Why is Gold appreciating?
Many people would say that Gold and other precious metals are gaining momentum, as a hedge against inflation and economic/financial turmoil.
This certainly is a motivation to buy some for many awakening members of the public.
It’s not, however, the reason Central Banks are buying Gold.
Are the Powers that Be unhappy with the appreciation of Gold?
Many seem to think so. They say the banks suppress the price of Gold, to hide the depreciation of paper currencies. The people from http://www.gata.com have been exposing that process for years.
On the other hand: the Powers that Be control or outright own most of the Gold. The few ounces that the few people reading the Free Media own, are not a significant part of the World’s Gold reserves.
Where these reserves are? Nobody knows.
But it is a reasonable bet, that the same families that control the FED and other CB’s, also own most of the Gold. After all: we used to have a Gold Standard under their control, the Rothschilds made their fortune with it. It is unlikely they dumped their Gold after 1972, when Nixon finally killed Bretton Woods.
So the rising price of Gold increases the worth of their Gold too.
Ah, you say, but it decreases the relative worth of their paper monopoly.
True, but that is end of life as it is.
A new Gold Standard is the likely solution for the problems they created with paper.
That’s the fundamental reason why Gold has been on the up for years now. The avant garde in the market is speculating Gold will be restored as the Phoenix our bosses so much like to associate themselves with.
And if Gold is indeed reinstated, it will have to buy up all the paper around. In practice it will be more complicated than that, there will likely be a haircut for those holding paper, but basically this is what is going to happen.
And if it does, Gold would have to go to about 40k dollars per ounce to be able to mop up all the paper.
So as long as a new Gold Standard is a plausible ‘solution’ to the current ‘problems’, it will continue to appreciate. Notwithstanding the fierce downward corrections that we have seen over the last few years.