A grudging acknowledgement of gold market manipulation

10:10p ET Monday, November 30, 2009

Dear Friend of GATA and Gold:

Another important acknowledgement of manipulation of the gold and silver markets was published today -- and by a long-time disparager of suggestions of manipulation.

The acknowledgement came from Robert J. Moriarty, proprietor of the excellent 321Gold.com Internet site. In a wide-ranging commentary headlined "Last Week Was a Top in Gold," Moriarty wrote:

"Gold and silver are no more manipulated than any other commodity. The government thinks it's their job to manipulate currencies, interest rates, and probably the stock market as well. Why wouldn't they manipulate gold and silver as well?

"But a fundamental belief in manipulation and conspiracy as being the prime mover behind the price of silver and gold is to say you don't believe in supply and demand. Sooner or later, supply and demand have to have some effect."

Yes, Moriarty's was a backward, grudging sort of acknowledgement and one apparently forced on him by recent events rather than brought about by any serious investigation of the gold and silver market manipulation issue. Just weeks ago Moriarty might have sneered at anyone posing the rhetorical question he himself asked today: With the government now manipulating so much in the open, "Why wouldn't they manipulate gold and silver as well?"

At least Moriarty now is ahead of a few other supposed market analysts. But GATA would disagree with his second assertion cited above -- that belief in market manipulation is necessarily disbelief in supply and demand. GATA long has maintained that supply and demand factors in the gold market are explosive and have been held in check only by the manipulation underwritten by central bank dishoarding and cash underwriting of the bullion banks shorting gold.

That is not to suggest, as Moriarty does, that supply and demand and markets necessarily triumph in the end. Supply and demand and markets in gold and silver have not triumphed in time to give many precious metals investors the rewards they deserved. Such investors are dying every day, and dying cheated. And even when manipulation is acknowledged markets are not always able to assert themselves. That is the lesson of the U.S. government's confiscation of monetary gold in 1933 and its outlawing possession of such gold until December 31, 1974. Thus the gold market in the United States was defeated for 41 years.

GATA advocates and works for free markets in the precious metals. But there is no inevitability to free markets or to any sort of justice. Free markets and justice result only from the great struggles of human action.

You can read Moriarty's commentary, "Last Week Was a Top in Gold," at the 321Gold Internet site here:

http://www.321gold.com/editorials/moriarty/moriarty113009.html

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

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