Fed Floods Market with Fake Gold, the Latest Hurdle for Gold Investors

By Dominique de Kevelioc de Bailleul

Tungsten-filled 10-ounce gold bars suddenly have appeared at some of the finest dealers of Manhattan.

No doubt, beginner investors who seek to purchase real money, a real asset, the ultimate safety, have had to overcome decades of carefully orchestrated financial propaganda from the Fed, Washington and academia.  ‘They’ say, the dollar is good, and gold is just a rock, a silly anachronism and an asset useful only to persecuted WWII-vintage Jews.

Then, having cleared the propaganda hurdle, the new class of awakened investors have had to somehow research the gold market long enough to maybe run into articles which discuss the accusations of fraud riddled throughout the paper gold aspect of the market and the manipulation scheme perpetrated by JP Morgan.

What appeared to be an easy way out of the dollar, through a click of a mouse and a few bucks commission on the Scottrade website, may turn out to be more dangerous than holding a debauching currency.

Enter, stage right, comes Jeff Christian, who assures investors that the paper market is on the up-and-up.  The debate between GATA and Jeff Christian kept some investors out of the line to take delivery of real metal, forestalling a bit longer the inevitable and coming stampede into the gold market.

Was GATA an organization spewing ‘conspiracy theories about a gold cartel?

Christian, a suspected shill for the gold cartel, argued that GATA was seeing things, imagining dark-hat bankers ripping off the public with un-backed gold ETFs and bogus short sales of the metal in the futures market.

The case of Andrew Maguire and the CFTC investigation into JP Morgan proves beyond a reasonable doubt that Christian is either a liar, an incompetent or a shill for the Fed.

Christian leaves the stage and CFTC’s Bart Chilton enters.  Chilton, the corn-fed, boy-next-door kind of guy, who grows up to become a heroic fighter of corruption in the financial markets, is the perfect character for the next act to Christian’s ‘Gaslight’ performance.

And the tangible results of the so-called Eliot Ness of Wall Street?  Nothing.  Nearly three years after the CFTC hearings and investigation into JP Morgan, Chilton comes up with zip, furthering the con of the U.S. dollar.  Chilton is now quiet.  He’s done his job for the Fed.  He may leave now.

Now, the poor, confused investor hears that the Fed’s QE-to-infinity policy will further debase the U.S. dollar.  Even some of the ‘big boys’ have come out with recommendations to buy gold.  PIMCO’s Bill Gross and Bridgewater Associate’s Ray Dalio have gone public recently to counter Warren Buffett, Charlie Munger and Bill Gates, the con-job trio billionaire shills for the Fed.

Is it time to buy some physical?  Even the big boys think it’s a good idea.

But wait, the circulation of phony gold bars hits the news, and the companies selling the bars are, of course, the most reputable walk-in retailers of New York.

And the timing of news of the tungsten-filled gold bars couldn’t come at a most fortuitous time for the Fed.  The most recent announcement of QE3-to-infinity policy from Bernanke & Company is a downright admission that the U.S. economy is not responding to previous QEs, unprecedented levels of ‘currency swaps’ and a reflation of the over-the-counter derivatives market.

The Fed needs more help pushing the mob away from gold, because there isn’t enough gold to back all the paper promises saturated throughout the banking system.

“We’re getting closer and closer to the big disclosure that the banksters have stolen the gold, and now they’re flooding the market with fake gold,” TruNews radio host Rick Wiles tells his listening audience of Sept. 24.

Is Wiles spreading another ‘conspiracy theory’?  Let’s ask Christian what he thinks.  Let’s see if Chilton will recommend to the U.S. State Department that it shut down the Chinese company that’s been alleged to have made the phony bars.  Let’s see if Warren Buffett has anything to say.

This Oddball Indicator Has Gold Bugs Salivating

By Dominique de Kevelioc de Bailleul

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

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

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

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

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

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

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

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

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

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

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

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

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

CNBC Interview: Warren Buffett Shows Fear

By Dominique de Kevelioc de Bailleul

In one of the most revealing interviews with the man who has always been optimistic for a continued prosperous America, Berkshire Hathaway Chairman Warren Buffett, for the first time, appears noticeably fearful about the future of the U.S. economy.

Buffett cult members must have noticed his more-than-usual speech stammer as he searched for the right words in response to questions posed by CNBC’s Becky Quick—who, incidentally, is one of CNBC’s softest of softball interviewers.  In contrast, a Buffett interview with Rick Santelli would most likely drop the Dow 1,000 points within the first few minutes of questioning.

