Imminent Silver Price Explosion!

By Dominique de Kevelioc de Bailleul

Silver has perked its head up and sniffed the next round to hyperinflation is on the way.  Load up the truck; it’s expected to be the best ride, yet.  Here’s why:

No less than three articles penned by well-placed journalists at the ‘establishment’ rags of the Wall Street Journal, Financial Times and the Economist were launched within days of each other, with all three ‘suggesting’ that Bernanke better start stirring-up the animal spirits—on the pronto!

Jon Hilsenrath of the Wall Street Journal, the man who the straight-shooting Stephen Roach of Morgan Stanley calls the real chairman of the Fed, wrote Wednesday, following the dismal U.S. GDP report:

A few quick thoughts on GDP report out this morning:

Key price indexes are uniformly running below the Federal Reserve’s 2% objective. The personal consumption expenditures price index was up 1.6% from a year ago, thanks in part to falling gasoline prices. This is the price index that the Fed watches most closely, more so than the consumer price index produced by the Labor Department, which is running a touch higher. Excluding food and energy, the PCE price index was up 1.8% from a year ago. The Fed watches this ex-food-and-energy index to get a read on underlying inflation trends. For the quarter at an annual rate, the PCE price index ran at 0.7% and excluding food and energy it ran at 1.8%. An alternate measure, the “market-based” price index, is also running below 2%. This is ammunition for Fed officials who want to act right away to spur growth. Not only is growth subpar, and the job market stuck in the mud, inflation is also running below the Fed’s long-run goals.

Final sales of domestic product — a measure of how the economy is doing when you take out inventory swings – up at a 1.2% rate in Q2 and averaging a 1.7% rate since 2011. That’s really substandard for a recovery.

That’s the first polite salvo at Bernanke.

Now from Greg Ip of the Economist.  Ip is Europe’s version of Wall Street Journal’s Hilsenrath, but it’s all the same as far as the American-European central bank alliance is concerned, with the Depression of 1873-79, the banking crisis of 1907, the brief but deep Depression of 1921, and the Depression of 1930-1945 to serve as stark reminders that the two economies are inexorably tied at the hip.

Ip piece for the Economist was written with the point of view of an article he would write in 2021, looking back at monetary policy of 2012.  A blog entry about Ip’s piece can be found at Zerohedge.com.

In the fall of 2012, Greece abrogated its bail-out agreement with the IMF, European Union and ECB, declared a moratorium on all external debt payments, and began paying domestic bills with IOUs that it then declared legal tender. The ECB cut off Greece’s banks, Greece responded with capital controls, and relabeled its IOUs “new drachmas” which quickly plunged to 35 euro cents. Bank runs immediately commenced throughout the periphery; bond yields in Spain shot over 7%; global stock markets cratered.

The ECB was finally forced to act to save the euro: it announced it would buy as many bonds as necessary to cap all sovereign yields at 6%, with the exception of Greece. The ECB never had to buy any bonds: investors no longer had any reason to sell since the ECB had taken insolvency off the table.

Days later, the ECB president destroyed the euro shorts during a press conference.

“Within our mandate, the ECB is ready to do whatever it takes to preserve the euro,” ECB President Mario Draghi told reports last week.  “And believe me, it will be enough.”

UBS’s Art Cashin commented on Draghi’s surprise market-moving jawbone antic:

“Mario Draghi’s comments stunned the markets,” stated Cashin.  “What prompted the timing of his move?”

Referring back to Ip’s article, Cashin continued, “Wait a minute! That [article] sounds rather close to what Mr. Draghi was discussing. Coincidence? Probably, but the timing is stunning. Somewhat like the simultaneous but separate development of calculus by Isaac Newton and Gottfried Leibniz in the early 1600′s.”

Unlike Morgan Stanley Roach’s direct style, Cashin’s more-diplomatic observation nonetheless delivers the point.

And to complete the shock-and-awe three-man series of salvos from the mouthpieces of the ‘establishment’, Council on Foreign Relations commissar Sebastian Mallaby of Financial Times wrote Tuesday:

 . . . the Fed could couple more quantitative easing with a formal announcement of a higher inflation target.  Some Fed leaders are open to this. Charles Evans, the Chicago Fed president, has floated the idea of a 3 per cent target, effective until unemployment falls below 7 per cent. A higher inflation target would lead markets to understand the Fed is committed to quantitative easing of game-changing magnitude, inducing the behavioural shifts needed to make the policy succeed.

The Bernanke Fed has been pilloried for pursuing wild quantitative easing at the risk of inflation. The truth is that it has pursued cautious quantitative easing without risking inflation. The time has come for some fresh thinking. A Fed that can escape the myth of its audacity might be able to do more.

Inflation isn’t a problem, according to Mallaby, though ShadowStat’s John Williams’ reconstruction of M2 reveals a 15 percent growth rate doesn’t quite jibe with Mallaby’s neoclassical assertion.

And according to Williams, further money printing is, not only expected by the Fed, it will lead to hyperinflation by the end of 2014.

Not too surprisingly, no one really expected central banks to repeat a Wiemar scenario so quickly, including Williams, who, after witnessing central bankers unleash the printing presses following the aftermath of the collapse of Lehman, pushed up his forecast for toilet paper money to 2014, from 2019-20.

And the conclusion that can be drawn from all of that jibber-jabber from the ‘establishment’s’ prestitutes?

FX Concepts’ currency expert extraordinaire John Taylor told Bloomberg News Monday, “I think something’s going to happen on Tuesday, Wednesday, obviously reported Wednesday,” referring to the FOMC meeting this week.  “And mostly likely it’s going to be Bernanke teasing us a little bit, you know, that QE is coming.”

“September it’s [a formal announcement of more QE] coming,” Taylor said.

This Oddball Indicator Has Gold Bugs Salivating

By Dominique de Kevelioc de Bailleul

Gold bugs salivate at the turbo-bullish implications of this recent discovery by two economists of an oddball indicator that investors can compare with the U.S. Commerce Department’s jury-rigged GDP number.

Recent guest interviews on King World News (KWN) that suggest a huge short squeeze in the gold market is about to begin a massive rally in the yellow metal got a boost Thursday from a couple of economists’ and their analysis of garbage.

