Wednesday, February 29, 2012

Silver closes higher in New York trading


Silver and Gold traded higher in New York trading overnight, with Silver hitting a 2012 high of over $37/oz. This level represents an approx 40% increase in the US$ price year to date.

Reasons sighted for the overnight rise were a weaker US$, which is ironic, a piece of paper that represents nothing is somehow suddenly weaker against a substance that has been money for 6,000 years, but I digress. Also S&P's relization that Greece should be rated as D, as in Duh!

In reality it doesn't matter what the group think media says, we know the truth, Silver is rarer than paper, rarer than government lies and rarer than politicians' promises, and thousands of more people are discovering this everyday.

MF Global: Crime, Comedy and the Cover-Up

Thanks to Jesse for the article

Huffington Post
MF Global: Crime, Comedy and the Cover-Up
By Janet Tavakoli
2/28/2012 5:37 am

MF Global's October 2011 bankruptcy was the eighth largest bankruptcy by assets in the United States. James Giddens, the bankruptcy trustee, issued a press release on February 6 stating that his investigation found that money from customer accounts that was supposed to be segregated was improperly used to fund MF Global's daily activities. Improper transfers of customer money occurred regularly in amounts under $50 million before MF Global's bankruptcy. MF Global wasn't caught, because it put the money back before customers knew it was missing.

On January 30, 2012 the Wall Street Journal did a hilariously bad job of reporting when its front page article stated that a "person close to the investigation" said that as a result of chaotic trading in the week before MF Global's October 31 bankruptcy, customers' money "vaporized." Money doesn't vaporize. It's true that tracing money transfers can be tedious, but that's why we call it work.

As for the Wall Street Journal's article, the editor should have made it vaporize. I was having breakfast with several traders at Chicago's East Bank Club. One trader read the passage aloud. The entire table burst out laughing. Then he got up and ceremoniously threw the paper in the trash. The entire table applauded.

Fox Business News had people in stitches when it reported that federal investigators are saying that this wasn't criminal, it's just a matter of sloppy bookkeeping.

The habitual filching of customers' funds -- even if the funds are later replaced -- goes way beyond sloppy bookkeeping. It goes way beyond bad judgment. Just because MF Global got away with it for a long time before it blew up in its face doesn't mean one can call it sloppy bookkeeping and have any reasonable person believe it. If federal investigators and law enforcement people want to make public statements like this, one should investigate corruption in their ranks. They seem to be providing undeserved excuses as a trial balloon to see if it will fly. Nice try, but it's not working.

According to the bankruptcy trustee, money was repeatedly filched from customers' accounts. That goes way beyond sloppy bookkeeping.

Senior officials of the Chicago Mercantile Exchange and of MF Global's regulator, the U.S. Commodity Futures Trading Commission (CFTC), have already testified to Congress their belief that MF Global violated regulations -- it broke the law -- because using customers funds, money that was supposed to be in segregated accounts, to pay off MF Global's creditors or to use that money to fund MF Global's day-to-day operations is not permitted.

MF Global CEO Jon Corzine, a former head of Goldman Sachs, signed off on statements that said his internal controls were adequate. After Enron, the Sarbanes Oxley Act was meant to assure Americans that officers that signed such statements would be held accountable for their accuracy....

Read the rest here.

Iran really is going to accept payment in gold for oil

As first mentioned on this blog on 25 Jan Iran will accept Gold as payment for Oil, they are just admitting it now. Actually with the dramatic downturn in the Iranian economy they would probably trade your mother-in-law for oil if she still has all her own teeth.

From Reuters

TEHRAN, Feb 28 (Reuters) - Iran will take payment from its trading partners in gold instead of dollars, the Iranian state news agency IRNA quoted the central bank governor as saying on Tuesday. Iranian financial institutions have been hit by sanctions imposed by the United States and the European Union in an effort to force Tehran to halt its nuclear programme.  Significant difficulties in making dollar payments to Iranian banks have forced Iran's trading partners to look for alternative ways to settle transactions, including direct barter deals.

"In its trade transactions with other countries, Iran does not limit itself to the U.S. dollar, and the country can pay using its own currency," central bank governor Mahmoud Bahmani was quoted as saying. "If a country should so choose, it can pay in gold and we would accept that without any reservation." The sanctions include a phased ban on importing oil from Iran, which EU member states are to implement by July.

China and India, two of the largest consumers of Iranian oil, have said they will continue imports, but Japan and Korea have announced cuts to quotas following pressure from the United States.

Read more

Keiser Report: Weed Out Wall St. Crooks!

RussiaToday on Feb 28, 2012 Follow Max Keiser on Twitter: http://twitter.com/maxkeiser

In this episode, Max Keiser and co-host, Stacy Herbert, discuss 'no wrongdoing' settlements, defrauding school children and a morbidly obese, bedridden Volcker Rule. In the second half of the show, Max talks to Karl Denninger of the Market-Ticker.org about rigging Libor, ruining Volcker and shorting Facebook.

Tuesday, February 28, 2012

Capital Account - Is the "Demographic Carry-trade" putting Human Capital at Risk of Flight in Europe?

CapitalAccount | Feb 27, 2012

William Engdahl on Greek Bailout terms

RussiaToday on Feb 27, 2012

Putin assassination plan foiled

RussiaToday on Feb 27, 2012

S&P downgrades Greek credit rating to Selective Default


From The China Daily:

& Poor's late Monday cut Greece's "CC" long-term and "C" short-term sovereign credit ratings to "selective default"(SD), after the debt-laden country launched a bond swap plan to ease its debt burden last Friday.

The rating agency attributed its rating decision mainly to the Greek government's retroactive insertion of collective action clauses (CACs) in the debt swap deal, a legislation Greece has passed to force all private bondholders to participate in the swap.

"In our opinion, Greece's retroactive insertion of CACs materially changes the original terms of the affected debt and constitutes the launch of what we consider to be a distressed debt restructuring," S&P said in a statement on its website.

"Under our criteria, either condition is grounds for us to lower our sovereign credit rating on Greece to 'SD' and our ratings on the affected debt issues to 'Default'," the rating agency added.

S&P noted that Greece's decision to add CACs into the debt reduction program was equal to a debt issuer's "unilateral change of the original terms and conditions of an obligation", something it viewed as a "de facto restructuring and thus a default."

Read more

A Cluster Frack

Warning contains references to Natural Gas:

Silver and Opium

By Antal E. Fekete

The opium wars do not belong to the glorious episodes of Western history. Rather, they were instances of shameful behavior the West still has not lived down. Mercantilist governments resented the perpetual drain of silver from West to East in payment for Oriental goods (tea, silk, porcelain) that were in high demand in the Occident, facing low demand in the Orient for Occidental goods. From the mid-17th century more than 9 billion Troy ounces or 290 thousand metric tons of silver was absorbed by China from European countries in exchange for Chinese goods.

The British introduced opium along with tobacco as an export item to China in order to reduce their trade deficit. Under the disguise of free trade, the British, the Spanish and the French with the tacit approval of the Americans continued sending their contraband to China through legitimate as well as illegitimate trade channels even after the Chinese dynasty put an embargo on opium imports. Because of its strong appeal to the Chinese masses, and because of its highly addictive nature, opium appeared to be the ideal solution to the West's trade problem. And, indeed, the flow of silver was first stopped, and then reversed. China was forced to pay silver for her addiction to opium smoking that was artificially induced by the pusher: the British.

