Dr. Paul Craig Roberts continues...
“And you have to ask yourself, who would short gold in a rising gold market? In the physical gold market the demand for gold rises consistently. Investors would ride the rise in gold. Do investors go in and short a bull market in stocks? Not unless they want to get wiped out. So why would they short a rising gold market unless the purpose is to stop the rise?
So it’s obvious that they are fixing the price of gold because we hear every day that there is more physical demand for people who actually want the metal....
Continue reading the Dr. Paul Craig Roberts interview below...
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“We hear reports that central banks are starting to acquire and accumulate gold using their dollars, and lightening their dollar load.
So if the demand for physical possession is strong, why would you short gold in the paper market, unless you are trying to hold down the rise of its price? When the price of gold hit $1,900 a year or two ago it told the Fed that they can’t fix the price of bonds if the world perceives the dollar deteriorating at such a rapid rate in terms of the price of precious metals.
If the dollar is deteriorating there (against gold), people also know that the value of assets denominated in dollars are also deteriorating. So the Fed was worried that they would lose control of the bond price and interest rates because of the erosion in the dollar price of gold. That is the origin of this policy. The (heavy) shorting appeared then, and they broke up what was a very consistent and strong rise for over a decade.
If you look at the chart you see there is a very sharp increase, and then it drops down a little bit and is kind of capped. So it’s an obvious manipulation.”
Eric King: “Dr. Roberts, as the former Assistant Secretary of the US Treasury, you brought up the dollar there, as you watch the massive creation of money, what are your thoughts on that?”
Dr. Roberts: “You can’t retain a stable exchange value of your currency while you print it in enormous quantities. So, at some point it has to shake the confidence of the rest of the world in the dollar as the reserve currency.
We already know about efforts to move away from the use of the dollar as the reserve currency. We know the BRIC’s are making agreements to resolve their trade balances with one another in their own currencies. That’s Russia, China, Brazil, South Africa, India. It covers most of the geography of the world.
There are reports that Japan and China, despite their disputes over islands, are working to conduct their trade in their own currencies. As the use of the dollar as the reserve currency for transactions or as a store of value declines, then the demand for dollars declines, so its exchange value in currency markets declines.
The Federal Reserve can print all of the money it needs in order to support bond prices, but printing dollars doesn’t support the dollar price. And the Fed has not the power to print foreign currencies with which to support the dollar price. So the dollar is the vulnerable spot in the Fed’s policy management, and the popping of the bubble is likely to come from the dollar.”
Here is the link to Part II of the extraordinary Dr. Paul Craig Roberts written interview.
This is the first in a series of interviews with former Assistant Secretary of the US Treasury Roberts that will be released which reveals the increasingly desperate situation that Western central planners face going forward. The written portion above is just a small part of this extraordinary interview with Dr. Roberts.
Dr. Roberts discusses the Fed’s manipulation in the gold market, and a coming financial collapse. In addition to the written interviews which will be released, the KWN audio interview with Dr. Roberts is available now and you can listen to it by CLICKING HERE.
IMPORTANT: Jim Sinclair is holding a meeting in New York this coming Wednesday, March 20th at 2 PM EST. For details and to sign up to attend this event CLICK HERE.
The interviews with Eric Sprott, Dr. Paul Craig Roberts, Egon von Greyerz, Rob Arnott, James Turk, Jim Sinclair, John Embry, Gerald Celente, Rick Rule, Ben Davies and Andrew Maguire are available now. Also, be sure to listen to the other recent KWN interviews which included Marc Faber, Felix Zulauf and Art Cashin by CLICKING HERE.
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Eric King