Silver Price: Sprott Hatches an OPEC for Silver Industry

In a gesture of highlighting the glaring impediments and equally exciting opportunities facing the silver industry today, Sprott Asset Management CEO Eric Sprott issued a “A Call to Action” letter to 17 of the world’s largest silver producers, posted on one the world’s leading sources of breaking news in the bullion markets, King World NewsSign-up for my 100% FREE Alerts
As a synopsis of the 1,876-word letter, Sprott outlines a compelling case for producers to hold back inventory for the sake of supercharging its balance sheets as well as maximizing future profits in the wake of drastically changed global market conditions from years past—namely, an environment, in which:

1)   The dollar’s value is expected to decline more rapidly than it did during the 1970s.  Through the Fed’s policy of negative real interest rates, the CRB Index has risen at a 10.3 compounded percent rate since 2002, already rivaling the decade of the 1970s and expected to get worse, as Bernanke has stated that ZIRP rates will last through June 2013, at least, in an effort to mitigate the effects of the crisis in Europe to liquify U.S. banks;

“Fitch Ratings recently warned that the U.S. banks may face severe losses from their exposures to European debt if the contagion escalates,” Sprott stated in his letter.  “There’s very little at this point to suggest that it won’t. The roots of the 2008 meltdown live on in today’s crisis.”

2)   A U.S., European banking and sovereign debt crisis, which has many years left to monetize, already shows signs of systemic failure, post QE2.

“Given the current environment, we see much greater risk holding cash in a bank than we do in holding precious metals,” stated Sprott,   “And it serves to remember that thanks to 0% interest rates, banks don’t pay their customers to take on those risks today.”

3)   And to the backdrop of currency destruction of the West lays a top a eye-popping emergence of demand for silver from a combined additional population of 4.3 billion people of Asia and South America for both industrial applications for silver and as an investment.

“During the month of September, the U.S. Mint reported the second highest sales of physical silver coins in its history, with the majority of sales made in the last two weeks of the month,” stated Sprott.  “Reports from India in early October indicated that physical silver demand had created short-term supply issues for physical delivery due to problems with airline capacity.

“In China, which reportedly imported 264.69 tons (7.7 million oz) of silver in September alone, the volume of silver forward contracts on the Shanghai Gold Exchange was more than six times higher than the same period in 2010.” See BER articles on China here and on India here and here.

So far, nothing new here—just a recap of the known demand profile of silver.  But what is new and mighty interesting about Sprott’s Call to Action letter is his solution to the CFTC’s obvious delay tactics regarding a resolution to the silver price suppression scheme still in progress at the CME—a solution to a similar problem that the Saudis have already implemented as a response to an artificially high US dollar against its sacred and depleting commodity, oil.

From Reuters, April 13, 2008:

Saudi Arabia’s King Abdullah said he had ordered some new oil discoveries left untapped to preserve oil wealth in the world’s top exporter for future generations, the official Saudi Press Agency (SPA) reported.

“I keep no secret from you that when there were some new finds, I told them, ‘no, leave it in the ground, with grace from god, our children need it’,” King Abdullah said in remarks made late on Saturday, SPA said.

Though the Reuter’s article received nearly no play in the U.S., the gravity of King Abdullah’s decision to retain his kingdom’s oil inventory in the wake of global peak oil production and a declining dollar is a natural and understandable business move by him.  Why would the Saudis want to give away oil so cheaply when discounting today’s present value of the dollar is so artificially low.

“Local leaders [of Saudi Arabia] have repeatedly said that they feel an obligation to preserve some of their natural resources,” said Jeremy Gilbert, BP’s retired chief petroleum engineer, in response to the Saudi announcement.  “These feelings must be intensified when their recent production has been sold for U.S. dollars which have depreciated by 25% or more against other strong world currencies over the last four years.”

Sprott’s call for silver producers to retain more of its inventory is akin to King Abdullah’s decision to inventory Saudi oil, and is exactly what silver producers should do to protect silver, a resource that prolific financial author and researcher Dr. Steven Leeb has said is so “critical” to the alternative energy market that governments may at some point panic in response to its depletion rate.

“I emphasize this, [silver is] a critical . . . the best thermal conductor in the world, the best electric conductor in the world, and one of the best reflectors in the world,” Leeb told GoldSeek Radio in a Sept. 2011 interview.  See BER article here.

“And as a result, silver is a critical ingredient in solar panels . . . so silver is critical to making the transition to renewable energy . . . in computers . . . it’s critical in many, many areas,” he added. “So silver has the potential to truly go exponential.

“My prediction is that silver will go high enough [in price], and if we recognize it’s so critical, that the government may even ban public ownership of it, like the government banned public ownership of gold during the Depression,” Leeb concluded.

Silver is today’s monetary metal and tomorrow’s oil; it, too, has had its present value artificially discounted severely via government schemes hatched by the Western banking cartel.

Spott’s idea, not only makes sense from a longer-term business standpoint, but it’s also a righteous one for investors.  Who can forget Barrick’s final capitulation to unwind its hedge book due to its shares being shunned by investors?  Sprott’s telling silver producers it’s time to take the next logic step—keep more silver as an asset on its books.

“Silver miners need to acknowledge that investors buy their shares because they believe the price of silver is going higher,” stated Sprott.  “We certainly do, and we are extremely active in the silver equity space. We would never buy these stocks if we didn’t. Nothing would please us more than to see these companies begin to hold a portion of their cash reserves in the very metal they produce. Silver is just another form of currency today, after all, and a superior one at that.”