There’s little doubt, if you read between the lines of Buffett’s responses to questions from stick-figure journalist Becky Quick, it’s time to head for the hills and buy gold, gun and take up God.  The 81-year-old investor had nothing good to say about the U.S. economy—a first for the Orifice of Omaha.

When Quick asked whether Buffett’s optimistic assessment of the U.S. economy of six weeks ago is still on track, Buffett began with a mea culpa nervous laugh, as if to say, ‘Oops, I misread the tea leaves.  Sorry fans; this thing is going down.’

Stripping out the filler and avuncular chit-chat ‘Uncle Warren’ persona, the cold-hearted Nebraskan is saying that the outlook for the U.S. economy is not good—just as Jim Rogers and Marc Faber have warned investors many months ago.  In fact, if Buffett wasn’t such a cheerleader for the establishment—the establishment that has feathered his nest for so many years—he’d stop treating investors with disdain though his condescending obfuscations to direct questions and hokey homilies of America the Beautiful—and come clean with investors.

Not Warren.  Joining the Washington mafia is for life.  No exceptions.

“Well, I’ve got a little different story this time,” Buffett chuckled, and went on to say that he’s been looking for a turnaround in the economy for more than two years, but nothing stands out as a potential catalyst of future growth.  The GDP stall, back to flat-line, hasn’t been led by any particular sector; “ . . . it’s pretty general,” he said.

Quick asked, “Well with everything else — not a reversal, a slowdown in the growth, what happened? What happened six weeks ago to spook people, to spook businesses?”

Buffett responded, disingenuously, of course,  “I don’t know the answer to exactly why it’s happening. And I don’t know what it will be three months from now or six months from now because three months ago I didn’t know what it would be today.”

The Sergeant Schultz of billionaires doesn’t know what Jim Rogers knows, or Marc Faber knows, or Peter Schiff knows—and Max Keiser, Eric Sprott, John Williams, Ben Davies, James Turk and about a dozen regulars of Eric King’s King World News.  Buffett knows nothing, the Hogan’s Goat of Washington.

As the mountain of sovereign, corporate and personal debt chokes the economy—while the Fed won’t allow the markets to clear with its ZIRP policy—while the dollar debases at rates never seen since the Civil War, Buffett knows nothing of why the U.S. economy isn’t miraculously recovering from the post-Minsky Moment.

Lies through omission are still lies, Uncle Warren.

In short, the 81-year-old ‘legend’ has turned into a ‘has-been’ overnight.  Or better yet, Buffett the oligarch is about to tank along with the U.S. economy, American exceptionalism, his Cadillac, his ice cream cones, See’s peanut brittle, and his phony blue-collar flag-waving imitation.

Instead of fighting the good fight throughout his storied career to prevent the U.S. from sinking into a fascist plutocracy, like the humble Texan Ron Paul has for three decades, maybe Buffett would gain some respect from other analysts who’ve been too busy being told they’re doom-and-gloomers, nut cases and extremists by the ‘prestitutes’ of main stream media.  While Ron Paul was telling it straight, refusing Medicare payments from his elderly patients during his time as a practicing physician, Buffett smiled, chuckled and played paddy fingers with Charlie Munger and the boys in Washington who bailed him out with TARP.

Recall Uncle Charlie Munger’s comment about goldbugs.  May 7, he said on CNBC, with who else, but the Tokyo Rose of the oligarchy, Becky Quick, “Gold is a great thing to sew onto your garments if you’re a Jewish family in Vienna in 1939 but civilized people don’t buy gold – they invest in productive businesses.”

And another oligarch, George Soros, should know exactly what Munger is talking about.  Through his own admission, the teenage Soros turned in Jews to the Gestapo during the reign of the Third Reich in the 1930s.  Soros is civilized, but people escaping the tyranny of Nazi Germany or 21st century America are uncivilized cattle.  But, then again, Soros owns gold, hedging again from tyranny.

What a cast of characters.

Back to Buffett, who said this about JP Morgan gold cartel kingpin Jamie Dimon, “I think Jamie Dimon is one of the best bankers in the world.”

Sure, and Bernie Madoff was one of the best fund managers, too, until it was discovered that Bernie’s phony profits were just that, phony, a smaller Ponzi scheme than the one managed by a man at the helm of America’s largest bank.

“There’s No Way You Can Bet Against America & Win,” Buffett had said in his previous interview with Quick of six weeks ago, which begs the question: What America is he talking about?  Central America?  Those are the strangest words from a disgrace of a man who was ashamedly Made in America.

