Hey Silver Bugs, “Act Like a Man!”

By Dominique de Kevelioc de Bailleul

Right now silver bugs need to view the following scene from The Godfather (1972) when Johnny (Frank Sinatra?) goes to see the Godfather for help breaking into the entertainment business.

Johnny: Oh godfather, I don’t know what to do.  I don’t know what to do.

Godfather: You can act like a man!  <slaps Johnny in the face>  What’s the matter with you?  Is this how you turn out?  A Hollywood finocchio that cries like a woman? <imitating Johnny> What can I do?  What can I do?

So “toughen up” as Jim Sinclair of JSMineset.com said to wimpy precious metals investors who were calling him and crying about the precious metals market earlier this year.

Act like a man!  Need a slap to the face, too?!

At the time of the making of the movie, silver had dropped to $1.37 per ounce in November 1971, after falling from a high of $2.57 per ounce in 1968, a drop of nearly 50 percent in more than two years.  But by December of 1972, the silver price cracked $2.00 once again, on its way to $50 eight years later in Jan. 1980.

Today, after only half the time of the 1968 to 1971 fall in the price of silver, silver bugs are crying like women—like a finocchio (gay).   After 13 months, the silver price has dropped from nearly $50 in late April to $26.20.  Big deal.  That’s typical silver market action.

Look at the chart, above, and see the 40-times move in the price of silver through the next eight years.  The 1968-71 price decline looks tame within the overall picture in the year 1980.

Today’s chart, below, shows the silver price forming a head and shoulders pattern, with the Slow STO looking as oversold as the price of silver was back in October 2008.  So far, nothing looks out of the ordinary for the silver price as it works off excess speculators money.  For the long-term holder, the silver price trades at a nearly 50 percent discount from late April 2011 runaway move.

Be patient.  The fireworks have yet to begin.

Jon Nadler, Another Fed Whore

By Dominique de Kevelioc de Bailleul

If there’s an interview that almost proves beyond a shadow of a doubt that Kitco’s Jon Nadler has an agenda outside the interests of the American investor, the Jun. 22 interview on Bloomberg with Tom Keene serves as strong evidence.  It’s a remarkable demonstration of complete ignorance, or worse.

Keene asked Nadler, what is the ‘natural value’ of gold?  Whatever ‘natural value’ means.

“If we didn’t have the melange of easy monetary policy from the Fed, the aggressive dehedging of the world’s mines and, of course, the advent of gold-oriented ETFs and the hedge fund speculators that instrument brought to the marketplace since about 2005,” Nadler began his interview in his typical affected speech, “my opinion is that we would probably be muddling along somewhere in the $860 area.  And that’s fair value currently in gold,” Nader continued, throwing in the word, “melange” to give his presentation a bit of James Grant gloss, simialr to Dennis Gartman’s affected speech.

“I think $1,200-$1,300 could be in the cards [for the price of gold] inside less than a year,” he speculated.

Instead of Wall Street’s lackey Keene challenging Nadler by saying, “Well, Jon, why are mining companies dehedging?  Isn’t it logical for investors to hedge against negative real rates?  How do you derive at ‘fair value’ of gold at $860?  Since, you’ve been wrong about the direction of gold for so many years, why did my producer ask you onto the program?”

And it’s gets better.  Nadler tried to paint the picture that everyone was expecting hyperinflation after the Fed embarked on QEI and QEII.

“Another interesting chart I noticed in you interview of Mr. Bullard was this great disinflation since we’ve had in place since 2009,” Nadler revealed his love of Fed statistics.  “You know, that’s a long-term process of deleveraging and you know an adjustment back to norm, which, albeit, with some interruption, has really disproved the case for this advent of this Zimbabwe on the shores of the Hudson.  And I think that is also playing into this equation to some degree, because after QEI and QEII, we still haven’t had this hyperinflation that everybody was convinced would result.

Firstly, Nadler has to tighten up his sloppy language when using the word, “everybody”.

Secondly, if he was listening carefully to economists who don’t whore for the Fed, such as Mr. Bullard, he would have noticed that most credible analysts of the gold community (independent analysis) said the Fed has embarked into the process of hyperinflation, and that, hyperinflation is not a monetary event, it’s a political one.  Read a little von Mises for a primer on the subject of hyperinflation, Jon!

Moreover, the process of triggering an eventual panic out of a currency, as von Mises explained so diligently, through, in this case, the Fed’s debt monetizing plan (which it hides through its primary dealer network), can take some time as the global community finally loses confidence in the U.S. dollar as a viable store of value.  Psychologically, the global investor is presently at the stage which precedes a complete loss of confidence in the U.S. dollar; that is, the fear-of-losing-principal stage.  Seeking a store of value from currency debasement years comes next.

von Mises called the process to hyperinflation, the Crack-up Boom, whereby there is a period of ‘disinflation’ as the financial system ‘deleverages’, then followed by a period of awareness, a tipping point, that debt obligations cannot ever be repaid.  Then, the fight against the Kondratiev Winter by central banks begins in earnest through hyper-inflating the currency into oblivion after the markets reprice debt to reflect erosion of purchasing power and default risk, such as the case with Greece, and now Spain and Italy.

In fact, according to the economist many ‘gold bugs’ follow to yardstick the Crack-Up Boom process is John Williams of ShadowStats. Williams has recently move up his hyperinflation scenario to some time in 2014, from his original estimate of the end of the decade.  So who is Nadler taking of when he says ‘everyone’ expected hyperinflation during QEII?

Keene asked, “What do the gold bugs have wrong, Jon?  I mean, are they trying to relive those early 80s?”

“In part, I’m afraid that’s exactly what they’re trying to relive,” Nadler said with a chuckle.