Moreover, Sprott’s idea kills more birds with his one stone.  Unlike other businesses, mining companies’ inventories deplete, warranting a discount to book value.  Carrying mined silver onto its books during a bull market mitigates that book value erosion over time in addition to the virtuous cycle of higher silver prices and stock prices the new paradigm would foster within the industry.

Unlike the oil price, whereas crack spreads at refiners become tiny and unprofitable as crude input costs rise but cannot be passed on to the consumer so easily, the silver price is somewhat elastic to fabricators.  But to investors, it’s an asset whose price paradoxically benefits from the rise as investors seek a bull market in something . . . anything . . . to flee the Fed’s ZIRP policy.  Right now, silver producers are playing the role of oil refiner.  But it doesn’t have to be that way.

Sprott merely suggests, and rightfully so, that instead of silver producers taking a big hit on the price of silver, like the refiners take one in the oil industry, come together and take charge of your inventory—the Saudi way.  Investors are sure to like it.

James Turk’s Silver Price Target, $70

While the silver price moves higher with the gold price during this latest consolidation phase in the bull market for precious metals, Goldmoney’s James Turk expects another violent move higher for the metals, especially the price of silver.

“This move [in the silver price] is going to catch a lot of people by surprise as evidenced by the extremely low sentiment readings,” Turk told King World News, Monday, pointing to the lack of overall enthusiasm in the precious metals market of late, with a relatively steep contango in the silver futures market chain serving to support his thesis.  “Those low readings are a clear indication that there is a lot of money on the sidelines that is waiting to jump on board.”  Sign-up for my 100% FREE Alerts

Such low sentiment readings and steep contango prices in the silver futures haven’t been seen since the first quarter of 2010, when problems in the Greek sovereign debt market first emerged.  At that time, fears of another Lehman event, this time from Europe, took the DJIA sharply lower from its intermediate post-crash peek of 11,250, down to 9,600, a nearly 15 percent correction in the  30 Industrials.

In contrast, after ttading between the $15 and $18 range during a nine-month period of September 2009 and June 2010, the silver price climbed higher in the face of a risk-off-then-risk-on-again trade in stocks of 2010 as the white metal never looked back, soaring to just shy of $50, from the $15 base of the previous flagpole pattern.

The tremendous rally in the silver price took Wall Street by surprise, as any asset rising this rapidly typically begets a much wider audience beyond the silver bug watchers.  That contrarian signal suggested to legendary commodities investor Jim Rogers that the silver price would need to “settle down” before he’d become a buyer again.  The weak hands had taken over the silver market.

But as the silver bugs remember, all too well, the steep and dramatic drop in the silver price to $25 sent the weak hands to slaughter, as a series of five margin hikes compound the pressure of a rapidly falling market to sell into the hands of the strong.

“During a big correction like the one we’ve just gone through, a lot of weak hands get shaken out of the market,” said Turk.  “We know that has happened because of the change in open interest and also because of the smaller volumes of late.”

Today, the situation has reversed direction, according to Turk.  Silver futures are back in contango and Jim Rogers is talking about silver once again.  Moreover, as the crisis in Europe escalates, Europe’s new ECB chief, Goldman Sachs alumnus Mario Draghi is now printing approximately 30 percent more than the Fed is—and the European central bank needs to print more, and could get some needed help from the Fed, according to zerohedge.com.

“Throughout history, when things have gone wrong, they [central banks] print money … when they print money, you should own silver, you should own rice, you should own real assets,” Rogers said in an interview with CNBC of Nov. 23.  See BER article.

Back to Turk, who said he’s calculated a target for the silver price during the upcoming next leg higher.  By taking the April 2011 high and subtracting the September 2009 and June 2010 base price—a common and fairly successful technique applied in the use of technical analysis—Turk expects the next move higher will achieve an all-time record price for the metal.

“The first we have already spoken about, namely the bullish flag pattern on the weekly silver chart (above). When silver breaks out to the upside, this flag measures to a target price of around $68 to $70,” Turk explained.  “More importantly, the jump out of the flag should happen more quickly than the $18 to $50 move we saw back in 2010 and early 2011, which took about nine months.”

Sprott Makes His Move of the Comex, Physical to Break from Paper

Following the dramatic and viral news of famed trends researcher Gerald Celente’s confiscated MF Global future brokerage account, scaring legitimate commercial sellers and buyers like a Celente to withdraw from the fraudulent system, the crafty Canadian billionaire Eric Sprott positions himself to make a bold move to finally break the Comex grip on the silver market.

In his Nov. 25 interview with King World News, Sprott’s noticeable focus shifted to his PSLV closed end fund, from his usual discussion with King about the European fiasco and other selling points for owning bullion.  Sign-up for my 100% FREE Alerts

After a brief moment discussing the tired, yet power ‘printing presses’ case, for owning bullion, the discussion turned to the real juice.  His message to both physical buyers and sellers of silver:  You can trust me to deliver.

Here’s how it works—

“If you had a total bust and people feared the banking system and started buying gold,” Sprott said,  “. . . by that time currencies will almost be worthless . . .”  And no one will take on counter-party risk at that point, either.

“All you know is that there’s only a couple of things that you have to have your money in to be safe,” he continued.  “For example, I’m writing a letter basically suggesting to the silver producers, you know you guys have all of this money in banks, why do you have it in banks?”

Knowing full well that mining CFOs cannot justify holding their own inventory in lieu of cash on their balance sheets because the company suddenly wants to become a hedge fund instead of silver producer, it appears that Sprott may likely follow up his “letter” with a personal visit to explain to the brass that he would like to nudge the Comex out of the business of clearing deliveries.

