A friend sent me some comments from Chris Powell over at GATA (headquarters for the gold manipulation crowd) writing about the possibility of a change in the thinking of the Central Banks in regards to the gold price.
Here is the pertinent part of Chris’s comments:
‘…the consensus policy of central banks in regard to gold has changed recently – that they now want gold rising again, most likely to assist in the devaluation of their currencies, particularly now the U. S. dollar, as well as devaluation of the world’s debt, and that the huge short positions of the banks in the futures markets are actually central bank positions that must continue to increase even to unprecedented levels to keep this devaluation ‘orderly,’ to use a favorite term of central banking. (Really, who else but institutions that are authorized to create infinite money and that hold large gold reserves could accept the risk of such shorting?)
This would mean that …far from considering a sharply higher gold price to be the end of the world, central banks consider a sharply higher gold price – at least if it can be accomplished in an ‘orderly’ way – the prerequisite of worldwide debt relief, their own reliquefication, and the maintenance of their power, gold remaining, as the assistant undersecretary of state for economic and business affairs, Thomas O. Enders, explained to Secretary of State Henry Kissinger in April 1974, the supreme ‘reserve-creating instrument’ of governments, the ultimate money, the form of money that underwrites all other forms of money, the form of money whose valuation is control of the world:
To Chris and Bill over at GATA, I can only say: ‘Welcome to my world. What took you so long?’
I had been saying for some time that the Fed was NOT BEHIND weakness in the gold price ever since the Dollar embarked on its bull run back in 2014. Remember, back during the time frame when I actually subscribed to GATA’s views, the US Dollar was sinking off the charts and was threatening to fall below the 72 level on the USDX. A soaring gold price at that time was a harbinger of inflationary pressures tied to a weakening currency and at that time, AND ONLY AT THAT TIME, did the idea that our Fed would be interested in slowing down any rise in the gold price make sense. After all, a gold price rip roaring to the upside was a most definite sign that investors were losing confidence in the US Dollar.
However, and this is where I parted company with GATA, once the US Dollar began to strengthen and particularly when it was confirmed from a technical chart perspective, that the US Dollar had entered a bull market, there was no longer any fear whatsoever of investor concerns towards the Dollar. As a matter of historical FACT, the main concern of the Fed then shifted to an EXCESSIVELY STRONG DOLLAR.
This post was published at Trader Dan on May 2, 2016.