gold producers. GATA
says the central banks have less than half of that, or have less than 16,000 tones left in
their vaults.
The difference is staggering.
GATA has discovered that the more than 13,000-ton difference can be accounted for by the
gold cartel surreptitiously feeding central bank gold into the marketplace over the last
decade to artificially suppress the price. |
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