[carsongross]

Well, the Federal Reserver produces a paper currency, the dollar, and gold has historically been a competitor of paper currencies. So it makes sense that the Fed would not want competition in currencies, and would attempt to both disparage and devalue it.

The Federal Reserve is also intimately bound up in fractionally reserved expansion of the paper currency, so it is reasonable to assume that they might use the same basic technique with gold. And that, in fact, is the historical origin of banking, in the modern, leveraged sense: gold assayers began loaning out gold on a fractionally reserved basis, allowing them to collect interest beyond their core assets. Worked great until people ran on them.

So I assert that it is less irrational to believe that there is a possibility that central banks engage in manipulation of gold prices than it is to believe that there is a dinosaur living in the subway under manhattan.

YMMV.

[tdees40]

If the Fed were lending gold on a fractional reserve basis, a huge number of people would know about it: employees of the Fed, bankers, counter-parties. Why are all of them keeping silent? Why does the Fed endear such intense (some would say insane) loyalty? How do they cover the tracks of this huge operation (both in terms of people and dollars)?

Also, to believe this you have to postulate that:

1) Employees of the Fed are personally concerned about gold destroying the dollar.

2) They are willing to do something illegal (or at least unauthorized) to protect the dollar.

3) So they came up with a complicated, elaborate plan to manipulate the price of gold down that perfectly plays into the narrative of gold bugs (note the nefarious fractional reserve lending).

It's not impossible!

[carsongross]

1) Yes.

2) People involved in the banking system, by definition, are willing to fractionally reserve something

3) Nothing particularly complicated, same fence that fractionally reserved frauds have been running for a thousand years.

_shrug_