And why not?  Sprott’s $1.5 billion available firepower today now represents more than the 31 million ounces worth of silver stored at the Comex.  So the choice Sprott offers silver producers is simple:

Trust the CME/Comex following the MF Global affair, or trust Sprott Asset Management’s viable $10 billion enterprise, which sports a healthy premium to NAV as proof of his reputation and massive customer base.  Sprott is telling us that he’s positioned to make a market beyond the retail end of the business.

And, on the buy side: How likely is Celente, or anyone who read his shocking tale of how he was robbed by the U.S. financial system, to initiate future delivery of bullion (or anything, for that matter) from an obviously dysfunctional and criminal clearing operation at the CME/Comex?  Moreover, wouldn’t a declining base of buyers in the futures market ease JP Morgan’s naked short selling operation that much more, suppressing prices to its legitimate commercial accounts?

Now comes in a big buyer of silver; he wants to buy the metal but doesn’t want to take delivery though the Comex in fear of being ripped off like some rube taken in by the Nigerian bank scam that’s now moved to the Comex.

Sprott has a solution.

“In my ideal, we get a couple of institutions come in here and say, ‘Hey we’d like to take down a couple of hundred million bucks worth of silver, we love your vehicle,’” Sprott added.  “And then we might go and say, ‘Okay, I think it’s time to go out there and go raise some money to buy silver.’”

And to mitigate the effect of an escalating premium this ideal couple hundred million ounce order would have on the NAV premium to the small buyer, Sprott can raise the money through a Letter of Credit in conjunction with an assumed wide premium take down available to him from selling some PSLV shares to raise cash, arrange delivery from the producers (who have by then ‘invested’ in silver), and the deal is made.

Everyone’s happy, except the Comex.  Big buyers get a deal from NAV premium, producers don’t lose sleep, and small buyer aren’t hurt by the sudden volume.

“I’ve always stated that I’m not going to do anything that would negatively affect the premium of that fund,” Sprott reassured investors, as these silver aficionados know soaring silver prices also ratchet up PSLV NAV premiums, a complaint voiced on the Internet from time to time.

And as far as the timing of such a price-popping event?  Sprott won’t venture to say, or isn’t telling.

“So we’ll just have to wait for the right time and who knows when it happens?”  added Sprott.  “Maybe we have to imagine that the silver price is moving up, which we haven’t been in that environment recently, but the interest can come back very quickly.”

Sprott’s plan is a win-win-win proposition for investors, producers and him.

Expect registered silver at the Comex to dwindle now that MF Global has done its job chasing participants from this tiny marketplace.

Who’d imagine that another Son of American Liberty would come from a profiteering billionaire from Canada?  Marquis de Lafayette Sprott has come to the aid of America once again.

Jim Rogers, “You Should Own Silver”

Fence sitters of the silver market are forewarned: buy more silver.   That advice, according to Jim Rogers of Rogers Holdings, is the heads-you-win-tails-you-win investment proposition in the years ahead.

In a Nov. 23 CNBC interview, Rogers has little doubt of more central bank intervention planned in the wake of a global economic slowdown, but if he’s off the mark, silver (and commodities, generally) investors will win anyway, as Asia’s production-export model gears to supply what the world needs—including lots of existing and new products containing silver. Sign-up for my 100% FREE Alerts

“I’m long commodities and currencies, because if the world gets better, the shortages in commodities will make sure I make money,” the 69-year-old Rogers told CNBC.  “If the world economy doesn’t get better, I’d rather own commodities because they’re [central banks] going to print money.”

It’s interesting to note that of all commodities investors of which investors can buy, Rogers singles out the ‘commodities’ silver and rice, with the latter, a staple of the Asian diet, and the former, a critical metal used in the manufacturing of alternative energy products—a sector, in which, China has taken an enormous interest and investment due to long-term strategic reasons, according to researcher and author of Red Alert: How China’s Growing Prosperity Threatens the American Way of Life, Dr. Steven Leeb.

Leeb points out in his book that China has invested more $500 billion per year in windmills, solar and other forms of clean energy, not because Beijing is necessarily concerned about the environment as a principal objective use of its $3 trillion reserves, but because it seeks to ween the Peoples Republic off rapidly rising fossil fuels prices while at the same time reducing the odds of a military confrontation with the West over remaining accessible global oil reserves.

“I mean, once the Chinese build out their solar energy, and they haven’t up to this point, but they will, they’ll start accumulating silver,” Leeb said in a September interview with Goldseek Radio. “In fact, I wouldn’t be surprised right now if they weren’t accumulating a lot of silver.”

“And my prediction is that silver will go high enough, and if we recognize it’s so critical, that the government may even ban public ownership of it, like the government banned public ownership of gold during the Depression,” Leeb continued.  “I think, well, silver over $100 per ounce—I almost think it’s inevitable, that silver hits three digits to be honest with you.”

Apparently, agreeing wholeheartedly with the Leeb thesis about the future value of silver as a vital metal to alternative energies, Rogers said at a RBS conference on Nov. 22 that he expects wind and solar to be among the leading forms of alternative energy in the 21st century and recommends investing in the sector for its long-term potential.

Given the assumption of China’s planned strategic initiatives in the area of alternative energies, the demand for silver to achieve a China-wide roll out of alternative energy is projected to surpass available silver mine production by as late as 2020, according to Leeb.  Rogers sees a similar potential of China’s demand for critical metals.

