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Major dislocations are coming.
Tremendous disruptions are coming. Price discontinuities are coming. Price
chart patterns might be rendered useless soon. Last week, the case for a
grand Paradigm Shift was made, covering many elements in order to paint a
mosaic. Taken in isolation, any one point is important in its own right, but
not enough to convince of a structural change. Taken in entirety, the many
points create a full picture that is more easily recognized. The ruinous
events of the Wall Street banks last September and October surely served as an
extreme event loaded with profound disruption. The Chinese have proceeded
with a transition to yuan-based domestic banking, with an installation of
yuan swap facilities around the world, with an ASEAN regional fund again
supplied by yuan for flexible purposes, with permission granted to two Hong
Kong banks to sell yuan-based bonds, with an admitted rise in significant
gold bullion reserves, and with continued verbal battles over legitimacy of
the USDollar as the global reserve currency. These Chinese initiatives in
recent weeks, occurring rapidly, are serving as a collective extreme event
with the potential for profound disruption. A gold-backed yuan currency
would surely cause massive disruption in a climax merger of events. The
barter system set up between Russia and Europe will bypass the US$-based settlement system, as will the barter system set up between Russia and China. The avoidance of contract settlement in USDollars
would result in extreme disruption to the global banking system. The
creditor nations are plotting to organize and launch alternative currencies,
maybe to fortify existing currencies (like the euro or yuan or ruble) with a gold
component, maybe also with a crude oil component. A challenge to the USDollar
by asset-backed currencies would result in extreme disruption to the
global banking system. The hidden nitroglycerine to the disruptions is
the Russian military, and any pledges of support for nations attempted to
force systemic changes. These are just some important examples of change
agents.
All Paradigm Shifts result in
extreme disruption. That is the essence of Paradigm Shifts. The entire table
changes, like its shape, its seats, its location, even who sits at the table,
and in particular who sits at the head of the table. Big disruptions are to
come from the COMEX pit of corruption, the central nexus for controlling
illicitly the price structure for gold, the USDollar, and the USTreasury
Bonds. The COMEX in all likelihood is the weakest link in the US-UK chain of
corrupted financial markets. For many months my view has been that gold
fights the political battles, while silver gathers more than its share of
rewards and spoils. Gold has a long history of experience fighting grand
battles. It can be placed in dungeons, but not for more than a couple
decades. The rot in financial systems without golden foundations forces gold
to the surface!
THE HITMEN COMETH
It has come to my attention that
several private parties have accepted contract assignments to neuter
the COMEX and London
Metals Exchange, to render ruin to its gold market. That bears
repeating from the rooftops. MUTLIPLE HIRED HITMEN HAVE ASSIGNMENTS TO KILL
THE COMEX GOLD MARKET. That is the lynchpin to control the USDollar, the
USTreasurys, and the corrupt mechanisms used by the New York and London
syndicates. Their clear criminal behavior is beyond the reach of law
enforcement, but they are not beyond the reach of hitmen. The USDollar has
been in violation of the US Constitution since 1971, perpetuated by a
renegade series of administrations. The global creditors for the USTreasury
Bonds are so angry at the past suffered losses, the prospect of deep future
losses, and the corruption laced throughout the US financial system, that they
have hired third parties to kill off the US$-gold platforms, to
destroy the burdensome banking ballast dominated by protected entrenched
fraud experts, to lay waste to the vehicles used by the US-UK bond
trafficking syndicate totally saturated with corruption, dishonesty, and
collusion, replete with greed, totally absent conscience. They have
systemically been dismantling the COMEX pillars and levers over the last
several months, quietly and without fanfare, surely without publicity. If
gold investors knew of their actions, they would become much bolder. Some
want the bankers in their gunsights not to be warned. They await their fate
with the Financial Grim Reaper. Their executions will be as swift as brutal.
