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.”

Surprise Second-Half Gold Rally, Says Guru Economist

The man whose passion for urging investors to load up on gold bullion since the Fed tipped its monetary policy hand following the collapse of Lehman Brothers in 2008, has jumped a notch in intensity in his latest update for gold investors.

Stephen Leeb, economist and best-selling author, told King World News Washington lawmakers and Federal Reserve Board of Governors have been so reckless with their handling of U.S. budget deficits and monetary policy in response to the collapse of the global credit Ponzi scheme that he wants to move to Canada before the crisis in Europe blows up—because, after all, a repeat of the past will most likely strike again.  Sign-up for my 100% FREE Alerts

It was Europe that triggered the greatest economic depression in U.S. history—the Global Depression of 1873-96.  Then it was the U.S.’s turn to return the favor during the decade of the 1930s following the 1929 U.S. stock market crash which quickly spread to London, Paris and across the rest of continental Europe.

According to Leeb, the relatively sanguine Leading Economic Indicators (LEI) data streaming in of late is now topping.  The second half of the year will reveal what the Fed most likely already knows is coming, a catastrophe—the beginning of the next leg down in the global economy that will turn the most defiant of the reality confronting the U.S. into true believers.

Jim Rogers of Rogers Holdings and economist John Williams of shadowStats.com, too, expect the worst of the trouble to gather steam after the election.  The Fed is expected to preempt the downturn in the LEI with more QE.

“QE3 to me seems to be a 80-20 probability right now, within the next 3-4 months, or maybe even 90-10 given that there’s an election out there,” said Leeb. “I don’t see any reason not to be in gold at this point, even from a relatively short-term basis.”

“Long term, the case is so powerful it’s . . you know . . it’s crazy,” Leeb added. “Gold, gold junior miners, you know, you’re not going to believe what it gets to in five years.  I mean this is a gift—all these prices at this point, all of them.”

Leeb goes on to say the eurozone is seriously flawed, as the Maastricht Treaty of 1992 didn’t account for the problems that may arise considering the disparate economic models between member nations.  As an example, Germany’s culture of production and stable fiscal and monetary policy starkly contrasts with Spain’s culture of collectivism leanings and zestful social lifestyle.

“The euro is not going to last . . . Spain right now has about 25 percent unemployment, Leeb explained.  “They’re being forced to be austere to satisfy the needs of the euro, and that’s just not going to fly.  It’s no going to fly.”

Unlike some economies, such as the United States of post WWII, massive debt and deficits incurred by Spain cannot be grown into, according to Leeb.  U.S. production capacity and global position relative to its competitors after the devastation of Europe during WWII allowed U.S. deficits approaching 30 percent of GDP to quickly shrink to a surplus within several short years.  In contrast to the example of Spain, its model and position on the world stage cannot achieve anywhere near similar results.  Ditto for Greece, Portugal and other European nations.

“What does Spain produce?  I’m not even sure what Spain produces . . . They’re not a country that can really grow their way out of the kind of mess that they’re in right now.  And if that’s the case, soon or later something is going to break.

“And curiously enough, Eric, that is what’s holding gold; that’s the difference between gold being $1,600 today and gold being at maybe $2,500.”

Leeb continued by telling investors that the price of gold today already reflects the expectation of another plunge in the gold price in sympathy with a collapse in the euro, similar to the drop in gold following the surprise collapse of Lehman Brothers and the immediate liquidity a sold gold position provided the global financial system during that crisis in 2008.

Is FX Concept’s John Taylor wrong about gold’s probable fall to the $1,000-$1,200 level before retracing to new highs?  And for the time frame of his prediction, Taylor said in a Bloomberg interview in the summer of 2011 that sometime in April or May (of 2012) gold would become a super bargain.

Leeb says, probably not so.