Source: CNBC

Rigged Gold Market, a Secret Payoff to China

By Dominique de Kevelioc de Bailleul

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

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

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

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

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

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

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

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

China, 1,054 tons, 1.8 percent of reserves

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

Germany, 3,396.3 tons, 73.7 percent of reserves

France, 2,435 tons, 71.8 percent of reserves

Netherlands, 612.5 tons, 61.9 percent of reserves

Italy, 2,435.8 tons, 73.4 percent of reserves

Spain, 281.6 tons, or 39.2 percent of reserves

Portugal, 382.5 tons, or 89.2 percent of reserves

Greece, 111.7 tons, or 81.3 percent of reserves

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

David Einhorn Slams Ice Cream Cone in Warren Buffett’s Face

By Dominique de Kevelioc de Bailleul

“Let blockheads read what blockheads wrote,” Warren Buffett once said.

The man who loves being photographed with his favorite prop, an ice cream cone, also said this about gold:

Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.

Since the earth is a place for humans, those unique creatures of the cosmos who have sought gold for 5,000 years, and who’ve eaten Warren Buffett’s See’s peanut brittle more recently, what Buffett’s hypothetical Martians have to do with making his case against owning gold is telling, as well as nonsensical and manipulative, strongly suggesting that people who buy gold are foolish and are laughed at by Buffett’s imaginary Martians.

He’s right; fiat currency isn’t dug out of the ground; it’s printed, created out of thin air, everywhere, and that same Martian would wonder why it has any value at all to us silly humans.  And what value is there in See’s peanut brittle other than people like to eat it.

Gold has no utility?  Who categorized gold as an investment in a power company or auto firm?  Indians of India find spiritual value in owning gold, for one thing, and there’s about a billion of them, at last count.  Why do Indians like gold?  Why do people like sunsets?  Many people don’t like See’s peanut brittle, but they like gold and sunsets.  Maybe Buffett is truly different from the majority of the human race.

In a great post by David Cohen on DeclineOfTheEmpire.com, titled, Sociopaths in America,he writes:

 . . . some proportion of the population is “sick” and there’s nothing you can do about it. However, a Decent Society uses a multitude of checks & balances to rein in conscienceless people, to prevent them from running amuck. But in America, the most dangerous inmates are now running the asylum. These elaborate controls on immoral (unethical) behavior have been lifted. (This is often called deregulation or regulatory capture.) The corrupt politicians have rewritten the laws in such a way as to make it legal to rip people off. There is no longer any fear of punishment. 

Sociopaths can run wild—

ñTrue sociopaths have no conscience—none.

ñThey make life a game

ñThey get their kicks from kicking others, from manipulating, and most of all from WINNING.

And Warren Buffett surely hates to lose, according to his own words.

The first rule is not to lose. The second rule is not to forget the first rule.

He also refers to his life’s adventure as a game—again, according to his own words.

If past history was all there was to the game, the richest people would be librarians.

The game.  How many people call life a game with a straight face?

Back to Buffett’s argument against owning gold.

You could take all the gold that’s ever been mined, and it would fill a cube 67 feet in each direction. For what that’s worth at current gold prices, you could buy all — not some — all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?

Instead of Martians, Buffett now talks about cubes, an irrelevant and manipulative obfuscation of thought.  How many Hope Diamonds can fit in the trunk of his car?

Or this, from Greenlight’s Capital Fund Manager David Einhorn, who wrote in a recent report to investors:

The debate around currencies, cash, and cash equivalents continues. Over the last few years, we have come to doubt whether cash will serve as a good store of value. If you wrapped up all the $100 bills in circulation, it would form a cube about 74 feet per side. If you stacked the money seven feet high, you could store it in a warehouse roughly the size of a football field. The value of all that cash would be about a trillion dollars. In a hundred years, that money will have produced nothing. In a thousand years, it is likely that the cash will either be worthless or worth very little. It will not pay you interest or dividends and it won’t grow earnings, though you could burn it for heat. You’d have to pay someone to guard it. You could fondle the money. Alternatively, you could take every U.S. note in circulation, lay them end to end, and cover the entire 116 square miles of Omaha, Nebraska. Of course, if you managed to assemble all that money into your own private stash, the Federal Reserve could simply order more to be printed for the rest of us.

Einhorn knows quite well the system is rigged against investors, those Warren Buffett suckers who must lose for him to win.  Buffett’s original empire of insurance companies, by definition, are rigged to profit the ‘deep pockets’ at the expense of the ‘scared money’ with no pockets, if things don’t work out.  But Buffett wouldn’t understand that; he gets bailed out from his corrupt political friends when he doesn’t take out his insurance: GOLD.  Insurance is for suckers, not for vampires who view life as a “game”.

Another Buffett quote:

Only when the tide goes out do you discover who’s been swimming naked.

