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Rob Kirby: True Scale of Dollar Ponzi Scheme Becoming Apparent

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a photo by William Banzai7/Colonel Flick on Flickr.

by Greg Hunter

Financial expert Rob Kirby says global central bank fraud is propping up the economy. Kirby contends, “The amount of fiat money that has to be created on a go forward basis rises exponentially over time. So much, much money is being created whether the Fed says they are ‘tapering’ or the Fed says they’re not ‘tapering’ is irrelevant to what is really happening. The money is being created, and they have to find places to hide it. What else has happened? Internationally, we see the likes of Russia and China basically setting up to trade in other than dollars because they know what’s going on with the dollars, and they know too many dollars are being created. They know this story of too many dollars being created ends very badly. . . . Fiat money by its very nature is designed to fail. Fiat money by its nature needs to be increased. Fiat money at the beginning has a very shallow incline, and then you hit an inflection point where the amount of fiat money being produced literally has to go vertical. We are into the vertical part of that curve now.”

Kirby thinks the inflection point was the 2008 financial meltdown. Kirby, who has 15 years’ experience as an international derivatives broker, charges, “The only thing the monetary elites can do to prolong or delay that inflection point is by lowering rates. By pushing rates to zero, which they did roughly 7 years ago, basically bought them some time. A lot of things the central bankers have been doing are nothing but buying time. In terms of the money that is being created, it’s really starting to hit home, and it’s really starting to become apparent the true scale of this Ponzi scheme. We see a little nation like Belgium, with their $480 billion GDP, in the last three reporting months . . . put $141 billion worth of U.S. government securities into their reserve account. They are now holding something like $340 billion in their reserve account. This is absolutely absurd. This is something that wouldn’t pass as a prank in the schoolyard. This is an international game of hide the salami. The dollars have to be created, and the central bank is running out of places to hide it.”

Kirby goes on to explain, “People think it’s outrageous that the Federal Reserve has a $4 trillion balance sheet. Try a $10 trillion balance sheet, and try a $10 trillion balance sheet in another sovereign’s debt. It’s absolutely absurd and ridiculous. This is high fraud. What it shows is that this is not a problem that is with just America anymore. It shows the real problem is with central banking and fiat money itself. Fiat money and central banking are not the offspring of capitalism. They are the central planks of the communist manifesto. They are socialist and communist in nature. The real problem is with the money itself. We need to revert back to real capitalism which is real weights and measures and honest commerce. Otherwise, we are going to devolve into a very dark period of feudalist oppression.”

Why is this happening? Kirby thinks, “It doesn’t really matter who occupies the Oval Office. The office of the President has been captured, and it has been captured by the bankers. We are living under banker rule. This is a big problem. Bankers are soulless. Bankers have no nation. Bankers are a religion unto themselves. It’s a cult, and it’s dangerous.” Kirby goes on to say, “At this point, there is going to be pain no matter what we do. . . . At some point, the whole thing will unwind, and hopefully it will not do so in a cataclysmic fashion. I hope it will not do so with a push of a button that will start a nuclear war. You can get truly dark when you start thinking how this might end. I’d like to think saner heads might rule the day. What we are witnessing in real time is this experiment with central banking, and fiat money is failing. The evidence is written all over the walls. It’s completely clear. Anyone who is not paying attention to this, at this point, is delusional.”

Join Greg Hunter as he goes One-on-One with macroeconomic researcher Rob Kirby of Kirby Analytics


William Banzai7/Colonel Flick on Flickr.

True Scale of Dollar Ponzi Scheme Becoming Apparen

Greg Hunter

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Written by testudoetlepus

April 24th, 2014 at 4:06 pm

Jim Willie: Ukraine Is The Waterloo Event For The US Dollar!

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March 7, 2014

The desperation of the Anglo-American leadership, guided by the steady corrupt banker hands, has never been more acutely high, nor obvious in full view. The entire Ukraine situation is a travesty. It includes Langley agents killing police and street demonstrators from rooftops, the confirmation coming from the Estonian Embassy (translation of scripts). It includes thefts of official Ukrainian Govt funds, again sent to the Swiss hill sanctuary. It includes sanctions delivered by a US Paper Tiger, sure to cause horrific backlash. It involves the last gasp attempt to obstruct the Gazprom energy pipelines, which will inevitably corner the European market in monopoly. It involves subterfuge with the NATO card (aka Narcotics And Treachery Outlaws) with missiles placed on the Russian borders. Look for NATO members to find a back door to exit the spurious treaty. It involves playing with nitro-glycerine in the Petro-Dollar room. It involves putting tremendous risk for much more clear isolation of the United States. The more the USGovt pushes, the more the US will be isolated. Remember that Nazis steal from their enemy states, de-fraud from their allied states, and force themselves into an isolated state. In Ukraine, the United States has over-played its weak hand. Already, a secret document was leaked in London that the UKGovt would not support the US-led sanctions against Russia. Ukraine is the Waterloo event for the USDollar.


by Jim Willie,,

History repeats itself from the Kremlin phone calls made during the Syrian conflict just a few months ago, when the UKGovt withdrew its support and left the US isolated, looking very weak. Already, Putin has threatened to dump USTreasury Bonds. Putin aptly calls the Anglo-Americans as Mutants. Imagine the lunacy of trying to cut off the only Russian warm water military naval port in the Crimea. Just as stupid as the Trans Pacific Partnership faux pas, trying to cut off China from its Asian neighbors and partners in trade. The intelligence level of the USGovt has never been more stupid, destructive, and in full view. The lost ground for the United States is obvious and glaring in the Persian Gulf, the Mediterranean Sea, and the Caucasus region.

