RE: Dave / Gold conspiracy?Dave,
I see three weaknesses in GATA (Gold Anti-Trust Action Committee) arguments:
1) We only hear accusations from GATA, never other plausible explanations. Often there are at least a few alternatives to explain any given event, yet GATA is only willing to present opinions that lend support for their conspiracy theory. As a rule conservative bankers tend to ignore critics like these, so we only get to hear one side of the story.
2) Even if banks are utilizing gold reserves in markets, and I am not saying that this is the case, how would this activity be illegal? And how would the total removal of all central bank gold reserves serve consumers? Obviously this would create a shortfall in the market which would benefit gold investors, but how would consumers benefit from $2000 gold?
3) The main concern for central banks is inflation. If gold were to go to $2000/oz, due to a critical supply shortage, i.e. for reasons unassociated with inflationary pressure, then why should the Fed be concerned? If wages and prices for goods and services are growing at a relatively slow rate, the Fed wouldn’t have a motive to control the gold price.
It’s this last point, the lack of reasonable motive, that leaves me unconvinced of an organized international conspiracy by central banks to control gold price. In fact, the opposite is true. The US and other governments stand to benefit most from any non-inflationary rise in the price of gold, since they own the largest reserves!
I see this whole GATA thing as a variation on the age old theme of conflict between good and evil, where gold represents all that is pure and good in man, while fiat currencies symbolize the impure and corrupt. The honest citizens of GATA stand for wholesome living, while evil central bankers are decay and wickedness personified.
Some people go to church on Sunday, whereas others can attain similar emotional satisfaction through serving a cause, which in this case involves saving the good citizens of the earth from the perils of paper money.
-B-