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Edification
is not the word that comes to mind when observing an interview with Larry
Fink of Blackstone this morning on network financial news. It was
inspirational if not humorous, and somewhat pathetic. Of course the
interviewer treated him like royalty, when just a syndicate captain, a Made Man. As a cog within the US financial hierarchy, he
was asked why Gold is approaching record price levels near $1500 per ounce.
He gave his best 10-second answer, showing no depth of comprehension but an
excellent grip of propaganda laced with simplistic distortion. He said, "GOLD IS RISING FROM ALL THE GLOBAL
INSTABILITY, AND NOT FROM INFLATION AT ALL." Sounds good, but it
lacks much reflection of the world of reality burdened by complexity and
interconnectivity that the enlightened perceive. At least he did not babble
about Gold being in an asset bubble. It cannot, since Gold is money. It is
curious that all the analysts, bankers, fund managers, corporate chieftains
who did not advise on Gold investment over the last ten years are precisely
whom the financial network news appeals to for guidance in the current
monster Gold bull run. They knew nothing before, and they know nothing now.
The major US news networks carry the Obama water while the USCongressional members carry the USBanker
robes and show respect with genuflection before the priests. But guys like Fink
are their harlot squires. Poor Ben Bernanke, despite his high priest
position, does not gather a fraction of respect that Alan Greenspan did even
though Alan presided over the collapse. The wild card possibly later this
year or 2012 will be a national movement to force mandatory wage gains, and
thus avert a national economic collapse. The squeeze is on in a powerful
manner to both businesses and households.
ANOTHER STRONG GOLD BREAKOUT
As long as Quantitative Easing
programs are in place and actively pursued, Gold & Silver prices will
soar. The programs are urged by exploding budget deficits and absent USTBond
demand. That translates to a ruined USDollar currency. Gold & Silver respond
to the debasement and ruin. Efforts will become ridiculously stretched to
save the USDollar, but will fail. QE will go global and secretive, assuring
tremendous additional gains in the Gold & Silver price. No effort to
liquidate the big USbanks will occur, thus assuring the process will continue
until systemic breakdown then failure. The more extraordinary the measures to
save the embattled insolvent fraudulent USDollar, the more the Gold &
Silver price will soar. It is that simple. Gold & Silver will soar as
long as central banks continue to put monetary inflation machinery to work.
They are attempting to provide artificial but coordinated USTreasury Bond
demand. In the process their efforts will continue to push the cost
structure up further. In my view, since the Japan natural disaster hit with
financial fallout, the Global QE is very much in effect, but not recognized
as a global phenomenon. It pushes up Gold in uniform fashion worldwide.
50 FACTORS POWERING THE GOLD BULL
1)
USFed is stuck at 0% for over two years and
printing $1.7 trillion in Quantitative Easing, otherwise called monetary
hyper inflation. They are not finished destroying both money and capital.
2)
USFed tripled its balance sheet, with over
half of it bonds of exaggerated value, while it gobbled up toxic mortgage
bonds as buyer of last resort. The mortgage bonds have turned worthless. The USFed waits for a housing revival to bail itself out, but
it will not arrive.
3)
Debt
monetization has gone haywire, as over 70% of USTBond
sales from the USFed printing press. The QE was
urgently needed, since legitimate buyers vanished. Even the primary dealers
have been reimbursed in open market operations within a few weeks.
4)
PIMCO
has shed its entire USTreasury Bond holdings,
seeing no value. They joined many foreign creditors in an unannounced buyer
boycott in disgusted reaction to QE which is essentially a compulsory
unilateral debt writedown.
5)
Growing USGovt deficits have run over $1.5 trillion annually,
with absent cuts, obscene entitlements, endless war. The prevailing
short-term 0% interest rates are out of synch with exploding debt supply and
rising price inflation.
5)
Unfunded
USGovt liabilities total nearly $100 trillion for medicare, social security, pensions, and more. The
obligations are never included in the official debt. It represents insult to
injury within insolvency.
6)
Standard
& Poors warned that USGovt
could lose AAA rating in lousy credit outlook, one chance in three within the
next two years. Ironically, the announcement came on the day when the USGovt exceeded its debt limit. The network news missed
it.