If he had not cared what a Martian would think of him, he would not have lost three-quarters of his fortune in realterms, that’s right, in terms of gold—real money! —a currency that he and his Martian friend don’t seem to ‘get’.

Why would someone pay a quarter of a billion dollars for the Hope Diamond?  Answer: Because they want it.

Essentially, Buffett shows a huge blind spot in his understanding of the wholeness of the human race.  But he insists on telling us how foolish we all are for owning gold, the Hope Diamond and holding spiritual beliefs, beliefs that are no less noble than his—in fact, more noble in many cases.  He never talks about human feelings other than the feelings of fear and greed, but he talks about value, cold cash, critical journalists, Martians and cubes.

He once said, “Value is what you get.”  Is this some kind of riddle?  Is value only derived from cash flow?  If so, why didn’t he speak up about overvaluations of the housing market?  But he wants to talk endlessly (through he’s lately enlisted his  sidekicks Munger and Gates into the fray) about the overvaluation of gold.  And he should have know better, too.  Munger talked about persecuted Jews, and Gates couldn’t come up with anything intelligible to say about gold.

And another one-liner from Buffett:

There are 309 million people out there that are trying to improve their lot in life. And we’ve got a system that allows them to do it.

But then he said:

The rich are always going to say that, you know, just give us more money and we’ll go out and spend more and then it will all trickle down to the rest of you. But that has not worked the last 10 years, and I hope the American public is catching on.

Yeah, ‘Blockhead of Omaha’, the American public is “catching on.”  And kudos to Greenlight Capital’s David Einhorn for his critique (the ice-cream-cone slam to the Buffett face) and very generous and charitable giving at such a young age.  And it’s unlikely, too, Einhorn will disown his granddaughter, if he ever receives one in the future.

Bill Gates Joins Warren Buffett to Play Joseph Goebbels

The propaganda war against the world’s safest of havens, gold—with a track record of 5,000 years as proof of its role in a monetary system—has taken a step up with the voluntary outing of the latest American copy of the WWII-vintage Nazi Party Minister of Propaganda, Joseph Goebbels.  His name is William (Bill) Gates.

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In an interview with CNBC’s Becky Quick, Gates agreed with Warren Buffett’s negative assessment of holding gold during a financial crisis.

As Gates’ eyes shifted off to the side, he said, “I’m certainly in that camp,” as he proceeded to elaborate in a manner that showed his uncomfortableness with the question and his own response, shifting in his chair several times as he starts off talking about the risks of central banks selling it because it doesn’t “do anything for the people,” and then repeating almost word-for-word Buffett’s sophomoric line about the “psychology” of people buying it because they think it may be worth more in the future.

Here’s the link to the 2-minute clip of Gates’ response to Quick’s question regarding Buffett’s remarks about gold.  Note how he truly struggles with a fabricated response.

Make no mistake it.  Gates’ role is one of a man who finds himself playing a performing puppet for a criminal enterprise, which itself plays the roll of a legitimate Constitutional government.  It appears that Gates must play this role, because the world is too small and his face too well-known to bow out to live in peace on some South Pacific island away from those who would like to remind him of his lifelong commitment to ‘the family’.

Congressman Ron Paul understands the awkward position in which Bill Gates finds himself.  Paul once said of the endless others of Gates’ ilk, all of whom have been seduced by Washington and its suited prostitutes, “When one gets in bed with government, one must expect the diseases it spreads.”  The disease Bill Gates has caught he cannot shake unless he steps out of the pack.  But the pack, in addition to holding a carrot in one hand, also holds a stick in the other.

To better understand Gates and the context behind the disconnect between the reality people feel in their daily lives and the faux reality in which media would like us to believe about almost anything, Republican political operative Karl Rove of the George W. Bush administration shamelessly repackages a Goebbels-ism for a reporter he deemed to be an enemy of Washington power.

From a NY Times Magazine article of Oct. 17, 2004, written by Ron Suskind, who quoted an unnamed “aide” to George W. Bush (revealed later as Karl Rove):

The aide said that guys like me [Ron Suskind] were “in what we call the reality-based community,” which he defined as people who “believe that solutions emerge from your judicious study of discernible reality.” … “That’s not the way the world really works anymore,” he continued. “We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality—judiciously, as you will—we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors … and you, all of you, will be left to just study what we do.”

Washington’s propaganda war, from the war on terrorism, to the invasion of Iraq, Afghanistan, to the virtues of the Federal Reserve, and endless other topics, media is the all-important weapon in the information war between those who report the truth as they believe it to be and those who seek to condition an electorate into thinking against their own self-interests in favor of a few.

