Dollar Reaches “Pre-Avalanche Moment”; Gold $7,000, Jim Rickards

By Dominique de Kevelioc de Bailleul

Speaking with Max Keiser’s On the Edge, Currency Wars author Jim Rickards says, the collapse of Lehman Brothers and the Fed’s response to the crisis convinced China to no longer trust the United States and the dollar-based reserve scheme.

In the past, the thinking among the world’s central banks focused upon the dollar as an anchor for relative valuations of other currencies trading against it.  That was a bad idea, according to Rickards.

“We trust the United States to maintain the value of the dollar, so we’ll anchor it [other currencies] to the dollar,” he says.  “That trust was misplaced, beginning, really, around 2010.

“The United Sates decided, as a matter of policy, to trash the dollar.  The Chinese made one enormous blunder; they actually trusted the United States to the tune of $3 trillion of assets to maintain the value of the dollar.

“China’s learning the hard way that you really can’t trust the United States anymore.”

After that breach of trust, following the Fed completed round of its first QE program, it became clear to the Chinese, according to Rickards, that the Fed intends to devalue the world’s reserve currency and the $3 trillion of U.S. paper it bought as the mechanism of maintaining a competitively cheap yuan against the dollar.

“The Chinese, you know, they don’t want to be the suckers at the poker table.  the United States put enormous pressure on China to allow the yuan to appreciate a little bit against the dollar, which it did in 2011.”

Since then, evidence shows the PRC has responding to the Fed through drastically stepping up central bank gold stock at the PBC.  But, in the meantime, the race to the bottom of the currency graveyard for the world’s major currencies will continue until that fateful day, when the global system is forced into a ‘big reset’ to another currency regime.

“These things [global currency devaluations] can go on, as I’ve show, historically, for 10 or 15 years,” says Rickards.

“Nobody wins.  All get is, either, global inflation or contraction of world trade if the currency wars turn into trade wars,” he adds.  At some point, “the system breaks down.”

But, “we’re some years away from that.  These currency wars will continue,” he says.

When Keiser likens last week’s Fed QE3 announcement to a “pre-avalanche moment” for the dollar, Rickards agrees.

Yes, “we are in a pre-avalanche moment, Max,” he says.  QE3 is a “suicide mission for the dollar.”

All you “have to do is look down the road and envision a Fed balance sheet that has, perhaps, $5 trillion of base money, up from about $3 trillion, today.  That’s sort of where we’re heading,” he adds.

So, China’s race to stockpile gold, in earnest, is on, according to Rickards.  China needs to acquire more gold reserves to earn a place at the Bank of International Settlements (BIS) table at the time when a new global currency regime is negotiated.

China wants the yuan to be included within the new global currency, necessitating an appreciable increase in the PRC’s gold hoard of an estimated 2,000 tons.  No gold, no inclusion.

“We don’t know exactly how much they have, but China is the largest gold importer in the world,” Rickards explains.  “They are the largest gold producer in the world.  Their mines are producing 300 tons a year, that is by far the largest in the world  Where are that 300 tons going?  Some of it’s going for domestic purchases, but a lot of it is going to the central bank.”

“To just look at the U.S. in the eye, they actually need 4,000 tons,” he says.

“This is just going to put upward pressure on gold prices for years to come, and my estimate is it will get to $7,000 an ounce, not next year, not immediately, but sooner than later.  That’s my target price for gold.”

Silver to Breakout Amid Odd Forecast—Ben Davies

By Dominique de Kevelioc de Bailleul

“We’re trend ready, Eric.  I think it’s a prescient time to come on the show,” Hinde Capital CEO Ben Davies begins his interview with King World News (KWN), referring to a resumption of the upward trend in the gold market.  But, where gold goes, silver follows at a ‘double-time’ pace—at least.

Davies proprietary model for pricing silver suggests to him a move higher of 25 percent, citing reasons of a slight upturn in the U.S. economy, the return of easy-credit European politicians from vacation, and, possibly, truth in the rumor that Spain will ask the ECB for a bailout during the weekend, ending Aug. 19.

On the news of a Spanish capitulation, alone, silver prices could move higher this week, according to Davies.

Though Davies doesn’t expound upon his ‘odd’ thesis of U.S. growth next year, or even suggest where that growth will come from, he does expect, however, more monetary accommodation by central banks to buoy silver prices—an expectation echoed by currency and monetary policy expect Jim Rickards, who, so far, has been on the money with his prediction of ECB easing ahead of the Fed.  Now, it’s the Fed’s turn, according to Rickards.

