“…US Treasury data show that China
has cut its holdings of Treasury debt by roughly $100 billion (L65 billion)
over the past year to $844 billion…
Two epochal forces are colliding in the
global bond market: core deflation is gathering force but the West is losing
sovereign credibility just as fast.
Arch-bear Albert Edwards at Societe Generale advises
clients to prepare for a violent policy swing from one extreme to the other.
First we deflate into the abyss: Then we inflate hard rates to get out again.
At some point the "euthanasia of the rentier"
will wear off. Misjudge the sequence at your peril.”
“America no longer needs Chinese money,
for now”
Ambrose Evans-Pritchard, The Telegraph, London,
8/23/10
“The Federal Reserve has been at the
top of the news for a long time and it’s getting a lot of attention now
as it appears the next down cycle in the depression may be upon us. So
what’s the real reason the world listens so intently to an Ivy League
bureaucrat like Bernanke? Of course, it has nothing to do with him.
It’s who he is accountable to–the international banking cartel:
These institutions are the current primary
dealers of the Federal Reserve System. They have power over the entire
economy, everything in “the market,” very much a non-free market.
They sit at the top of the world’s monetary system, currently the
Fed’s debt-dollar pyramid, with a governmental license to what has been
the most secure capital in the world–US Treasury debt–for a
monopoly price that nobody else can get…
These banks get first dibs on buying the
servitude of the US
population through the Fed/Treasury auction process. They distribute some of
it to subordinate capital for a guaranteed premium, and they park a large
amount of it on their own balance sheets as assets upon which they can
speculate, trade, and fractionalize to create the rest of the money in the
economy and put other countries, companies, and people in even more debt. So
these institutions hold a monopoly position that even leviathan Standard Oil
never dreamed of: a government-enforced usury license that generates
trillions for their premium capital holders and senior employees and allows
them to act as imperial armies sucking in more territory around the world as neoliberalism breaks down sovereignty…
…The institutions aren’t
national. The list only indicates that the banking establishment has a
permanent parasitic stake in those countries to churn their populations under
the Fed’s debt system. All of the listed institutions are global in
nature… they have power over nations. Like any corporate institution,
banks drive earnings per share (EPS) by expanding and leveraging their
balance sheets, which for banks means putting everything else in more debt.
So these cartel banks work to expand their territorial control beyond their
national borders to put other populations in debt. This is a mathematical
requirement of exponential growth enforced by the private capital system. The
eventual end state of this dynamic is one integrated, global banking empire.
It’s only a matter of time before their collective balance
sheets…control the rest of the world if people don’t awaken and
choose to put a stop to it.
Will they succeed?”
“Monopoly Money and the International
Banking Cartel”
Dvrabel, Council on Renewal, 8/12/10
“Manipulative selling of gold on the
daily London PM fix has failed to suppress the gold price since April 2009,
when China
announced that it surreptitiously had accumulated a large gold reserve over
the previous five years, GATA board member Adrian Douglas disclosed today in
a statistical study. Since then, Douglas finds, ever-increasing dumping of
gold in London by central banks and their bullion bank agents has been having
less and less effect on the gold price. He concludes that the second
"London Gold Pool" -- a clandestine one, unlike the first -- is
imminently facing a collapse identical to the collapse of the first as
physical gold demand overwhelms the ability or the desire of the market
riggers to provide the necessary metal. Douglas'
study is titled "The Failure of the Second London Gold Pool" and
you can find it at GATA's Internet site here:
http://www.gata.org/files/DouglasFailureOfSecondLondonGoldPool-08-18-2010.doc”
“Adrian Douglas: The imminent failure
of the second London
Gold Pool”
Submitted by cpowell,
GATA, 8/18/10
“Remember, government and the Fed
produce nothing – they only manipulate the process and essentially
expropriate the wealth of the wealth producers…
All kinds of excuses are made for government,
banking and Wall Street, but none of them create wealth. They control our
lives by force, usually legally by paying off our electoral
representatives…”
Bob Chapman, The International Forecaster,
8/21/10
“L.B.M.A. IS DEAD, DRAINED, AND
DEFUNCT. LIKE THE BIG BANKS, IT IS A ZOMBIE SHELL OF A MARKET ENTITY. A MAJOR
RUN ON THE BULLION BANKS HAS BEGUN IN EARNEST. ITS PHONY STRUCTURE IS BEING
REVEALED. SETUP STORIES ARE COMING TO HIDE ITS EMPTY INVENTORY. THE DATA DARK
EVEN IN LATE JULY WAS PROBABLY DUE TO A SUCCESSFUL LEGAL RAID.”
