RE:RE:RE:RE:RE:Manipulations or NOT ? touareg
Thanks for the civil discourse, which if often missing in these discussions.
Many investors seem to have little ability to detach from the emotions related to holding the metals or the miners.
Regarding the issue of possible US government manipulation of the gold market, I have some difficulty in understanding the rational for this.
The US dollar has had no legal link to gold since 1971, when Pres Nixon stopped the exchange of gold to settle balance of payment imbalances between countries.
This stopped the drain of gold from the Treasury and the USD has been a fiat currency ever since.
Every currency in the world is now fiat and governments can create unlimited amounts “out of thin air”.
So the question that looms large to me is: why does the US Government care what the POG is?
One motive that I hear is that the Government wants to suppress gold to protect the value of the dollar.
I fail to see what the POG has to do with the value of the USD since there is no legal gold-dollar exchange anymore.
The POG has gone from $35 in 1970 to over $1300 now and that has not stopped the Government from continuing to debase its value.
This huge rise in the POG has not alarmed our citizens to the danger of fiat currencies.
I don't see any strong demand in the US from its citizens to stop debasing the dollar and tie its value to gold.
I understand why gold was sold prior to 1971, in a misguided effort to keep stable exchange rates, but why does it matter now?
When the POG goes higher it usually goes up in all currencies, not just the USD.
When governments want to manipulate their exchange rates, they can do it in more direct ways, such as through buying and selling currency futures or using currency swaps between nations.
So why is it important to suppress the POG to bolster the USD?
goldguy