“I am very optimistic about energy sources, yes wind power, solar power and all alternative energy sources have a good future.” Rogers told the RBS conference attendees.  “ . . . the politicians love wind power, they love solar power for many reasons so they would subsidize it.”

And if the global economy takes a turn for the worse, which Rogers said, recently, is inevitable in 2012, central banks will print money to prevent a collapse of the global financial system—a system much too leveraged to weather another slowdown so soon following the Lehman crisis.

In that case, silver’s role as hard money could get another big boost, as previous so-called QEs from the Fed, and now from a Draghi-led ECB, may cause another flee out of paper currencies and into the tiny market of the white monetary metal.

“Throughout history, when things have gone wrong, they print money…when they print money, you should own silver, you should own rice, you should own real assets,” Rogers said, noting previously in the interview that the collapse in MF Global has created some forced selling in all commodities and precious metals.

While the MF Global liquidation plays itself out, how much lower silver and gold will continue to drop in prices is unclear, according to Rogers, but he will be ready with his checkbook if the metals fall further from here.  He said the liquidations of gold and silver contracts provide an opportunity for accumulators of the metals to catch better prices.

Roger concluded, “Gold could go down a fair bit more…but I’m certainly going to buy more gold if it goes down and silver.”

 

“Holy Jeepers,” Sprott to Buy $1.5B of Silver Bullion!

The silver price could explode higher in coming months.

As the silver and gold price predictably fade ahead of option expiration, JP Morgan’s bullion manipulation scheme could be headed for unprecedented problems, not from the record purchases of gold and silver from the Chinese, Indians or Russians, but from one Canadian billionaire.

Canadian-based Eric Sprott Management CEO Eric Sprott filed a follow up prospectus for the purchase of an additional $1.5 billion of silver bullion to cover expected demand for the company’s exchange traded fund, PSLV.  Sign-up for my 100% FREE Alerts

Combined with the recent decline in the PSLV premium to spot silver to 14 percent from the typical 20 percent, along with Sprott’s reported sale of some of its holdings of PSLV at the rich premium, it appears a familiar hallmark of a gigantic $580 million silver bullion purchase in December of last year emerges once again.  Since demand for silver products at Sprott remain brisk, it should come as no surprise to the silver world that Sprott needs more silver.

Yet, only two Web sites mention the breaking news, The Globe and Mail and bullion market reporter Harvey Organ, HarveyOrgan.blogspot.com.  Don’t expect Eric Sprott to herald the milestone purchase; he’s trying to avoid investors front running the purchase.

“Since Sprott filed its prospectus last Friday, PSLV units have come down 12 percent, while the price of silver has dropped only 6 percent,” stated Canada’s daily newspaper, The Globe and Mail, on Nov. 18.  “Whether or not the new filing is the root cause of the difference doesn’t affect Mr. Sprott much. He has been selling his PSLV units for most of the year (as documented by kid dynamite.)”

Because Sprott today represents ½ the size of the Hunt brothers wallet and their attempt to corner the silver market in 1979-80, nimble investors have taken advantage of the bulky Sprott in the past by front running his purchases, as his size and legal entity requires him to file with Canadian regulators—an issue he laments of during his interviews.

But for silver investors, the regulation could be a boon to the silver price, as the last time Sprott needed substantial inventory, the silver price soared 177 percent, though Sprott’s purchase cannot directly be proven to be responsible for all of that monstrous move.

However . . . more than four years earlier, in April 2006, prior to the launch of the NYSE version of PSLV, the Barclay’s iShares Silver Trust SLV, spot silver at the COMEX more than doubled at its price peak leading up to the launch of the SLV to $15 from $7.50, as late as September 2005—a double within six months, or a 200 percent ARR.

Moreover, further evidence of a coming silver price mega pop may be gleaned from the exciting silver rally of July 2010 to April 2011.  That monstrous rally could easily be rivaled soon, as Sprott apparently gears up for a whale of a purchase, $1.5 billion of silver bullion—a nearly three times last year’s $580 million purchase and coincidental 177 percent explosion of the silver price.

“Today the Globe and Mail announced Eric has filed a short form follow up Prospectus for a billion five physical silver,” respected bullion market blogger Harvey Organ wrote in a Nov. 21 post.  “holy jeepers, it could be approved in as little as two weeks people tell me, and he can trigger it OVERNIGHT without warning. Just bang, if he has got the orders. WE all know what happened with his last Physical Silver Issue, it was 580 million and blasted Silver 18 to 50 bucks in 5 months.”

Considering the fundamentals underlying the raging bull market in silver and the confident predictions of, in some cases, another double in the silver price, at least, by spring from industry peer James Turk of Goldmoney, as well as other hard money heavyweights, Ben Davies of Hinde Capital, Jim Rickards of Tangent Capital Markets, Euro Pacific Capital CEO Peter Schiff and QB Asset Management Co-founder Paul Brodsky, it appears the industry insiders to the tiny world of silver anticipated Sprott’s need to replenish—and when Sprott needs silver look out.

Gerald Celente, Unwitting Gold Cartel Operative?

The gold cartel may get some desperately needed relief from the barbarians after all, as the bone shivering tale of Gerald Celente’s hit by the banking syndicate, which stripped him of his “six-figure” account, has gone viral within the gold community.

With the untold number of longs still frozen with MF Global’s designated trustee (coincidentally, a JP Morgan vendor) as well as the shocking site of Celente hanging upside down from a bridge with a bullet in his head, how many Celente wannabes will now become herded away in fear of the endgame prize? Sign-up for my 100% FREE Alerts

“Now, after a decade in which official gold reserves shrank continuously – outpacing growth in exchange traded funds nearly twofold – there may be a change in the air,” according to the London’s Financial Times Nov. 17 edition (free subscription required).  “Central banks made the largest purchases of gold in decades in the past quarter, says the World Gold Council.