Incidentally, Rickards anticipates Fed Chairman Ben Bernanke to announce further QE at the annual central bankers meeting at Jackson Hole, Wyoming in early September.  He tweeted, Sunday, that recent weakness in the Chinese renminbi against the dollar weighs more heavily with the Fed than U.S. jobs and GDP, and that downdraft in the Chinese currency, beginning from the first days of May, will push Bernanke to make the long-awaited QE announcement at Jackson Hole.

Moreover, it turns out the rumor that Spain would ask for a bailout, that Davies alludes to, is fact-based, in part.  The Wall Street Journal reports, Sunday, Spain’s Finance Minister Luis de Guindos “would like to see the European Central Bank commit to massive, open-ended sovereign-debt purchases” before Spain asks for a new bailout from the central bank—a request that former Goldman Sachs operative Mario Draghi would only be too happy to accommodate.

However, Spain and the other nations which make up the PIIGS will await Germany’s high-court ruling on whether an exception to Germany’s constitution will be granted on behalf of the ECB and its sovereign debt purchases.  That critical ruling is scheduled for Sept. 12.

Back to Davies.

When asked by KWN host Eric King about the short-term prospects for the silver price, Davies didn’t hang his hat on the central-banker-easing mantra as the primary reason for his anticipation of higher silver prices.  Instead, Davies emphasizes a disconnect between elevated equities prices and depressed silver prices as his reasoning for silver to play catch up.

He also suggests that U.S. economic growth will add to the several known catalysts to a substantial move higher in the silver price, a shocking departure from the 2013 Armageddon scenario advanced by Jim Rogers, Marc Faber, Peter Schiff and a legion of well-informed, talented and ‘unencumbered’ market handicappers, including, too, economist John Williams of ShadowStats, who would take grand exception to Davies’ U.S. economic forecast.

Flying in the face of Davies’ forecast of economic growth comes an American Petroleum Institute (API) article which reports global fuel deliveries for all products dropping through the floor—not a good sign.

From API:

Demand for gasoline, the most widely used petroleum product, dropped 3.8% from a year earlier, to 8.624 million barrels a day, the lowest July level since 1997. Gasoline use in the heart of the peak summer driving season was 2.2% lower than in June. January-July gasoline demand averaged 1.1% below a year earlier, at 8.671 million barrels a day, the API said.

Kerosine-based jet fuel use fell 0.8% in July from a year ago, to 1.455 million barrels a day, while demand for heavy residual fuel, used in power plants and industrial burners, dropped 7.1% year-on-year, to 294,000 barrels a day.

Production of all four major products–gasoline, distillate, jet fuel and residual fuel–was greater than demand for those products. As a result, petroleum imports decreased and exports increased. Total imports of crude and refined products fell by 9.6% to average 10.4 million barrels a day in July. Exports of refined products increased 11.1% to a record high for July of 3.244 million barrels a day, and year-to-date exports were up 14% compared with the same period in 2011.

Refineries operated at 92.7% of capacity in July, the second month in a row above 90%.

Crude oil production rose 13.6% year on year in July to 6.225 million barrels a day, the highest July level since 1998. Year-to-date output averaged near the July level and was up 11.9% from the same period in 2011.

Nonetheless, Davies likes silver, in the short-term.

“Silver is the ugly duckling at the moment.  Isn’t it?  It’s definitely performing very badly, and I think it’s tantamount to the same as gold,” says Davies.  “But I think I would err slightly on the side of more silver bullish.

“I think that with recent equity and S&P 500 performance, I think that the strong correlation there and optimism for growth, and, actually, our analysis is actually [sic] for a pick-up in U.S. growth in nine months time.  So the overlay there, for us, is that silver could perform well here.”

Davies’ timing for a move high in the silver price pretty much sacks up with Goldmoney’s James Turk and other frequent guests of KWN.  It’s a breakout any day in both gold and silver, they say, with silver expected to catapult quickly and close the 57-to-one ratio of the two metals.

“I think we’re threatening to make a move here and it could come in the next few weeks if not sooner,” proffers Davies.

“Optically [chart], I’m looking for the low-to-mid-30′s, and that is as far as our trend system will take us in the interim—in the short term, I should say.”

His target for gold of $1750 and silver of $33-$35 equates to a gold:silver ratio of between 50 and 53.

Gold & Silver: Go “All-In”

By Dominique de Kevelioc de Bailleul

Calls for the Fed to make a QE announcement in September by Jim Rickards and John Taylor got another handicapper, Michael Pento, to go on the record for a likely announcement following the annual Jackson Hole meeting of the world’s central bankers in late August.

