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Jim Rickards: The golden conspiracy buys time for China to hedge its dollar surplus
8:37p MT Thursday, May 25, 2017
Dear Friend of GATA and Gold:
In commentary posted today at the Daily Reckoning, headlined "The Golden Conspiracy," geopolitical analyst, fund manager, and best-selling author James G. Rickards writes that manipulation of the gold market is so obvious that it's embarrassing and that it is a conspiracy of central banks to help China obtain enough gold inexpensively to hedge its enormous foreign exchange position in U.S. dollars.
This sounds very much like the hypothesis developed five years ago by the economists and fund managers Paul Brodsky and Lee Quaintance and brought to your attention by GATA:
http://www.gata.org/node/11373
Rickards writes: "Here's the problem: If you took the lid off of gold, ended the price manipulation, and let gold find its level, China would be left in the dust. It wouldn't have enough gold relative to the other countries, and because the price of gold would be skyrocketing, they could never acquire it fast enough. They could never catch up. All the other countries would be on the bus while the Chinese would be off.
... Dispatch continues below ...
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"When you have this reset, and when everyone sits down around the table, China's the second largest economy in the world. They have to be on the bus. That's why the global effort has been to keep the lid on the price of gold through manipulation. I tell people, if I were running the manipulation, I'd be embarrassed because it's so obvious at this point.
"The price is being suppressed until China gets the gold that they need. Once China gets the right amount of gold, then the cap on gold's price can come off. At that point, it doesn't matter where gold goes because all the major countries will be in the same boat. As of right now, however, they're not, so China has to catch up. ...
"The price of gold will go significantly higher in the years ahead. But contrary to what you read in the blogs, gold won't go higher because China is confronting the U.S. or launching a gold-backed currency.
"It will go higher when all central banks, China's and the U.S.' included, confront the next global liquidity crisis, worse than the one in 2008, and individual citizens stampede into gold to preserve wealth in a world that has lost confidence in all central banks.
"When that happens, physical gold may not be available at all."
Rickards' commentary can be found at the Daily Reckoning here:
https://dailyreckoning.com/the-golden-conspiracy/
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
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