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Currency reset is more likely than China to goose the gold price

Section: Daily Dispatches

12:21p ET Sunday, January 24, 2016

Dear Friend of GATA and Gold:

GATA's friend R.B. sends a note that may be paraphrased this way:

"I know there's little chance GATA would ever say 'uncle,' but I'm sure that no followers of GATA would mind if you said simply, 'Wake us up when the Chinese take control of the price of gold.' For that seems to be the only counter to all the price suppression happening these days. There seems to be little hope that price suppression will be stopped by any supply-and-demand imbalances, world events, and market and currency problems. Western governments have the gold market locked down tight. China seems to be the only way out."

For whatever it's worth, your secretary/treasurer does not see China as any particular friend of gold. Rather, China almost certainly wants to have enough gold only so that it can start rigging the currency markets just as the United States long has been doing, gold being the prerequisite for currency market rigging.

... Dispatch continues below ...


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Gold's necessity for currency market rigging was explained in detail at a meeting at the U.S. State Department with Secretary of State Henry Kissinger in April 1974, the transcript of which, maintained at the State Department's archive, often has been publicized by GATA and presumably has come to the attention of other governments:

As other countries recognize their exploitation by the currency market rigging done by the imperial powers, they will add to their gold holdings and thus increase the pressure on the world's gold supply even as the world faces the catastrophic debt deflation that is inherent in a debt-based monetary system, as the burden of compound interest outpaces economic productivity. This catastrophic debt deflation is already well underway, with central banks -- particularly the U.S. Federal Reserve and the European Central Bank -- frantically monetizing debt all over the place and using futures market derivatives to prevent the escape of money from financial assets into commodities, resulting in hyperinflation.

These circumstances are likely to result eventually in an official, overnight upward revaluation of gold, a resetting of the international currency system, as the Scottish economist Peter Millar wrote a decade ago:

Such resets have happened before going back to ancient times. The Bible calls it a jubilee. The modern objective is to devalue debt and enable a new round of debt-based money creation as well as another round of monetary metals price suppression at a more sustainable level.

Your secretary/treasurer thinks there is a reasonably good chance that at least the younger ones among us will live to see such a day.

Even so, any such reset will not guarantee profits for gold holders. For governments can tax away any particular capital gains or even try to outlaw private ownership of monetary gold. The latter was attempted not only by the United States from 1933 to 1974 but also by Nazi Germany throughout occupied Europe during World War II.

No one can be sure how desperate governments will become to sustain their power over people by controlling all forms of money. But this struggle is for all the marbles -- for control of the planet. It's a struggle between tyranny and individual liberty, between parasitism and the progress facilitated by free markets, which is why GATA sticks with it.

Your secretary/treasurer's advice, given entirely as a mere layman and high school graduate, remains to get all the monetary metal you can, find a safe planet to keep it on, and, when you do find one, call me.

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

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