Gold's struggle back.

If you read Larry Edelson, his charts predict gold a) to have no support till 1,420 and possibly lower and b) go back all the way to 1,200. I look at the figures and I see something else. Gold threatened to go hyperbolic last September (after Larry's predictions all Summer of a coming crash in gold prices and the Stock Market) so a New York entity intervened and started dumping paper contracts. Gold price was driven to 1,550. As the market absorbed the sell signals gold prices rose again so a second dose of contract dumping took place in Dec that drove gold prices to 1,550 again. Gold prices rose again and this time (Feb and March) gold prices were driven to 1,650. According to my calculations, attempts to keep gold prices low will soon become ineffective and gold will reach a new high before the end of May.

I am a curious person and I asked two questions: 1. why do the powers that be try to keep gold prices low? and how come that they stop after a while?

I have already answered Q1 before, but will repeat the answer here. Gold price is linked to inflation. If gold prices are allowed to rise very steeply, prices will start rising very steeply; most of all oil. The Socialist authorities want to have inflation, but most of all they want control. And they want prices to rise slowly. So, every time gold gets ahead of itself, they knock it down.

So, if Socialist authorities (which includes the FED) really have this much control, how come the gold price keeps going up and does not stay down? That is a good question to which I did not have an answer untill I had read the notes from "Gold Trader" on KWN. Others tell me that the dollars to gold ratio has increased so much that our gold would have to sell at 10-20,000/oz gold to cover all the paper dollars. Socialism is so inefficient that Socialists must kite checks (more printed money and bonds) to cover expenditures. Eventually, the paper currencies will become worthless, so Central banks want to hang on to their gold. But, every time gold is knocked down by the avalanche of paper contracts, some of the phony paper is paid for by fiat currency, but some of it is paid by actually delivering the gold. Thus, something of great value (gold) goes from the Socialist central banks to the East. Then gold price recovers and hits a new high.