The HITMEN have been hired, with highly lucrative
contracts and wide berth in methods to be put to use. Their assigned task
is to castrate the levered family jewels from some of the major players who
illegally keep the gold price and silver price artificially low. The
targeted victims know their awaited fate, and are presently defecating in
their skivvies. A short list of banks facing the firing squad is already
known, details for Hat Trick Letter members. Some detailed speculation will
be devoted to the June HTL reports, since too controversial. This will be an
evolving story, with new chapters soon written. The executions will be
sudden. The missing US-UK levers will be immediate. Since last autumn,
the global powers have aligned against Wall Street, even if the central
bankers have supported it. If one wants to destroy a building, then weaken
its pillars, cut a few support beams, then rush in a crowd of people, and
wait for a turbulent storm. In the case of the COMEX, the wicked players will
crowd the corrupted building. They will sink into ruin and then oblivion.
They might become objects of mockery when they make noises from prison. If
lucky, they will join Ken Lay from Enron fame in a remote Caribbean island
where other favored operators live a secluded life, but a life nonetheless,
complete with plenty of sunshine, fresh air, beaches, bikinis, and sailboats,
but no intrusive cameras. Please, do not disturb the quasi-dead!
The financial cartel dominated
by the United States and United Kingdom is soon to suffer some serious blows. The
list of their financial crimes is as magnificent as it is long. Its list of victims
is as prominent as it is long. The harbored resentment is great by many
global players. They waited patiently for the Obama Admin to install a new
group, but the old group remains due to a revolving door from the same smoky
club, dominated by Goldman Sachs once more. Their influence, if not bribery,
of the USCongress is in continuation, sufficient for unwanted obsequious
approval. The regulatory agencies are from the same encrusted chambers
replete with stench. The Coup d’Etat of the USGovt financial offices
has not changed with Obama, who sounds like a refreshing leader but who is
actually a marionette under control by those who selected him, favored him
with publicity, then enabled his election. Nothing has changed except the
rhetoric of change and the pace on the path to bankruptcy for a few icon
firms like General Motors and Chrysler, if not the desperate cries from the
50 states suffering from insolvency. More prominent failures will follow,
since nothing has been remedied. The channeled funds directed to Wall Street
firms continue unabated. The bread crumbs to Main Street and the people continue unabated. Even the war
continues unabated. Forget not that Marie Antoinette once said “Let
them eat cake” before the French Revolution and the Storming of the
Bastille. Today, the Bastille is the entire USEconomy where insolvent
Americans are stuck.
Some might wonder what was the
turning point that resulted in hired hitmen to be under contract against
certain US financial markets. Some might say the failures of
Lehman Brothers, American Intl Group, and Fannie Mae. Not so! In my opinion,
it was the invasion in the South Osettia region of Georgia in August 2008. The events around Georgia, with the United States Military deeply involved,
along with a certain tiny mischievous ally nation, lit a fuse that set off a
chain of events. In time, events led to orders given by high level powers,
for the US fraud kings on Wall Street to swallow the medicine no later than first
thing Monday morning on September 15th. When the Jackass inquired as to the
nature of the urgency leading into that understood stated deadline date, no
answer was given. The guess of the Bank For Intl Settlements was submitted by
me, and it was confirmed. Other sources, the USTreasury Bond creditors, also
applied the pressure, it was told. Rumor was thick that death threats had
been delivered to certain Wall Street executives, such as Paulson. Thus the
pressure passed on to the USCongress for passage of T.A.R.P. funds. The
disbursement of those funds have not been made public partly because Wall
Street (read Goldman Sachs) does not want the US people to be aware of
payoffs for bond fraud under death threats. Also, the Congressional Inspector
has cited a few dozen recommendations for criminal fraud investigations of
the same T.A.R.P. funds. The US financial sector has become a den of vipers, no longer
the bastion of gentlemen, but rather of syndicate bosses.