“My first impression was that the reports we had from the Wall Street Journal that the Fed was imminently going to interfere with the markets (with more QE), once again proved to be untrue,” Pento told King World NewsThursday.  “Bernanke is waiting for Jackson Hole.  He’ll make some kind of announcement, like he did back in 2010, and then he will start to put his plan to destroy the currency in effect, probably in September.”

That’s the situation in the U.S., as Pento sees it.  But within the EU, the situation is more dire and murky.  Laws there don’t allow for the ECB to intervene in the bond market like the Fed can.  But Pento has drawn the same conclusion as former Asst. Secretary of Treasury Paul Craig Roberts has: the laws will be broken in Europe—again, Germany’s outrage to the suggestion that the euro be monetized away will be ignored, and the EU will be taken over by a supranational cabal.

“In my estimation, the ECB is about three or four weeks away from giving a banking license to the EFSF and the ESM,” said Pento.  “This will lead to unlimited purchases of European debt, and an unlimited dilution to their currency.”

With Spanish 10-year yields soaring back over 7 percent today, ECB President Mario Draghi’s “do whatever it takes to preserve the eurozone” speech to save the euro from cracking 1.20 lasted only three days.  After touching approximately 6.5 percent Tuesday, the 10-year yield soared right back up past the 7 percent mark Thursday, likely putting more pressure on the euro in the coming days.

In the meantime, ‘main stream media (MSM)’ paints a picture of Draghi as an independent, yet dependent, central banker, pointing to the hurdles of corralling 17 sovereign nations before the ECB can intervene in a Fed-like manner to purchase Spanish sovereigns, implying that Draghi is in a box and panicked Monday when he awoke to a 7.6 percent Spanish yield.

“From a communication point of view, he [Draghi] misguided the markets,” Commerzbank’s chief economist Jörg Krämer told the New York Times. “He raised expectations which he could not fulfill.”

Analysis such as Kramer’s observation of what the ECB can or cannot do is either naive or intentionally misleading the markets, according to former U.S. Asst. Secretary of Treasury Paul Craig Roberts.

In an interview with Slovakia’s TV24li, Roberts stated that Greece and Italy have been taken over by former Goldman Sachs bureaucrats in Europe, with Italy’s president and entire cabinet appointed by those close to the nefarious U.S. investment banker.  The entire drama played out in Europe is a scam to save banks and to consolidate power to a supranational body, according to Roberts.

“Democracy [in Europe] is being destroyed.  And of course the EU bureaucrats are using the crisis [in the EU] to takeover the economic policies of the individual countries,” said Roberts.  “They say, we can’t trust the governments.  Look what’s happened, and so we are going to consolidate and we will make the tax decisions, budgets decisions for all the countries.”

To Pento’s credit, he’s picked up on Robert’s theme playing out in Europe, and has advised clients of Pento Portfolio Strategies to expect a dual last-minute ‘stick save’ from both the Fed and ECB.  Reports by the MSM of an imminent death of the euro are greatly exaggerated, he speculated.

“I am telling my clients, I am gearing them towards the inevitable inflation.  But I think it’s silly to go ‘all-in’ right now,” Pento concluded.  “We have significant holdings in precious metals and we have written covered calls against that strategy.” Then, we are ready to go all-in once we have a firm commitment on the part of these two central bankers to massively monetize the debt.”

Watch for Bernanke’s speech at Jackson Hole for hints of a ‘favorable’  announcement following the FOMC meeting in September.  All inflation-sensitive assets should soar, “but you will see the most salient moves in precious metals, base metals, energy and agricultural stocks and commodities,” he said.

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.

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.”

“We are Preparing for Massive Civil War,” Says DHS Informant

In a riveting interview on TruNews Radio, Wednesday, private investigator Doug Hagmann said high-level, reliable sources told him the U.S. Department of Homeland Security (DHS) is preparing for “massive civil war” in America.

“Folks, we’re getting ready for one massive economic collapse,” Hagmann told TruNews host Rick Wiles.

“We have problems . . . The federal government is preparing for civil uprising,” he added, “so every time you hear about troop movements, every time you hear about movements of military equipment, the militarization of the police, the buying of the ammunition, all of this is . . . they (DHS) are preparing for a massive uprising.”

Hagmann goes on to say that his sources tell him the concerns of the DHS stem from a collapse of the U.S. dollar and the hyperinflation a collapse in the value of the world’s primary reserve currency implies to a nation of 311 million Americans, who, for the significant portion of the population, is armed.