7)
State
& Municipal debt have collapsed, as 41 states have huge shortfalls, and
four large states are broken. They might receive a federal bailout. It could
be called QE3, maybe QE4.
8)
Coordinated
USTBond purchases from Japanese sales have relieved
the USFed, as other major central banks act as
global monetarist agents. The sales by Japan are vast and growing. Witness
the last phase in unwind of Yen Carry Trade, where 0% borrowed Japanese money
funded the USTreasury Bonds and US Stocks.
10) Quantitative Easing, a catch word for
extreme monetary inflation and debt monetization, has become engrained into
global central bank policy, soon hidden. It is so controversial and deadly to
the global financial structures that it will go hidden, and attempt to avoid
the furious anger in feedback by global leaders. This is the most important
and powerful of all 50 factors in my view.
11) The FedFunds
Rate is stuck near 0%, yet the actual CPI is near 10%, for a real rate of
interest of minus 9%. Historically a negative real rate of interest has been
the primary fuel for a Gold bull. This time the fuel has been applied for a
longer period of time, and a bigger negative real rate than ever.
12) The USGovt
claims to have 8000 tons of Gold in reserve, but it is all in Deep Storage,
as in unmined ore bodies. The collateral for the USDollar and USTreasury debt is
vacant. It is in raw form like in the Rocky Mountain range or Sierra Nevada
range.
13) Fast rising food prices, fast rising
gasoline prices, and fast rising metals, coffee, sugar, and cotton serve as
testament to broad price inflation. So far it has shown up on the cost
structure. Either the business sector will vanish from a cost squeeze or pass
on higher costs as end product and service price increases.
14) The entire world seeks to protect wealth
from the ravages of inflation & the American sponsored QE by buying Gold
& Silver. The rest of the world can spot price inflation more effectively
than the US population. The United States is subjected to the world's
broadest and most pervasive propaganda in the industrialized world.
15) The European sovereign debt breakdown
with high bond yields in PIIGS nations points out the broken debt foundation
to the monetary system. The solutions like with Greece in May 2010 were a
sham, nothing but a bandaid and cup of elixir.
Spain is next to experience major shocks that destabilize all of Europe
again, this time much bigger than Greece. The Portuguese Govt
debt rises toward 10% on the 10-year yield, while the Greek Govt debt has risen to reach 20% on the 2-year yield.
16) Germany is pushing for Southern Europe
bank climax in their Euro Central Bank rate hike. Europe will be pushed to
crisis this year, orchestrated by the impatient and angry Germans. They have
no more appetitive for $300 to $400 billion in annual welfare to the broken
nations in Southern Europe.
17) Isolation of the USFed
and Bank of England and Bank of Japan has come. The small rate hike by the
European Central Bank separated them finally. The Anglos with their Japanese
lackeys are the only central banks not raising rates. With isolation comes
all the earmarks on the path to the Third World.
18) The shortage of gold is acute, as 51
million gold bars have been sold forward versus the 11 million held by the
COMEX in inventory. Be sure that hundreds of millions of nonexistent
fractionalized gold ounces are polluting the system. Word is getting out that
the COMEX is empty of precious metals.
19) Such extreme Silver shortage has
befallen the COMEX that the corrupted metals exchange routinely offers cash
settlement in silver with a 25% bonus if a non-disclosure agreement is
signed. The practice cannot be kept under wraps, as some hedge funds push for
fat returns in under two months holding positions with delivery demanded.
20) China has begun grand initiatives to
replace its precious metal stockpiles. They are pursuing the Yuan currency to
become a global reserve currency. As they build collateral for the Yuan, they
are also elevating Silver as reserves asset.
21) A global shortage of Gold & Silver
has been realized in national mint production. From the United States to
Canada to Australia to Germany, shortages exist. Many interruptions will
continue amidst the shortages, which feed the publicity.
22) The Teddy Roosevelt stockpile of 6
billion Silver ounces was depleted in 2003. He saw the strategic importance
of Silver for industrial and military applications. The USEconomy
and USMilitary will turn into importers on the
global market.
