The price of gold has fallen to that of 1983: $1,401.24 (USD) an ounce. That dramatic plunge has sparked reactions worldwide.
In Hong Kong and other Chinese cities, it’s triggered a buying spree for jewelry and bullion. While the weak global economy has others attempting to sell off precious metal assets, the hunt for bargains thrives in China. That’s because some investors predict the decline in gold prices has hit a wall, and any further fall is unlikely.
An HSBC report predicted the price of gold would stabilize after a recovery in jewelry prices from emerging markets like China. The world’s largest gold retailer, Chow Tai Fook, said gold sales “had surged in the past two days.”
Chaninat & Leeds is a US-Thailand law firm located in Bangkok, Thailand and is staffed by licensed Thai attorneys and licensed US lawyers.
But in the U.S., the low price of gold has some skeptics wondering if the Federal Reserve is “rigging the system.”
“A fall in the dollar’s exchange rate would push up import prices and, thereby, domestic inflation, and the Fed would lose control over interest rates,” writes Dr. Paul Craig Roberts of Global Research. “The bond market would collapse and with it the values of debt-related derivatives on the ‘banks too big too fail’ balance sheets. The financial system would be in turmoil, and panic would reign.”
Dr. Roberts asserts that the Fed is rigging not only bond prices and interest rates, but the bullion market in order to protect the US dollar’s exchange rate.
“With the Fed adding to the supply of dollars faster than the demand for dollars is increasing, the price or exchange value of the dollar is set up to fall,” writes Dr. Roberts.
This elaborate effort to keep the price of precious metals low means the Fed fears financial unrest – a theory not hard to believe, given the financial unrest that’s already erupted in Cyprus.
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