Uprisings in Greece is, indeed, a problem, but an uprising of armed Americans becomes a matter of serious national security, a point addressed in a recent report by the Pentagon and highlighted as a vulnerability and threat to the U.S. during war-game exercises at the Department of Defense last year, according to one of the DoD’s war-game participants, Jim Rickards, author of Currency Wars: The Making of the Next Global Crisis.

Through his sources, Hagmann confirmed Rickards’ ongoing thesis of a fear of a U.S. dollar collapse at the hands of the Chinese (U.S. treasury bond holders of approximately $1 trillion) and, possibly, the Russians (threatening to launch a gold-backed ruble as an attractive alternative to the U.S. dollar) in retaliation for aggressive U.S. foreign policy initiatives against China’s and Russia’s strategic allies Iran and Syria.

“The one source that we have I’ve known since 1979,” Hagmann continued.  “He started out as a patrol officer and currently he is now working for a federal agency under the umbrella of the Department of Homeland Security; he’s in a position to know what policies are being initiated, what policies are being planned at this point, and he’s telling us right now—look, what you’re seeing is just the tip of the iceberg.  We are preparing, we, meaning the government, we are preparing for a massive civil war in this country.”

“There’s no hyperbole here,” he added, echoing Trends Research Institute’s Founder Gerald Celente’s forecast of last year.  Celente expects a collapse of the U.S. dollar and riots in America some time this year.

Since Celente’s ‘Civil War’ prediction of last year, executive orders NDAA and National Defense Resources Preparedness were signed into law by President Obama, which are both politically damaging actions taken by a sitting president.

And most recently, requests made by the DHS for the procurement of 450 million rounds of hollow-point ammunition only fuels speculation of an upcoming tragic event expected on American soil.

These major events, as shocking to the American people as they are, have taken place during an election year.

Escalating preparatory activities by the executive branch and DHS throughout the last decade—from the Patriot Act, to countless executive orders drafted to suspend (or strip) American civil liberties  “are just the beginning” of the nightmare to come, Hagmann said.

He added, “It’s going to get so much worse toward the election, and I’m not even sure we’re going to have an election in this country.  It’s going to be that bad, and this, as well, is coming from my sources.  But one source in particular said, ‘look, you don’t understand how bad it is.’  This stuff is real; these people, the Department of Homeland Security (DHS), they are ready to fight the American people.”

TruNews Wiles asked Hagmann: who does the DHS expect to fight, in particular?  Another North versus South, the Yankees against the Confederates?  Hagmann stated the situation is far worse than a struggle between any two factions within the U.S.; it’s an anticipated nationwide emergency event centered on the nation’s currency.

“What they [DHS] are expecting, and again, this is according to my sources, what they’re expecting is the un-sustainability of the American dollar,” Hagmann said.  “And we know for a fact that we can no longer service our debt.  There’s going to be a period of hyperinflation . . . the dollar will be worthless . . . The economic collapse will be so severe, people won’t be ready for this.”

Source: Full TruNews interview, May 2, 2012.

KWN Cyber Attacked Following Gold Market’s Deep-Throat Interview—The Secrets of the Temple Revealed

King World News is under a vicious ‘distributed denial of service’ cyber attack once again, according to GATA.org.

The attack on Friday of KWN’s servers is the latest of several previous attempts to disrupt Eric King’s broadcast of interviews that expose to the public the extent of the JP Morgan precious metals manipulation scheme—a scheme in full progress, yet still not resolved by the CFTC after two-plus years of the watchdog’s ‘review’ of the evidence. Sign-up for my 100% FREE Alerts

Friday’s attack is believed to have been prompted by proprietary trading data offered up by KWN’s Anonymous London trader regarding a large “Asian buyer” and this buyer’s trading patterns.  It now appears that, according to Anonymous, this large buyer has successfully ‘cracked the code’ of JP Morgan’s equally-large client’s algorithm used to achieve optimum and cost-effective price-suppression tactics in the gold and silver market.  The motive for such a criminal act is obvious to international financiers: capping the gold price lends support to the US dollar.

“Interestingly, the Asian buyers have figured out the algorithms, like breaking an enemy’s code in war, and they are using the algorithmic trading to get the best prices each day for physical gold at these levels,” Anonymous told KWN in the interview that apparently prompted the attack. “The trading is just taking place at lower levels because these bullion banks and the Fed, which manage the price of gold, get overzealous in their price fixing.”

