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Gold Resurrection from Financial Disaster

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Published : October 17th, 2013
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Take a whirlwind tour with graphics and photos. Absorb the images. They are profound, broad, and ugly. The central bank concept is the Matrix in embodiment, but the Eastern nations led by BRICS and G-20 have a key to unlock the USDollar prison. A quick look at the Australian banking system reveals four global banks who own outsized portions, their reach extending to the largest gold producer in Oz as well. Incest is best. The fast decline in Money Velocity is the most convincing proof of the failure of monetary policy. It does not provide stimulus, but rather capital destruction. The foreign dumping of USTreasury Bonds actually accelerated this past summer, amidst the Taper Talk trial balloon offered by the hapless desperate Bernanke Fed. His legacy will be one of disproving his own PhD Thesis, since liquidity in torrents does not repair insolvency, and no traction comes to soaked ground. A grand game of shuffling gold bars has begun, actually accelerated in a final phase. The big bullion banks wish to obscure that they are almost bone dry of gold in inventory. The COMEX will shut down from no gold, rather than criminal prosecution in a land where crime rules and treason is the syndicate bylaw. China has imported two thirds of GLD inventory in the first seven months of this year. They use the Hong Kong route. In fact, the emerging giant is on course to import over 1000 tons in 2013, compared to 2750 tons in global annual mine output. China & India are taking the majority of gold and silver straight from output. The climax event will be the return of the Gold Trade Standard, discarding the USTreasury Bonds, converting them to Gold bullion. The early adopters and those who follow the viable solution will be the winners. Those who cling to their USTBonds and their other paper securities in indentured servitude will be the losers.

CENTRAL BANKS AS MATRIX

No Plan B is on the table. The central bank is stuck in a destructive cycle with no viable workable exit strategy. They operate with no perceived risk reward, only desperation to delay the certain collapse, proved by the wrong-footed Taper Talk. They must continue the Zero Interest Rate Policy (ZIRP) forever and the Quantitative Easing (QE) to infinity. They preside over failure with a franchise model that causes great capital destruction in the climax phase. The current grand monetary experiment is untested, and is proving to be a glaring disaster. They have sold a moral hazard to the entire world like a passed goblet of hemlock. Rather than stimulus, the monetary policy produces killed and retired capital. The Keynesian path has led to the monetary corner, a wrecking zone from bad policy. They preside over collapse while sitting in their own thrones within the matrix.

A counter-culture comparison is due. The USFed and the Wall Street bankers have created an environment of alternative universe. The financial markets are rigged. The USDollar currency and USTBond are propped. The politicians are syndicate puppets, include the leader of the land straight out the Manchurian Candidate theme. The debts are covered by hyper monetary inflation. The USEconomy is stuck in quicksand, as it deteriorates, while the blaring music sings about recovery. The Fascist United States is the embodiment of the MATRIX, the multi-sequel hit movie series from the 1990s. Notice the similarity between the cold controlling deceptive alternative world Matrix architect and USFed Chairman Bernanke. The contrast is scary. No offense to Helmut Bakaitis, the Austrian actor and director who played the architect who fought the rogue Oracle and Neo and Morpheus and Keymaker. They symbolize the Gold community working toward freedom from the Matrix itself, doing battle against a corrupt controlled fiat currency Matrix centered upon the USDollar, defended by the USTBond software, preying upon the sleepy captive population. The rogue programs loose within the Matrix are from the giant workaround subroutine being fashioned by the East, the Dollar alternative for trade and thus bank reserves. The gold trade settlement will be the New Gold Trade Standard which renders the Matrix with obsolete software. It opens the door to freedom from the Matrix.

  

AUSTRALIAN BANK INCEST

Big international banks own both the Australian big banks and the biggest Australian mining firms. They are in control for the financial adjustments and reset. The story is typical of the Western financial super-structures. In the West, Barclays is the banker's bank that owns a significant portion of almost every important large Western bank. The integrated ownership of these banks reveals a vast incestuous network. The banking system in Australia is controlled by HSBC, JPMorgan, NAB, and Citigroup. The tree below displays the ownership of the largest banks in Australia. In parallel, Americans, British, and Europeans have no idea that Barclays owns a piece of almost every large Western bank. The same shareholder examination for National Australia Bank, JPMorgan, and Citicorp found that the these four companies not only control a vast array of mining and industrial companies, but also pull the strings as banks under a different name. Furthermore, the four financial firms which own Australia's banks also have substantial holdings in Newcreat Mining Ltd, the largest gold producing company.