“ . . . in Europe, it’s the same kind of calculus [a Lehman-like event].  People feel that there will be a major event.  When, is the only question,” Leeb said.  “And they’re a little bit scared to get into gold with both feet until that event is out of the way.  So my advice to people is, not buy that conventional wisdom because, it doesn’t usually play out the way people think [it will play out].

“But if it does, have a little money in reserve because, any drop you see in gold based on some catastrophe in Europe is probably going to be the greatest buying opportunity of your life.  And I’m not really kidding about that.”

Leeb is so convinced of gold’s meteoric rise following a potential sharp drop in its price that he even suggested buying the precious metal using margin.  Sign-up for my 100% FREE Alerts

Source: KWN

Silver Bugs: Toughen Up & Hang Tight

In his latest comments on King World News, Trader Dan Norcini of Jim Sinclair’s JSMineset.com makes a great point—a point which may turn out to be the most critical to newcomers of the silver market.  Volatility has been tremendous lately in all commodities markets. But in the silver market, volatility is the norm.

Bottom line for silver investors: if volatility scares you, get over it, or get out!  Sign-up for my 100% FREE Alerts

Unless you’re in this thing for the long haul, trade AAPL or some other stock, because the Fed is intentionally creating volatility in the commodities markets to keep wimps, amateur traders the uninformed out of the silver market.  In fact, Bernanke would like to punish traders.

“We have tremendous whipsaw action in commodities.  It’s so wild right now in terms of the trading swings. . . ,” Norcini told King World News, Friday.

“In my opinion, the Fed and the Working Group on Financial Markets have been actively manipulating key markets.  The Fed has been doing this manipulation in an attempt to push investors back into the stock market and out of commodities and hard assets.”

If you’re new to the silver market because due diligence brought you to the precious metal, stick to the buy side, first of all.  Second, don’t be a fool and trade it.  You must exhibit discipline.  And third, stop waiting for wonderful prices!  Anything below $50 is a wonderful price, if your research has told you anything.

As a suggestion, Google “Stephen Leeb site: kingworldnews.com” or go to FinancialSense.com and listen to Leeb’s past three interviews.  You feel good at buying silver at $30, $40 or $50.  So, at $32, silver, according to Leeb, is a joke.

Back to Norciini: “The Working Group on Financial Markets (aka Plunge Protection Team—PPT) then goes in and starts putting heavy pressure on key commodities, which triggers a cascade of sell orders,” Norcini added.

So the point is: unless you’re privy to the PPT’s next attack, stop trading silver!  The Max Keiser Casino Gulag is stacked against the trader in the silver market.

Norciini rightfully points out as well that, part of the Fed’s plan of incrementally capping commodities prices is to make the markets very volatile for the 90 percent of the public who can’t take the heat—the wimps, if you will.  If you’re looking for another smooth ride from a lifeboat off this sinking Titanic, too bad, there’s is none.

“The Fed is literally undercutting the value of the dollar and they are causing a lot of repercussions around the globe. . . ,” Norcici continued.  “The other countries are not run by fools and they understand the destructive policies of the Fed.”

Norcini makes another good point:  Mom and pop investors have traditionally played the fool.  Nation states with lots of capital move money into extended macro trends, and so should you.  As prices fall, sovereign wealth funds go to work by accumulating what they want.  Copy the flows of the big money and you’ll be carried along for the ride, not whipsawed.

And finally, if you’ve listened to Jim Sinclair for any length of time, you should be laughing each time the Fed threatens to stop its so-called ‘quantitative easing’ or Bernanke suggests that the U.S. economy is on the mend, which would then preclude further money printing.

When the aforementioned wimps panic out of the silver market because they continue to play the mom-and-pop fool to Bernanke’s lies and deceit, you better be buying with the Chinese on the pullbacks.

The only troubling decision to be made in the silver market is when to ultimately sell your stash, if it all.  Buying the metal and holding it should be a very easy thing to do.  Sign-up for my 100% FREE Alerts

Worried About $6 gas? Try $8

With oil prices remaining stubbornly above the $100 per barrel mark for WTIC, calls for $6 gas in the U.S. as a consequence of an attack on Iran may turn out to be a rather conservative, maybe even a low-ball estimate.

