Russia Today interviewt Adrian Douglas von GATA

RT: You are the head of the Gold Anti-Trust Action Committee. And from what we heard the gold market was suppressed for over ten years. What does that mean? That there was suppression of the gold market in US for over a decade?

A.D.: In the first place in 1999 we recognized that there was a total mismatch between the demand for gold and its price performance. And we have met a lot of evidence over the years that was showing that the gold market has been suppressed. This suppression is an effort to maintain the value of the US dollar and also to keep trust rates low.

The whole mechanism for this has been described in a paper by Lawrence Summers, who was ex-Secretary of the Treasury, but when he was professor of the economics of Harvard University he wrote a paper called "The Gibson paradox and the gold standard". In that research he explains how in a freely traded gold market the real interest rates and the gold price should move in inverse relationship to each other. In other words, if trust rates are low, the gold price should be high and visa versa.

What we've seen through the 90s and most of this decade is that we've had a low gold price and low interest rates. So, the conclusion we made was that the gold market is not freely traded and it has been suppressed.

RT: Lawrence Summers is part of President Obama's cabinet.

A.D.: Yes, he is one of his economic advisers and so we can summarize that the suppression to gold price is ongoing.

RT: You've referred to this as basically a Ponzi scheme.

A.D.: Yes, the Western central banks, with the leaders of federal reserves and governments, have investigated this scheme of suppressing the gold price. And this is what is at the core of the strong dollar policy. If you can suppress the gold price and not make it a free market then you can have low interest rates and a low gold price.

The low gold price essentially switches off the alarm in the financial system. What the purpose of the strong dollar was so that the US Government could issue lots of dollars without the alarm bells going off. The benefit for the US has been to live beyond their means. They managed to import goods from foreign countries and they have paid for them essentially with overvalued treasure debt. And they have even been so successful they have convinced other central banks that US treasure debt is a reserve asset. Now central banks around the world are sitting on trillions of dollars of treasure debt as a reserve asset which has a huge counterparty risk now of the American government – they will not repay it.

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RT: So instead of these stimulus plans that keeps getting push from Washington, what would you suggest or needs to be done to save the US economy?

A.D.: First of all we need to outlaw the OTC derivatives. Second thing we need to do is to abolish the Federal Reserve and nationalize the banks.

The Federal Reserve is a private bank and the government has to pay them their interest for creating money out of the thin air which the government could do on its own without having to pay any interest. The third thing we need to do is to back the currency with gold. And we need of course to reinstate discipline in landing and enforce the rules that keep the stock market honest and keep the banking system honest.

=> zum ganzen Interview...