Rigged: Central banks fear exposure of their interventions, by Chris Powell.
Since 1999 the Gold Anti-Trust Action Committee (GATA) has been trying to get the financial industry, the mining industry, and mainstream financial news organizations to acknowledge that the gold market is aggressively manipulated by governments and central banks to protect their currencies and bonds against competition from a potentially superior currency and store of value. This year seems to have been the one when respectable people in the financial industry gave up disputing us.
Not that GATA still isn’t disparaged. Rather, respectable people in the financial industry have gone from denying that the gold market is manipulated to dismissing complaints of gold market manipulation because, they say, ” All markets are manipulated.”
Of course this response is an evasion. It fails to address the specifics and purposes of the manipulation of the gold market. That is, are all markets manipulated nearly every day by the surreptitious sale by governments and central banks of massive amounts of imaginary product? Are all markets manipulated every day so the developed world can expropriate the resources of the developing world?
Respectable people in the financial industry still find such issues politically incorrect, very bad for their business. To avoid these issues, some of these respectable people even assert that central banks don’t matter — even though central banks are authorized to create infinite money and deploy it in secret on a patronage basis, making them the most powerful institutions in the world.
But the evidence of market rigging that has been exposed this year makes it easy to understand the transition from “gold isn’t manipulated” to “everything is manipulated.”
The author lists many examples of market manipulation by central banks, especially in the gold market. For example:
A study published in July by a finance professor at the University of Western Australia, Dirk Baur, concluded that, as GATA long has maintained, central banks rig the gold market primarily through their leasing of gold, their creation of imaginary gold. This leasing vastly inflates what the world mistakenly understands to be its gold supply and thus suppresses the price.
While gold’s advocates like to say, “You can’t print gold,” in effect central banks print massive amounts of it, and while it is imaginary gold, people still accept it.