“LBMA was raided in JULY, Portugal
gold; B.I.S. GOLD SWAP & L.B.M.A. DRAIN”
Jim Willie, investorvillage.com, 8/22/10
Increasingly, Credible
Evidence indicates that the International Banker Cartel* and Allies are about
to suffer their First Significant Loss since President Andrew Jackson
(“The Bank tried to destroy me, but I destroyed it first” –
Ed. a Paraphrase) liquidated the Second National Bank of the United
States in 1833.
We must hasten to add
that we do NOT believe the Entire Mega-Bank Cartel* is about to collapse
– far from it. Indeed, overall The Cartel’s Power was enhanced by
the supine U.S. Congress’ Passage of the ostensible FinReg
Bill.
What we do mean
is that the Cartel’s* (in its Modern incarnation led by the Private
for-Profit Fed) years-long, ongoing, and hitherto mainly successful, attempts
to suppress the Price of Gold and Silver, may Collapse in the next few weeks.
Or at least become even less effective than in recent months.
*We encourage those who
doubt the scope and power of Overt and Covert Interventions by a
Fed-led Cartel of Key Central Bankers and Favored Financial Institutions to
read Deepcaster’s December, 2009, Special
Alert containing a summary overview of Intervention entitled “Forecasts
and December, 2009 Special Alert: Profiting From The Cartel’s Dark
Interventions - III” and Deepcaster’s
July, 2010 Letter entitled "Profit from a Weakening Cartel; Buy Reco; Forecasts: Gold, Silver, Equities, Crude Oil, U.S.
Dollar & U.S. T-Notes & T-Bonds" in the ‘Alerts
Cache’ and ‘Latest Letter’ Cache at www.deepcaster.com.
Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org,
including testimony before the CFTC, for information on precious metals price
manipulation. Virtually all of the evidence for Intervention has been gleaned
from publicly available records. Deepcaster’s
profitable recommendations displayed at www.deepcaster.com have been
facilitated by attention to these “Interventionals.”
Attention to The Interventionals facilitated Deepcaster’s recommending five short positions
prior to the Fall, 2008 Market Crash all of which were subsequently
liquidated profitably.
Deepcaster and others have
recently made the case that there are many good reasons for the Prospective
Collapse of The Cartel Precious Metals Price Suppression Regime and soon.
We and several others
have called attention, for example, to the mounting evidence that Major Gold
Repositories likely do not have anywhere near the Physical Gold they
represent they do (see “GOLD: Opportunities + Threats =
Opportunities” (06/11/10) in the ‘Articles by Deepcaster’
Cache at www.deepcaster.com and the Quotes from A.
Douglas and J. Willie above).
Most recently GATA Board
Member Adrian Douglas has made a significant contribution (see Quote above)
to the Evidence of such Chicanery and, therefore, to the body of Evidence
that such a Collapse may be close at Hand.
Thus The Critical
Issue we address today is: In the event of a Collapse of The
Cartel’s Precious Metals Price Rigging Operation, what are the likely
Collateral Effects? And how can we Profit and Protect.
Yes, Profit and
Protect, because not all the Collateral Effects will be Positive, not at
first anyway.
The First, and Most
Obvious likely Positive Effect is that those who have placed a significant
portion of their Wealth in Gold and Silver, and Gold and Silver Mining
Shares, will be richly rewarded due to a Massive and very rapid increase in
their Wealth as measured in Fiat Currency Terms.
Holders of Physical
Bullion and Quality Mining Shares will be especially richly rewarded.