He added, “But I think the other part they have wrong is that they believe the Fed is some how going to take its hand off the steering wheel, lose control, and careen into the hyperinflation ditch.  And I think we’ve had proof enough, with all the criticism that we can level at the Fed, one thing they’re cognizant of is what happens when they don’t watch the brake pedal.”

Ha?  Does Nadler have some advice for the Fed as to when to apply that proverbial brake? So far, the Fed has stated in it FOMC statements that the brake won’t be touched until 2014, at the earliest.  And of course, the Fed is aware of what could happen if it doesn’t apply the brake.  The question is, Jon, how can the Fed apply the brake without soaring carrying costs of $15.2 trillion of federal debt (not to mention state and local interest costs) without entering into a Greece-like fiscal debt spiral?

Nadler really come across sounding as silly as Warren Buffett, Charlie Munger and Bill Gates have.

The last crazy analysis by Nadler comes from his response from Keene’s question regarding the idea proposed by the EU of a gold-backed version of an ESF.  Nadler said it would end up being a “double-edge sword” for the gold price, with the initial plan being bullish for gold as central banks would highlight to the world that gold has no counter-party risk.   But in the end, according to Nadler, it would be bad for the price of gold in the event of default.   The gold backing the lending scheme would end up being dumped into the market, therefore depressing the price.  A sophomoric analysis, at the very least, and at the most, proof that Nadler is completely full of bull—a whore for the Fed.

If the arrangement to back a default by the Italians, Spanish, Ireland, Portugal and any other country which foolishly decides to sign onto such a suicidal arrangement by pledging its gold, why would Germany, the supposed lender in the scheme, dump the gold into the market after a default?  Wouldn’t these indebted countries and the eurozone be right back to where they started?  And what would prevent China, or any other central bank, from buying the gold?

And finally, why won’t Jon Nadler take up Peter Grandich on the $2 million bet that gold will reach $2,100 before it hit $1,000?

Nadler is all talk and a fraud.  He appears to suffer from the same disease as Dennis Gartman and Jeff Christian suffer from.  None has any shame and appear to not be moved by an entire gold community laughing at the spectacle of these three men appearing on television programs after making one bad call after another.  It took Goldman Sachs years to ‘downgrade’ Abby Joseph Cohen.  How long will it take Bloomberg to figure out that the viewer has figured out that Bloomberg intentionally gives Nadler airtime to whore for the Fed?

America on Verge of Communist Takeover, Says Former Castro Revolutionary

By Dominique de Kevelioc de Bailleul

In an eye-opening interview from TruNews Radio, former Fidel Castro revolutionary Julio Lara explains the eery parallels between the days of the Communist Revolution in Cuba of 1953-9 and the lead up to the social and political upheaval witnessed post 9/11 in the United States.

His book, American Apocalypse, How to Stop the Destruction of Liberty, brings together decades of his personal awareness campaign of the methods used by Communists to incrementally subvert the principles of liberty upon an unsuspecting nation of free people and turn them into willing workers of the State.

“I’ve spent 49 years combating Communism,” Lara began his plea to listeners of TruNews.  “I’m not new at this.  I’ve spent almost all my life in this struggle, a battle, against them, because I know how cruel they are.  I know how they work, and I always saw how I could be very useful.”

Lara continued to tell TruNews host Rick Wiles that he sees the American version of Communist revolutionaries about to make their move to shutdown the remaining pretensions of a constitutional republic in the U.S., and warns that unless more Americans take action against the coming plot, Communism will replace democracy in the U.S.  Lara also believes that U.S. President Barack Obama is merely a front man for other more powerful people who have become entrenched throughout the years within Washington’s ‘elite’ circle.

If Lara’s knowledge, experience and instincts are correct, Obama’s circle of friends are plotting their next move now, knowing that it is most likely that a second term and golden opportunity to turn disarray, brought on by the global financial crisis, into a political overthrow may be lost for good.

“If he [President Obama] decides not to leave the White House, he would do something before the election in a way the he got a chance to the . . . how do they call it . . . the martial law,” Lara said.  “If they can put the martial law in effect, then we don’t have elections.  That’s a possibility.

The former Cuban military officer who served under Castro’s right-hand man Che Guevara suggests that the days leading up to the November U.S. presidential election could be that golden opportunity for Mr. Obama to possibly attempt martial law to solidify decades of Communist indoctrination and propaganda taught in U.S. public schools and universities, which were cleverly repackaged and relabeled as post-WWII liberal democratic principles.

“I’ve been hurt in this country [U.S.] for a long time ago,” Lara began to recount his experience with the U.S. public school system.  “In the 80s, when my kids start to go to their school and I start to help them in their homework, I start to see that the same doctrine they use[d] on me was in my kids’ curriculum.”

But when Lara confronted the principal of the school, he said the administration look upon him as a “crazy”, and told TruNews listeners how the experience of being rebuffed “was very painful” for him for many years afterward.

But from that experience, Lara knew back then that the process of a Communist takeover had already begun in the U.S.—first by fooling the masses into thinking that the principles of Communism are in their best interest through the use of government-sponsored propaganda classroom material, then by waiting for an opportunity to walk into power during times of crisis.  Decades of indoctrination would therefore not necessitate an army of soldiers to overthrow a government, according to Lara.  In fact, he said, it took only 500 men to overthrow the American-backed Fulgencio Bastita government in Cuba in 1959.

“That’s how the Communists work; they brainwash the masses, and when the masses are ready to be take[n] over it’s a very little effort to overturn the government and send the country down,”  Lara explained.

And the U.S. has entered that period of danger, according to him.

“If we lose the next election, we’ve lost America.  That’s how close we are” to a Communist overthrow of the United States.

However, if there is no false-flag attack or other emergency condition that could destabilize the American people enough to attempt a soft coup, Lara doesn’t see Obama winning a second term.

