A rising price of gold does not devalue the dollar, because there is no official link between gold and the dollar. The world’s monetary and financial systems have no link to gold. Gold can be any price without causing any effect upon those systems. We have seen gold at $1900 dollars per ounce, and things were running just as they were when gold was $300 dollars per ounce.
However, the rising price of gold is a huge embarrassment to the US
government not because it devalues the dollar (it does not do this) but
because it provokes a loss of confidence in the dollar. When the dollar
is seen as falling in value against gold, its fall causes investors to
exchange dollars and other currencies for gold as a means of protecting
wealth. The rising price of gold is a blot on the prestige of the US
dollar and the prestige of the US itself.
The price of gold in dollars is therefore under strict government
control. This fact, once derided as ridiculous, is increasingly accepted
as truth by those interested in monetary matters around the world.
Gold Manipulation How?
means for controlling the price of gold lies in the massive sales of
“paper gold” which take place to suppress its price, as so many
investigators have amply documented.
US monetary policy considers that the dollar is here to stay forever,
and that gold is no longer - and never again will be - the world’s
The governments of several nations around the world do not share the
same conviction with regard to the permanence of the dollar. China
invented irredeemable paper money – which is what the whole world uses
today – some one thousand years ago, and several dynasties of Chinese
emperors learned to their cost that paper money always degenerates into
Gold Manipulation: So what?
The Chinese government knows that the dollar will not be around
forever. China is purchasing enormous amounts of gold to add to their
huge pile of US Bonds in the reserves of the Bank of China; the
government of China is more enlightened than the government of the US,
because it is encouraging the Chinese to purchase gold and silver.
The US and its allies are allowing the Chinese and Asia in general,
to take possession of huge amounts of gold every year, while the US, the
UK and Europe are drained of gold by shipments to the East.
The US evidently believes that the dollar is here to stay and that gold is just a passing fancy. This is classic hubris or arrogance.
When serious problems for the dollar surface – as they surely will –
and the US has little or no gold to fall back on, the US with its back
to the wall may become a very dangerous entity. The US Standard of Living will certainly degenerate. The questions is, how dramatically for the vast middle class that is already struggling mightily. And then, what will be the response of a government that is suddenly faced with the loss of the ability to simply print their way out of every financial problem?