As well such a Fiat
Currency Crash in terms of Gold and Silver may temporarily cause Equities
Markets to Bounce.
That is because, in that
event, it would take more weakened Fiat Currency (in Purchasing Power terms)
to purchase Equities, thus increasing their Nominal Prices).
But the accompanying
loss of faith in Government and the Financial and Economic Systems, would
likely cause such a Bounce to be short lived.
Thus, such a
Stratosphere Launch of Precious Metal Prices, will almost surely be
accompanied by a Massive loss of faith in, (and Purchasing Power of) Fiat Currencies
in General, and in the Governments and Central Banks that sponsored them.
This would likely
rapidly launch a Devastating Hyperinflation (manifest in the Fiat
Currencies), Weimar
Republic style.
Even in the event of
such a Hyperinflation Investors are likely to favor Tangible Assets over
depreciating, or even apparently appreciating, “Paper”
Assets.
In other word, such a Precious
Metal Prices Regime Rigging Collapse could trigger or exacerbate a Worsening
Hyperinflation. As Fiat Money increasingly rapidly loses its Purchasing
Power its Velocity increases, thus exacerbating it rate of loss of Purchasing
Power (cf. The Weimar Republic) in a Lethal Spiral.
Such a Scenario would
likely breed Panic with a consequent Assault (whether justified or not) on
Government and Other Institutions, and consequent Societal Turmoil.
In such an event, Bank
“Holidays” and a Governmental attempt to confiscate Precious
Metals (a la the Gold Reserve Act of 1934) could be The Order of the Day.
In this event, holding
Bullion in Legal Tender Coins might provide some protection from
confiscation, as the Numismatists Exception to the 1934 Act did in the 1930s.
But before addressing
further likely consequences of The Collapse, it is essential to consider
what is likely to occur in The Run-Up
to The Collapse.
First, it is highly
likely The Cartel would be the first to know when their Precious Metal Price
Suppression Regime Collapse (i.e. Gold and Silver Price Launch) would likely
come, before anyone else, and would be able to prepare.
Just what would that
preparation likely entail?
It would likely entail
preparing to impose a Successor Regime which would perpetuate and Maximize
The Cartel’s Power and Profits.
It would also likely
entail the attempted the much Broader imposition of some Global Currency
(which already exists in its Fetal Form – the IMF SDR’s).
And it would likely also
entail the attempted further imposition of powerful Globalist (as
opposed to Internationalist) Institutions.
The Sovereignty of Major
Nations and the Civil Liberties (such as they are) of their Citizens would be
at greater risk even than they are today.
In sum, as the evidence
indicates, and as we have earlier laid out, The Cartel most likely has, and
is likely already implementing, a comprehensive ‘End Game’
Plan (for more details read our “Surmounting The Armageddon Scenario
& Cartel ‘End Game’” (2/26/10) in the ‘Articles
by Deepcaster’ Cache at www.deepcaster.com).
Given that The Cartel is
surely preparing, we should prepare too – The Coming Crisis is also an Opportunity.
Consider the following Facts, and then Our Strategy and its Upside Potential:
Powerful Forces should
continue to impel Gold and Silver upward as Richard Russell explains:
“The public doesn't understand that the
stock market is in the process of topping out. Even as business news turns
rosy, stock holders are beginning to show losses. So while the public is
losing money in the stock market, they are missing out in one of the greatest
bull markets in history the gold bull market, which is now heating up. The
smart money of the world is fleeing fiat currencies and loading up on gold as
well they should.”
Richard Russell, Dow Theory Letters
The “Gold Bull
Market… is now heating up…” to where?
So let’s consider
just what those inflation-adjusted Gold and Silver highs could be.
John Williams of Shadowstats.com provides a cogent answer:
“Even with the June 8th historic high
gold price of $1,246.00 per troy ounce, the earlier all-time high of $850.00 (London
afternoon fix, per Kitco.com) of January 21, 1980 was not breached in terms
of inflation-adjusted dollars. Based on inflation through May 2010, the
1980 gold price peak would be $2,384 per troy ounce, based on
not-seasonally-adjusted-CPI-U-adjusted dollars, and would be $7,595 per
troy ounce in terms of SGS-Alternate-CPI-adjusted dollars.