“I have no doubt in my mind that they are going to lose the election, if they go to the election,” he said.  “And I think they know that already, if they have a fair election.”

If Obama somehow retains the executive branch, Lara believes the next move in the process of a Communist overthrow of Washington will come from increasing the number of Americans dependent upon food.  Today, 46 million American receive food stamps from Washington, but complete control of the farms is the next step in the Communist playbook for non-violent political control.  More Americans must be dependent upon government for their food, according to Lara.

“They’ve been buying farms.  The agriculture industry is almost eliminated,” he said.  “If you watch very close, they are deteriorating, dying; they don’t have enough money, so many laws, so many stuff that will drive the farm industry out of business.

“That’s how they control the masses.  Let me tell you, when you don’t have gas, your only means of transportation is a bike, and you have to pay for the food, you are in their hands.  Complete.”

Interestingly enough, a dollar crisis may be just what the Communists in Washington have planned all along as the tool for social chaos.  Rapid inflation by way of a currency crisis immediately affects food and energy prices.

“The first thing that we have to be aware [of], they want to create a problem with the fuel,” Lara explained.  “When we don’t have oil to run, we don’t have gas to go places, we are right there.  There’s not much we can do, and if you don’t have gas to go places, and if you don’t have food to eat, what else you [can you] do <inaudible>?”

During a crisis (such as one created from a rapidly declining currency), the public becomes desperate for basic necessities, such as food and energy.  Lara speculates that that’s how the Obama Administration plans on growing dependency upon centralized government power.  Either a collapse in the dollar, or some other incident (attack of Iran?), would provide the needed cover to easily turn the U.S. into a Communist nanny state of dependent citizens.

Rick Wiles asked Lara if creating more dependency upon Washington is the plan for a hypothetical Obama second term before a soft coup could be attempted.

“Right.  That’s how they’re planning to do it, and this probably what I believe they’re going to do first,” he said.  “They want to try to . . . that’s why they are tolerating so much and they are not saying anything about what we do or nothing is because they are considering right now what the next step is going to be, how they want to do.

“I believe they that they made mistake with the Wall Street movement and they are right now, like a stuck, and they don’t know what to do.  Some people are putting a lot of pressure on Obama to take over, because six months ago that America was already ripe for takeover.”

The coming months leading up to the election are “critical,” he said.

Source: TruNews Radio

U.S. Seeks War with China to Stiff Investors of Treasuries

By Dominique de Kevelioc de Bailleul

In Max Keiser’s Friday edition of On the Edge, veteran mainstream-journalist-gone-straight Greg Hunter of USAWatchdog.com posited an interesting endgame scenario to a failed globalist agenda of financial consolidation and economic repression—that is, start a war with China and just say ‘no’ to those evil Chinese creditors.

Under that scenario, Hunter believes the only viable U.S. option to save the so-called Western ‘elite’ from the guillotines is to start a war with China by fomenting and redirecting pubic anger away from Washington and onto the Chinese in an age-old ploy of jingoism in an effort to provide a ‘valid’ excuse for not paying on U.S. Treasuries.

“You know, you just had China and Japan, the no. 2 and no. 3 economies, getting together, saying we’re just going to change to yuan and yen,” Hunter told Max Keiser.  “We’re not going to use the dollar anymore.  You know, that’s huge.”

He added, “There’s a move underfoot not to use the U.S. dollar as the world’s reserve currency.  If things get bad enough.  I mean, there’s $12 trillion held outside the country.  I know this is blasphemy, but, hey, what’s stopping it if there’s a shutdown of the Straits of Hormuz, a $200 a barrel, $300 a barrel spike in oil, a shutting of the U.S. dollar?  What’s stopping the U.S. from just saying, you know, we’re not going to pay those Treasury debts?  China, you’re not going to get paid back.  We’re at war.”

And as a corollary to the scenario, not broached by Hunter in the interview, what would prevent the U.S. government from scapegoating Constitutionalists, Christians and the Patriot movement as un-American terrorists during the process leading up to a full-blown war?  Such a tack was used in Germany during the rise of the Third Reich.

Evidence of a build up toward that end has been reported almost daily by journalist Alex Jones of InfoWars.com, with FEMA camps at the ready, violations of Posse Comitatus gone unchallenged by Congress, and the signing of the NDAA Executive Order of Jan. 1 as the telltale steps already taken by Washington in preparation for civil unrest and possible attempts to overthrow the capitol’s two-party oligarchy, according to Jones.

InfoWars’ Alex Jones and Kurt Nimmo penned on Dec. 6, 2011:

In 2009, the National Emergency Centers Act or HR 645was introduced in Congress. It mandates the establishment of “national emergency centers” to be located on military installations for the purpose of providing “temporary housing, medical, and humanitarian assistance to individuals and families dislocated due to an emergency or major disaster,” according to the bill.

In addition to emergencies, the legislation is designed to “meet other appropriate needs, as determined by the Secretary of Homeland Security,” an open ended mandate which many fear could mean the forced detention of American citizens in the event of widespread rioting after a national emergency or total economic collapse, as Paul Joseph Watsonnoted in January of 2009.

Moreover, evidence of the Hunter scanario can be gleaned by relentless U.S. rhetoric fired at Iran, proxy and ally of China in the Middle East.  Iran, a member of George Bush’s ‘Axis of Evil’, has been the target of Cuba-like sanctions by the U.S. since the overthrow of the Shah in 1979, with the latest action to cut the Persian state from the international SWIFT system a sign of retaliation for Iran’s new Kish oil bourse (and Iran’s refusal to accept U.S. dollars as payment for its oil), plunged the rial by 50 percent within days of the announcement.  Oil-dependent China receives 400,000 barrels per day from Iran, according to the Rhodium Group, and has agreed to pay Iran with any currency it prefers.

