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Jim Willie’s “Most Important Article Ever”- USdollar: Ring-Fenced & Checkmate

Editor Note: The following MUST READ Hat Trick Letter is Jim Willie’s self-described “Most Important Article Ever“, following Friday’s release of Willie’s first audio interview on Cyprus.

An unstoppable sequence of events has been put into motion finally. The pressure has been building for months. Some themes are plainly evident, except to those who wear rose colored glasses in the US Dome of Perception. The USTreasury Bond will be brought home to the US and British banks, where it will choke its bankers, then be devalued for survival reasons, after a painful isolation. The Chinese and Russians will conspire to finance the Eurasian Trade Zone corridor foundation with USTBonds, held in reserve, put to usage. The British will play a very unusual role, selling out the United States in order to be squires to the Eastern Duo. The process has begun; it cannot be stopped. The events are already being grossly misinterpreted and minimized in the US press, where devoted lapdogs, artistic swindlers, and creative writers prevail. The Paradigm Shift eastward is showing its next face, with a truly massive trade zone for cooperation and reduced cost overhead as the giant foundation. The Untied States for all of its past hegemony and devious manipulations and vicious attacks, will be excluded. The British will assist in the exclusion in order to avoid the Third World themselves. The following blueprint is the result of years of planning, with steady information and hints and confirmations by at least two Hat Trick Letter sources. The sunset of the USDollar has a blueprint.As a personal embroidery, let me state that this article is the most important the Jackass has ever written.

EURASIAN TRADE ZONE

The crowning blow is the financial centerpiece to the trade zone, which draws upon the critical mass bulk of the BRICS nations as nucleus. Together Brazil, Russia, India, China, and South Africa have begun to form an alliance built upon trade and economic development, forged by investment in infrastructure and its construction. Include Iran and Indonesia to welcome the new BRIIICS nations for a larger Eastern representation. The arterial system of the trade zone will be energy supply, the life blood of commerce. The Eurasian Trade Zone is being formed, with an energy foundation. Important bilateral pacts were made concrete in the last week. Supply of crude oil, natural gas, including LNG, will come from a vast system of pipelines from Russia to Central Europe and from Russia to China. Completed pipelines will flow. Other pipelines will be completed. Crucial pacts have been made final, with more to come. Additional important pipelines along the periphery will be completed also, like the Iran-Pakistan Pipeline, despite the USGovt obstruction and intimidation. New LNG ports will be constructed. Logistics for rail traffic will be agreed upon, for commodity supply. Many features of the trade zone will be worked out, like reduced tariffs, like border inspection methods, like payment systems including barter, like environmental concerns, like regional cooperation.

BRICS DEVELOPMENT BANK

Consider the BRICS Development Bank. It is so much more than a fund to build railroads in remote African locations, as the delusional US press reports. It will form the giant credit line for countless projects upon which trade will be conducted, often called infrastructure, but so much more. It will gradually reveal itself to provide a second function, a core bank for trade payments outside the USDollar sphere. Steps are being made, extremely important steps, that will shape the next chapter. The United States will not play a role. With a trade zone and financial payment structure, the USDollar is to be rendered an outsider looking in, soon to be deemed obsolete. The many emerging nations are coming of age, flexing their muscles, banding together. Their critical mass in trade volume, in industrial output, and in product development, including patent registration, are impressive. In the last two years, they have demonstrated that the G-20 Meeting of finance ministers has totally eclipsed the G-7 Meeting that had dominated for two decades. They are making the next critical step in creating a bank, a global bank whose role will grow and expand. It will operate under the golden glow.

EXCLUSION OF UNITED STATES

The many years of abusive control of the FOREX currency markets, intervention in the sovereign bond markets, manipulation in the important commodity markets, devious propaganda in the communications networks, with support role played by the aggressive USMilitary and nefarious activity by its security agencies have guaranteed exclusion of the United States. The unspeakable abuse of the US$ credit card will end, as the global reserve currency is dismissed from its throne. The US leader crew, led by fascist bankers, can print money and counterfeit bonds all they wish, but the currency will be required to submit to grand devaluation if they wish to purchase supplies for the massively lopsided and imbalanced USEconomy, the greatest travesty in marketplace history. While the Keystone Pipeline is corrupted by the USGovt with hidden beneficiaries such as Halliburton and Burlington Northern, essentially divvying up the gangrenous paunch of the exhausted bloated American torso, the vast pipelines of the European and Asian continents are merging. They will not include the Americans, whose pathetic gambit fell on its face, the Trans-Pacific Partnership pushed by the Obama Admin. It actually attempted to form a trade zone with Asia, on condition that the lead nations Japan and South Korea excluded China. How incredibly moronic and amateurish! What a pathetic return on the dime for votes for this leader in the new police state.

BRITISH BROKER ROLE & INTRIGUE

The British have an historical knack to remain on top of the bank center heap. Earlier this year, when they announced the launch of a Chinese Yuan Swap Facility in London City, they stepped on the New York neck. Never in a million years would South Manhattan serve as the site of a Yuan Swap functionary post, not during a trade war that has a secret hot military war element being played out in Southern African near the horn (see Djibouti). The embattled British Petroleum will retain a 19.75% stake in Rosneft, which is to acquire the significant BP-TBK energy firm in Russia. Both Bank of America and Citigroup are brokering a $55 billion deal that will enable Rosneft to become the world’s largest oil company. Several hidden messages are laden within the blockbuster global changing deal by Rosneft. By dissecting the flow, it is clear the BP executive staff is selling out, since not paying dividends. The collateral for the deal toward the loans will come from USTreasury Bonds. The Anglo-American bank complex will in effect be forced to swallow its own high volume of toxic paper. The tainted BP oil giant still reels from the tarnish of the Gulf of Mexico incident. Worse, BP is finally pushed out following its dubious role in the Yeltsin years of Russia. That difficult transition period in the 1990 decade saw a failed attempt by the Western Oil Giants to control Russia and its vast energy wealth. Putin from the KGB said no, and it did not happen on his watch. He assumed the Kremlin top post. Witness a potentially crucial London role in helping the Eurasian Trade Zone, perhaps buying favor to avoid the Third World. The broad exclusion of the United States guarantees a Third World flavor and stench for the North American core, with a Mad Max overtone and a Dachau closet.

DEVIOUS CYPRUS HIDDEN ANGLE

A piece of the financing for the Rosneft deal came from GazpromBank, which operates out of Cyprus. China has posted $30 billion in USTBonds as collateral within the massive deal, in return for ample future crude oil supply. Since Russia will receive a steady flow of payments from China from diverse energy pipeline supply, in the form of USTBond fund flow, the big debt to the London banks will be paid off by USTBonds. The payoff will be in the same terms of the huge collateral. Conclude that the Eurasian Trade Zone will have an energy pipeline and delivery system with loaded supply whose foundation is built upon USTBonds, sent back to the Anglo-American bankers to digest. The USTBonds are going home to die. As Lenin said, the rope to hang themselves will be bought by the capitalists. As footnote, some important toes were stepped on in Cyprus. Expect more entries to the morgue. The event opened the door to dangerous games of brinksmanship.

The timing of the Cyprus bank account tax and confiscation is curious, exactly when the extremely significant summit meeting took place between Russian President Putin and Chinese President Xi Jinping, where several big pacts were signed. One is left to wonder if the Cyprus fire was lit by the Europeans in order to attempt to disrupt the Moscow Energy Summit with heavy smoke. It bears repeating. The summit received almost zero Western press coverage, even though its details outline a sunset of the USDollar. Maybe because its details outline a sunset of the USDollar. The Jackass is left to wonder if the next important energy pact with the Eurasian Leader Duo (Russia & China) will involve Saudi Arabia, with a whiff of sunset for the Petro-Dollar defacto standard. Cyprus might indeed have been all about trying to save the Petro-Dollar, more than the European banks. Perhaps the Moscow Summit dictated the Cyprus timetable. The Italian elections to depose Monti, Spanish high level corruption and bankruptcies, and the French backtrack on massive spending cuts, these three nations point to urgency in disaster control. The bank account tax was thrust forward, unmasking the fascist bankers.

USDOLLAR HEGEMONY ENDING

The alternative system to conducting trade outside the USDollar system has had formative stages since the Lehman Brothers and Fannie Mae collapse. The Eastern trade leaders have been very busy quietly constructing a new system, with almost zero press coverage. They prefer to work in the background. Recent events indicate they have chosen the formal public stages and forums with wider visibility, starting with the February G-20 Meeting in Moscow. The true agenda for G-20 finance ministers was to hatch finally the USDollar alternative. The sleepy West appears not to be paying much attention. The initiatives to construct alternative platforms were given a major thrust in the last year since the Iran sanctions led by the USGovt banker and their henchmen in London. For the last 20 years at least, trade has followed banking. Nations of the world have been coerced for three decades into holding USGovt debt securities in order to make payment in trade, most notably in crude oil. With the Grand Arab Recycling accord struck by the 1970 decade leaders, the Petro-Dollar was born in return for a fantastic higher oil price. The oil-rich Arab royalty supported the USDollar by recycling trade surplus into USTreasury Bonds. The conventional practice dictated that global banking systems be dominated by USTBonds in reserves, serving as the banking foundation of debt.

New chapter to turn. The ongoing endless QE to Infinity has hastened Eastern trade leaders. The near 0% return from USTBond yields has motivated them to seek alternatives. They are horrified by the debasement of their hard-earned reserves, filled to the gills with USTBonds of shrinking value and low yield. The new trade settlement system based in Gold finance will turn the tables, as once more trade is to dictate banking. The combination of central bank hyper monetary inflation, big US bank fraud, security agency $100 bill counterfeit, and rampant criminality in the US financial system has motivated the Eastern nations to act. They have acted. The clear outcome is that the Western banking system will topple, since the East will be shoving the USTBonds back to Anglo-American shores for cemetery treatment. Trade should always dictate banking. The major trade partners no longer want US$-based trade settlement. Watch for the crowning blow in the Saudi response soon, since they always follow the winners.

THE CENTERPIECE PLAN

The new BRICS development bank will surely be supplied with USTreasury Bonds at first. The primary seeding is obvious. The emerging nations have collected huge reserves from successful trade over the last decade, primarily held in USTBonds. They do not wish to hold them, since undermined and debased by their own steward at the US Federal Reserve. The big Eastern nations have committed $100 billion for the fund, whose liquidity lies in USTBonds. On a gradual ramp, the USTBonds will be converted to Gold bars for the core bank asset in the development fund. Some of the 6000 metric tons of Gold bullion removed from London banks by the Eastern entities from March to July 2012 might find their way into the BRICS Fund core. The initial role of funding critical important projects like pipelines, communication networks, railroads, shipping ports, ships & trucks, perhaps even energy transfer ports, will become clear. The more overarching role of forming a (Eastern) global core central bank clearing house for payment transactions will be its second dual role. The emerging nations have had their fill of the USDollar control mechanisms with the SWIFT bank structure, the Intl Monetary Fund steering committee, and others. Finally, Gold Trade Notes would be used in trade settlement. Witness the new Eastern Fed for trade settlement in Gold bullion. Better to call it the BRICS Development Fund, since a major Trojan Horse for excreting USTBonds through its rectum, the London Boyz busily catching it.

The Gold core will facilitate the purchase of Gold Trade Notes much like the common letters of credit used widely in commerce nowadays. Like the Eurasian Russian-Chinese energy foundation, the development fund will be built on the back of USTBonds in toxic discharge. In the process, expect extreme hardball, shoving the toxic USTBonds back into US and British banks, as collateral for huge loans, as funds for repayment of huge loans, as funds to purchase Gold. In the process, the COMEX with LBMA appendage will be drained of its Gold, a future default assured. The Western gold marts will be unmasked as corrupt dens of empty inventory shelves. What comes is a BRICS Development Fund which will serve as a quasi global gold central bank for the expressed purpose of facilitating trade settlement in Gold. This is hardly just a fund to finance African rail projects.

THE CHECKMATE

A checkmate is in progress. It has four important elements.

1) The established Eurasian Trade Zone joins the massive Asian continent with a significant portion of the European continent, where three quarters of the world population resides. The trade zone has no visible presence or participation by either the United States or United Kingdom.

2) The BRICS Development Fund will control a giant sum of $100 billion. It will eclipse the role of the Intl Monetary Fund. The fund will facilitate numerous infrastructure projects. However, its other feature will be the shocker, as its core is transformed into Gold bullion. The conversion of USTBonds to Gold will nail the coffin in the isolated USDollar, a topic of Jackass scribbles for the last full year.

3) The flow of USTBonds will be from China to London, for financing the foundation of the Eurasian Trade Zone on its energy backbone with brisk energy flow. The collateral for large loans is to be USTBonds, as is repayment for loans to be USTBonds.

4) The transition from Yuan-based trade settlement via the numerous Swap Facilities in barter trade with key nations, toward Gold trade settlement via the BRICS fund that will feature a gold core, will launch the new Gold Trade Standard. It will not be a banker dominated currency type of Gold Standard. It will instead be a trade settlement Gold Standard that bypasses the hegemony of the Anglo-American banking system, the SWIFT rules, the FOREX gaming, and the IMF/World Bank harlots that harbor insects.

ZINGERS AS COFFIN NAILS

Many are the big signals and signposts with deep meaning. They line the path to the Third World. They are many, diverse, and unmistakable in importance. The gradual discard of the USDollar as global reserve currency, the gradual discard of the USTreasury Bond as primary banking system reserve asset, these events are in progress with a speed not seen in past months or past years, not since 2008. The level of intrigue matches the level of deception. Cyprus is not a one-off event, an isolated insignificant beer fart. It is a flash point event. The tipping point events could be bank runs across Southern Europe extending to Britain and the United States, including Canada. Numerous potential tipping point events can be identified, each powerful and ominous for the US Fascists in power. The USDollar is coming home to be buried and devalued. The USTBond is coming home to be buried and downgraded. The ring fence has been clearly laid out. The checkmate with the Eurasian Trade Zone and BRICS Fund is evident for the trained analyst eye. The devaluation will cause severe price inflation and supply shortages for the USEconomy. The end game has never been more clear. Follow the numerous highly important factors at work, each of which could produce a tipping point event. The dominos are aligned and ready. Inside the US Dome of Perception, they are less visible, yet still at work for extreme consequences. Some severe disorder comes this way. Expect some quantum leaps upward in the Gold price and Silver price, each controlled by unprecedented criminal activity in the financial markets.

The BRICS Development Fund is the main event, to build a railway to a dark place for the United States, ring fenced for its toxic USDollar. Gone will be the corrupted motivated tools like the IMF and World Bank, with even Western central banks of lesser importance. The BRICS Fund could be the Trojan Horse (much like ObamaCare) that permits a vast conduit to be built, a seemingly innocuous let permitted entrance through the door, which permits USTBonds to be dumped like the trash.

The upcoming Gold purchases by the BRICS Fund might be coordinated with the Shanghai Metals Exchange, to exploit the artificial low London Gold price. A COMEX bust can be foreseen.

The BRICS should be careful about the new undersea global communication cable system. In 2007, foul play resulted in the Iranian cable being cut, the result of cooperative action by the USGovt and the little ally on the Southern Med that looks northwest to Italy.

The tipping nation is Germany, which has had its fill supporting the slower wasteful debt-ridden Southern European nations. After cutting the cord, they will embrace the Eurasian Trade Zone. Evidence is the numerous heavy rail facilities that begin in Russia and end in Germany for commodity supply. There are two Germanys, one with old corrupt ties to the West, another with traditional reliable ties to the East. The Western camp is given light by the press, while the Eastern camp works behind closed doors shaping the next chapter.

The Eastern Alliance (often discussed in past Hat Trick Letters) is slowly coming into view. The Russian and Chinese corridor will serve as the commercial foundation. The BRICS Development Fund will serve as the backbone. When Germany joins in more overt manner, the Alliance will be clear on the geopolitical stage. Then comes the Saudis to join, complete with protectorate role already offered by the Eastern Duo giants, who together will announce the end to the Petro-Dollar defacto standard.

The political rebellion movement inside Germany is slowly coming into view. They wish to return to the D-Mark currency and to discard the Euro, an experiment in disaster, waste, fraud, and ruin. The movement is gaining traction. Discussion of the Nordic Euro (aka Teutonic Euro) has been heard on an increasing basis among its tribal cousins. Germany will side with Russia & China, and join the next chapter, after shedding its PIIGS pen trash.