Immediate Petro-Dollar Risk

If the Kremlin demands Gold bullion (or even Russian Rubles) for oil payments, then the interventions to subvert the Ruble currency by the London and Wall Street houses will backfire and blow up in the bankster faces. Expect any surplus Rubles would be converted quickly to Gold bullion. If the Chinese demand that they are permitted to pay for oil shipments in Yuan currency, then the entire Petro-Dollar platform will be subjected to sledge hammers and wrecking balls. The new Petro-Yuan defacto standard will have been launched from the Shanghai outpost. If the Saudis curry favor to the Russians and Chinese by accepting non-USDollar payments for oil shipments, then the Petro-Dollar is dead and buried. The rise of the Nat Gas Coop run by Gazprom is in progress, its gas pipelines to strangle the OPEC and its bastard Petro-Dollar child. The entire USDollar foundation with the USTreasury Bond bank reserve structure is at risk is collapsing, as consequence to the desperate adventure and criminal activity conducted in Ukraine. Just like with Syria, a hidden giant energy deposit is concealed under the table. Off the Lebanese and Syrian coast, a massive off-shore energy deposit was recently discovered. The US & UK & Israeli oligarchs wish to take it all. Confusion is their game. In the western plains of Ukraine, a massive gas deposit was recently discovered. The US & European oligarchs wish to take it all. Confusion is their game.

The danger level has never been higher. No resolution to the Global Monetary War can come, which we have been seeking, without a climax. It is hardly just a financial crisis amidst a stubborn economic recovery. The nature of the currencies and their underlying sovereign bond foundation is highly toxic, which requires a strong replacement as solution, using an alternative to the USDollar alongside its reserve ledger item the USTreasury Bond. A return to the Gold Standard is coming, but the birth will have loud pangs and possibly broad damage suffered. The Global Currency Reset is better named the Return to the Gold Standard. The United States and London will not give up their control of the Weimar Printing Press easily, used for elite self-dole of extreme wealth. It has served well as the Elite credit card. They will not go quietly, and assume their place in the backwater without taking the world to the brink. No climax can occur without enormous risk and loss. The Global Paradigm Shift is in full gear, with attendant risk huge here and now. My Jackass firm belief is that the US/UK fascist team face a Waterloo event in Ukraine, the victim to be the Imperial Dollar. This bulletin will not be a comprehensive note, as the situation is too vast. The information in the Hat Trick Letter is used to interweave a story of the impending removal of the USDollar from its corrupt throne.

United States Trapped and Cornered

The Anglo Americans have fallen into a carefully designed trap by the Russians and Chinese in a clever designed sequence. More Sun Tzu tactics have been put into practice, which utilize the momentum from the enemy to be thrust back on them. Planning for final steps must have taken place during high level Putin meetings with Xi from the elite Sochi viewing box. The unfolding of events has been more carefully engineered and orchestrated than what appears. The US/UK team has been caught in a vise for months, as the rejection of the USDollar as global reserve currency is in high gear, the refusal of the USTBond a recognized trend in diversifications. The death process is slow and grueling. Much of the American Hemisphere is surrounded and controlled by Russia & China, whether the canal, the port facilities, the oil supply, the mineral deposits, even Yuan Swap facilities. Africa has largely gone under Chinese control, with Russia playing a hidden role as well.

The Persian Gulf is in transition, with the critical protectorate role shifting to China. The Qatar royals have just ordered a dismissal of USGovt ambassadors from their nation. Note that Qatar is the site of a giant USNaval base. To be sure, the Sochi Olympic Games are over, a successful event. The gloves have thus come off. The risks have reached acute levels. The US leadership seems cavalier to the risks that over half the USGovt debt is in foreign hands, over 30% of it in Russian & Chinese hands. A severe backlash cometh. The most vulnerable player in the room is the most aggressive, arrogant, vile, and obnoxious. The instability of the situation is far beyond acute. The victim will be the USDollar and its sidekick the USTreasury Bond. The USTBonds will be kicked out of the global banking system. The Third World awaits the United States, for its domestic betrayals, its financial failures, its criminal deeds, and its war aggression.

The Russian Backlash To Be Sudden

Russian President Vladimir Putin will slam the West, and very soon. The initial salvo might be a natural gas cutoff by Gazprom, the Russian giant which has fast moved into the global monopoly position. Eventually, Putin might demand gold payment for the natgas in the captured pipelines, that being the plan according to The Voice. Russia supplies one quarter of Western European gas needs. It will be the opening salvo for Gold Trade Settlement, for which the Iran workarounds to the sanctions provided the critical prototype. Combined with a formal announcement of USTreasury Bond sales in volume by Russia & China, the impact would be tremendous, even devastating. The reverberation will be soon seen as the pending demise of the defacto Petro-Dollar Standard, dictated by crude oil sales in USD terms. It will also be soon seen as the end of the USTBond as the global reserve standard in banking systems. Notice for over two years, the primary buyer of USGovt debt (and its refunded rollover) has been the US Federal Reserve via bond monetization, an absolute heresy to central banking. Hyper monetary inflation cannot stand as fixed policy. The world has responded by constructing an alternative to trade settlement. The forum has been the BRICS conferences and the G-20 Meetings of finance ministers. The US & UK will gradually be excluded from both forums, a process well along. Even traditional allies like Japan are buying gold in high volume, with suppressed lowball data so far. This is game over for the USDollar, the direct victim of Ukraine backlash. The war against Russia has been veiled, but the Jackass has exposed it.