Thus silver was replaced by opium as the mainstay of Western exports. In 1729 China, recognizing the growing problem of addiction and the debilitating and mind-corrupting nature of the drug, prohibited the sale and smoking of opium; allowing only a small quota of imports for medicinal purposes. The British defied the embargo and ban on opium trade, and encouraged smuggling. As a result, British exports of opium to China grew from an estimated 15 tons to 75 by 1773. This increased further to 900 tons by 1820; and to 1400 tons annually by 1838 -- an almost 100-fold increase in 100 years.

Something had to be done. The Chinese government introduced death penalty for drug trafficking, and put British processing and distributing facilities on Chinese soil under siege. Chinese troops boarded British ships in international waters carrying opium to Chinese ports and destroyed their cargo, in addition to the destruction of opium found on Chinese territory. The British accused the Chinese of destroying British property, and sent a large British-Indian army to China in order to exact punishment.

British military superiority was clearly evident in the armed conflict. British warships wreaked havoc on coastal towns. After taking Canton the British sailed up the Yangtze River. They grabbed the tax barges, inflicting a devastating blow on the Chinese as imperial revenues were impossible to collect. In 1842 China sued for peace that was concluded in Nanking and ratified the following year. In the treaty China was forced to pay an indemnity to Britain, open four port cities where British subjects were given extraterritorial privileges, and cede Hong Kong to Britain. In 1844 the United States and France signed similar treaties with China.

These humiliating treaties were criticized in the House of Commons by William E. Gladstone, who later served as Prime Minister. He was wondering "whether there had ever been a war more unjust in its origin, a war more calculated to cover Britain with permanent disgrace." The Foreign Secretary, Lord Palmerston replied that nobody believed that the Chinese government's motive was "the promotion of good moral habits", or that the war was fought to stem China's balance of trade deficit. The American president John Quincy Adams chimed in during the debate by suggesting that opium was a "mere incident". According to him "the cause of the war was the arrogant and insupportable pretensions of China that she would hold commercial intercourse with the rest of mankind not upon terms of equal reciprocity, but upon the insulting and degrading forms of the relations between lord and vassal." These words are echoed, 160 years later, by president Obama's recent disdainful pronouncements to the effect that China's exchange-rate policy is unacceptable to the rest of mankind as it pretends that China's currency is that of the lord, and everybody else's is that of the vassal.

The peace of Nanking did not last. The Chinese searched a suspicious ship, and the British answered by putting the port city of Canton under siege in 1856, occupying it in 1857. The French also entered the fray. British troops were approaching Beijing and set on to destroy the Summer Palace. China again was forced to sue for peace. In the peace treaty of Tianjin China yielded to the demand to create ten new port cities, and granted foreigners free passage throughout the country. It also agreed to pay an indemnity of five million ounces of silver: three million to Britain and two million to France.

This deliberate humiliation of China by the Western powers contributed greatly to the loosening and ultimate snapping of the internal coherence of the Qing Dynasty, leading to the Taiping Rebellion (1850-1864), the Boxer Uprising (1899-1901) and, ultimately, to the downfall of the Qing Dynasty in 1912.

The present trade dispute between the U.S. and China is reminiscent of the background to the two Opium Wars. Once more, the issue is the humiliation and plunder of China as a "thank you" for China's favor of having provided consumer goods for which the West was unable to pay in terms of Western goods suitable for Chinese consumption. The only difference is the absence of opium in the dispute.

Oops, I take it back. The role of opium in the current dispute is played by paper. Paper dollars, to be precise. In 1971 an atrocity was made that I call the Nixon-Friedman conspiracy. To cover up the shame and disgrace of the default of the U.S. on its international gold obligations, Milton Friedman (following an earlier failed attempt of John M. Keynes) concocted a spurious and idiotic theory of floating exchange rates. It suggests that falling foreign exchange value of the domestic currency makes it stronger when in actual fact the opposite is true: it is made weaker as the terms of trade of the devaluing country deteriorates and that of its trading partners improves. Nixon was quick to embrace the false theory of Friedman. No public debate of the plan was permitted then, or ever after. Under the new dispensation the irredeemable dollar was to play the role of the ultimate extinguisher of debt, a preposterous idea. The scheme was imposed on the world under duress as part of the "new millennium", shaking off the "tyranny of gold", that "barbarous relic", the last remnant of superstition, the only remaining "anachronism of the Modern Age". The ploy was played up and celebrated as a great scientific breakthrough, making it possible for man to shape his own destiny rationally, free of superstition, for the first time ever. Yet all it was a cheap trick to elevate the dishonored paper of an insolvent banker (the U.S.) from scum to the holy of holies: international currency. The fact that fiat paper money has a history of 100 percent mortality was neatly side-stepped. Any questioning of the wisdom of experimenting with is in spite of logic and historical evidence was declared foggy-bottom reactionary thinking.

The amazing thing about this episode of the history of human folly was the ease with which it could be pushed down the throat of the rest of the world, including those nations that were directly hurt by it, such as the ones running a trade surplus with the U.S. Their savings went up in smoke. The explanation for this self-destructing behavior is the addictive, debilitating and mind-corrosive nature of paper money, in direct analogy with that of opium. The high caused by administering the opium pipe to the patient (read: administering QE) had to be repeated when the effect faded by a fresh administration of more opium (read: more QE2).

If the patient resists, like China did in 1840, then a holy opium war must be declared on it in the name of the right of others to free trade. 170 years later a New China once more demurred against the paper-torture treatment it was subjected to by the American debt-mongers and opium pushers.

But beware: if the West starts another Opium War, this time it is not China that will be on the losing side.

Syrian War Update - Precious Metal Trading Banned

From The Jerusalem Post:

BRUSSELS - European Union foreign ministers agreed new sanctions against Syria on Monday, targeting its central bank and several cabinet ministers to try to curb funding for the government and increase pressure on President Bashar Assad.

The measures, expected to be enforced this week, include prohibiting trade in gold and other precious metals with Syrian state institutions and a ban on cargo flights from Syria, officials said.

British Foreign Secretary William Hague said the sanctions were crucial to putting pressure on Assad to end violence that has killed thousands of civilians over the last 11 months.

"I hope we will agree further sanctions today which will further restrict the access to finance in particular of the regime," Hague told reporters before the meeting.        Read more

CrossTalk: Crude Crisis

RussiaToday on Feb 27, 2012

Israel ruined Iran's nuke plans - WikiLeaked Stratfor emails

RussiaToday on Feb 27, 2012

Monday, February 27, 2012

Quote of the Week

"The most intense hatreds are not between political parties but within them"
-  Phillip Adams, journalist.


Unique pink diamond found in Australia

click photo for more images
 From Pravda.ru

Mining giant Rio Tinto says it has unearthed a "remarkable" 12.76 carat pink diamond in Australia. Named the Argyle Pink Jubilee, the stone was found in Western Australia. "A diamond of this calibre is unprecedented -- it has taken 26 years of Argyle production to unearth this stone and we may never see one like this again."The individual who gets to wear this remarkable pink diamond will be incredibly lucky indeed," Josephine Johnson from Rio's Argyle Pink Diamonds division said. When the Jubilee diamond has been cut and polished it will be graded by international experts and showcased globally in private settings before being sold by invitation-only tender later this year.

Martin Armstrong - The Thirteen Year Curse

click on image to access report

Jim Sinclair on Gold and Derivatives

Jim Sinclair discusses the Gold market and the potential for a derivatives blow up due to a Greek default could cause with Eric King of King World News. Listen here

Sunday, February 26, 2012

Brother John F's latest silver update

BrotherJohnF on Feb 24, 2012

Keiser Report: Bubbling Economy

RussiaToday on Feb 25, 2012

In this episode, Max Keiser and co-host, Stacy Herbert, discuss market participating rally monkeys, market regulating surrender monkeys, economic policy making suicide monkeys and Greek ministry website hacking cheeky monkeys. In the second half of the show, Max talks to David Hales about ending top down Central Bank imposed financial and economic systems with peer to peer economics.

