Dear Friend of GATA and Gold:
How nice it would be if any of the financial market analysts who have been noting, sometimes in great detail, that the "fundamentals" for gold are spectacular would offer an explanation for this week's spectacular smashing of gold futures prices
After all, the world money supply in the last year has quadrupled, commodity prices have doubled, inflation is roaring everywhere, shortages are developing, real and even nominal interest rates are negative, banks are having trouble finding places to stash their cash without losing money -- and gold doesn't just go down but goes down sharply for two days?
Do they really think that the Federal Reserve's statement Wednesday -- that it might feel compelled to raise interest rates two years from now -- was hawkish about interest rates, even as the Fed acknowledged that inflation is roaring already?
Do they know anyone who is buying or selling actual gold at the prices posted in the futures market?
Just how do they explain the incongruity between their "fundamental" analysis and the prices emanating from the futures market?
What do they think about the possibility of central bank intervention, directly or through intermediaries?
Could the big banks that trade that market be doing so on behalf of the U.S. government or other governments, as by trading contracts back and forth among themselves to achieve a certain price with which to deceive investors?
If the proponents of fundamental analysis think such complaints of market manipulation are nonsense and "conspiracy theory," what do they think of the documentation compiled by GATA here --
-- and have they ever attended a meeting of, say, the Federal Open Market Committee, the Board of Directors of the Bank for International Settlements, or the G-7 Gold and Foreign Exchange Committee? Isn't secret government by definition a conspiracy? Why are "fundamental" analysis and even "technical" analysis of markets any good if government, the creator and allocator of infinite money, is manipulating them?
As of this hour, it seems that all monetary metals-oriented internet sites have no more interest in these questions than the World Gold Council and 999 out of a thousand gold mining companies do.
So, advocates of "fundamental" and "technical" analysis, where are you on gold tonight? Can you offer any explanation? Or are you just hiding under the covers until this smash is forgotten?
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.