Another cry from China about gold market manipulation
10:30p ET Wednesday, November 6, 2013
Dear Friend of GATA and Gold:
The Perth Mint's Bron Suchecki today publishes observations from someone in China who has begun to get an idea of gold market manipulation and reports that it is discouraging Chinese gold investors. But Suchecki suggests that the Chinese should just get over it because the world economy has been financialized as interest-free money fuels leveraged speculation in all markets.
"The weight of this money in the gold market," Suchecki writes, "overwhelms the non-leveraged money from the 'good-natured and hard-working' just looking for safety. So even if you got rid of fractional reserve banking, futures markets, and manipulative trading tatics (which would help), you would still have this volatility as large investors could still borrow money at little cost and leverage up the little bit of their own money to buy a lot more gold. The consequence of that leverage is that it takes only a small change in price to threaten to wipe their capital out, resulting in quick and rushed liquidations back out."
Suchecki doesn't touch on whether and how central banks assist gold market manipulation directly through surreptitious allocation of their metal and their own purchase and sale of gold-related derivatives, as through the Bank for International Settlements:
But China's government itself is on to that:
Suchecki's commentary is headlined "Confusion in Beijing's Gold Shops on Price Manipulation" and it's posted at his blog, GoldChat, here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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