According to economists Michael McDonough and Carl Riccadonna, of the 21 categories of items shipped by rail, which aid economists in their forecasts of GDP, the amount of waste hauled away demonstrates the highest correlation (82%) to domestic output.  Makes sense.  As the U.S. produces, it throws away, too.

Well, the verdict is in on the amount of crap carried off on Warren Buffett’s rail-cars. Waste cargo is down, way down.

And it’s tanking fast.  It appears that delaying getting back into the gold trade may cost traders, as the news media echo chamber prepares to suddenly and simultaneously begin parroting that a ‘Double-Dip’ Recession or Depression is back in the U.S.—and from the looks of the chart, below, it’s likely to be another 2008 economic cliff-dive, as well.

As CNBC and Bloomberg continue to promote hope. there’s little doubt now among professional traders that the coy Ben Bernanke has already crafted his QE speech and readied it to be deployed at a moment’s notice.  Gold’s close above $1,600 tips the hand of savvy traders front-running a Fed capitulation to use the printing presses more aggressively.

“I would say that from now on, any economic number being released which is showing an improvement [in the U.S.] is probably either a fluke or a phony figure,” Matterhorn Asset Management’s Egon von Greyerz told KWN on Friday.

“We are not going to see growth in the next few months or even the next few years,” he continued.  “If you look at the U.S., home sales are down 8%, durable orders are down, and debt is continuing to increase.”

Despite global-wide GDP statistics that show small growth, which von Greyerz said are “phony” numbers, better evidence suggests that the entire global economy has accelerated to the downside, therefore, prompting the need for Chairman Bernanke to accelerate asset purchases at the Fed—with this next announcement possibly including outright buying of stocks on the open market.  Yes, the Fed is legally able to by U.S. equities.

With the Germany’s Bundesbank still “resistant” to the idea of bond purchases to match Fed policy of monetizing U.S. Treasuries, according to UBS’s Art Cashin, the U.S. dollar may become the next focus of the dormant bond vigilantes, as rates on the 10-year Treasury note reached a record low 1.39 percent this week, a rate lower than even the Fed’s massaged GDP deflator of 2.1 percent.

Liquidity, then, appears to not be the motivation behind more Fed QE, if we can take Bernanke’s word for central bank intervention “if needed” to allegedly increase employment.  Cashin believes the Fed is attempting to hide its monetization of U.S. sovereign debt by constantly talking about jobs and economic growth as reasons for central bank intervention.

“By standards, the amount of liquidity that’s around the globe should be hyperinflationary,” Cashin told KWN on Friday, with the dollar most likely leading the way down against gold during the next QE program expected by the Fed.

“The real time bomb here is that large short position in the euro,” said Cashin, suggesting that the dollar’s next major move is decidedly down.  Gold is poised to soar in response.

Gerald Celente Will ‘Go Postal’ When He Hears About This

By Dominique de Kevelioc de Bailleul

Gerald Celente fans won’t want to miss Celente’s first interview after getting word that the next head of the Bank of England could be yet another Goldman Sachs boy.

In the spirit of Celente’s famous saying, “You can’t make this stuff up,” Bloomberg News released a trial-balloon article to assess public opinion of UK Prime Minister David Cameron’s potential choice of another former-Goldman Sachs boy, Mark Carney, to become the next governor of the Bank of England to replace Mervin King at the end of King’s term set to expire in 11 months.

“London is losing so much trust as the global financial center that Prime Minister David Cameron may need to consider an unprecedented choice for Bank of England governor: Mark Carney, the Canadian who polices the world’s financial system and has no ties to the bailouts or rigged markets tainting Labour and Conservative governments alike,” Bloomberg begins its article, titled,Carney Leading Bank Of England Seen As Scandal Remedy.

In keeping with his reputation as a top trends forecaster, Celente previously warned in 2011 of the Goldman Sachs takeover of the global financial system.  In November of that year following the news that he was ripped off by MF Global the preceding month, Celente spoke with FinancialSense Newshour’s James Puplava about what he pieced together regarding the omnipresent Wall Street firm.

“And I go do some research and say, wait a minute, this MF Global is run by the wonderful Jon Corzine. Oh, you remember him—the former governor of New Jersey and then Senator until he ran that into the ground. He was a top cat with Goldman Sachs. Boy the Rothschilds would be jealous if they could see what the Goldman Sachs gang has taken over. Anyway, let’s not forgetHenry Paulson under Bush was a Goldman Sachs guy, Robert Ruben under Clinton, the Treasury Secretary, was a Goldman Sachs guy that deregulated the industry, killed the Glass-Steagall act and made it legal for these guys to become open criminals Financial Sense Nov 2011.

I knew Gary when I was over at Goldman Sachs. He was one of the boys. He said I could do this. So this is what he [Jon Corzine] is doing. What he did was he stole the money out of my account and others and, brilliant Jon Corzine, bet on European bonds. Oh you know those wonderful Italian, Greek, Portuguese, Spanish and Irish bonds…going down the toilet.

“The loan sharks have taken over this nation. They have just taken over there in Italy. They put this guy Mario Monti—they call him Super Mario. How about three card Monti? How about this guy—look at him, look at the connections! I’m not making this up. Monti. The new[Mario] Draghi head of the ECB. [Lucas] Papademosover there in Greece, three bankers just took over the deal. Where did what’s his name, Draghi come from? Oh, he was head of the Goldman Sachs group there in Europe wasn’t he?” [emphasis added to the text]

All three replacements of key positions to ‘manage’ the financial crisis in Europe were drawn from a former employees list of U.S.-based Goldman Sachs.  Monti, Draghi and Papademos had worked for the Fed’s second-largest primary dealer or the U.S. Treasury.

Apparently, it works two ways, as well.  Sometimes high-ranking politicians or ‘advisers’ to these public servants transfer to Goldman Sachs presumably to replenish the stock of ‘experienced’ Washington-Wall Street team players.

Celente noticed President Obama’s notorious White House Counsel heading over to Goldman Sachs in 2010 to advise the firm on legal matters relating to its potential criminal role in the financial meltdown that began in 2008.

