Writing for the Daily Reckoning today, newsletter editor Greg Canavan explains what he calls “Gold Price Management 101.” Canavan writes:
“If you think the gold price is not ‘managed’ by central banks, then you’re really not looking hard enough. The management scheme has certainly become very sophisticated via the use of massive amounts of derivatives, which is essentially paper gold. If you couldn’t be bothered trying to work out what’s really going on (and let’s face it, not many have the time or inclination), just google the London Gold Pool.” Canavan goes on to recount that historic bit of gold price suppression.
Gold is the only warning siren for the international monetary system. Forget the nonsense written about it going up because of ‘concerns about inflation’. In a fiat currency world, there will always be inflation. When the system that produces the inflation starts to wobble and break down, as it is now, gold will let you know. But the mis-managers of the monetary system would prefer you didn’t know how badly they were doing. They manage gold’s ascent so it won’t lead to too many questions.
Canavan’s essay can be found at the Daily Reckoning HERE