Guest post from Stewart Dougherty:
As the Fiscal Year 2018 budget, and particularly its war component
are floated, it has become clear that without continued, massive
military spending, paid for with mass-produced electrons masquerading as
money, U. S. GDP would collapse, taking the country’s financial and
monetary systems with it. The nation, whose real economy has been
hollowed out, for profit, by the Deep State plunderers, has become
significantly reliant upon deliberately contrived wars and military
tensions for its economic survival.
With systemic monetary risk now at an unprecedented level,
intensified by a new, partisan, “politics of defeat,” scorched earth
agenda being implemented by those displeased with the results of the
2016 election, there has never been a more dangerous time for people to
denominate their wealth in unbacked, baseless, debt-drugged dollars.
The absolute last thing the Deep State, and particularly its Banking
Division (the Bank State), can allow the people to figure out at this
time is that there is a far more safe, secure and potentially profitable
way for them to position their financial assets than dollar-denominated
bank deposits: precious metals. A widespread movement into metals at
this time would damage the Bank State and its umbrella organization, the
Deep State, because their future profits require the control and
progressive expropriation of the people’s money.
Therefore, a March rate hike is guaranteed, for three primary
reasons. First, precious metals prices must be pummeled as much as
possible, in order to scare uninformed people away from the easy, safe
and logical financial refuge it provides. Even though the “rates up,
metals prices down” reflexive reaction is absurd, it has been baked into
the trading algorithms so that it will occur no matter what other
factors might be in play when rates are increased. Strategic Deep State
price fraud, which is perpetrated by internationally signaled,
time-coordinated and algorithmic inside trading, ensures that metals
prices can reliably be controlled. At least for now. When physical
demand finally increases in a material way, the price fixing fraud will
collapse.
Second, the Bank State must increase the incentive for people to keep
their money in its institutions, while it pushes forward, as fast as
possible, with its cash elimination agenda. Once cash is eliminated, the
banks will no longer have to worry about bank runs, which would
otherwise be historic when the monetary wheels coming flying off the
thoroughly debauched system, an event we view as inevitable.
Third, the Federal Reserve System is now 100% politicized, and run by
sneaky, die-hard political ideologues who lie about why they do what
they do and what they really think. Those who run the Fed are despondent
that despite implementing for eight YEARS an interest rate policy
specifically designed to enable Obama to create a totally false illusion
of economic “recovery” by massively increasing government spending with
trillions of phony, deficit, zero-interest-rate “dollars,” the people
saw through the economic lie and defeated the Fed’s next intended
puppet, Clinton.
Yellen, Fischer and the other partisan Fed governors are simply not
going to allow Trump to turn around, in a matter of months, an economy
that the Deep State and the Fed have systematically been looting, at
mind-boggling and astronomical profit to themselves, for the past
decade. Nor are they going to allow Trump to bask in DJIA-record glory.
Therefore, the power- and money-obsessed functionaries at the Fed and
within the Deep State, who all totally buy into the scorched earth
agenda, are going to bring down the economy and markets, even if it
means that every single private pension fund and the net worth of every
non-connected citizen collapses with it. They couldn’t care less about
that, as we are about to see, because they will have a scapegoat for
what they, themselves have wrought: Trump. The Fed, in league with many
others, is now doing everything in its power to rig the 2018 mid-term
elections, in order to live up to its Sole Mandate, which is the
preservation of political power.
While we deeply admire what President Trump is trying to do to expose
to the people and turn around the fake economy in which the nation is
drowning, we believe the challenge of reversing, in the short amount of
time available to him, decades’ worth of asset stripping, corruption and
for-profit economic destruction is beyond extreme. And the constant
political obstructionism he is up against, which is increasingly
treasonous, might make the achievement of his worthy objective
impossible.
With this as our backdrop, let us move on to the geopolitics of gold,
which while it might seem abstract and removed, we believe is highly
relevant to your personal financial situation.
Aside from being tedious, politicized and baseless drama, the ongoing
demonization of Russia, particularly with respect to its so-called
rigging of the 2016 U.S. Presidential election, makes no common sense.
But it makes perfect Deep State sense. It is about war-mongering, global
destabilization, internationalized looting and the continued plunder of
the American people, the for-profit enterprises in which the Deep State
specializes.
We believe that there is actually a more specific reason for the
demonization of Russia than the above, usual suspects. This is a case
where one should not just follow the money; one should follow the gold.
For the past fifteen plus years, physical gold supplies have been
like Lazarus: they keep rising from the Dead. Just when it appears that a
serious supply-demand imbalance is about to precipitate futures market
delivery problems and therefore increased prices, supply miraculously
appears out of nowhere to alleviate the shortage and stabilize or
depress prices.