Veiled Attacks Against Russian Gazprom

First was the attack against Russian Gazprom in Cyprus. It was a hidden attack made to look like a bank confiscation event. Notice no bank account confiscations outside the small but important island nation. The entire Russian banking clearance system had been done through Cyprus. Also, Russia was making significant transactions to purchase Gold bullion using Cyprus as clearing house for the purchases. Second was the attack against Russian Gazprom in Syria, another complicated event. The US had used the Libyan Embassy as a weapons running facility (major diplomatic violation), after which the US lost Egypt as a transfer station on the weapons running. The false flag attack in Syria was made to look like a chemical weapons event. However, the Saudis were the guilty party. The motive by the US was to block the advance of Russian Gazprom pipelines, which are to connect to the vast Iran supply centers. Iran has far more oil & gas than Iraq. In fact, Iran is the linchpin nation, which will throw its support toward Russia. Iran will push the Nat Gas Coop certain to eclipse Saudi Arabia and the loud gaggle of OPEC members. With the Russian Gazprom, together Iran and the Nat Gas Coop will usher in the Petro-Yuan Standard and bury the Petro-Dollar, the price set by Russia, the contracts set in Shanghai. Thus the Saudis will be expendable, and their Gold in London to be totally stolen.

Move to the present. Third was the attack against Russia Gazprom in Ukraine, done by the CIA and its partner security agents from the small ally nation on the SouthEast Med corner. The old game of destabilization, popular uprising, bank thefts, and now data files stolen has been put into action. The theft of significant funds in Ukraine has only started, funds gone to Swiss banks. The full betrayal will be seen soon. The US & UK have a lunatic plan to corral the Ukraine pipelines and possibly the vast farmlands of Ukraine. The wrong-footed plan will backfire, when Putin cuts off the natgas supply to Europe, when Putin demands a new type of energy supply payment structure, and when Putin engineers certain other steps. They might execute a Nat Gas Coop double in price, much like the OPEC event in 1973. Witness the upcoming Birth of the Eurasian Trade Zone, the birth pangs heard in Ukraine. The United States and Great Britain will not be included. The Eurasian Trade Zone will span 14 time zones and will settle in gold.

Iran Workaround As Key Prototype Solution

The Anglo Americans have disrupted a key nation with longstanding historical and religious ties to Russia. The land of Ukraine also contains Russia’s only warm water naval port in the Crimea, the site of a recent suspicious earthquake. The response will be swift and firm. The Eastern nations (led by China & Russia) have been making detailed preparations in the last couple years to launch the alternative trade system founded in Gold Settlement. Its launch lacks a potential open door trigger, possibly offered by the Ukraine situation. The Gold Standard could return in a baptism by fire. The open door trigger appears to be the Western interventions into Ukraine, since the Western banking structures will not be permitted to collapse, the ugly reality. The abuse of the central bank monetary expansion and fraudulent bond redemption has gone totally out of control, forcing an endless cycle of alternative preparations and motivated reactions, including the Iran workaround with Turkey as intermediary in gold provision. Other attacks have taken place in the last few months against the Russian Ruble by Wall Street firms. The reaction will possibly be the launch of what could eventually be understood to be a gold-backed Ruble currency, combined with natgas cutoffs to Europe and USTBond dumps. At first it could be perceived as the oil-backed Ruble, but its quick hidden conversion to Gold bullion could be revealed later on. The USDollar will be discarded as obsolete, even toxic. The USDollar debt basis might be widely accepted to be the cause of the global financial crisis, and the USFed Quantitative Easing be widely understood to be the cause of the global financial collapse.

Europe As Key Region To Tip Eastward

Events inside Western Europe could unfold rapidly. Behind the scenes, much is happening. The important German-French Axis is breaking down, weakened by each passing month and bailout exercise. The motive for much of the German support of bailouts and rescue plans, as faulty as they have been, is the oversized German ownership of both French Govt debt and big French banks. They will fail, both the French sovereign debt and the big French banks. Germany must undergo a split, with a restructure from the devastating damage due to Southern European sovereign debt and related big bank losses. At the same time, Germany is on the verge of turning East to Russia. Already Russia is a large energy and mineral supplier to Germany, the heavy railway facilities in place. The core of Nordic Europe is firm. Austria and Finland are aligned with the pragmatic forces in Germany and the Netherlands. Italy is being transformed, but Spain might be lost to chaos. Turkey is also undergoing change during chaotic reform. The entire NATO Alliance has never been weaker. The military action in Ukraine is framed as a supposed NATO exercise to honor a treaty. Watch the loose end like Turkey fall off the NATO wagon, while Finland falls off the Euro currency wagon. The Jackass is eager to see the Snowden NSA files reveal key data on the illicit usage of NATO bases for narcotics distribution, the origin being Afghanistan. What a bombshell it would be if Turkey announced that their government would no longer permit heroin shipments from USMilitary aircraft on their Incirlik Airbase.