MONEY VELOCITY FAILURE

Money velocity remains crippling low, at historic lows. The amplified monetary expansion has aided banks and redeemed bonds, but with no tangible benefit to the useconomy. Many are the channels for money flow, but most are blocked. As capital is killed or retired from the USFed monetary policy, the money velocity declines. It is proof of capital destruction in its wake. The Money Velocity is at historic lows, a point of extreme embarrassment to USFed Chairman Bernanke, who is on the way out with failure on his resume. Worse, the outcome of four years with extraordinary money growth has been a crippled USEconomy. Next on the global stage will be the USFed serving as the processing plant for the USTBonds returned to sender from a vast stream of foreign entities. The money flow has numerous textbook channels, of which at least five are important channels. They are 1) redeemed toxic bonds without price inflation effect, 2) business capital expansion for a massive typical effect which is not happening, 3) USGovt deficits and its moderate effect when infrastructure which is not happening, 4) Wall Street and financial account expansion for a tiny effect that offers psychological lift to consumers, and 5) Military spending for a profound deficit effect that harms twice with capital destruction in true nazi style. Be sure to know that fast reducing money velocity is the most reliable signal of deep recession and economic danger. The churn is gone to pay taxes in homage to the USGovt.

The nation seems to completely accept the notion of the USFed monetary policy being a radical stimulus that runs the risk of promoting extreme price inflation. The truth is the exact opposite. No stimulus is seen, when in fact the QE bond monetization will continue to kill capital and destroy business. The price inflation effects are all over the board, with material costs rising, service costs rising, but liquidation sales throughout the field of view in a suppressive cross current effect. The same incorrect stimulus propaganda has been spouted for months on end, actually over three years steadily like a propaganda loudspeaker. However, almost no economists comprehend the capital destruction and severely harmful effect from the USFed policy. The sequence is simple, from rising cost structure, poor pricing power, shrinking profits, ruined business segments and even entire businesses, then shut down of equipment and liquidated capital. The ongoing QE will ensure the USEconomy continues to deteriorate, with more acceleration coming. Those who expect a rise in business activity are way off, bordering on delusional. They are led by the system harlots. Those who expect the money velocity to rise are way off, bordering on clueless. They are led by morons and quacks.

FOREIGNERS DUMPING USTREASURY BONDS

Foreigners sold more US$-based securities in June than after the Lehman Brothers bankruptcy. The USFed must lap up what is dumped. Big pressure is on primary dealers, which the USFed must relieve. The Taper Talk will reverse into an acceleration of official bond purchases. A global USDollar rejection is in full swing. The new threat is the seizure of the REPO market, the vast overnight credit window device. In June and July, the Jackass indicated that the USFed would eventually be forced to buy up all the foreign dumping of USTreasury Bonds. It happened. The TIC Report is compelling. Paul Mylchreest added a great point regarding the tighter capital requirements imposed by Basel III Rules. He said, "Leverage ratio regulations might preclude banks using REPO's to accommodate sudden influx of Treasury [being dumped by foreigners.] Maybe they will use the Exchange Stabilization Fund if BRICS start swapping USTreasurys for Gold as you suggest." So the big US banks, and London banks too, might not be able to withstand the huge flood of USTBonds returned to the sender from foreign sources due to stricter rules on stretched capital.

A recent Treasury Investment Capital (TIC) Report showed every single type of US$-based securities sold on a net basis, a rare occurrence. The big culprit Treasurys sold a record setting net $40.8 billion, the largest single month sale of USTBonds in history. The consolidated foreign sale in June 2013 was greater than either month when Lehman failed, September or October 2008. The conclusion is simple and staring the nation in the face. The USFed must accelerate the QE bond monetization program, not reduce it. The public statements and declared rationale will be interesting, if not a comedy in lies, and an exposure of failure. The bigger conclusion is that the USGovt debt default is within view, no longer over the horizon.