Reminiscent of U.S. embargo of Japan from American oil in March 1941, today, China has replaced Japan as the target of U.S. aggression through the energy market.  The Chinese have stated publicly it supports Iran and condemns the sanctions as illegal and does not intend to comply with U.S. wishes to boycott Iranian oil shipments.  China knows that in order to strengthen the yuan as a future reserve currency, it must do so by incrementally replacing the dollar with the yuan in the $3 trillion global oil market.

“We’re a huge debtor nation, the largest debtor nation in the world, the United States, and other countries are beginning to say but we want our debt in something other than dollars,” John Perkins, author of Confessions of an Economic Hitman, said in a 2008 interview for the movie Zeitgeist Addendum.   “We don’t like the dollar.  We don’t trust it, so Saddam Hussein threatened to go to what he called an oil bourse, the oil exchange where he would sell oil for something other than dollars, yen, the euro, or some other currency.  And that’s one reason we went after him, that’s one more reason.  And today, interestingly enough, Iran is doing the same thing.

“This is a huge threat to us.  I think it’s the primary reason why we’re making threats as if we’re going to attack Iran.  I don’t think it has nearly much to do with nuclear energy . . .”

Perkins went on to say in the 2008 interview that the scenario Hunter proffered in the Kaiser interview on Friday may be the likely scenario the U.S. will adopt to end the pressure on the dollar via the Treasury market, if the U.S. can use its military to force all oil transactions to be denominated in U.S. dollars.  Otherwise, there is no hope for the dollar, as the math precludes the U.S. making good on its debt.

“If Iran, in fact, does sell oil for something other than the dollar, that puts the dollar in a very weak position,” Perkins continued, “and if someone wants to bankrupt us, someone like China or Japan or one of the other big holders of our debt, they can call in our debt in euros or something else.  But they can only do that if they can buy oil in that other currency.”

Peter Schiff’s Latest Advice to Investors

Dominique de Kevelioc de Bailleul

Gold and silver investors watching metals prices move back down near to the Dec. 29 lows of $1,523.90 and $26.15, respectively, should seriously consider accumulating the metals now.   The ‘Big Reset’ of the global financial, slated for no later than 2014, will reward precious metals holders as the big winners among investors, according to Peter Schiff.

Speaking with Cambridge House International, the CEO of Euro Pacific Capital said, “The United States is in a lot of trouble.”   After the Fed presumably embarks on QE3, and that stimulus wears off, “I think we’re going to have a crisis.  I don’t think we’re going to have time for QE4 or QE5.  I mean, ultimately, that’s where we’re headed, because that’s all QE does.  Each QE sows the seeds of the next QE.”

And global money looking for a safe haven won’t stand for another repeated currency debasements through debt monetization by the U.S. central bank.  Because Europe’s woes have forced politicians to make tough choices there, the spotlight has been taken off, temporarily, the even-more dire circumstances of debt loads and deficits of the U.S., according to Schiff.

Schiff’s time line for the Armageddon scenario of a U.S. dollar crisis matches predictions made by commodities legend Jim Rogers and ShadowStat’s economist John Williams, with each man projecting 2014 as the year the U.S. dollar no longer maintains its former role as the world’s premiere reserve currency—implying a severe decline of its global purchasing power and much higher metals prices.

In 2014, that’s the year the U.S. economy is expected to reach fresh new lows and the year politicians will finally be forced to face the tough choices regarding proposed cuts to federal, state and local government budgets, according to the three men.  It will also be the year that ushers in severe social unrest, similar to what is happening in Greece, in the case of Jim Rogers’ prediction for 2014.

Ironically, Schiff believes that if the U.S. economy miraculously digs its way into real economic growth, the bond market will sell off due to concerns of inflation from two massive QE programs from the Fed, driving interest rates much higher, along with U.S. borrowing costs—costs that will explode the federal budget deficit beyond the already red-line levels of 10-plus percent of GDP.  The dollar cannot survive under that scenario, according to Schiff.

“We don’t want to allow a real recovery, because that means real bitter-tasting medicine needs to be swallowed,” he said.  And added, no later than the year 2014, we’ll see “higher interest rates.  There’s going to be lower real estate prices, stock prices, some banks are going to fail, and the government is going to have to seriously cut spending dramatically to everybody.”

Under a Schiff scenario of deeper economic recession/depression, dramatic cuts to all levels of U.S. government spending will create a similar and immediate economic and financial death spiral, now faced by Greece, with reduced GDP coming from total U.S. government spending—presently 40.3 percent of GDP—further limiting the U.S. economy to pay on its local, state and federal debt, thereby initiating a feedback loop of further cuts and GDP declines, and so on—an unraveling of the Ponzi-like scheme warned of by Russian economist Nikolai Kondratiev in 1925, and later, by Austrian economist Ludwig von Mises, among others.

By the year 2014, like Jim Rogers’ longstanding ‘heads-you-win-tails-you-win’ investment theme as a result of continued stimulus (currency debasements) to fight the Kondratiev Winter (depression) or the immediate inflation unleashed from years of Fed balance sheet expansion, Schiff recommends holding real money—gold (and silver)—the only money that will survive the loss of confidence in all fiat currencies and the ability of the U.S. to make good on debt obligations.

“There is no short-term fix anymore, because we’ve been doing these short-term fixes for a along time,” Schiff concluded.  “We got a little extra rope from this European crisis . . . Something is going to happen in Europe, because this cannot go on indefinitely.  And the numbers are just so big for the U.S.  Interest rates have got to rise, or the Fed is going to have to print so much money to keep them from rising that inflation is going to flare up in a way that government numbers can’t hide it anymore.”

Therefore, Schiff’s advice: Avoid dollars and euros.  Buy gold, real “money”.