Saturday, February 25, 2012

Chris Whalen and Rick Santelli discuss MF Global

Capital Account with Gerald Celente

CapitalAccount | Feb 24, 2012

Sean and Andy Hoffman - $1,000 - $4,000 Silver?

SGT talks to Ranting Andy Hoffman of milesfranklin.com about the fall of Greece at the hands of the IMF and banksters, Silver to $50 by summer.





Sean, BrotherJohnF, Chris Duane Round Table

Three way round table with Sean of the SGTReport.com, Chris Duane aka The Silver Shield and BrotherJohnF for a discussion about citizen blogging and their accomplishments in the new media and where they're heading.

FinancialSurvivalNet on Feb 22, 2012

SBSS - The Real Hunt Brothers Story

TruthNeverTold on Feb 22, 2012


Friday, February 24, 2012

Weekend Chillout - War is a Racket edition

With hot war in Syria, cold war in Iran and potential civil war and military coup in Greece at the moment it seems peace is not going to get a chance for some time to come. This weekend's chillout hopes there is some outcome that brings us back from the abyss.

Nigel Farage on Greece, Iran and Freedom

Former gold trader and current Euro politician Nigel Farage discusses the Greek tragedy and its potential flow on effects with Eric King of King World News. Listen here

Clarke and Dawe - Solvency in Our Time

ClarkeAndDawe | Feb 22, 2012

India Silver Imports May Top 5,000 Tons in 2012


By DEBIPRASAD NAYAK
From WSJ.com

MUMBAI -- India's silver imports may top 5,000 metric tons in 2012 due to strong investment demand, Prithviraj Kothari, the president of the Bombay Bullion Association, said Tuesday.

The country imported around 4,800 tons of silver last year, he said.

"Silver demand is expected to rise on firm industrial and investment demand," he told reporters on the sidelines of a conference.

Though demand for silver may not pick up in the next few weeks as returns from debt instruments are better than that from silver, investment interest in the white metal is expected to grow as and when the country's central bank starts lowering lending rates, Mr. Kothari said.

Such a move is expected to boost an economic recovery and, in turn, silver usage as the precious metal finds as much application in industrial goods as in jewelry, coins and artefacts.

Read more

For a historical perspective on Indian Silver imports from 2007 - check out the silver and gold prices back then:

http://uk.reuters.com/article/2007/09/03/india-silver-idUKNOA33259620070903

Silver plays catchup


Silver in over night trading has managed to break out of its month long range of $33 - $34, at one point hitting $35.50. Likewise gold has maintained its break made yesterday, currently gold is trading at $1780.

Not surprisingly the Gold to Silver ratio has also fallen to approx 50:1. Of course this is nowhere near the historical norm of 12-16:1 or the more important current mining ratio of 9:1 but at least it is heading in the right direction for the silver bugs.


Pact With the Devil Over Gold

By Mish:

The one and only thing that might possibly spare Greece the agony of a completely worthless currency is Greece's small hoard of 111 tons of gold.

Pact With the Devil

Yet, in the fine print in the latest deal, Greece’s lenders will have the right to seize its gold reserves according to the New York Times article Growing Air of Concern in Greece Over New Bailout.

In the fine print of the 400-plus-page document — which Parliament members had a weekend to read and sign — Greece relinquished fundamental parts of its sovereignty to its foreign lenders, the European Commission, the European Central Bank and the International Monetary Fund.

“This is the first time ever that a European and probably an O.E.C.D. state abdicates its rights of immunity over all its assets to its lenders,” said Louka Katseli, an independent member of Parliament who previously represented the Socialist Party, using the abbreviation for the Organization for Economic Cooperation and Development. She was one of several independents who joined 43 lawmakers from the two largest parties in voting against the loan agreement.

Ms. Katseli, an economist who was labor minister in the government of George Papandreou until she left in a cabinet reshuffle last June, was also upset that Greece’s lenders will have the right to seize the gold reserves in the Bank of Greece under the terms of the new deal, and that future bonds issued will be governed by English law and in Luxembourg courts, conditions more favorable to creditors.

Keiser Report: Burning Bankers Pays

RussiaToday on Feb 23, 2012

In this episode, Max Keiser and co-host, Stacy Herbert, discuss Lloyd Blankfein's suicide twinkie vest, Iceland's parliamentary pelting, manipulation of Libor rates and rampant foreclosure abuse. In the second half of the show, Max talks to Shir Hever about price tagging in Area C of the West Bank and about destroying the competition in Gaza.

Thursday, February 23, 2012

Alex Jones & Gerald Celente - More Money for the Money Changers

TheAlexJonesChannel | Feb 22, 2012





Is something stirring in Slovenia?

I just reviewed this blog's weekly stats and in the top 10 views by country Slovenia came in 9th, beating out Switzerland at 10th. I can't remember Slovenia ever rating a mention in the top 10 before, hardly surprising as the country's population is only 2 Mil and its GDP is 89th in the world. So if readers in Slovenia are looking for education on precious metals, etc there maybe something a foot. I fear it maybe similar to the time this blog received a large number of hits from South Korea just prior to a series of banking runs.

The only thing in the news that I could find that might be relevant was:

From Balkans.com

Fitch Ratings has placed the six largest Slovenian banks on its negative rating watch, newswires report. The rating agency cited rising concerns over the provision of support of the Slovenian authorities for the country's banking sector. Putting the ratings of NLB , NKBM ,Abanka Vipa, Gorenjska Banka , Banka Celje and Probanka under review, the rating agency said it would review the ability and inclination of Slovenian as well as European authorities to provide support in case of need.

Herding Greek Cats from Bondage

By Jim Willie

Listen to the empty words of the last bailout for Greece. Credibility with the Jackass was lost back on the third bailout, well over a year ago, out of the six bailouts in total. Perhaps it is seven comprehensive final bailouts. The pattern is clear. The politicians, without popular support, forge agreements on debt coverage with the Greek officials. The deals fall through, hit the ground, and expose the lack of support even from the European bankers, led by the Germans. The pattern has been vividly clear for over a year, enough for my dismissal of new accords right away on the basis that the German bankers will not conform and agree to the deals struck. The political leaders in France (Sarkozy) and Germany (Merkel) are due to lose their offices, yet they continue to march around at useless summits attempting to cut last ditch agreements that mean nothing. The people are not willing in Germany to hand over any more than the $3 trillion to date, from the start of the common Euro currency experiment. The bankers, like at the Bundesbank, should attend the summits, but that would be too obvious on where the majority of power is held. What is unfolding is a comprehensive Greek Govt debt default from the inability to contain the situation, the impracticality of the austerity budgets put in place, the wreckage that has come to the Greek Economy, and the intractable solution.

My view is the entire charade for two years has been a grand delay to enable the big banks to sell out of their bonds and dump them on the Euro Central Bank. Almost every bailout has been of bank assets in some sort of redemption, not budget assistance. The biggest question posed and not answered is: HOW ANGRY ARE THE OWNERS OF THE FEDERAL RESERVE AND EURO CENTRAL BANK TO ACCUMULATE AND OWN SUCH A MOUNTAIN OF TOXIC PAPER?? My German banker source says the Germans will make what seem like agreements or permit the politicians to make them, but the bankers will consistently obstruct them. He steadily stresses how Germany has wasted $300 billion in savings each year, is exhausted, and no longer is willing or able to provide national welfare for Southern Europe. They will write no more checks except what will successfully grab collateral prize properties. It has become obvious the Greeks will not hand over much of any property without lighting the city on fire. It is the end of the bailout road. A few months ago my firm position, stated in the newsletter, that the bailouts would end when the riots amplify. They have amplified. Conclusion: GAME OVER.