23) The betrayal of China by USGovt in Gold & Silver leases is a story coming out
slowly. The deal was cut in 1999, associated with Most Favored Nation granted
to China. But the Wall Street firms broke the deal, betrayed the Chinese, and
angered them into highly motivated action. No longer are the Chinese big
steady USTBond buyers, part of the deal also.
24) Every single US financial market has
been undermined and corrupted from grotesque intervention, constant props,
and fraudulent activity. The degradation has occurred under the watchful eyes
of compromised regulators. Fraud like the Flash Crash and NYSE front running
by Goldman Sachs is protected by the FBI henchmen.
25) The USEconomy
operates on a global credit card, enabling it to live beyond its means. The USGovt exploits the compulsory foreign extension of
credit in USTBonds, by virtue of the USDollar acting as global reserve currency. Foreign
nations are compelled to participate but that is changing.
26) The USMilitary
conducts endless war adventures for syndicate profits. They use the USTreasury Bond as a credit card. The wars cost of $1
billion per day is considered so sacred, that it is off the table in USGovt budget call negotiations, debates, and agreements.
27) Narcotics funds have proliferated under
the USMilitary aegis. The vertically integrated
narcotics industry is the primary plank of nation building in Afghanistan.
The funds keep the big US banks alive from vast money laundering.
28) No big US bank liquidations have
occurred, despite their deep insolvency. Any restructure toward recovery
would have the liquidations are the first step. The USEconomy
is stuck in a deteriorating swamp since the Too Big To Fail mantra prevents
the urgent but missing step.
29) The unprosecuted multi-$trillion bond
fraud over the last decade has harmed the US image, prestige, and leadership.
The main perpetrators are the Wall Street bankers and their lieutenants
appointed at Fannie Mae and elsewhere. They bankers most culpable remain in
charge at the USDept Treasury and other key
supporting posts like the FDIC, SEC, and CFTC.
30) The ugly daughters Fannie Mae and AIG
are forever entombed in the USGovt. They operate as
black hole expenses whose fraud must be contained. The costs involved are in
the $trillions, all hidden from view like the fraud. Fannie Mae remains the
main clearinghouse for several $trillion fraud programs still in operation.
31) The US banking system cannot serve as an
effective credit engine dispenser, an important function within any modern
economy. It is deeply insolvent, and growing more insolvent as the property
market sinks lower in valuation. The banks lack reserves, and hide their
condition by means of the FASB permission to use fraudulent accounting.
32) The big US banks are beneficiary of
continuous secret slush fund support from the USGovt
and USFed. Their sources and replenishments have
been gradually revealed. The TARP Fund event will go down in modern history
as the greatest theft the world has ever seen, easily eclipsing the biggest
mortgage bond fraud in history.
33) The insolvent big US banks continue to
sit at the USGovt
teat. The vast umbilical cord of banker welfare has not gone away. Goldman
Sachs still is in control of the funding machinery.
34) The shadow banking system based upon
credit derivatives keeps interest rates near 0%. The usury cost of money is
artificially low near nothing. As money costs nothing, capital is actively
and rapidly destroyed.
35) A vast crime syndicate has taken control
of the USGovt. A vast crime syndicate has taken
control of the USMilitary. A vast crime syndicate
has taken control of the USCongress. A vast crime
syndicate has taken control of the US press networks.
36) A chronic decline of the US housing
sector keeps the USEconomy in a grand decline with
constant deterioration. With one million bank owned homes in inventory, a
huge unsold overhang of supply prevents any recovery of housing prices. Home
equity continues to drain, and bank balance sheets continue to erode.
37) Over 11 million US homes stand in
negative equity. The sum equals to 23.1% of households. They will not
participate much in the USEconomy, except when
given handouts. They have become downtrodden.
38) The USEconomy
will not benefit from a export surge. The US industrial base has no critical
mass after 30 years of dispatch to the Pacific Rim & China. The industry
must contend with rising costs in offset to the falling USDollar,
which is cited as providing the mythical benefit. Then can export in droves
if they do so at a loss.
