US Dollar valuation and the price of Gold

In the news from Egypt, an American-originated declaration of Mubarek's impending resignation and departure is resoundingly refuted by that embattled leader. The United States Federal Reserve announces it will buy "back" $97 billion in debt, according to MarketWatch, which goes on to state the Fed has bought "$397 billion in U.S. debt since August." The world's most powerful nation in the 20th century has in the 21st passed its prime and is suffering horribly from dementia. It's like watching a faded starlet in Hollywood try to strut down Rodeo Drive, a laughingstock to passersby, but she convinces herself that she's still 'got it,'

How does the central bank of a nation $14 trillion in debt keep coming up with money to buy its own money? Is it not supremely revealing of the extreme depths of delusion to which this so-called bank and its governors have now descended? The fraud inherent in this perpetual shell game is obvious to all except the hucksters moving the shells around and the dupes naively trying to follow the pea shell in the hopes of winning a prize. The audience knows there is nothing under any of the shells.

Gold

The fact that gold's price performance in the last 40 days or so digresses thoroughly from its normal course during times of Mideast instability amid severe monetary and price inflation is evidence that either the price of gold is directly manipulated by banks, or that the coordinated campaign of disinformation by the Big 6 media division of the U.S. Treasury has finally become so fine tuned as to hypnotize recipients of its message. In either case, $2 billion in redemption of Gold ETF GLD makes one wonder what has changed fundamentally to justify such a sell off in a month where global instability and inflation are robust?

Or have those with a vested interest in the appearance of a stable dollar realized that they could use the billions of dollars in quantitative easing to directly influence demand for and thereby price of gold by incrementally building large holdings in gold ETFs, and then dumping them in compressed time lines to help generate severe price swings?

How very ingenuous to use the strength of gold's demand and price metrics to undermine those very same dynamics! Buy up ETF shares with dollars fabricated out of thin air, and then dump the built-up position in a single month to drive superficial dollar demand and coincident gold aversion. Whoever dreamed that up should get the Congressional Medal of Honor and go straight to jail.

These short-term machinations aren't relevant in the long run, however, and only provide buying opportunities for those building a store of value in precious metals. Pundits speculate on an impending day of default for the U.S. dollar, when to sovereign bondholders, that day has come and gone, and the big players are tiptoeing to the exits accumulating gold as they go. When we finally shine the light on them and acknowledge the default has already occurred, the gold and silver price explosion to the upside beyond $2,000 will begin in earnest.

http://www.theaureport.com/pub/na/8609