According to Bloomberg, the average price paid at the pump has recently jumped above $4, again, with the charts suggesting a breakout to test the all-time high of $4.50 set in May 2011 is pennies away.  And the month of March still has more than a week left. Sign-up for my 100% FREE Alerts

“Bloomberg’s U.S. Average Gasoline price index, we are now back above $4 per gallon for the first time since May 2011,” Zerohedge.com reported.  “We also note that the average price for a gallon of gas across the EU is inching ever closer to the $10 mark.”

Loose monetary policies among G-8 member nations, Peak Oil, and Persian Gulf tension—which have now begun escalating to the highest threat of military action since the 1980-88 Iran/Iraq War—have conspired to lift gas prices to levels which may appear high, today.   But $105 WTIC and $4 gasoline may, in retrospect, turn to fading memories of the ‘good old days’ some economists speculate.

In late February, economist, author and money manager Stephen Leeb told King World News he expects a record gas price this summer.  The author of Red Alert said the oil market has entered the perfect storm.

“March is now on the way, and we are seeing very high prices for gasoline at the pump,” Leeb told KWN in a Feb. 22 interview.  “ . . . we are continuing to see higher prices for gasoline and it may even hit record highs.  In fact, I think they will hit record highs and we will see a minimum of $6 per gallon gasoline in the United States this summer.”

Leeb cites China’s decision to loosen monetary policy as well as tight oil supplies in the oil patch as the basis for his expectations.

But a military conflict with Iran could throw Leeb’s $6 price target far off the mark, as approximately 17 percent of the world’s oil supply could be shut out for, not a matter of weeks as the Pentagon has estimated, but months, according to Caitlin Talmadge, fellow at the John M. Olin Institute for Strategic Studies at Harvard University.

Talmadge stated in her article, entitled, Closing Time: Assessing the Iranian Threat to the Strait of Hormuz, Iran possess the capabilities of mining the Strait of Hormuz with nearly 1,000 mines or more, as well as achieving the capacity to attack U.S. mine countermeasure (MCM) ships with land-based, anti-ship cruise missiles (ASCAMs).

According to Talmadge, before the U.S. could embark on a dangerous mine-clearing mission, it first must conduct an aerial “hunt” for Iran’s ASCAMs, a hunt which “could add days, weeks, or even months” in addition to the time needed to clear the Strait.

“Iran possesses a larger stockpile of missiles and mines ten times as powerful as those used in the tanker wars of the 1980s, the last period of sustained naval conflict in the gulf,” she explained.  “If Iran managed to lay even a relatively small number of these mines in the strait, the United States certainly would act to clear the area. But the experience of past mine-warfare campaigns suggests that it could take many weeks, even months, to restore the full flow of commerce, and more time still for the oil markets to be convinced that stability had returned.”

CEO of Sprott Assett Management USA Rick Rule told KWN on Tuesday that he believes an attack on Iran could take oil to levels beyond $150 per barrel WTIC, much beyond.  According to Rule, “there is virtually no limit to the upside for oil prices. The oil price could easily double.”

Moreover, oil trading above $200 per barrel could easily take gasoline to $8 in the U.S., as a panic to secure already-tight global supplies could shock the American people into another significant downturn in the U.S. economy, more Fed monetary stimulus in response to the crisis, as well as technical support at much higher oil prices, irrespective of the eventual opening of the Strait of Hormuz possibly months into the future.

Insurers of carriers of crude may take an additional time period before becoming comfortable writing insurance on the oil tankers within the region.

In that grim scenario, Leeb said in his Feb. 22 KWN interview, “This could turn into really tough times.”

And added, “Because the economy will be struggling in that environment, we could see QE3 in the midst of already record high gasoline prices.  Now that will be wildly inflationary.” Sign-up for my 100% FREE Alerts

What Happened to the Anonymous London Trader’s Intel?

