In September 2009 the geopolitical analyst James G. Rickards was interviewed about the currency markets on the cable television network CNBC. Rickards remarked: "When you own gold you're fighting every central bank in the world."
That's because gold is a currency that competes with government currencies and has a powerful influence on interest rates and the value of government bonds. This was documented in an academic study published in 1988 in the Journal of Political Economy by Lawrence Summers, then professor of economics at Harvard, future U.S. treasury secretary, and Robert Barsky, professor of economics at the University of Michigan -- a study titled "Gibson's Paradox and the Gold Standard." This study is posted at GATA’s Internet site:
This close correlation among gold, interest rates, and government bond values is why central banks long have tried to control -- usually suppress -- the price of gold. Gold is the ticket out of the central banking system, the escape from coercive central bank and government power.
As an independent currency, a currency to which investors can resort when they are dissatisfied with government currencies, gold carries the enormous power to discipline governments, to call them to account for their inflation of the money supply and to warn the world against it. Because gold is the vehicle of escape from the central bank system, the manipulation of the gold market is the manipulation that makes possible all other market manipulation by government.
Of course what Rickards said about gold was no surprise to my organization, the Gold Anti-Trust Action Committee. To the contrary, what Rickards said has been our premise for most of our 12 years, and we have documented it extensively. But while the gold price suppression scheme is a hard fact of history, it is seldom mentioned in polite company in the financial world. The public records of the scheme are largely ignored.
That is, the gold price suppression scheme is not what it is sometimes disparaged as being, "conspiracy theory." Rather it is a matter of the most extensive public record -- at least for those who want to look at the record.
These records include:
-- Public statements by Federal Reserve officials, officials of other Western central banks, and the International Monetary Fund.
-- Declassified Central Intelligence Agency memoranda.
-- The minutes of the Federal Reserve's Federal Open Market Committee.
-- Filings and statements in three gold price suppression lawsuits in the United States; one brought by my committee's consultant, Reginald H. Howe, against central banks and bullion banks in U.S. District Court in Boston in 2001; another brought by Blanchard Coin and Bullion against Barrick Gold Corp. in U.S. District Court in New Orleans in 2003; and the third brought two years ago by my organization against the Federal Reserve in U.S. District Court for the District of Columbia.
-- These records also include declassified or leaked U.S. State Department cables.
-- The records include statistical studies done by market researchers like Adrian Douglas in the United States and Dimitri Speck in Germany.
-- And then there is testimony at the hearing about the precious metals markets that was held on March 25, 2010, by the U.S. Commodity Futures Trading Commission. The testimony there led to the filing of a massive silver price rigging lawsuit against J.P. Morgan Chase. The revised complaint against J.P. Morgan Chase, filed last month in U.S. District Court for the Southern District of New York, contains pages and pages of extraordinarily specific detail, identifying trades, traders, and dates.