Jim Rickards: Reveals Fed Blueprint, Gold $5,000

By Dominique de Kevelioc de Bailleul

Speaking with Russia Today Wednesday, best-selling author of Currency Wars Jim Rickards said Fed Chairman Ben Bernanke is drawing up a blueprint for more ‘QE’, and he expects the gold price to jump three to five times within three to five years as a result of the currency war heating up between the U.S., Europe and China.

However, in addition to his forecast for gold, Rickards also laid out Bernanke’s plan for the timing of the next round of ‘stimulus’ and the signs to watch for—and in a desperate last-ditch effort to yank scared money out of hiding, the Fed has the legal authority to buy equities, which is all good for the gold price, according to Rickards.

“I kinda expect something [QE] in August, September.  But whether it’s then or after the election in January, you can see it coming,”  Rickards told RT’s Lauren Lyster.

Rickards continued to state that the Fed’s tacit mission—implied from the FOMC’s ‘Operation Twist II’ announcement, Wednesday—is to incentivize investor cash to leave low-yielding interest-bearing accounts and to enter the stock market in the hopes of reigniting economic activity and speculation since lost in part due to the Flash Crash of May 6, 2010.

“The Fed wants them [broker dealers] to buy stocks, wants them to buy mortgages; it’s just more market manipulation,” he explained.  “It’s forcing investors to buy other riskier assets, and that will pump up asset prices such as stocks and housing. . . It’s all about getting asset prices up.”

Rickards’ thesis for his expectation of a Fed QE announcement out of the July/August 31-1 or September 12-13 meeting is predicated on the probability of an European Central Bank policy move of lowering overnight interest rates by 25 basis points on July 5.  As Italy and Spain bond yields blow out to near-capitulation levels of six and seven percent, respectively, the ECB needs a “bazooka” to lower rates again to keep the Ponzi scheme of debt from collapsing.

“I still expect that, probably a 25-basis-point rate cut,” Rickards speculated.  “By the way, that ECB rate cut that’s coming, that I see coming, is one of the reasons the Fed could hold off. . . The Fed says, you know, we can hold off on QE3 to August, September because the ECB is going to pick up part of the slack in the meantime. . . I do expect the ECB rates to come first.”

Rickards continued by laying out the sequence of events he sees coming out of both the tag-team efforts of the Fed and ECB, reminding viewers of RT that, through the Fed’s own admission, Bernanke and ECB President Mario Draghi talk privately about coordinating monetary policy between the two premiere central bank reserve currencies.

The ECB “didn’t want to ease ahead of the Greek election, because that makes it too easy on the Greeks,” proffered Rickards.   “Keep the pressure on.  Get the Greeks to do the right thing, which they did.  Then you get your rate cuts and you get your QE3.  That’s the sequence.”

And regarding the question of a globally coordinated interest rate cutting ‘shock and awe’ move to arrest an impending collapse, Rickards dodged the question somewhat, but said it has happened before with the wildly rising Japanese yen which followed the Fukashima tragedy.   A coordinated move between the G-8 outside of targeting one currency, as in the case of the yen last year, would be unprecedented.

Despite the drama in Europe, Rickards is bullish on the euro and expects that, not only will Greece and the other beleaguered PIIGS remain in the euro, but he “expects members to be added over time” and anticipates the next move in exchange rate between the euro and the dollar will be back up to 1.35.

Rickards also said to watch for the June 28, 29 European Summit.  “That’s when we’ll see some very big announcements, and I think positive ones,” he said.

And for the gold price, “My long-run thesis on gold hasn’t changed,” Rickards said.  “I do see it in the $5,000-$7,000 range over a kinda three-to-five-year period as confidence in paper money begins to collapse.  But that’s not something that happens overnight.  The world governments and IMF will print a lot of money before that happens.”

Gold Bugs: Do You Suffer from Pappagallo?

By Dominique de Kevelioc de Bailleul

As the Greek vote Sunday came and went, the G-20 Summit, ditto, and now the announcement of the FOMC meeting in Washington comes to a close, gold bugs appear to be hanging onto every event like dogs eyeballing his master in hopes of receive a scrap from the dinner table.

And for those news junkies following the European spectacle, how many times do we need to read a variation of the following quote?

“This [prop up of the global financial system] is not going to work unless they let the fund gear up and draw on the full firepower of the ECB,” David Owen of Jefferies Fixed Income told The Telegraph.

And here comes that ‘pappagallo’ line that Trends Research Institute’s Gerald Celente talks of—that tired, over-baked and repeated analysis coming out of every so-called financial ‘expert’ quoted for the past three years from so-called ‘papers of record’ . . .

The “only institution with the credibility and balance sheet to reassure markets. It would be much simpler if the ECB carried out quantitative easing but that does not seem to be an option.”

No kidding!  If only the masters of markets would notice how hungry you are, how starved for capital you are.  You’ll get it, because if you don’t, some very angry mobs, mixed and matched up among 46 million food-stamp recipients toting guns, won’t be too happy going to bed hungry.  And if you don’t think America’s pathetic version of nobility didn’t notice what happened in Egypt and Libya after the money run out, you’re not even half on track to understanding the gold market.

“So the wolves are at the door and it’s the door to (German Chancellor) Merkel’s home,” prolific author and money manager Stephen Leeb told King World News, Monday.  “My guess is she is going to cave. The Mexican central banker, Ortiz, who is widely regarded as one of the clear thinkers, was quoted as saying they can stop the problem in Europe almost immediately, ‘by carrying out a massive round of government bond purchases.’”

Leeb continued, “I think that’s where we have to go.  In other words, just as our Fed has printed literally trillions of dollars by buying our bonds, the European central bank has to do something very similar.”

High-profile politicians and bankers are deathly afraid of violence and retaliation from an awakened citizenry, now hungry.  When a nation’s currency collapses, so do civility and bourgeoisie pretensions.  Leeb isn’t quite sticking his neck out with his prediction (and he knows it).  Either money floods the system now or in the fourth quarter, or whenever, privately held gold won’t change one microgram.