COMEX STRESS NEAR A
BREAKING POINT
Sources from GATA (the Gold
Anti-Trust Action committee) report growing distress for participants in the
COMEX gold contracts, where a commercial party is very short and in deep
trouble. They have sold more gold bullion than they can deliver. They are
likely one of the big banks who violate the law with impunity, with USGovt
sanctioned protection. By that is meant they routinely do not post 90% of the
metal as collateral that they illegally sell. This is naked shorting by any
other name. There are reports of grave concern over the upcoming June gold
option expiration. If too many deliveries are ordered, then the
commercial shorts would be under stress for exposure for naked shorting. They
will eventually be caught in a bind and default on contracts. The important
loaded monthly contracts are March, June, September, and December. The COMEX
has tried to limit the ability of buyers to take delivery, running them
around in circles, and entangling them in red tape, all clearly restraint of
trade endorsed by the USGovt. Such rules are not in effect for cotton or
soybeans or crude oil or pork bellies. After all, a financial crime syndicate
has taken control of the USGovt, ever since Robert Rubin took charge at the
USDept Treasury in 1992. His major project was to gut the nation of its gold,
for the private profit of his friends. Recall Rubin came from Goldman Sachs.
Rubin was the author of the Strong Dollar Policy which brought ruin to the
nation. Hey, just my opinion!
Background inventory strain has
come from unexpected sources. The Germans have demanded that gold bullion
held in US custodial accounts be returned to their owners, with physical gold
shipped back to Germany. The Dubai bankers
have demanded that gold bullion held in London
custodial accounts be returned to their owners, with physical gold shipped
back to the United Arab Emirates. They are following the hired German
counsel. In all likelihood, neither US nor London sources are in possession of all the gold held in those
custodial accounts, since at least some of it probably was improperly leased.
By that is meant without owner permission or knowledge. So an uproar could
come soon with charges of gold bullion theft, or at least failure of
fiduciary responsibility. Theft is a simpler description.
China is the biggest gold
producer in the world now, but none of its output is directed to the open
market. Russia is a significant gold producer also, but none of
its output is directed to the open market either. A near default occurred in
early April from a close call to Deutsche Bank on 850 thousand ounces of
gold. The tarnished bankers at D-Bank dug up over a million ounces on the
quick from the ready Euro Central Bank mine shifts in the nick of time. Never
ignore the basic fact that COMEX lies through its teeth about the gold
bullion in its vaults, since audits do not occur, some is leased (replaced by
paper certificates), and some is committed in some fashion to very wealthy
parties (unavailable). Far less gold bullion rests in COMEX vaults than is
advertised. All signals point to serious strain in COMEX gold supply.
FEEDERS FOR GOLD
FULLY LOADED
Two important feeder systems
continue to be USDollar weakness and USTreasury Bond weakness. More
important than these is the systematic ruin of the major global currencies
generally, but a convenient chart is not offered to track it. Just note
the near 0% official rates dictated by the failed franchised Politburos known
as central banks in most countries, or the movement toward 0%. The USDollar
has broken below important support at 81. Expect it to fall further after
more dithering. The long-term USTreasury Note has suffered a fast rising
surge in its bond yield. Its target from different perspectives is 4.1%, and
right quick. These two highly favorable charts will power the gold price to
new highs very soon. Nobody knows how soon, but soon. Rarely does one see
both the USDollar and USTreasurys fall in value simultaneously. They are now,
and will provide a jet assist to gold, which is held back only by COMEX
corruption. Their illicit maneuvers are more obvious and desperate with each
passing week. Someday their actions might even be on the news. The
imminent Standard & Poors debt downgrade of the UKGilt (bonds from
British Govt) hit the credit market last week like a bolt of lightning. My
belief is that it might have short-circuited the US-UK financial foundation,
and burned out some major circuit boards. The US and UK share Third World finance characteristics. If a Fourth World existed, the US would merit it.