Both Russia and China purchase all their domestic gold mining output. If truth be told, their gold reserves are multiples higher than the official data indicates. Neither nation has any desire to cooperate with such critical disclosure, much like national trade secrets. Both nations are ready for the next chapter, with a few years of preparation in new modern systems, platforms, wiring, and gold held in reserve as core wealth.
The ABN Amro news of halted gold delivery speaks volumes to the absent inventory linked to the corrupted London gold market. They have no Gold in inventory. They control the Gold price with paper leverage and suppressive techniques. This news halt out of the Netherlands should be viewed in context of the Germans, Dutch, and Austrians demanding their gold in repatriation. London has none. What gold bullion they do obtain comes from urgent shipments from the Roman Catacombs and the Basel hills of Switzerland.

The nations across the entire West have citizens deeply worried about their savings wealth stored in the banks. They are beginning to realize their accounts are legally considered as bank liabilities subject to heavy loss upon bank failures. They will begin to remove the money from bank accounts in droves, but with capital controls imposed.

The Cyprus bank account tax is the latest ignored shock wave warning to the West. It is described as a small tax to assure bank solvency, but it is a vicious transfer from sovereign source to depositor private source in funded bailouts. It is confiscation. The 2005 Bankruptcy Law in the US gave away the plan, with savings deposits subordinated under derivatives. The MF-Global episode has not resulted in much learned. It was the first test ride of the subordination rules in the new law. The Jackass warned in early 2012 of an MF-Global event for bank accounts and stock accounts. The event is coming very soon, but the public is very sleepy distracted and dulled.

THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.

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Jim Willie CB, editor of the “HAT TRICK LETTER”.

Use the above link to subscribe to the paid research reports, which include coverage of critically important factors at work during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.

Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a PhD in Statistics. His career has stretched over 25 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors at www.GoldenJackass.com. For personal questions about subscriptions, contact him here.

JIM WILLIE’S “MOST IMPORTANT ARTICLE EVER”- USDOLLAR: RING-FENCED & CHECKMATE

Silver Doctors

Written by testudoetlepus

April 4th, 2013 at 4:00 pm

Posted in Change,Economic Collapse,End of Empire,Fraud

Tagged with BRICS, Cyprus, Eurasian Trade Zone, Jim Willie, Silver Doctors, US Dollar, USTreasury Bonds

Jim Willie: Gritty Questions on the Historic Collapse

without comments

by Jim Willie, GoldenJackass.com

The typical articles over the last many years have featured a particular theme. In the last few months, the central theme in Jackass articles has been the isolation and demise of the USDollar, how it is happening, why it must happen, and its importance in the restoration of the global financial structure. But this week, a sudden urge has come to address an overwhelming list of critical gritty questions. They crop up with clients, colleagues, and friends.

More than a crisis,c it is more accurately described as a collapse of a corrupt inequitable monetary system, and a desperate defense by the major Western bankers to preserve their power over nations and their governments, alongside a vile vicious violent attempt by the United States to maintain its privilege as owner of the vast USDollar counterfeit machinery, as controller of vast banking pillars of paper columns, and as commander of a vast military.

THE UNITED STATES IS PREPARING TO FALL INTO THE THIRD WORLD.

The current monetary system has a debt foundation, which is collapsing in lockstep with the rapid breakdown in the sovereign bond market. The last four years have seen a long drawn-out unstoppable process, where the collapse cannot be avoided and must happen. The pathogenesis is obvious to those in the Sound Money camp. The blossom of corruption and complete banker criminal immunity has only hastened the urgent need for the collapse. The cadaver in Intensive Care cannot be revived with more intravenous applications of contaminated money, the body dead since September 2008. Insolvent systems rush to the crash zone, where efforts can only delay the outcome.

The central banks are finally in crosshairs of focus, for not producing a solution, more recently for worsening the problem. They have confused their function from providing liquidity, in the belief that they are creating wealth. They have destroyed the system as costs rise relentlessly. Perversely, their efforts to dampen demand so as to reduce price inflation has added to the economic destruction. The outcome will be shocking in its power shift to the East, shocking in its evaporation of paper wealth, and shocking in the simplicity of the new financial structure that rises from the ashes based in barter and gold payments. However, the United States will be left behind, due to its basic ownership of the global reserve currency being scrapped. The extreme corruption cannot be reformed. The US financial system must be extinguished, and with it extreme damage to the USEconomy, which has been hopelessly dependent upon asset bubbles for two decades. No single theme in this article, just an attempt to answer in a straightforward manner some extremely difficult and appropriate questions for this ongoing crisis. Some effort is made for the topics to be presented in a logical flow, with answers not lengthy. For much more detailed analysis, look to the Hat Trick Letter paid reports with a subscription, offered each month.

1) CAN WE BE CERTAIN A COLLAPSE WILL COME AND WHY ??

To be sure, a collapse is not only coming. It is happening before our eyes in what used to be ultra-slow motion. Each year the pace quickens. Two years ago, the MFGlobal client account theft episode was preceded by another red-line event a few months before, and followed by another a few months after. But nowadays, the crisis events occur every month or every week. With $1.2 trillion doled out by the USFed to European banks in January, the Germans demanding repatriation of their official gold account, the Italians electing a comedian to halt the property tax hikes that bail out banks, the British sponsoring a Chinese Yuan Swap Facility, the attack on Mali to wrest its gold for German repayment, the move to shut down the Mongolian copper & gold mine by Rio Tinto, the raids larger and bolder of the GLD inventory, the USFed preparing for QE5 (or rather QE187), the US facing a fiscal cliff, the Japanese ratcheting up the competitive currency devaluations, the Swiss managing their Euro-Franc peg, the Russians hosting a G-20 Meeting of finance ministers to coordinate the alternative to US$-based trade, the Iranian sanctions coming to a conclusion in US acquiescence, and a gathering of five aircraft carriers in the Chesapeake (against all rules, angering the Pentagon), to be sure, the pace of extreme events is quickening. All these have occurred just since the new year began less than two months ago. Extreme events have become the norm. A series of climax events is coming very soon. The changes will be rapid and breath-taking.

2) WHAT WILL THE FUSE BE THAT TRIGGERS THE FINANCIAL COLLAPSE ??

Some mid-sized seemingly minor bank will fail. It will have linkage to another big bank in a corresponding role. The obligations will not be possible to cover. The contagion will spread to numerous large banks across Europe to London and New York. The derivatives could be involved, very unmanageable. If not a mid-sized bank, then a major bank will fail from the inability to contain the profound insolvency and massive bleeding during capital flight. The Greek zone has been contained, where disaster runs its course. But larger Italy, Spain, and France are rapidly breaking down, each in its own unique important way. A great many fuses lie, each waiting to be lit.

3) WHY HAS NO SOLUTION BEEN PUT IN PLACE AFTER OVER FOUR YEARS ??

Because the big banks that hold the power are insolvent, and they choose not to shut down their helm of power. Any valid solution must begin with liquidation of the insolvent broken structures, starting with the biggest banks, which happen to be the protected sites (if not headquarters) of the corruption. The power centers are the central banks and the big attendant banks. They are responsible for the bond fraud, the bond counterfeit, the dispensation of $trillions in secret deals, the narcotics money laundering, and the financial market interventions. They are protected entities with large private police forces. They will not be reformed or prosecuted or liquidated. Thus no solution from internal forces. The solution will be imposed from the outside.

4) WHAT IS THE SIGNIFICANCE OF THE USGOVT-LED IRANIAN SANCTIONS ??

The real objection to Iran is that they sharply increased their non-US$ energy transactions over a year ago. That is regarded as financial terrorism, which entered the propaganda mill only to come out as some daft baseless story on nuclear development. Iran has thus followed the Iraq pathway to depart from the USDollar market, but Iran cannot be attacked like its neighbor since it has allies in China and Russia. They work to undermine the USDollar dominance. To brush the USDollar aside is to snuff the American Empire and to remove its full spectrum dominance by stripping the free money credit card. The significance of the Iranian sanctions by the USGovt can be described in chapters of volume, but described in simple terms. The sanctions have galvanized the efforts of Eastern nations to seek a non-US$ alternative in trade settlement that avoids the banks under Anglo-American control. By working to settle trade outside the reach of SWIFT bank rules, the Eastern nations led by China and the many Iranian trade partners have hastened their efforts to settle trade in unconventional ways that center on Gold as a means of payment, either directly or indirectly through hidden intermediaries. The United States did not shoot itself in the foot. The US shot itself in the face where the USDollar is imprinted, and in the chest where the USTBond is held in favor. The US acted to accelerate the rejection of the USDollar in global usage, and thus to quicken the pace of its lost global currency reserve status. The US has pushed itself down the path to the Third World.

5) WHAT EFFECT WILL THE NEW ITALIAN ELECTIONS HAVE ??

The creation of a three-way coalition of Berlusconi, Bersani, and Grillo will shake Europe to its core. The Italians rejected the property tax hikes imposed by appointed leader Monti in very efficient timely grandiose style. The consequent risk is for the big banks to lose their guardian in Monti, the Goldman Sachs preppie. With attention and priority taken away from serving the needs of the big banks, complete with filling the channels to bigger European banks, the risk has risen ten-fold for an accident in Southern Europe. The insolvent (broke, illiquid, desperate) big Euro banks will be vulnerable to default events which could quickly spread across Europe to London and New York. The control room managed by Monti will be at great risk of being shut down. The risk of a great accident is acute.

6) OF ITALY, SPAIN, AND FRANCE, WHICH IS IN THE WORST CONDITION ??

All of them are in dreadful atrocious condition, none worse than the others. The bigger issue is which will ignite the explosion in the financial platform. Spain has a blossom of corruption exposed during a skein of financial firm failures. The scandals involve both politics and security laced with finance. France has capital flight in response to the self-mutilation common to socialism. An absurd tax rate directed against the wealthy might as well be 100%. Socialism will soon be equated with confiscation and tyranny. Italy has a comedian to join two political leaders, where the message is a counter-attack in response to higher capital gains to finance the banker aid. Their political system is far more responsive to the people’s will than any Western government, no exception. The distinction in these three nations is their size. Their populations range from 47 to 65 million, together 17 times the size of Greece. None can be bailed out, referring to their government deficits and their banking system. Any or all of the trio of broken nations could collapse, with triple the fuses exposed. If any of the trio falls, the other two will follow quickly. Germany cannot bail out any of the three, and certainly not all three. The duty of bail out would fall on the Euro Central Bank doorstep, which would reveal the monetization schemes as a grand paper mache sham game. As the trio in Southern Europe collapses, the titan Germany will depart the common Euro club. It will then embrace Russia and China, and help the establishment of the great Eurasian trade zone.

7) WHAT THREE COMMON THREADS CONTRIBUTED MOST TO THE COLLAPSE ??

A) The dispersion of phony money throughout the economic and banking system, which in the process contaminated and undermined capital. B) The plethora of bond fraud, bond counterfeit, huge bailouts for the big banks, and hidden banker loans totaling $23 trillion (still counting), which created a banker syndicate and banker welfare system together. C) The spread of predatory war sponsored by the USMilitary and USGovt security agencies, for the advancement of banker seizures, resource grabs, and attacks on civilians. Aside from the costs to the USGovt deficit, the global impact has been horrendous concerning US prestige and good will toward the United States. With bad money, corrupt banks, and aggression through war, the world has been brought to its knees as it wishes to bring the US leadership to heel.

8) WHAT HAVE BEEN THE OBJECTIVES FOR THE ARAB SPRING ??

Multiple motives appear at work. The goal has been to loosen the grip of power by Moslem autocrats, which would permit the replacement of more suitable pro-West leaders (puppets). The goal has been to loosen the lines to official government accounts, like the 144 tons of Libyan gold that still sits in London banks, which is much more integrated into their bank management schemes. The goal has been to destabilize the national fabrics, an old favorite game of the USGovt security agencies, since it tends to permit a climate conducive to their ploys. Imagine pitting your neighboring husband and wife against each other with false sexual dalliances, while setting fire to other neighboring houses, then robbing the neighborhood homes. But a backfire is in progress on three fronts. Egypt is on the verge of a banking breakdown which might expose the USTreasury Bond is unwanted in the global financial market, outside the big US bank control. Syria is leaning more heavily toward a Russian alliance. Their naval port will not be yielded. The presence of HezBollah is clear, with the Saudi assassination of Prince Bandar in September, in response to other Assad family hit squad actions. The big impact crater is likely to be the House of Saud itself, which is in great danger of falling. King Abdullah is teetering in health, if not comatose. With the fall of the Saudi regime will come the fall of the Petro-Dollar, thus the USDollar itself as global reserve.

9) ARE THE OFFICIAL GOVERNMENT GOLD RESERVES DATA ACCURATE ??

Not a single nation reports accurate gold reserves data. Doing so would reveal the absence of their gold from domestic raids and the consequent bankruptcy. Doing so would reveal the accumulation of gold toward new plans for the next financial chapter. Either weakness or strength would be publicized in a true accurate statement of the gold accounts. Not even foreign official accounts are accurate. In fact, no gold accounting is accurate the world over. The national treasure and jewels are well concealed, as the global monetary war runs white hot.

10) HOW MUCH GOLD DO CHINA AND RUSSIA REALLY HAVE ??

At least five times as much, and possibly ten times as much gold as reported, which would mean more than Fort Knox before it was pillaged in the 1990 decade. Both superpower nations purchase all their domestic gold mining output, with nothing exported. The Russians have gold accumulated over the centuries dating back to Peter the Great, Catherine the Great, and the Czars. (Tidbit: Russian word Czar is for Caesar, and German word Kaiser is for Caesar.) The Kremlin contains a vast system of tunnels under its main buildings, stretching for kilometers, filled with gold bars and gold artifacts (think chalices, necklaces, inlaid gemstones). The Kremlin is a veritable Eastern Orthodox version of the Vatican itself, in wealth under control, but surely not religious political power. Over the last decade or more, Russia has been converting its vast oil wealth into gold bars. Since the Soviet debt default, a new strategy has been put to work in the conversion. On the other hand, China has two gold accounts. Their official sovereign wealth accounts and central bank reserves have been accumulating gold at a much more rapid pace than revealed. They see no need to reveal any strategic plans. The fast accumulation of reserves from trade surplus has served as easy flow to gather gold, mostly through the Hong Kong window. The public statement of their Gold reserves data brought laughter to my best gold source of information, since he personally has brokered great volumes of Chinese gold purchases.

11) WHY DOES GERMANY DEMAND A RETURN OF ITS GOLD ACCOUNT ??

An important camp within Germany is no longer part of the Anglo-American financial team of syndicate bankers. When Deutsche Bank CEO Ackerman was pushed out, fell out, or was dropped into the hot seat of interrogation, the German role changed more visibly. The nation is of two camps, one still beholden to the Anglo-American bankers and the satellite offices at the Intl Monetary Fund and the World Bank. Their past cooperation and allegiance had been firm and loyal. The other camp has been building ties with Russia and China, even the Persian Gulf. It has been working diligently and vigorously for over four years in establishing the framework for a new trade system founded in barter, to be transacted in gold. Germany offers the engineering, project management, and coordination, like from the Finns on connecting the electronics from commodity to monetary markets. The other camp has been busy in heavy railroad construction directly with Russia for resource and mineral delivery. It has been busy in trade with China, centered on construction equipment. Germany no longer trusts the bankers to the West, having suffered a fraud from both London and New York. The fraud involved runs far deeper than reported, since it includes a substantial amount of fake gold bars made of tungsten. The British Brown Bottom in 2001 involved Deutsche Bank in gold delivery to cover massive short positions. The Mali excursion in yet more USMilitary (NATO cover) adventure involves an attempt to secure more gold in order to repay the German gold account. Germany has changed teams in the true playbook, the new adversary to the Anglo-American bankers who will find themselves increasingly isolated. Germany has been defrauded, and they are angry. The Germans make for a strident determined potent adversary. In the Jackass view, Germany is the swing nation, the brain trust, the key member of the newly formed Eastern Alliance. It has aligned with Russia, China, and the Persian Gulf.