In like manner, the all-time high price for
silver in January 1980 of $49.45 per troy ounce (London
afternoon fix, per silverinstitute.org) has not been hit since, including in
terms of inflation-adjusted dollars. Based on inflation through May 2010, the
1980 silver price peak would be $139 per troy ounce, based on
not-seasonally-adjusted-CPI-U-adjusted dollars, and would be $442 per troy
ounce in terms of SGS-Alternate-CPI-adjusted dollars.” (emphasis
added)
“Inflation Update, Housing and
Production”
John Williams’ Shadow Government
Statistics, 6/17/10
What is immediately
striking about these numbers is how far below the Inflation-Adjusted Highs
Recent Highs are.
It is important to
consider just how far. As we write, Gold is trading around $1230/oz.
The Gold Price of $1230
is a mere 16.2% of the Real Inflation-adjusted 1980 high of $7, 595.
And the Silver Price at
about $18/oz. (as we write) is a mere 4.1% of the 1980 Inflation-adjusted
high.
Yet above-ground stores
of Silver are Small relative to Demand and are depleting!
These figures show how
effective The Cartel has been in suppressing Precious Metals prices in recent
years.
These numbers also gives
us an important Clue regarding the potential highs for Gold and Silver.
From an historical and
Supply perspective, Silver is a somewhat better Buy now than Gold (But given
the figures above, both are Sweet Deals these days).
This Historical Trading
Ratio of Gold to Silver in Price is 16:1. But recently it has been 68:1 up
from 64 in December, 2009.
And while there are
about 5 billion ounces of above-ground Gold extant today, there are only
about 1 billion ounces of above-ground Silver left (Prior to WW2 there were
10 billion above-ground ounces of Silver) And Silver is not only a Monetary
Metal, it gets widely used, and used up, by Industry.
So today, Silver would
seem to have a higher price Appreciation Potential than (the admittedly very
high Price Appreciation Potential of) Gold EXCEPT that it is, a smaller, and,
if anything, a more heavily manipulated (by The Cartel) Market than Gold.
In sum, both have
dramatic Price Appreciation Potential.
Thus, in light of
repeated Cartel attacks on Gold and Silver Prices in recent years, Deepcaster has developed a Strategy to Maximize Profits
and Minimize losses from these Cartel Price Suppression attacks. This
Strategy also is designed to enhance the chances of Profiting from a Cartel
Precious Metals Price Suppression Regime Collapse. Key Aspects of that
Strategy are:
A.
Recognizing that while
The Cartel is still Potent, it is significantly less potent than it was even
a few months ago due primarily to:
a)
The years-long efforts
of the leaders and members of GATA in exposing Precious Metals Price
Suppression
b)
The stunning Allegations
that Major Gold Repositories do not have nearly as much Physical Gold
they say they do. See the following allegation regarding GLD and Deepcaster’s recent article (in the ‘Articles
by Deepcaster’ Cache at www.deepcaster.com) regarding the
allegations concerning the London Bullion Market Association.
“…another CNBC guest, David Lutz,
managing director of the Stifel Nicolaus
brokerage and investment banking firm in St. Louis, having been asked for his
recommendations in regard to gold, disparaged the gold exchange-traded fund
GLD as follows: "I wouldn't necessarily look at the GLD because they
don't invest in the physical gold.””
“CNBC, GLD is dissed
for not investing in physical gold”
Chris Powell, GATA, 5/12/10
These reports are doubtless (and
understandably) leading Major Gold Investors to demand Delivery and
possession of Physical Gold.
B.
Thus we recommend that
Investors follow their lead with a significant portion of the funds you
allocate to Precious Metals purchases committed to purchasing, and taking
Personal Delivery of, Physical Gold and Silver.
Indeed, because Physical held in one’s
personal possession is so precious, some Forms of it trade at as much as a
25% premium to the spot price of “paper” Gold.
