Thomas,
I suspected my comment would elicit a response from somebody - particularly yourself. I feel somewhat like you are asking me to prove the exisistance of God - I doubt that I can provide you with the empirical evidence that a person (like I sense you are) would be comfortable with. The very fact that I sense the process unfolding before us, is somewhat clandestine in nature, suggests the very evidence one would need to support their claim, is also somewhat hidden. Does that mean the claim is wrong - perhaps. Does that mean the claim should not be made; IMO no, it does not mean anything of the kind.
Forums like this are here to discuss ideas. Some may be perceived as "off the wall" and "crazy"; nevertheless, occasionally these so-called "crazy" or "off the wall" ideas have more truth behind them then one would initally believe.
Notwithstanding the above, I do believe that if one is to make such a claim, one must at least be able to formulate a construct that, as a minimum makes the claim possible. I will attempt to do so - but as I said, I doubt my musings will withstand, nor provide the burden of proof I suspect you want.
My claim: I believe the price of gold is being manipulated for the benefit of North America and some parts of Europe, to the detriment of Asian countries.
How I see it ....
- For thousands of years gold (and silver) have both been safe ports during time of economic and/or political turmoil.
- We have experienced several years of outstanding economic growth. This growth can be attributed to a number of things - one of which is, other than the stock market, there really is no other place one can get a decent return on their capital. Of course there are other things, such as the incredible amount of available money flowing into the market .... but the one that I am going to focus on is .... there really is no other place one can get a decent return on capital
- Up until 6-8 months ago, that really did not matter, because people were comfortable having their $ in the market, all-in-all, the risk/reward was still good - so equities benefited.
-I suspect that within the last several months many investors had begun to consider alternative invesments, including gold. But what happens if gold starts to go up - well .... to many investors, that signals the end of the bull market - time to preserve the $$ you have made, and head for the hills. IMHO, certain governments do not want this to happen ..... an equities market that starts to contract, at a point in time when there is extremely high goverment and secular debt, could potentially be catastrophic - especially when one considers the huge debts many countries have (US - 5.5 trillion and Canada 500-600 billion, for example). I suspect that the American, Canadian and some European governments , believe that if they lose the present economic battle, they may never have another chance to get out of debt again - at least through reasonable and peaceful means.
- At about this time, we start to have all of the stories about the 33,000 tons of gold that CB's have overhanging the market - and that fact that European CB's have not decided how much gold will back their currency new currency. Also .. about the same time, we start to get more of these stories ... "gold is dead" ...... "gold is just a commodity" ...... "Euro, may not be backed by gold" ..... etc. In fact, at one point gold appeared to started to look bullish - and then the Swiss come out with their "1400 tons coming on the market" nonsense. The fact that CB's never preannounce gold sales is likely not apparent to many the throw-it-in-my- mutual-fund-and-forget-about-it type investor, but to many of us (at least I suspect most goldbugs <g>) it was clearly orchestrated to stymy the nascent gold run.
- If one is to believe Frank Veneroso (sp), there is something like 8000 tons of gold sold short at the moment - _despite the fact the physical demand for the commodity is very high. One has to marvel at the stalwartness of those that are short; in the face of very high demand, they remain steadfast ... that shows _extreme confidence (cockiness ?).
- If one views the amount of gold CB's have sold within the last several years (if one is to believe Robert Pringle's research) it becomes evident the amount of gold that CB's have actually sold in previous years, is much higher than what has been sold in the last year or two. And, those sales were during times when demand was _lower than it is at present - yet gold sold for much _higher prices.
- more recently we hear how the gold South Koreans are selling will dampen the gold market - despite that fact that the amount they are selling, is not that much within the context of present demand ... more nonsense.
- The IMF says "we will help" (nice guys, eh!) ..... oh BTW - do not form your own crisis management fund surplus, Asia .... otherwise we would lose too much control over you.
- As you indicated (and correctly so) Asian currencies were artificially high. Now - it is my understanding that one of the conditions the IMF insisted upon, was their currencies be allowed to float - otherwise, no help. It was obvious once this happened, they were going to get creamed - and of course, they are getting just that.
- Now ... what happens if the North American and major European markets start to fall apart. Government debt wil be very tough to pay off (as will secular debt) .... jobs will be lost ..... backruptcies ..... generally, things will be a mess. We can not have a situation where North America/European economies are weak ..... either Asia will be economically weak, or Asia and North America/Europe will be economically weak - but not North America/Europe weak and Asia strong(er) ... that will not do! (Note - when I say strong here, I am talking in relative terms. The only Asian country that could truly compete, in economic terms with the US, is Japan.) In addition, weaker Asian countries guarantee a cheap supply of goods should the US/Canadian/European economies go in the dumpers ...and if it doesn't, the cry for "protecting North American/European jobs" will likely lead to some sort of protectionism ... if you can't compete, block the competition - after all, they need us more than we need them .... for the time being anyway.
- Now - what did Japan do when they felt vulnerable ..... they whispered something about getting rid of US paper and buying ..... gold! Go back and look how much gold has fallen since that statement. Granted, it was falling before that (despite great demand!!) .... but good opponents anticipate the moves of their adversaries ..... IMO the politicians clearly anticipated what Japan's response might be - and they started to drive gold down for that reason. Franky, I suspect that Japan is buying gold now ... but of course, we will never know until it done.
- Thailand and Korea ..... they need/want gold NOW.
Well ... that is a brief summary of my thoughts .... sorry if they somehow offend you - but the point of this forum is to exchange ideas .... and sometimes things like that happen.
One final comment. I appreciate that you have taken great strides to keep this thread focused, interesting and sensible - you have done a good job. However - I also sense a that if things are said that you do not necessarily agree with, you can be a little overly dogmatic and condescending. If the intent of this thread is to share ideas, you must appreciate they will come from all levels of participants (the novice to the expert). If your intent is to solicit comments from only those that meet some sort of prescribed level of competence (all others to lurk only), perhaps you should consider a some sort of "thread entry examination", which you would of course, develop and administer. Those that passed your test will be allowed to participate, those that fail will be relegated to lurker mode only. Certainly not a guarantee the thread will remain devoid of "superstition" but it may help ..... Just a thought.
MB
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