Capital Account — Welcome to Capital Account. In one of his writings, a leading English art critic of the Victorian era, John Ruskin, told the story of a man who boarded a ship carrying his entire wealth in a large bag of gold coins. When a storm hit a few days into the voyage and the decision was made to abandon ship, the man strapped the bag around his waist, jumped overboard, and sank straight to the bottom of the sea. The man’s body was found with the wreck of the ship many years later. Reflecting on this, Ruskin asked “Now, as he was sinking, had he the gold? Or had the gold him?”
We tell you this story to impress upon you the enduring value that gold has held in the minds of people through the centuries. It has represented not only a store of value, but a means to an end…any end, including one that concludes at thebottom of the sea.
For muchof Western history, gold has been synonymous with money. It was not so long ago that the United States and Europe fixed their currencies to gold, and despite the free floating currency regime that we have had since the end of Bretton Woods in the early 1970s, one could argue that we are still on a defacto gold standard.
After all, gold has been rising steadily, and at times rather frenetically, since 2001, when it was trading at below 300 dollars per ounce, to levels nearing 2000 dollars in the past year. There are those, like Nouriel Roubini, who have been calling it a bubble since at least 2009. One of the good things about markets is that they tend to have a mind of their own, and don’t care all too much what academics or policy makers think.
But even if markets don’t need policymakers, policymakers still need markets, and the gold market in particular is one that central bankers keep a close eye on. Gold, as our guest James Turk said in a recent interview with us, is the messenger, and what it has been telling us is that people don’t trust governments and they definitley don’t trust central banks.
But how far are governments, central banks and their too-big-to-fail handlers willing to go in order to silence the messenger? Is market manipulation by governments real, and if so, how is it being done and where? Joining us to discuss this, and other golden news is Bill Murphy, Chairman of the Gold Anti-Trust Action Committee and veteran of the precious metals space. Bill Murphy has been raising the alarm of manipulation in the precious metals market since at least 1999, and has been a prominent voice among defenders of free markets and sound currency.