“This is like the fox watching the foxes.  No, so the whole thing is corrupt from top down,” Celente said in a Russia Today interview in April 2010.  “Look what’s going on, President Obama’s Chief Counsel Greg Craig is now working for Goldman Sachs.  The Goldman Sachs gang. Wall Street’s hijacked Washington.”

According to Wikipedia, Craig’s client list reads like a Who’s Who of notorious Washington politicians, international figures, CIA personnel, and alleged CIA-connected individuals of foreign states.  Interesting enough, except for Goldman Sachs, Craig has no previous record of taking on clients from the banking industry.

“The banks are doing the robbing,” Celente told King World News in an interview on Wednesday, before Bloomberg’s article about former Goldman Sach’s Mark Carney.  “They’re the bank robbers.  It’s the greatest heist in world history and the banks are doing the robbing.

“You know, Eric, you can give a man a gun and he can rob a bank.  But you give a bank to people like Barclay’s Robert Diamond, to Goldman Sachs Lloyd ‘I’m doing God’s work’ Blankfein, or JP Morgan’s ‘It’s a tempest in a teapot that two-billion dollar loss’ Dimon, and they can rob the world.

“No one has ever seen anything like this in history.”

Because the global financial crisis ranks as the no. 1 U.S. national security threat, according to the Pentagon, the use of CIA tactics to shape public opinion to accept another Goldman Sachs boy to head Washington’s partner in crime across the pond in the ongoing financial debacle shouldn’t be much of a surprise.  Celente warned of it.

“Other methods for IO [Information Operations] attack may include psychological operations such as initiating TV and radio broadcasts to influence the opinions and actions of a target audience. . .” 

—U.S. Department of Defense

Bloomberg’s article title is a dead giveaway as a PSYOP from the banking cartel, as it gratuitously makes the suggestion that another Goldman Sachs boy will somehow remove the tarnish of the kingpin institution of the LIBOR scandal.  It’s akin to suggesting that a member of the Capone gang will clean up the Chicago police department, Celente reminds us of previous personnel ‘appointments’ or ‘installations’.

And a well-crafted PSYOP would be incomplete without testimonials from other gangster bankers, another pet peeve of Celente, who routinely lampoons former White House economic adviser Larry Summers as the “brilliant Larry Summers.”

“Larry Summers, I love it, every time they talk about Larry Summers, he’s always brilliant,” Celente told InfoWar’s host Alex Jones in august 2009.  “He’s another brilliant one, he’s the one that helped dismantle the Glass-Steagall Act, the banking act that was put in place in the 1930s so the banks could again become the banksters that they’ve become.”

Bloomberg doesn’t quite catch a quote referring to Carney as “brilliant”, but the well-known propaganda rag for the Washington-Wall Street cabal did, predictably, publish a quote lavishing how “smart”, “savvy” and a “good manager” Carney is, and how appropriate that the BOE has looked “outside” of its sovereign nation for a foreigner—a Goldman Sachs foreigner.

“Mark Carney is one of the brightest, most capable people I’ve ever met in global finance and central banking,” former U.S. Treasury undersecretary Tim Adams told Bloomberg.  “I’ve been around these circles a long time and he’s smart, politically savvy, a good manager and has an outstanding track record. It’s tough to find all those elements in a single person.”

And somehow Bloomberg included a clever quote from a former BOE lackey, who must have forgotten that Carneyis  a banker—a central banker, referring to him only as a “Canadian”.  Everyone loves a Canadian Goldman Sachs boy; he’s from the “outside”.

“Why not get a head that’s global? Bankers aren’t very popular, and a Canadian sounds like a good choice,” said Kent Matthews, former Bank of England researcher. “It may well be that to restore credibility they have to look outside.”

“Dan Conaghan, author of a book on the Bank of England, said he’s almost certain there’s never been a foreign head of the central bank since it was founded in 1694,” stated Bloomberg.

Just as Celente said, “No one has ever seen anything like this in history.”  Well, in the case of Mark Carney, 1694.

Could it be that the UK will threaten U.S. dollar hegemony with a run on its sovereign debt next, after Europe, and that a Goldman Sachs hatchet boy needs to make sure it’s ‘handled’?  Refer back to a portion of the opening paragraph of the Bloomberg article, above.  In that paragraph, Bloomberg writes a ridiculous line: “Mark Carney, the Canadian who polices the world’s financial system . . . ”

Carney, the Canadianpolices the world’s financial system?  This article is no doubt a bankster PSYOP, through and through.

STOCK CRASH ALERT: Strange Indicator Spells Doom

By Dominique de Kevelioc de Bailleul

“The charts look terrible,” eccentric technician Arch Crawford told GoldSeek Radio host Chris Waltzec on Tuesday.

But the unusual methods of planetary alignments and astronomical technical readings which Crawford utilizes to make his predictions should not be scoffed as the work of a lunatic.  His successful 25-plus-year track record and large subscriber base speak for themselves.

“There have been five-year periods along the way when Crawford’s timing was at or near the top,” according to Forbes Newsletter Watch, 2002.

The prestigious Hulbert Financial Digest ranked Arch Crawford’s Crawford Perspectives no. 1 for Stock Market Timing for the period October 1 2007 through October 31, 2009.  In addition, his researching into correlating market action with astronomical cycles and sun activity, Crawford has achieved fame for ranking at the top of his peers for the years 1987, 1994 and 2008.  He ranked no. 2 for 2002.

Aside from a ‘normal’ year during 1994, Crawford has achieved the best of the best during years of severe market turmoil and vicious declines, suggesting that maybe stock investors should pay very close attention to his latest call.

“The highest number of electrons for the longest period of time that I’ve ever seen on record prior to this year was the week of the crash of 1987,” Crawford explains, referring to electrons reaching the earth caused by geomagnetic storms erupting from the sun.

“The number of electrons at the Geostationary Operational Environmental Satellites (GOES) geosynchronous satellite level was . . went over 10-to-the-third (1,000) per cubic centimeter about a week before the crash, and the market was dropping every day,” he continues.   “And the day after the crash day, that morning was the actual low in the price, and the electrons dropped back under 10-to-the-third per centimeter that day, and that was the bottom.”

Crawford states that the amount of electrons reaching the earth from the sun on a per cubic centimeter parameter metric reaches 1,000 per cubic centimeter on very rare occasions and for relatively short periods of time.  But this year, the year of the Mayan calendar end, something most unusual is happening right now, according him.

