Stewart Thompson: Gold's controllers want it higher now

Section:

3:07p ET Tuesday, September 14, 2010

Dear Friend of GATA and Gold:

Stewart Thompson, who writes the Graceland Updates letter, is among the few gold market analysts who fully understand and acknowledge gold's centrality to the world financial system and the life-and-death interest central bankers have in controlling gold's price. It would be nice if a few investment conferences invited Thompson to speak instead of, say, Kitco senior gold market analyst Jon Nadler, who continues to insist that central banks have no interest in interfering in the gold market.

Thompson's new commentary, "Gold's Controllers: They Want It Higher," explains how "gold is a control mechanism used to increase/decrease the amount of debt outstanding and to increase/decrease the value of paper money." Gold revaluation has been undertaken by governments before, and, Thompson writes, it may happen again to ease the worldwide debt burden.

... Dispatch continues below ...



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Others have made this point over the years, like the economist Peter Millar of Valu-Trac Investment Research Ltd. in Scotland, whose important 2007 study of gold's role in the world financial system noted the periodic upward revaluation of gold by central banks as the mechanism for defeating a deflationary debt depression at the end of an economic cycle. A preface to Millar's study along with the study itself can be found at GATA's Internet site here:

http://www.gata.org/node/4843

Of course GATA always has maintained that central banks have been suppressing gold's price to support their currencies and government bonds and to keep interest rates low, gold being a competitive currency and a determinant of the value of other currencies, bonds, and financial instruments generally. Now Thompson writes -- as he has written before -- that central banks want gold to rise in price.

But if central banks do want gold to rise now -- and it has been rising pretty steadily for a decade in what GATA has characterized as the central banks' "controlled retreat" -- even Thompson acknowledges that they continue to manipulate the gold market surreptitiously. As much as GATA believes that the gold price should be higher, this is not because of any particular love for the precious metal but because our objective always has been free and transparent markets in the precious metals as the prerequisites for free and transparent markets in everything else and, indeed, the prerequisites for democratic, limited, and accountable government, that kind of government being utterly incompatible with central banking as currently practiced.

Anyway, Thompson's new commentary acknowledging central banking's interest in controlling the gold price can be found at GoldSeek here:

http://news.goldseek.com/GoldSeek/1284482292.php

And at 321Gold here:

http://www.321gold.com/editorials/thomson_s/thomson_s_091410.html

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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