I haven't talked about Wall Street's/Washington's hidden interventions in gold prices because I am trying to keep this blog simple, so that it is easy to understand.
Take for example, the enormous short positions taken by large commercial banks against precious metals:
"In the past three weeks, the large commercials have increased their net short position by 175 million ounces, or 350%, to 225 million ounces net short. Last week alone, the large commercials sold net short over 90 million ounces of paper silver futures contracts. Large commercials now make up 80% of the entire futures short position. The price of silver would be materially higher, were it not for this manipulative and uneconomic naked short selling. The additional 175 million ounces sold short, in just three weeks, is more than any country can produce in two years or much longer. It is more than all known silver stockpiles in the entire world. It is not possible for the short selling of 175 million ounces of silver, in a three week period, not to manipulate the price."
THE SIMPLE EXPLANATION: In another example of the monumental stupidity banking executives routinely display, large commercial banks sold short a quantity of silver that exceeds all known silver stockpiles (these are the same banks that gave us subprime CDOs squared). Since these large financials are insolvent, there is a high probability of default should investors request delivery. Investors should buy physical gold and stay away from COMEX gold.
THE COMPLICATED EXPLANATION: As the above quote states, "It is not possible for the short selling of 175 million ounces of silver, in a three week period, not to manipulate the price." Large commercial banks are acting as intermediaries for central banks. They are doing this to protect fiat currencies and hide their massive money printing. The reason rising gold price threaten central banks is they provide an alternative to paper money. Unfortunately for central banks, the manipulation of paper gold prices is reaching levels that are scaring investors out of the paper market, and, as the physical market, uncontrollable by central banks, gains control of gold prices, faith in paper currencies will be undermined. Investors should buy physical gold and stay away from COMEX gold.
Bear in mind, there is no definite proof of government interventions in precious metals, just overwhelming circumstantial evidence. All investors really need to know is that commercial banks have enormous short positions, the COMEX isn't a creditable market anymore, and they should buy physical gold. Going into conspiracy theories just confuses the issue. Government's interventions and behind the scenes dealings will be revealed after dollar collapses.