12) HOW WILL THE COMEX SUFFER A FINAL SHUTDOWN ??

The COMEX will be drained eventually of its Gold & Silver inventory. They had to resort to stealing 140 thousand accounts at MFGlobal in November 2011 in order to preserve its inventory. Do not be surprised if the Libyan 144 tons of liberated gold found its way to the LBMA and then COMEX. The two crime events should indicate the final stages of desperation. The COMEX has resorted to regular raids of the GLD & SLV exchange traded funds over the last two to three years, in greater recent volumes. They short the ETF shares, a privilege granted only to the big banks, then arrive to cart off bullion bars in overnight shipments. Also, vast supply routes have been established between the LBMA and COMEX, with help from the Swiss castles situated at the Bank For Intl Settlements, and from the Roman Catacombs, where decades of cooperation have been afforded. The armored shuttles have been at a frenetic pace to avoid defaults, especially in Silver. The most recent element has been the solicited aid of Scotia Mocatta, the Canadian pillar which appears to have joined the big US banks in naked shorting. The COMEX will shut down from a vicious combination of absent inventory and thin ranks of brokerage accounts. The players have left the COMEX, after the MFGlobal thefts which were endorsed by the corrupted US court system beholden to Wall Street objectives. All across the United States, compliance departments have banned usage of the COMEX by futures risk management teams. Empty shelves and no traffic.

13) CAN THE INELASTIC SUPPLY IN THE GOLD MARKET BE EXPLAINED ??

The inelastic demand for Gold is well known. Demand rises with a rising Gold price, called Gold Fever. But inelastic supply is less understood and mentioned. As forward sales schemes unravel, they drain large mining firms of scarce cash. Operations suffer and big projects are not funded like in the past when a lower Gold price was the case. Two new ravaging effects have taken root. As the major central banks debase the currencies worldwide, they lift the cost structure for businesses and the cost of living for workers. So mining firm profit margins are reduced and worker household stress increases for feeding families. The pinch from reduced profitability combines with the nasty pinch of labor strikes to hinder mining output. Also, the new wave of resource nationalism has struck in several nations. The poorer nations that host mining projects have turned hostile. They are suffering from slower economies and wider deficits. The response has been for their governments to renegotiate royalty agreements, to confiscate properties, and to manage a much tougher line against the foreign mining firms. They have imposed harsher strictures on environmental contamination, often as a ploy to gain more revenue from royalty or penalties. The end result is lower mining output in association with a higher price for Gold & Silver, which defines inelasticity. It is the opposite of what clownish conventional economists predicted, and exactly what the Jackass predicted over the last seven years.

14) WHAT CRITICAL DAMAGE HAS THE CHINESE YUAN SWAP FACILITY DONE ??

The Yuan Swap practice has created a broad platform and precedent for non-US$ trade. The list of nations with such swap deals include Brazil, Australia, Russia, Japan, South Korea, Belarus, Malaysia, and Indonesia. Add England to the long and growing list of nations making bilateral currency agreements with China, which should instill fear in New York. The swaps have established a virtual barter system that is divorced from the banking settlement for trade. Instead, a bilateral account is set up with credits and debits, depending upon delivery and receipt. Regard the swap system as a foundation for global trade settlement in Gold, as the Chinese Yuan makes the rough transition to a gold-backed currency. In the Jackass view, the shift to a gold trade settlement system will coincide with the gradual Yuan currency backed by gold. They will become interchangeable when procuring Gold Trade Notes, my theory, all in time. The Chinese Yuan Swap Facility has undermined the USDollar dominant role in trade. Following trade practices will come bank reserve management practices, which means the removal of the USTreasury Bond from global banking. The numerous Yuan Swap Facilities have essentially worked to dethrone the USDollar as global reserve currency.

15) WHAT IS THE CRITICAL PIECE IN THE GOLD TRADE FINANCE CONCEPT ??

Actually three pieces. The absent usage of the USDollar itself, and the bypass of the Western banking system with its community of SWIFT members, and the sidestepping of the FOREX currency market. If trade is to be settled in Gold, or using vehicles such as the Gold Trade Note, then the USDollar, the big Western banks, the SWIFT codes, and the FOREX are all rendered suddenly obsolete. The banks must adapt to become utility firms. A few gold-backed currencies might spring up with unique distinctions. The gold trade finance concept ushers in a new alternative system long sought in order to create a more viable equitable sustainable financial structure. The banking system should serve trade, not the reverse. Hence the USTBond will slowly vanish from the global banking system, and the USDollar will lose its global reserve status. The end result is a unavoidable slide by the United States into the Third World.

16) WHAT WILL BE THE NEXT FINANCIAL CENTERS ??

Whatever nations begin to dominate as intermediary functions for gold trade as it serves trade settlement between nations, they will grow into the next financial centers. The current attention is on Turkey and India. The Ankara banks are under scrutiny. New attempted controls by the USGovt have been announced by the pretender lords, under the guise of consequence for aiding trade with Iran. The US efforts will not succeed in stopping the progress in gold intermediary development. The Near East has a long history, much longer than the American history. Iran has numerous trade partners, and an extensive system of intermediaries that include the United Arab Emirates, which is undergoing a transformation. Iran’s partners include Turkey, India, China, Japan, and South Korea. These are major nations which will refuse to comply with pressured US tactics. The emergence of alternative trade payment methods in order to keep Iran moving will create the next financial centers. They will be centered upon Gold flows, Gold management, Gold purchases as intermediary, Gold in payments, as well as Gold in smuggling. The recent decision to relax Gold rules within India, to permit corporations to form banks, to ease the pathways for integrating the vast household gold wealth in India, will work to thrust India as a potential gold finance center. Both Turkey and India will realize a benefit in economic growth, which has been nonexistent in the last five years under the fiat paper currency regimes that fast approaches the dust bin. The Near East is a logical center for gold finance, since it links the East with the West in a natural intermediary role. They have been developing the non-standard currencies that have served for five thousand years, namely Gold, Silver, and Platinum. By pushing Gold into the periphery, the financial centers of the West have pushed themselves into an awkward position where they will fall off the stage. In doing so, they have promoted new centers to crop up and mushroom in growth.

17) WHERE ARE THE SAFEST PLACES TO STORE GOLD BARS & COINS ??

Hong Kong for a number of reasons will remain the safest place for Gold storage. It has a long history of professionalism, independence, and integrity. Following the independence in 1997, the city state nation has pursued a unique role and direction. It is under the Chinese wing, but has its own regional charter toward continuity and some measure of autonomy. The Mainland China rulers prefer to use Hong Kong as a port to the West, but also to copy it internally. The British roots helped to establish HK bankers as top notch, but they are no longer subservient to London whims. The HK banking hub is the foremost in all of Asia, with a new rival Shanghai having emerged. The HK airport has greatly expanded its vaulted services. My source indicates that the HK vault service capacity is three to five times greater than reported. It has associations with all the major vault firms in an impressive list. Their integrity is as great as their disdain for the US bankers, with whom they show zero cooperation, as confirmed by an Interpol source. The claimed advantages of Singapore are spurious and illusory. Don’t bother, since it does not even have a Depository Bond agreement for the bullion vault firms.

18) WHAT HAS GONE SO HORRIBLY WRONG WITH GOLD MINING STOCKS ??

Several serious flaws and shortcomings to mining stocks exist. The big hedge funds short them heavily with Wall Street help like credit lines. Other hedge funds short the smaller mining stocks and go long the majors, a spread trade. The majors are working with Wall Street on hedged forward sale programs, a grand collusion. The Goldman Sachs GDX fund shorts the entire group, just to keep them suppressed. The brokerage house Canaccord is involved in naked shorting of mining stocks. After acting as partner to raise cash in a very large number of finance deals for Canadian junior mining firms, they keep selling shares with the collusion of the Alpha Group, far more than they own. The mining firms themselves are in deep trouble, with rising costs, a shortage of engineers, hostile foreign governments, and difficult projects. The mining firms are printing new shares in heavy dilution (like the USGovt on USDollars), which is inflation. Under pressure, the mining firms will soon begin to renege on their covenants, as some will be forced to sell their properties to the banks. Eventually the USGovt and other Western governments might force sale of mining companies for pathetic low prices under law in order to replenish their Gold reserves in the central banks. The recent extreme challenges for the mining firms relates to hostile labor unions and resource nationalism that prompts confiscations. Distress for mining firms will result in continually lower metal output, resulting in supply shortages which favor owners of physical metal, not the mining stocks. The global assault on paper wealth includes mining stocks. The Gold & Silver metal prices have vastly outperformed mining stocks since 2008, when the Hat Trick Letter subscribers were urged to dump the paper and to buy the metal. Expect the trend to persist.

19) WHY ARE BOND YIELDS SO LOW, GIVEN HUGE SUPPLY AND NO BUYERS ??

The JPMorgan war room controls the Interest Rate Swap derivative machinery. The contract is a complex device that matches short-term spreads versus long-term spreads in order to fabricate fresh USTreasury Bond demand for the long maturities. In essence the IRSwap creates artificial demand for USTBonds, and thus creates the illusion of a flight to safety in the USGovt sovereign debt securities. Since 2011, the buyers for the USTBonds have largely been confined to the US Federal Reserve. Since 2011, the supply of USGovt debt sold in securitized bonds has remained at a frenetic $1.0 to $1.3 trillion pace. With huge supply and almost no buyers, the bond yield should have zoomed higher than bonds from Spain and Italy, maybe even Greece. But instead, thanks to the JPMorgan derivative room, the vast USTBond tower is maintained from a brisk demand of totally artificial type from flying IRSwap buttresses. They will all experience seizures. The USTBond yield might be zero when the USGovt debt default occurs. The Weimar replicas of fake toxic money will not halt until the end.

20) DO LOW INTEREST RATES REALLY STIMULATE THE USECONOMY ??

No, low interest rates smother the USEconomy for several reasons. They also create conditions for the banks to convert into speculative houses even more than a decade ago. They are playing the USTBond carry trade, borrowing cheap short-term money and investing in long-term bonds. They cannot earn much profit with low rates in the commercial sector. But the important negatives for low rates work to dampen commercial activity. To begin with, the vast armada of savers, the retirees holding CDs from banks, and the big pension funds, all earn very little on their capital. It is unjust and a perversion. Twice as much savings earn interest as consumer loans pay interest, a net negative that Wall Street harlots prefer to ignore in their promotional harangues to shrinking audiences. The banking sector is suffering for many reasons, one of which is the poor income on their bond portfolios. As much as the mavens and official barkers recite the benefits of low rates and its stimulus, the exact opposite is the case. Worse, the low rates signify low value for capital. They therefore distort the financial markets on valuation of a broad assortment of assets. But the worst effect that renders deep damage to the USEconomy from low interest rates is the encouraged diversion of assets toward investment in commodities in defense, as a hedge for inflation. The migration toward commodities lifts the entire cost structure, and reduces the profit margins for business. The effect is deadly as it forces capital in the form of equipment and machinery into retirement. Business segments shut down. The low rate environment kills capital, reduces the capital base, and smothers the USEconomy. Not one in ten economists comprehends this basic point.

21) WHY HAS THE USDOLLAR NOT BEEN REFORMED IN RECENT YEARS ??

Because the USGovt has no jurisdiction over foreign nations and international contracts. Although the USDollar is widely used in foreign commerce, the USGovt cannot dictate changes and important alterations to past contracts in place. About five years ago, a plan was afoot to replace the USDollar with a newer better version. But all efforts hit an obstacle since the USGovt has no jurisdiction to alter past contracts that involve the USDollar within them. To be sure, the USGovt can control flows of money as a grand gatekeeper and toll taker, but it cannot dictate over external contracts. As the global financial and monetary collapse has continued, the United States has found itself unable to extricate itself from the tightening noose around its own neck. In time, the USDollar will experience a global shun, at which time great new problems will befall the nation.

22) HOW WILL THE USDOLLAR BE ELIMINATED ??

The USDollar will not be reformed replaced or repaired by bankers, since they are too committed and entrenched in fraud and corruption. The USDollar will be eliminated in a series of steps that begins with its isolation. The movement toward trade settlement outside the USDollar, not necessarily in Gold, works to isolate the USDollar turned toxic. Once isolated, the many nations not so firmly aligned to the West will thrive, while the Western core nations continue to crumble and collapse. When the USDollar is no longer in favor in a majority of trade settlement, it will begin to see wholesale dumping of the USTBond as a reserve asset. Then the US-led axis of fascism will be revealed in the United Kingdom, Canada, and most of Western Europe. They will continue to use the USDollar in both trade and banking, but they will ingest toxic paper during their continued unabated collapse. As the stage shrinks and the lights dim, the USDollar will be dealt with by the USGovt itself in brutal fashion. The US will devalue its own currency to survive, just like Third World nations.

23) HOW DOES THE CURRENCY WAR AFFECT THE USDOLLAR POSITION ??

Nations around the world are locked into policies to debase their currencies in a series of competitive devaluations in order to protect their export trades. A lower domestic currency exchange rate protects the trade by keeping the prices down for their exported products. Other nations are affected as they lose trade to the competitor which devalues. Actually all nations lose, since global trade shrinks in aggregate. The USDollar is artificially propped as a result. But pain comes from the devaluations since they increase import costs like crude oil, such as in the case in Japan. Also, nasty effects occur like with Switzerland, whose central bank collected a pile of Japanese Govt Bonds in a diversification program. In competing currency wars, everybody loses in a race to the bottom. Nations are slowly coming to the realization that if they simultaneously rid themselves of the entire batch of fiat paper currencies, and adopt a gold trade finance system, even if they suffer a writedown of USTBonds in the process, they will be better off with a future, after being freed from the toxic tentacles. The USDollar and USTBond are agents of ruin during the ongoing unstoppable collapse of paper assets, paper wealth, and paper money. The next stop is the Gold Standard, which the participants in the currency war are gradually moving to adopt, as they follow the Chinese lead.

24) HOW WILL THE UNITED STATES FALL INTO THE THIRD WORLD ??

The global isolation and rejection of the USDollar will force the USEconomic participants to bid up the currency required for the many supply routes leading into the nation’s factories, offices, stores, and homes. The USDollar will be forced to bid up Chinese Yuan and Gold ultimately. They will be forced to bid for whatever currency is required for the assorted supplies like crude oil, metals, and foodstuffs, as well as for finished products like cars, hardware, home electronics, and clothing. The process will see some shocking events like 30% devaluations, just like seen in Venezuela. My estimate is that the USDollar will eventually see a 50% to 60% devaluation in total over the next few years. That will cut US personal wealth in half. That will open the door to 25% to 30% price inflation suddenly. The process will cause grand shortages, civil disorder, and perhaps chaos. Violence will erupt at the gasoline stations and food supermarkets. The USEconomy will lose its credit line, and become a credit risk. For decades, the USEconomy has been running up deficits, with no enforcement or discipline or controls, in essence shoving the debt paper on foreign nations in lieu of legitimate savings. They resent it. Foreigners will demand hard currency at a time when the USDollar loses its global reserve status and premier position. A sense of retribution will emerge. As the gold trade finance chapter opens, the USDollar severe devaluation will coincide.

25) WHY ARE AMERICANS SO ILL-INFORMED ??

The United States is the home of a vast syndicate that has been in firm control for decades, but only since 911 has it exerted stronger controls. In the process, much greater banker welfare has become the norm, as have tight reins to control the USCongress while integrating and enriching the military contractors, and more quietly the pharmaceutical giants with at times deadly vaccines. In order to maintain the charade of a national directive toward security, complete with all the earmarks of national socialism, the network news has been under very firm control. Dan Rather and Keith Olbermann can attest. Since the 1980 decade, the entire news conglomerates that include television, radio, newspapers, and journals has been subject to strict oversight by the USGovt security agencies. Since 911, the Homeland Security apparatus has exerted its controls. The ownership of the major network conglomerates is a short list, which in the 1970s consisted of 25 firms. Now it consists of a mere five firms. They have been totally woven into the security fold. A branch of Hollywood has also been grown from the security fold. The bias is evident in domestic political stories, international geopolitical stories, bank related stories, money related stories, economics stories, and financial market stories. The US citizens remain the worst informed people of any industrialized nation, and the most subjected to propaganda. The British are a close rival. The Goebbels methods are actively at work in propaganda widely disseminated.

