- Dr. Paul Craig Roberts: Gold and The Dollar Are In A Fight to the Death!
by Greg Hunter’s USAWatchdog.com
Former Assistant Treasury Secretary, Dr. Paul Craig Roberts, says, “Gold and the dollar are in a fight to the death.” Dr. Roberts explains, “The Fed, in order to save a handful of banks too big to fail that are the mindless deregulation of the 21st century, the Fed has had to create a tremendous number of new dollars. The United States has never experienced anything like the creation of new money it has issued from quantitative easing, which is now multi-years old. Because the dollar has been the world reserve currency since the end of WWII, countries all over earth have huge stocks of dollars. It’s not just countries or central banks, but companies and individuals. As people view their holdings, an enormous supply of dollars in light of this extraordinary printing of new money by the Fed, they get nervous. They say ‘I should lighten up my holdings of dollars and get into something else. Maybe I should get into gold or foreign currency.’ So, this puts pressure on the dollar’s exchange value. The first way that pressure manifested itself was the rising price of gold. Despite the fact the price of gold has been pushed down since 2011, it still has about the highest rate of return of just about anything in the 21st century. The Federal Reserve, in order to protect quantitative easing which is necessary to save the banks, began manipulating the gold price in a new and more intense way. They used their bullion banks to short the gold in the COMEX futures market. The trouble with this policy is that it’s been going on long enough that it’s being recognized by people who formerly thought ‘the Federal Reserve would never do anything like that.’ Of course they would, and people are catching on.”
Dr. Roberts goes on to say, “Another factor is central banks such as China and Russia are purchasing more and more gold. . . . So, what is happening is the actual physical quantity of gold is moving out to Asia in such large quantities that supply in the West to meet purchases is diminished dramatically. This is starting to bite on the ability of the Federal Reserve of this sort of operation of rigging the gold price. . . . So, it looks like the Fed could be running out of the ability to continue this policy, in which case it will be bad news for the dollar.” So, is the Fed losing the fight to the death between gold and the dollar? Dr. Roberts says, “They are not losing right now, but they’re running out of bullets; but the Chinese and the Russians are not running out of dollars in which to buy gold. The Fed is running out of gold in which to make these deliveries.”
What happens when physical gold can no longer be delivered to buyers? Roberts predicts, “The gold price would skyrocket.” Dr. Roberts doesn’t give the timing for physical non-delivery of gold. He does point out, “The fact they are having now to use naked shorts in the futures market, paper gold, implies they don’t have enough real physical gold to suppress the price any longer. So, they have to take it to the futures market where they can do it with purely paper contracts. . . . Yes, the possibility of not being able, at some point, to make delivery is real. Of course, that then would cause all confidence to be lost certainly in the dollar.”