Writing on the Wall...Street
Charles R. Stahl
Never did so many put their intended 'victims' on notice so much ahead of time as is happening now with foreign gold producers and distributors, who are preparing to unload their gold on the American public.
The gold market has been manipulated immemorially and today's gold market is no different. The gold manipulators in the past were pharaohs, kings, queens, emperors, presidents, central bankers; today they are the gold producers and the Swiss gold pool. Since March 1968 when the two-tier gold system came into being, the combined volume of gold traded in Zurich and London amounted on the average to no more than 160,000 ounces per day (five metric tons), which compares with above ground gold stocks of about three billion ounces, out of which 1.2 billion ounces rest in the coffers of central banks and IMF. Therefore the daily quotations on the London fixing and in Zurich are a typical case of the tail wagging the dog. The Swiss gold pool has deliberately talked the price of gold up.
The unmined gold reserves of South Africa are in excess of one billion ounces; the unmined gold reserves of the Soviet Union are many times that amount. Both are vitally interested in ever higher gold prices: but favour a gold standard with a pegged price of gold to avoid the risk of declining prices whenever they want to sell. Therefore it was a wise decision to eliminate gold as the pivot of the monetary system and to replace it with Special Drawing Rights. 1974 will go down into the annals as the year of worldwide inflation and skyrocketing gold; we believe that 1975 will be the year of the golden disappointment for the bulls, and that, like the price of sugar, which went sour, the current price of gold favours the short sellers of the yellow metal.
Charles Stahl is President of Economic News Agency and publisher of Green's Commodity Market Comments
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