Next comes a planned or unplanned default. Let's see how inequitable they will make it. Obviously it will be inequitable, since all accords have greatly favored the bankers. The TARP Fund was the most egregious, but it only disguised the bigger multi-$trillion grants with zero cost to the many banks, both central bank and private bank. The upshot of the Financial Regulatory Bill is that the USFed must open its books, but only after such loans take place, not to be reversed. Back to Greece. For a few months, some clarity and realism has entered the discussions and analysis concerning the burning nation of antiquity. The new theme has been that Greece will default, must default, and cannot avoid a default. Exactly. So the challenge is to avoid the horrendous collateral damage that will come. The central bankers, regional commissars, and technocrats have been working overtime, but Davos was a missed opportunity for forging potential solutions or at least elements.

A great comment came out of the World Economic Forum in Davos. The comment came from one of the few Economics Nobel Winners who makes any sense at all. The recent parade of prize winners seems either clownish in support of the status quo in disaster mode, or abstruce to the point of irrelevance. Joseph Stiglitz uttered perhaps the only wisdom or story worth reporting from the forum, a country club gathering of bankers and their investment fund cohorts whose mission is to defend the failing system. Stiglitz said, "European leaders repeat the same kind of platitudes, [like] we need to get growth going, [like] austerity will not be enough, but no country has policies that will achieve growth. I have not heard a single thing here in Davos that has convinced me that the European leaders have any sense of what they need to do and will do. Nobody knows who owes what to whom, where the risks of a Greek default are." It reminds me of a premise that the first step in a reconstruction, remedy, and solution is to liquidate the big insolvent banks. But that is precisely where the power lies in controlling the USGovt. If not the banks, the agencies that have evolved into a private sprawling enterprise control much hidden power.

BLUEPRINT FOR DAMAGE CONTROL

One must be serious and grounded in reality. No solution exists for Greece without liquidation of their debt, its restructure with huge writedowns if not total wipeout loss, a return to the Drachma currency, recapitalization of their banks, and a hands off to carpetbaggers. Almost none of these measures will be done, except blockage of the foreigners intending to exploit. Talk is clear about a 70% bond haircut, which does not seem enough even though it is brutal. The biggest practical impediments to the Greek Economy are the austerity plan and the absent ability to devalue the currency. Every single austerity plan to date has been a failure, in every nation attempted. They result in worse economic slowdowns, greater job loss, broad cancelation of projects, reduced pension security, and much wider deficits. Yet they continue in a grand procession of ruin. One must wonder if ruin is the goal, so that another technocrat can be put in power, unelected and with allegiance only to the syndicate. Who selected Papademous and Monti?

The absent path to a currency devaluation hits as the central flaw of the common Euro region. The weakest cannot compete against the strongest. In time the strong nations refuse to provide the higher standard of living at their own domestic expense. The German standard of living has fallen badly, angering many of its citizens. The normal evolutionary path calls for a troubled nation to do debt restructure, to enact broad reforms, to devalue the currency, and to stimulate the economy. The path taken for two years has been to dance around the debt table. No action at all on devaluation, since removal from the Euro currency umbilical would mean enormous debt writeoffs for the major European banks. This is the same obstructive dynamic at work in the United States. Greece needs to go back to the Drachma, devalue it by 30% or more, and enjoy some stimulus. Their list of export items is not in great volume. The austerity budgets are the exact opposite of stimulus. Lunacy has taken root, like with an entire class of public contract workers must work for no pay. The power center of the big banks prevents solutions. So the next phase will be full of risk and intrigue, if not treachery.

LAYERS OF RISK

Big Bank losses: The big banks in Europe face staggering losses. The attempts to make a mere 35% bond loss haircut in past deals was so unworkable as to be laughable. They fooled nobody. Reality has entered the room, as a 70% writedown figure has been proposed on current bailout deals. The big banks are already reeling from credit portfolios damaged by property like home mortgage and commercial mortgage. They are hurt by sovereign debt generally, not just from Greece. The Italian and Spanish Govt debt losses will be higher in volume, lower in percentage loss. The big bank exposure extends also to private debt within the Greek Economy, like with mortgages and commercial loans. They are all at heavy risk. The Basel II rules have forced de-leveraging as a warmup process that weakened many banks. The big European banks should enter failure from an imposed Greek Govt debt default and restructure. The Greek losses will strain the system to the hilt.

Contagion to Banks outside Europe: The interwoven nature of Western banking does not add to its strength, like in integrated plywood sinews, but rather exposes its weakness. The London banks own a huge amount of Southern Europe sovereign debt. The New York banks own a sizeable portion also. A recent conversation with a sturdy German banker revealed that Citigroup owns an enormous amount of debt in Greece, Italy, and Eastern Europe in the mortgage sector. Most will be written off with big losses. The amount of PIGS sovereign debt owned by banks in France is enormous, well detailed, but under-reported. The cross pollenation will come to the fore as the ripples are felt. The German banks own too much sovereign debt. The big banks outside Europe are at great risk, just like those throughout the Continent. Many non-European banks should enter failure from an imposed Greek Govt debt default and restructure. The Greek losses will strain the system to the hilt.

Euro Central Bank: Like the US Federal Reserve, these two central banks have served as the buyer of last resort for toxic bonds that both nobody wants and have nearly worthless value. Their owner lords (think castles in London and Switzerland) must be pushing back hard. The new EuroCB head Mario Draghi at first stated a firm position of not wishing to buy Southern European sovereign bonds, since badly impaired. When the Italian and Spanish Govt Bond yields rose toward or past the 7% magic mark, he relented. The stability returned in the bond market, but at the high cost of further wrecking the EuroCB balance sheet. It is hard to know which is more ruined, loaded with toxic paper, the EuroCB or the USFed. Both in my view are wrecked entities and control towers. Neither can serve adequately as a central bank when acting like a proxy for the entire banking system. They must remove the bank reserves held as hostage from private banks. The major central banks should face severe insolvency from an imposed Greek Govt debt default and restructure. The Greek losses will strain the system to the hilt.

Credit Default Swaps: The bond insurance market is even more corrupt than the mortgage market. At least the mortgage arena contained some hint of regulatory oversight. The derivative market has none at all. Some fine analysts like Chris Whalen stated two and three years ago that without the derivative trade, the US banks would have keeled over dead long ago. They took in huge fees on contracts whose legitimacy and effectiveness are unclear. The ISDA has issued rulings on bond debt default that seem corrupt to the core. The next round of Greece Govt Bond writedowns apparently will feature CDSwap insurance responses in the form of awards in exchange for bond ownership, the inherent asset swap. Like the SEC and CFTC, the ISDA is loaded with bankers from the everpresent Wall Street revolving door. They will serve the banks at the expense of the system and economy. The interwoven nature of Western banking does not add to its strength, but rather exposes its weakness. The claimed offset on derivative ownership is nonsense, as Bank A holds derivatives that cover Bank B, and vice versa. They do not cancel out for net neutral. Both banks are killed, neither able to aid the other. The payouts for Credit Default Swap contracts being enforced should cause tremendous additional damage to the entire financial system, from an imposed Greek Govt debt default and restructure. The Greek losses will strain the system to the hilt.