As the silver price breaks below $32, precious metals investors will soon see whether KWN’s mysterious London trader is correct, or not, about the Chinese exercising “massive accumulation” orders “on dips” below $33.

“The Chinese are doing the exact same thing in the silver market that they are doing in the gold market, massive accumulation on dips,” Anonymous told KWN’s Eric King in a Mar. 8 interview. Sign-up for my 100% FREE Alerts

Whether the paper market holds somewhere near $33 isn’t relevant to the long-term holders of silver, it’s timing the purchases along with the elephant buyer in Beijing that has traders wondering about Anonymous.  It would, however, be nice to know that someone with access to the same internal data as JP Morgan could be indeed a blessing to the ‘good guys’ in the war to free the public from the tyranny of the banking cartel.

“The physical silver orders that were just filled have been waiting since February 16th,” Anonymous continued.  “Those orders near the $33 level were filled in huge size on Tuesday.  These long-term accumulators are buying every dip.  There were some fills at $34, but some very large orders were filled near $33.”

Below, is a chart of silver, using monthly data and Richard Russell’s favorite moving average parameters for the precious metals of 20 and 40 months.

According to the chart, silver’s 20-month MA stands at $32.71, a price consistent with expected levels of buy orders.  So, Anonymous’ intelligence appears to square with the charts.

Anonymous also pointed out in his Mar. 8 interview, as well as in previous interviews that, the Chinese have embarked on a substantial buying spree in both precious metals, gold and silver.  That, too, jibes with Leeb Capital Management’s Stephen Leeb’s contention.

Leeb, the author of Red Alert: How China’s Growing Prosperity Threatens the American Way of Life, has passionately advised silver investors to accumulate the white metal along with the Chinese, who view silver as vital to Beijing’s plans for transforming the People’s Republic into a heavy user of alternative energy in the post-Peak Oil era.

According to Leeb, the Chinese are “frantic” about stockpiling silver, as alternative energy products such as windmills and solar panels cannot be manufactured without it.  Silver is a “vital” commodity to the Chinese (and others seeking to wean off fossil fuels), according to Leeb.

There is no economically viable substitute for silver in applications that require the most efficient electrical conductivity and heat transfer properties.

Back to Anonymous, who said in the KWN Mar. 8 interview, “The Chinese are doing the exact same thing in the silver market that they are doing in the gold market, massive accumulation on dips.”

Whether the Chinese have suddenly pulled their buy orders below the $33 level (presumably to seek successful buy orders at lower prices), or not, Anonymous puts the silver trade into prospective for the long-term investor.

“As long as we stay under $34, there is going to be constant accumulation,”  Anonymous continued.  “What does it matter if you buy silver at $32 or $38, when it is going to go multiples higher from these levels?  The Chinese know this and that is why they are accumulating in size.”

Leeb agreed, and stated in a Jan. 31 interview on KWN, “I think the outlook for silver, both as an industrial metal and certainly as a monetary metal, is as bright as it can possibly be.  I’m sticking with my target of at least $100.  But I tell you, Eric, it will happen this year.  We are definitely headed for triple-digit silver in the not-too-distant future.”

Both Anonymous and Leeb recommend buying silver, monthly, weekly, or anytime cash becomes available.  But the point is: keep buying on significant pullbacks. Sign-up for my 100% FREE Alerts

Gold:Silver Ratio Screams BUY SILVER

If ever a chart signaled a time to buy, it’s the silver chart.  Breakouts are everywhere, with the big one at $37 still ahead of us.  Then there’s nothing between that price and $50.   Sign-up for my 100% FREE Alerts

But it may get much better, of course.  Silver investors are already aware of the explosive moves in the metal.  The chart (gold:silver ratio), below, serves as a visual reminder of how wild the runs can get when compared with the more tame precious metal cousin, gold.