Beginning with the GATA roundtable discussion in March 2010 regarding a vital and material witness to the scheme, Andrew Maguire, and the suspicious mob-like hit-and-run incident that threatened the lives of Maguire and his female companion shortly after Maguire’s shocking announcement of his meeting with the CFTC about the JP Morgan scheme, some person or organized cyber cabal has periodically attacked King’s servers following key interviews with experts providing play-by-play commentary of the ongoing financial crimes committed by the beleaguered Fed and its primary dealer network.

GATA’s decade-long work has demonstrated how the precious metals manipulation scheme works in impressive detail, but prosecution of the case requires a witness to the fact alleged by GATA; that witness is Andrew Maguire.

Two years later, the attacks started again—and the subject of manipulation discussed by one of the world’s leading experts of the gold market, Jim Sinclair of JSMineset.com, as well as Anonymous’ witness to the “Asian buyer’s” entry into the fray, was again the catalyst for the DDoS barrage.

“The attacks started when the London trader interview piece was released April 5,” King told GATA, Friday.  “The attacks continued and intensified when our interview with Jim Sinclair’s futures market analyst, Dan Norcini, was published on April 11.  A very powerful entity did not want this information out there.” Emphasis added.

Due to privacy laws on both sides of the trade, JP Morgan’s large naked short sell-side client can’t be revealed, and the buyer’s identity can’t be disclosed either.  But the overwhelming suspicion by the gold market’s premiere experts as to whom JP Morgan’s big naked short-seller is points to the NY Fed.

Consultant to the Department of Defense Jim Rickards in his interview with TruNews Radio of Apr. 11, explains the grossly unappreciated role gold plays in geopolitics between the US and the biggest Asian buyer of the precious metal, gold: China.  But Rickards stops short at the time of the punch line.

“So Russia, China, Brazil, the other BRICS countries that you mentioned have very large dollar holdings,” Rickards told TruNews’ Rick Wiles.  “So they’re watching their savings account in effect evaporate or melt as we cheapen the dollar, so they’re looking for alternatives.  One of them is gold, but gold is very difficult to find and when you start buying it you tend to drive the price upSo if you want to buy a lot you’re going to be paying higher and higher prices.” Emphasis added.

Precisely.  China needs a counterparty to provide ‘dig up’ the gold—the weak hands.

What Rickards neglects to add in the interview with TruNews is that, for China to offer an alternative to the dollar in a new reserve currency scheme endgame, it will have to match the US’s alleged 8,150 tons and the Europe’s verified 10,000 tons of European gold to earn a seat at the BIS table.  Why else would there be a reason for a meeting in the first place?

Is it any wonder why the Germans refused to back the EFSF with German gold?  It also explains why the US and now, Germany, have no interest in auditing their respective gold holdings.  Military capabilities, oil reserves and gold holdings are secrets necessary for national security.  How much gold does China really have?  No one knows.  All mined gold within China’s borders and procured directly by the PboC are not necessarily accounted for in official disclosures.  The same can be said of Singapore and other ‘money center’ jurisdictions.

Moreover, if China’s “savings” are dominated with and denominated in dollars and euros, what would give China the upper hand in the negotiations to have the renminbi included in a new gold-backed SDR?  A collapsed dollar and euro won’t include trade surpluses anytime soon for China with a heavily weighted trade component to its GDP.  Therefore, it’s fiat currency reserves won’t mean much now that the jig is up for the dollar, and by extension the euro, of which, together represent approximately 88 percent of global paper reserves.

Therefore, Beijing needs to replace as much of its dollar holdings to gold holdings while the dollar remains a viable trading currency.  And Beijing has the patience to play the other side of the Blythe Masters gold giveaway trade.  Beijing has no plans to trash the dollar at this time unless it wants to use it as a weapon in the geopolitics of Iran—which incidentally would like to receive gold for its oil if push comes to shove in its maneuver to counter a SWIFT blockade.  Russia’s military approves of Iran’s decision.

No one is trying to run down Jim Rickards in the street.  And that’s why the Anonymous’ play-by-play of the real war has the NY Fed frantic.  Is it a coincidence that Blythe Masters has suddenly begun to make appearances on financial television to ‘explain’ JP Morgan’s position on the matter of manipulation.  And who else has the clout to impede a CFTC determination of whether the gold and silver market have been, and are, manipulated? Sign-up for my 100% FREE Alerts

German Bundesbank’s “Incredible Gold Scandal”

“The incredible gold scandal,” the German newspaper BILD began its article about the disposition of Germany’s mysterious gold holdings following the collapse of Lehman Brothers in 2009.

