What if the U.S., European, etc. governments decide to sell gold in the open market? The price would collapse in a matter of days. It would be a way to scare speculators away from this metal and back into equities, treasuries, even good old fashioned CDs.

This is easy to do because the gold market is relatively thin, unlike that of oil, for instance. Back in 1980 there was a speculative bubble in gold, with prices exceeding $840 an ounce, only to drop to $300 in the following months and years.

The price of gold didn’t go back to $840 until Jan 2008!! (That’s 28 years waiting for the price to come back…) Of course, you may be thinking “this time is different!” But, haven’t we heard that before?