I do not think the inevitable increase in interest rates will depress the price of gold for several reasons,the primary one being that increasing rates signal the inflation that comes with the increasing printing of dollars (definition of inflation)...and the continuing debasement of currencies. More dollars are needed to buy the same amount of goods as people's real incomes are eaten away by inflation. The very goal of the illegal suppression of gold and silver masterminded by the Fed., the Admin, and Wall St.... really taking effect during the Clinton/Robert Rubin institution the "strong dollar policy"... was to create the false impression that there was no inflation (see Larry Summer's Gibson's Paradox) and that the US dollar be maintained as the world's reserve currency and as a flight to safety ... as opposed to gold.
All legal and illegal means have been and are being employed to those ends....and have almost reached the point of exhaustion and exposure. That is why the ultimate exposure of unbelieveable gold leverage and fraud at the recent the CFTC hearings is creating so much buzz all around the world (except in the mainstream US press). The cat has been publically and unwittingly let out of the bag as the news reverberates around the globe striking fear into all those who hold gold certificates on gold supposed stored and vaulted for them for fees.
An attempt was made on the life of one of the whistle blowers three days after those meetings. The unfolding exposure of the biggest criminal fraud in history is all about gold and silver and the US dollar. Even words such as treason are being bandied about because the gold owned by the US taxpayer has been sold off without the permission of Congress...stolen from the US taxpayer. And what are they going to be left with?...a debt that cannot be paid back for three generations of taxpayers. See Califonia re coming bankruptcy and the revelation yesterday that they have $800 billion unfunded pension fund liabilities alone! I won't get into the banks, TARP, GM, Freddie, Fannie, Goldman, Billions in bonuses, Etc.
Also, it has been reported for over 11 years by so many... such as GATA, John Embry, Bill Murphy, Ted Butler, Chris Powell, and many more, how the western central banks led by the US and Britain have both openly and nontransparently been seelling off their gold to the now extreme fraudulent situation that it is about to be confronted with by global interests...to the shocking detriment of all. This is no longer a situation that can be controlled by the complicit parties I referred to in my previous posts...who made sure there is only one ounce of gold left for every 100 ounces sold and held with claims on it. If every 100 people who have gold certificates from, say the Bank of Nova Scotia, or the London Gold Pool or the Comex etc., ask for the delivery of their gold, there wll be a run on gold and a run on the banks at the same time. If cash is offered wit a premium, which has been the case recently, then that is in effect a default. This involves fraud and theft against nation states, sovereign funds, hedge funds, eastern and some western banks, governments,wealthy individuals and others. This is not a trial run.
Also, recently the dollar price of gold has seperated from the paper price of gold and gold is departing ways with the dollar....increasing when the dollar increases....or decreases in value. As interest rates rise it becomes more difficult for the US to sell its debt (as the dollar debases especially against gold and silver), its treasuries and bonds...durng a time of lower tax receipts, unemployment, manipulation of almost all statistics, etc. (see Shadow Statistics). So, the US is forced more and more to monetize its massive debts by opaquely purchasing its own bonds and treasuries...leading to a weaker and weaker dollar...and an ever inreasing debt load. Foreigners such as China, Russia, Brazil, India, Sovereign Funds and so on look for alternatives to the dollar, such as the world's only currency, gold. This is now reaching a danger point. There simply is not enough gold to satisfy even a tiny jump in physical demand from these giant entities.
Another unpleasant problem for the paper pushers is and has been that the prouction of gold is decreasing annually as demand is and has been increasing. It has also become much too costly, due to the orchestrated low price of gold, for many miners, developers and explorers to maintain profitability. Many have shut down and many of those left are barely succeeding. Thus we see, for example, huge stock dilution as there is constant need to meet rising expenses for exploration, drilling, studies, capex, etc. Simultaneously, the bad guys as mentioned, along with bad miners such as Barrick, have conspired not only to keep the price of gold and silver down, but also stifle the interest and price of their shares by way of naked/counterfiet shorting while the regualtors look the other way.
Their ultimate desire and end plan is to take over the gold and silver that awaits them in the ground at very low prices...to back up their obligations. This has been their end game plan...hence we see the price of shares the ECU's of the world...and even the SFMIs, woefully undervalued. They do not naked short to make money, they naked short to suppress the price of the shares and they have all the dirty tricks and power one could ever dream of...even posters on BBs.
The fly in the ointment is that the bad guys are now being prematurely exposed since it is no longer the "conspracy theorists" and "tin foil hat brigade" that are being suspect. The light is now shining on those who live the dark and they are in deep trouble and desperate. He who has the physical will win. The fundamentals of the global situation right now cannot be denied as gold and silver begin their parabolic rise to undreamed of heights. The only hope for all of us however, is that there is a global consensus of some sort to control the price rise and maintain a modicum of sanity. Talk of a global currency backed by gold is possible. This will take time.
In the meanwhile, any tectonic plate shift caused b trigger happy angst re the gold fiasco could cause pandemonium, especially in the US with possible runs on banks...bank holidays, etc. Gold is the ultimate currency at this time...as it always has been...whether we like it or not. just how long the madding crowds can be kept in the dark is another problem. IF/when the average American finds out about all this...all bets are off. What we have to fear now is that there is blood in the water and the same greed that caused all this could well make it worse going the other way in a desperate attempt to buy up physical gold at any cost. Can the US keep it all together for a few years by printing $ to goose the economy? That's what Mark Faber and others think. But after that, and by then, the $US will hit bottom and a hyperinflationary induced depression will start, and the only way out is war...as history has proven.
Those are but a few reasons of many, many why gold will keep going up...to $2000 by year end and onwards up to $5000 in a few years. Silver, proportionately, will rise much more.
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