According to three-years of veteran gold trader Jim Sinclair’s commentary, the path has already been set; the endgame to the global financial system is clear—it’s done!  The propaganda, sideshow events from the actions taken by politicians and monetary authorities at this stage, are much, much too late and won’t change the outcome for gold.  Sinclair calls the charade, the circus act of political spin and downright lies—MOPE—Management of Perspective Economics.  The Fed calls it, Management of Expectations—or ’1984′ talk for the word: propaganda.

Either gold drops far less than financial assets, or gold will soar to massive heights, leaving financial assets behind.  What’s important is, the purchasing power of gold after the financial 9-11 dust settles in the coming months.  Then you become one of the ‘rich’ and ‘wanted’ by the lynch mob who will come to believe that you were unpatriotic for ditching worthless script, contributing to the dollar’s demise.  That’s all that you need to worry about.

Take it from Kyle Bass, the billionaire who has prepared for anarchy by fortifying his residential estate against wayward criminals.  Ask George Soros about Malaysian Prime Minister (1981-2003) Mahathir bin Mohamad’s publicly scapegoating the famed currency trader’s role in the Asia currency crisis of 1997-8.

In other words, just get some of the yellow metal and stop the suffering from the day-to-day wranglings of the price of gold.  Better yet, if you want to see what a patient’s heart monitor reading looks like during a heart attack, buy the white metal, silver, and enjoy the adrenaline rush.

Now, start preparing for escape routes and telling your friends you gave up on the gold market and sold all of what you had to pay for unexpected expenses.  You’ll be scapegoated, ratted out and a victim of envy and scorn—as the Mogambo Guru Richard Daughty predicts.

Rigged Gold Market, a Secret Payoff to China

By Dominique de Kevelioc de Bailleul

As Italian and Spanish 10-year note yields breakout to ‘engine light’ levels of more than 6 and 7 percent, respectively, the China-led BRICS announced at the G-20 in Mexico an additional $95.5 billion ‘contribution’ to the IMF’s emergency bailout fund, with China signing off to $43 billion of the total package.

As renowned historian of economics Niall Ferguson put it on the eve of the Greek election, Sunday, “If there’s going to be a Lehman moment in the crisis it’s going to be next week.”  Well . . . that’s this week.

But, so far, the Lehman-like moment hasn’t arrived and won’t.

Granted, no nation gains from a sudden collapse of the eurozone.   However, China, the biggest creditor of them all, with approximately $3.2 trillion of Western fiat on its books, won’t come to the financial aid of the hopeless European Union (from its own making) without some form of collateral—or maybe a deal, instead, in which something of tangible value could be acquired very cheaply in return for its ‘altruism’.

That tangible central bank asset can only be the coveted asset, most dear as a hedge against the endgame for the dollar—gold!

Though the Fed and its high-profile cheerleaders (billionaire icons Warren Buffett, Charlie Munger and Bill Gates) poo-poo gold’s intrinsic value to dupe/contain the awesome collective purchasing power of the American and European people from entering the tiny gold market in force, the reality of its price rise against every currency for the last 12 years tells quite a different tale.

“Gold is a reserve currency, as far as the market is concerned,” Sprott Asset Management’s Eric Sprott told FinancialSense Newshour’s Jim Puplava in an Oct. 2011 interview.  Sprott went on to say that central banks and the shrewd money know the endgame for the dollar will include gold as the backbone of a new global monetary system—a system that presently finds China sorely lagging in gold reserves when compared with the core EU nations and the U.S.

According to IMF data of 2010, China is way behind, though estimates of China’s real gold reserves reach as high as much as more than 3,000 tons—a still meager amount considering China’s deep central bank reserves.

China, 1,054 tons, 1.8 percent of reserves

United States, 8,133.5 tons, 76.6 percent of reserves

Germany, 3,396.3 tons, 73.7 percent of reserves

France, 2,435 tons, 71.8 percent of reserves

Netherlands, 612.5 tons, 61.9 percent of reserves

Italy, 2,435.8 tons, 73.4 percent of reserves

Spain, 281.6 tons, or 39.2 percent of reserves

Portugal, 382.5 tons, or 89.2 percent of reserves

Greece, 111.7 tons, or 81.3 percent of reserves

And here’s how JP Morgan’s gold suppression scheme works for the Chinese but not the American people (or Europeans).

A rising gold price, or better still, a soaring gold price crashes the dollar (all G-8 currencies) and China’s $3.2 trillion of reserves.  No one wins under that dire scenario except those holding privately-held gold—the castigated tiny group referred to as ‘preppers’.

Moreover, an overt announcement issued by the West to transfer gold to settle payment (the scheme devised under Bretton Woods) after multiple decades of trade deficits would not work either, as years of artificially low gold prices would create immediate and furious front-running by the market, thereby drastically reducing the number of gold-tons China would receive for its fiat, and causing rapid runaway inflation, globally.

Additionally, public outcry of the overt and sudden transfer of wealth from the West to the East would be political suicide to those in power at the time.  For example, the protests among the overall prosperous German people at the thought of Germany pledging its gold to back the EFSF last year was fierce and has caused its president Angela Merkel dearly in the polls.

Therefore, the solution is to covertly transfer gold to China through the LBMA, the Comex or any backdoor available to Western central banks in a gradual manner.  JP Morgan’s trading desk is the mechanism, while the CFTC pretends to investigate the gold manipulation matter to delay further the day of reckoning.

On Mar. 8, Jim Sinclair brilliantly observed that Western central banks know the jig is up for any hope of maintaining the current financial system and plan to prop-up a seriously listing global economic ship for as long as possible before the inevitable revaluation of gold is announced.  In the meantime, China stockpiles gold in preparation of a new gold-backed monetary regime.