“There have been very rare occasions when they’ve been over 10-to-the-third per cubic centimeter for any period of time,” he says.  “Well, they’ve been over 10-to-the-third for most of this year and has been as high as 10-to-the-fifth, which is a 1,000 times stronger.  Excuse me; I guess, it’s 100-times stronger.”

And it gets worse for the future of the DJIA, yet, according to Crawford.  In addition to the electron density of the earth’s atmosphere reaching red-line readings, another astronomical cycle has moved into place—an ‘indicator’ which has been his bread and butter tool for 25 years for predicting successfully stock market crashes.  That predictor is the Mars-Uranus cycle.

“The Mars-Uranus crash portion of the Mars-Uranus cycle has just become active on July 18, and that means that, well, for the last hundred years every crash that has taken place in the market has taken place in the same 40 percent of that cycle,” Crawford explains.

“And that’s a several-month window, which is not saying it will crash tomorrow, or it crashes at the end of February,” he adds.  “But between 18th of July and the end of February, I believe the markets worldwide will crash.  And that’s because, that if, any one of them falls, it’s going to take a bunch of others into a black hole.”

Interestingly enough, Swiss economist and money manager Marc Faber told Russia Today on the same Tuesday of this week that he, too, sees the potential for a 1987-style stock market crash.

“I think there’s a possibility that there will get some kind of a crash” in stocks due to the disconnect between the lofty U.S. stock market levels and the rest of the world’s depressed levels, Faber told RT.

Source: GoldSeek Radio

Gold Bears Will Be Shanghaied

By Dominique de Kevelioc de Bailleul

Gold bears expecting the ‘gold bubble’ to pop must be smoking that funny stuff left over from the two opium wars of the mid-1800s between the British and China.  Today’s war with China finds the Son of Britain attempting a variation of the same colonialist trick by forcing, this time, funny money onto the Chinese.

Not only is Uncle Shunyuan not falling for Uncle Sam’s modern-day sharecropper scheme of purchasing real goods with counterfeit money, Americans will soon wake up to the realization that, in addition to their jobs being sent to China, their wealth, too, has set sail for the Middle Kingdom.

Those soon-to-be worthless dollars promised by Uncle Sam to retirees to pay for their golden years are being traded in for gold at an alarming rate in China.  Soon, even the gold bears will have to admit they’ve been Shanghaied.

“China’s underlying financial policy is to sideline the U.S. dollar and build its domestic metals inventories, notably of gold and silver and using these to replace its huge dollar surpluses while prices are cheap,” Silver-Coin-Investor.com’s Dr. Jeff Lewis stated in a recent article, China’s move into gold and silver part of global monetary plan.

Lewis goes on to state that irrespective of China’s economy experiencing a proverbial soft or hard landing, Beijing’s near “panic” to acquire as much of the yellow metal as a means of protecting its monstrous reserves—and to protect its citizens from a collapsing 21st century colonialist empire behaving like a cornered rat—is, by far, a more pertinent issue to China’s long-term strategic goals.

“China mined a total of 355 tons, which was by far the largest amount of gold mined for any country,” Stephen Leeb told King World News, Tuesday.  “And yet they are still buying every single available ounce they can get in the open market.

“ . . . gold has become increasingly important and China has encouraged its citizenry to buy gold,” added the author of Red Alert: How China’s Growing Prosperity Threatens the American Way of Life.  “With the stock market already frustrating people in China, the Chinese, interestingly, will not want gold to be added to that list of frustrations for their investing public.”

As a reminder of a WikiLeaks cable released last year, published by its Aussie founder Julian Assange (a traitor, of course—or stooge?), the Chinese are quite aware of the dollar’s role for maintaining the neoconservative goal of complete global U.S. hegemony; and with Russia’s help, along with the other motivated members of the BRICS nations, Uncle Sam’s meddling, threatening, extorting, bribing and swindling ways with its ‘partners’ in the The-World-is-Flat nonsense, the U.S. will assuredly near its MF Global sudden death moment—but on China’s timetable, at the very latest.

US embassy cable – 09BEIJING1134

MEDIA REACTION: U.S.-CHINA-JAPAN RELATIONS, U.S. POLICY, CHINA’S GOLD RESERVES

3. CHINA’S GOLD RESERVES

“China increases its gold reserves in order to kill two birds with one stone”

“The China Radio International sponsored newspaper World News Journal (Shijie Xinwenbao)(04/28): “According to China’s National Foreign Exchanges Administration China ‘s gold reserves have recently increased. Currently, the majority of its gold reserves have been located in the U.S. and European countries. The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold’s function as an international reserve currency. They don’t want to see other countries turning to gold reserves instead of the U.S. dollar or Euro. Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar’s role as the international reserve currency. China’s increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB.[emphasis added]

Back to Leeb, who believes the Chinese won’t delay its “frantic” accumulation of gold by finessing better gold prices.  Instead, Beijing has surreptitiously established a floor under the gold market in the mid-$1,500 area, as it catches as much falling metal from the pockets of the upside-down logic of the gold bears, who still believe (conveniently serving as useful idiots to the Chinese) the safety trade remains with the U.S. dollar.  Beijing has high hopes for U.S. investors to remain ‘stoned’ for as long as possible.

“In the past, if the Chinese could step out of the way and let gold tumble in price so they could purchase it cheaper they would,” said Leeb.  “Right now I think they just don’t want to add to their citizen’s frustrations with key markets, gold being one of them.  If I’m right, then the Chinese will continue to support the price of this metal.”

Sprott Asset Management Chief Investment Strategist John Embry, another regular of King World News, agreed with Leeb.  In Embry’s interview with Eric King, Tuesday, he intimated that the Fed must allow the gold price to rise very soon to stop a Charles de Gaulle run on the gold market by the Chinese.

Embry also echoes Goldmoney’s James Turk’s daredevil prediction that August will be the month the Chinese will be stopped from buying “cheap” gold due to apparent shortages of the physical metal seen coming.  The theory goes: higher prices create marginally higher supplies.