26) WHAT HAS KEPT THE BIG US BANKS AFLOAT FOR THE LAST FOUR YEARS ??

Two flows of funds have kept the big US banks going. The first is the financial derivative trades that grew out of control in the 1990 decade and became vogue. They are totally unregulated, and therefore subject to grand fraud. For instance a big financial firm might have credit default swap contracts against its bond bust that total 200 times the value of the corporate bonds themselves. It like the entire neighborhood owning a fire insurance policy on a single home. To lite the home ablaze can be profitable for some participating investors. The banks have an extremely large volume of both credit default swaps and the more important interest rate swap contracts. In fact, JPMorgan owns $82 trillion in interest rate derivatives, which exceeds the size of the global economy. No regulation in oversight means the big US and London banks can rig the prices, even counterfeit some of the contracts held. Notice the LIBOR banker scandal that emerged in 2012 to shock the world. It will spread, not shrink, as all major financial markets are corrupted. The second very important source of funds is basic narcotics money laundering, the biggest beneficiaries being the New York banks. Few realize that JPMorgan runs the Iraqi Export Bank in Baghdad Iraq, which serves as the clearing house for Afghan narcotics. A ripe 85% of all heroin in the world comes from Afghanistan. Terrorists pale by comparison in importance in the war mission. The United Nations has issued several drug related finance reports that have identified the big US banks as primary centers for money laundering of narcotics funds. Some like Wachovia have pled guilty. In recent months, the Queen of England has been implicated, as have the Vatican bankers. Without the derivatives and money laundering, the big US banks would have folded and gone bust years ago.

27) DOES THE USFED REALLY HAVE AN EXIT PLAN ??

The USFed has no Exit Strategy. It ran a blatantly obvious fake plan in 2009 that the Jackass dismissed immediately and correctly. The Zero Percent Interest Rate Policy will remain in place until the USGovt debt default occurs. Any rate hike would cause a balloon in USGovt borrowing costs and much greater deficits. Any rate hike would cause a sudden implosion of the entire derivative structure, the so-called nuclear event. Any rate hike would break the big US bank carry trade locked into USTBonds, and thus cause bond yields to rise twice as fast as the USFed could control them in a great unwind. Any rate hike would crush the already comatose housing market. Any rate hike would harm badly the USEconomy from higher cost of loans. The Quantitative Easing policy will remain in place until the USGovt debt default occurs. No buyers of any critical mass exist to purchase USTreasury Bonds. The USFed has been purchasing at least 80% of USTBonds in new issuance and rollover supply. Foreign buyers are long gone, aghast at the hyper monetary inflation and toxic effect on their banking reserves. They also possess smaller trade surpluses. If the USFed were to halt the purchases of USTBonds, the pressures on the Interest Rate Swap machinery would break it quickly in a matter of one to two months. The result would be long-term bond yields rising to the 7% to 8% or 9% range. The USFed has no Exit Strategy, never had any Exit Strategy, and will not be granted an Exit Strategy. It is stuck in the monetary corner, totally reliant upon its Weimar printing press, gradually isolated in its USDollar self-fellatio activity.

28) HOW WILL THE USGOVT BUDGET DEFICIT BE FINANCED AND COVERED ??

The only exit ramp that might be seen is with the USGovt and its deficit finance. The likelihood grows every month for a major oppressive event, where private US pension funds (IRA, 401k, Keough, managed pension, etc) are forced to cover the USGovt deficit in the form of special USTreasury Bonds which also cover a portion of the USAgency Mortgage Bonds. The US citizenry is captive to the desperate whims of the USGovt and its bankrupt condition, sure to dole out desperate policy actions.

29) ON THE FISCAL CLIFF, ARE SEQUESTERED BUDGET CUTS ALL THAT BAD ??

The Jackass loves the automatic budget cuts, even if across the board in nature. Whatever it takes to reduce the vast USGovt bureaucracy and vast military establishment is wonderful and welcome. The fear tactics have already reached a fever pitch, with recited calls for long airline delays and cuts to the welfare morass that includes Social Security and Medicare. The point must be made that even the first round of cuts will be only $85 billion for the fiscal year ending September 30th. That is minor compared to the overall $3.8 trillion bloated budget, as in $3800 billion. It is a trifling amount in proposed cuts from the sequestered route, only 2.2% of the total bloated budget. The pain comes from the budget cuts arriving at a time of chronic recession that dogs the USEconomy. The marginal effects will be certain, but the movement to reduce the size of the USGovt is in a good direction.

30) WHY ARE AMERICANS SHUNNED ACROSS THE WORLD ??

The USGovt regularly puts out volumes of requirements and onerous rules for foreign entities to follow and abide by, at their own cost. The USGovt has in the past few years forced a burden on the foreign firms. As a result, the foreign firms have decided on an increasing basis not to incur the cost, not to support the staff, and not to deal with the nuisance. They do not hate the US citizen. They despise the USGovt and its sprawling imperial over-reach.

31) WHY DID THE POPE REALLY RESIGN ??

This is difficult to answer with any measure of certainty. But indications have been made by credible parties that the Vatican is soon to be exposed for some truly devious pernicious scummy banking relationships that involve big banks like JPMorgan and various central banks. The big corrupt US bank has managed the Vatican gold account for decades. Imagine the cross traffic from the brisk Afghan narcotics money laundering activity. More clearly, the Vatican is embroiled in narcotics money laundering at its primary bank. It is difficult to confirm, but the Jackass doubts that God approves of any activity on usage or finance related to heroine and cocaine. The Vatican apparently is soon to be subjected to a new financial audit. The recently appointed German lawyer Ernst von Freyberg will be the new president of its bank, filling a post left vacant since May when a financial scandal involving narcotics money laundering with Roman banks tainted the institution for the umpteenth time. The appointment was made by a commission of Cardinals and approved by Pope Benedict before his departure was announced, now final. The bank’s formal name is a total joke, the Institute for Works of Religion. Plenty of other reports swirl about an intolerance for certain sexual rituals by the Vatican bankers that the current pope has no more patience for. Benedict has laid a trap. There are two chambers to the Vatican, the College of Cardinals and the Jesuit Bankers. The former pledges fealty and devotion to the Prince of Light with active ceremonies. The latter pledges fealty and devotion to the Prince of Darkness with active rituals.

32) ARE THE ANGLO AMERICAN BANKERS STILL IN CONTROL ??

In no way are the London and New York bankers in control. They are reacting to events. Their many structures are fast crumbling. Their bond markets are held up by paper emissions in ever increasing volumes. Their currencies are at war with each other, not simply competition. Their banks are grotesquely insolvent, kept afloat by direct monetary inflation, open state welfare, and oppressive taxes. The central banks are stuck in the ZIRP corner with only QE as an option, otherwise known as dead money and hyper monetary inflation. Weimar is alive and vigorous on its destructive rampage. The global trade settlement system is making steady progress in a non-USDollar alternative, which will strip the United States of the global currency reserve privilege, abused to the hilt. The trade finance structure will gradually revert to the Gold Standard, and from that firm position, dictate banking policy. The bankers of the future will be those who own Gold & Silver, which will rise to $5000 per ounce and $250 per ounce respectively, probably more suddenly than even the gold community comprehends or anticipates.

THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.

From subscribers and readers:

At least 30 recently on correct forecasts regarding the bailout parade, numerous nationalization deals such as for Fannie Mae and the grand Mortgage Rescue.

(ElaineW in California)

(The Voice, a European gold trader source)

but I feel your information is vital to know.”

(KathyN from Arizona)

Jim Willie: Gritty Questions on the Historic Collapse

[SilverDoctors]

Written by testudoetlepus

March 1st, 2013 at 1:46 pm

Posted in Change,Economic Collapse,End of Empire,Fraud

Tagged with China, collapse, France, gold, gold trade finance, Iran, Italy, Jim Willie, silver, Spain, the Third World, US banks, US Dollar

Death Knells for the USDollar

without comments

by Jim Willie, GoldenJackass.com

The recent decision by the US Federal Reserve to contaminate the financial body until it responds favorably was the last straw in my book. Witness a declaration of permanent QE and hyper monetary inflation of the most virulent strain, unsterilized. The USFed is essentially admitting failure. The signal serves as the loudest death knell for the USDollar among many in a sequence. The QE bond monetization of USGovt debt has turned viral and entrenched. It is sold as stimulus, when in fact it acts like a giant wet blanket on the USEconomy. It is intended as stimulus to businesses, but the effect is felt on the financial speculation and on Asian direct business investment. In the past the emergency lever device had been successful only because it was used on a temporary basis. But now the USFed high priest assures it is a permanent fixture, a sign of their failure.

The money is not finding its way into the USEconomy for further circulation. The plague is insolvency, soaked by endless applications of tainted money from central bank fire hoses.

GOLD PRICE READY TO EXPLODE UPWARD

A powerful USDollar decline is imminent.

The public is too ignorant to comprehend the ruin. They can only see the threat to their personal ruin.

The bankers are determined to ruin the entire system in order to retain power, all while dispensing increasingly nonsensical dogma like from heretical high priests about the effectiveness of their solutions. Theirs is heresy built upon alchemy laced with arrogance, with no precedent of success in past history. A definition of insanity comes to mind, offered by a psychologist who works in a clinical practice. Let’s stick with the layman translation. Insanity is defined as repeating the same action but expecting a different result. So the USFed conducted QE, then QE2, then Operation Twist (a deceptive QE), now is set for QE3. It expects a different result from the rising costs and debasement of the currencies. Somehow by enlisting the cooperation of the Euro Central Bank, the Bank of England, the Bank of Japan, and the Swiss National Bank, together they can pull off QE3 in a veritable ongoing QE to Infinity when all previous efforts have failed to produce a solution or economic recovery. The high priests from the central bank altars do admit that liquidity does not address the insolvency ills, yet they hit the monetary levers and accelerators more quickly. The central bankers are in a panic, and it is beginning to show clearly. Their solutions solve nothing. They will next attempt to rule more formally over the ruins.

MONEY VELOCITY

Money velocity is going down as quickly as money supply is going up. This report card is a grand contradiction of the USFed actions for a generation. The American Weimar experiment is turning into a tornado of financial ruin with inadequate recognition. As industry was dispatched and forfeited to Asia, the USEconomy lost its base for traction. New money has lost its effect in producing economic activity following a series of asset bubble busts, a spinning of capitalist gears, now stripped gears. New money is devoted to the financial sector in perverse fashion, as a reward for the past destruction of capital itself. The central bankers cannot dictate the speed at which money moves. They can only create it and drop it in the mix, speak their incantations, sprinkle pixie dust, offer some loony fiat prayer to the duped public, and continue with the next paper dump. The Untied States will gradually achieve systemic failure from redoubled efforts, suffer debt default from inability to manage the debt structure, and fall into the Third World. The nation will experience the monsters of high prices and acute shortage without comprehension of its source. It is toxic money.

The growth of the monetary base has been staggering high since the financial crisis broke in September 2008 with the collapse of Lehman Brothers. Since the end of August 2008, the monetary base has risen from $877 billion to $2,651 billion as of September 2012. That is a giant 3-fold rise. Witness the American Weimar era, its final chapter. The massive increase in new money has done nothing to foster growth in the USEconomy. The main reason is that fiat paper money destroys capital, a concept the hapless corrupted US economists cannot comprehend, either from compromise to their masters or lack of intellect due to years of exposure to the ass backwards preachings. The USEconomy is stuck in a powerful recession based in grotesque insolvency and bond fraud. As the USFed is poised to kick in another round of QE bond monetization, the money supply will ramp sharply up again. Do not expect much of any economic benefit, since the cost structure will rise again, then shrink profit margins. This capital destruction factor is a great blind spot to the hack economists who operate more as marketing harlots for Wall Street and the USGovt than analysts and advisors. The Ponzi Scheme theory dictates that an acceleration in new money is required to keep a constant speed. Expect more wreckage from the stripped gears of the USEconomic engine.

The money velocity chart shows a deadly decline since 1980, and a powerful decline since the 2007 outbreak of the absolute bond crisis. The new money is going to the big banks in bond redemption, derivative coverage, and Black Hole (Fannie Mae, AIG) fills under the USGovt supervision. The money is not finding its way into the USEconomy for further circulation. The plague is insolvency, soaked by endless applications of tainted money from central bank fire hoses. The velocity of money has been falling for years, in reflection of an economy that is not turning over much at all. Think of a car missing its cylinders, spinning its gears, burning itself out, going nowhere. The above chart serves as pictorial evidence that the root cause of ruined money was the war. In the current decade, the wars are endless. America chose war over industry. A fuller explanation is offered in the September Hat Trick Letter.

Three eras are worth identifying in my view. The Vietnam War era and its aftermath saw huge expansion in money supply, huge nominal income growth, and huge increases in price inflation. The USFed did not interrupt the expanded USGovt debt from reaching Main Street, simply put. For consecutive years, the Consumer Price Index rose over 10%, which led to big worker pay hikes. The result was that US corporations began to send industry overseas. It started with Intel going to the Pacific Rim. The money velocity fell, as income fell on a real basis. The climax event was China being given the Most Favored Nation status in 1999, which released the gates for foreign direct investment. China made a deal with the Wall Street devils that has yet to gain publicity. The hidden motive was for Wall Street firms to borrow the Chinese gold hoard from the Chairman Mao era, so as to continue the great gold suppression game that has bankrupted the Untied States and betrayed the nation. US and London bankers skimmed and stole the gold.

HOUSE OF SAUD STARTS TO UNRAVEL

More loyal Jackass wannabee followers will recall a story (repeated often) that on the Easter Sunday weekend of April 2010, a secret gathering of over 200 Arab billionaires convened in Abu Dhabi. They arrived in unmarked jets. My source was one of only two or three white faces in the crowd, invited by his clients. One result of the meeting was an accord struck between the Persian Gulf oil producers, led by the Saudis, to work toward a pact with Russia and China as protector of the gulf in return for financial cooperation, economic construction, and forward progress. The implicit message was that the Untied States would be phased out in the protectorate. In the balance would lie the Petro-Dollar defacto standard as victim. Events continue to this day in movement toward that end.

However, since the Syrian uprising, a new lethal element has entered the mix. Account will be kept brief, since so volatile and controversial. Just some bare notes. The Assad family in Syria has suffered some assassinations. Apparently, the Saudis had a hand in the killings. HezBollah has vowed retaliation. Their ties to Iran might be longstanding, but perhaps are exaggerated. My view is their home is in Lebanon. In August, Prince Bandar was assassinated. He was the Saudi head of security, and long-time ally to the USGovt. The Saudi regime is concealing his death, with outdated photos and false statements. They are working toward a transition. The House of Saud has been unstable from threats to the south in Yemen. It is unstable from internal threats tied to the fundamentalists. Although cooperation and respect has been shown between Riyadh and Tehran, the Bandar hit has created an entirely new environment. The Saudi regime with high likelihood is in its final months.

More importantly, the Petro-Dollar is losing its all important Saudi leg. Implications are vast. The US public takes the USDollar for granted, with almost no concept of FOREX exchange rates. If the House of Saud falls, when it falls, the impact crater will include the entire waistline of the USEconomy and its financial dog tail that wags it. The USGovt and its banker handlers have relied heavily upon the Petro-Dollar in general, and on the Saudis in particular, ever since Henry Kissinger signed an accord that governs over the grand surplus recycling back in the 1973-1974 era. Watch the Saudis convert USTBonds to Gold, then bug out of the desert to their new mansions in Southern Spain.

CHINA AS INTERMEDIARY AGAINST PETRO-DOLLAR

Reports swirl that China is attempting to act as intermediary in global oil transactions, for Yuan currency settlement. The rebellion globally is picking up momentum against the USDollar. The Petro-Dollar defacto standard is slowly unraveling. The denizens of the Untied States have no idea the ravaging impact of a lost global reserve currency. It will unleash price inflation when the USFed central bank is letting loose the monetary flood gates. This declaration is an act of financial war directed at the US by China. To fortify the rear flank, Russia has promised to meet all requests for crude oil made by China, with settlement in Yuan and Ruble currencies. Take the pledge as a protection from any sudden USGovt threat or retaliation. The Russia-China Axis is forming more clearly in opposition to the USDollar, the Syndicate behind it, the many Embassies that offer sanctuary for espionage, and the global rules that enforce its hegemony.