In the case of Gates in this instance, he’s merely been called upon to act on the stage at the behest of Washington.  And after reviewing his latest performance, he doesn’t pull it off very well when it’s time to outright lie, because Gates’ entire life has been conditioned to respond in an intelligent and thoughtful manner to complex puzzles.  He’s clearly not gifted at political rhetoric.

After Warren Buffett took a shellacking for his child-like presentation of why he has no gold (he says), Gates, like a drunk trying to save his buddy who was struck by a car while staggering to reach the other side of a busy freeway, will also receive a Chevy bumper to the face in his effort to come to the aid of his friend.

And it’s really of no surprise that Gates would side with the man he “fell in love with” at first sight.  It’s safe to say that Buffett would pooh-pooh Apple’s operating system in favor of Microsoft’s clunker, if push came to shove.

And considering that the two men have in common the burden of being captured by a Washington power structure that aided and abetted both their empires from the jaws of the Sherman Ant-Trust Act of 1880, anyone can clearly see the motivation of both men for going out of their way to discuss that “silly” gold.  Both men would lose a substantial percentage of their fortunes if gold became the foundation of the world’s monetary system.

It’s quite obvious that someone has applied pressure on these two men to play roles each must certainly now feel uncomfortable playing.  How can one of them now buy a billion dollars worth of gold and still cheer-lead the hopelessly broken dollar.  Call it a “deal with the devil” or a simple quid pro quo with Mafia Dons who need to call in that big favor.  Either way, it smells of Nazism dressed in suits.

But the overarching question to this recent spectacle surrounding gold is:  if the yellow metal is so unimportant, irrelevant, barbaric and useless, why do these two men feel so compelled to talk about it?  Shame on both of them.

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“Not Owning Gold is a Form of Insanity,” Says Broker to the Queen

If those words sounds familiar, that’s because you may have read it somewhere on the Web some time in January of 2011.  “Not owning gold is a form of insanity,” Robin Griffiths of Cazenove Capital (believed to be the private broker for the British royal family) told CNBC on Jan. 11. “It may even show unhealthy masochistic tendencies, which might need medical attention.”

Though Griffith’s apparent flare for offering up salacious soundbites for financial journalists, his diagnosis directed at investors who worry whether their financial future is intact, yet, don’t hold a meaningful portion of their wealth in gold may not have wandered too far from making a valid point, especially considering that since January 2011 the world’s unresolved issues have only mounted rapidly in quantity and severity. Sign-up for my 100% FREE Alerts

Consider the news of just the past two weeks, alone, and never mind the events that have shaped the world’s radical change in public consciousness since the fall of Lehman Brothers in 2009.  Griffith’s seemingly flippant remark of more than a year ago appears more and more worthy of repeating as the endgame to the crisis unfolds.

On the Feb. 29, the European Central Bank announced a massive QE program in the amount of $712 billion for approximately 800 European banks—a move so audacious that Mr. Gold, Jim Sinclair, felt compelled to alert investors of the troubling event, underscoring the desperate manner by which the announcement was obviously camouflaged, obfuscated and provisioned in the hopes of not triggering a panic into the gold market.

“Today does qualify as one of the biggest injections of liquidity into the system in the history of the system,” Sinclair told King World News.  “Today was a cover-up by the U.S. Federal Reserve and by the mainstream media of one of the largest injections of liquidity into the system that has ever occurred.”

Sinclair continued to explain that, in essence, the Fed has embarked on a course as the buyer-of-last-resort to, not only the U.S. debt market, but Europe’s equally-sized debt market, as well.  In total, the U.S. dollar and euro represent approximately 88 percent of central bank currency reserves (excluding gold reserves).  These reserves have been debased at a staggering rate, with no end in site.

“This money flows, in order, through these entities—Federal Reserve to the IMF; IMF to the ECB; ECB to the member banks.  This is pure QE on a global scale,” he said.

On Thursday, following the decision by the ECB to maintain its member bank rate at one percent, reporters ask ECB president Mario Draghi about contingency plans for the euro in the event of a Troika failure in dealing with the European sovereign debt crisis.  Draghi said, pointedly, “We have no Plan B. Having a Plan B means to admit defeat.”

Translation: The ECB will print, print and print more money (or get it in a circuitous way from the Fed)—or die.

Again, on Thursday, in response to the ECB’s latest $712 billion injection of capital into the European banking system, former ECB executive member Juergen Stark told the Frankfurter Allgemeine “. . . the balance sheet of the euro system, isn’t only gigantic in size but also shocking in quality.”

In total, the ECB’s balance sheet now stands at more than (euro)3 trillion, or nearly one-third larger than the Fed’s ‘official’ balance sheet, with more to come, according to some prominent analysts.