“So their [central banks] efforts, in my opinion, are not to depress the price of gold, but to prevent gold from rising into the area where it becomes ballistic,” Sinclair told King World News (KWN).

Sinclair continued by stating that gold will continue to rise enough to prevent a force majeure in the gold market, but the plan by the Fed is for gold to rise in an orderly and stealth manner for as long as possible in the hopes of preventing another post-Plaza Accord (1986) stock market crash of 1987, or an Asian currency crisis of 1997.

“The major players in this game of power need stability for as long as possible,”  Portola Group founder Robert Fitzwilson told KWN, Mar. 19.  “Stability, in this case, is defined as the absence of chaos and absolute panic.”

Commenting on the enlarged pledge by the BRICS out of the G-20 meeting in Mexico, Monday, the US-centric IMF President Christine Laggard told reporters the additional contributions by the BRICS demonstrate “the broad commitment of the membership to ensure the IMF has access to adequate resources to carry out its mandate in the interests of global financial stability.”

She added, “Countries large and small have rallied to our call for action, and more may join. I salute them and their commitment to multilateralism.”

Multilateralism.  Code word for a globally coordinated agenda, which must include a reconciliation of global imbalances and a revaluations of the world’s reserve currencies to achieve that alleged “global financial stability”.

As Western powers dupe its constituencies into holding dollars and euros throughout the crisis, the Chinese have been given red-carpet access to cheap gold through JP Morgan’s price suppression scheme.  As the Chinese buy huge quantities of the yellow metal, JP Morgan helps ‘paint the tape’ for the ‘punters’ and inexperienced money managers, alike, who look for trends to buy into as a momentum trade.  No trend in gold has emerged for nearly one year, giving China that much time to accumulate the gold it needs before the Big Reset.

“Why would the West give China that gold at discounted prices?” KWN’s Anonymous London Trader asks, rhetorically.   “Yes, the bullion banks act on behalf of the central banks to manipulate the price, they act as agents, but the central banks and their agents are also aware that the Chinese are building up their gold reserves. This is the bigger picture which the gold bears do not understand.”

Correct.  But the bears will fully understand the “bigger picture” when the time comes after the Chinese have accumulated enough gold during an orderly bull market in the yellow metal.

U.S. political leaders have outsourced American jobs to China throughout the past two decades, given military technology to China during the Clinton Administration, and now prepare the Chinese for a new global monetary regime at the expense of the American people.  It’s all about “multilateralism,” as globalist Christine Laggard refers to the BRICS’ generosity—and she “salutes them.”

“This Thing is Coming Down,” Says Gerald Celente

By Dominique de Kevelioc de Bailleul

In a lively Saturday interview on King World News, Gerald Celente began by ridiculing the media’s propensity to jump from one hyped event to the next during the global financial crisis, providing a unnecessary distraction from the all-important final outlook he forecasts for investors.

“This thing [financial system] is coming down,” Celente told KWN’s Eric King.

The outcome of the Greek election is not important, according to the founder of Trends Research Institute.  What’s happening in any country is not particularly important, per se; it’s the collective symptoms of a global financial collapse that investors should focus their minds upon before considering what to do to protect their wealth.

“The entire financial system is under collapse,” Celente forcefully continued.  “It’s not about the Greeks; it’s not about the Spanish; it’s not about the Italians; it’s not about the English; it’s not about the Americans; it’s not about the Chinese; it’s about everybody.”

‘It all comes back to gold,” he said.  Celente added that he is not an investment adviser, but has repeatedly stated in the past that he likes the yellow metal for its ancient reliability as the ultimate safe-haven during times of financial crisis.

Simultaneously, vital economic statistics across the global economy show steep drops or have begun to resemble bubble-like characteristics.  Suddenly, the global economic growth story, the West-East ‘decoupling’ theory, and the global ‘muddle-through’ thesis, increasingly appear to be nothing more than well-crafted media-driven nonsense.  It’s just a media con job to keep investors back on their heels and away from critical thinking regarding their savings and wealth, according to Celente.

It was Fed Chairman Ben Bernanke and his predecessor Alan Greenspan who claim they didn’t see the housing bubble, nor the dangers of more than one quadrillion dollars of derivatives written since 1999.

In August 2010, Bernanke told attendees of the Jackson hole Summit, “For a sustained expansion to take hold, growth in private final demand — notably, consumer spending and business fixed investment — must ultimately take the lead.

“On the whole, in the United States, that critical handoff appears to be under way.”

As it turns out, nothing could have been further from the truth.  The financial crisis deepened throughout 2010 and 2011, with revelations that Greece could not pay on its gigantic sovereign debt and by implications threatened to take the eurozone with it as other EU sovereigns would be next.

In the U.S., bogus jobs reports issued by the U.S. Labor Department, which showed an economic recovery, streamed in month after month.  In essence, the data merely show a halt of an immediate economic Armageddon, not a recovery.

Back then, gold traded at $1,200.

Today, global statistics point to a deepening of an already recessionary global economy, but the media continues to spin the data to help the Fed ‘manage expectations’.

Though, not complete, below, is a list of items that support Celente’s call for an impending next leg down in the global financial crisis.

