Rob Kirby on Central Banks and Silver manipulation (dated Mar. 22nd, 2011)
Below is a great, and long, interview with Rob Kirby on central banks and precious metals manipulation. He gives some great insight on how Lebanon ‘was’ the Middle East equivalent of Switzerland and a banking center for Arab petro dollars. He goes on to comment on gold and how closely the rigging of interest rates is highly linked to the price of gold (reference reading included for those with spare time on their hands).
He also touches on the tungsten cored gold bar debate and the fact that most gold reserve numbers are fake, if not due to the tungsten debate, then due to all the gold swaps setup in the past and the fact that from an accounting standpoint a swap is considered the same a physical gold in a vault. He also covered his investigation on whether Germany’s gold reserves are in Germany or still in NY under U.S. control as well as the question of currency wars. He points out that ultimately the war is between all fiat currencies and gold.
The most interesting topic he touches on is the question of whether gold, and silver for that matter are in a bubble? He notes that the last recognized gold bubble was with the 1980 run up in gold to $850. He also notes that at that time the monetary base was $200 billion. He goes on to comment that the monetary base is currently $2.4 trillion or 12X what it was in 1980. Therefore if $850 was considered a bubble in 1980 then the corresponding number for gold to be considered a bubble today would be $10,200! Oddly enough this would seem to be in the top end range that Martin Armstrong thinks gold could run to. See previous Armstrong post here.
He goes on to say, like many others, that silver historically has been 10-15X gold’s price. So based on a current price of gold around $1430 and assuming the high end of the historical ratio of 15X, this would imply silver should be around $95/oz currently. It should be noted that if he doesn’t consider gold to be in a bubble at the current range than silver at $95 isn’t a bubble either. Kirby doesn’t talk to this but if you take his same approach applied to gold above and apply it to silver it would imply that the corresponding bubble silver price would be as follows. $10,200 / 15 = $680/oz, which at present seems like a rather ridiculous price. When you consider that Rob McEwen has stated in recent interviews that he doesn’t consider $300/oz unrealistic, maybe it’s not so far fetched.
See full article here.