The big Gold Crash: was it caused by the Fed to prop up their worthless currency?

The big news early this week was the huge drop in gold prices that threatened golds privileged position as a strong protection against inflation and a good alternative to fiat currencies. Some may have had their faith in precious metals shaken but, was the price drop real or was it engineered by the Fed to prop up their worthless greenbacks?

After Gold Crash, Experts Point to Central Bank Manipulation

Some experts, whistleblowers, traders, and former officials say the Fed dumped as much as 400 or even 500 tons of “paper gold” on the market — metals that it might not even have — as part of a naked short sale aimed at driving down the prices. Other analysts, especially among the establishment, pointed to the ECB chief’s recent suggestion that struggling European authorities in countries such as Cyprus would have to sell their precious metals to keep receiving bailouts.

Gold prices plummeted from above $1,550 an ounce on April 11 to below $1,400 by Tuesday, with April 15, seeing the biggest single-day drop in some three decades. Prices for silver witnessed similarly massive declines, dropping to below $24 from around $28 less than a week ago. Analysts referred to the plunges as a “blood bath” that triggered even more sell orders.

Economist Dr. Paul Craig Roberts, assistant treasury secretary during the Reagan administration and former editor of the Wall Street Journal, is one of many experts who argue that the recent collapse in gold and silver prices was carefully orchestrated by the Fed and a coalition of allied mega-banks. In a widely cited analysis of the recent plunge in precious metals entitled “Assault On Gold Update,” he said the U.S. central bank was “rigging all markets” — bond prices, interest rates, and of course, the bullion market.

The purpose, Roberts argued, is to protect the value of the dollar while the Fed continues adding to the supply of fiat U.S. currency faster than demand increases. If the dollar’s exchange rate were to fall, prices would rise, the Fed would lose control over interest rates, the bond market would collapse, and turmoil would reign in the financial system, Roberts noted. So, the U.S. central bank had to act. According to Roberts and other experts, it did so by selling “paper” gold that may not even really exist — naked short selling, in other words.

The New American

The article cites lots of other economists who all came to the same conclusion; the Fed is propping up its worthless currency in order to hang on just a little longer. Many think this may be a risky move as the Fed may not even have the physical gold to back up all that paper it dumped onto the market.

It looks to me like its a good time to buy while the prices are artificially low (just wish I had some actual money to invest myself ). One thing you can be sure of; the gold prices will bounce back because all the big central banks are continuing on their road or printing more and more of their worthless paper to flood the markets in their attempts to get the economy chugging along again.

Nothing like doubling down on a failed policy certain to cause even bigger problems down the road. Their desperation is showing how bad things are really getting. Scary times ahead...

Yes, I agree something was rigged here to cause this very quick reduction in prices. From the folks I have read, they say the prices are lower than the cost of mining/production and the contracts lock the mines into situation, so bascially, they are saying the mines are going to go bankrupt. Now, that will be interesting.

OR....the dollar is showing stability compared to other currencies, OR.....European economies are faltering which could mean they are selling gold to cover losses, OR....corporations have recovered and stabilized enough to draw in investors for their corporate bond fund payouts, which are now more attractive for income purposes than gold is.

But..but..but.....Why would anyone pay 1600 bucks for a little piece of metal in the first place. An ounce of gold is small. I would rather buy two logging trucks full of logs with that money, it would heat my house for three years. The money I save on oil would be almost five grand. With the six grand I can buy a nice toy

I think there was more manipulation nearly 2 years ago when the top in silver occurred simultaneous with the "Bin Laden raid" (May 1st 2011) and the end of Feb, 2012 when it collapsed. We have been coming down to multi year support (low $26 handle in silver and $1520-50 in gold) for some time...finally busting thru triggering a ton of stops in the futures market and changing the tone of the charts from corrective (bull market correction) to impulsive (bear market trend*).

* At least a cyclical bear within a secular bull market.

double tap.
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If I recall, Germany wanted all its gold back in country, during the cold war it spread its wealth around the world like to the United States and United Kingdom, this has effected the gold market, then Russia at the same time wanted to go back on the gold standard to strenthen its economy. (SEE LINK)

Gold

China gold

China is doing the same thing so no wonder why the gold is Crashing, most contries base there currency off of Gold but they don't have any, but the US is backing its currency off of its Domestic products. (Regan era) So in another word, other contries are buy up the US Debt useing Gold, which is forcing the Price of it down.

Here is a Titanic/ Fed analogy: The Titanic would have survived a direct hit by an iceberg (equivalent to a Fed raid) but the manner in which the hole tore across a large section of the side of the boat contributed to it taking on too much water (selling) which spilled over the bulkhead barriers and ultimately sank the boat. In the case of Gold, the Fed (thru their proxy Goldman Sachs who issued a sell recommendation and shorted the market) got the market down to and thru the support area for Gold (and Silver followed) where buyers (incl China) had stopped it several times over the last few years and the buyers where not there en masse this time so the market broke support and hit a flurry of stops that went off like a string of "chinese firecrackers" (pun intended as China stepped aside knowing this). At this point the gold (silver already down approx 50%) passed the 20% mark that is the standard for technically entering a "bear market" (not a MSM conspiracy but fact). What is true is that the rout was primarily in the derivatives contracts (futures and options) but also there was serious ETF Gold selling that forced the dumping of actual bullion held. Gold is not sunk; however, this type of demand that we are seeing at the lower plateau is NOT how you make a bottom. Bottoms are not made by en masse bargain hunting but rather by despair and a lack of buyers. That psychology tells me that this is not the low.......yet.