Growing pressure from the German people and politicians exerted upon its central bank, the Bundesbank, to audit the nation’s gold reserves intensifies, running parallel with escalating anxieties felt by German taxpayers for more than two years leading up to Greece’s to-big-to-pay $18 billion interest payment deadline of March 20, 2012.  Sign-up for my 100% FREE Alerts

Everyone knows that Greece doesn’t have the money, and the big money has bet that Greece will have to officially default on the 20th, as evidenced by the one-year Greek bill, which topped 1,100 percent this week.  Hedge fund managers have spoken: Greece is done with the euro.

Now it becomes a scramble for the gold.

Considering the ominous Greek sovereign debt backdrop, a suspicious Germany now wants to know where its gold is stored, as the last audit made in 2007 clearly indicates that the Bundesbank skipped its 2010 audit.

Just as pressure has been applied on the Fed by U.S .Rep. Ron Paul to agree to an audit of U.S. Treasury gold held at Ft. Knox and West Point, Germany may have to break the rules, too, by stonewalling the country’s elected representatives on the matter of its gold reserves.

“A clear breach of the law,” top Bilanzrechtler Prof. Jörg Baetge told BILD. “At least every three years to control counts the bars are made. [Google translation]”

When Germany’s controversial member of the Bundestag, Phillip Missfelder, inquired into the reason for the missed audit by the Bundesbank, the 32-year-old  chairman of the Junge Union received a series of Fed-like responses from Germany’s central bank.

“I was shocked,” Missfelder told BILD.  “First they said that there was no list.  Then there were lists that are secret.  Then I was told, demands endanger the trust between alliance bank and the Fed. [Google translation]”

A skipped audit, and now, peculiar responses from one of the most respected central banks, regarding the world’s second-largest sovereign gold stockpile (after the United States) has gold bugs wondering if German gold has been essentially held hostage at the NY Fed to prevent another explosive run in the gold price.

Coincidentally, or not, some traders suspect that Venezuela’s Hugo Chavez’s repatriation of 99 tons of gold from London vaults created a nearly 25 percent jump in price during the un-seasonal summer rally in gold of last year.

But in the case of Germany’s 3,401 tons, of which approximately 60 percent (2,000 tons) is rumored to be stored outside of Frankfurt, a potential move in the gold price from an unwind of 20 times more potentially re-hypothicated gold (levered as much as 100:1) could take out gold $5,000, $10,000, $20,000 or more, easily, if Germany insisted that its gold (possibly rehypothicated) be returned to its own vaults.

A leveraged gold market of approximately 100:1 would, in effect, translate to 200,000 tons (2,000 x 100) removed from the gold market (or any fraction of that amount).  That cannot happen without a total and immediate implosion of the world’s Western fiat currencies (in terms of gold).  It’s too much gold to unwind and continue on the facade of viable Western fiat currencies.

Therefore, German gold moving back to Germany won’t happen.  London’s scramble to find 99 tons for Chavez is one thing; finding as much as 2,000 tons to ship to Frankfurt is quite another.

Missfelder told BILD, “It may be that is the gold assets of the German apparently violate any applicable accounting law.  This is a case for Parliament.  I call for a clear view. [Google translation]”

Aside from the heat that Germany has taken for more than two years in its fight against pledging its country’s people as collateral for Greek fiscal profligacy, Germany has another, even bigger problem.  That is: how to repatriate German gold without destroying all hope of keeping the post-Bretton Woods fantasy alive.

Will Germany ultimately take the big hit at the endgame of dollar hegemony?

Author of Currency Wars, Jim Rickards, believes that German gold has, de facto, been confiscated, already.  If any mention from the officialdom in Berlin that it seeks to repatriate its gold reserves could force Washington’s hand to refuse the request and confiscate the up-to 2,000 tons of gold held at the NY Fed.

“ . . . as I’ve described in the book Currency Wars, if the U.S. gets into extreme distress, and there’s a collapse in the dollar, I have no doubt that in an emergency basis the U.S. will basically confiscate all the gold in their possession,” Rickards told King World News in mid-November.  “Then they will convert it to back up a new gold based U.S. dollar as plan B or some way to stop the crisis.”

Rickards continued, “So it’s a political question for Germany as to whether they want their gold back, but sometimes you don’t ask questions if you don’t think you are going to like the answer.  It would be interesting if Germany demanded that gold be shipped to Frankfurt or Berlin what the U.S. would say.”  Sign-up for my 100% FREE Alerts

Marc Faber’s latest take on the Gold Price

After gold’s nearly $150 rebound from its December low, Marc Faber continues to believe that gold is not done with its correction, but he recommends the precious metal during an environment of negative real yields on U.S. Treasuries engineered by a Bernanke Fed. Sign-up for my 100% FREE Stock Alerts

Speaking with Fox Business on Jan. 17, the publisher of the Gloom Boom Doom Report suggests that, in response to record-low interest rates, investors should accumulate a “little bit” of gold each month instead of trying to pick a bottom in the gold price and going all in.