“We are moving toward a fundamental shortage of gold, and I believe it may start as soon as next month,” Embry proffered.  “I think the bottom is being put in right now . . .

“But this action is all just building a massive base in gold.  I think the big issue going forward is this growing shortage of available physical gold.  I strongly believe one of the reasons for the shortage is a lot of it is headed East. [emphasis added].

“The last four or five months of the year gold should challenge and easily take out its all-time high.”

Fed Plans Dollar Devaluation, New Evidence; Why Now?

By Dominique de Kevelioc de Bailleul

Zerohedge.com once in a while posts a bombshell.  The latest, This Is The Government: Your Legal Right To Redeem Your Money Market Account Has Been Denied – The Sequel, proves once again that Trends Journal Founder Gerald Celente should top investors’ Google News alerts for his latest outlook and commentary.

“You don’t own your money unless you have it in your possession.
—Gerald Celente Nov. 2011 (following MF Global’s sudden bankruptcy, Oct. 31)

And to put some official sanction to an already corrupt banking system, the safest of safe assets, cash, will shockingly turn out to be not safe after all when the big reset nears.  In fact, cash, too, will be confiscated through, maybe, another Obama Executive Order, more un-prosecuted fraud and consolidation to benefit JP Morgan, or just an old-fashion overnight currency devaluation, which is usual and customary—and is, presently, the odds on favorite after all attempts by the Fed to jury-rig the banking system fails.

As the following excerpts of the NY Fed proposal to Bernanke and Co. reveals, plans for coping with a banking crisis in the U.S. via some form of dollar devaluation are underway, including capital controls to stem a bank run—of course.  Therefore, it’s necessary to make changes to Money Market Rule 2a-7.

Title: The Minimum Balance At Risk: A Proposal to Mitigate the Systemic Risks Posed by Money Market Funds

 . . . This paper proposes another approach to mitigating the vulnerability of MMFs to runs by introducing a “minimum balance at risk” (MBR) that could provide a disincentive to run from a troubled money fund. The MBR would be a small fraction (for example, 5 percent) of each shareholder’s recent balances that could be redeemed only with a delay. The delay would ensure that redeeming investors remain partially invested in the fund long enough (we suggest 30 days) to share in any imminent portfolio losses or costs of their redemptions. However, as long as an investor’s balance exceeds her MBR, the rule would have no effect on her transactions, and no portion of any redemption would be delayed if her remaining shares exceed her minimum balance. [her?  Politically-correct thieves.]

The motivation for an MBR is to diminish the benefits of redeeming MMF shares quickly when a fund is in trouble and to reduce the potential costs that others’ redemptions impose on non-redeeming shareholders. Thus, the MBR would be an effective deterrent to runs because, in the event that an MMF breaks the buck (and only in such an event), the MBR would ensure a fairer allocation of losses among investors.

Importantly, an MBR rule also could be structured to create a disincentive for shareholders to redeem shares in a troubled MMF, and we show that such a disincentive is necessary for an MBR rule to be effective in slowing or stopping runs. In particular, we suggest a rule that would subordinate a portion of a redeeming shareholders’ MBR, so that the redeemer’s MBR absorbs losses before those of non-redeemers. Because the risk of losses in an MMF is usually remote, such a mechanism would have very little impact on redemption incentives in normal circumstances. However, if losses became more likely, the expected cost of redemptions would increase.  Investors would still have the option to redeem, but they would face a choice between redeeming to preserve liquidity and staying in the fund to protect principal. Creating a disincentive for redemptions when a fund is under strain is critical in protecting MMFs from runs, since shareholders otherwise face powerful incentives to redeem in order to simultaneously preserve liquidity and avoid losses. . .

Importantly, an MBR rule also could be structured to create a disincentive for shareholders to redeem shares in a troubled MMF, and we show that such a disincentive is necessary for an MBR rule to be effective in slowing or stopping runs. . .

. . . if losses became more likely, the expected cost of redemptions would increase.

[emphasis added to the above text]

And that bank run is sure to come, according to John Williams of ShadowStats, among other ‘unencumbered’ analysts, and will most likely involve all the “if necessary” clauses to kick in, such as “suspending redemptions” of money market funds altogether.

As the moment of another Lehman-like collapse (on steroids) nears, more and more bold calls for soaring gold prices by regulars of King World News (KWN) streamed in, all within a week.

With Spanish 10-year notes reaching 7.47 percent, Tuesday, closing above 7 percent for the past two trading days, and the IMF preparing to cut Greece off, the air is rife with an imminent emergency QE from the Fed, a global QE announcement of some kind, or at the outside chance, a complete financial panic brought on by a systemic European bank run.

However, Bernanke and his colleagues won’t allow a collapse as long as investors believe they’re still relevant.  More QE most likely is at hand to keep Spanish yields from, then, pushing up Italian yields above 7 percent, creating three fires in the eurozone instead of the only one fire still raging in Greece.

“It [global QE] is coming a lot faster than the gold bears think. It can be any weekend now. It could be this weekend,” Jim Sinclair of JSMineset stated on his blog this weekend.

“The longer the central banks wait, the more nuclear and longer the QE blast will have to be maintained,” he added.  “The price of gold is going to $3,500 and higher.”

And Eric Sprott of Sprott Asset Management brought up ‘black swans’ in his lengthy interview with KWN late last week.

“My biggest ‘black swan’, Eric, is that I think I’ll be right one day,” said Sprott.  “My worry is that one day they just shut everything down.  They say, ‘You know what, we just can’t keep this up anymore, the whole Ponzi (scheme), we just can’t do it and we shut it down.’

“All of the markets freeze, and the stocks that you are short are never allowed to go where they were.

“They might cease gold trading, in the normal sense, or maybe they will even outlaw gold trading.”

Jim Rickards, another regular on KWN was quoted by Austria-base FORMAT, Tuesday, “I expect a gold price of $7,000 by the next several years.”  Rickards, too, expects the U.S. to either outlaw gold possession or tax it into the underground economy.

Egon von Greyerz Matterhorn Asset Management told KWN, “ . . . my target on gold of $3,500 to $5,000 over the next 12 to 18 months, and then over $10,000 in 3 years.”  von Greyerz is convinced the monetary ‘authorities’ will have to incorporate gold back into global settlements.

