Central banks have a long and well-documented history of gold price manipulation, which shouldn’t be a surprise to anyone considering their history of manipulation with ALL other financial markets. However, gold is to central banks like Kryptonite is to Superman, they can’t ignore it so they must attempt to control it. They are terrified of it, but in awe of it at the same time. They are terrified, because it serves as a public and accurate inflation barometer, as well as an excellent indicator of the relative strength of fiat currencies. But they are in awe of it, because of its importance as a reserve asset, as well as its value and power within the international monetary system, which is undeniable, universal, and like it or not, “in control.” Nevertheless, for their own sake these are two critical factors that central banks have an overwhelming desire and need to “attempt” to control.
In March of 1968, the U.S. Treasury triggered the move to “free market” gold, when they ran out of good delivery gold. Through the Sixties, a consortium of central banks from Western Europe held gold prices at or near $35 per ounce, by coordinating their operation through the Bank of International Settlements and utilizing the Bank of England as transfer agent. Once the price of gold was “released,” in the early Seventies, central bank price suppression and demonetization efforts continued, requiring the occasional dumping of physical gold back into the market in order to squelch rising prices. Consortium meetings were not publicized at the time, but Bank of England archives now contain public records of those meetings.
A review of those meeting records clearly indicate the contempt that central bank members felt toward a freely functioning “and in control” gold market. Recorded comments from these meeting include, “there is a need to break the psychology of the market” and “no question of any permanent stabilisation of the gold price, merely at a critical time holding it within a target area” and “to stabilise the price within a moving band” and “it would be easy and nice for central banks to force the price down hard and quickly.” Most meetings were shrouded in secrecy at the time, but the activities that followed were predictable and consistent. Even Alan Greenspan, Federal Reserve chairman at the time, testifying before the U.S. Congress in 1998 admitted, “central banks stand ready to lease gold in increasing quantities should the price rise.”
The gold lending market, primarily based in London, was and remains a covert business affair that empowers central banks to manipulate the price of gold. Likewise, many central banks lent out gold long ago and hold nothing more than a “gold receivable” on their balance sheet. The liability can be rolled over and over and central bank gold is never independently audited. Central banks go to great length to make sure that the market does not know the true status of outstanding gold lending and swapped gold positions. Your financial well-being could be at stake. Don’t operate in the dark! Call American Bullion at (800) 653-GOLD (4653) to fortify your gold position, today!
Although the information in this commentary has been obtained from sources believed to be reliable, American Bullion does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. American Bullion will not be liable for any errors or omissions in this information nor for the availability of this information. All content provided on this blog is for informational purposes only and should not be used to make buy or sell decisions for any type of precious metals.