For approximately a decade, Faber has liked assets, which have historically benefited from widening U.S. current account deficits and central bank money printing, especially following 9-11.  For most investors, today, that means holding stocks and precious metals.

“Well, I think that eventually you want to be positioned more in equities than in government bonds, and you want to own some precious metals as well,” Faber said as a response by investors to future inflationary pressures he expects as a result of rapid money supply expansion and continued $1+ trillion U.S. budget deficits.

When asked about a gold price within range of $1,650, Faber took the contrarian viewpoint held by many gold market analysts and technicians.

Taking the opposing position of those held by 40-year veteran Jim Sinclair of JSMineset.com, currency specialist Jim Rickards, and another veteran gold analyst GoldMoney’s James Turk (who believe the lows in gold had been reached in early January), Faber apparently still harbors the notion that gold could drop to as low as the $1,100 to $1,200 range before beginning its next move to all-time highs.

“Well, I like it [gold], yes, but I think the correction is not over yet,” he said.  “I think, we had a big correction from the peak September 6 when gold hit $1,921.  We went down to around $1,522 at the end of December.  Now we’ve rebounded above $1,600.  I think we can have another leg down.”

In September 2011, Faber told CNBC, ““We’re now close to bottoming at $1,500, and if that doesn’t hold it could bottom to between $1,100-1,200.”  So, Faber remains unconvinced that the gold price has bottomed.  See BER article, Marc Faber Releases Gloom Boom Doom Report.

In countless previous interviews, Faber has said he would never sell his gold due to its special historically based role as insurance against profligate government spending, expansionary central bank monetary policy or financial disaster.

“If I were an investor or a saver I would buy every month, a little bit, and not everything at the same time, because what you want to essentially have is an insurance policy,” Faber suggested.

As no surprise to those already familiar with Faber’s thinking, he has recommended that investors stay far away from U.S. Treasury debt, a viewpoint also held by another popular investment guru, Jim Rogers of Rogers Holdings—who, by the way, is short U.S. bonds.

Faber has said repeatedly that at some point bonds will fall and interest rates will rise, but he doesn’t know when that will happen.

“It’s very difficult to tell when the central banks are manipulating and keeping interest rates artificially low,” he said.

Though not asked during this interview, Faber routinely gives a similar response to journalists who ask him how high gold can go before the gold bull market comes to an end.  His pat response is usually, “I don’t know; you’ll have to ask Mr. Bernanke.”  Sign-up for my 100% FREE Stock Alerts

Silver price: Hey Silver Bugs, You Cryin’ Yet?

The more silver bugs cry as they watch the latest breakdown in the silver price the better it is for the rest who will make it through to the other side of the biggest financial crisis since the Civil War.  Sign-up for my 100% FREE Alerts

Take in the economic scenario the Fed faces, then ask yourself what the Fed will do about it and which planet will the silver price orbit after the dust settles.  Here are the facts that should calm investor fears:

“Let us be honest. The U.S. is still trapped in a depression a full 18 months into zero interest rates, quantitative easing (QE), and fiscal stimulus that has pushed the budget deficit above 10pc of GDP,” The Telegraph’s Ambrose Evans-Pritchard penned in a Jul. 4, 2010 article.

Now look at Shadowstats economist John Williams’ chart, below.  GDP is again dropping, 18 more months later, from Evan-Pritchard’s last year’s Independence Day article. (The real GDP is calculated by Williams, shown by the blue line.)

Now, take a look at the number of U.S. food stamps recipients?  Does the graph, below, square with an employment rebound?

If the economy has been on the mend, slowly creating jobs for nearly a year now, why have there been 4 million more food stamps recipients in the U.S. since July 4, 2010?

Note the blue line in John Williams’ graph, below.  That’s the real unemployment rate (approximately 22.5 percent)—the rate that would have been reported by the BLS during President Ronald Reagan’s first term (1981-85).

And the jobs created which blunted a crashing jobs market have been the throwaway kind.  See BER article, Gerald Celente:  Brace for Economic 9/11.  The trends forecaster describes the type of jobs created, mostly the type of local jobs that you would find on the tropical island of Fiji, not the high quality jobs found in Germany or Switzerland.

And it’s about to get worse, as Celente predicts.