Gerald Celente said on Max Keiser’s program, On The Edge, a false-flag attack could be in the offing before a QE announcement, presumably to distract the world from the Fed’s upcoming ridiculous and reckless policy move.

And, the interview to rival the Sinclair announcement comes from the Anonymous London Trader (ALT), who told KWN’s Eric King that something big will be coming out of official channels soon.  There’s too much discussion and scuttlebutt surrounding the unmentionable topic among polite company, which is, allocated gold accounts, or better, yet, the lack of allocation, thereof.

“It is now beginning to be discussed, openly, that the unallocated gold is not at the banks,” said ALT.  “This is definitely the case with many of the allocated accounts as well.  The reason I’m pointing this out is you have a more ‘open’ disclosure that’s taking place with regards to this.

“This tells me there is something major that is happening behind the scenes.  It tells me that the LBMA’s price fixing scheme is coming to an end.  You have these naked short positions, that are incomprehensible to most people, in both gold and silver….”  [emphasis added]

With GATA’s Bill Murphy’s testimony of his ‘connected’ source suggesting August will be the month of fireworks in the gold market, Nouriel Roubini making the rounds telling the world that the U.S. economy is tanking—again—and reports from Germany-based Der Spiegel that the International Monetary Fund will stop funding Greece as soon as the EMS becomes operative in September (which is still not funded), the world is on the precipice—for the umpteenth time—of financial Armageddon, unless something drastic comes out of the world’s central banks, soon.

All of that comes back to the NY Fed’s latest proposal to the FOMC.  If adopted, the NY Fed proposal to institute capital controls on money market funds may come sooner than investors now believe.  But you can count on central bankers to deploy Jim Sinclair’s mantra “QE to infinity” in the meantime.  In the eyes of neo-Keyensians, they have no better choice but to devalue the U.S. dollar more rapidly.  Gold (and silver) will be the last refuge.

“Big, Big Moves” in Gold Price in August, Elite Insider Leaks to GATA

By Dominique de Kevelioc de Bailleul

As early as 10 days, the gold price will suddenly explode to the upside, according to one of Europe’s elite.  Moreover, the European tycoon also explained why the silver price soared approximately 150 percent to nearly $50 within an eight-month period of Sept. 2010 and Apr. 2011.

Speaking with SGTreport host Brandon Smith, Chairman Bill Murphy of Gold Anti-Trust Action Committee (GATA) said a longtime British “contact” told him that the month of August will usher in an event which will shock traders into buying the gold and silver bullion market aggressively again.

“The fellow I spoke with I’ve known for years, one of the wealthier men in all of Europe,” said Murphy.  “He’s got a lot of connections . . . It will be tough for the gold and silver markets [during the month of July], but starting in August they would start to ‘go nuts’, and they would ‘stay nuts’ for a long time. . . Big, big moves are coming, starting in August.”

Murphy continued with the suggestion that the “big, big move”, starting in August, could possibly be triggered as a result of an announcement by the CFTC regarding its nearly four-year-long investigation into charges of silver market manipulation practices leveled against mega-banks JP Morgan and HSBC, the two banks that Murphy and his associates at GATA have accused for more than a decade as the kingpins of the gold and silver market cartel.

“I’ve a great deal of respect for Bart Chilton, one of their commissioners,” Murphy explained.  “I’ve met him twice—communicate with him here and there—he doesn’t tell me anything he can’t—but he told me . . . I don’t know . . . two, three months ago, that we should be hearing something [announcement] in three or four months, either way.  So, that would put it [the announcement] in August.”

Echoing predictions for a late-summer rally in the precious metals market, Goldmoney’s James Turk, told King World News, Jul. 16, the factors that soared precious metals prices in 2007, 2008 and 2010 are, again, in place for another stellar move to the upside this summer, as well.

According to Turk, in addition to the volatile credit markets in Europe, prices of food commodities are expected to jump sharply in August in response to global drought conditions, including severe drought conditions in the world’s breadbasket, the United States, not witnessed since the 1950s.  Turk expects the commodities market to spark another eye-popping move in the precious metals.

“There is a new factor at work that is about to light a fire under the precious metals that few people recognize – food inflation,” said Turk.  “It was one of the key drivers in the summer of 2010 which launched the huge rally that eventually took silver near $50 and gold to a new record over $1900.

“Food inflation was also a factor in the big run-up of the precious metals in 2007, and early 2008, when food riots broke out around the globe because of high prices,” added Turk, and conclude, “food inflation will again become one of the drivers sending gold, silver and the mining shares much higher from here.

“The summer doldrums are over.  Gold and silver are ready to get exciting once again.  We can expect a rally from here that will take our breath away.”

Silver Manipulation: CFTC v. Dollar Hegemony

By Dominique de Kevelioc de Bailleul

If the silver community expects satisfaction out of CFTC Commissioner Bart Chilton and his ‘colleagues’ at the commodities future trading ‘watchdog’, don’t expect any!  Get it out of your mind.

As a reminder, the Silver Doctors published an email of Bart Chilton’s response to their inquiries into the matter of the silver manipulation investigation—as in, why is it taking so damn long to resolve?!  In short, Chilton stated he expects the results of the investigation will be released by Oct. 1, 2012.

Why nothing will happen?

A fraudulent financial system is predicated upon a continuation of the fraud—a la Ponzi scheme.  Simple.  Ergo, no action will be taken by the CFTC against JP Morgan, and the manipulation will continue, though kind words or sympathy most assuredly will come from CFTC’s sympathetic good cop, Bart Chilton.

“I empathize with you on your loss; I really do, but thank you for being a lovely contestant on Fascism, the game.”

Ted Butler, Bill Murphy, Chris Powell and Adrian Douglas at GATA are good people, doing the right thing for noble reasons.  The silver community owes each one of these men sincere gratitude, but they are outnumbered by a pack of suit-wearing psychopaths, not by the CFTC, but from the financial system oligarchs and Washington politicos who have naturally teamed together to form a fascist state.

Nothing will come out of the CFTC’s investigation regarding the manipulation of the silver market.

