Paul Craig Roberts.org:
The crooks who run the Western financial system set up the gold market in a way that lets them control the price. Gold is not priced in the physical gold market where bullion is bought and sold. Gold is priced in a futures market where uncovered contracts that are settled in cash are bought and sold. As the futures contracts do not have to be covered in the way that shorting a stock has to be covered, the bullion bank agents of the central banks can create paper gold by printing naked contracts. In other words, it is possible to inflate the supply of gold in the market in which the gold price is determined by dumping futures contracts on the market. The huge increase in supply of paper gold drives down the futures price of gold. This Western policy is stupid, because it drives down the price of real gold for the major Asian purchasers—China, India, and Turkey. But the policy protects the value of the US dollar by preventing a rising gold price that would show the growing lack of confidence in fiat paper currencies.
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