ñ A property bubble about to burst in Canada

ñ Bank runs in Greece, Spain and Italy

ñ Spain housing market to drop another 25 percent, according to S&P

ñ Netherlands reports sudden 10 percent drop in retail sales

ñ EU proposes currency controls

ñ China reports rapidly decelerating GDP, ramps up gold imports

ñ Baltic Dry Index approaches 2009 low

ñ India’s currency, the rupee, is under attack

ñ Slovenia needs a bailout

ñ Cyprus needs a bailout

ñ Egypt in the throes of civil war, again

ñ Fed overtly monetizing debt 30-year treasuries, according to zerohedge.com

ñ U.S. job market is fictitious, according to John Williams and Charles Biderman.  Real unemployment is 22 percent

ñ U.S. consumer tapped out and buying necessities with credit cards

ñ Global recession next year pegged at “100 percent” certainty, according to Marc Faber.  Jim Rogers agrees with Faber’s assessment and includes 2014 as a worse outlook

Countering misleading comments made by officialdom throughout the crisis—blatantly appearing to follow the playbook of former President of the European Council Jean-Claude Juncker, who once said, “When it becomes serious, you have to lie,” —Celente told KWN listeners to not expect the truth out of Washington or Brussels.  You must “think for yourself” and that “you’re on your own” while the global financial collapse plays out.

What should investors do? Eric King asked Celente.

“Speaking for myself . . . You [referring to Eric King] know me,” Celente stated.  “I’ve always made it clear; I only put my money in gold and in silver,” and added, “And a friend of mine, to me, the best strategy that I’ve heard.  And again, I do not give financial advice.  His strategy is, every month he buys gold and silver.  Every month he buys gold and silver with the extra money he has.  Every month.

“It’s a brilliant strategy. . . I’m in gold for the long term.  I’m not getting out of gold, and I continue to invest in it when I can.”

Spot on! “Mayans Forecast 2012” as “End of Era”, Says Prominent Swiss Money Manager

By Dominique de Kevelioc de Bailleul

It’s all too clear to long-time gold and silver investors, the finally days have come for a collapse of the global financial system.  No doubt about it, this time.  Gold and silver will take its rightful place as money whether the global monetary magicians like it, or not.

In a striking interview on King World News, Egon von Greyerz of Switzerland-based Matterhorn Asset Management told Eric King the financial world is in collapse—right now—in 2012—just in time to vindicate the Mayan prophecy buffs who have been repeatedly ridiculed as ‘unsteady’ throughout the year of financial turmoil.

With Cyprus, Greece, Spain and Italy (now Slovenia) collapsing at once, “it’s incredible that the Mayans forecast 2012 would be the end of a major era,” said von Greyerz.  “It looks, today, like we are standing on the eve of massive changes in the world that will have consequences for a long, long time to come.”

Time is on the side of every gold and silver stacker.  The trend is up, and any steep drop in the paper price (albeit from a JP Morgan takedown or industrial buyers slacking of purchases from bad economic news) has triggered the Pavlovian response from accumulators of physical to ‘back up the truck’ and drain inventory from the Comex.  That knee-jerk reaction, buying on paper market dips as well as buying truck loads on crashes is a relatively new phenomenon in the precious metals markets.

That patience and forthrightness throughout the 11-year precious metals bull market may be well rewarded soon, according to von Greyerz.


Not only are fiscal budget deficits and sovereign debt levels unsustainable, so is the rate of physical silver leaving inventories.  To put the silver market into a proper prospective, especially to newcomers, here’s a recap of Eric Sprott’s interview with FinancialSense Newshour of October 19, 2011.  It’s worth repeating a spot-on interview with a dealer who has his ear to the ground on a daily basis.

It’s all about the physical market.

“There’s a paper market; there’s a physical market.  The physical market is what I analyze more than anything else.  And all I see is buyers.”

The markets recognize gold as a reserve currency, and silver cannot be far behind.

Sprott: “One of things I believe, sort of, on a longer-term prospective, is that, the markets have made gold the reserve currency . . . it’s gone up hundreds of percent against every currency in the world, so it is the world’s reserve currency as far as the markets go.  And, as an offset to that, gold is not going to be a reserve currency without silver playing a hand, here.”

Historically, silver trades at an ‘equilibrium’ price of 1/15th the cost of gold.  Today, gold trades at more than 50 times the price of silver’s price.

Sprott: “Give it three to five years, we’re going to get back to ratios which are way more appropriate to the underlying fundamentals of gold and silver.”

The global banking crisis will drain cash from the monetary system into gold and silver.

Sprott: “If you think it’s bad for banks, today, wait until you deal with a couple of years of negative GDP growth and what happens to the value of those [tier-3] paper assets that they own, because it will get worse.  One thing I’ve always imagined . . . the ultimate destiny for gold and silver is that, people will prefer to own those investments rather than have their money in the bank.”

See BER article regarding future GDP, Jim Rogers’ Most Dire Warning, Please Get Worried

Conventional commentary on the state of the banking system is completely wrong.  Ignore it.

Sprott: “Three months ago (July 2011), when they did the European stress test, Dexia bank was considered to be the most well-capitalized bank.  And three months later, they were . . . I don’t the word, broke, or taken over by respective governments.”

Fund managers haven’t discovered the silver market yet.

“You go to some of the biggest names that even own gold and you ask them: Have you looked at silver?  They haven’t even looked at it.  So, I think we’re in the early days to people moving into silver, both in the sense of owning physical silver and of course in the sense of owning silver stocks. . .”

Fast forward back to von Greyerz’s latest KWN interview. Everything Sprott spoke of in the October 2011 interview may be coming to a head right now, according to von Greyerz.

“What we know is that the euro will collapse, and it doesn’t matter whether it collapses by being printed into oblivion or because many countries desert it such as Greece, Spain etc.,” von Greyerz said.  “We also know that other major currencies will collapse.  The consequences of these (eventual) collapses will be horrible because we will have a hyper-inflationary depression.

“Gold is on the verge of a major breakout here.  I agree with James Turk that this summer we could see a major move starting.  I could see a 12 month rise of major magnitude.  Gold will reflect the destruction of the world economy.”

And silver’s ratio should shrink dramatically during a summer rally, giving investors of the white metal more bang for the buck against gold on the way up during a catchup feeding frenzy from fund managers and retail public caught off guard.  Maybe the Mayans were right after all.