A few months back I theorized the rest of the world led by a
Chinese/Russian alliance might let loose with a “truth bomb” or a series of
them. It is clear the U.S. has been on a pathway in the desire to start
a war. We have pressed in Syria and the Ukraine but so far to no
avail. From the standpoint of the U.S., it is my opinion that a war is
“necessary” to point at and blame for the financial collapse surely coming
because in no way can “policy” be blamed.
The upcoming month of June will be a telling one as the situation in
Greece comes to possibly a final head. Tiny Greece is important for
several reasons. The first and most obvious, they are certainly a
firing pin for the derivatives market. Should they default, what will
it be called? Somehow, some way, a Greek default cannot be classified
as one because a cascade of failures will immediately follow.
Financially, Greece can take the Western financial system down all on its
own.
Next, Greece is also a member of NATO, what will they do when the current
economic and financial sanctions on Russia run out? Will they vote to
extend the sanctions or vote in their own interest against
them? Or, will they accept financial help and the cash
flow from the proposed natural gas pipeline? A lesser question is what
will happen to their EU status? Will they quit, get kicked out or
remain as a black sheep in a dirty family?
I ask these questions again because Greece now says they will run out of
money on June 5th. They have already pilfered pension funds and
sequestered local agency monies, while pleading for the previously pledged
but so far withheld aid. Atop this and more important are the sanctions
on Russia due to end also in June. June is a very pivotal month!
To this point, the Chinese and Russians have been patient but
firm dealing with the U.S.. Russia has warned about arming western
Ukraine and placing firepower on Russia’s borders. China has sternly
warned the U.S. regarding the disputed islands in the South Sea, a near spark
incident was avoided last week. My point is this, the U.S. has been
pushing while Russia and China have stood their ground. How long
this can go on without some sort of “accident” morphing into conflict is
questionable.
As an example are the recent events surrounding the Spratly islands in the
South China Sea , can the U.S. really push China in their own back
yard? China and Russia are fully aware of the U.S. falling
further and further into a weakened position in many ways, time is
running out before a financial collapse and they know a wounded animal often
strikes in desperation. They must in my opinion do something very
soon to neutralize the U.S. or face the reality of fighting.
As I began with, I believe the only form of neutralization is some sort of
“truth bomb” or a series of them. How best can this be done? I
believe it must and will be done “financially”, let me explain. If the
ROW can neuter the U.S. financially, they will seriously hamper U.S.
efforts to make war. As a side note, “the truth” will also take most
all public support away for making war. I believe the process may have
begun this past week.
While you may react with “oh it’s just propaganda” because of the source,
Pravda posted an article over the weekend speculating China will very soon
announce their gold reserves. The
article speculates China has amassed 30,000 tons of gold. This
may or may not be true, but I can easily prove 10,000 tons just on the back
of a napkin. Whether the number is 10,000, 30,000, more or somewhere in
between is moot in my opinion because it is MORE than the U.S. “claims” to
have. It would also call into question “where” exactly all of this gold
came from. As I have written before, China need not ask for an “audit”
of Western gold, should they provide audited numbers; market participants
will make the connection themselves.
I believe there are several questions needing to be asked. Is this a
“30,000 ton bluff” by Russia? I don’t think so but if it is, what is
the upside? Would Russia really throw this figure out publicly without
clearing it with Beijing? Would China really bluff about how much gold
they have? My opinion is no, they would not. I have said all
along I believed China would announce their holdings probably this
year. If this is the “pre pre announcement”, it is a very big number
and one I believe only as an opening salvo. Should China themselves
make this announcement, please understand the “golden nuclear bomb” this would
actually be. The financial system of the West will be destroyed
overnight!
Before going any further, let me put a few of the various dots on the
table. First and maybe what they were waiting for, the Western credit
markets have had two very big convulsions in the last 10 days, these flash
crashes have occurred as nearly all liquidity was briefly lost. While
speaking of liquidity, this seems to be drying up across the board including
the equity markets as volume has gone comatose. U.S. economic numbers
are unmistakably weak and recession will be known by the end of June or early
July. Another classic sign of illiquidity is the shortage of
collateral available to the shadow banking systems in both the U.S. and in
Europe. A “margin call” to a system undercapitalized and under
collateralized is a deadly recipe.
We also saw a story last week where several of the larger
ETF’s have contracted for rather large credit lines to use in a “market
event” causing mass liquidations. This is an entire story in itself and
a humorous one at that! What makes the ETF’s believe their financial
institution will be left standing and able to lend during a panic?
And even if standing, during bad times the old saying goes …”credit lines are
made to be pulled”! Worst of all, if they actually do use the credit
lines because their various investments cannot be sold, won’t this ultimately
injure remaining shareholders and make those who panicked first …the
best? And especially if their investments do not immediately snap back,
they will be required to sell more and at lower prices just to pay the loans
(if they get them) down! Very poor “preparations” if you ask me.
Other dots include, the AIIB, an alternative clearing system to SWIFT,
currency hubs all over the world, physical metals exchanges and even the ABX
which plans to arbitrage between Eastern and Western markets. China has
very rapidly recreated the “old silk road” trading route which includes both
Iran and Greece, both sticking points in the side of the West.
I believe the Sino/Ruso alliance now sees weaknesses in the West, it is
exactly what Sun Tzu would look for. The economy is slowing,
liquidity is drying up and leverage is maxed out. Volatility has now
struck the all-important credit markets of which are relied on to support the
West’s way of life. What is next? I believe an announcement of
China’s holdings will only be the beginning and put the U.S. on her heels as
to our holdings. Next, and I mentioned this previously, I would not be
shocked if Edward Snowden has done a data dump similar to what was feared
with Mr. Assange of Wikileaks.
We already know of so many and various “dirty deals” which banks have
pleaded guilty to, “proof” of Western deceit will be believed because of all
the fines and “non” admissions of guilt already paid and entered. In
essence, it very well may be the East pulls the curtain back on the Wizard of
OZ! A data dump by the Russians and Chinese regarding the finances of
the West (including a lack of gold), how markets are rigged and economic numbers
“created”, along with information regarding various false flags and the
misdirection of the public would go a long way. The “questions” are
numerous and may have a starting date of 9/10/01 when Donald Rumsfeld
announced the Pentagon’s “missing” $2.3 trillion …which was never spoken of
again after the following horrific day.
Much, if not everything has a paper trail to it. Enron’s
misdeeds and hollow derivatives were conveniently washed away the following
day as well as any paper trail to the “world bonds” issued during the Reagan
years …and cashed in within the two weeks following 911. Nearly
everything since then still has a paper trail attached to it, should
Russia/China have the ability to expose and prove some of it, our financial
system will be toast!
In the event of a little sunlight touching Western “dirties”, currencies
and bonds will be smoked along with of course the precious Dow Jones.
An exposure would effectively cripple us financially, torpedo public support
and effectively make it very difficult for the U.S. to run around the world
further swinging a bat and stirring up war. In essence, an exposure
would take the ability to point blame elsewhere off the table …and the past
policy itself will finally eat the blame it deserves!
