Essentially, the price of gold has been kept artificially low and should be well over $2000 per ounce by now. The manipulation game with gold, currencies and the economy in general cannot continue indefinitely and we’ll see that soon. The Fed is running out of tricks.
The future direction of the planet is between the central bank’s counter-party paper Ponzi currency or the independence of real money.
Foresighted central banker John Exter is famous for his classification of risk assets. Using Exter’s Golden Pyramid the riskiest assets are those at the bottom of the pyramid and situated at the top of the apex is gold bullion – independent from the counter-party risk of central banks’ paper and electronic currency.
At the bottom of the wealth asset pyramid are overleveraged paper derivatives estimated to be a magnitude of up to six times the world’s wealth. An example of this is in Germany today where it was recently estimated that Deutsche Bank has a massive 70 trillion dollars worth of exposure to derivatives. Meanwhile, annual GDP in Germany is just 4 trillion dollars.
Warren Buffett warned of these “financial weapons of mass destruction.”
This staggering giant paper Ponzi of unpayable leveraged finance means there are multiple counter-party paper claims within complex risk structures that will bankrupt the entire counter-party paper and electronic global financial system in a derivative collapse.
The downward arrows on the inverted pyramid point to wealth fleeing from the perceived risk of unpayable counter-party paper to the ultimate assured protection of gold as independent money that offers the security of having a physical asset that will retain liquid disposable wealth.
Gold is the mortal enemy of the central bank counter-party paper system; to prevent the flight of capital away from the Ponzi of paper finance markets and into independent wealth, the price of gold is tightly suppressed by the central planners as documented by GATA, especially during times where there is market uncertainty or periods of geopolitical stress.
Losses from deleverage and deflation since the 2008 paper crash have been so immense that central banks’ counterfeit of quantitative easing has been necessary to prevent a collapse of the derivative complex.
At the same time re-inflated worldwide stock markets have become totally dependent on managed central bank intervention for life support, while gold and gold mining shares have been monkey-hammered even though the physical demand for gold greatly exceeds world mining supply.
Full article: Fed, Central Banks Trapped – Gold Foundation of Exter’s Pyramid (GoldCore)