On March 8, German newspaper BILD ran with a story about the rumblings in Germany regarding the status of its 3,401 tons of gold reserves.  A growing mistrust of the United States as the custodian of Germany’s gold has reached critical mass, according to BILD sources.  Many Germans wonder if they’ll get their gold back.

According to the article, German politicians are feeling heat from a growing concern among the German people regarding the euro and Germany’s financial obligations to a failed euro experiment.  Germans wants an audit of its gold and repatriation to Frankfurt in the event of a euro collapse and an emergency reinstatement of a gold-backed deutsche mark.

When elected member of the Bundestag, Phillip Missfelder, made an inquiry of the Bundesbank as to why Germany’s gold was not audited in 2010 as required by law, the Bundesbank’s response sent chills throughout Germany’s fiscally conservative electorate.

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

On the heals of the BILD article comes another article about a country and a people known for prudent fiscal behavior: the Swiss.  They, too, have come to the realization that the euro is sinking and that a Swiss franc peg to the euro will take the franc down with it.  They want their gold.

Zerohedge posted on Thursday:

“Gold Initiative”: A Swiss Initiative to Secure the Swiss National Bank’s Gold Reserves initiative, launched recently by four members of the Swiss parliament, the Swiss people should have a right to vote on 3 simple things: i) keeping the Swiss gold physically in Switzerland; ii) forbidding the SNB from selling any more of its gold reserves, and iii) the SNB has to hold at least 20% of its assets in gold.

Contrary to propaganda spewed by the Fed, U.S. media and America’s unofficial spokesman and cheerleader for a broken Bretton Woods scheme, Warren Buffett, in the end, it all comes down to the gold.  How much.  Where it is?

And if the two countries known for their level-headed approach and reputation for maintaining a strong currency are now lurching for the gold, it’s most likely that other Western countries will follow suit—and quickly.

While the news turns from the latest scheme to bailout Greece, to gold, why then would an investor put off acquiring a 3,000-year-old, tried-and-true asset that holds value under the most dire of financial and geopolitical circumstances—such real-time textbook examples of profound currency debauchery from each G-7 nation, imminent war and political upheaval?

Obvious to a long-awakened bunch, crunch time approaches, and, as Swiss economist and money manager Marc Faber has said in the recent past, it’s also time for each investor to become “your own central bank.”  And if investors cannot or will not see the consequences and market reaction to bizarre policy actions taken by the stewards of 88 percent of the world’s reserve currencies, Cazenove Capital’s Robin Griffiths’ characterization of “masochistic” investors knowingly taking no action in response to this abomination won’t seem so sensationalist after all. Sign-up for my 100% FREE Alerts

Warren Buffett’s Latest Insurance Con

In an article authored by famed investor Warren Buffett, titled, Warren Buffett: Why stocks beat gold and bonds, he attempts to dissuade investors from accumulating gold (again) as insurance during the ongoing financial crisis.

Cleverly riddled throughout his ‘sales pitch’ for keeping with paper assets at this time, essentially, Buffett deploys the old “Feel, Felt, Found” technique of persuasion on his readers, in the hopes of instilling confidence through his past performance, aided by his Lt. Columbo-like charm and icon status.  Sign-up for my 100% FREE Alerts

Here’s how it works:

Buffett begins his pitch against the yellow metal with, “ . . .  gold . . . currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful).”

You see, Buffett wants you to know that he knows how you feel.  He validates your fear.  But . . . now for the ‘but’.

“True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production,” he continued.  “Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end.” Emphasis added.

He continued his article by guiding the reader to his understanding that others felt the same way about gold, but after they found that the Berkshire method of investing outperformed very well throughout 46 years, they turned to him, Warren Buffett, the prudential ‘oracle’, the ‘you’re in good hands’ master of money.

In the above quote, Buffett demonstrates that he doesn’t really know how investors feel about the U.S. government and Fed, or he dismisses the fear altogether, as it is the threat to his dollar-based empire.  Does he want to end the Fed and stop the madness, which is the very root of investor fear?

Polls show that the American people don’t trust the Fed, or the U.S. government.  So, Buffett asks you to trust him.

Moreover, he neglects to point out that other billionaires, central banks and ‘smart’ money don’t hold gold for its industrial and decorative utility; they feel that they should own gold because it can be used as money, whose demand for it, while currencies are actively debased, doesn’t have a limit, just as there is no limit to governments debasing currencies.  Why, then, does the Fed store 8,150 tons of gold for the U.S. Treasury?  Why did the EU ask Germany to back the EFSF with German gold? Aren’t they listening to Warren Buffett?

