In the wake of gold prices cratering in recent days, more than a few prominent experts have already started pinning the blame on Western central banks — especially the Federal Reserve and the European Central Bank (ECB). According to numerous analysts, the central bankers are desperate to salvage their fiat currencies and eliminate competition as "monetary authorities" continue to create ever-greater quantities of euros and dollars out of thin air.
Some experts, whistle-blowers, traders, and former officials say the Fed dumped as much as 400 or even 500 tons of “paper gold” on the market — metals that it might not even have — as part of a naked short sale aimed at driving down the prices. Other analysts, especially among the establishment, pointed to the ECB chief’s recent suggestion that struggling European authorities in countries such as Cyprus would have to sell their precious metals to keep receiving bailouts.
Gold prices plummeted from above $1,550 an ounce on April 11 to below $1,400 by Tuesday, with April 15, seeing the biggest single-day drop in some three decades. Prices for silver witnessed similarly massive declines, dropping to below $24 from around $28 less than a week ago. Analysts referred to the plunges as a “blood bath” that triggered even more sell orders.
All of the economic fundamentals that sent gold soaring from about $400 an ounce a decade ago to more than $1,900 an ounce, however — wild currency-printing binges by privately owned central banks such as the Fed, for example — remain in play. Indeed, monetary authorities in the West have actually expanded their unprecedented so-called quantitative easing (QE) programs in recent years amid a supposed effort to revive the economy.
Economist Dr. Paul Craig Roberts, Assistant Treasury Secretary during the Reagan Administration and former editor of the Wall Street Journal, is one of many experts who argue that the recent collapse in gold and silver prices was carefully orchestrated by the Fed and a coalition of allied mega-banks. In a widely cited analysis of the recent plunge in precious metals entitled “Assault On Gold Update,” he said the U.S. central bank was “rigging all markets” — bond prices, interest rates, and of course, the bullion market.
The purpose, Roberts argued, is to protect the value of the dollar while the Fed continues adding to the supply of fiat U.S. currency faster than demand increases. If the dollar’s exchange rate were to fall, prices would rise, the Fed would lose control over interest rates, the bond market would collapse, and turmoil would reign in the financial system, Roberts noted. So, the U.S. central bank had to act. According to Roberts and other experts, it did so by selling “paper” gold that may not even really exist — naked short selling, in other words.
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