For those who discount that “manipulation” explains the price beat-down in precious metals this year, I submit two simple multiple-choice questions. Please answer both.
1) In your opinion, when it comes to the price of precious metals, the Fed (and or bullion bank traders such as JP Morgan) would probably prefer the price of precious metals to:
A) Be low with likelihood of going lower
B) Be high with likelihood of going higher
C) Are completely indifferent to precious metal prices
2) When it comes to price of precious metals, central banks (and/or bullion bank traders such as JP Morgan Chase) can influence the price in a significant manner if they so choose.
A. True
B. False
Third question (the money question!)
If the honest answers to Questions 1 and 2 are both "A," why wouldn't the Fed/Bullion Banks do what they can to achieve low prices?
Teacher comments:
To me at least, it’s common sense to think that central banks and/or bullion banks who might be in alliance with one another do not like or want high (or rapidly increasing) precious metals prices.
It’s also common sense to think that these players possess the means to influence market prices.
Given these two assumptions, the only thing that might preclude the above entities from acting to manipulate prices lower would be either some sense of fair play and/or perhaps a fear of prosecution.
Which leads to another question: Do you think such a fear exists?
Maybe the gold and silver markets are not manipulated. But I do not think those of us who believe they are are crazy for thinking this.
In fact, I think my two little questions are enough to raise legitimate suspicions.
Yes, “The Powers that be” do not like high precious metals prices and, yes, if they were so inclined, they could probably do something about said prices.
Fortunately, they are not so inclined ... or so those who make fun of us in the “manipulation” crowd would have us believe.
I can’t help but ask one more question: Who is really being naive?
Bill Rice, Jr. is managing editor of The Montgomery Independent. He can be reached at bill@montgomeryindependent.com.
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