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What if central banks have NOT lost control of gold? – Chris Powell
TND Guest Contributor: Chris Powell
Has the positioning of the big commercial traders in the monetary metals futures markets lost its value as an indicator of future monetary metals prices?
It seems like gold and silver bugs and maybe a few ordinary investors have been waiting for weeks for the usual smashing of the metals by those traders, the big investment banks, hoping to buy the next dip, only to have to watch the metals and the mining shares move steadily higher.
Among the market analysts whose prediction of a smash has gotten stale and who seems to be doubting himself is Clive Maund, whose latest commentary notes that it’s a “paradoxical situation.” His commentary is posted at GoldSeek here —
http://news.goldseek.com/CliveMaund/1462129992.php
— and at 24hGold here:
http://www.24hgold.com/english/news-gold-silver-gold-market-update–para…
Meanwhile in other commentary at GoldSeek, market analyst Dan Norcini, while not yet so alarmed about the commercial short position in gold, chides “gold cult members who seem to not understand that when they are cheering predictions of $5,000 or even $50,000 gold they are cheering the ruin of everything around them”:
http://news.goldseek.com/DanNorcini/1462129200.php
Count your secretary/treasurer among those who have been expecting the commitment of traders signal to be validated again for the thousandth time. But insofar as it is not validated and the monetary metals continue to rise, your secretary/treasurer can envision two possible explanations and offers them here with the justification of a slow-news Sunday night and the expertise of a high school graduate.
That is, either central banks, the biggest participants in the gold market, have lost control of it, the physical gold part of the market is overthrowing the paper gold part of the market, and the market is in the midst of the fabled “commercial signal failure.”
Or else central banks have not lost control of the gold market, and the gold price continues to go exactly where they want it to go.
That would mean that the consensus policy of central banks in regard to gold has changed recently — that they now want gold rising again, most likely to assist in the devaluation of their currencies, particularly now the U.S. dollar, as well as devaluation of the world’s debt, and that the huge short positions of the banks in the futures markets are actually central bank positions that must continue to increase even to unprecedented levels to keep this devaluation “orderly,” to use a favorite term of central banking. (Really, who else but institutions that are authorized to create infinite money and that hold large gold reserves could accept the risk of such shorting?)
This would mean that central banks disagree with Norcini. It would mean that far from considering a sharply higher gold price to be the end of the world, central banks consider a sharply higher gold price — at least if it can be accomplished in an “orderly” way — the prerequisite of worldwide debt relief, their own reliquefication, and the maintenance of their power, gold remaining, as the assistant undersecretary of state for economic and business affairs, Thomas O. Enders, explained to Secretary of State Henry Kissinger in April 1974, the supreme “reserve-creating instrument” of governments, the ultimate money, the form of money that underwrites all other forms of money, the form of money whose valuation is control of the world:
http://www.gata.org/node/13310
Your secretary/treasurer is far from the first to have such suspicions. They were expressed in detail four years ago by the American economists and fund managers Paul Brodsky and Lee Quaintance —
http://www.gata.org/node/11373
— and have been expressed increasingly by others lately, including, perhaps most notably, by fund manager and author James G. Rickards.
Since the world belongs to central banks and the rest of us occupy it only at their sufferance, they don’t volunteer what they are doing with our planet. Their policies and actions can be discerned only through careful observation, investigation, and research, like tedious searching of government archives that have not been fully redacted, leading to the compiling of documentation summarized by GATA here —
http://www.gata.org/node/14839
— and here —
http://www.gata.org/node/16377
— and even this research does not give much help as to the timing of policy.
So Maund, Norcini, and even your secretary/treasurer may be forgiven for not knowing certain things or not giving them their proper weight. The problem with Maund, Norcini, and others like them is only that, clinging desperately to their narrow craft, “technical analysis,” refusing to entertain the possibility that what they are analyzing are not really markets at all but the tools of higher powers, they seem not to want to know.
# # # #
About Chris Powell:
Mr. Powell has been managing editor of the Journal Inquirer, a daily newspaper in Manchester, Connecticut, since 1974. He serves as the secretary/treasurer and a director of the Gold Anti-Trust Action Committee (GATA). Mr. Powell publishes GATA “dispatches” on stories relevant to the precious metals community: click here to access them and the GATA website. For additional information about precious metals, financial markets and the economy a 2 week free trial to GATA chairman Bill Murphy’s subscription service is available by clicking here. This article is reprinted on The News Doctors with permission.
Source: http://thenewsdoctors.com/what-if-central-banks-have-not-lost-control-of-gold-chris-powell/