Previous violent compressions of the gold:silver ratio manifested, starting on Oct. 3, 2003, when the ratio briefly touched 80 on a Friday (keep that in mind).  Silver closed at $4.80 on the day.  Six months later, on Apr. 6, 2004, the ratio bottomed at 51, for a drop of 36 percent in the ratio.  The silver price closed at $7.21, a gain of 50.2 percent for that period.

The more recent and ever more dramatic decline in the gold:silver ratio began on Jun. 4, 2010, when the ratio briefly touched 70, on a Friday.  The silver price closed at $17.41 per ounce.  Nearly 11 month later, on Apr. 29, 2011, the ratio pierced 31, for a drop of 56 percent.  Silver ended the day at $48.48, for a 178 percent gain for the 11-month hyperbolic move.

Then, of course, the raid on silver began within 30 minutes of the open of trading on Globex.  The silver price plunged nearly $6 in literally minutes, according to Kitco’s database for May 1 (May Day).

It appears that another compression rally is underway.  This time, on Dec. 30, the gold:silver ratio touched 57, again on a Friday.  Since then, the silver price has soared, taking the ratio back down to 51.  Silver closed at $27.86.  A ratio of 50, if broken, could start the avalanche to a much tighter ratio.  Everyone is watching closely.

So a compression in the gold:silver ratio to, say, the extent of the Oct. 3, 2003 – Apr. 6, 2004 rally of 36 percent, the new ratio calculates to 36.5 for this present move.  If the compression reaches the Jun. 4, 2010 – Apr. 29, 2012, rally, the ratio calculates to 25.

During the Oct. 3, 2003 – Apr. 6, 2004, silver rally, gold closed at $372.50 on Oct. 3 and $418.50, respectively, for a gain of 12.3 percent for that time period.  Silver rallied 50.2 percent during that period, or a 4.08 times more powerful move in favor of silver.

The monstrous rally in silver from Jun. 4, 2010 to Apr. 29, 2011, was a 178 percent move, against gold’s move of 28.3 percent—from $1,220 to $1565.70.  Silver’s move again trounced gold’s to the tune of 6.3 times!

Assuming gold and silver are indeed in a power move up and that Jon Nadler and Nouriel Roubini are dead wrong, the combinations of potential gold prices and ratios are too numerous to present here.

But let’s assume the 2010-11 rally in the precious metals repeats.  A 28.3 percent return on gold from the Dec. 29, 2011, close of $1,565.70 calculates to $2,009.  Taking a gold:silver ratio of 25 and dividing that number into $2,009, that calculates to a silver price of $80.36.

If to match the duration of 11 months from the 2010-11 silver rally to the present one, by year end, silver would reach $80.

But of course, after silver passes the $50 threshold, $100 is assumed to be the next target.  That’s the Stephen Leeb scenario, and it makes a lot of sense.  Traders love round number targets.  But then there’s the cartel who’s watching, too.  $100 might be their target, as well.

Richard Russell once stated that as far as the price of gold is concerned, traders will look at $2,000, $2,500, then $5,000, and then $10,000.  So, at $2,500 gold on this move and a ratio of 25 gives us that $100.  Sure makes David Morgan’s target of $60 tame, but traders would still make out like bandits.   Sign-up for my 100% FREE Alerts

Eastman Kodak Silver Scandal?

As we move into the next silver delivery month of February and the controversy surrounding the MF global bankruptcy still swirling in the minds of investors, the world’s largest consumer of silver, Eastman Kodak, files bankruptcy.  Sign-up for my 100% FREE Stock Alerts

The timing of Eastman Kodak’s bankruptcy, the massive amount of silver it consumes each year, as well as the consulting firm hired to sort out the mess will most likely make for another interesting conspiracy theory, indeed.

Eastman Kodak filed for Chapter 11 bankruptcy on Jan. 19.  The 131-year-old company manufactures photography equipment and paper, printers and other products.  According to Bloomberg News, Eastman Kodak consumes approximately 8.5 million ounces, or $300 million worth of silver, each year for its manufactured goods and supplies.