COMEX VACANT GOLD VAULT

The COMEX registered gold continues to plummet, down to 665k oz gold in a recent snapshot. Members must distrust JPMorguen deeply. They are either removing their eligible gold, or refusing to put it among the registered stock. Pressures for a default are rising every month without respite. Refer to the COMEX Registered Warehouse gold in their official vaults. By Registered is meant available to meet delivery, in full satisfaction of strict requirements for form, weight, and purity. The present level of 0.665 million ounces marked on September 10th means a 77 to 78% decline had occurred this year. Bear in mind that the declines occurred following the German Govt repatriation request. The plummet is a major wake-up call for a COMEX default, or whatever they call a forced cash redemption to bullion bank suppliers. They are being drained and lied to, holding a fistfull of gold certificates that are in the process of being forcibly redeemed at cash.

Further investigation reveals JPMorguen taking gold from Scotia Mocatta under certain hidden threat, as well as from HSBC and other big banks. The drain has a pathway bound by coercion. A grand game of internal raids is underway that cannot be stopped. Pressure is brought to bear. Ramps are busy moving gold bullion around in trucks and tunnels. It is curious why Scotia Mocatta played this game of harikari. They cut a deal in Satan's service.

CHINA GOLD IMPORT VIA HONG KONG

China imported an impressive 116.4 tons of gold in July. The exponential rise continues unabated in 2013. China is the Asian juggernaut on gold demand, and the primary engine for demand in the entire world. Their demand approaches half of global mining output. China imported through Hong Kong another robust load totaling 116.4 tons of physical gold in July of 2013. Their demand comes after the 517.92 tons of gold imports in the first six completed months of this year. In total, from January through July of this year, China imported a staggering633.94 tons of physical gold. The trend continued in the next months. Put the figure into perspective. The global gold mine output in 2012 was on the order of 2750 tons. The SPDR Gold Trust (aka GLD Fund) had 919 tons at last count, but has been fast dwindling. Hence China alone has imported two thirds of GLD inventory in the first seven months of this year. In fact, July recorded their second largest gold import in a single month since the start of this bull market in 2001. The chart is courtesy of Sharelynx, often shown on the Hat Trick Letter with gratitude. The exponential growth is a steady trait.

GOLD TRADE SETTLEMENT

Let the graphic below tell the story, worth at least 1000 words, a Jackass task done on Powerpoint with glee. The Black Hole of the USTreasury Bond implosion has a corresponding fountain in Gold pressures. Acting like Old Faithful in Yellowstone Park, the gold movement continues to apply upward visible pressure. In fact, the analogy is more complete. The entire expanse of Yellowstone region is a giant caldera that serving as remnant to an ancient volcanic eruption and explosion. The region has been well studied, as geologists conclude its surface level is rising an inch or two (a few centimeters) every year. The return of the Gold Trade Standard outside the bank purview governed by SWIFT rules and outside the FOREX temples filled with moneychangers will arrive like a massive gigantic impressive volcano. Nothing can stop it. It is driven by the Eastern Hemisphere seeking an alternative to the USDollar in trade and a diversification away from the USTreasury Bond in banking reserves. The nations which actively depart the USDollar Sphere will survive, the others to fall into the De-industrialized Third World. Many are the forces within the inner circle and along the periphery. The Gold Trade Standard, enforced largely by China & Russia, supplied by the BRICS Bank which will manage the conversion of USTBonds to Gold bullion, will manifest the Paradigm Shift. The Price of Gold will easily reach the $7000 per oz mark, then surpass it. The Price of Silver will easily reach the $200 per oz mark, then surpass it. Gold (rock) wins, and USDollar (paper) loses, with BRICS acting like scissors on USGovt sovereign toilet paper.

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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 24 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors at www.GoldenJackass.com .
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Great article Jim.

US banks on the share registry of foreign banks should not be permitted as manipulation and self interest will result. Much the same goes for the mining industry. Australia is a place where you correctly noted that US banks are on the share registry of both. This is because we have governments which are tied to the purse strings of the US and pander to their master like dogs in front of a butcher's shop. The national interest is rarely of interest and the sell off mentality which has gripped our nation is what has been the norm for several decades.

