Gold Smashes Through $2,500 Barrier
Aug. 17—The price of gold crashed through the $2,500.00 "barrier" yesterday, closing at $2,546.00, a record high. But before the goldbugs start going off about how the sky is the limit, it is important to realize that this and all commodities markets are rigged by the central banks to try to manage the flow and ebb, and this is most decidedly the case with the gold market.
"The Fed and the other central banks try to keep things under control," said a Wall Street-linked financial source. "One would have thought, given the chaos in the other markets including the high volatility in the equity markets, which are now trending downward, that such market pressures would have already shot gold prices through the roof. But the Fed had its various agents and operatives selling gold, even as they were trying to manage a controlled disintegration of equity and bond values that saw about $11 trillion dollars worldwide go up in smoke.
"Under normal conditions, such equity losses would send people fleeing into the perceived safety of gold, especially when its price has been more or less steadily appreciating. But the Fed and the other central banks who were running the $11 trillion steam valve run-off of the huge speculative boiler that the markets have become were prepared for that and so they sold gold, to keep the price down. But, as soon as they stopped doing that, the gold price started heading skyward again.
"What this means is that they are going to need to manipulate the market more," said the source. "The god price increases helps two of the largest gold producers, Russia and South Africa, both members, along with China, India, and Brazil of the BRICS economic alliance. And these guys are working on the framework for a new, non-dollar based trading system, with a new currency, that could be backed, in part, by deposited reserves in the BRICS international bank, the New Development Bank. The Fed and the central banks don't want to give this more legs than it already has, so I look for them to try to manage any gold price rise. And they must also fear that any sharp rise in the gold price will be interpreted by traders and so-called pundits as a sign of continuing weakness, the kind of thing that could trigger another sell-off in the equity markets
"The trend is upward, but they are going to try to keep it from going sharply upward," the source concluded. "But in the end, this whole screwy system has to change. The rigged system is coming unwound and must eventually collapse beyond the means of the central banks to control or cover it up. Gold is going tom play a role in a new system, likely the same one that it played, as reserved used to help settle current account balances between nations, in the old Bretton Woods system, before [President Richard] Nixon pulled the plug on it some 53 years ago, Aug. 15, 1971—a day that should live in financial infamy. But in such a new system, the gold price cannot be allowed to float, it is going to need to be pegged, and at some realistic value, that wipes out all speculative value that it has been infused with by the global financial casino. That will not make the goldbugs very happy. And to make them more unhappy, there would likely have to go back to the prohibitions on private individuals holding or hording gold. No, the gold-bugs will not be happy campers. But for now, they are all congratulating each other on the price rise."