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GOLD
PRICE MANIPULATION PROOF, M3 UPDATE
by Bart
January 23, 2007
There's
really not much to say, since the raw charted data is so obvious, but
there are some facts.
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The
correlation between the European
Central Bank's gold purchase and sale activity and the gold
price in Euros is .97. That means that 97% of the gold price changes
can be explained by ECB actions alone.
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The
left hand scale on both charts is in metric tonnes. One metric tonne
is about 32,000 troy ounces of gold.
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As
just one example of the very large size of ECB gold operations,
during the gold price increase from early April 2006 to the peak in
mid May 2006, the ECB sold 1,800 metric tonnes of gold. That
translates to about 58 million troy ounces. During the fall from mid
May 2006 to a bottom in June 2006, they bought back 2,345 metric
ounces, which is approximately 75 million troy ounces.
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The
total gold price increase from about 325 to 500 Euros caused the
average ECB gold inventory to drop about 1500 metric tonnes or about
48 million troy ounces.
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The
quantity of gold trading by the ECB dwarfs the total 500 metric
tonne sale limit of the Washington Agreement.
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For
those who might point out that futures trading quantities are far
larger, that's true. But not only are they only paper trades and
physical gold is seldom delivered, but also there are thousands of
different traders and none consistently trade in quantities similar
to the ECB.
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The
data is published by the ECB anywhere from 2-6 weeks behind the
events, so it’s not useful for trading.
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Some
might prefer to look at the data as evidence of control, as opposed
to manipulation.
The gold trading
record of the ECB, since 1999
The 2006-07
close-up gold trading record of the ECB
"The last
duty of a central banker is to tell the public the truth."
-- Alan Blinder, Vice Chairman of the Federal Reserve, on PBS’s
Nightly Business Report in 1994.
M3 update
Just last
week, we broke above a 12% annual rate of change which is the first time
that has happened since May 2001. For what its worth, the official
recession started in March 2001.
© 2007 Bart
Editorial
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CONTACT
INFORMATION
Bart
Los Angeles, CA USA
Website
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The
opinions of FSU contributors do not necessarily reflect those of
Financial Sense.
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