A key player in the mix is Israel. They have a Tamar floating platform, whose natgas has been pledged under contract to Russian Gazprom. The tiny nation is possibly changing its alliances out of pragmatism, seeing its drained weakened host that has duly served its purpose. The next big step is for Western Ukraine to suffer the drain of remaining resources (financial and agricultural) to the West, using all the diplomatic tools the Euro Elite can muster. The people in the East will realize that they have been betrayed once more by the Western powers. This is the critical final step. Several swing nations will consequently align with Germany, if only to make being integrated by Russia less painful. During all the transitions, China will take care of Asia in this game. The remaining overriding question is whether the US & Britain will go quietly in the night of faded empires, or else to wreck the world with nukes and viruses. The main exports out of the United States and its royal handlers have been fraudulent bonds, military hardware, genetically modified food, fast food with diabetes, pharmaceuticals, surveillance software, computer viruses, and jamming software technology. Such is the nature of the fascist transformation.

Russia Cannot Be Isolated

The West is in for a gigantic surprise in the sequence of events to unfold. They have placed criminal oligarchs into top government positions in Ukraine. Doing so might suit the West but not the Ukrainian people. The political brain trust in Berlin shows extremely errant strategy, still kowtowing to the USGovt and London Elite in an incomprehensible manner. The West cannot isolate Russia, which is the latest absurd bone-headed strategy. They need Russia in vital ways that will become apparent when the West faces energy supply cutoff or forced Gold payments during an open global USDollar rejection. The US will quickly feel the lost Petro-Dollar gear mechanisms. China has already aligned itself beside Russia, which makes isolation impossible. Consider the Russian commodity supply and Chinese industrial power, the new axis to the Eurasian Trade Zone.

The West cannot continue to bully Russia & China. Poking a stick in the bear’s face will not work for long. Disrespecting the Chinese creditor is deep folly. The risk that coincides is for the two Asian superpowers to threaten or actually execute a dumping initiative of USTreasury Bonds, and force the United States to use its last card in a grotesque display of hugely amplified monetary expansion. The US would collapse by falling on its own sword, the event occurring in the Weimar chamber. A super high volume bond monetization machine to cover globally dumped USTBonds is a strong likelihood as climax event, with a broken derivative mechanism that is revealed during its fracture. The London banker murders (another Jackass correct forecast, made in mid-2011) indicate a motive to keep covered up the extreme $100 billion JPMorgan derivative losses at the hands of the London Whale Bruno Iksil, first sighted in May 2012. The accelerated hyper monetary inflation in response to Russian & Chinese joint retaliation would finally kill the USDollar. The echo event, born from failure, would be for the USGovt to launch the new split Scheiss Dollar. Then the USGovt could have its domestic currency finally, and then wreck it with an assured painful sequence of devaluations. The fundamentals for the US domestic only currency are truly horrible, typical of a Third World nation. Ukraine is about the last gasp of the USDollar. It has no viable defense.

Ukraine As Waterloo For The USDOLLAR

Ukraine is the Waterloo event for Team Obama and the Wall Street handlers, the true controllers of the White House puppet. Ukraine will lead to wreckage to the USDollar and its USTBond partner in crime. Witness the death of the USDollar and the Birth of both the Gold Trade Standard, on the new Eurasian Trade Zone landscape. Neither Russia nor China will cooperate on the IMF super sovereign reformed currency basket at this point, not during extreme hostility and conflict. Hope and pray for cooler heads to prevail, since already many serious military attacks have occurred with advanced weapons off the Syrian coast. The Western Press prefers to frame the Ukraine situation as one more curious Orange Revolution event staged in Eastern Europe, akin to the other deceptive Arab Spring events. The old Soviet Union was trapped years ago, forced to use hyper monetary inflation in defense, as the nation imploded financially. The United States is now trapped in an ironic parallel manner, and will be exposed for its heretic inflationary response that ramps up to obscene volumes, followed by financial implosion. In fact, the events from here onward are the final hurrah for the USDollar regime and the criminal cabal.

Now has never been a better time to own a big stack of gold & silver coins & bars, stored in a secure place outside the United States, outside England, outside Switzerland, even outside Canada. The people must defend against a climax of systemic failure, led by arrogance, stupidity, desperation, and delusion, even armed aggression. It remains to be seen whether the Kremlin has some secret allies who might emerge in time, from other worlds. But that is an entire other story to be told someday maybe. We earthlings will all find out soon enough. Times are changing fast, and better to be alert than to get hurt. The Global Currency Reset lies directly ahead, complete with its doubled Gold price and doubled Silver price. The Russians & Chinese are motivated to respond to a military prod, poke, and nudge by delivering a financial response. The rejection of the USDollar is near. The rapid diversification away from the USTreasury Bond is near. The arrival of the new Global Gold Standard is imminent.




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“Jim Willie is a gift to our age who is the only clear voice sounding the alarm of the extreme financial crisis facing the Western nations. He has unique skills of unbiased analysis with synthesis of information from his valuable sources. Since 2007, he has made over 17 correct forecast calls, each at least a year ahead of time. If you read his work or listen to his interviews, you will see what has been happening, know what to expect, and know what to do.”
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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 For personal questions about subscriptions, contact him at


JIm Willie: Ukraine Is The Waterloo Event For The US Dollar!

Silver Doctors

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Written by testudoetlepus

March 7th, 2014 at 2:11 pm

Jim Willie: Seismic Waves of Destruction Coming For The US Dollar!

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Jim Willie, editor of the Hat Trick Letter joins the FSN an extensive interview. He says that Syria and the Ukraine are really all about the pipeline wars. Gazprom is pushing aside OPEC’s monopoly and the West’s effort to stop it. Willie believes that Venezuela is what the US will look like in the future, criminality, inefficiency and corruption. On the financial front, the seismic waves of destruction for the US Dollar are coming more fast and furiously. From Cyprus, to German repatriation, to LIBORgate, etc. How much longer can’t be accurately forecast, but things are certainly heating up. China’s financial system is on edge, but their gold reserves (15,000 tons) will enable them to crater their paper system, along with the dollar, thereby putting them in charge of the resulting gold-based economic system.If it sounds scary, that’s because it is. Jim sees shortages and civil unrest in the US, when it all comes to pass. Buckle your seat belt and get prepared now!