This surprise supply has primarily come from sovereign central banks:
for example, 1,500 metric tonnes from one-time sound money nation
Switzerland; 600 from France; 430 from the United Kingdom (most at the
bear market’s absolute low price of around $255.00/ ounce; central bank
“genius” for all to see); 300 from Netherlands; 225 from Portugal; 240
from Spain; 180 from Venezuela and counting; 90 from Brazil. And the
list goes on.
Each sovereign sale has produced needed physical gold at times of
supply – demand imbalance, many of which have been critical. This has
enabled the paper gold price manipulation fraud to persist without any
failures to deliver or the need to set a true, as opposed to fake gold
price. A delivery failure, even a minor one, would expose and terminate
the Deep State’s enormously profitable price rigging fraud, and has
therefore been prevented at all cost.
The Deep State’s overthrow of legitimate, sovereign governments has
been another means by which needed gold supply has been injected into
the pipeline. After Libya was overthrown, 143 tonnes of the nation’s
gold disappeared. Dozens of additional tonnes disappeared from Iraq
subsequent to its invasion.
Ukraine provides another example. Immediately after Neocon, Deep
State functionary and State Department plant Victoria “F**k the EU”
Nuland launched the for-profit coup d’etat in Ukraine, 43 tonnes of the
nation’s gold, worth $1.7 billion at $1,200 per ounce, were airlifted
out of the country in the middle of the night and went missing.
(As a side note, it is worth mentioning that while the cargo plane’s
exhaust was dissipating into the Ukrainian atmosphere, Vice President
Biden’s storied son, Hunter, miraculously appeared on the Board of
Directors of Burisma Holdings, the largest private natural gas producer
in Ukraine. Biden was joined by close friend Devon Archer, a lead
fundraiser for by-then Secretary of State John Kerry’s 2004 presidential
bid. Archer is also the former college roommate and current business
partner of Kerry’s stepson, Christopher Heinz (an heir to the H. J.
Heinz fortune). These two ascendancies to Burisma’s Board were curious,
given that Biden and Archer had no natural gas production or Ukrainian
business experience whatsoever, did not speak one word of Ukrainian and
had never previously stepped foot in the country. This gives us better
insight into the true nature of the Deep State’s murderous, gold-seeking
and highly profitable coups.)
While the perfectly-timed materializations of sovereign gold have
plugged the Delivery Failure dike at various critical moments, there
have been two persistent demand problems that have bedeviled the Deep
State’s designs: Russia and China.
China’s official gold reserves surged from 395 tonnes in Q2, 2000 to
1,838 tonnes in Q3, 2016. This number, impressive in itself,
dramatically understates China’s actual, official gold reserves, which
many well-informed analysts put at 5,000 tonnes, minimum. China’s
official reserves do not include the thousands of additional tonnes
imported into the country for the private sector during the same period.
While the Deep State routinely pummels the paper price of gold both
to mint fraudulent profits on the futures exchanges and scare
financially naïve western citizens away from it, the Chinese government
urges its citizens to buy gold, which they do by the millions of ounces.
The Chinese government knows what is coming, and wants its citizens to
be prepared. Apparently, capitalism and communism have traded places,
which will result in an exorbitant cost to the people of the west.
Meantime, Russia’s gold supply increased from 343 tonnes in Q2 2000 to 1543 tonnes in Q3, 2016.
Remarkably, it increased by 508 tonnes from Q1, 2014 to Q3, 2016,
alone. This occurred when Russian sanctions, which were intended to
destroy Russia’s economy and currency, were in place. The sanctions were
not only expected to halt Russia’s ongoing gold purchases, but also
force them to sell some or all of their existing reserves in order to
raise cash, which is exactly what Venezuela has been forced to do since
early 2014.
Chess Master Putin went in the exact opposite direction, by
dramatically increasing the nation’s purchases of gold. This was
unexpected and has put the Deep State on the defensive. It had counted
on fresh supply from Russian to keep the supply – demand balance in
equilibrium, and to prevent the Delivery Failure dike from breaching.
One way the Deep State reacted to Russia’s unexpected, continued
demand was to engineer the out-of-nowhere Indian rupee demonetization,
which stripped the Indian people of the cash they have traditionally
used to purchase gold. This plan was effective at reducing Indian gold
demand in the beginning, but is now backfiring, just as the attempt to
reduce Russian gold demand backfired.
If China and Russia continue to buy gold at current rates, the only
way the Deep State’s paper gold price manipulation fraud can continue is
if other sovereign gold reserves are put into play, or, if physical
demand is somehow diminished. While the Deep State is pursuing both
tactics, their options are shrinking.
Even though sovereign gold sale risks remain, the value of nations’
reserves at the current fake price of gold is absolutely meaningless
when compared to their exploding debts.
For example, Italy’s 2,452 tonnes of gold are worth $95 billion at
$1,200 per ounce; the government’s debt is $2.45 trillion. France’s
2,436 tonnes are worth about the same, $95 billion; it national debt is
$2.44 trillion. The same situation exists in virtually every western
nation. Therefore, even if these countries were to sell all of their
gold, it would not buy them any meaningful or lasting fiscal or
financial relief whatsoever. There has never been a more pointless time
for nations to sell their gold, particularly at today’s fake price.
