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Economist columnist says gold is ''eminently manipulable''
1:48a ET Tuesday, September 13, 2005
Dear Friend of GATA and Gold:
Today's daily commentary by Richard Russell in his
Dow Theory Letters has been posted in the clear at
321Gold, and some readers are remarking that Russell
has just gotten closer than ever to acknowledging
manipulation of the gold market.
Russell writes:
"The 'battle of gold' has been long and arduous. The
central banks want to control the world's money, and
gold (real money) is in their way. Therefore, the
central banks have fought gold both economically and
psychologically. They've fought gold economically by
periodically selling portions of their gold holdings.
They've fought gold psychologically by implying that
fiat money is real money and gold is 'an ancient
relic.' This 'war against gold' worked for many years
but it stopped working around 2001-2002. It stopped
working when smart money started accumulating gold
when the metal got down to absurd prices around $250
to the ounce."
Russell has earned respect as a longtime gold advocate
but that is exactly why his tentative recognition of
what has been going on is so pathetic. For it comes as
he repeatedly remarks that he is having more trouble
than ever figuring out the markets, Dow Theory seemingly
proving less and less reliable.
Of course Dow Theory is less reliable because there
really are no longer markets as markets have been
understood; instead there are mainly surreptitious
government interventions and manipulations. What GATA
Chairman Bill Murphy first established with gold,
tying it to the coordinated interventions of bullion
banks and central banks, and what GATA board member
Mike Bolser first established with the bond and
equity markets, tying them to the Federal Reserve's
daily repurchase agreements, what Sprott Asset
Management's John Embry and Andrew Hepburn compiled
in their magnificent report on the rigging of the
gold market in August 2004 and their magnificent
report on the rigging of the equities market this
August -- all this seems to have gone over Russell's
head. Even Dennis Gartman of The Gartman Letter,
no friend of gold, picked up on it before Russell
did.
Maybe it is understandable enough -- for anyone
who, like Russell, has built a career as a
technician cannot want to know that all this
stuff is utterly meaningless now that the data is
not the market talking but rather the government.
For GATA supporters, the best part of the
Connecticut newspaper story dispatched to them
today about the latest Sprott report, the one on
the U.S. government's repeated intervention in
support of the equities market, came in the last
several sentences. Asked for comment on the
report, the Federal Reserve, the Securities and
Exchange Commission, and the Treasury Department
all declined.
Perhaps news organizations with more influence
can be persuaded to thrust the Sprott report into
the hands of U.S. government publicists and will
have better luck getting responses. Russell, a
highly respected newsletter writer with an
influential audience, should try it himself and
stop confusing himself with his charts.
You can find Russell's comments at 321Gold here:
http://www.321gold.com/editorials/russell/russell091305.html
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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