And what a fortuitous turn of events for the Fed, too, as Moe Green, played by Jon Cozine, takes a bullet to the foot for Washington’s mob boss Bennie Bernanke—who, amongst the confusion, clandestinely prepares the QE3 launch in an effort to ward off the inevitable de facto force majeure of the U.S. debt market and the widely expected knee-jerk rise in the yellow metal that’s sure to come following an announcement from the Godfather, himself.

The technique of sacrificing one of its primary dealers to offer some needed R&R to JP Morgan’s Joseph P. Kennedy School of tape painters wreaks of another job well done in a series of sorties on the gold market planned to punish the golden bulls out of their positions and to affect another beautiful waterfall on the charts.

“Central bankers are late to the gold party,” FT continued.  “Private buyers of ETFs alone have accumulated 15 times as much since their advent a decade ago as governments bought last quarter. But their shift should be of far more concern.”

Not to worry, the U.S. will show the Englishmen again how to win a war, this time without French help.

Jamie ‘Dapper” Dimon, who works as a JP Morgan banker, according to leaked internal IRS documents, couldn’t be more pleased with the Celente hit.   In fact, Dapper D was so delighted that he decided to cover Johnnie Cs gambling debts for a job well done.

“MF Global Holdings Inc., the bankrupt futures brokerage, has located $658.8 million in customer funds in a custodial account at JP Morgan,” two people [why anonymous] told Bloomberg News.

“The account contained a total of $2.2 billion as of Oct. 31, including both the firm’s own money and customer funds, according to one of the people, who declined to be identified because the information is private,” Bloomberg News added, but neglected to add that ‘sources’ who are willing to breach fiduciary ethics may not turn out to be all that reliable <gasp>.

Though, it’s nice to see that a second American news source can now become the most recent inductee to the journalism hall of shame, whose recent inductees, Financial Times of London and CNBC, were honored for their Yeoman’s work of providing COINTEL pro-euro rumors for the syndicate during the height of the European crisis, which helped buoy the euro long enough to install puppet governments in Greece and Italy.

Moreover, with the recent installment of another Goldman Sachs alumnus, Mario Draghi, as ECB head capo during the touch-and-go, he’ll surely pump the paper (as he did in Italy’s debt market, last week) to help the Fed out in a joint effort to coordinate the debauching of 78 percent of world’s central banks currency reserves, planned sometime soon.

But before the epic reflation can commence, all stops to hit the gold market must be pulled, including the added touch of screwing the most vocal gold bug, Gerald Celente, the latest live case of a variation of the gangster government’s implementation of the Milgram experiment to the gold market.

The controversial experiment, first performed at Yale University during the 1960s, demonstrated that, for the most part, people are lemmings and will follow a leader irrespective of their personal believes, morals or standards.  If a leader says to get out of the gold futures market, many will follow.  Since the U.S. is legendary for its CIA tactics across the globe, is there little doubt that a hit job on the largest commodities futures trading firm could have been waged?  Oh those tin-foil hats again.

“They [the Fed] are going to have to introduce some financial repression tactics, which just means they will do some money printing,” Hinde Capital CEO Ben Davies told King World News in a Nov. 20 interview.  “Now if that happens I cannot be short risk assets, I cannot be short silver and I cannot be short gold.”

Hang onto your gold.  These guys play rough.

Gerald Celente: Run, “Entire System is Collapsing”

Many have long predicted a time to run for cover would come, but the notion that the reason for selling your paper assets to move into plain ol’ cash, or better yet, physical gold and silver, would be triggered by a fear of becoming victim of fraud by the U.S. government is beyond newsworthy; it’s perverse.

The theft of Gerald Celente’s “six figures” futures account in the wake of the MF Global collapse has gone viral on the web within the financial community—and for very good reason, too.  The Trends Research Institute founder and director Gerald Celente, a big advocate of gold, told King World News it is now definitely the time to close your futures accounts.  Your money isn’t safe.  Under the smiling facade of Uncle Sam, this psychopath has gone off the rails, ‘Bernie Maddoff’ style. Sign-up for my 100% FREE Alerts

With plenty of cash in his account and the December delivery month approaching, Celente was less than 60 days from taking physical possession of two contracts worth of gold bullion when he got the news of the swindle.

“And I get this call that I have a margin call and I said, ‘What, are you out of your mind?” Celente told King World News.  “I have enough money to take possession.’  (A voice on the other end of the line said) ‘Well you don’t anymore, they’ve decided to put the money with a Trustee.’ They closed out a couple of my positions because I refused to send more money.”

More than two weeks later, with no resolution, no communication and no respect for a man whose only crime is that he’s not ‘connected’, Celente feels the complete impact of what he has warned of for some time now—a U.S. government gone completely rogue.

And it’s unlikely Jon Corzine will be punished for damaging innocent victims such as Celente and the reported 33,000 other account holders of MF Global.  In fact, Corzine is rumored to be the replacement for another Washington/Fed crime syndicate member, Tim Geithner, at Treasury.

Anyone following Celente knows that he has been totally aware of the criminal takeover of the United States.  Surely, the theft of his account has reignited his belief—in spades!—that some form of tyrannical cabal has seeped in through the years which reeks of tyranny.