Crude oil payments are the critical core of global trade. The rest of global trade will follow in non-USDollar payments, all in time. Entire banking systems will gradually make a transition away from the USTreasury Bond in its reserves managements. The banking practices will follow the trade payment structures, as it should be. The profound effect on the USEconomy will be clear, as blame is shifted as usual to external factors, even to extremists. In reality the US is up against vengeful Cossacks and the angry Mongol Horde. The entire world is moving against the USDollar, seen increasingly as a toxic agent within their internal domestic systems. They see the lack of solutions, the spreading bank insolvency, the accelerated debasement of currency, and the corrupted grants of multi-$trillion banker grants. They are taking action in response. They are following the Chinese lead with the Russians acting as a quasi-Rasputin.

Gerald Celente reported in early September, “On September the 6th of 2012, China officially announced that any country in the world that wishes to sell crude oil using its currency the Renminbi instead of the USDollar can do so. The following day September the 7th, Russia announced that the nation will sell China all the crude oil they need, no limitations whatsoever. They will not use the USDollar for their trade.” The claim by Celente is far reaching. The USDollar is dying a slow death. Its antagonists do not wish to speed the death process too rapidly, for fear of quickening the ravage to their own nations. They also do not wish to invoke the wrath of the USGovt, which since 2003 has enforced the USDollar as global reserve currency via its war machinery.

What China is offering is an intermediary clearing house role to sidestep the Petro-Dollar, where crude oil payments can be made in the Chinese Yuan currency. This offer is a financial act of war against the Untied States currency, where China will backstop all transactions. It is a violent offer to disrupt the USDollar. Look to see if any Saudi oil sales are settled in Yuan currency as alternative, even the Euro currency as expedient. The superpowers are openly attempting to isolate the USDollar, the clear victim to be the USEconomy, the land of consumption excess. The move is a tacit push of the US into an isolated place where it can very easily slide into the Third World.

MEXICO CUTS A DEAL WITH CHINA FOR OIL

Mexico is in the process to make concrete a major deal to sell crude oil to China, but not in USDollar terms. The Chinese declaration of financial war against the Untied States has reached both the northern border in Canada and the southern border in Mexico. To be sure, the Canadian oil is not sold outside the USDollar. But other factors are hard at work. The bulk of Athabasca oil produced from the oil sands in Western Canada (Alberta) output is directed to China, by way of the Vancouver ports owned 100% by China. In fact, the Chinese influence is so strong in the beautiful city on the Pacific coast that it has earned the nickname of Hongkouver. Some shallow analysts attribute a wayward motive to the decision by the USGovt to abandon the Keystone Oil Pipeline several months ago. The more realistic hidden motive was to assure the Western Canada oil output would be sent to China. The cutoff to the pipeline came with spurious official accounts, all quite humorous to the informed. The pipeline was abandoned to accommodate China, owner of significant USTBond holdings. They are the largest USGovt creditor. The tipping point was passed many years ago when the majority of USGovt debt was held by foreign creditors. Its consequence is vivid and unmistakable. The Untied States is converted into a colony, a killing field, as pathways are fashioned for entry into the Third World.

China through closed door negotiations is sealing deals to purchase Mexican crude oil without using USDollars as its trading currency. The Yuan is slowly moving toward global reserve status, not by a summit meeting and signed accord, but rather by numerous bilateral deals. Consider the bilateral swap accords signed by China with partners in Brazil, Japan, and elsewhere. The list grows, and beyond oil trade. As it does, the net is cast over the USDollar in isolation. Officials claim meetings were held with the Mexican Govt and PEMEX, the state owned oil giant. They are in progress with a brokered secret deal to purchase crude oil using currency means other than the USDollar. Expect a public announcement soon by Chinese Govt and PEMEX firms. In the past decade, China has planted seeds in trade while ignoring politics with numerous major players in global trade. The USGovt prefers the heavy handed financial banking games, backed by the heavy handed military maneuvers, all part of the sickening Full Spectrum Dominance that has blossomed in ruin. The Chinese have responded with an archipelago of trade pacts, best viewed as a Full Spectrum Encirclement of the USDollar. It cannot be conquered. So their plan apparently is to isolate it, to starve it, to let it suffer the Weimar consequences of its own high pitched debasement, and to permit it to become a Third World currency by default.

Over the past ten years with new trade agreements China has invested $billions inside Mexico. China has helped the Mexican Govt create jobs and has financially supported investments in the privatization of ports and infrastructure throughout Mexico. As the movement toward privatization of large sectors of its economy continues, China is in line to benefit from additional investments inside Mexico. Since the 2009 global economic crisis, Mexico’s central bank has been quietly purchasing large quantities of gold. In fact, some of the recent boost in May for Mexico Central Bank gold holdings was gold purchased from Chinese sources. The gold sales belie a closer relationship building with Mexico on the southern US border. While the USGovt is occupied with the Mexican Govt on matters pertaining to gun running, to handling illegal immigrants, and to shielding vast narcotics sales, the Chinese are busily working on trade, with a gold foundation and crude oil blood system. Those are the stuff of a stable currency. Perhaps Mexican leaders are preparing for the imminent and unavoidable devaluation of the USDollar. In more practical terms, regard the movement as the collapse of the USDollar in a vast sea of liquidity, better identified as toxic fiat paper currency.

STRIKES HINDER GOLD OUTPUT

Not in sufficient focus is the radical impact on gold supply. The gold investment demand has been on a tear in recent months. A sinister effect has been realized from the vast QE bond monetization conducted by the USFed and its partners at the Euro Central Bank and the Bank of Japan. The effect is of rising food and energy costs. The impact is particularly hard felt in poorer areas of the world. The great majority of major gold and silver mines are located in the poorer nations. The labor strikes at mining facilities are as much based upon unsafe worker conditions as they are based upon a higher cost of living, centered on food costs. The workers need more to survive at home, as they provide more precious metal output that satisfies mining company production targets. The end result is lower output in pockets of South America such as Bolivia, but more importantly in South Africa. A whopping 39% of South African Gold production has been taken offline. The impact on global output will be seen in the next few quarters. The fast rising investment Gold demand will be met by a significant decline in Gold supply. Price pressures will force a much higher Gold price. But first comes the depletion of the COMEX, as its paper contract merchants continue to ply their trade. Their new specialty is stealing client accounts that stand ready for contract delivery. See MFGlobal and the JPMorgan thefts, all fully blessed by the tainted US Court system.

THIRD WORLD THREAT

The implications are vast. A lost Petro-Dollar standard would mean a grand shift in payment for oil transactions, the most important of all global trade. In the last 20 years, all has been turned upside down. A global phenomenon of a powerful nature has been at work since the Lehman Brother failure, the Fannie Mae adoption, and the AIG redemption in 2008. The entire world is losing trust in the USGovt and its financial institutions. Personal email exchanges cite a regular occurrence of US corporations not receiving return phone calls, and of open disrespect in Europe for American businesses. The debt rating agencies do their part in upholding the paper fortress walls, but they must over time deliver the downgrades. An important catalyst took place when the USGovt imposed trade sanctions against Iran. The result was angering US trade partners more than anything else, well, except for causing severe price inflation on the Iranian Economy. The movement in reaction has been swift by global trade partners, in establishing bypass routes for payment systems between nations. The workarounds against the SWIFT bank payment system have been remarkable. The climax will be the non-US$ payment system to emerge, with no centralization, complete independence, relying upon non-bank devices like mobile communications.

Another bypass event just hit the news wires. The Swiss-based Vitol is the latest oil firm bypassing the USGovt sanctions against Iran. They exploit a legal loophole in Swiss law, since the nation did not abide by the US-led sanctions, a notable resistance. Vitol boasts being the largest oil trader in the world. It buys and sells Iranian fuel oil, undermining Western efforts to choke the flow of flow of money to Tehran. In August alone, Vitol purchased two million barrels of fuel oil, used for power generation, from Iran and offered it to Chinese traders. The Vitol firm is not obliged to comply with a ban imposed in July by the European Union on trading oil. The tale of the cargo for Iranian fuel oil involves tanker tracking systems being switched off, frequent ship-to-ship transfers, and the blending of the oil with fuel from another source to alter the physical specification of the cargo. How crafty.

Global finical markets are acutely aware that oil trade outside the USDollar will rapidly destabilize the USDollar even further. With Russia and China having entered into an agreement to trade crude oil using their own currencies, the Mexican news of a Chinese oil deal has potentially devastating consequences. The eventual effect is that the USDollar will lose its prestigious reserve currency status. In the process, it will lose value gradually. My view is that the defense of the USDollar will lead to all major fiat paper currencies to implode, step by step, taking down the banking systems and economies of major nations. The prevailing currency will be what is used in global trade. All signposts point to Gold. A new global trade system is ready to be installed, based upon gold in special notes. The transition awaits further collapse of the current currency regimes, the further collapse of the sovereign bonds, and the further collapse of the banking systems, which all assures the collapse of the global economy.

The QE fallout by the desperate central bankers has been seen in fast rising demand for gold bars and gold coins. The phenomenon is primarily in the Eastern world but also in Europe. The American crowds remain transfixed on their dwindling paper assets locked in stock accounts, many not easily altered due to tax rules. They remain transfixed on home equity losses, in a mindnumbing effect that the Jackass described in years 2005 and 2006 and 2007. The American Home was not a hard asset at all. Since its value was largely determined by the mortgage loans and mortgage bonds, together with the vast network of devices like MERS among bankers and the hidden caches with slush funds at Fannie Mae. The entire criminal history of Fannie Mae has been safely buried under the USGovt roof. Ten years ago, people would laugh at comments that the largest and most powerful criminal syndicate was operating under the USGovt label. They do not laugh anymore, including my own family. They protect themselves with the real deal currency for storing life savings, GOLD. They will soon enjoy the benefits, safety, and efficiency of trade systems based upon GOLD also.

GOLD PRICE READY TO EXPLODE UPWARD

Gold market instability could be a tremor before a burst upward. The same appears true for the silver market. On a single day last week, JPMorgan dumped two years worth of US silver mine output in the form of paper silver supply on the COMEX market. The corruption went largely unnoticed. They defend the important $36 level. Volatility has returned to the Gold price. The current pause could be interrupted very quickly with a strong upward leg in both precious metals. The announced QE3 bond monetization program cannot be sterilized any longer. A powerful USDollar decline is imminent. As the USDollar reserve status is threatened, the gold price will zoom upward. Notice the occasional propaganda and basic lies regarding sterilization of new bond purchases. The USFed is fast running out of short-term USTBills to fund long-term USTBonds in the Quantitative Easing shell game that is more reminiscent of the Weimar Republic.

Fortunately for the USFed paper mache artisans, the American public is a lousy student of history and especially the concept of money, even the nature of economics and capitalism. The dumbing down of the public has reached a critical mass, but hope lies in the Gold sanctuary if people have any savings left after the busted bubbles and the parade of banners to join. They joined asset bubble parades instead of lines to enter factories. Across the world, an army of Gold soldiers is awakening after a 16-month slumber. They react to the stark awareness that QE not only ruins money, but its purpose is to redeem the toxic bonds owned by banks. The QE programs are not intended to bolster, stimulate, or fortify the economy. In fact, they render the USEconomy incredibly deep harm by raising the cost structure, reducing profit margins, wrecking business segments, and killing jobs. But the hard sell sure is fun to watch, as the central bankers squirm. The Jackson Hole conference was a gathering of buffoons without the clown suits. The public must seek refuge in Gold & Silver or face personal ruin.

The USFed mandate on inflation moves next to an absurd mandate on jobs. They will fail on both. Inflation will be permitted by the USFed central bank in order to produce jobs, in the most heretic and misguided folly ever seen in modern times. The 0% rate will stick until economic growth arrives, but it will never arrive, due to the damaging effect from the 0% rate itself. The dog’s tail is eating the entire dog in a perverse reverse effect of modern alchemy. The USFed ignores all Weimar chapters, after having rewritten the Great Depression chapter. The nation emerged from the depression only due to the Gold Standard and ample industry. The nation has neither today, and will therefore plunge into a systemic failure. The Third World awaits. Watch for the pressure points of tens of thousands of gasoline stations and food supermarkets, certain to erupt as the frustration and disorder spread.

The response in the Gold price has smelled a QE3 in bond monetization since the summer months. The difference is that this time, unlike the deceptive Operation Twist, the bond purchases will be unsterilized with new money injected into the system. That is a Golden supercharge to recognizable inflation. A major intermediate reversal is underway, with a 1570 base, a 1780 top, which indicates a 1990 Gold price target. The kicker in the market is the broad mining industry strike, which extends from South Africa to South America. Gold supply will be inhibited. Expect some regrouping with a pause at the 1720-1770 area, as a critical consolidation takes place before a breakout that captures the world’s attention. The right side handle is being formed, carved out. During this time, the doubters are tossed off the train. The new believers join. A recycle process is underway, as the monetary dumb are unloaded and new intelligent soldiers join the ranks. The renewal will permit a run over $2000. Once over 1800 price level, the 1900 resistance will be overrun like a paper fortress by angry mobs bearing torches and sticks. But in the meantime, a big battle is being waged at the right side handle, a consolidation before breakout.

THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.

From subscribers and readers:

At least 30 recently on correct forecasts regarding the bailout parade, numerous nationalization deals such as for Fannie Mae and the grand Mortgage Rescue.

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“Your monthly reports are at the top of my list for importance, nothing else coming close. You are the one resource I can NOT do without! You have helped me and countless others to successfully navigate the most treacherous times one can possibly imagine. Making life altering decisions during tough times means you must have all the information available with direct bearing on the decision. Jim Willie gives you ALL the needed information, a highly critical difference. You cant afford to be wrong in today’s world.”

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“You have warned over and over since Fall of 2009 that Europe would come apart and it sure looks like exactly that is happening. You have warned continually about the COMEX and now the entire CME seems to be unraveling. You must receive a lot of criticism regarding your analysis, trashing the man, without debate. Your work is appreciated. I do not care how politically incorrect or how impolite your style is. What is happening to our economy and financial system is neither politically correct or polite.”

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The money is not finding its way into the USEconomy for further circulation. The plague is insolvency, soaked by endless applications of tainted money from central bank fire hoses.

Jim Willie: Death Knells for the USDollar

[SilverDoctors]

Written by testudoetlepus

September 27th, 2012 at 1:40 pm

Posted in Change,Economic Collapse,End of Empire,Flash Crashes,Fraud,Inflation or Deflation,Silver

Tagged with gold, GoldenJackass, Jim Willie, silver, The Hat Trick Letter, US Dollar

The End of The Dollar Era

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GEAB

Issue N ° 63 is Available!

Global Systemic Crisis – The Five Devastating Storms In Summer 2012 At The Heart of The World Geopolitical Swing
- Public announcement GEAB No. 63 (March 15, 2012) -

In its January 2012 issue, LEAP/E2020 signalled the current year as that of the world geopolitical swing. The first quarter 2012 has, to a large extent, started to establish that an era was in fact coming to an end with, in particular, the Russian and Chinese decisions: to block any Western attempt at interference in Syria1:their stated desire, associated with Indiaespecially, to ignore or circumvent the oil embargo fixed by the United States and the EU against Iran2;the increasing tensions in relations between the United States and Israel3the acceleration of the policy of diversification out of the US Dollar led by China4and the BRICS (but also by Japan and Euroland5the premise of change in Euroland’s political strategy at the time of the French electoral campaign6and the intensification of actions and statements fueling the rising strength of trans-bloc commercial wars7In March 2012, we are far from March 2011 and the “hustling” of the UN by the USA/UK/France trio to attack Libya.

March 2011 was still the unipolar world of after 1989. March 2012 is already the post-crisis multipolar world hesitating between confrontations and partnerships.

