An article in the Financial Times makes the link between the right-wing Tea party movement and a classic pump-and-dump scheme being run by a group of gold sellers. Basically the scam works like this. The gold sellers provide funding for key Tea Party spokespersons and in return they (the spokespeople) push the line that massive inflation and massive currency devaluations are looming and thus their supporters ought to buy gold to protect themselves.
The twist on the classic pump and dump is that the gold sellers, as the article in the FT seems to indicate, are not just looking to hype the price of gold but are also selling denuded gold products (how very gold standard of them). Now if they are selling gold products which they bought a lower prices then they win three times and some of those “profits” get recycled back to the Tea Party movement. There is just too much irony here.
As Krugman might want to point out this is going to be another area where the right is wrong and all those poor dupes that listen to them are going to be materially worse-off. Suckers are as suckers do…I suppose.
Relentlessly Progressive Political Economy 