To further amplify this point, the United States is reported to own
8,133 tonnes of gold, supposedly the world’s largest stockpile. (We
disagree; to us, the arithmetic is clear that China now owns more.) This
is the equivalent of 261.5 million ounces troy ounces, or about 0.82
troy ounces per citizen. At $1,200 per ounce, the reserve is worth $314
billion. The nation’s actual, annual deficits are roughly $1 trillion
per year, more than three times the value of the entire gold reserve.
The nation’s existing debt and contingent, unfunded liabilities exceed
$200 trillion. Therefore, the nation’s gold supply could only pay off
0.16%, or one sixth of one percent of the nation’s current obligations.
If it has not already done so, the United States could sell every ounce
of the people’s gold and it would not make one bit of difference to the
nation’s fiscal situation.
The U.S. gold reserve has not been professionally, comprehensively
audited since 1953. We will not go into the U.S. gold audit topic here,
because it has already been well documented. You can find the details
with a simple search, if you wish to learn more. But we would like to
point out something that is not typically noted.
In order to create positive “optics,” the United States government
consistently massages, manipulates and even totally misrepresents a wide
variety of financial, economic and monetary statistics (such as GDP,
unemployment, inflation, money supply, interest rates, retail sales and
many others). These positive optics are viewed as being crucial to
preserving confidence in the nation’s economy and fiat currency.
Accordingly, one would expect that if the United States gold reserve
actually exists, physically and unencumbered, the government would go
out of its way to prove and advertise it, in order to create the
favorable optics it spends so much time and effort engineering about
everything else.
Instead, they refuse to conduct a professional audit, invoking the
truly ridiculous excuse that it would be too costly to do so. One
specialist has estimated that a comprehensive, independent audit would
cost $10 million, which is approximately 1 MINUTE of federal spending,
literally. So the expense excuse makes no common sense, and arouses
serious and legitimate suspicion about the true state of America’s gold
reserve.
The foregoing factors help explain the intensifying demonization and
scapegoating of Russia. The Deep State needs to prevent Russia from
continuing to buy gold in quantity, and is therefore intensifying its
efforts to damage the country’s reputation, economy and currency.
Based on these and several other factors, the Inferential Analytics
model is signaling that there is a strong probability the Deep State’s
gold price manipulation fraud is dying, and that the imbalance in
physical gold supply is becoming systemic and reaching a point where it
can no longer be bridged with sovereign, stolen or fake supplies. This
increases the risk of futures market delivery failure. The occurrence of
any significant endogenous event at this time, such as an unexpected
military, social, economic or financial disruption, that provokes a
further reduction in supply or even a modest increase in demand, would
dramatically increase the probability of delivery failure and a
resulting, necessary, sharp increase in the price of gold.
The fact that the paper gold price manipulation fraud is reaching the
end of the line due to deteriorating supply – demand fundamentals is
exactly why we are seeing a radical, concurrent Deep State escalation of
the War on Cash. Cashlessness is the Deep State’s upcoming Looting
Field, and is designed to replace Gold market price fixing as its next,
organized, long-term method of plunder. The elimination of cash will
result in the largest looting spree ever orchestrated by the Deep State.
Every time the Deep State hatches a new looting scheme, they dress it
up in false righteousness, phony morality and motherhood. In the case
of cash elimination, they say it is needed to fight terrorism, drug
laundering, tax evasion and crime. This is a huge, concocted,
pre-packaged lie; the same kind that Hitler and Goebbels used. Hitler
said and proved that if you make the lie big, and repeat it again and
again, the people will come to believe it. This is the exact kind of lie
the Deep State is telling to push its corrupt, greed-diseased, epically
evil cash elimination scam.
While the Deep State demonizes Russia to perpetuate its gold price
fixing profit center for as long as possible, it is simultaneously
building, as fast as it can maximum security prisons for the people’s
money. For the bricks, they intend to use your cash; for the mortar,
they are mixing a stinking amalgam of their lies, corruption and greed.
We can be sure of one thing: if we allow them to imprison our money in
their cashless prisons, they will grind it into oblivion by fees and
fraud, and our financial slavery will become inescapable. Please, do not
underestimate what is happening all around you, and use your current
quasi-freedom wisely.
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Dave Kranzler spent many years working in various Wall Street jobs. After business school, he traded junk bonds for a large bank. He has an MBA from the University of Chicago, with a concentration in accounting and finance, and graduated Oberlin College with majors in Economics and English. Dave has nearly thirty years of experience in studying, researching, analyzing and investing in the financial markets. Currently he co-manages a precious metals and mining stock investment fund in Denver and publishes the Mining Stock and Short Seller Journals. Contact Dave at dkranzler62@gmail.com.
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The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.