Though 8.5 million ounces of silver doesn’t appear to be a lot of consumption each year, at this time of questionable supplies, it could be quite significant, especially when demand from investors and China for the white metal is rising at an alarming rate, while alleged inventories at the COMEX hover at 35 million ounces of unencumbered silver.

Economist and author of Red Alert: How China’s Growing Prosperity Threatens the American Way of Life, Stephen Leeb, believes Sprott Asset Management’s recent communique to investors (mere days before the EK bankruptcy) that stated the Sprott’s Canada-based silver PSLV fund intends to purchase 10 million ounces of silver, an amount slightly more than Eastman Kodak’s annual 8.5 million ounces, is quite a big deal.

“What people don’t realize about silver is how illiquid silver is, and how little physical silver that is available in the market,” Leeb explained.  “Now you have the Canadian, (Eric) Sprott, who has really been spot on for more than a decade, Sprott has just raised money and needs to take delivery of another 10 million ounces of silver.  My question is, from whom?  That’s the question.

“Who is he going to buy it from?  The Chinese, who need it for solar?  It’s not around.  10 million ounces doesn’t sound like such a big number, but when you have such illiquid markets, it is a big number.  In reality, it’s a very big number, especially when you already have shortages.  People are already hoarding silver.  The Chinese are also hoarding silver.

“When you have a situation like that, you haven’t seen anything yet in the way of a bull market in silver.  There’s no way of saying how high silver is going to go, but this is going to become an exceptionally scarce commodity.”

The Internet is already abuzz at the timing of the EK bankruptcy, and for obvious reasons.  If it weren’t for the mysterious and troubling case surrounding the MF Global scam, the EK bankruptcy would probably have gone away quietly into the night as the latest example of U.S. hegemonic decline.

But, like the handlers of the MF Global bankruptcy, who have demonstrable ties to the ringleader of the silver cartel, JP Morgan, EK’s bankruptcy will be handled by a ‘turn-around’ specialist from FTI Consulting, Vice Chairman Dominic Di Napoli, a man who has been unfortunate enough to have worked for the most sleazy operators of the financial industry, behind the kingpins of JP Morgan and Goldman Sachs.

“The company [EK] . . . named Dominic Di Napoli, a vice chairman at FTI Consulting Inc., as its chief restructuring officer to help steer the company through bankruptcy court,” the Wall Street Journal reported on Thursday.

From its Web site, it appears that FTI Consulting sports a rather long list of well-known financial clients, including JP Morgan, with several consultants listed and assigned to JP Morgan.  But the most interesting consultant at FTI Consulting is Dominic Di Napoli, himself.

From the FTI Consulting Web site:

Before joining FTI Consulting, Mr. Di Napoli led the consulting practices at PricewaterhouseCoopers (“PwC”) and Coopers & Lybrand. While at PwC, he also served as the managing partner within its U.S. Business Recovery Services practice, where he initiated the discussion that led to the subsequent acquisition by FTI Consulting. Emphasis added.

A review of PwC’s involvement in scandal reveals quite a few.  In fact, PwC has been the auditors of the most notorious financial scandals of the past 15 years, with the most recent black eye coming from its involvement with MF Global and the theft of client money by another cartel operative ‘The honorable’ Jon Corzine.

MF global is only the latest of PwC’s trail of ‘negligence’ and ‘bad behavior.’  According to Wiki, PwC was involved in improprieties with the companies AIG, Refco, General Re Corp, Berkshire Hathaway, Tyco, the Sityam fraud, Yukos prosecution scandal, the Global Trust Bank misconduct (leading to a one-year ban by India’s central bank from doing business in India), the Transneft Russia scandal and Britain’s Northern Rock case.