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Jim Willie – An Exclusive Extended Interview (Part 1)

Kerry Lutz

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Written by testudoetlepus

March 4th, 2014 at 3:12 pm

U.S. Dollar To Be Outlawed?

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LIAR OF THE JEKYLL, a photo by WilliamBanzai7/Colonel Flick on Flickr.


Published on Nov 21, 2013


IN This Interview:
*Global Economic Reset (00:27)
*Russian Lawmaker Calls for the Outlaw of the U.S. Dollar (2:23) – Source: “Russian lawmaker wants to outlaw U.S. dollar, calls it a Ponzi scheme”:…
*Federal Reserve Printing More Than $85 Billion/mo (4:47)
*Dollar Collapse And How It Will Impact YOU (7:30)
*Is Real Estate A Good Investment? (9:49)





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Written by testudoetlepus

November 21st, 2013 at 6:15 pm

Fate of Dollar is the Fate of U.S. Power

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by Greg Hunter

November 4 2013

Former Assistant Treasury Secretary Dr. Paul Craig Roberts says, “The fate of the dollar is the fate of United States Power.” Dr. Roberts goes on to say, “The whole question of the dollar’s longevity depends on the willingness of other countries to continue holding dollars and dollar denominated assets while the Federal Reserve prints a trillion dollars a year to prop up the big banks and to finance the federal budget deficit.”

There are many ways countries are currently moving away from the dollar. One of the most startling, says Dr. Roberts, “China is accumulating very large quantities of gold.  So, this does show that the dollar may have a limited life as the supreme currency.” With global NSA spying scandals, if the dollar starts coming under attack in the currency markets, Dr. Roberts predicts, “All of this makes it very difficult if there is a run on the dollar for the Treasury and the Federal Reserve to call up these foreign governments and say help us stop this run.” Don’t think the Fed is ever going to stop printing money because Dr. Roberts contends, “They’re trapped because you can’t expect them to say let’s blow up the world right now so we don’t have a crisis in the dollar next year.”

Join Greg Hunter as he goes One-on-One with economist Dr. Paul Craig Roberts.


[Fate of Dollar is the Fate of U.S. Power-Dr. Paul Craig Roberts]

[Greg Hunter]

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Written by testudoetlepus

November 5th, 2013 at 2:44 pm

The End of The Petrodollar’s Rule Over The World

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– Excerpt GEAB N°72 (February 15, 2013) –

Excerpt GEAB 72 (February 2013) - 2013-2015: The end of the petrodollar’s rule over the world

Next, clearly oil plays a vital role in the whole of this story. When, in January 2006, the first GEAB issue anticipated the fall of the Dollar wall, the comparison was made between the Berlin Wall and the Iron Curtain which made it possible for the Soviet system to hold up for so long and the Dollar Wall which protects America. But this Dollar Wall itself is founded on oil, this so strategic raw material which oblige(s) (ed) the planet to resort to the US Dollar to get it. As long as oil is still paid for in US Dollars, the demand which it creates ensures the currency’s domination. The fact that the European Union followed the United States’ sanctions against Iran, rather than to pay for its oil in Euros, suits them well. But the easing of relations with Iran and the June 2013 elections which will see another president follow on from Mahmoud Ahmadinejad creates a situation favourable to abandoning these sanctions and oil imports paid in Euros. This action would strongly accelerate the petrodollar’s retreat.

Finally, this sliding out of the Dollar is being prepared for by many countries as the gold market shows: record purchases of gold by the central banks (26), record purchases by China as well (27), Germany’s wish (in particular) to repatriate its gold back home (28)… (29)


Excerpt GEAB 72 (February 2013) - 2013-2015: The end of the petrodollar’s rule over the world


The objective of these gold purchases are, in particular, to ensure countries’ survival when confidence in the Dollar collapses and it won’t be used to buy oil anymore (30) and in order to get through the following monetary storm, perhaps also in the eventuality of the SMI restructuring itself around a Gold Standard.

The United States’ desperate search for short-term energy independence at the cost of their environment can be also read from this angle: if the Dollar isn’t the single central currency of the system anymore and it’s strongly devalued, how will the country import oil which has become too expensive for it?

The repercussions on the rest of the world
Needless to say oil geopolitics will be upset by this change, dormant since the beginning of the crisis. This is why we are devoting the telescope section of this number to studying oil. Incidentally, it’s not insignificant to note that the crisis’ beginning coincides with the time when emerging countries’ consumption exceeded that of the “developed” countries.


Excerpt GEAB 72 (February 2013) - 2013-2015: The end of the petrodollar’s rule over the world


What has radically changed the landscape since the Iron Curtain fall is the appearance of two quite distinct blocs of oil consumers: a block around the West and the other around China and the emerging countries (or BRICS), in the knowledge that the consumption by the first is in a downturn whilst that of the second is expanding fast. When the West decides to no longer buy a country’s oil anymore, it is automatically bought by the BRICS, China in particular. Thus the West’s zone of influence and the territories of supply continue to shrink.

