CNBC's Santelli blurts it out: Central banks suppress gold
8:37p ET Monday, November 23, 2009
Dear Friend of GATA and Gold:
Tin-foil hats are suddenly in fashion, with the latest one being worn by none other than CNBC on-air editor Rick Santelli, who donned his early this morning on the business news network's "Trading Block" program.
The program began as a general discussion of the markets by several investment house representatives but soon got into a long exchange between Santelli and Philip Gotthelf, president of Equidex Brokerage Group in Closter, New Jersey. Gotthelf was making the case for a much higher gold price and asserting that central banks would dread such a thing when Santelli interjected about former Treasury Secretary Lawrence Summers: "Didn't Larry Summers himself write a paper, called 'Suppression,' that central banks have to keep a lid on gold for obvious reasons?"
Until today it had seemed that only the lunatic fringe -- or the exceedingly well-informed -- knew about Summers' paper, a keystone of GATA's research. Of course the paper, written while Summers was a professor at Harvard, wasn't titled "Suppression," though that well could have been its title if it ever reached paperback. No, the paper was titled "Gibson's Paradox and the Gold Standard" and it explained the historic inverse relationship between gold and real interest rates and suggested that central banks could achieve their holy grail, complete control over interest rates, if they gained complete control over their nemesis, the price of gold. "Suppression" is indeed the best single-word summary for what Summers' paper had in mind for gold, and you can read "Gibson's Paradox and the Gold Standard" at GATA's Internet site here:
gata.org
So now Santelli has let the CNBC audience know that gold price suppression is not only the bane of the supposedly lunatic fringe but also the very premise of the U.S. financial establishment.
Whoddathunkit? But it happened today and you can watch it, starting at about the 7:30 mark in the 10-minute, 46-second segment at the CNBC video archive here:
cnbc.com |
