Gold Manipulation Is Larger Than You Think

Bill Murphy and James Turk discuss gold price manipulation

"What do I get if I own gold or silver today?" What you get is the fact that you own a tangible asset that's historically always been money, and there's no counterparty risk, which is increasingly important when you're in a financial bust like we've been in the past few years. When you have no counterparty risk, you own a tangible asset. The value of that asset is in the asset itself. It's not based on someone's promise.

I remember as a kid, growing up in the 1950s, that my parents could go into the gas station and with two silver dollars fill up the family car. And today, with two silver dollars, you can still do that, but only when you look at silver at the face value of the silver itself, not with the dollar amount on the coin. So it's a good example that silver does have usefulness because it preserves purchasing power over long periods of time. And that to a large extent, this rise in the price of silver is really just a decline in the purchasing power of the dollar. Maybe we're going to see more and more people moving into the precious metals for that simple reason that you alluded to, the fear factor, that people want to preserve what they have.

James Turk

What's going to have to happen is understanding that Americans just can't afford what we've been told we were entitled to all these decades. We're broke. If we are just going to keep kidding ourselves and printing money, keeping interest rates down... The bankers love it. Wall Street loves it. The politicians love it. But as we get broker and broker and broker, we're probably looking at another flash crash, except that will be real, out of nowhere. Things are just going to tank at some point. A collapsing dollar and soaring inflation is not good for our markets. As it is already, the real estate market, with all that's been done, is a total disaster. And even now, the jobless claims, the employment situation in the United States, instead of showing signs of improving, it's starting to tank again. This is after all this quantitative easing and stimulative measures. The standard of living, I'm afraid, I hate to say this, is just going to fall apart in the US

Bill Murphy (GATA)


I wholeheartedly agree with the topics discussed in this interview. While I disagree on some timing issues, like the collapse of the US dollar, the general trend is very clear, debasement of the dollar and the rise of gold despite manipulative forces.
In my view, the dollar is likely to rise short term in response to the trouble in Europe which will result in commodity prices dropping. Soon afterward, in my view, we will see the flight from the dollar as QE3 unfolds and debasement continues. As always, timing of these events is difficult or impossible to predict, but this autumn looks ripe for the final US dollar rebound, or if you prefer, dead cat bounce.


  1. August 11/2011
    In late April, silver flirted with $50 per ounce. "They" stepped in to manipulate the silver price (as if J.P. Morgan's and HSBC's manipulation wasn't enough), and raised margin requirements THREE TIMES in five days effectively stopping in its tracks the rise in the silver price that the MARKET wanted. As gold hit $1,800 yesterday, "they" did the same and raised the margin requirements on gold with the same effect as silver. In both cases, the raising of margin requirements caused a sell-off and of course, a decrease in prices.
    How can those of us who know that gold and silver are the only true store of wealth and who have purchased physical gold and silver and continue to do so, protect ourselves from these blatant, in-your-face downward manipulations? Also, what if the government makes it illegal to own gold as FDR did, ripping off the American people when it revalued gold higher?

  2. Anonymous at 3:50pm you have asked two questions that are so important that I will attempt to answer them in my next blog post.

  3. August 12, 2011
    Thanks PWB. Looking forward to your reply. If I could be so bold as to ask another one - in Jan of 1980, the gold price fell (or was pushed) off a cliff from $840 per oz. to $490 in what looks like a couple of months and continued disintegrating until it was down to $290 by mid-1982. My question is: Does anyone really know how "they" pulled that one off? I could be wrong, but I don't think you could buy on margin back then, so they couldn't have fiddled with the margin requirements to cause such a massive sell-off. Thanks again.

  4. This is another astute comment Anonymous at 7:21am.

    Back in the early 1980s gold was not manipulated. The price of gold fell legitimately because of Paul Volcker's anti-inflation policy of jacking up interest rates significantly "above" the inflation rate. This is key to understanding movement of the price of gold. If fiat paper is paying a return to savers above the rate of inflation, then gold will fall. If fiat paper follows accommodative interest rate policies as we have today, then gold will rise. This simple formula explains about 90% of the movement in the price of gold and is why gold has been increasing at a rate of about 24% annually for the last three years.

    With respect to your previous comment, you can find my response here:

  5. PW: I was aware of the corelation between overprinting of fiat currency (inflation) and the price of precious metals, but you really opened my eyes as to how interest rates also affect the precious metals prices. Many thanks.


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