What’s hotter than the price of gold? Gold conspiracy theories. Conspiracies theorists say that the price is being manipulated, by central banks and big dealers, and that when the truth comes out, the price of an ounce could go haywire–say, to $3,000 or $5,000.
The purported plots against gold loving investors are pretty convoluted. Among the possibilities:
–Many of the gold bars in vaults are fake, having been replaced with tungsten, a metal with a nearly identical density.
–Some of Uncle Sam’s giant gold hoard may have gone missing. The bars have been either whisked out of Fort Knox by government agents or, more likely, pledged or traded away in derivative transactions involving other central banks.
–The banks that act as custodians for gold bullion funds are not to be trusted, because they have secret short positions in gold futures.
Some of this is borderline kooky. Some is almost plausible. Just what are the U.S. Treasury and the Federal Reserve up to with their gold reserves? No less a personage than U.S. Representative Ron Paul (R—Texas) is demanding an outside audit of the Fed, in part to get an answer to this question.
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