 
The gold price is on the verge
of a breakout to new nominal highs. The chart demands it. It needs only a
trigger, in a land where potential triggers dot the charred landscape. A gold
event will be unavoidable. Its chronic strain has derived from the extreme
disparities between the physical market mired in shortage, versus the paper
market with unlimited supply. The tail is wagging the dog here, as it has
been for years, soon to end. The silver price will easily recover to the 17
level in a flash. It has already surpassed the February high. It is loading
up for the next little surge to resistance that awaits at the 17-19 range. The
potential sling shot momentum boost for silver will be powerful, enough to
send its price to 30 with ease. Think pendulum.
NOW FACTOR IN DISRUPTIVE EVENTS,
THE PRICE DISLOCATIONS, AND THE OVER-ARCHING PARADIGM SHIFT IN PROGRESS. THE GOLD PRICE COULD
REACH 1300 SUDDENLY. WITH EXTREME CONTROVERSY FROM COMEX, LIKE DELIVERY
DEFAULTS, PUBLICIZED CORRUPTION, AND EVEN FRAUD INDICTMENTS, THE GOLD PRICE
COULD OVER-RUN THE 1300 TARGET AND HEAD FOR 1500 AND BEYOND. SILVER COULD AS
A RESULT FOLLOW ITS WARRIOR BROTHER, HEAD PAST 20 IN A FLASH, AND PURSUE 30
EASILY.
Little attention has been given lately to one of
the most reliable time-tested forward indicators of the gold price. The
ratio of the 10-year USTreasury Note yield to the 2-year USTreasury Bill
yield has always been highly reliable in predicting a move in the gold price.
The simple chart of bond yields versus maturity years is known better as
the Treasury Yield Curve. The ratio is more amenable to chart analysis. A
breakout in the Treasury Yield Ratio is in progress. All benefits
from the mid-March monetization announcement have vanished. If the 2-year
bond yield remains near 1%, where it appears stuck, then the breakout target
would indicate that the 10-year bond yield is heading to 4.1% at least. Yet
another method targets 4.1% in the long bond yield. The presented ratio
contains information on the future prospect of price inflation, in a reliable
contrast of time perspectives. Knuckleheads who insist on pounding the
Deflation Tables might want to check this indicator, and look at the crude
oil price. It is $63 per barrel, not the $20-25 predicted by these lost
troopers. Yo Mish Bro, can you spare me a deflating dime? The strict
definition of money is useless anymore. The Shadow Banking system is an
actual part of the real world, which you do NOT count.
To the fools, dolts, and morons
out there who cling to notions of recovery and Green Shoots, bless your
heart. Hope has clouded your minds. Once more you believe the liars and
purveyors of propaganda, after being nearly fatally burned. You must believe
in the Easter Bunny, Santa Claus, and the Tooth Fairy. You should not be in
charge of investment funds, but rather of crayon supply cabinets and Beanie
Baby collector items. The Case Shiller housing price index this week reported
a 19.1% annual decline in 1Q2009 from Q1 last year. Foreclosures in April
were up 32% over last year, as the nightmare continues. That is 1 in 374
homes with mortgages in America in some process of foreclosure. A relentless
decline in home prices erases household wealth, and the source of consumer
spending. Consumer confidence is ephemeral and baseless. The mortgage rate
has just gone above the pre-March levels, when the USFed announced they would
monetize $1050 billion in both USTreasury Bonds and USAgency Mortgage Bonds. The
benefit has been erased. Today’s underwater mortgage is
tomorrow’s foreclosure, made worse by job losses. The FDIC this week
reported a 25% rise in non-current loans in 1Q2009 from Q4 of last year. Greater
bank losses will come, much like floods follow hurricanes. And lastly, give
credit to the USGovt statrats in their busy laboratories. They decided to
ramp up the Q2 Gross Domestic Product by including all USGovt rescue funds
for the big banks, including the diverse funds from the many liquidity
facilities. All those funds will go directly into the GDP for Q2 as a special
line item. Expect a miraculous economic recovery in the second quarter, based
in vapor. The stock rally since March was based in accounting fraud. These
are true American innovations, but too bad they are not exportable! They are
not, since they have no value.
Jim Willie
CB
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