39) A global revolt against the USDollar is in its third years. The global players work
to avoid the US$ usage in trade settlement. Several bilateral swap facilities
flourish, mostly with China. If China supplies products, then the Yuan
currency will be elevated to global reserve currency.
40) Global anger and resentment over three
decades has spilled over. The World Bank and IMF have been routinely used by
the US bankers to safeguard the USDollar and Anglo
banker hegemony. Neither financial agency commands the respect of yesteryear.
41) A middle phase has begun in a powerful
Global Paradigm Shift. The transfer moves power East where the wealth engines
of industry lie, far from the fraudulent banking centers. The next decade
will feature the Chinese as bankers, since their war chest contains over $3
trillion.
42) The crumbling global monetary system was
built on toxic sovereign debt. Legal tender has been nothing more than
denominated debt posing as legitimate by legal decree. That is what word FIAT
means. The system is gradually breaking in an irreversible manner.
43) The global central bank franchise system
has been discredited. It is a failure, which is not recognized by the bank
leaders still in charge. The stepwise process of ruin continues with a new
sector falling every few months. Next might be municipal bonds.
44) Witness the final phase of a systemic
cycle, as the monetary system has run its course. It is saturated with debt
from faulty design. The deception cited in the mainstream media focuses upon
the credit cycle which will renew. It will not. It will break of its own
weight and lost confidence.
45) The recognition has grown substantially
that suppression of the Gold price has been the anchor holding fiat system
together. The Chinese realize that Gold, when removed, leads to the collapse
of the US financial system. They realize it more than the US public. But the
syndicate in control of the USGovt understands the
concept very well, as they designed the system.
46) The institution of a high level global
barter system might soon take root. Gold will sit at its central core,
providing stability. No deadbeat nations will participate. That includes the
United States and several European nations. The barter system will be as
effective as elegant.
47) The movements spread like wildfire in
several US states to reinstitute gold as money. In a few states, led by Utah
and Virginia, progress has been made for Gold to satisfy debts, public &
private. Consider the movement to be in parallel to the Tenth Amendment
movements.
48) Anglo bankers have lost control in
global banking politics. The phased out G-7 Meeting is evidence. China has
wrested control of G-20 Meeting, and has dictated much of its agenda in the
last few meetings. The US has been reduced to a diminutive Bernanke and Geithner being ignored in the corner.
49) New loud stirrings by Saudi Arabia seek
a new security protector. If security is no longer provided by the USMilitary, then the entire defacto
Petro-Dollar standard is put at risk. Remove the crude oil sales in USDollars exclusively, and the US sinks into the Third
World with a USDollar currency that cannot stand on
its own wretched wrecked fundamentals.
50) The IMF solution to use SDR basket as
global reserve is a final desperate ploy. By fashioning a basket of major
currencies in a basket, they attempt to enforce a price fixing regime. It is
a hidden FOREX currency exchange rate price fixing gambit that will invite a
Gold price advance in uniform manner across the currencies bound together.
This ploy is being planned in order to prevent the USDollar
from dying a horrible death at the expense of the other major currencies. By
that is meant at the expense of the other major economies which would
otherwise have to operate at very high exchange rates.
THE BIGGEST UPCOMING NEW FACTORS
Introduction
of a New Nordic Euro currency is near its introduction. The implementation
with a Gold component will send Southern European banks into the abyss,
marred by default. The new currency has the support from Russia and China,
even the Persian Gulf. In my view, it is a USDollar
killer. The first nations to institute a new monetary system for banks and
commerce will be the survivors. The rest will slide into the darkness of the
Third World.
Gold
& Silver seem to be the only assets rising in price, an extension of a
terrific 2010 decade. The exceptions are farmland and the US Stock market.
However, stock valuations are propped by constant and admitted USGovt support. Their efforts are mere attempts to keep
pace with the USDollar decline, as stocks merely
maintain a constant purchase power.
A
hidden overarching hand seeks the global Gold Standard as the bonafide solution. Darwin is at work, but Adam Smith
turns a new chapter. The crumbling monetary solution demands a solution.
Further investment in the current system assures a devastating decline into
the abyss of insolvency and ruin.
Jim Willie CB
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