Exposure of Profound Fraud again: The strain from any imposed default skein will expose the derivative market. The cast of counter-parties is too diverse. The obligations are too unclear. The nature of the contracts is too untested. The enforcement by the ISDA rulings are too subservient. Like with the mortgage sector, liquidations reveal the seriously putrid underbelly. With mortgages, no widespread liquidation of mortgage bonds could be done, since the process would reveal bond fraud to the extreme. Its mortgage contract fraud is in the open for full view. So patchwork was done, even nationalization of Fannie Mae and AIG under the USGovt wing. The fraud is contained supposedly, but without the basis of a solution. Hyper monetary inflation goes down a Black Hole. So also is the nature of the derivative market. Liquidations will reveal the seriously corrupted core of the business. After the recent MFGlobal, JPMorgan, and COMEX episode, one more log on the raging fraud bonfire. The system's foundation of integrity is burning. The CDSwap contract award process should expose profound fraud in the system from an imposed Greek Govt debt default and restructure. The Greek losses will strain the system to the hilt.

Recapitalize domestic banking systems: The banking system has operated in the Western nations amidst deep insolvency for three years or more. When the Greek default is begun, that insolvency will be much worse. Some banks will fail. The dominos will fall. The impact will be understood quickly. The need to rebuild the banking system will be an obvious and very painful realization, but the volume will result in shock. The big banks serve as the core for the domestic credit engines, the machinery to pump credit into the many businesses. That engine is sputtering badly. Some measures will be done to enable new Euro Bonds to take senior position, but expect it to backfire since bond dealers and bond funds will resist the favored treatment and retreat. Several $trillion will be needed to recapitalize the banking systems, not just a few banks. With the dependence upon newly printed unbacked money, the banking systems should lose further integrity from an imposed Greek Govt debt default and restructure. The Greek losses will strain the system to the hilt.

Debt Rating Agencies: Since the autumn months of 2008, the agencies have acted more responsibly. The Standard & Poors downgrade of the USGovt debt was a wakeup call of unprecedented manner. However, the Moodys and Fitch agencies did not follow suit. Worse, the S&P chief executive was forced out of office, probably by a Wall Street phone call, replaced by a Citigroup veteran. In the last several months to perhaps 18 months, the debt rating agencies have been doing their job reponsibly, but their focus is entirely on Europe. They have ignored the United States, even ignored the embattled insolvent US States. They are piling on with European sovereign downgrades, European bank downgrades, even European stability fund downgrades. Instead of putting the debt rating agencies at greater risk from an imposed Greek Govt debt default and restructure, the pressure will be on them as a group to focus more attention on the USGovt and the US States. Their collective financial condition is equally bad as Greece.

Economies suffer from Austerity: The impact of every austerity plan is to put in place what appears to be a more rigid spending process. But the dependence of the domestic economies is so great upon the public sector for jobs and projects and grants and subsidies, that the damage is instant and deep. No austerity budget plan has resulted in improved finances in the first two years of emplacement. None! The economists seem blind to the effect. The politicians seem ignorant. The corporate leaders are frustrated. No solution exists for remedy short of a five year period. Many economies in the West should suffer even worse and more painful recessions from an imposed Greek Govt debt default and restructure. The Greek losses will strain the system to the hilt.

Amplified Inflation Risk: All solutions proposed involve the disposition of new money, either from outright printing without backing or from grander fiscal deficits. The austerity plans result in worse deficits, thus worse pressure on inflation. Any banking system recapitalization would be the crown jewel of monetary inflation. Imagine the effect of $1 trillion or $2 trillion in recapped banks, only to find they require another $1 trillion several months later. The inflation impact could be enough to push the water level over the bunker banker walls. Those walls have prevented the staggering hyper monetary inflation from spilling over into Main Streets across the nation. The bank sector has enjoyed 98% of the bailout benefits. The public has been told to tighten belts and to eat cake. Look for the bank recapitalization project, if it occurs, to finally push the inflation process in such a way that price inflation hits the USEconomy in force. Refer to rising wages and rising prices, not just costs. Tremendous pressure should come on systemic price inflation from an imposed Greek Govt debt default and restructure. The Greek losses will strain the system to the hilt.

Interest Rate Swap Risk: If price inflation rises in unexpected fashion, the pressure put on the USTreasury Bond market will be greater than any time in the last ten years. So far, the abuse of the Interest Rate Swap contract has provided outsized leverage in keeping down the USTBond yields generally, by creating artificial bond demand. The financial press is totally oblivious to this phenomenon. Investors do not flock to USTBond as safe haven. The Wall Street leverage machinery has created bond demand from the basement working overtime for over two years. The smoking gun was the 1Q2011 report on derivative growth by the Office of the Comptroller & Currency. It revealed $8 trillion in notional derivatives put on by Morgan Stanley alone. So much for investor bond demand and contradiction of the S&P downgrade of USGovt debt. What a clever tactic. However, the Greek Govt debt unraveling could place tremendous strain on the IRSwap device, even to expose it during a time of increased foreign creditor isolation. The US sovereign bond market inner circle hidden devices should be brought into the open from an imposed Greek Govt debt default and restructure. The Greek losses will strain the system to the hilt.

Unintended Consequence Risk: The last risk to cite is the risk of the unknown, the unexpected, that which cannot be properly planned. The potential unintended outcomes and pressures emanating from a comprehensive planned Greek Govt debt default defy description. In my view, it is like herding 100 cats freed from bondage on a truck in an open field. The Jackass loves cats, but never have they been captured in a yard when attempted. They jump fences, crawl under fences, disappear in holes under houses, even hide in car engines. They are fast and elusive, changing directions with extreme quickness and agility. So will be the consequences to a planned Greek demolition of their indebted edifices. The Powerz must realize the challenge that lies ahead, and look upon each with some trepidation.

GOLD & SILVER

The battle has been waged in the 1750 to 1800 price corridor for almost a full month. It is critically important. A smaller battle to overcome the 1650 mark was a success, thus making the Gold price recovery firm and recognized. As a solution is worked out in Greece, or the absence of one with another in a series of grand missteps, watch the Gold price cast a vote. The system's integrity lies in the balance. The pressure points are across the entire financial and economic systems. The solutions are elusive since the basic initial step of big bank liquidation is refused, too much damage to be doled to the banks that control the power. The zinger is the recapitalization of the banking system, an urgent need and requirement, the understood impact from the imposed Greek comprehensive solution. Expect more favored treatment to the banks. However, as they are put back on solvent feet, a process only possible with vast hyper monetary inflation directed specifically at the banking pillars, the retribution from within the system will possibly be the first serious price inflation leakover. For over three years, the monetary inflation leakover has been contained, to the detriment of the economy.

The anticipation of that systemic price inflation event could be seen in the Gold price. The direct response to the imposed Greek debt solution could be some sort of capitulation, a recognition that the Western financial and monetary system cannot be fixed. Any perception that bank system reconstruction would assure another powerful bout of price inflation as the heavy cost could be a major unintended consequence. The Gold price could explode past $2000 per ounce if that were to occur. If the planned demolition of the Greek Govt bond building does not go according to plan, look to the Gold price for a powerful upward response. The list of unintended consequences and collateral damage is very long indeed. The risk is staggering acute and not easily measured. Gold should serve as the effective pressure valve. Most every attempt to push down the Gold price in the last few weeks with yet more naked shorting has been thwarted and opposed by the Eastern Coalition, their new project.



Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a Ph.D. in Statistics. His career has stretched over 22 years. He aspires to one day join 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


Bix Weir: Silver rarer than Gold?