Obvious demonstrations of what GATA is dealing with can easily be gleaned by the cast of social misfits and genetically defective masses of human flesh already well-know to us.  How about Bernie Madoff?  And MF Global’s Jon Corzine, JP Morgan’s Jamie Dimon, Goldman’s Lloyd Blankfein, U.S. Treasury Secretaries Timothy Geithner and Hank Paulson, politicians George W. Bush, Dick Cheney, Donald Rumsfeld, William & Hillary Clinton and Barrack H. Obama as well as many others yet to be discovered by the public as racketeering mobsters tied to Washington’s one-party cabal—and that’s just on the American side.

“Psychopaths have what it takes to defraud and bilk others: They are fast-talking, charming, self-assured, at ease in social situations, cool under pressure, unfazed by the possibility of being found out, and totally ruthless,” wrote Andrew M. Lobaczewski Ph. D., Polish psychiatrist and author of Political Ponerology: The science on the Nature of Evil Adjusted for Political Purposes.

According to Amazon’s introduction of the book, Political Ponerology, another capo of the Washington/Wall Street syndicate tried to suppress its publication.

Amazon: The first manuscript of this book went into the fire five minutes before the arrival of the secret police in Communist Poland. The second copy, reassembled painfully by scientists working under impossible conditions of repression, was sent via a courier to the Vatican. Its receipt was never acknowledged, no word was ever heard from the courier – the manuscript and all the valuable data was lost. The third copy was produced after one of the scientists working on the project escaped to America in the 1980s. Zbigniew Brzezinski suppressed it.

Political Ponerology was forged in the crucible of the very subject it studies. Scientists living under an oppressive regime decide to study it clinically, to study the founders and supporters of an evil regime to determine what common factor is at play in the rise and propagation of man’s inhumanity to man.

Shocking in its clinically spare descriptions of the true nature of evil, poignant in the more literary passages where the author reveals the suffering experienced by the researchers who were contaminated or destroyed by the disease they were studying, this is a book that should be required reading by every citizen of every country that claims a moral or humanistic foundation. For it is a certainty that morality and humanism cannot long withstand the predations of Evil. Knowledge of its nature, how it creates its networks and spreads, how insidious is its guileful approach, is the only antidote.

If psychopaths and war criminals in control of America & Companies, Inc. are willing to kill innocent American citizens, Iraqis, Afghans, Sudanese, now Syrians, and soon-to-be Iranians, in the face of every human law of decency—not to mention dozens of U.N. treaties and other sanctioned rules of international conduct—what causes someone to think that the very financial system, founded upon global U.S. dollar hegemony, will be threatened by a complaint from the CFTC?

The source of funding of the U.S. military and its role as protector against any threat to said system will be crushed.  Saddam Hussein and Muammar Gaddafi threatened the petrodollar system, and they got crushed.  What chance do Ted Butler and the good guys at GATA have against the most powerful fascist state the world has ever seen and the individuals in power who are willing to kill to protect the U.S. dollar?

Commissioner Bart Chilton, I’m sure, is already aware of the powerful cabal behind the manipulation of the price of silver and doesn’t stand a chance of making a difference either.  The issue is a matter of ‘national security’.

UBS: Hyperinflation Nears; Gold, the Canary in the Coalmine

By Dominique de Kevelioc de Bailleul

Swiss-based UBS AG issued a warning to clients Wednesday that the U.S. is on the path of a hyper-inflationary depression.  Forty years of a nation’s currency not redeemable for a physical asset has just about reached its limit of usefulness, according to the world’s 17th largest bank (ranked by assets) and its economist Caesar Lack, Ph.D. economist.

In Lack’s note to investors, titled, Global Risk Watch: Hyperinflation Revisited, he states:

Hyperinflation: Paper money only has a value because of the confidence that the money can be exchanged for a certain quantity of goods or services in the future. If this confidence is eroded, hyperinflation becomes a threat. If holders of cash start to question the future purchasing power of the currency and switch into real assets, asset prices start to rise and the purchasing power of money starts to fall. Other cash holders may realize the falling purchasing power of their money and join the exit from paper into real assets. When this self-reinforcing cycle turns into a panic, we have hyperinflation. The classic examples of hyperinflation are Germany in the 1920s, Hungary after the Second World War, and Zimbabwe, where hyperinflation ended in 2009. Indeed, hyperinflation is not that rare at all. Economist Peter Bernholz has identified no fewer than 28 cases of hyperinflation in the 20th century. [emphasis added]

Lack’s overview of the events which lead up to a currency collapse comes straight from the work of Austrian economist Ludwig von Mises (1881-1973), an economist shunned by the establishment’s money masters for his heretical economic viewpoints, and scoffed by today’s confused legion of ‘expert’ economists, media personalities and political figures such as deficits-don’t-matter Dick Cheney.

Americans will soon find out that deficits, indeed, do matter, says UBS.

Just as a student pilot is told to trust his flight indicators and not the sensations brought about by his inner ear, the readings of hyperinflation stare each investor in the face—if he’s trained to ignore the likes of the establishment’s head cheerleader Paul Krugman, and, instead, interpret what the economic indicators tell him from the standpoint of the obscured von Mises.

As von Mises pointed out, hyperinflation is not a result of a money supply gone wild through the excessive printing of paper notes, per se; it’s the result of a marketplace of participants suddenly rushing out of a monetary system which they perceive no longer works or can be trusted.  MF Global, PFG, LIBORgate and, now, hints of fraudulently managed ‘allocated’ gold accounts surfacing, all contribute to that cumulative, then sudden drop in confidence in the U.S. dollar.

As repeated attempts to audit the Fed regain renewed support in Congress, policymakers are under pressure by a public—a public that now questions the once-sacred, enigmatic and arcane central bank’s role as the steward of the nation’s money.  As congressman Ron Paul stated in an interview with GoldSeek radio during the weekend, another bill to audit the Fed makes its way through committee.  The issue has mushroomed in popularity with constituents, therefore their representatives, and can no longer be ignored, according to Paul.  The issue of the Fed won’t go away.