The U.S. is “tipping into a new recession,” ECRI’s Lakshman Achuthan told Bloomberg Radio on Sept. 30  “We don’t make these calls lightly. When we make them, it’s because there’s an overwhelming objective message coming out of our forward-looking indicators. What is going on with the leading indicators is wildfire; it’s not reversible.”

Since Sept. 30, Achuthan hasn’t budged from his dire forecast.  (See Economic Cycle Research Institute—ECRI, here and, of Dec. 9, here.)

Okay, the Fed faces a U.S. economy that’s rolling over—again—from an already negative GDP, according to John Williams.

So, what will the Fed print to prevent an economic collapse?

Watch it; it’s a trick question!  Jim Rogers explains in a Dec. 14 interview with TheStreet:

TheStreet Reporter: What should the Fed do at their upcoming meeting, aside from QE3?  We’ve seen more Fed presidents come out and call for more monetary easing.  What should they really do?

Jim Rogers: They’re already, Alex, they’re already . . . QE3 is already here, Alex.  Get out the numbers for non-seasonally adjusted M2, and you will see that Mr. Bernanke said, in the summer, we’re going to keep rates artificially low. You can’t just say the words, you got to do something.

Rogers goes on to say that the Fed hasn’t stopped printing money since QE2; it just wants people to think it has.  And thanks to a complicit media, whose been told to repeat the con over and over in an effort to prevent a bona fide run on currencies, some investors still believe the Fed has stopped printing.

Look at the chart, below.  A couple of months ago, the Fed was expanding M2 money supply by 20 percent!  That’s a rate that even former Fed Chairman under President Nixon, Arthur Burns, would blush at, as the maestro of the 60s and 70s presided over the highest U.S. inflation rate since the Civil War.

The Fed never stopped printing!

Silver investors now wait for Bernanke to announce even more printing! That’s when the top blows off the gold and silver market, according to Jim Rogers, Peter Schiff, Jim Rickards, Marc Faber, James Turk, James Sinclair and FX Concepts John Taylor.

That signal could come in late January, maybe tomorrow, or next week, but it’s coming.  Let’s see what more Fed money printing will be called this time.

Back to the Rogers interview.  Notice how the scripted question by TheStreet reporter was written in a way to fool the public into thinking that the Fed hasn’t been printing money since so-called QE2 ended on June 30?

It’s the ol’ leading the witness trick, with a false premise to plant a lie in the minds of the observers, to throw them off the track to the truth.   At least TheStreet reporter didn’t stoop to the, “Well, of course you’re going to say that, Jim, you sell your Rogers Commodity Fund” line, or something along those lines.

Here’s another example of the vicious propaganda thrown at some pretty smart guys who warn of a coming tsunami of commodities price inflation in 2012:  Witness the Marc Faber interview on CNBC, last week.

In his interview with CNBC’s ‘working girl’, Maria Bartiromo, Marc Faber got the better of the dullard Bartiromo, working her over pretty well (if she noticed).  Faber’s had 20+ years experience dealing with such nonsense during his time living in Thailand.

Do a Google Images search on the term, “Maria Bartiromo.”  You’ll see endless poses in the search results.  That’s what CNBC thinks of you—a 20-year-old drunk on a Thai vacation.

Bartiromo, after hearing Faber’s gruesome assessment of the world economy, said, “Okay, you think the world is ending, so which five stocks would you buy?”

By the way, if you didn’t listen to the Bartiromo interview, Faber outdid himself with yet another one his great Faberism.  He retorted, “I Have A Very Special Stock Tip For You. The Symbol Is G-O-L-D.”  Now, that’s a great Faberism!

And finally, and more dramatically, The Hat Trick Letter’s Jim Willie explains the Fed con in a really classic Jim Willie style—his style is the rambling and information-packed rant!  See BER article and link to audio interview here.  Willie covers almost everything in this interview that silver investors should know.

So we see sub-$30 silver.

Now for the question that’s on everyone’s mind . . . drum roll please. . . how far will the silver fall?

And the answer is the same as it has been since the bull market began in 2002: When every last ripe apple falls from the shaken tree.  That’s when the price will stop falling.

And right now, the tree needs to be shaken as hard as the Fed can shake it, because the next move up in silver will most likely be akin to the last one.

You remember, the move from $17.50 to $49.94, from August 2010 to April 2011, a 177 percent price explosion higher within 8 months?!

The Fed would just prefer the base of the next move for silver (gold, too, as well as oil and other commodities) is lower before the massive catapult higher.  Also, remember, north of $50 in the price of silver unleashes the metal; there is no resistance levels above that price.  This is the last stand for the Fed, and it will make the best of it.