But not all forms of Physical are Equal, as
it were.
Some forms are much more liquid than others,
and some are much more susceptible to counterfeiting, as e.g. by
Tungsten-lacing.
Deepcaster has recently
recommended Purchase of One Form of Physical Gold (and Silver), that is quite
liquid, not easily susceptible to counterfeiting, and commands about a
considerable premium (about 25% recently) over the spot price of Paper Gold
(and Paper Silver). See Deepcaster’s Alerts
“Real Moves & Fake-outs Launching; see Forecasts: Gold, Silver,
Equities, Crude Oil, U.S. Dollar & U.S. T-Notes & T-Bonds; & Buy Reco.” (week ending
5/14/10) and "Cartel Failing? Precious Metal Buy Reco!
Forecasts: Gold, Silver, Equities, Crude Oil, U.S. Dollar & U.S. T-Notes
& Bonds" (week ending April 16, 2010) in the ‘Alerts
Cache’ at www.deepcaster.com.
C.
Do not give Short Shrift
to Gold and Silver Miners.
But purchasing shares of these should be done
with particular care, because, being “paper” (or, usually,
electronic entries on some remote server) Miners shares are especially
vulnerable to periodic Cartel attacks and Price Takedowns.
Thus, they are most profitably accumulated
near interim lows resulting from Cartel Interventions.
In order to estimate these interim lows one
needs not only to consider Fundamentals and Technicals,
but also Interventionals, as Deepcaster
does.
D.
Buy the Dips! And as for
determining approximate Interim Bottoms of these dips, Deepcaster
has developed helpful Guidelines (See “Defeating the Cartel... With
Profit, Part 2” (6/19/2009), “Defeating the Cartel... With
Profit, Part 1” (3/28/2008) and “Profiting From Cartel
Intervention” (06/30/06) in the ‘Articles by Deepcaster’
Cache at www.deepcaster.com) to enhance the chances
of buying at the right time, and thus maximizing profit. And for Deepcaster’s latest Forecasts for Gold and Silver
Prices, see our latest Alerts in the ‘Alerts Cache’ at
www.deepcaster.com.
E.
Finally, we recommend
that Investors not keep their Physical Gold and Silver in Bank Vaults
for the following reasons enunciated by Jim Rickards.
“Interviewed by Eric King of King World
News, Jim Rickards, senior managing director of the
Omnis Inc. consulting firm in McLean, Virginia, says:
-- Far more claims to gold have been sold
than can be delivered upon.
-- To save the dollar the United States will
be forced back on a gold standard with convertibility and gold revalued to
$5,500 per ounce.
-- China's need for gold to back its own
currency and hedge its U.S. debt exposure is massive but the metal isn't
available even as the Chinese government is commandeering the output of
Chinese mines.
-- And gold owners should keep their metal in
vaults not operated or controlled by banks, since keeping gold in bank vaults
negates gold's purpose as a wealth preserver outside the banking system,
which is vulnerable to a run on gold banks.”
“Don't keep your gold in bank vaults”
Jim Rickards, King
World News via GATA, 4/13/10
In sum, had the price of
Gold not been suppressed, and in light of the ongoing Economic Crisis, it
should already be priced in excess of $7,600/oz (and Silver in excess of
$450/oz), the approximate 1980 inflation-adjusted highs.
It is reasonable to
expect to see those prices in the next very few years, or sooner, given the
Cartel’s recently impaired ability to sustainably take down Precious
Metals Prices.
The Gold and Silver Bull
Market has only just begun and a Crash of The Cartel’s Precious Metals
Price Suppression regime would impel it higher faster. That’s the Good
News.
The Bad News is that
Bullish launches of Precious Metals prices are likely to be accompanied by
increased Social Stress and Turmoil, as the world adjusts to a Renaissance of
Real Money – the Precious Metals.
Indeed, the Boy Scout
Motto is appropriate here: “Be Prepared”.
Deepcaster LLC
Deepcaster.com
Wealth Preservation - Wealth Enhancement
Financial and Geopolitical Intelligence
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