SGTbull07 on Feb 22, 2012

SGT talks to Bix Weir of RoadtoRoota.com


Gold breaks free of the $1700 - $1750 range


Gold in New York trade has finally broken free of the $1700 - $1750 range of the last month, exceeding $1780/oz at one point. Reasons for the rise can be somewhat attributed to the tensions in the Gulf, as can also be seen with the WTI Oil price rising to $106 overnight. Although this issue is hardly new, the latest Greek bailout deal no doubt has eased fears of a financial panic hence allowing traders to take a more positive / risk on outlook.

CrossTalk: Iranoia

RussiaToday on Feb 22, 2012

Monday, February 20, 2012

NWO Puppet Masters VS. Military PATRIOTS = Revolution

RussiaToday on Feb 20, 2012


SGTbull07 on Feb 19, 2012


US in bed with Al-Qaeda to oust Assad

RussiaToday on Feb 19, 2012


zionget on Feb 14, 2012

David Morgan at the Vancouver Investment Conference

David Morgan speaks at the Vancouver Investment Conference, January 22, 2012

silverguru on Feb 15, 2012

John Embry on Greece and Gold

John Embry discusses the looming Greek default and the impact it may have on the Gold and Silver markets with Eric King Of Kong World News. Listen here

Iran Bans Oil Sale to UK and France

From The Raw Story:

Iran has halted its limited oil sales to France and Britain in retaliation for a phased EU ban on Iranian oil that is yet to take full effect, the oil ministry said on Sunday.

“Oil sales to British and French companies have ceased,” spokesman Ali Reza Nikzad Rahbar said in a statement on the ministry’s official website.

“We have taken steps to deliver our oil to other countries in the place of British and French companies,” he said.

The decision was not expected to have a big impact. France last year bought only three percent of its oil — 58,000 barrels a day — from the Islamic republic, and Britain was believed to be no longer importing Iranian oil.

But it was seen as a warning shot to other EU nations that are bigger consumers of Iranian oil, including Italy, Spain and Greece.

Although those countries were not affected by Iran’s announcement on Sunday, they are included in an EU decision to stop buying Iranian oil that was announced last month and which will take full effect from July.

According to the International Energy Agency, Italy sourced 13 percent of its oil, or 185,000 barrels per day, from Iran, while Spain imported 12 percent of its oil needs, or 161,000 bpd, and Greece bought 30 percent of its needs, or 103,000 bpd.

Read more

Frenemies

RussiaToday on Feb 19, 2012

Sunday, February 19, 2012

Alex Jones and Nigel Farage on Greece

TheAlexJonesChannel | Feb 15, 2012


Keiser Report: Rich guys totally observe you

RussiaToday on Feb 18, 2012

In this episode, Max Keiser and co-host, Stacy Herbert, discuss the riches made monitoring the population and the pittance paid for agreeing to be monitored. The also discuss the Serious Organised Crime Agency threatening to monitor Stacy for following a link while Max envisions a future in which granny gets it. In the second half of the show, Max talks to Charles Hugh Smith of OfTwoMinds.com about social fractals, tanking energy consumption and a citizenship futures market.

Saturday, February 18, 2012

The Brain Wallet

For those who don't know what a Biticoin is click on the image
For those with a mathematical bent and a damn good memory......

Source

Brain Wallet

A Brain Wallet refers to the concept of storing Bitcoins in one's own mind by memorization of a passphrase. As long as the passphrase is not recorded anywhere, the Bitcoins can be thought of as existing nowhere except in the mind of the holder. If a brainwallet is forgotten or the person dies or is permanently incapacitated, the Bitcoins are lost forever.

A Brain Wallet is created simply by starting with a unique phrase. The phrase must be sufficiently long to prevent brute-force guessing - a short password, a simple phrase, or a phrase taken from published literature is likely to be stolen by hackers who use computers to quickly try combinations. A suggestion is to take a memorable phrase and change it in a silly way that is difficult to predict.

The phrase is turned into a 256-bit private key with a hashing or key derivation algorithm (example: SHA256). That private key is then used to compute a Bitcoin address, or a deterministic sequence of addresses. This conversion can be done with a utility such as Casascius Bitcoin Utility or Electrum.

Bitcoins are sent to the address. In order to recover the Bitcoins, one must recompute the private key with the same phrase. The private key is imported into a wallet.

Example Brain Wallet:

First, a phrase is chosen. "Man made it to the moon,, and decided it stinked like yellow cheeeese."

Note that the extraneous characters and broken grammar are intentional, this makes the passphrase harder to attack.

The SHA256 hash of this string is calculated. (Note, this is also the private key in hex, and must be kept secret). SHA256 = 74 E8 60 03 A7 4C BA 14 ED 92 74 30 1E F4 75 FE C0 DA 8B 0F 76 48 69 FC 14 43 5A E0 36 8F DD B9

This number is turned into a Bitcoin address using the standard published algorithm.
Bitcoin address = 1CeU9ugjwfsnzrhqjKy1HUBzXCCXVC76m1

End result: Bitcoins sent to this address are accessible to someone who knows the original phrase. The extraneous characters, of course, must be remembered intact.

Gold in 1980 vs Today

visionvictory on Feb 17, 2012

Alex Jones and Bob Chapman - A Depressed World Economy is Here To Stay

TheAlexJonesChannel | Feb 17, 2012





Alex Jones on why Judge Andrew Napolitano was fired

TheAlexJonesChannel | Feb 17, 2012

George Galloway on British government's support of Bahrain regime

PressTVGlobalNews on Feb 17, 2012

$6 Trillion in fake US Bonds seized


What this story doesn't explain is how these "fake" bond differ from "real" bonds pretending to represent money? What do the real ones have nicer engravings of dead blokes on them or something?

From Bloomberg:

Italian anti-mafia prosecutors said they seized a record $6 trillion of allegedly fake U.S. Treasury bonds, an amount that’s almost half of the U.S.’s public debt.

The bonds were found hidden in makeshift compartments of three safety deposit boxes in Zurich, the prosecutors from the southern city of Potenza said in an e-mailed statement. The Italian authorities arrested eight people in connection with the probe, dubbed “Operation Vulcanica,” the prosecutors said.

The U.S. embassy in Rome has examined the securities dated 1934, which had a nominal value of $1 billion apiece, they said in the statement. “Thanks to Italian authorities for the seizure of fictitious bonds for $6 trillion,” the embassy said in a message on Twitter.

The financial fraud uncovered by the Italian prosecutors in Potenza includes two checks issued through HSBC Holdings Plc (HSBA) in London for 205,000 pounds ($325,000), checks that weren’t backed by available funds, the prosecutors said. As part of the probe, fake bonds for $2 billion were also seized in Rome. The individuals involved were planning to buy plutonium from Nigerian sources, according to phone conversations monitored by the police.

Read more

Could Moody's and the Greek CDS time-bomb take down the "Goodfellas of Wall Street?"

CapitalAccount | Feb 16, 2012

Michel Chossudovsky on the Syrian War

RTAmerica on Feb 15, 2012

Friday, February 17, 2012

Weekend Chillout - The Missing Edition

With news this week that the total of "missing" client money at MF Global now stands at $1.6Bil up from earlier estimates of $1.2Bil I am guessing many farmers and mining company's are missing that money as well.

God damn it I want that suit. Have you ever seen Gold and Silver so happy together?


US wants in the Asia-Pacific

PressTVGlobalNews on Feb 15, 2012 Senior Pentagon officials have defended President Barack Obama's military spending plan, which includes a shift in strategic focus to the Asia-Pacific region.