Just as reports of Cambodians laughing at those warning of Cambodia’s Pol Pot takeover during the Khmer Rouge regime, Americans still remain divided between the ‘rational’ thinkers and the so-called ‘tin-foil hat’ crazies to whom insult has added to the psychological injury they suffer from knowing.

“What I’ve been warning everybody about, and I’ve been playing it safe, I had a contract to take delivery (of gold),” Celente, the 33-year veteran of the futures markets explained.  “You can’t trust anybody and the entire system is collapsing.  What’s the takeaway from this?  It’s to make sure you have every penny in your pocket.”

What the people of Chile, Russia, Germany, China, Cambodia, along with a long list of other nations touched by tyranny has no doubt come to the U.S.—high tech style, and we’ve only just begun, too.  Celente’s case may be looked back at as a time of the good ol’ days.

Oh, it could never happen in the US, many say.  But imagine if we could pit the wits of a typical circa 1935 German against a typical American of today, we may be able to reassess this ‘tin-foil-hat’ proposition offered here in a better and fuller context, keeping in mind, too, that denial is a very strong defense mechanism of the human psyche—giving yet another retread to the famous line, “You can’t handle the truth.”

It’s become increasing clear to anyone who cares to investigate the events leading up to the radical change of the political and social psyche of the U.S. at the point of the 9/11 attacks that the U.S. has noticeably degenerated into a society dominated by a tiny political-banking class of psychopaths.

Celente is the latest high-profile example of when push comes to shove, that is, Americans no longer really have rights if you wander too close to the syndicate.  And it’s not particularly necessary to make a formal announcement, with Army issued uniforms worn by men sporting funny mustaches.  That would be too in-your-face for a population that stores more guns than there are citizens.

How can a rational person deny when pressed for the explanations for the sudden myriad of strange happenings in Washington, the Fed, and the bankers, who loot to finance the takeover?  Would anyone go through what Celente and the other account holders of MF Global have gone through, say, 20 years ago?  Would Lloyd Blankfein, Jamie Dimon, Robert Rubin, Alan Greenspan, George Bush, Dick Cheney and a raft of other syndicate criminals not stand trail or at least be indicted in year 1985?

Can you imagine Obama taking the stand during another Iran-Contra investigation, which, today, is mere child’s play compared with the criminal activity by the U.S. government today?  Nixon resigned for lying?  Can you believe it?

“I heard this guy, this Terrance Duffy and I went back and looked him up,” Celente continued.  “He was saying, ‘In the history of the CME, going back to the days of the Depression, nobody ever lost a penny.’ Well I have and so have a lot of other people.  And he also said, ‘We are the guarantors.’ Well where are you now bigmouth Duffy? ….

“Where’s my money now Terry Boy?  How about guaranteeing me my money?  How come nobody is putting these people on perp walks?  You have to be a fool to have your money in there now.  I’ll never do it again.  This whole thing is a cooked game, Eric.”

A great read on the subject of today’s insane American, which explains a lot of what has taken place since 9/11, can be found in the book, ‘Political Ponerology’, a science on the nature of evil adjusted for political purposes—Andrew M. Lobaczewski.

Lobaczewski performs a brilliant job explaining the process of political tyranny, how and why it happens, as well as the lasting damage it creates at the individual level of society.  Have you ever wondered why approximately 10 percent of Americans are prescribed psychotropic ‘medications’?  Lobaczewski explains so much of today’s bizarre reality.  It appears that over time psychopaths rise to the top of power, make friends with other psychopaths and move on from there.

I really don’t think a psychopath such as Lloyd Blankfein understood how revealing his line to Congress earlier this year was, when he said, “I’m doing God’s work.”

In his book, Political Ponerology, on page 98, Lobaczewski writes:

One of the most disturbing things about psychopaths that normal people must deal with is the fact that they very early learn how their personalities can have traumatizing effects on the personalities of those normal people, and how to take advantage of this root of terror for purposes of reaching their goals. This dichotomy of worlds is permanent and does not disappear even if they succeed in realizing their youthful dream of gaining power over the society of normal people.  This strongly suggests that the separation is biologically conditioned.

In the psychopath, a dream emerges like some Utopia of a “happy” world and a social system which does not reject them or force them to submit to laws and customs whose meaning is incomprehensible to them. They dream of a world in which their simple and radical way of experiencing and perceiving reality would dominate, where they would, of course, be assured safety and prosperity.

In this Utopian dream, they imagine that those “others”, different, but also more technically skillful than they are, should be put to work to achieve this goal for the psychopaths and others of their kin.

“We”, they say, “after all, will create a new government, one of justice.”

They are prepared to fight and to suffer for the sake of such a brave new world, and also, of course, to inflict suffering upon others. Such a vision justifies killing people, whose suffering does not move them to compassion because “they” are not quite con-specific. They do not realize that they will consequently meet with opposition which can last for generations.

Subordinating a normal person to psychologically abnormal individuals has severe and deforming effects on his or her personality: it engenders trauma and neurosis. This is accomplished in a manner which generally evades conscious controls. Such a situation deprives the person of his natural rights: to practice his own mental hygiene, develop a sufficiently autonomous personality, and utilize his common sense.

Hasn’t Alex Jones warns us of this each day?  Former Assistant Secretary of the Treasury, Paul Craig Roberts, has warned us.  Jim Rogers surely knows about it. Could it be one of the real reasons why he moved to Singapore?  He’s a 69-year-old commodities trader.

Marc Faber chuckles as he waits for the inevitable US collapse and the deployment of the TSA and FEMA stooges.