Thus, as anticipated by LEAP/E2020, the handling of the “Greek crisis”9has quickly caused the disappearance of the so-called “Euro crisis” from the media headlines and market participants’ concerns. The mass hysteria maintained by the Anglo-Saxon media and the Eurosceptics during the second half of 2011 on this subject hasn’t lasted long: Euroland is increasingly asserting itself as a sustainable structure;10once again the Euro is in vogue in the markets and for emerging countries’ central banks,11the Eurogroup/ECB functioned effectively and private investors will have to accept a haircut of up to 70% on their Greek assets, thus confirming LEAP/E2020’s 2010 anticipation which then spoke of a 50% haircut when almost no-one imagined such a possibility without a “catastrophe” signalling the end of the Euro12. Ultimately, markets always yield to the law of the strongest… and the fear of losing more, whatever the students of ultra-liberalism may say. It’s a lesson which political leaders will jealously guard because there are other haircuts to come, in the United States, in Japan and in Europe. We will come back to this in this GEAB issue.

Central bank held sovereign debt (as a % of GDP) (2002-2012) – United States (in violet), United Kingdom (in grey), Euroland (in violet dots), Japan (in grey dots) – Sources: Datastream / central banks / Natixis, 02/2012

Contemporaneously, and that contributes to explaining the gentle euphoria which feeds the markets and many economic and financial players these last few months, due to it being an electoral year and from the need to make a good impression at all costs against a Eurozone which isn’t collapsing13, the US financial media have given us a remake of the “green shoots” story from the beginning of 2010 and the “recovery” 14 from the beginning of 2011 in order to paint a picture of an America “exiting the crisis”. However, the United States at this beginning of 2012 really resembles a depressing scene painted by Edward Hopper15 and not a glowing 60s chromo in the style of Andy Warhol. Just as in 2010 and 2011, the spring will for that matter be the moment of the return to the real world.

In this context all the more dangerous, as all the players are lulled by a dangerous illusion of a “return to normal”, in particular of the “restarting of the US economic engine” 16, LEAP/E2020 considers it necessary to alert its readers to the fact that summer 2012 will see the shattering of this illusion. In fact, we anticipate that summer 2012 will see the crystallization of five devastating shocks which are at the heart of the current process of world geopolitical swing. The black clouds which have been accumulating since the beginning of the crisis around economic and financial issues have now been joined by the dark clouds of geopolitical confrontation.

Therefore, in LEAP/E2020’s view, five devastating storms will mark the summer of 2012 and thus accelerate the process of world geopolitical swing:

. US relapse into recession against the background of European stagnation and BRICS slowdown
. dead end for the central banks and interest rate increases
. storm on the foreign exchange and Western sovereign debt markets
. Iran, the war « too far »
. new crash in the markets and financial institutions.

In this GEAB issue our team analyzes these five shocks of summer 2012 in detail.

At the same time, in partnership with the Anticipolis Editions, we are publishing a new excerpt from the book by Sylvain Périfel and Philippe Schneider, “2015 – The great fall of Western real estate”, at the time of the French version going on sale; dealing with the prospects for the American residential real estate market.

Lastly, we give our monthly recommendations targeting gold, currencies, financial assets, stock exchanges and commodities in this number.

Read the rest of this entry »

Written by testudoetlepus

March 21st, 2012 at 2:19 pm

Posted in Change,Economic Collapse,End of Empire,Inflation or Deflation

Tagged with Anglo-Saxon media, BRICS, Central Banks, China, currencies, Euro, Europe, GEAB, gold, Iran, Israel, Japan, LEAP/E2020, oil, Russia, silver, sovereign debt, Syria, United States, US Dollar

Dollar Is Facing An Extinction Event

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Ty Andros of Traderview.com, a speaker at FreedomFest’s Global Financial Summit, believes the economic system and the Dollar, as it presently exists, are facing an extinction event. Currency shifts have taken place many times before and will continue to occur; they simply are part of human existence. No matter how hard we try, we cannot change this reality.

The solution is to understand where you are in the cycle and invest your resources accordingly. Precious metals are certainly an insurance policy against the resulting chaos, and Ty believes Silver is your greatest ally in protecting and building wealth. As a believer in the Austrian School of Economists, Ty says that the current crisis was long ago foreseen, and it was unavoidable. Better to be prepared than to be surprised.

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Ty Andros Says the Dollar is Facing an Extinction Event

[TOTALINVESTOR]

Written by testudoetlepus

February 6th, 2012 at 4:54 pm

Posted in Change,Economic Collapse,End of Empire

Tagged with currency, gold, silver, Ty Andros, US Dollar

Corruption in The Fascist Business Model

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So, Benito . . . Are You Enjoying Fascism?

by Jim Willie

Few can define fascism. Many cannot recognize it. History provides shocking stories of its past episodes. But its root structural feature is the tight relationship between the state and large corporations of a nation, which permit enormous fraud and lead to grand inefficiency, even while aggression and war accompany its handiwork in an ugly fabric weave. Nowhere is the bond more scummy and corrupt than with the banking industry, not in general but in Wall Street where defense of the USDollar has come. That defense was contracted from the USGovt to Wall Street, whose ties developed into a vast network of corruption. That cozy relationship led to the gutting of Fort Knox and its gold bullion in the 1990 decade of so-called prosperity. The 0% gold leasing resulted in vast speculation schemes, private multi-$trillion profit, and absent collateral for the USDollar itself. The other cozy connection is with the defense contractors, where war generates colossal cash flows, some of which result in kickbacks to Congress. The Fascist Business Model is a cord to strangle the neck of a nation. The rage of nationalism, the eradication of liberties, the pursuit of conjured enemies, the constant sense of alert, the attack on enemies with alienation of allies, all tend to effectively conceal the theft and corruption. The other tell-tale infection is of inefficiency, where the most insolvent lead in policymaking, where the most connected are not the best in class, where the most corrupt are shielded by cronies in watchdog posts. These ordinary teams have dominated, not from capability according to the marketplace forces or Darwinism, but from connection to the power center.

The United States of America had been the beacon of capitalism and freedom. In the last 20 years, it has proven to be the epitome of anti-capitalism, shown mortal wounds from the NeoCon assault on liberty and the more recent collectivism assault typical of Soviet regimes. The global revolt against the USDollar is not just an organized movement to protect against a reserve currency suffering declining value. It is a movement also intended to avoid a climax in corruption, the likes of which modern history has never witnessed. The bright light from the beacon has attracted a deadly swarm of moths, which tragically have enveloped the light completely, masked its wondrous effect, and disguised the vile cobwebs of fascism. The historians all too well are aware that the final chapter of a capitalist nation is embedded in fascism, as its institutions suffer from profound corruption, as inefficiency depletes the wealth structures, as the system breaks down, as the rule of law vanishes.

CORRUPT BIG BANKS

One must begin with the banks, whose leaders have formulated the plan at work. Perhaps their actions began in the removal of Kennedy in 1963, an obstacle in their path. Their plan was revealed more in the open with the abandonment of the Bretton Woods Accord, the basis of the gold standard. The most telling mark has been the Goldman Sachs grip on the USDept Treasury. The Rubin experience at the London gold desk was crucial. Goldman Sachs is a key Wall Street funnel toward the USCongress dole, the Financial Regulatory Bill being the backfire in reform that granted the bankers more powers. See the power to dissolve any financial firm that threatens the power structure, and see the protective cover given to firms deemed financially important. The TARP Fund congame was a clever ruse, a $700 billion segment of the congame. Hidden from view was the $138 billion reload of JPMorgan, given cover to handle Lehman private accounts by the Bankruptcy court that convened at 6am on a Saturday morning in Manhattan. The climax badge of dishonor and fraud was the phony bank accounting rules permitted by the Financial Accounting Standards Board, and blessed into law by the USCongress. The big banks in control of the USGovt were all hopelessly insolvent, but covered. Their quarterly earnings reports read like an Orwell chapter, riddled with Credit Value Adjustments and raids from the Loan Loss Reserves. Once in the news back in 2009, but not forgotten, the failure to deliver on USTreasury Bonds never went away, only the publicity and spotlight. Over $1 trillion remains a regular feature for the practice. Wall Street firms indeed found a source of income to replace their absent stock IPO and corporate bond issuance business. Sell USTBonds, take in income, and no bond delivery. What a business! The Facebook IPO is the exception, not the rule.

CORRUPT CENTRAL BANK

A debate brews as to which body is the actual corner office at the helm of the central bank in charge, the New York Fed or the Federal Reserve itself. Who cares? They operate in secrecy and with impunity, according to their agenda. The FinReg Bill did shed some light on this control box, as the USFed $16 trillion so-called loans plus the $8 trillion additional loans were revealed in a string of unending grants at 0%. To be sure, the borrowers could purchase global assets in preparation for the next chapter. Two of their most important ongoing projects are the Exchange Stabilization Fund and the Working Group for Financial Markets. The ESFund is charged with defense of the USDollar, but its actual project load extends far and wide in interpreting what defense is essential. Their reach includes the FOREX currency market, the sovereign bond markets, the Gold market, the crude oil market, the S&P500 market, and much more. Entire books can be written about the ESF history, a cross between an adventure novel and a spy novel. The other group is more aptly named the Plunge Protection Team for its regular and frequent rescues at 10am and 3pm when the stock market reacts to the endless string of bad economic news, all deemed better than expected. The mantras focused on confidence and volatility obscure the underlying corporate insolvency, fraudulent accounting, and pursuit of lower valuations. The spy novel aspect is furthered by the global financial bodies. The Intl Monetary Fund and World Bank are commonly filled with non-banker agents operating with agendas to obtain financial information in foreign lands. They are routinely used as weapons to maintain dominance. The resentment overseas is huge.

CORRUPT REGULATORS

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Written by testudoetlepus

February 3rd, 2012 at 2:45 am

David Wilcock, Part II: History Lesson

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The Trillion-Dollar Lawsuit That Could End Financial Tyranny, Part II

David’s life has been threatened to tell you this story . . . . so we are rushing it out to insure his safety.

This is the big one . . . . over two million tons of gold secretly confiscated by the Federal Reserve to create “bubble money”, and the lawsuit that could bring the whole global conspiracy crashing down.

Click Here For Part One

Written by David Wilcock, Divine Cosmos, Sunday, 18 December 2011

THANK YOU ALL FOR YOUR SUPPORT

First of all, I want to thank you for giving this your serious consideration. Nothing I’ve ever written before has gotten me a death threat — and though I consider myself a strong person, I was quite disturbed by it.

I sprung into immediate action to insure this electrifying story went as far as wide as possible — in case anything happened to me.

We now have multiple, powerful insider groups pledging to protect me — and the story has spread so quickly through the Internet that I believe its publicity is its greatest protection.

As I prepare to post this section, we’ve already had over 400,000 hits, 1000 written comments and 21,000 Facebook Likes on Part One in less than six days.

Tens of thousands of people are writing about this on their own websites, and the growth rate is at least geometric, if not logarithmic at this point.

HERE’S WHAT HAPPENED

It was 3:30 PM on Wednesday, December 14th, 2011 when I found out I might be tortured to death for writing “The Trillion-Dollar Lawsuit That Could End Financial Tyranny.”

I was told I should get Part Two out that night for my own protection, as this was the most sensitive, jealously-guarded secret of all — and tomorrow may be too late.

I moved very quickly to protect myself once this call came in, immediately publishing “death threat” updates to my article, which was already extremely popular.

Kerry Cassidy suddenly called me and told me she was going on the radio in 20 minutes and recommended I join her. I ran into the shower and started the show immediately after I dried off in a hurry.

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Written by testudoetlepus

December 20th, 2011 at 12:44 pm

Posted in Change,Economic Collapse,End of Empire,Fraud

Tagged with Benjamin Fulford, David Wilcock, death threats, fiat currencies, gold, Kerry Cassidy, Neil Keenan, trillion dollar lawsuit, US Dollar

A Capitulating System

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What we are witnessing is the death throes of the financial system. It is in full capitulation. There is a big move coming up, and everyone is going to have to pick a side, because there will be no middle ground.

The strict deflationist camp says that all prices are going down, and capital will move into USTs and dollars. This is the typical scenario concerning deflation for the last umpteen years.

The strict inflationists point to the money printing of the central banks, and say prices are going to rise. Inflation will be the Fed’s main concern and they will keep their target come hell or high water.

Stagflation is also a worry. Here, the concern is that prices will rise, but that wages will not keep pace. This has been the scenario so far, albeit without the proper inflation numbers. Using oil in the CPI, inflation is much higher than the US government is saying.

All of these scenarios are likely, and in fact, all will occur. That is why the system is dying; it is pricing all of this in at once. Once the system realizes the dire straights, it will finally roll over. Anything could happen to equities, but concerning the dollar and USTs, I don’t think they are the safe haven the once were. Maybe they do not go into hyperflation, but they should not be the only safe play. Precious metals will keep that hedge.

With oil production peaking, oil will not fall much, and this too will keep a lid on the dollar, since they trade inversely. This scenario is bullish for silver, as silver trades with oil, and with gold.

In all likelihood, the system is set to fail, and I am not sure how much longer it can be propped up. What matters is what new policies arise. If money printing continues at its breakneck pace, inflation will take the lead. If not, the massive deflation hitting real estate etc could take down equities. I would also not be surprised if stagflation ruled for a few months while politicians and policy makers messed around.

A Capitulating System

[Same As It Ever Was]

Written by testudoetlepus

September 27th, 2011 at 3:54 pm

Posted in Change,Economic Collapse,End of Empire,Fraud,Inflation or Deflation

Tagged with capitulation, deflation, inflation, their system is dying, US Dollar, US Treasuries

Billboard Signals of Collapse

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by Dr. Jim Willie

Wow!! The billboard signals of extreme crisis are overwhelming. Three years of near 0% with no recovery. A full year of ample USTreasury and mortgage bond monetization with no recovery. Tons of cash aid deliveries to the big US banks with no recovery. Some key corporate nationalizations with no recovery. Oodles of errant stimulus programs with no recovery. Some important misdirection in home loan aid initiatives with no recovery. The US Federal Reserve admits it can do nothing more as a recovery remains elusive. The USGovt is paralyzed by disguised fascist warmongers opposed by disguised marxist collectivists, but intent on maintaining the status quo among bank fraud. An approved accounting fraud directive is kept in place to present a picture of bank solvency. Intermediate credit markets have come to a standstill. The US stock market is in tatters. The USTreasury Bond market is the only conventional rally at work. And with all these programs, developments, and events, the USEconomy moves toward a recession with relentless determination and purpose, In today’s age of lying about price inflation by at least 5%, that means the recession is about to turn into a Minus 5% Recession after never exiting the recession recognized in 2009. The billboard messages are dire, ugly, dreadful, dangerous, and full of destruction, typical of systemic failure. Too bad the Keynesian textbooks do not have a chapter on banking system insolvency, or one quarter of the households living in negative equity, or central bank toxic paper pits, or global currency war, or confiscation of tyrant accounts. The ineffective monetary & fiscal policy has ushered in the nightmarish systemic failure. That is what is occurring.

MANY DIRE MARQUEE MESSAGES

Big US banks remain insolvent. The claim is greater financial health versus 2008, but only because they grade their own balance sheet assets and shove much toxic paper to the USFed. As credit engines, they sputter. As USTBond carry trade mechanics, they hum along. Their REO home inventory is strangling them. DEBT DOWNGRADES TO BANK OF AMERICA, WELLS FARGO, AND CITIGROUP HAVE COME FINALLY.

Central bankers finally see the futility of attempting to recapitalize the giant insolvent hollow trees called the big banks. The banks are losing capital faster than they can take in new capital, either from gifts by central banks (toxic bond redemption) or secondary stock issuance (long gone opportunity). BIG BANK RECAPITALIZATION RECOGNIZED AS FUTILE.

The US housing market is stuck in quicksand. Low mortgage rates mean nothing to home loan applicants who must pass very strict FICA tests. They mean nothing to home loan applicants who must refinance their loans or default, suffering under the weight of negative home equity. RESUMED HOME PRICE DECLINE IN THE LAST FEW MONTHS DESPITE FALLING MORTGAGE RATES.

The USFed enjoys falling long-term rates since their credit assets rise in value. That makes the central bank look less broken. They cannot send back the so-called Excess Reserves to the big banks (actually Loan Loss Reserves) since the central bank would look more wrecked. USFED BALANCE SHEET WORTH OVER MINUS $1.3 TRILLION.

The Shadow Banking system requires $1 trillion per year in replenishment, as the bone marrow rapidly vanishes within the US banks. Mortgage bonds and asset backed financial products lead the way in colossal erosion on their balance sheets. QE3 PROGRAM NEEDED JUST TO AID THE FALLING CAPITAL IN THE GREAT DE-LEVERAGE PROCESS.

