Jesse: Why the Official Antipathy to Gold and Silver? The Second Oldest Profession
Excellent excellent post from Jesse at Jesse's Café Américain
Why the Official Antipathy to Gold and Silver? The Second Oldest Profession
August 9, 2010
Every so often someone asks, 'Why do the government and the banks manipulate the price of gold and silver?'
There is a great deal of circumstantial evidence to support this, even some blatant quotes pertinent to the topic from the likes of Volcker, Greenspan, and Bank of England governor Eddie George. Of course it can all be denied. People can deny anything, even well known historical events with many witnesses, if it suits their bias and purposes.
But putting aside the operational aspects, what is the motive?
Most recently a correspondent from India asked the question 'why do the banks wish to control silver from the short side? Why would they not blow it into a bubble like they do with stocks and make their profit there? Why do the banks wish to hold these prices down and make people think badly of silver and gold which we here value so much?'
When asked this, I will usually attempt some explanation that begins with the fact that the banks involved are the Primary Dealers for the most part, and very involved with the Federal Reserve and the government on a variety of levels in the issuance and arbitrage of official US debt.
The motive therefore involves aspects from an 'official' monetary perspective. It will often include a reference to Gibson's Paradox, a paper by Larry Summers involving the price of gold and its perceptual relationship with the long end of the curve. It might include Volcker's and Greenspan's comments about the price of gold casting a negative light on the stability of the currency if it rises too high or too quickly. I may even get into the Second Bank of the United States, and Andrew Jackson's populist role in exposing its frauds, and refusing to renew its Charter in favor of constitutional money.
But if I am ever asked about this in the future, I can think of no better, no more concise statement of a possible motive for the manipulation of gold and silver than this:
“The central economic problem plaguing this country since 1913 has been the presence of the Federal Reserve System. Without the Federal Reserve System’s debt-currency scheme having effectively supplanted the constitutional monetary system based upon silver and gold, it would have been impossible - not simply improbable, or difficult, but impossible - for politicians in the public sector and speculators in the private sector to have amassed the staggering level of unpayable, unconstitutional, and unconscionable debt that now bears down upon this country.”
Dr. Edwin Vieira, Jr., Going to the Roots of the Problem
It's enabling the fraud, always and everywhere, and the power obtained in controlling the supply and issuance of money. As Lord Acton noted,
"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the Banks."
There are those who are involved in productive labor, and those who wish to unproductively tax it. It is an old story with deep roots in history.