Gold manipulation...why??

[socialize_me]

I've been watching gold a lot lately and it's dropped over $200 in the past month and a half yet demand has shot up worldwide. My question is this: Why is it so important for the world central banks, the President's Working Group on Financial Markets, and the Exchange Stabilization Fund, to all work together to keep gold prices low?? What is the threat of high gold prices?? Does it show the Dollar is worth nothing, or is there a better reason? Perhaps to keep financing the debt would be my guess. If Treasuries are only yielding 3% (<1% today) yet if gold is going up 20% per year then I guess it does threaten the government's ability to keep debt financing. Is this the reason or is there something else??

[wgadget]

I guess if gold appears to be losing money, others will shun it for the Treasury bonds you mentioned...But I sure ain't no expert.

I'm wondering who is manipulating the spot gold price?

I've also heard that the hedge funds need cash and are dumping massive amounts of gold bars into the system, but there are no coins. What I don't get about this explanation is, why can't they MAKE coins?

[socialize_me]

I guess if gold appears to be losing money, others will shun it for the Treasury bonds you mentioned...But I sure ain't no expert.

I'm wondering who is manipulating the spot gold price?

I've also heard that the hedge funds need cash and are dumping massive amounts of gold bars into the system, but there are no coins. What I don't get about this explanation is, why can't they MAKE coins?

Well, hedge funds aren't goldsmiths or refiners and the demand for coins are generally coming from smaller time investors who can't afford the 100 oz. gold bars going for $75,000 a piece.

The gold price is manipulated in large part by the Federal Reserve and other central banks. I'm not an expert on this, but they lease their gold to commercial bullion banks like JP Morgan, Citigroup, and Goldman Sachs, which then dump the gold onto the open market. It's the supply and demand concept where there's just so much excess gold available that it meets or perhaps surpasses demand. Yet when the US Mint has to suspend minting of pure gold coins, local coin dealers are sold out of bullion, and Saudi Arabia, Qatar, Argentina, China, and Russia are buying up thousands of tons of gold, you have to wonder why gold has dropped in price this much when demand is that high. The money supply has been flooded recently by trillions of new dollars, coupled with the fact that gold miners are maintaining low production and no new finds have occurred in the past few years means there's a shortage of supply. The reason why gold is easier to manipulate (as is oil) is for the simple fact that when you buy and sell gold on the Futures market, you are simply buying paper representing the commodity itself. It's literally like a fractional reserve gold system where the market can be controlled until people start exercising their contractual rights when they buy the gold derivative that the gold market actually shoots up in price. When people "take delivery" on their commodities, they are converting their paper gold into actual gold similar to what happened when banks lent out too much gold certificates yet didn't have enough physical gold to meet depositor's demand.

With interest rates at 1% and the Fed announcing to cut that AGAIN sometime soon, gold has been 'depreciating' and the price actually dropped today even with the news of more inflation.

I think gold will begin to move drastically as 401(k)s drop even further, stocks begin to be moved away from (which makes for a great buying opportunity in a year or two), and bonds become unprofitable versus inflation that is coming. For those saying there's deflation, that is true but it is temporary. Never in the history of mankind have you ever been able to create trillions of dollars of new money in such a short amount of time that it resulted in no inflation. I say deflation is in the short term and inflation is the long run perhaps 12-18 months from now.

[jonahtrainer]

I've been watching gold a lot lately and it's dropped over $200 in the past month and a half yet demand has shot up worldwide. My question is this: Why is it so important for the world central banks, the President's Working Group on Financial Markets, and the Exchange Stabilization Fund, to all work together to keep gold prices low?? What is the threat of high gold prices?? Does it show the Dollar is worth nothing, or is there a better reason? Perhaps to keep financing the debt would be my guess. If Treasuries are only yielding 3% (<1% today) yet if gold is going up 20% per year then I guess it does threaten the government's ability to keep debt financing. Is this the reason or is there something else??

You should really watch the Gold Rush 21 (http://www.runtogold.com/2005/09/goldrush-21/) DVD.

[steph3n]

There was great insight this week, the banks are flooding the markets to drive down the costs.

[NerveShocker]

Heres a link from www.realityzone.com/currentperiod.html unfilitered news section explaining the manipulation.

http://news.silverseek.com/TedButler/1226344970.php

[werdd]

Notice the cash4gold ad at the bottom of this page. Ive been seeing them on tv constantly lately. They are making an investment on gold rising here pretty soon. Preying on stupid chumps gullible enough to take worthless dollars for their precious gold.