Though Buffett states earlier in his article, “the dollar has fallen a staggering 86% in value since 1965, when I took over management of Berkshire. It takes no less than $7 today to buy what $1 did at that time,” he fails to alert the reader to the connection between the gold price and the dollar’s drop in value during the last 46 years.

Sure, the correlation is no where near a lock-step rise in the gold price as the dollar dropped in value, but gold investors understand the myriad of reasons for that—which includes central bank collusion to ‘manage’ its rise, as former Fed Chairman Paul Volker (1979-1987) laments his remissness during the dollar crisis of the 1970s.

Regarding the dollar’s 86 percent decline in value since 1965, hasn’t Buffett seen massive balance sheet expansions of the Fed, BOE, BOJ, ECB, PRC’s central bank and the SNB since the beginning of the financial crisis?  Hasn’t the Fed indicated that ZIRP could be extended into the year 2014?  What will be the extent of the latest dollar devaluation during this decade against the value of the dollar of 1965?

In essence, Buffett provides the reader with the bum’s rush into having you believe that he knows how you feel, when, in fact, he doesn’t know—or doesn’t want to address the more salient point for owning gold.  Maybe, along with the Fed, he too, is in fear of opening a can of worms to his own argument against holding the yellow metal.

His fortunes are tied to the Fed’s continuation of the dollar-debasement scheme, an old scheme from which he has profited smartly, along with the money center banks—at the public’s expense, not at his expense.

And speaking of eternity (in reference to the above Buffett quote), no one has suggested that gold accumulators hold the precious metal longer than they deem necessary, so why the talk of the long run?  Some investors will hold some gold for eternity (and should), but the point of long-term investing is a specious one for many old hands and newcomers alike to the gold market.

Moreover, gold’s track record of preserving wealth is a bit longer than Buffett’s 46 years of performance, by approximately 3,000 years.

Isn’t gold really an insurance against Buffett’s paper insurance empire, which, by the way, had to be bailed out by the taxpayer?  Gold investors didn’t need a bailout; they’re not connected to Washington.  That’s why they hold gold.

Shouldn’t Buffett know his audience (customer), an audience of many politically and financially repressed retirees who don’t have time for the long run?

Investors have been, as Jim Rogers has recently said, “forced to own real assets” while the Fed deprives retirees, especially, of a market-clearing interest rate for their savings.  Can Buffett still imagine what it must be like to live like Jim Rogers, telling it like it is, instead of pitching nonsense for his own self-centered survival and legacy?  His entire identity was saved by taxpayers, and he’s still talking the same game.

Buffett may have forgotten that it was the taxpayer who took on the roll of AIG’s reinsurance policy, not the other way around, giving true meaning to The Black Swan author Nassim Taleb’s statement, “We’re all blind to rare events and routinely fool ourselves into believing we can predict risks and rewards.”  Touché.  Buffett grossly under-priced risk, and that’s his job.

“I don’t want to spend too much time on Buffett. George Soros has 2 million times more statistical evidence that his results are not chance than Buffett does. Soros is vastly more robust,” said Taleb, in response to a question regarding Buffett’s investing performance.  “I am not saying Buffett doesn’t have skill—I’m just saying we don’t have enough evidence to say Buffett isn’t doing it by chance.”

A snapshot of financial history, between 1946 and 2008, or 62 years, could easily suggest to a statistician that Fed money creation during that period, as well as the demographic trends associated with baby boomers living out their lives staring in 1946 (through 1960), may have more to do with Buffett’s savant-ish buy-smart-and-hold investment strategy than his brilliance for assessing and quantifying ALL risk throughout his various long-term holding periods, as Taleb implies.

In his book, The Black Swan, Taleb reminds readers of the story of Long Term Capital Management (LTCM) and its demise due to the unforeseen event of a crisis in the Thai baht in 1997.  The collapse of LTCM prompted the Fed to quickly bailout the financial system before a Lehman-like event occurred.

At the helm of LTCM were two Nobel Prize laureates who are quite familiar with the Black Swan.  In contrast, Buffett, not only ignores gold’s vital role within the financial system, he ignores his own shortcomings.  Pure hubris.

In a somewhat similar manner, Buffett’s empire was saved by TARP, and now he has the nerve to advise investors to roll the dice again on his paper promises—and just in time, too, for the European crisis to spread to the U.S. in the not-so-distant future.  Holders of gold are betting Buffett will need another bailout, but he doesn’t see that, just as he didn’t see the crisis that necessitated the first one.

“The inability to predict outliers implies the inability to predict the course of history,” Taleb wrote.  At 81-years, Buffett may not be around to pay off on his bets.  It’s been quipped, “The goal in life is to pass on while the last check you write bounces.”  Is that the Buffett personal endgame to the endgame.

