Forex Books Talking

You go back to the 1950s, the U.S. lost a third of their national gold hoard in 1956 and 1957 trying to defend the pegged price of $35 an ounce. There were hearings. You can look this up

You can Google this stuff. There were hearings on Capitol Hill, "How can this happen? We've lost a third of our gold because the dollars convertible in the gold,"

and all this kind of stuff. Well that wasn't going to work as the US tried to defend $35 an ounce. That's manipulation. You're feeding physical in the market to keep the price where it is

So what happened? The U.S. decided, "We can't do this ourselves," so we put together what's known as the London Gold Pool, again, a term anybody can Google

From 1961 to 1968 the U.S. and seven other countries deposited gold in London, physical gold that was used to keep price at $35 an ounce. Anytime

there was demand, the Gold Pool would dump physical onto the market, and wait for the price to come back down, and then buy it back. That was how it worked.

Well, finally that was broken. In 1968 the London Gold Pool fell apart. Eventually Nixon had to close the gold window. Gold starts to shoot higher and then somebody really got smart and said, "Wait a second

Why are we supplying physical gold trying to suppress prices? It doesn't make any sense at all. Why don't we create and do some alchemy and we introduce paper gold?

Nobody will ever take delivery. It will be beautiful. We'll never have to supply any. We'll lever up what we have." And so the timing of this was even equally brilliant

because on January 1, 1975, after a basically 40-year prohibition, U.S. citizens were finally allowed to own gold again, January 1, 1975. Mike, do you know

Craig Hemke: December 31st, 1974. Imagine that and ever since you could call it the "New York Gold Pool" because gold price has been managed by this same process but now instead of delivering actual,

physical metal trying to control things, they've used futures contracts instead. Manipulation of gold and silver prices is a historical fact. It's not conspiracy theory

These goons that are out there trying to make it sound like this is just some scheme we've all concocted as an excuse as to explain why gold has gone down for three years

that's just horse hockey. That's a total disregard of the historical record. Anyway, I've had enough coffee this morning, Mike. You've got me thinking about that and I just thought I would kind of relay that story again for folks.

Mike Gleason: Yeah, all great points. Switching gears a little bit, mining stocks are definitely confirming the move in the bullion and we've also got silver leading the way, which we like to see as well.