Targeting Iran: Israel ramps up rhetoric

RussiaToday on Feb 16, 2012

Thai police say Israeli diplomats were the target of a group of Iranians arrested after prematurely setting off explosives in Bangkok. The claims are expected to further fuel anti-Iranian rhetoric that Tel Aviv has ratcheted up after bomb attacks targeted Israelis in Georgia and India.

Battlefield USA 2012: Gerald Celente on year's top trends

RussiaToday on Feb 16, 2012

Gerald Celente, the founder of the Trends Research Institute gives RT's Marina Portnaya his predictions for the headlines of tomorrow. OWS movement, US presidential elections, economic embargo on Iran are among the issues discussed.

Judge Napolitano - How to get fired in under 5 mins

Remember when things were built to last?

Yes 911, still my top reason for stacking gold and silver, well at least until they hold the treason trials and nail up those responsible. At current progress this could be awhile.

ae911truth on Aug 16, 2011


TheAlexJonesChannel | Feb 13, 2012



Keiser Report: German Empire vs Greek Carthage

RussiaToday on Feb 16, 2012

In this episode, Max Keiser and co-host, Stacy Herbert, discuss a 'Grexit' after the Carthaginian peace deal and also safety net critics and collateralized hemlock futures. In the second half of the show, Max talks to Chris Whalen of Tangent Capital about Greek deals, gold and raising interest rates to save the economy.

Thursday, February 16, 2012

Capital Account with Stephen Leeb and Nigel Farage

CapitalAccount | Feb 15, 2012

Spanish village returns to old money instead of the Euro


A Spanish town is looking to the past to safeguard the future of its ailing economy by reintroducing the peseta.

Fed up with the failing euro, rebellious locals in Villamayor de Santiago have reverted to using the old currency, which was phased out a decade ago.

News quickly spread, and shoppers from neighbouring villages and towns have been flocking there to spend the old currency.

Luis Miguel Campayo, chairman of the local merchants’ association, who came up with the idea, said: ‘People kept hold of old pesetas thinking that they might come in handy one day if the euro fails.

Around 30 shops in the historic town, 75 miles south-east of Madrid, started accepting pesetas last month after urging customers to dig out any old notes and coins they had forgotten about.

Read more: http://www.dailymail.co.uk/news/article-2100565/Spanish-village-goes-peseta-euro-crisis-takes-hold.html#ixzz1mWTqSLwX

Alex Jones has a sense of humour

TheAlexJonesChannel | Feb 15, 2012

http://www.infowars.com/events

What you are about to watch is ridiculous. It's absurd. But it is all the more ridiculous because it reflects what is really happening in society. It is the first 6 minutes from Alex Jones' new documentary- which will premiere at both of his upcoming "Blueprint to Defeat the New World Order" speaking events in Dallas, TX and Orlando, FL.



Dr. Ron Paul on markets and precious metals

An interesting interview on GoldSeek Radio with presidential candidate Dr. Ron Paul. Take away comment:

"I think they always seem to be able to patch things together longer than we ever believed. But, the one thing is, is you can’t promise that because the end stages of a currency can come rather quickly. You can slip and slide, as we have been. If you look at the value of the dollar from 1913, it’s dropped dramatically. But, even since ’71, it’s dropped about 85%, but it’s been steady and gradual; but when the panic comes, when people lose confidence, then everything breaks down and that’s so serious"

Greece sacrificed in name of dying EU

RussiaToday on Feb 15, 2012

Iranian War update

RussiaToday on Feb 15, 2012

Chris Martenson's presentation at the Gold & Silver Meeting in Madrid

A brilliant presentation by Chris Martenson in late 2011.

Gold fire sale

By Darryl Robert Schoon

Today, central bankers, the mandarins of capitalism, are in disarray. Their attempts to contain capitalism’s current crisis increasingly resemble the tactics of a defeated army in retreat. Like Napoleon and Hitler’s respective “Moscow moments”, the 21st century economic crisis has brought to an end the bankers’ spectacular 300 year run at the table of power and wealth.

The indebting of others as a means of accumulating wealth ends when the indebted can no longer pay what they owe. The arcane and esoteric scribblings of second generation University of Chicago trained economists cannot cover up this basic fact, i.e. that the indebted are broke; and soon, their creditors will be as well.

The bankers’ franchise of credit and debt built on a leveraged foundation of paper money fractionally backed by gold allowed the West to accumulate geopolitical power and wealth on a vast scale. That era is now over.

It ended when the gold convertibility of the US dollar was terminated in 1971 when the cost of maintaining a global military presence outstripped the ability of the US to pay in gold what it owed on paper.

It was as if someone removed a pin from the axle of international commerce when the US dollar was no longer convertible to gold. Previously, the US dollar was linked to gold, and other currencies were linked to the dollar. Everything was stable. It is no longer so. Once the pin connecting gold and paper money was removed, everything changed. The axle of international commerce began to vibrate and lately it’s been getting much worse. The fear is that the wheels are now about to come off. - Section 1, topic 3, How to Survive the Crisis and Prosper in the Process, Schoon, 2007

Today’s fragile state of the euro, a fiat currency created in a failed European attempt to compete with and/or replace an increasingly unstable US dollar, is but another indicator that the wheels are now about to come off.

After the US ended the gold convertibility of the US dollar in 1971, gold skyrocketed from $35 per ounce to $850 in 9 years, increasing almost 2,500% in value, dwarfing the later rise of the Dow (from 777 in 1983 to 11,722 in January 2000) a much smaller rise of 1,400% over almost twice the time (17 years instead of 9).

After gold’s spectacular ascent, central bankers decided the price of gold needed to be ‘managed’, as a rapidly rising price of gold signaled that something was fundamentally amiss with the bankers’ fiat paper money, a signal that central bankers did not want sent, a signal that bankers would work exceedingly hard to disguise for the next 40 years.

When stocks lose their value
That’s a terrible thing
When homes lose their value
That’s a terrible thing
But when money loses its value
That’s the most terrible thing of all


Introduction, How to Survive the Crisis and Prosper in the Process, Schoon, 2007

CENTRAL BANKERS MANAGE THE PRICE OF GOLD

In actuality, central bankers did not work ‘exceedingly hard’ to disguise the real market demand and price for gold. Instead, bankers disguised market demand not by hard work, but by smoke and mirrors, a contrivance common to confidence men everywhere and, today, to central bankers in particular.

To suppress the price of gold, central bankers covertly supplied markets with gold bullion belonging to the nations on whose behalf they ostensibly toiled, suppressing gold’s real price with excess supply. This artifice was discovered by Frank AJ Veneroso, an extraordinary financial analyst and consultant well known only in the rarefied circles of international finance.


According to Veneroso, since the early 1980s central bank gold sales and loans comprised a significant portion of all gold sold. In 1990, Veneroso estimates that 21.5% of gold sold that year came from central bank vaults; and by 2000, central bank gold sales had increased to over a 1/3 (34.6%) of all gold sold.

Frank Veneroso’s story of central bank manipulation of gold markets is found here.

With thousands of tons of central bank gold coming onto the market, it’s clear why the price of gold declined from 1980 until 2001. What is remarkable, however, is that in the face of such overwhelming supplies, the price of gold began to rise in 2001.

THE TURNING POINT

The turning point, however, actually occurred in 1999 and is marked by an event relatively unknown and almost tantamount to financial treason. About that event, I wrote in March 2009:

In 1999, it was rumored that investment bank Goldman Sachs had a 1,000 ton gold short position in the markets. Goldman Sachs was betting that the price of gold would continue to fall and they would be amply rewarded for their apparent “risk”.

