In other words, lying about inflation is a stealthy way of engaging in a massive transfer of wealth from the poor and middle-classes to the wealthy. This partially explains how Western “democracies” — who claim to have “progressive” tax systems, and “progressive” social programmes — are experiencing a rapid increase in the already huge wealth-gap between the rich and poor. This is a complete reversal of a trend during most of the 20th century, where (for one of the few times in history) the wealth-gap was actually narrowing.
For a quarter of a century, their campaign was based on simple, brute force. With roughly 20,000 tonnes of gold at their disposal, any and every time that the price of gold showed any upward momentum, these bankers would “bomb” the gold market with their huge gold reserves.
This campaign was so ruthless that by the 1990’s this cabal had driven the price of gold well below the cost of production for most of the world’s gold mines — causing shut-downs of mines all over the world, and the bankruptcies of numerous gold-mining companies. This can be considered the first step in their own downfall, as they had depressed mine-supply to the point where it was well below annual demand.
While the once-huge stockpiles of Western central banks could absorb this supply/ demand imbalance for many years, the cost of such a strategy was to steadily deplete their own reserves (or “ammunition”) which would be available to continue depressing the gold market in the future.
Beginning this decade, the “future” has now caught up with this cabal. The moment of transition can now be clearly identified, in hindsight.
It occurred in May 1999, when then UK finance minister (and now prime minister) Gordon Brown dumped roughly half of his countries gold reserves at essentially the all-time low for the price of gold. The rumoured motive for this panic-sale was to rescue Goldman Sachs — who was sitting on a huge “short” position just as the gold market was showing signs of staging a big rally. This move has cost UK taxpayers in excess of $1 billion.
The increasing failure of these bankers to control the gold market can be illustrated in two ways. The most obvious indicator is that the price of gold has more than tripled this decade. Even given the low standards for performance which these bankers set for themselves, this represents a dismal failure.
The other way in which the inevitable defeat of this cabal can be revealed is through their own declining gold sales. A decade ago, these central bankers embarked on an official gold-sales strategy: an agreement to set an annual ceiling on gold sales.
At the time, with gold dismissed as a “barbarous relic” by these propagandists, selling gold was fashionable among these bankers.
Thus, during the first five-year term of the central bank sales agreement (which expired in 2004), all was well in the world of gold-manipulation.
However, as the second of these five-year agreements approaches its conclusion, the imminent defeat of the anti-gold cabal is now plain for all to see.
The writer is editor of bullionbullscanada.com and can be reached at j.nielson@shaw.com
This is a condensed version of what originally appeared on http://www.bullionbullscanada.com/ index.php? option=com_content&view= article&id=2034%3Agold-wars-part-i-central-banks-supreme&catid=48%3Agold-commentary&Itemid=131&limitstart=1.
Reprinted with permission of the author.
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