Peter Schiff must know about all of this.  His father, Irwin Schiff, the famous IRS protestor must have had a strong influence on Peter—and rightful so.

#OWS marches know the score, though 57 percent of Americans don’t see it yet, according to a recent CBS poll.  They will.

It’s time for Americans do whatever they can to fight these psychopaths.  It could be as small as the simple spreading of the word—not matter what is said about you.  You’re planting a seed.

Others have the capacity to do more, and they will.  If you haven’t been touched by tyranny as Gerald Celente has just been touched, you will, then you’ll really know that it’s time to put these psychopaths in cages for the sake of their protection and of ours.

Marc Faber on Gold, Stocks & QE3

As the global financial crisis accelerates in the fourth quarter following revised economic data revealing a high probability of another recession in Europe and the United States (see BER article of Nov. 7) on the horizon, the ever-entertaining publisher of the Gloom Boom Doom Report Marc Faber stated Wednesday that he’s convinced that governments across the globe will print money to prevent a collapse of the financial system.

Japan, the UK and EU continue to relentlessly debase their respective currencies in a fight to retain a piece of shrinking global demand, simultaneously reducing crushing debt obligations in real terms priced in their respective currencies—a kill-two-birds-with-one-stone monetary policy salvos fiercely unleashed anew in the recent wake of horrendous drops in global export data for October. Sign-up for my 100% FREE Alerts!

In the case of Europe, imminent debt defaults merely add to the urgency for more money printing by the ECB—whose new U.S.-centric central banker from Italy, Mario Draghi, has taken the helm as the next step toward flushing out the ultimate intentions of Germany regarding the euro.

China apologetically lurches back onto the dollar peg, and it’s now the turn of the U.S. to fight back with its own strategic weapon—the dollar—in the race to devaluations.

“A third wave of quantitative easing by the U.S. Federal Reserve is just a matter of time,” Faber said in a speech in Taipei, according to Taiwan’s Taipei Times.

Faber also points out that, while the world’s industrialized countries wage a full-blown global currency war, the victims of said war won’t include the rich; it will be the masses who take on the traditional role of cannon fodder for the bankers and politicians.

“Some people will benefit from money printing that deflates the purchasing power of currency . . . but the middle and lower—income classes are being hurt,” said Faber, who has repeated on many occasions throughout the global financial crisis his disdain for central bankers and the financial pain they inflict on innocent people.

Faber recommends eschewing bonds in favor of stocks, Asia real estate and physical gold—especially gold, an asset he colorfully referred to in an interview with Newsmax in September, “I own my gold and I will never sell it, especially when I see clowns like Ben Bernanke, Larry Summers, Tim Geithner.”

On the growing debate regarding China’s economy, according to Faber, it’s in a bubble; but the Chinese bubble can last longer than many expect; it could pop in three months or three years, he said.

It should be noted that the notion of a potential Japanese-style collapse in China has gathered steam lately—and was first suggested by famed hedge fund manager Hugh Hendry of Eclectica Asset Management, who said at an investment forum in Russia last year regarding China’s successive string of high GDP rates which appeared to him to be driven by too much capital spending, “Confucius say: thou shall not invest in overcapacity.”

Faber also touched upon the escalating geopolitical tensions between the West and the Middle East/Central Asia region.  To contain China’s rise as a bona fide superpower, the West must secure oil supplies for themselves at the expense of China, he said.

But no matter how the struggle for oil supplies between the West and China plays out, or whether China’s economy heads south, or not, Faber wittily said, if need be, “Chinese invented paper. They know how to print money.”

According to Faber, at some point, the global reflation trade is all but certain.

Gerald Celente: MF Global “Took my Money”

Trends Research Institute founder and director, Gerald Celente, told Russia Today (RT) in a Nov. 14 interview that the fall of MF Global took his futures account down with it.   Celente cannot access his account nor get answers to his inquiries from representatives of Lind-Waldock, the firm with whom he opened an account.

“They took my money; they took out of my account . . . it wasn’t being traded by anyone . . . this is like having money in a bank account,” Celente forcefully said.  “They took my money out of my account, six figures, and they have it.  They closed out two of my positions, and I cannot get any answers, and I can’t get my money.”

So far, Celente is the highest profile victim of politico operative John Corzine’s MF Global.  The firm filed for bankruptcy protection in October following credit downgrades of its debt and a collapse in its stock price weeks prior to the filing event.

Within days of the news of MF Global’s demise, it was learned that in addition to the bankruptcy, more than $600 million in 33,000 client accounts were unaccounted for, including Celente’s money, in an apparent case of MF Global’s ‘commingling’ of clients accounts with its corporate accounts. Sign-up for my 100% FREE Alerts

Ironically, Celente, who advocates holding physical gold as protection from a collapsing financial system, uses a futures to buy paper gold, temporarily, with the intention of taking delivery of physical gold at the COMEX in the future, which in his case is the most active delivery month of December.  Physical gold is the safest form (only form) of true ownership, according to Celente.  He stands as the most recent high-profile proof of the risks involved with entrusting savings and investment capital in today’s financial system.

In his tell-it-like-it-is manner of speech, Celente told viewers of RT that for a long time he has noticed an ‘elite’ cabal of criminal bankers and mafia-like political cohorts steadily taking over America’s financial, political, and regulatory institutions—and the freezing of his futures account as well as the lack of communication about the disposition of his money while MF Global’s bankruptcy proceeds is the latest example of a small group of corrupt Americans receiving special treatment at the expense of the nation’s decent and law-abiding citizenry.  In fact, specific laws and regulatory oversight bodies regarding client accounts were crafted and instituted to prevent a Celente case from ever happening.