You may be unaware that the latest act of treason is the unabated sale of our freehold farming land to FOREIGN GOVERNMENTS. The US, Great Britain Indonesia and China are amongst the countries which have bought in as this is a deal too good to ignore. In case you are unaware 'freehold' means 'gone forever' and food produced on this land is not subject to the tax laws as it will never be sold until repatriated to country of (land) ownership leaving nothing other than the initial sale windfall for Australians.

Whilst the US political system is completely toxic and has vested interests which ignore the good of its citizens at least you have not sold the ability to feed future generations. AUSTRALIAN POLITICIANS HAVE. They call this treason "foreign investment".

The irony of what is happening in your wonderful country is that you are losing the 'American dream'. The nation is being sold into slavery and serfdom (the poor are already there!) and future generations will despise those (and their descendents) who did this to them. Being at the receiving end of of US policy though I cannot feel too much sympathy though as the rest of the world has been paying out in a rigged game for many decades. But I do feel sorry for ordinary citizens who are the pawns and who will ultimately suffer for electing deadbeat politicians based on political advertising rather than the national interest and sound management principles. But as I have always said populations get the governments they deserve and if things turn out bad then there is only one person to blame.

Whilst I hear what you and others say in your articles I like so many others have a foot in each camp. I know that I need to take a stronger position on gold but then there are pressures from past behaviour which continues to say 'don't touch'. In the end another good price fall will push me in.

What I fail to understand and what I hope somebody will write an article about is WHY the US dollar has not dropped like a rock. The supply/demand mechanism has apparently stopped working. Printing the currency like confetti should have driven its value down but it hasn't. and has done just the opposite. Whilst I understand that money floods to perceived safety I ask 'what safety' as the US economy is anything other than on a knife's edge?
My thoughts regarding your question are that all CB's are expanding debt at the same rate and are devaluing relative currencies together, most oil is traded in USD still, and no (widely perceived) default on manipulated commodities as yet. Interesting here..."Furthermore, the four financial firms which own Australia's banks also have substantial holdings in Newcreat Mining Ltd, the largest gold producing company."
I suspect when push comes to shove these big four will take off the bridle, slap their liabilities on the arse and send them bush...At the same time warmly embracing their assets. I understand this part now as i have had it recently happen to me and i received an arse slapping. Experience rarely spares the rod when giving lessons to the ignorant ! But at least i now know to put both feet in the one camp - don't learn that the hard way Trader.
Your comments apply to the US, Japan and Europe. Australia is not in the money printing game from what I understand. I should be so that, like the US, it can then go on a spending spree with its funny money and purchase overseas assets for nix. It is a rort. And I still fail to see why the AUD is not roaring ahead of the USD. it makes no sense. But then we all know that like precious metals (gold and silver) the market is heavily manipulated by the big players many of whom have tied back to Washington.
Since 1993 the AUD currency base has been expanded by a factor of 6 (actually more). From roughly $250 Billion to roughly $1.5 trillion as of June 30th 2013. This information can be verified at the RBA web site. But you are correct, it is not money printing, it is debt creation, but at the end of the day it achieves the same thing which is expansion of the currency base. It is debasement.
Debt can be paid back but currency is rarely if ever taken out of circulation.

If Australia has increased its currency by a factor of 6 since 1993 then where is the US at currently? Not only has the US printed money like confetti but it also has debt which is astronomical and unlikely to ever be repaid. I am willing to bet that the US is trying to get inflation going and trying to devalue its currency so that it can devalue its offshore indebtedness. In the meantime the trillions floating around the financial system are going to make their way offshore and buy (overseas) assets - called robbery in any other jurisdiction.

Fair minded people draw a clear line between 'business' and 'dishonesty' but some nations sadly have no conscience or moral fortitude.
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Since 1993 the AUD currency base has been expanded by a factor of 6 (actually more). From roughly $250 Billion to roughly $1.5 trillion as of June 30th 2013. This information can be verified at the RBA web site. But you are correct, it is not money print  Read more
Cameron Waugh - 10/20/2013 at 10:36 AM GMT
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