If one dares to make a comparison, like in the time of the cold war, an oil producing country now has two customers to turn to. When a country knows how to play, that gives it a certain amount of room to manoeuvre and makes its destabilization more difficult. Nigeria, for example, a traditional supplier to the United States, has recently been taken off-guard by the US announcement that they wouldn’t buy any more of its oil (31) (under the pretext that their shale oil production would be sufficient). No matter, China will be happy to extend its influence a little further in this country…


An increasingly reduced private domain
To protect their energy independence, the United States has favoured imports from producers with close geographical or political ties (63). Nevertheless, when Mexican production falls, it’s Saudi Arabia which is called upon as the swing producer, in spite of the intrinsic risk of latent volatility in the Middle East (64). For its part Venezuela, rebelling against Washington, is preparing to construct a pipeline via Colombia to diversify towards a Chinese clientele (65).

In the US-OPEC relationship, it’s the latter and especially Saudi Arabia which holds the initiative. It has an “anvil”, which protects it from being destabilized: the risk of disorder in the country which could take the price of a barrel to $300, with dramatic consequences for the world economy (66). It also uses a “hammer”, for example in 2012 to impose the biggest annual fall in its production and thus support the already high price of a barrel (67). As a sign of the times, OPEC even takes the liberty of reproving the United States over its financial problems (68).


Excerpt GEAB 72 (February 2013) - 2013-2015: The end of the petrodollar’s rule over the world


Arabia is freeing itself from US influence to accommodate its primary customer: China.

Since America is less dependent on Middle Eastern oil than Europe or Asia, the enormous military cost of providing security to the region (69) – which meets the tacit 70s agreement with the Saudi authorities forcing dollar use in oil transactions (70) – is pursuing another challenge: the survival of the petrodollar which ensures global demand for the greenback and guarantees it an artificial value, independent of fundamental US economics. Here lies the only US option to continue financing its debt, the essence of its economic survival.

However, recent US intervention in the region, as much military (leaving Iraq in tatters, triggering disorder in Mali after Libya) as policies (generating dangerous chaos in Egypt following the “Arab Spring”, seeking a change fated to fail in Syria, supporting Israel in its bellicose threats against Iran), have only shown in the eyes of the world a complete failure to understand the terrain and a major inability to impose order. Their flexibility and credibility are shown as considerably weakened for the next few years.

China and the emerging countries question the petrodollar’s supremacy
In 2005, emerging countries’ consumption exceeded that of the Western nations. The appearance of this “second” customer, rich and gourmand, constituted an irresistible opportunity for the producers, pushing up oil prices and radically transforming relations between the Western powers and OPEC. This major oil market rebalancing was obviously not done for the Western powers’ benefit, deep in debt and unable to pay the slightest increase in the price of oil. The strategies then implemented by the West have contributed to splitting the oil market into two: on one side, an OPEC increasingly oriented towards the emerging nations and diversifying its sales outside the petrodollar; on the other, a “new” unconventional market based on extraction from Western lands by extremely polluting fracking, a market “invented” to put downward pressure on world market prices, to keep the petrodollar alive and reduce dependence on the world market. It’s not difficult to see where the future lies.


Excerpt GEAB 72 (February 2013) - 2013-2015: The end of the petrodollar’s rule over the world


China makes its suppliers partners (71)

Growing rapidly, China is aware it’s vitally dependent on fossil fuels, in particular coal whose consumption is skyrocketing (72), but also oil. To guarantee stable development, it weaves an ecosystem politically and economically aligned to its interests.

With 25% of its crude imports coming from Africa, China has invested in Angola, Nigeria, and particularly in Sudan for exploration and refining (73), ignoring the Western position on Darfur.

In 2012, an agreement was signed with Saudi Arabia to build the largest refinery in the world there, a joint venture amounting to $8.5 billion (74).

The BRICS tools to break free from the petrodollar: bilateral agreements in rapid succession

Beyond this strategy based on co-operation which ensures the commitment of its partners on jointly produced long term growth, China places itself as engine of the emerging countries’ agenda to break free of the petrodollar monopoly and its constraints.

Under a Western embargo, Iran sells its oil to China for Yuan (75), much more effective than through the Iranian Oil Bourse project (76). And these agreements have multiplied in just a few months to exclude the dollar from oil purchases and other commercial transactions: with the United Arab Emirates (77), Brazil (78), Russia (79), the BRICS between themselves (80), but also with countries in the Western sphere, like Japan (81) or Australia (82). China takes a similar stand over territories which, a priori, are under US influence, with the huge $15 billion purchase of the Canadian oil company Nexen well underway, which will open up the options of tar sands operations and drilling in the Gulf of Mexico (83).

Outside of China, the emerging countries are following similar initiatives, for the purchase of Iranian oil through Turkey for gold (84) or for trade between India and Japan (85).

If one adds to this emancipation from the dollar in general and the petrodollar in particular, the political coherence of the oil producers’ bloc opposed to US power that Russia, Iran and Venezuela form combined with China, there’s no doubt for LEAP/E2020 that 2013 will see the end of the reign of a petrodollar whose territory is gradually shrinking away to nothing.

The splitting of the oil market into two

The national companies, at the heart of these agreements with the emerging countries, only handled 10% of oil production in 1970 against 90% today (86). A collateral consequence of this change in gravity, the private companies – the famous majors, primarily Western – making media noise with their latest profits due to the rise in the oil price, have actually completely lost speed. Currently, with production falling regularly these last few years (as is the case with Exxon and Chevron (87), Shell (88), BP (89), Total (90) or Gazprom (91)), but also in the future, since their prospecting territories are amongst the most difficult and thus the most expensive to operate. The parallel with the financial industry, which blusters thanks to results artificially inflated by Quantitative Easing operations to better hide a future condemned by an exponential dependence on debt, is striking.


