Arctic Goldfinger

J’Accuse: The large Central Banks, with the complicity of their governments and some major investment banks, have been engaged in a conspiracy to systematically depress the price of gold by both open and covert means.

There is evidence to support this charge, but I can’t prove it as if I were in a court of law. There are no minutes of meetings at which such a conspiracy was agreed to. It has to be inferred from the conduct of those involved and from certain economic events that cannot otherwise be explained.

So who are these Central Banks? They are institutions (like the Federal Reserve) that claim to be independent of their respective governments (yeah, right!) and who have control of their country’s money supply. In the case of the Euro there is one Central Bank for multiple countries.

As I said, one of any Central Bank’s main jobs, and the source of its main problem, is to create paper (or, nowadays, electronic) money. There is no theoretical limit on how much it can create and everyone knows that the more it creates the less it will be worth. Therefore, as with any money, its supply has to appear to be limited in order for the public to accept it.

So how does gold fit into this scheme? It doesn’t. It is, in fact, the Central Banks’ worst nightmare. Gold doesn’t have to do a thing to be money; it just is. As it has been for 5000 years. Its claim to fame from a monetary point of view (it has other virtues) is that there will never be much more of it. It is still dug out of the ground, but the world’s stock of gold increases at a snail’s pace. And you could take all the gold on earth and fill a space about equal to the bottom third of the Washington Monument. You definitely can’t print it or conjure it into being with a computer key stroke.

Gold does not require anyone’s Good Housekeeping Seal of Approval to be money. No pictures of Presidents or Queens are necessary. You can take a one ounce gold coin and go practically anywhere on the face of the earth and you will have little trouble finding someone who is willing to give you something in exchange for it, including a blow to the head.

Without any effort on its part, gold is now, as always, the touchstone for the value of paper currencies. And if the price of gold is steadily rising it arouses suspicions (well-founded) about the soundness of paper money. The fact that every single paper currency from history is now worth zip (except as a collectible on E-Bay) certainly fuels that belief.

From the standpoint of the Central Banks, it would be peachy keen if every gold molecule on earth were beamed into outer space. They even have trouble figuring out how to talk about it. The gold owned by the Central Bank is called “reserves,” but they won’t tell you for what since their money does not purport to be “backed” by gold — or anything.

Gold is the the silent witness to the inflationary schemes of the Central Banks. Therefore, the Central Banks have a compelling motive to suppress its price. The most blatant of the gold suppression schemes will be discussed in the next post.

P.S. In case anyone is wondering, I am not a conspiracy buff. I do not believe that J.F.K. was assassinated by Fidel Castro. I do not believe that aliens have visited the earth. I do not believe that the Commies are trying to pollute our Precious Bodily Fluids. The Central Bank gold conspiracy is my only one. I can promise you that I will not be veering off to discuss fluoridation of drinking water or the Protocols of the Elders of Zion.