Obviousness of gold market rigging helps central banks but there’s a limit

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Obviousness of gold market rigging helps central banks but there’s a limit by Chris Powell for GATA

Dear Friend of GATA and Gold:

Responding to your secretary/treasurer’s observation Sunday that central bank and government interventions against gold have been becoming more obvious —


— our friend C.W. writes that the more obvious interventions against gold become, the more effective they are.

“As more investors see that the gold market is relentlessly and successfully suppressed,” C.W. writes, “they (to quote Sam Goldwyn) ‘stay away in droves.’ The suppressors have found that there are no sanctions against their activities and so have concluded that the more widespread the belief that they are controlling the gold price, the better. That is why the rigging is so obvious.

“Although Stein’s Law (“If something can’t go on forever, it will eventually stop”) applies here, I am not sure I will live long enough to see it, and such a feeling also depresses sentiment.”

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C.W. is right, but only to an extent. For central banks and governments long have concealed their interventions against gold —


— and even now refuse to acknowledge them formally —




— and still refuse to acknowledge them because they realize that acknowledging them would cause bigger problems, demolishing the myth of free markets generally and, by informing ignorant market participants, of whom there are still many, drive them out of rigged markets and impair the necessary publicity for the prices that discourage other investors.

The increasing obviousness of government and central banks interventions is less a strategy than a consequence of the increasing difficulty of market rigging. Gold price suppression is discouraging production and causing tightness in the physical market that “paper gold” cannot relieve as easily as it used to.

Indeed, the manipulation and suppression of the gold price depend on a certain number market participants being deceived all the time. If manipulation and suppression did not depend on this deception, governments and central banks would proclaim their gold price suppression every day.

This manipulation and suppression also depend — perhaps most of all — on the dignity of mainstream financial news organizations. They can overlook market rigging by governments and central banks and maintain their dignity only if it is not officially acknowledged. Mainstream financial news organizations will never pose to governments and central banks any critical questions about market rigging or anything else, but if the rigging ever was officially acknowledged, the news organizations would lose too much face by not reporting it. Word would get around among journalists themselves and market participants and before too long and what remains of the credibility of the news organizations would be shot.

So with their gold market rigging governments and central banks now are enjoying the benefits of both suspicion and ignorance. Market participants who are suspicious of intervention stay out of the gold market, and market participants who are not suspicious stay in it, get fleeced, and in getting fleeced help governments and central banks publicize the manipulated and suppressed prices.

That’s why exposure of government and central bank intervention in the gold market and other markets remains the prerequisite of ending imperialism and restoring limited and accountable government, free markets, fair dealing among nations, and democracy.

That exposure is GATA’s work and the basis of our appeal for financial support:


Please consider helping us.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Chris Powell

The Gold Anti-Trust Action Committee was organized in the fall of 1998 to expose, oppose, and litigate against collusion to control the price and supply of gold and related financial instruments. The committee arose from essays by Bill Murphy, a financial commentator on the Internet (LeMetropoleCafe.com), and by Chris Powell, a newspaper editor in Connecticut. Murphy's essays reported evidence of collusion among financial institutions to suppress the price of gold. Powell, whose newspaper had been involved in antitrust litigation, replied with an essay proposing that gold mining and investor interests should act on Murphy's essays by bringing antitrust lawsuits against financial institutions involved in the collusion against gold. The response to these essays was so favorable that the committee was formed and formally incorporated in Delaware in January 1999. Murphy became chairman and Powell secretary and treasurer.