And the last step toward hyperinflation comes from a public that comes to realize that, in fact, deficits do matter and that four decades of deficit spending has reached its limit in the U.S.  The realization of American exceptionalism, as it relates to matters of fiscal responsibility, was just another propagated myth could come as early as next year, according to many students of the Austrian-school, such as Jim Rogers, Marc Faber, John Williams, Peter Schiff, Max Keiser, James Turk, Eric Sprott, among others.  As the U.S. economy rolls over, federal tax receipts will drop further, gaping an already monstrous $1.5 trillion deficit ($5.3 trillion, including unfunded liabilities) into a Greece-like death spiral.

“Ultimately, hyperinflation is a fiscal phenomenon; that is, hyperinflation results from unsustainable fiscal deficits,” states UBS.  “Peter Bernholz [author of Monetary Regimes and Inflation: History, Economic and Political Relationships]

notes that historically, cases of hyperinflation have been preceded by the central bank monetizing a significant proportion of the government deficit.

“After investigating 29 hyperinflationary episodes, 28 of which happened in the 20th century, Bernholz writes: ‘We draw the conclusion that the creation of money to finance a public budget deficit has been the reason for hyperinflation.’”

Reruns of Cheney video clips will be used by some as a reminder of how fiscally, politically and morally bankrupt American culture has become.  It will dawn on a larger and more meaningful portion of Americans that the promise of a trip on the train to the American dream was really the boxcar to the slaughterhouse.

That flashpoint worries the Fed and the oligarchy (witness the Warren Buffett, Charlie Munger and Bill Gates interviews with CNBC’s Becky Quick), as confidence in American institutions will be irredeemably lost, leading eventually to that fateful day of hyperinflation.  Just as 28 other currencies before, another currency, the dollar, will end up as the next worthless fiat.

The bizarre series of Executive Orders and other unconstitutional steps taken by all branches of government since 9-11 tip the hand that central planners have  been preparing for that day of awakening.  The anger generated by a public armed to the teeth most likely will trigger panic and another American Revolution.

UBS ends with:

Gold – the canary in the coalmine

Due to its long standing as the foremost, non-inflatable, liquid alternative currency, gold is the first destination for wealth fleeing from paper money into real assets. Gold can be considered a hyperinflation hedge, and its price can be considered an indicator for the probability of hyperinflation. A sudden rise in the price of gold would be a warning sign that the risk of hyperinflation is increasing, in particular if it went along with a worsening of the fiscal situation in the deficit countries and an easing of monetary policy. Not only gold, but also other commodities, as well as the stock market, would profit from investors fleeing from money and from government debt. Thus a strong rise of gold, commodities, and stock markets, accompanied by a fall in the currency and in government bond prices (i.e. a rise in yields) could signal the approach of hyperinflation. We will continue to monitor global inflation developments and change our risk assessment in the global inflation monitor according to current events.

Peter Schiff: A Much Bigger Collapse is Coming

By Dominique de Kevelioc de Bailleul

Euro Pacific Capital CEO Peter Schiff received top headline on Yahoo Finance News Tuesday, encouraging investors to loading up on gold and silver before the rush from global investors into precious metals becomes the only game in town.

The global financial crisis will inevitably move to the other side of the Atlantic to the U.S., as the focus on the dollar’s terrible fundamentals once again puts pressure on the Treasury market.  And when that day comes, the selling of US debt and market turmoil it will ignite will dwarf Europe’s sovereign debt catastrophe, according to him.

“We’ve [U.S.] got a much bigger collapse coming, and not just of the markets but of the economy” Schiff tells Yahoo’s Breakout host Jeff Mack. “It’s like what you’re seeing in Europe right now, only worse.”

In agreement with Swiss economist Marc Faber and commodities trader Jim Rogers, Schiff predicts the Depression of the U.S. economy will deepen some time in 2013.

As the Fed responds with more aggressive QE to prop up banks, in addition to maintaining historically record low debt carrying costs to Treasury, investors will most likely come to realize that the Fed has become powerless to affect any positive outcome to the crisis.  More jobs will be lost, tax revenue to the Treasury will fall, and deficits will soar even higher than the $1.5 trillion deficit expected for fiscal 2013.

“That’s when it really is going to get interesting, because that’s when we hit our real fiscal cliff, when we’re going to have to slash — and I mean slash — government spending,” says Schiff.

“Alternatively, we can bail everybody out, pretend we can print our way out of a crisis, and, instead, we have runaway inflation, or hyper-inflation, which is going to be far worse than the collapse we would have if we did the right thing and just let everything implode,” Schiff continues.

But Bernanke will most likely make good on his promise to economist Milton Friedman (1912-2006) during a speech the Fed Chairman made at Friedman’s 90thbirthday celebration.  In his speech, Bernanke relived the Fed’s monetary policy responses to the financial crisis of the 1930s, and praised Friedman for pointing out that the Fed’s restriction of money supply to stem the flow of gold out of the United States was a mistake.  The Fed, instead, should have increased money supply to save the banking system and move off the gold standard (as Britain did earlier in the crisis).

“This action [raising of interest rates] stemmed the outflow of gold but contributed to what Friedman and Schwartz called a ‘spectacular’ increase in bank failures and bank runs, with 522 commercial banks closing their doors in October alone,” Bernanke said At the Conference to Honor Milton Friedman, University of Chicago, Chicago, Illinois .

“The policy tightening and the ongoing collapse of the banking system caused the money supply to fall precipitously, and the declines in output and prices became even more virulent.  Again, the logic is that a monetary policy change related to objectives other than the domestic economy–in this case, defense of the dollar against external attack–were followed by changes in domestic output and prices in the predicted direction [down].”

In 1931, the gold price was fixed at $20.67, making it a bargain to holders of U.S. dollars if the Fed had acted by debasing the dollar.  But instead, the Fed decided to protect the dollar from “attack” by domestic and foreign holders, a policy move that Schiff believes is in the best interest of the U.S. economy, today.

That’s not likely to happen, however.  It’s clear from the passage, above, of Bernanke’s entire speech that Bernanke will sacrifice the U.S. dollar in the hopes of saving the banking system; he believes it’s a small price to pay to prevent the decimation of the banking sector—the very point of Friedman’s lifetime of work.

“Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve,” Bernanke ended his speech.  “I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry.  But thanks to you, we won’t do it again.”

And Schiff takes Bernanke at his word, and recommends that investors buy gold and silver before “Helicopter” Ben makes good on his promise to Milton Friedman of 10 years ago.