If you've browsed my blog, read my book or heard me speak, the topic of gold/silver manipulation has probably been discussed. At that point your eyes probably rolled and your mind focused on something more interesting, like what your favorite flavor of oatmeal is. Nonetheless, the importance of this topic isn't going away and my steadfast belief in the manipulation gets stronger by the day.
As you're certainly aware, Barclay's has been indicted in the LIBOR scandal. Matt Taibbi believes
most or all of the world's 15 biggest banks were also in on the LIBOR manipulation and his argument makes a great deal of sense. What does this have to do with gold? Well, just like LIBOR, gold reflects the value of money. It's a canary in the coal mine. If it's rising rapidly it's indicating something is severely wrong with the world's financial system.
If the world's central & commercial banks were willing and able to push around the $500 trillion LIBOR market, you don't need to suspend belief to think they did the same thing to the comparatively tiny gold and silver markets. By managing the gold price, it makes currencies like the U.S. dollar, EURO etc. look stronger than they really are. This was Barclay's purpose in submitting a false LIBOR rate, it made their bank look stronger than it really was.
As the LIBOR scandal proves, all manipulations eventually come to an end. Keeping a false lid on the gold price has undoubtedly scared many (most?) investors out of the one asset that can save their families from financial catastrophe should it occur. Don't be fooled. The financial system is rumbling: there is too much debt, sky high deficits and endless money printing. In a free market, gold would be screaming higher. Just like LIBOR, the true price of gold will eventually reveal itself.