Oil crisis: Special recommendations for European leaders
In today’s world undergoing acute transformation, the radical changes in progress can make the interpretation of a country or an area’s interests difficult if they are not correctly understood. Oil questions in particular, as we have seen, are playing a significant role in the current world’s reorganization. Within this framework and in order to clarify Europe’s interests to approach the future in the best shape, we give five simple recommendations (99) for submission to European leaders.

1. Lift sanctions on Iran

First of all, these sanctions won’t have any effect on the Iranian nuclear programme since the country sells the oil which it can’t get rid of in the West to China or others without any difficulty. They do nothing but instil a little more feeling of hatred towards the West in the Iranian population. Then, these sanctions distance Europe from the BRICS which, on the contrary, support Iran. It’s a very bad strategy so much as it’s clear that the future is on the side of these emerging countries. Lastly, whilst following the United States with these sanctions, Europe has shot itself in the foot. It loses a major supply of quality oil where the United States doesn’t suffer at all since they didn’t import Iranian oil. It is deprived of an opportunity to pay for its oil in Euros on the Iranian Bourse, thus reinforcing its dependence on the US dollar whose future isn’t brilliant however. The window of opportunity for this decision follows the Iranian June elections: the current President Mahmoud Ahmadinejad cannot in fact stand for a third term of office and another president will thus be elected. Whether the policy of the new Iranian President is to continue his predecessor’s or not, this change allows the argument of a more welcoming Iran to lift European sanctions without going back on its views.

2. Buy oil in Euros

Lifting sanctions on Iran is a first step towards payment for oil imported into Europe in Euros. Using the dollar is in fact a nonsense for several reasons: first, that requires a supply of dollars which is far from obvious when one recalls the attempt at draining of the flow of dollars to the European banks in 2011 (100); secondly, the exchange rate risks are far from negligible during the present turbulent times; thirdly, using the dollar is to support the US economy’s instability and weakness.

When you have the primary world economy’s currency, you shouldn’t hesitate to use it to pay for your oil. Not to do so serves to weaken the Euro’s role. Not to do so serves to carry the world-before at arm’s length rather than invest in the world-after.

3. Play an active role in reforming the international monetary system

The two preceding recommendations fall within the more general framework of the problem of the dollar’s central role. The dollar’s key position as the international reserve currency could be justified after the Second World War when the United States dominated the world and gold convertibility was still guaranteed. But the dollar’s centrality as the principal reserve currency in the present “non-system” is at the source of the world crisis and encourages the United States to run fiscal and trade imbalances, pushes it to defend its currency and petrodollars at the cost of wars and destabilization, and finally transfer their problems to the rest of the world.

To turn the page on the crisis and set out again on solid foundations, it is essential to create a new international monetary system, based on a basket of currencies (including gold) or on some other solution. Europeans can and must play an active role here, thanks in particular to the experience gained with setting up the Euro. They will find powerful allies in the BRICS countries, convinced of the need for this reform.

Finally, let’s note that, paradoxically, this recasting will also benefit the United States enabling them to benefit from the new dynamic rather than getting bogged down in their insoluble problems.

4. Get closer to the BRICS

In fact it’s here where the future lies and not on the United States’ side. The dynamic about which we spoke above comes from this group of countries. Europe as a footbridge between the East and West has the choice between remaining anchored to the United States or turning to the BRICS. Between sticking to a declining power and turning towards the future of the world, there’s no need to hesitate. The strategic Euro-BRICS rapprochement must thus become a priority in 2013, especially with the G20 meeting in St Petersburg and the prior BRICS Summit in view.

5. Don’t enter into the suicidal rationale of shale gas on European soil

As we see in this GEAB issue, shale gas extraction is a flash in the pan which is quickly exhausted at the cost of considerable environmental damage. Mortgaging the environment for a few years of slightly higher growth, whilst preventing the weaving of tomorrow’s international cooperation, is quite a sad thought. And this thought prevents finding the alternatives to fossil fuels which will give the country controlling them a substantial advantage however. Europe’s future plays out permanently without shale gas.



26 Source : CNBC, 14/02/2013

27 Source : ZeroHedge, 05/02/2013. China seems to have an interest in hiding the true figure of its gold reserves since it claims to hold approximately 1,000 tonnes whereas it buys 800 tonnes a year.

28 Source : Le Point, 16/01/2013

29 On this subject it’s interesting to wonder why 300 tons of gold stored in Paris have been transferred immediately to Germany, whilst the 300 tons in New York will take seven years to be transferred… The reaction wouldn’t have been any different if the gold was no longer on US soil.

30 Read Petrogold: Are Russia And China Hoarding Gold Because They Plan To Kill The PetroDollar? (The economic collapse, 12/02/2013) and The Petro-Dollar Sunset (Silver Doctors, 18/01/2013).

