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Jim Rickards: Gold is so manipulated we don't have to speculate about it
11:25a ET Tuesday, April 9, 2019
Dear Friend of GATA and Gold:
Fund manager, author, and geopolitical strategist Jim Rickards, whose recent book, "The New Case for Gold," provides the best summary of gold price manipulation by governments and central banks --
http://www.gata.org/node/18235
-- returns to the subject in commentary just posted at The Daily Reckoning.
In an essay that takes for a headline J.P. Morgan's famous dictum -- "Gold is money, and nothing else" -- Rickards writes in part:
"So much of the gold market is 'paper gold.' This paper gold market is so manipulated we no longer have to speculate about it. It’s very well documented.
... Dispatch continues below ...
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"A central bank, for example, can lease gold to one of the London Bullion Market Association banks, which include large players like Goldman Sachs, Citibank, JPMorgan Chase, and HSBC.
"Gold leasing is often conducted through an unaccountable intermediary called the Bank for International Settlements. Historically the BIS has been used as a major channel for manipulating the gold market and for conducting sales of gold between central banks and commercial banks. The BIS is the ideal venue for central banks to manipulate the global financial markets, including gold, with complete nontransparency.
"But it all rests on a tiny base of physical gold. I describe the market as an inverted pyramid with a little bit of gold at the bottom and a big inverted pyramid of paper gold resting on top. There's just not that much gold available. But in the paper gold market, there's no limit on size, so anything goes.
"Leasing of paper gold by bullion banks allows them to sell the same gold as much as 10 times over to 10 different buyers. It's like a game of musical chairs, only with more participants and fewer chairs.
"Someday, probably sooner than later, somebody is going to show up and say, 'I want my gold, please,' and the custodian won't be able to give it to them. What if a major institution wants its gold but can't get it?
"That would be a shock wave. It would set off panic buying in gold, driving prices through the roof.
"Meanwhile, the physical fundamentals are stronger than ever for gold. ..."
Rickards' commentary is posted at The Daily Reckoning here:
https://dailyreckoning.com/money-is-gold-and-nothing-else/
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
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