USGovt budget process has turned into tragic comedy in a powerful stalemate. The emphasis has been on spending austerity and management of the debt limit. The reality is that the limit has been reached again, probably breached. The reality is that renewed spending for urgent economic stimulus will overwhelm any budget prudence. A WORSE $2 TRILLION USGOVT DEFICIT SET FOR NEXT YEAR.

The US leaders have squandered time, money, and political capital. They have missed the opportunity for reform and remedy. Devotion to bank redemptions and avoidance of liquidation have wasted money. Vacant vapid stimulus programs have wasted time. The nation has run out of time. Breakdown and panic have begun in earnest. The political arena has a closed door toward well conceived actions. THE POLTICAL ARENA AS GIGANTIC OBSTRUCTION TO THE USECONOMY, WITH MASSIVE DEFICITS ACTING LIKE CLOTS.

The central bank franchise system is being recognized for its failure, ineptitude, helplessness. The system is saturated with debt. The solution to treat the excess of debt is to add to the debt levels and to let loose the dogs of monetary hyper-inflation. CENTRAL BANKS SEEN AS PART OF THE PROBLEM, MAKING CONDITIONS WORSE.

A bank run has begun in Europe, with epicenter in France. The land of France belongs among the PIGS nations, since the big French banks are the primary broken shepherd creditors for the PIGS. They hold more than all the other nations combined almost in Greek debt. They own huge levels Italian debt. Siemens and Lloyds have abandoned France, yanking money out. A BANK RUN IN FRANCE GATHERS SPEED TO MAKE A CRATER IN EUROPEAN BANKING SYSTEM.

China had been gobbling up PIGS sovereign debt bought at discount. They took a truckload from Greece and Portugal, in return for consideration on key conversions of assets or gold bullion. They are in talks with Italy. But they have a different treatment for France, pulling out of the currency market forward and swap contracts in trading lines for the benefit of French banks. China is angry about the European Union decisions against a market economy. CHINA HAS BECOME A PLAYER IN EUROPEAN BANKING TO BE RECKONED WITH.

The Competing Currency War spreads like wildfire, still not properly recognized, seen as isolated actions by central banks. Nations like Brazil and Switzerland suffer from a rising currency, as their export trade is damaged on higher prices. Rate hikes backfire. Nations whose currencies are falling have seen an associated steep decline in business investment and seizures in the interbank lending. Rate cuts do not address insolvency. ALL NATIONS LOSE IN THE CURRENCY WAR.

Central bankers met in Poland to address the worsening chronic global financial crisis. They agreed on nothing except they despise US Treasury Secy Geithner. The European bankers believe the Financial Stability Fund for bailouts is adequate, a very wrong view. THE EURO BANKERS FEEL HELPLESS LIKE THEIR AMERICAN COUNTERPARTS.

Grandiose aid to PIIGS nations failed to halt their momentum into the pits. A ripe $360 billion in collective aid failed to put these broken nations on a proper footing off cloven hoofs. The aid was actually bank aid to the Central European and London bankers. The key is the Poison Pills forced down the PIIGS throats in the pigpen. Now comes a string of sovereign debt downgrades, extending to Italy. NO REMEDY TO THE PIIGS NATIONS SINCE THE ENTIRE AID PROCESS IS MISDIRECTED.

The USFed does not comprehend the principles of capitalism. They believe that the USEconomy is driven by disposable cash in consumer hands, and by stock market investment trickle down. Economists and banking officials are ignoramuses one and all. The reliance upon Panhandle Doctrine for consumers and Parasite Doctrine for banks has killed the nation. THE UNITED STATES LOST ALL CONCEPT OF CAPITAL FORMATION.

The deep acceptance and tolerance of constant war and preoccupation with security has led to $2.5 trillion in squandered war costs and $600 billion in squandered security agency costs. The United States embrace of Fascism has killed the nation. HALF THE USGOVT DEBT FROM WAR, HALF THE USGOVT DEBT FOREIGN OWNED, AN ENTERPRISE DIRECTED AT DESTRUCTION.

The USDollar is losing its secure status of global reserve. The Chinese Yuan is expanding in bilateral trade accords and supporting currency swap facilities. The London bankers aid China in creating viable off-shore Yuan trading centers. Times are really bad when even Nigeria diversifies away from US$-based assets. THE CHINESE YUAN TO BE CONVERTIBLE IN A COUPLE YEARS AHEAD OF SCHEDULE, A GREAT CHALLENGE TO THE USDOLLAR.

Raids on foreign national accounts continue unabated. The funds in Egypt were taken ($60 billion) as London offered sanctuary, while Mubarek faces a bizarre court procedure for murder and theft. The funds in Libya were frozen ($90 billion) as the US, London, and Europe did confiscations through freeze, but give assurance that it will be returned when the stated 348 requirements are met, as in never. US & ANGLO BANKS SO DESPERATE FOR CASH THAT THEY TAKE IT FROM DESPOTS, AS NATIONS ARE DISRUPTED AND THE FIRE OF WAR IS LIT.

The entire system from numerous different corners attempts to translate the list of ailments into simple terms of confidence and volatility. The actual watchwords are insolvency and deterioration, with momentum gathering toward systemic collapse. The implication is that the monetary system is breaking down. THE CRITICAL CATCH PHRASE IS CONFIDENCE, THE MAIN REQUIREMENT TO A FIAT PAPER BASED MONETARY SYSTEM.

The interconnection of financial firms extends within continents and across the vast oceans to render them tied to the same global fate. If one big bank fails, or one nation fails, then the contagion will be rapid. GREECE PUSHED THE WESTERN BANKS TO THE EDGE, BUT ITALY AND FRANCE PUSH THEM OVER THE EDGE.

Attention has gathered on the corrupted accounting of the popular but tainted exchange traded Gold & Silver funds. The gold inventory is under scrutiny for usage in COMEX deliveries, enabled by questionable shorts to the GLD and SLV shares by its own custodians. The Bar Lists are regularly seen as erroneous and suspicious. THE BIGGEST GOLD & SILVER FUNDS ON THE DEFENSIVE, SOON TO FACE EITHER MASS EXITS OR HEAVY DISCOUNTS TO THE PRECIOUS METAL SPOT PRICES.

The central banks of Shanghai Coop Org (SCO) member states, observer states, and dialogue partners are almost all purchasing gold, overtly or covertly. Or else they are demanding the return of their gold bullion from the US & London centers. The latest demand was from Chavez of Venezuela. Russia is accumulating gold, shutting off its export. China is accumulating gold, making citizen ownership easier. SCO LEADERS IN RUSSIA & CHINA ORCHESTRATE A POLICY TO ACCUMULATE GOLD AND PRESSURE THE WEST.

The rally to ruin is in the USTreasury Bond market. Despite the downgrade slapped on the USGovt debt by Standard & Poors, the long-term bond yield has fallen well below the benchmark 2.0% level. It is under 1.8% today. The official government bond market is crowding out the business credit market. The end of the road is around 1.5%, at which point little if any profit potential will be perceived. The role of Interest Rate Swaps is critical, but not well understood to start a phony process that the public joins. The machete slices doled out to the saving community in puny interest yield is harsh and cruel. Gold will be seen as taking in diverted profits from USTreasury Bond proceeds. END OF USTREASURY CARRY TRADE IS NEAR, AS BIG BANKS TO BE FORCED TO FIND ANOTHER EASY MONEY RIGGED TABLE.

ENDURING GOLD CONSOLIDATION

The uptrend in the Gold chart is intact. A massive breakout is in a period of consolidation since August. Expect more USFed monetization purchase of USTreasury Bonds, a process that has not stopped. The main emphasis of the USFed and QE discussion is simple. They continue the debt monetization but have decided not to talk about it anymore, in an end to transparency. Expect more USGovt stimulus, as austerity is shoved aside. Expect $2 trillion in USGovt deficits next year, as revenues are on the decline and urgent new stimulus programs will be eventually passed. Gold rises from the ruin of the monetary system and elimination of all safe havens. People should not be discouraged by the relatively minor selloffs in Gold & Silver. The gold price is still at or above the uptrend line even after the minor panic on Thursday. Even at $1740, a hefty 12% gain in gold asset appreciation has been seen since the June $1550 price, for only one quarter in time. What a rout! What a distortion! What a joke! Climb aboard! When the storms pass and need for bank recapitalization occurs, the need for economic stimulus occurs, the need for more sovereign bond redemption occurs, the need for more debt monetization (new & rollover) occurs, the Gold price will fly past the $2000 mark.

Memories are indeed very poor and fleeting. The market slammed the Gold price in early May back down to $1500 during ambushes, yet in only four months new highs over $1900 were registered. History will repeat itself, but without the weak hands on the wagon train. They never learn, and neither do the nitwit Deflation Knuckleheads. They are consistently half blind. They were overrun by the gold train this summer, but maintain their arrogant erroneous views. Prepare for a massive Gold rally when the recapitalization, stimulus, redemption, and monetization comes forth in a very public manner. During the collapse underway, Gold & Silver will be among the very few assets standing. The USTreasurys eventually will be wanted by nobody except the USFed central bank. Their bid will be alone, leading to a USDollar symbolic of the failed monetary system. The USTBond will be in retreat from the 1.5% low point in yield, as foreign creditors will finally jump off the asset bubble zeppelin before it lights up in flames.

Few people know the story behind the Hindenburg. The United States denied supply of helium to Germany in a trade war, which resulted in the high risk usage of hydrogen. In parallel, foreign creditors will deny legitimate funding to the USTreasury Bond market, a process well along. The USGovt in turn has resorted to the high risk usage of direct monetary inflation, in the perverse debt monetization window. The investment community wants even more of it (hydrogen). History will repeat itself. Who could ever forget the New York Post headline after the death of Leonid Brezhnev during the Cold War? REDS BREZH DEAD! The next headlines could read: YANKS JIG UP!!

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Jim Willie CB, editor of the “HAT TRICK LETTER”

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Billboard Signals of Collapse

[The Daily Gold]

Written by testudoetlepus

September 23rd, 2011 at 2:29 pm

License To Debase USDollar Further

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by Jim Willie

The US Federal Reserve has no monetary options whatsoever. They have been backed into the corner since 2007. It was coerced to reduce interest rates as the subprime mortgage crisis morphed into an absolute bond crisis, as the Jackass loudly stated during that fateful summer. TheUSbank leaders claimed it was contained. It was not. The USFed was backed into the corner in 2009, unable to raise interest rates from near 0% (the Zero Interest Rate Policy disease) and put into effect its propaganda theme of an Exit Strategy. TheUSbank leaders knew the longest period of time for the Fed Funds rate to stick at 0% was nine months, ensuring a future disaster. They saw it. They claimed a move toward normalcy. It did not come. The Jackass called them liars with a message of deception to manage the USTreasury Bond and stock market. They did not hike rates, as their bluff was called. The USFed looked weak as a result. They began to shed thick layers of prestige. The USFed was backed into the corner in 2010, unwilling to use printed money to monetize USTBonds, giving birth to the second dreaded Quantitative Easing disease. They did anyway. So the ZIRP & QE twin scourges became part of the landscape of ruin. The USFed denied they would embark on QE. The Jackass called them liars with a message of deception. They did embark on QE, then QE Lite, then QE2, all replete with denials. The USFed has lost all its prestige, all its credibility, and all its respect for economic analysis. They are actually a central office for the Syndicate. They are the focal point of the failure of the central bank franchise model.

The unfolding drama on Capitol Hill with the USGovt changed the entire picture, thus putting a toxic icing atop a hemlock pie with arsenic candles giving off deadly gas. In private discussions, my full expectation was for no debt default, not even close, with the debt limit extended, the unfolding American Tragedy saga taking place on a global stage. My call was for a path of least resistance to be taken in consensus, but it would involve decision avoidance and political expedience, if not constitutional cowardice. The players in the USCongress, along with the leader himself, were exposed as pusillanimous, deceptive, polarized, destructive, wayfaring fools. They are as much fully equipped squires for both the banking industry and the military establishment. They avoided a debt disaster in default, but they did not avoid a debt rating downgrade. They have given the system license to debase the USDollar further, as Gold has responded in a breakout. The President is so clueless as to believe patent reform can make a difference. The bigger obstacles are poor education, minimal math & science requirements, tendency to play video games & text messages than studying (even inside school classrooms). Of course the debilitation is compounded by theUS lacking a strong industrial base. So better patent protection would mean theUS corporations could more effectively protect their offshore jobs, where the majority of jobs are located.

Worse, the players on the global debt debate stage exposed the USGovt as Greece times one hundred. The veil of ruin and arrogance has been lifted for all to see, the deep blemishes and skin cancer visible for all to see. The USGovt borrowing costs are near 0% for the same reason that the Greek borrowing costs are at 30%. BOTH NATION’S FINANCES ARE BROKEN. To cap it off, the tombstone on the US Republic will feature a Super Committee to recommend the most difficult of budget decisions. Such fanfare without proper label. The committee is a formalization of the Politburo process, a perverse interwoven political stranglehold fabric that takes the worst of the Weimar Republic and melds with the worst of the Fascist Business Model. Slowly forming is the Fascist Dictatorship that follows logically from nationalization of Fannie Mae and AIG, the home mortgage cesspool and the derivative black hole. The growth of czars will grow dangerously. Look in the near future for a wave of office shutdowns. The USGovt is required to pay its creditors. But it will act with negligence and shut down offices. See the Federal Aviation Agency, which must contend with 70,000 job cuts. It has lost its funding, while the USCongress went on its August vacation. An improvement would have come if the cut in budget came to the Transportation Security Admin (TSA) to alleviate the public from airport assaults that draws tears from old ladies, anger from defiant citizens, and consternation from most everybody. By the way, the planned date for the Super Committee to convene and make its recommendations is in the middle of the Presidential Primary season next summer. Expect a circus.

EFFECT & PREPARATION

Speaking of spineless and pusillanimous, Moodys and Fitch call the debt deal with the USGovt a good first step. They maintain the AAA rating. The brave Lancelot might be Standard & Poor which has delivered a louder firmer threat of debt downgrade if not significant progress to reduce the budget deficit. They all three seem more like boys cracking whips without threat of anything substantial. Their offices might be Oslo’ed if they actually downgraded. The USGovt debt deal accomplished nothing but to raise the debt limit, which means THE USGOVT IS PERMITTED TO DEBASE THE USDOLLAR CURRENCY FOR ANOTHER YEAR OR MORE. It is actually quite funny to watch and listen to hacks on the tube, as their share their shaman wisdom. They told the public that when the debt limit was extended and the crisis was averted, the Gold price would probably subside and relax downward. What nonsense! The Gold demand would continue from free rein to create more money to cover more permitted debt. They know nothing about gold. They seem to find no relevance or importance that theUSmoney supply is rising exponentially, without benefit of even economic flatline stability. The inefficient usage of new money is a story for the ages, a symptom of the ruin in progress. This point is made in the Hat Trick Letter in detail.

The Gold market correctly interpreted the vacant gutless debt pact, a deal to make a future deal, a decision to make future decisions. The Gold price rose on Tuesday by $40 and the Silver price rose the same day by $1.50 per ounce. The damage is more hidden than what is seen in nominal price. The short covering process has begun. The defended $1600 barrier has been breached, smashed, and overrun. Those who recklessly placed their short positions at that level did not anticipate the power of this bull market, or recognize the strong attack from all four flanks. The $40 barrier is also being overrun. Gold will continue to fight the political battles, to bust the cartel phalanx, and to enable the harsh light of truth to shine on the wrecked USDollar and ponzi ridden USTreasury Bond. Silver will continue to run impressive breath-taking strides through the opened pathways. Expect a run past the $50 mark within the next two months, likely sooner. Things always seem to happen more quickly these days. The clock is running faster with all the fever and ruin.