Prior to PwC, Mr. Di Napoli worked diligently for another firm, which apparently couldn’t play it straight either.  That firm is Zolfo Cooper, a company for whom he worked in the 1980s, according to Crain’s NY Business, but this fact was neglected as a mention on Di Napoli’s biography on the FTI consulting Web site.

“The Jersey City native and Montclair State College graduate joined Price Waterhouse’s fledgling corporate recovery division in 1984 after practicing at a bankruptcy boutique firm, Zolfo Cooper & Co,” Crain’s wrote in a ‘puff piece’ regarding the up-and-coming superstar of auditors, Dominic Di Napoli.

Zolfo Cooper, the same Zolfo Cooper whose partner, Neil Cooper, has been indicted in the Carroll Trust case, a case dubbed by Global Forensics Magazine as “bigger than Madoff.”

International News Networks reported:

New sensational disclosures in the Carroll Foundation Charitable Trust huge fraud scandal has revealed that Zolfo Cooper LLP the insolvency and restructuring firm’s principle partner Neil Cooper an accountant is understood to be confronting serious ongoing criminal allegations of conspiracy to defraud and racketeering following new revelations exposed in the American and British media reports on the case. It is understood that the FBI Washington DC field office has obtained explosive further Carroll Trust case files which are thought to contain Coutts Bank Gerald Carroll fraudulent accounts “linked” to dummy fraudulent HSBC International offshore corporations which effectively impulsed this massive offshore tax evasion fraud heist operation which stretches the globe.

So what is the point of all of this and Di Napoli?  Maybe nothing.  But couldn’t someone else have handled the EK bankruptcy case?  Couldn’t Bilderberg Group member Laura Tyson, an EK board member who resigned her post a couple of months before the bankruptcy announcement, have suggested someone else to handle the impending bankruptcy who wouldn’t possibly remind us of a criminal cartel operating in the global financial system?  Sign-up for my 100% FREE Stock Alerts

Silver Price: Attention All Crybabies, Get the Checkbook Out!

The tears stream from the faces of the silver bugs.  Boo-hoo!  Where’s my $100 silver?

Toughen up!  Better yet, go buy a 10-year Treasury, then.  I hear Greek 1-year paper is even better, paying out 150 percent.  What a deal!

Look! The Fed wants you OUT of precious metals.  Understand?  Sign-up for my 100% FREE Alerts

But before you hit that sell button, there are some pretty smart fellas who’ve done a lot of legwork and research on the subject of silver and see $100 as chump change when the dust settles from these manipulating bankers.  Keep the faith.

Physical buyers will break the cartel, and not by Max Keiser’s gang of JP Morgan haters getting together to clean out the COMEX, though Keiser’s laudable efforts will aid the cause of protecting investors from the Fed’s insanity.

No sir.  It will be China who will drive the silver price higher for all silver bugs.  So relax, be patient and enjoy.

One man who provides the silvery details to the China story, Stephen Leeb Ph. D, economist, NY Times best-selling author, and promoter of his latest book, Red Alert, is back to remind silver bugs of the bright future for the silver price in his latest  interview on GoldSeek Radio (GRS).  (Previous BER articles about Leeb and silver, click here and here.)

“Silver is an utterly critical metal when it comes to renewable energies, solar panels; there’s no other game in town,” Leeb told GSR.  “ . . . Silver-based solar is going to play a major part in our energy future . . . China used to export silver, now they’re importing, and they are very big importers.  And they [China] went on to say that they’re not going export any silver what so ever.”  Though China recently relaxed its strict export quota of rare earths, silver was not included in the increased export quota.  And for good reason, according to Leeb.

Who is Stephen Leeb.  He’s not the marquee name in Google’s search results.  He is not as well-known as Jim Rogers; he’s not Marc Faber; and he’s not Peter Schiff.