31 Source : AllAfrica, 28/01/2013


63 Source : « Where The U.S. Gets Its Oil », Energy Information Administration, Avril 2012

64 Source : « U.S. Reliance on Oil From Saudi Arabia Is Growing Again », NY Times, Aout 2012

65 Source : « Venezuela-Colombia Oil Pipeline: Leaders Discuss Plans For Project », Huffington Post, Novembre 2011

66 Source : « Yamani: Oil could reach $300/bbl over unrest in Saudi Arabia », Centre for Global Energy Studies, Avril 2011

67 Source : « Saudis cut oil output to lowest in a year », Financial Times, Décembre 2012

68 Source : « OPEC Cuts Oil Output to 14-Month Low Amid Economic Uncertainty », Bloomberg, Janvier 2013

69 Source : «The Cost of Protecting Oil in the Persian Gulf», Resources For the Future, Janvier 2012

70 Source : « Washington-Ryad : les liaisons dangereuses », RFI, Septembre 2003

71 Source : « China’s crude oil imports by source 2011 », EIA, Septembre 2012

72 Source : « EIA: China rivals the world in coal consumption », PennEnergy, Janvier 2013

73 Source : «Sudan: China, Sudan Agree to Increase Oil Production – Officials », All Africa, Novembre 2012

74 Source : « Saudi oil refinery deal shows close ties », China Daily, Janvier 2012

75 Source : « Iran accepts Yuan for Oil trade with China, threatens US Dollar », Commodity Online, Mai 2012

76 Source : « Iranian Oil Bourse », wikipedia

77 Source : « Dim sum bonds sprout in Dubai », CNN Money, Mars 2012

78 Source : « Brazil and China agree currency swap », Financial Times, Juin 2012

79 Source : « China-Russia currency agreement further threatens U.S. dollar », International Business Times, Novembre 2010

80 « BRICS to sign pacts for trade in local currencies », Zeebiz India, Mars 2012

81 Source : « China and Japan to start direct yen-yuan trade in June », BBC, Mai 2012

82 Source : «Currency pact with Australia is ‘natural’: Zhou », Financial Review, Novembre 2012

83 Source : « Nexen sale to China’s CNOOC backed by Canada government », BBC, décembre 2012

84 Source : « Turkey Swaps Gold for Iranian Gas », Wall Street Journal, Novembre 2012

85 Source : « India and Japan sign new $15bn currency swap agreement », BBC, Décembre 2011

86 Source : « National oil companies reshape the playing field », Bain, Octobre 2012

87 Source : « Exxon and Chevron toil in hunt for growth », Financial Times, Février 2013

88 Source : « Oil giants like Shell, BP struggle to increase output », First Post, Novembre 2012

89 Source : « Remaking BP has yet to pay off », Financial Times, Janvier 2013

90 Source : «PETROLE – Total : production en baisse, résultats en hausse», Enviro2B, Février 2013

91 Source : « Under Pressure: Once Mighty Gazprom Loses Its Clout», Der Spiegel, Février 2013


99 Simple, but requiring a certain political courage.

100 Cf. GEAB n°62 (February 2012). One wonders if that can’t happen again during a dollar debacle.


[Excerpt GEAB 72 (February 2013) – 2013-2015: The end of the petrodollar’s rule over the world]

[LEAP/Europe 2020]

| Gramercy Images |

Written by testudoetlepus

November 4th, 2013 at 11:12 pm

Annihilation of U.S. Dollar Coming

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by Greg Hunter

Renowned gold expert Jim Sinclair says financial calamity is just around the corner for America.  Sinclair contends, “We are facing the annihilation of currency.  We are facing the shift of America as the leading and most influential nation of the world to some form of banana republic. . . . If it wasn’t for food stamps, we would be facing long lines of people waiting for free food.”  For gold, everything hinges on the U.S. dollar, and Sinclair says, “I think the dollar gets hammered.  I believe we are headed for hyperinflation.”  One of the many black swans, according to Sinclair, is the possible abandonment of the U.S. dollar by Saudi Arabia.  If Saudi Arabia stopped selling oil only in U.S. dollars, what would that do to the buying power of the buck?  Sinclair says gasoline would be “$10 a gallon very soon, without a doubt.”

Sinclair predicts retirement funds and bank deposits are going to be taken by the government.  How much of your money could you lose?  Sinclair says, “In Cypress, it was a total of 83%. . . . Cypress is the blueprint, and it’s what we are going to experience here in the United States.”  Jim Sinclair, who has just accepted the position as Chairman of the Advisory Board for the establishment of the Singapore Gold Exchange, says, “The exchange will trade physical gold only and not future gold. . . . You have to make delivery.”  Meaning, there will be no naked short selling or manipulation of this new market.  Sinclair says, “This will emancipate gold from the paper price.”  How high will gold go?  Sinclair predicts, by 2016, “Gold will be $3,200 to $3,500 an ounce.”  By 2020, Sinclair predicts, “Emancipated gold will be $50,000 per ounce.”  Join Greg Hunter as he goes One-on-One with Jim Sinclair of


[Annihilation of U.S. Dollar Coming – Jim Sinclair]

[Greg Hunter]

Written by testudoetlepus

October 30th, 2013 at 2:13 pm

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

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by Jim Willie

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.




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.


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.


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.


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.


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.


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 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.


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.


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.




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

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Silver Doctors

Written by testudoetlepus

April 4th, 2013 at 4:00 pm

Jim Willie: Gritty Questions on the Historic Collapse

without comments

by Jim Willie,

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 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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.




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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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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 For personal questions about subscriptions, contact him at

Jim Willie: Gritty Questions on the Historic Collapse


Written by testudoetlepus

March 1st, 2013 at 1:46 pm

Death Knells for the USDollar

without comments

by Jim Willie,

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 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.

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 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.


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.


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 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.


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.


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 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.




From subscribers and readers:

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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 For personal questions about subscriptions, contact him at

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


Written by testudoetlepus

September 27th, 2012 at 1:40 pm