Gold plunge was 'state-engineered,' Hinde Capital's Davies writes

1p ET Monday, April 22, 2013

Dear Friend of GATA and Gold:

The recent plunge in gold prices was "state-engineered," Hinde Capital CEO Ben Davis writes in the firm's new market letter, published today.

"It is in the interest of any government that wields a monopoly control over the issuance of fiat currency to restrain gold," Davies writes. "A rising gold price signals the debasement -- that is, over-issuance -- of paper money. It is this over-issuance that enslaves you to remain a wage slave until your dying days -- no retirement plans for you at the beach -- as your disposable income and savings are eroded out of existence.

"By suppressing the gold price and reweighting growth and inflation indices to mask the effects of rising prices, a government can maintain stable and lower yields in the domestic sovereign bond markets, thus enabling government to have a virtually endless supply of paper money. Remember, currency in circulation is created by central bank purchases of government debt, which then helps supply the financial system with money and credit. ..."

Gold "has been at the mercy of a state-engineered correction using the threat of coerced European gold sales to scare holders into selling, and speculators jumped gleefully on the bandwagon.

"It is highly unlikely any peripheral European country will sell its gold; the rising groundswell of anti-European Monetary Union rhetoric among challenging parties and even incumbent politicians is manifest. The reality is that such sales raise a paltry sum, and just like the ill-advised or manipulative gold sales of the United Kingdom, this could well mark the new low for gold."

The Hinde Capital letter, "I Want to Scream and Shout," is posted at the firm's Internet site here:

http://www.hindecapital.com/attachments/reports/full/219/original/HindeS...

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