“And you watch this guy, Corzine.  You know, Lauren, the word ‘justice’?  They spell it wrong; it’s spelled, J-U-S-T-U-S—just us,” Celente added to his usual colorful dialogue.  “This clown walks . . . he’s raising what, having dinners for Obama at $35,000 a pop.  This guy’s sitting at the casino, making bets 36-to-1.  You go down one dollar, but you bet 36?  And he’s cleaned out and ruined a lot of people.

“So maybe the name MF, I’m thinking the first word is ‘mother’ and we can put the other word in there, if you use your imagination, because that’s what they’re doing to everybody.”

Celente’s difficulties underscores a case repeatedly made, by Goldmoney’s James Turk, Eric Sprott of Sprott Asset Management and a number of other hard-money advocates, for owning physical gold.

The MF Global bankruptcy and well-publicized malfeasance of fiduciary duty in the aftermath will most likely serve as an example to investors who are not yet truly sold on the idea of holding some gold as protection from the global financial meltdown—as it continues unabated since 2008.

The UK Telegraph ran an article about the problem clients of MF Global now face retrieving their money, further promulgating Messrs. Turk and Sprott contentions to a wider general audience.

“What worries me is that if the SAR [Special Administration Regulations] does not lead to client money being rapidly distributed people will be quicker to withdraw their money from other firms at the first sign of trouble,” Paul Kavanagh, a partner at Killik & Co, told the Telegraph.

Killik refers to an old fashioned bank run, a situation that easily could become the additional catalyst for the anticipated Lehman-like event in Europe—or maybe the catalyst for another U.S. surprise.  No one really knows from where the next bankruptcy will come and to where it might lead.

It’s been more than two weeks since the MF Global bankruptcy, and there is no word yet regarding a resolution to clients’ ‘allocated’ accounts at the firm.

Max Keiser: The Endgame is a Mass Panic Buying of Gold and Silver

Speaking with Russia Today on Monday, Max Keiser predicted gold and silver will be the wildly popular choice among the public leading up to and finishing with a catastrophic endgame of the global debt and fiat currencies crisis.

“The endgame [to the crisis], is a mass panic buying of gold and silver,” Keiser predicted, noting that bankers creating more debt on top of unserviceable debt will eventually lead to another meltdown, a conclusion also drawn by famed commodities trader Jim Rogers of Rogers Holdings last week in his interviews on Fox Business and CNBC. (article here)

“This will force the banks to go the way of Enron,” he said, as the public’s distrust of the banking system reaches a global zenith.  “JP Morgan will one day wake up and go the way of Enron; it will be worth zero.  Same thing for BNP, same thing for many of these banks.” Sign-up for my 100% FREE Alerts!

The 51-year-old, former equities broker, now hosts the widely-watched financial news program On the Edge, whereby Keiser steps the viewer through the various events of the financial crisis as they happen, providing colorful, insightful and understandable commentary as well as expert analysis along the way.

Keiser said Monday that the only way to stop “criminal bankers” from “stealing” from the public is to opt out of the system by turning in paper money for precious metals—specifically gold and silver, the money successfully used for thousands of years as a store of value and wealth during countless financial crises.  Kaiser especially likes silver.

“The gold and silver vigilantes, who are decapitalizing . . . remember when you’re fighting vampires, you need a silver stake and put it through their heart,” continued Keiser.  “This is what gold and silver acts like when you’re fighting terrorist banking zombies on Wall Street.”

Keiser said one of the immutable laws of economics [Gresham's Law] will eventually win over the bankers’ fight to maintain the status quo of its self-created “Bernie Madoff ponzi scheme” of fiat money—to borrow a phrase he regularly uses on his show.  As it fails, real money, he said, will not.

“That’s why gold and silver continue to go higher,” he explained.  “And when it gets to a certain tipping point, these bank balance sheets will blow up and we’ll have a new gold standard around the word, and this will be a rebirth of the global economy.”

Since the debt crisis began, the number of personalities and analysts has grown substantially, as millions of financial laypeople, who strain to understand the collapse of banks and sovereign nations, as well as why it has happened, grows rapidly.

Keiser is unlike any other, in that, he, aided by his assistant and research reporter, Stacy Herbert, delve into the bowels of the financial system and offer up simple and coherent explanations to viewers for the motives of bankers and politicians throughout the crisis.  His message of corruption, greed, power, and the evolution of a corporate fascist political system taking hold of the US and Europe resonates with more and more viewers each month.

According to Google Trends, the search term, Max Keiser, has grown in trend since the crisis began, in earnest, during the fall of 2008.

Thanks to Max Keiser and many other public personalities, who are capable of deciphering the financial jargon and the political response during the crisis to a weary public, the subject of gold and silver as their role as money is now mainstream after 30 years of dormancy.  The arcane subject of money has many new students, especially among the populations of those countries touched first by the harsh and sometimes shocking realities of a faltering global banking system.

The chart, below, courtesy of Google Trends, shows Max Keiser’s popularity as a search term in Google’s search engine.  Is it surprising that the two nations which have taken the biggest hit, so far, Greece and Ireland (the tiny populated country of Iceland has said, “no” to banker bailouts and have moved on), during the protracted crisis show as ranking no. 1 and no. 2, respectively, on Google’s country demographics statistic?

Interestingly, Italy is no where to be found—yet.  But as the crisis moves from country to country, there is little doubt that more and more affected by the spreading crisis will become familiar with Max Keiser and his partner Stacy Herbet.