Gold Conspiracy: "to keep the dollar as the world’s reserve currency"

... till 2010!?

Contingency plan to keep the dollar as the world’s reserve currency

How? Why, it has been publicly suggested by some analysts that Barrick is a front. It is not a profit-seeking business. As such, it is used by the U.S. in order to cap the gold price. According to this view the strength of the dollar is that it has only one viable alternative as a global currency: gold. Therefore, if the U.S. wants to keep its enormously profitable privilege to issue the world’s global currency, it has only to cap the gold price. Conversely, if the U.S. failed to do it, sooner or later the rising gold price would lead to an ignominious collapse of the dollar, by far the worst currency debacle in world history. It would be the height of naivité to believe that the U.S. would idly stand by watching monetary events to unfold, doing nothing, regardless how daunting the task of stopping the gold train in its track may be.

I want to make it clear that this is not my view. I haven’t bought into the conspiracy theory. At least not yet, but I think soon enough I shall know for sure. Newmont’s coup may reveal that the Emperor has no clothes. We have to wait and see what Barrick’s response will be. It is still possible that Barrick will throw in the towel and follow the lead of Newmont. Just watch the spread between the two stocks.

Be that as it may, the question arises naturally what the best procedure to cap the gold price may be from the point of view of the U.S. Obviously it would be self-defeating for the U.S. overtly to put the remnant of its gold reserves to risk in an effort to pacify surging demand. The ploy of the U.S. twisting the arms of other countries to sell their gold reserves, while retaining its, has been exploited for whatever it is worth. As the U.S. was preaching water while drinking wine, it was not very persuasive in the first place. A more intelligent and more promising strategy is to find a gold mining firm that would covertly put its unmined gold reserves to risk in support of the dollar. If a gold mine could convince the world that its unlimited forward sales program, promoted as an honest-to-goodness hedge plan, could attract imitators, then the fraud might never be exposed, and chances were that it could be perpetuated. The regime of the irredeemable dollar, like the Third Reich, could claim that it would last „a thousand years”.

So it is at least a plausible assumption that the U.S. has enlisted Barrick to come out with its so-called hedge-plan to fool the world. Here is the deal: the U.S. would covertly underwrite the potentially unlimited losses of Barrick in exchange for its complicity in the scheme of capping the price of gold. As an incentive, Barrick would be given the green light to gobble up its weaker brethren to become the world’s largest gold producer. Neat, isn’t it? Yes, if you bypass the ethical problem that the betrayal of shareholder trust on the global scale would be unprecedented in the annals of business. However, that problem could be managed by an ironclad stonewalling of the arrangement to guarantee secrecy.

(Source: Goldseek.com, by A. E. Fekete)