Letters to the Editor Gold price being manipulated?

Having been an observer of the gold scene for many, many years, I thought it was about time I got something off my chest.

The price of gold is being artfully manipulated. It has been for several years now. Gold at $450(US) is comparable to gold at $35 an ounce in the late 1960s when the so-called leading industrial powers were selling their own gold to stabilize the gold price. Of course, they “came a cropper” in 1971 for a variety of reasons, but in particular because international demand became so great as to overwhelm the conspirators. The same thing will happen again eventually but in the meantime gold at $450 is a farce. Here are some of the reasons I believe the price is currently being rigged:

* The U.S. dollar has been devalued 50-60% against the leading world currencies during the last two years. Gold should have doubled.

* The rate of inflation in all western countries is far greater than official figures would indicate — two, three and even four times greater.

* Commodity metal prices in general have skyrocketed during the last year; gold is the same or slightly less than the comparable period last year. For example: aluminum up 120%, lead 100% higher, zinc 100% higher, copper 54% higher, nickel 100% higher — and gold slightly lower.

* During the Oct 19, 1987, stock market crash gold barely moved. Why not? Central Bank selling? it was rumored on Oct 20, 1987, that the U.S. Treasury that day dumped 60 tons of gold onto the market in order to depress the price.

My view is that the various treasuries of the so-called leading industrial powers are continuously interfering in the gold market for very obvious reasons.

What are some of these reasons? A stable gold price represents a stable U.S. dollar. A regulated gold price is equated with low inflation. By putting the patient’s thermometer in the refrigerator it artificially depresses the patient’s temperature. A fairly stable gold price says indirectly — all is well in the economic world.

However, even the most indifferent student of economics realizes that something is very wrong with the western world’s economy. U.S. national debt doubled during the last eight years. Trade imbalances, budget deficits and all manner of other debt (corporate, consumer, etc.) increases almost exponentially. Gold at $450 says “no real problems.”

It is possible that the U.S. Treasury will eventually sell all its gold in order to establish an illusion of financial stability. My guess is that it will sell all or most of its gold during the coming years and will worry about the problem when it is confronted with a dreadful crisis.

In the meantime — a message to all gold investors — hang in there. Gold is now about one-third of its real unmanipulated value. Keith M. Barron Brampton, Ont.