Prepare for continuation in the long drawn out economic deterioration, business squeeze, financial depletion, and systemic failure. The USGovt debt default process is one for the history books, part of a bold Jackass forecast made in the wake of the Lehman, Fannie Mae, and AIG visible disaster in September 2008. At work was the more important but less visible destruction of theUSbanking industry. It has not recovered since the Lehman engineered bust kill job, fully exploited by Wall Street. Expect in the next couple years economic martial law, deep rationing, and economic implosion. Protect from lost life savings, forfeited wealth to the USTreasury Bond monster, and the fast pace of toxic paper spoilage. The answer is Gold & Silver, if not commodity stockpiles and energy deposits. For the small investor, the safest is precious metals with no paper securities and thus no counter-party risk. The GLD & SLV funds are both fraudulent, to be revealed in time, if not already for those with discerning eyes. They should be avoided, unless the investor wishes to miss the climax runup in price. The precious metals Gold & Silver have received zero positive press by the corrupted financial media, as well as very little respect despite being the best performing asset in the last decade. Ignore their deceptive messages, and climb aboard the Gold ship with Silver cabins, and watch the unfolding disaster from the heat tempered windows. The Fiat Paper locomotive has already gone over the cliff. The debt deal only defined a lower crash point in the abyss far below.

THE BIG HIDDEN BOND LEVER

The USGovt has the wonderful benefit of Interest Rate Swap contracts. They produce leveraged magnificent artificial demand for the 10-year USTreasury. Despite huge uncontrollable bond supply for USGovt debt, contrary to standard myopic finance theory promoted in universities (see USFed-funded chairs), the bond yield continues to decline. In no way does migration from stocks to bonds justify the move under 2.60% on the TNX yield. Every time some negative USEconomic news is released, and plenty of such lousy data has come in the last several weeks, a big bond rally comes. It is aided with a vast under-current of Interest Rate Swaps. Between 80% and 86% of the total derivative market is IRSwap contracts. That market was measured at $243 trillion by the Office of Comptroller to the Currency in its 1Q2011 report of the Top25 commercial banks and trust companies. Shockingly, Morgan Stanley added $51 trillion to their derivative book in the first quarter alone, with zero coverage by the sleepy intrepid lapdog financial press. Let the reader decided if $51 trillion in notional value spread over three months would have much effect on USTreasury Bonds.

The hacks who operate at the bond desks have pathetically little knowledge of their own sector. Most bond traders actually believe the IRSwap application has no practical effect on the USTreasury market, with no end product. They are at best stupid and at worst corrupt. As friend and colleague Rob Kirby points out, the IRSwap contract has a real actual end demand in a USTreasury Bill or Note or Bond. Typically, they sell a short-term USTBill in order to buy a long-term USTreasury, like a 10-year note. This is all within the structure of the IRSwap contract. Thus the fast move below 2.60% from 3.00% on the TNX yield.

THE BIG LIE

The USEconomy is stuck in a recession that worsens each quarter. The current recession is measured between minus 5% and minus 6%, is in progress, and is intensifying. The USGovt runs a devious stat lab shop. It uses every scummy trick known to the stat rats. The Jackass is a refined furry stat rodent, not a rat. Consider an honest method with integrity, which is actively avoided. A simple method is to take the nominal data (raw untreated numbers) for a full year and compare them to the nominal data for the previous full year, then adjust by a legitimate reasonable price inflation index. The Shadow Govt Statistics folks do a fantastic job in honest economic estimation, the best on the planet in my opinion. The SGS Consumer Price Inflation was about 9% in 2010 and currently runs about 10%. Anyone with half a brain can attest to the validity of their CPI estimate. The honest assessment of the USEconomy performance is minus 7.5% recession in 2010, much worse for 2009, seen in the red circle. Let’s be conservative and call the valid CPI at 7% last year and 8% this year. Then the recession of 2010 would have been recorded at minus 5.5% last year and worsening in the current year.

The above graph is utterly shocking and calls the entire USGovt stat team liars. Notice how in 2009 (green circle) the nominal GDP growth was minus 2%. Apply any CPI index to register something worse. That bears repeating. The unadjusted economic growth data for full year 2009 was negative, without inflation adjustment. Anything positive for price inflation would mean a worse recession in 2009 than minus 2%. The quarterly method used by the Bureau of Economic Analysis is corrupt and deceptive, intentionally so. They measure quarters in sequence and apply a raft of absurd adjustments led by the hedonic quality lifts, then multiply their gross error by four to annualize. Even Goldman Sachs realizes the economy is sliding into reverse. Even Martin Feldstein must see the poor taste of federal pork on the plate, as he has given a 50-50 chance for a recession reversal. He must not know much about economics, since the recession is in its fourth year.

USFED WITHOUT OPTIONS

The USFed realizes to their dismay that debt monetization does not stimulate the USEconomy. They will be pushed into purchase of USTreasurys for a simple reason. Another big lie of past Quantitative Easing motivated to stimulate the USEconomy has come to light from direct exposure. The QE process will become an integral part of the monetary policy. The purpose for its continuation has been and will continue to be to prevent USTreasury auction failures which would paint a global billboard sign of USGovt insolvency, ruin, and default. The events from this week have profound meaning. The deliberations over the lifted debt ceiling were interwoven in toxic fashion with the budget debate. USGovt expenditures and taxation issues were hotly debated, enough to produce a stalemate that clearly continues. The main message behind the imminent new budget & debt limit deal is that the USGOVT IS GIVEN FREE REIN TO DEBASE THE USDOLLAR CURRENCY, while nothing has been done to reduce the $1.5 trillion deficit. The USGovt debt should lose its AAA rating due to chronic $1.5 trillion deficits, whose lethal continuation was forecasted by the Jackass in 2009. At that time, most people were suffering from deep shock. They were told by captains on the Titanic Helm that the next annual national budget deficit would be under $1 trillion. The Jackass warned of consecutive calamitous $1.5 trillion forecasts. That was a correct call. One third of the $14.3 trillion cumulative USGovt debt is from war adventure. War spending forIraq andAfghanistan since 2001 has totaled $1.3 trillion. An almost hilarious partial solution was offered by the bold Tyler Durden of Zero Hedge, so on point and so sensible as to be funny. Shut down 15% of the USGovt offices and save $150 billion per year, save $1.5 trillion in ten years. My suggestion is to disband the USCongress by referendum, and to replace it with a group of city mayors and county leaders who would block lobbyists to their offices. Let the House of Representatives represent the people from where they live and work, and not represent the banks and corporations whose lobby budgets are huge.

INSOLVENCY PLAGUE

The last two years have proved convincingly that treating insolvency with liquidity solves nothing. The ineffective blunt tool wielded by the USFed has resulted in a rise in the cost structure globally, not just in the United States. The deceptive message promulgated has been to engineer a lower USDollar for the stated purpose of stimulating theUS export trade. This is a great lie! They wish to support the bigUS banks in unending fashion, until the end marred by systemic failure. The USEconomy has inadequate critical mass in the industrial base (see Chinese Foreign Direct Investment since 2002). The excess capacity in factories and workers does not prevent cost inflation (great irony, since lost base), as the clueless cast of US economists has insisted erroneously. TheUS bank sector is insolvent, heavily reliant upon naked USTBond sales and narco money laundering. The story broke in 2009 that the Wall Street firms had over $1 trillion in undelivered USTBonds sold to clients and funds. They are chronically not delivered after 30 days, because they were sold naked illicitly by Wall Street. They are formally called Failures to Deliver. But the good news (at least to Wall Street) was that it was a fertile source of liquidity and revenue generation when investment banking hit the wall. Imagine selling lemonade at a stand but not providing a cup of the tasty product. The money laundering of dirty ‘Agency’ funds through Wall Street is uniformly applied across its pillars to the Syndicate. The process and criminality is out in the open. The laughable part is that no felony charges are ever filed, since deals are cut. Last year Wachovia completed a plea bargain, paid a fine, and walked away. The details escaped the sleepUS financial press. Wachovia paid a mere 1/30-th of one cent per dollar of illegally laundered funds. The funds entered from Mexico. Chalk up a small business cost, a very small cost indeed. This is not a new story.

Back to the mainstream. The housing market is a guaranteed two-ton millstone to depress both households and banks by the neck. My annual forecast is for two more years of housing bear market decline. That always sounds better and more credible than a permanent bear market, which was the private Jackass forecast made privately in 2007. Read: permanent. Each year strong factors such as heavy new home supply and continued job loss make obvious another two years of powerful home price declines. The ugly joke in the bank industry is 3 million homes lie on bank balance sheets, 3 million homes stand in foreclosure, and 3 million line up in default. The overhang is staggering, enormous, magnificent, disastrous, and crippling. To claim theUS housing market is in recovery is the most egregious of lies. The additional hidden supply of homes makes impossible the clearing within the market. The bank balance sheets are still growing, despite their recent decisions to send the REO bank owned homes for sale in the open market. That has resulted in the resumption of the visible price decline, noticed by the dumb slow and half blind analysts who fail to apologize for a skein of wrong forecasts.

NO MONETARY POLICY OPTIONS

The USFed has no monetary options whatsoever. The USFed realizes debt monetization does not stimulate economy. But it does prevent USTreasury auction failures. The painful direct impact of USFed response to crisis and taken action is a uniformly rising cost structure. Price is determined by Supply & Demand, but also the USDollar. The current budget patch deal will result in further dampers. The termination of extended jobless benefits, part of the latest debt deal, has a direct obvious effect. The Austerity Pills have begun to come to the US throats. The low USTreasury yields mean the Interest Rate Swap machinery is working overtime. The low bond yields force low saving yields for certificates of deposit at banks. The result is a damper effect on the USEconomy, not a stimulus. The only stimulus is to the stock market, which has become heavily reliant upon the Working Group for Financial Markets, which does its work at 10am and 3pm in the form of miraculous market index recoveries. The propaganda continues in mindless fashion. The public is told that the policy is in place, it needs time to work, and the second half recovery is to be expected. We are not morons!! The second half of 2011 will feature a massive powerful headline Gold & Silver breakout rally that reflects the broken USDollar, the broken USGovt finances, the broken USEconomy, and the broken USFed leadership. The rally will capture global attention and encourage additional investment demand. Even the USMint badly aggravates the Silver shortage domestically.

GOLD FACTORS

The gold price is driven by certain immutable principal themes, each powerful in its own right. Combined, they form the basis for a global Paradigm Shift in wealth transfer. Gold has run roughshod over the $1600 supposed barrier. When it reaches $1700, it will make quick strides and long strides in a sudden move to $2000. The overriding themes are:

ultra-low interest rates, the 0% scourge that urges asset protection
lost faith in sovereign bonds, ruined on periphery, moving to core
exploding government deficits, made worse each year.

Most every Gold bull market has been triggered by ultra-low interest rates. The term is Negative Real Rates, which means the prevailing interest rate is way below the prevailing price inflation rate (in the real world). Since 2009, the USFed has held the Fed Funds rate near 0%. It is a signal of ruin, not stimulus, verified by its chronic continuation. All major currencies will fall together versus Gold, as in the USDollar, the Euro, and the British Pound. The Hat Trick Letter in the last two months has shown vivid detail of the broad Gold bull market breakout. A contrary wind is also detected. The Swiss Franc, the Japanese Yen, the Aussie Dollar, and the Canadian Dollar have risen versus the more broken major currencies. What they have in common is grand mineral and resource wealth. Their still fiat paper currencies are indirectly supported by the commodity riches, making them much more favorable to FOREX traders. The best that central banks can achieve is stability among the major currency exchange rates. This theme is their next propaganda plank of deception. They can claim stability while ignoring the resumed rising cost structure. The mantra must be recognized. Inflate or die means more rising costs, without benefit of increased wages.

Nothing changed since the COMEX ambush of naked shorting in early May, the avalanche that prompted the parade of deceptive analysts to proclaim the end of the Gold trade, the end of the Anti-US$ trade. They were wrong, loud wrong, and we called them wrong. Mark Twain defined ‘dogmatic’ as wrong at the top of the voice. How true! How appropriate! Nothing changed on the endless spew of debt, the endless spew of bank welfare, the endless spew of budget deficits, the endless spew of wrecked toxic sovereign bonds, the relentless rise of costs, the relentless lost job security, the relentless assault on households. The debt crisis has moved into new ground, with the USGovt debt moving onto the same stage as Greece, Portugal, and Ireland. The next broken legs to walk on stage will be Italy and Spain. The biggest surprise will be the entry on stage by France, which looks much more like a PIGS nation than the others. A simple cluster analysis (nifty multi-variate statistical technique) would reveal France as part of the PIGS pen easily. See the debt ratio charts of the past for a basic pattern. They might lead the PIGS in a Mediterranean Central Bank with a common devalued Latin Euro currency. It would be devalued at least 30%, maybe 50%. A split is coming to the Euro Monetary Union, since the PIGS nations cannot carry such Euro currency in their tortured insolvent tattered wallets any longer. The July Hat Trick Letter covered the split in detail. My belief is firm that France will remain with Germany, since the German financial firms own 95% of French Govt debt, a dirty secret that never is mentioned. The Germans will need squires to carry their bags to meetings.

After the EMU split occurs, look for 20 Lehmans to go bust in Europe, as their large banks are badly exposed and heavily damaged. The key is Italy, and tethered Spain. The cross-border debt exposure is magnificent. Bear in mind that Italy is the #8 biggest economy in the world. Italy is responsible for 17% of all European sovereign debt. The practical implications are immediate, as the Italian Treasury must roll over 69 billion Euros in August and September. The Italian Govt debt due between July and end 2011 totals 175 billion Euros, whose financing simply will not happen.Italy must find buyers for a staggering 500 billion Euros in new securities by the end of 2013.Italy will break the Euro, period! A massive Gold Rush will come when money flees supposedly safe haven sovereign funds. The big European banks will drop like wrecked pillars.

WOW ON JAPANESE YEN

Check out the Japanese Yen currency breakout. This was forecasted by the Jackass in April as a paradox concept. The Japanese financial institutions, insurance firms, and central bank are selling USTreasury Bonds in order to pay for grand Reconstruction costs. The J-Yen blew through the 130 level this week. It translates to under 76 on the Dollar/Yen index. That prompted Bank of Japan action, but it will prove futile. They called 78 a line in the sand to defend. It was overrun. The Japanese financial firms are selling USTreasurys on a massive scale. As reported in the Hat Trick Letter two months ago, sale of USTBonds is a better alternative than more fiscal deficits or more debt monetization. Instead of prompting more domestic price inflation, they will take their risk with a rising Yen exchange rate, and watch the export damage. Never overlook the rampage of Yen short covering, as the Yen Carry Trade continues to shut down after 20 years of abuse. The USEconomy will import price inflation from Asia, a diverse effect. See Wal-Mart already on this factor. My view is that the next pact (just like in April with the hasty G-7 Meeting) to halt the J-Yen rise will be the guts of GLOBAL QE. The central banks in the next several months will drop their transparency initiative. Hyper monetary inflation is not a message they wish to provide gory details for.

FIRST STRONG DOLLAR & NOW WEAK DOLLAR

The Strong Dollar Policy of the 1990 decade resulted in a gutting of US industry. Many jobs were sent off-shore. The primary emphasis became the clean industry behind the financial sector, whose size grew markedly, leading up to the 2000 tech telecom bust. Then came the housing bubble then bust, and the deadly aftermath of insolvency that plagues the nation. The Weak Dollar policy engineered in the last two years as part of the Quantitative Easing programs has resulted in more gutting of US industry. The great majority of households and businesses are suffering from a uniformly rising cost structure, but not rising wages. The support of the banker largesse bailouts and USTreasury Bond debt monetization has lifted the entire cost structure. What is missing clearly is a Sound Fair Dollar Policy. But the Gold Standard is considered a third rail with heavy electric current to kill anyone who touches it. The standard will emerge from the ruins that befall theUnited States in its economy, its financial structure, and its political morass.

QUICK CONCLUSION

Gold rises from threat of chaos amidst debt default. Gold rises from continued debasement of the USDollar and other major currencies. Gold rises from the powerful current of price inflation. Gold rises from strong investment demand, side by side with Silver investment demand amidst chronic annual deficits. Gold rises from the increasingly recognized ruin of sovereign bonds. Where are the stooges who shot their mouths off in May?? Do they merely preach as spokesmen for the Syndicate on the financial news channels?? Bring them back to explain where they went wrong. Start with two hacks named Dennis Gartman and Nouriel Roubini.

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Written by testudoetlepus

August 5th, 2011 at 3:23 pm

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