Volcker confirms central bank need to suppress gold to stabilize exchange rates at 'critical point'

Former Federal Reserve Chairman Paul Volcker today defended government intervention in the gold market to counter "exchange rate instability at a critical point." Volcker's comments came in response to inquiry from the German freelance journalist Lars Schall, who noted GATA's reference to Volcker's expression of regret, recorded in his memoirs, about the failure of Western central banks to intervene to suppress gold prices during a currency revaluation in 1973. Volcker's support of gold price suppression was cited by your secretary/treasurer in his address to the Vancouver Resource Investment Conference last Saturday.  the former Fed chairman confirmed the profound interest central banks have in the price of gold because of its effect on the currency markets, an interest that may justify intervention at any "critical point." This contradicts oft-repeated assertions by certain gold market analysts, like Kitco Jon Nadler, that central banks have no interest in manipulating the gold market.

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