Leeb is, however, a prolific author and researcher who’s looked at China’s multi-decade economic plans—plans that require a monstrous amount of critical industrial metals, including silver, to fulfill a national, strategic goal of reducing fossil fuels consumption within the People’s Republic.  Leeb predicted the oil price would top $100 when it traded at $27.  Now, he’s more alarmed at what he has discovered about China’s future consumption needs for the new energy commodity, silver.  (See Robert Hirsch interview (audio) on the subject of Peak Oil on Financial Sense Newshour of Dec. 15.)

Leeb’s emphasis on detailed points about silver and its importance to renewable energy projects in China is ahead of the curve from most precious metals advocates—though, Rogers, in a broader sense, has already taken Leeb’s thesis regarding China voracious needs to include almost any commodity.  And according to Leeb (echoed by Jim Rogers), the supply and demand characteristics for silver in the renewable energy sector must include a much, much higher price.

“I do believe [$200] is not an unreasonable target” for silver, Leeb told GoldSeek Radio host Chris Waltzek.

Leeb believes the silver’s industrial usage for renewable energy will greatly outweigh its usefulness as protection against central banker monetary profligacy.  The need for silver will become a global security issue at some point, especially in the US, but the America must “wake up” to, first, address the issue of Peak Oil and publicly recognize the vital commodity for the next decade or two will be silver.

“But the problem is,” Leeb continued, “once it reaches one hundred [dollars], people start getting very, very nervous.  It’s a very, big broad round number and they [bankers and/or government] start taking action; they might consider outlawing the ownership of silver as a monetary metal.”

The future must include breaking from fossil fuels as a source of energy; there’s just not enough cheap oil to go around, and China doesn’t want to take on the U.S. military to get the amount of oil it needs to increase its own GDP, according to Leeb in an earlier interview on Financial Sense Newshour of Nov. 10.

Wind and solar power are the future, and China “gets it,” he said.

“Along with rare earths, which are obviously so vital, so critical, you also have copper, which is on no one’s radar screen as a potentially scarce metal,” Leeb said in his most recent GSR interview.  “And you have silver, which is on some people’s radar screen, but they don’t know if it’s like gold, a precious metal, or whether it’s an industrial metal. Well, it’s both.

“But I do believe that its primary purpose over the next five to 10 years is going to be as an industrial metal; it’s going to be critical to defining our energy future.  And China really does get this.  They’ve written about peak oil and they’ve written about peak coal.  So they’re preparing.”

Shedding some light on the probably plans for China’s $3.2 trillion reserve, Leeb expects a lot of that money as well as future reserves will be spent on stockpiling strategic metals instead of using the cash to build a powerful war machine to match Russia to collectively compete directly against the U.S. and its allies during the remainder of the decade—speculatively speaking, a sort of a Sun Tzu tactic inspired by the book, The Art of War (English translation & Wiki synopsis), which has been reported by several sources as required reading for all Beijing senior officials.

“Their major expenditures . . . they have cited seven industries, of which, the most important, are energy based industries, which they plan to spend, I would guess, nearly $5 trillion to the end of the decade.  That’s the equivalent to two world wars . . . and they’re going to spend that over the next eight or nine years.”

How much silver will be needed during this $5 trillion outlay in renewable energy projects in China?  “Mind-boggling” amounts, according to Leeb.  And as far as price, Leeb steps up his $200 per ounce easy layup prediction to venture into much bigger price levels as possibilities for the white metal.

“There’s no way of saying how high it [silver] will go; it’s dramatically high[er],” according to Leeb, when taking into account, too, central banks opting to inflate out of a debt bubble gone popped.

At $27 silver, the price is “ridiculous,” he said, and added, “I’m a believer of $10,000 gold. . . but I would not be surprised, if we avoid a Depression between now and the end of this decade, I would not be surprised if gold doesn’t touch $10,000.”

Given Leeb’s prediction of a gold/silver ratio touching at least 7.5, that calculates to a silver price north of $1,000 by the end of the decade, making a $200 prediction seem easily attainable, indeed, under a Leeb scenario.  Sign-up for my 100% FREE Alerts