Because of central bank manipulation, the price of gold had moved inversely to the rise of stocks for almost 20 years and bankers were making easy money on the bet gold would continue its downward spiral.

However, much to the shock of Goldman Sachs and the central bankers, in 1999 gold stopped falling; and, because Goldman Sachs’ short position was so large, Goldman possibly could suffer catastrophic losses.

This is when England’s then Chancellor of the Exchequer, Gordon Brown, on May 8, 1999 announced England would sell over 50% of its gold reserves, 415 tons of the most precious metal on earth at the very bottom of the market.

The decision to sell England’s gold thereby saved Goldman Sachs and insured the political future of Gordon Brown. Goldman Sachs’ is still in business and Gordon Brown is now [2009] the Prime Minister of England - proving that good things come to those who do the bidding of the powerful (whether either outcome was worth 415 tons of England’s gold is questionable).

Selling a nation’s gold to save the bankers’ parasitic system is now common practice as the banker’s system continues to collapse and gold continues to rise. Since Gordon Brown sold England’s gold, gold has risen from $275 dollars per ounce to its present price of over $900 despite the thousands of tons of central bank gold sold to prevent its inexorable movement higher.[On 2/14/12 gold is $1,715]

CENTRAL BANK SALES AND LEASING OF GOLD HAS MADE GOLD AVAILABLE AT FAR BELOW MARKET RATES

To hide their burning house of cards, central bankers have sold thousands of tons of gold from national treasuries, mainly Switzerland, to keep the price of gold below what it would otherwise be. This is the true upside (for buyers) of the bankers’ gold suppression scheme.

While citizens cannot prevent central bankers from selling gold from their national vaults, today they are afforded the extraordinary opportunity to buy that very same gold on the open market at prices heavily discounted to their otherwise true market value.

My current estimate of today’s true market value of gold - without central bank intervention - is in excess of $10,000 dollars per ounce.

Many central banks, however, are today switching sides in the war on gold, preferring to keep their precious metals instead of selling them in an increasingly futile attempt to prevent the inevitable from happening - the collapse of the bankers’ now burning house of cards.

Today, the bankers’ fiat currencies are in a death spiral. It’s only a matter of time until the US dollar, the Japanese yen, the British pound and all paper currencies - including the Chinese yuan - come under the same pressure that now plagues the faltering euro.

Central bankers, however, will do everything in their considerable power to prevent their lucrative franchise of credit and debt based on paper money from collapsing; and, of late, they’ve discovered a new way to suppress gold and silver - the precious metal inventories of GLD and SLV, the precious metal ETFs used by investors to participate in the rising price of gold and silver.

When Europe’s debt contagion spread in the summer of 2011, the price of gold began moving rapidly higher which bankers feared could itself turn into runaway contagion. The below chart shows that GLD and SLV, the ETF funds, were used by central bankers to cap gold and silver prices in mid-August.


Source - www.gotgoldreport.com

Amid growing concerns about Europe’s debt crisis as gold rapidly rose, GLD sold 26.12 tonnes of gold and SLV sold 304 tonnes of silver, driving the price of silver down 8% although gold rose 4.9% despite GLD’s considerable efforts to the contrary.

That GLD and SLV ostensibly dedicated to profit from the rising price of gold and silver would sell their inventories in a rapidly rising market runs counter to their mandate; unless, of course, they did so knowing that central banks would soon ambush gold and silver with deeply discounted lease rates on precious metals that would cut short gold’s increasingly spectacular rise.

Jesse’s Café Americain traces the planned ambush of gold by central banks during their September take-down, read article here. Gold had risen to a record high, $1900, on September 1st and on September 2nd, central banks then took corrective action, dropping their lease rates for gold sharply lower into negative territory.

This meant that central bankers would actually pay bullion banks to borrow their gold and sell it on the open market. The new supplies of gold capped gold’s increasingly steep seven month rise and, by the end of September, the price of gold fell back to $1600.

After Sept 2nd, gold lease rates still remained negative, insuring a continued low price for gold even as the European debt crisis accelerated and the global economy slowed. This is exactly what central bankers intended. Gold is a barometer of systemic distress and central bankers wanted to conceal the flames rising from their now burning house.

Nonetheless, even with negative lease rates, gold again began moving higher before central banks on February 2nd supplied markets with more gold with again sharply lower lease rates deep in negative territory.


As the bankers’ ponzi-scheme of credit and debt disassembles, central bankers will find it more difficult to contain the price of gold; and when gold does break out - as it will - the price of gold will exceed the $10,000 price it would now command if it were not for central bank intervention.

At $1700 gold is cheap; at $3,000 gold is cheap; at $5,000 gold is cheap; at $7,000 gold is cheap. Wait till the central bank sale ends and you will realize how cheap gold actually is.

The wheels are now coming off the bankers’ once invincible juggernaut. Whether the out-of-control bankers will crash in a (1) hyperinflationary blow-off, (2) a brutal never-ending deflationary collapse-in-demand or (3) in a fatal bursting of capitalism’s bloated colostomy bag - derivatives - cannot be known.

But what is known is that the end of the bankers’ monetary fraud is near and its demise closer than most want to believe.

THEY’RE NOT LAUGHING ANYMORE

A remarkable blog, www.dailystaghunt.com, reviewed recordings of Fed Open Market Committee meetings between 2000 and 2006 and, interestingly, noted the frequency of laughter during meetings, observing: The number of recorded laughs actually increased in frequency from 2000 to 2006. In 2001, the FOMC erupted into laughter 16.5 times per meeting on average. In 2003, it was over 19. In 2005, 27. And then in 2006, the FOMC burst into laughter nearly 44 times per meeting!

As the 2007/2008 financial crisis grew closer, central bankers grew increasingly relaxed and confident; believing their extremely low 1% interest rates had worked; that they had survived the collapse of the greatest speculative bubble in the US since the 1920s - the collapse of the 2000 dot.com bubble - and all was well.

But those in attendance, Greenspan, Bernanke, Fisher, Mishkin, Krozner et. al., were wrong. Their fatally flawed solution to the collapse of the dot.com bubble, low 1% interest rates, had given birth to an even more dangerous bubble, the 2002-2006 US real estate bubble, the largest speculative bubble in the world whose collapse would bring down the world economy in 2007/2008.

Of course, this wasn’t known in 2006. In 2006, central bankers were still laughing.

Frequency of laughter during FOMC meetings

Data on the frequency of laughter at FOMC meetings after 2006 is not yet available. But it can be assumed the frequency subsided after the massive global credit contraction in August 2007 and after the collapse of world markets in 2008.

Note: the possibility that FOMC laughter remained high or actually increased after 2006 is far too macabre to consider. We do, however, await additional data before passing judgment.


Source - www.dailystaghunt.com

Today, central bankers are no longer laughing. Their nights are considerably longer as are their weekends; their daily grocery list might now include quarts of gin and whiskey, prescription anti-depressants and extra-strength deodorant.

We are collectively in the end game, a period of great change where the present paradigm is collapsing making way for what is to come. Keep your thoughts positive and focused on what is coming, not the troubled passing of the present world. Let central bankers do that.

Note #1: I will be speaking at Professor Antal Fekete’s New School of Austrian Economics in Munich, Germany, see http://www.professorfekete.com/gsul.asp. For details, contact nasoe@kt-solutions.de

Note #2: My latest video, What and Who Do Bankers Do (or what I really think about bankers and money).Dollars & Sense show #12, youtube http://youtu.be/hazULFo3oB4

Buy gold, buy silver, have faith.

Darryl Robert Schoon
email: info@drschoon.com
website: www.drschoon.com
website: www.survivethecrisis.comSchoon Archive