“Whether the currency a century from now is based on gold, seashells, shark teeth, or a piece of paper (as today), people will be willing to exchange a couple of minutes of their daily labor for a Coca-Cola or some See’s peanut brittle,” concluded Buffett.   “In the future the U.S. population will move more goods, consume more food, and require more living space than it does now. People will forever exchange what they produce for what others produce.”  Emphasis added.

Correct, Mr. Oracle.  It’s that little bit about “exchange” that has people worried. With what?  Your Berkshire shares denominated in dollars, or See’s peanut brittle?  Please don’t pass off the obvious as some kind of profound wisdom.  Isn’t Buffett making the case for gold with his cute ‘See’s peanut brittle’ remark?

But the one-trick buy-and-hold aged pony doesn’t see that either, or has Buffett made his latest installment to the cabal with his latest ‘advice’ in return for a tip about the kibosh of the Keystone Pipeline?  His railroad looks like a mighty fine investment right now.

Maybe Taleb is right.  Buffett sure is one lucky guy.  Sign-up for my 100% FREE Alerts

New OWS Slogan: Eat Sh*t Warren Buffet

We implore Occupy Wall Street (OWS) to remain focused on the message suggested by those who have spent careers delving deeply into the tactics of the criminal mind who attempt to achieve the ‘Perfect Crime.’  But when, slowly, over time, one criminal multiplies into a criminal syndicate of other like-minded brethren to control a nation’s treasury, one prosecutor is not enough to kill the cancer, a political revolution remains the only cure.

Willie Sutton was asked by a reporter why he robbed banks.  Sutton replied, “Because that’s where the money is.”

Among Al Capone’s Chicago-like crime spree, having gone “white shoe,” as social trends forecaster Gerald Celente likes to refer to them, for so many years, Bank of America’s case of rampant fraud is as good as a case as any to break this Washington-Federal Reserve cartel into pieces.

For a background and primer on the latest ‘in your face’ fraud at Bank of America, famed former bank regulator William (Bill) Black, the man who broke wide open the S&L scandal of the 1980s, involving five U.S. Senators, is a must read for OWS patriots.

The essence of the trillion-dollar crime in progress stems from Bank of America’s attempt to dump multiple-trillions of dollars of hopelessly worthless financial derivatives from its Merrill Lynch subsidiary to its taxpayer-insured Bank of America holding company.  OWS patriots should know that Brian “Mumbles” Moynihan and his bandits on the board of directors exhibit no guilt as they attempt to offload to the taxpayer the losses incurred by former Bank of America CEO Ken Lewis’ reckless and vain purchase of Merrill Lynch on the eve of the Lehman Brother meltdown.

For any high-profile institution to attempt a scam of this magnitude must be in cahoots with the Fed and Washington, Black intimates.  After all, for those studied in the sorted details leading up to the creation of the Federal Reserve in 1913, may come to understand the con of the Federal Reserve and to why Aaron Burr (the real-deal OWS patriot) and Alexander Hamilton were so at odds with each other during the early years of the American experiment of the late 18th to early 19th century.  Burr shot dead Hamilton in a dual in 1804.

Moreover, the all-important real motive behind the Federal Reserve Act’s passage into law (OWS recommended reading: G. Edward Griffin’s book, The Creature of Jekyll Island) was to protect the banks.  The duplicitous and alleged reason for the Creature rings true of many time-endured parasitic institutions throughout history:  it’s all about you and your needs.  When in reality, the compelling reason for bankers to create another ‘religion’ was to greatly mitigate future losses—of bankers!—such as those suffered during the Banking Crisis of 1906-7.  During that crisis, it was the 1% who took the lion share of the losses.  There was no need of an OWS patriot movement.  As Nassim Taleb explained on Bloomberg Television this week, America operated on the principles of the Hummurabi Code back then.

With the denouement of the debt crisis in full swing now, there should be no surprise, then, of how this endgame of the financial crisis will be attempted to be played out.

So, now, the crime has been exposed, thanks to bill Black and others.  It appears that the Fed and Washington are, again, not surprisingly, coconspirators of the crime(s), with preliminary evidence pointing to a cast of characters that make The Keating Five look more like a teenage gang of lunch money extortionists.  And Bill Black is on the case to keep everyone informed of the “white-shoe boys” crimes.

The fight against the cartel now will be waged in the media—yeah, the media that’s been covering up for this enterprise ever since investigative reporter Jack Anderson and those of his stripe left the scene decades ago.  And, now, these ‘useful idiots’ have been belittling the OWS movement, those American patriots who dare to be heard!

“The smarter the journalists are, the better off society is. For to a degree, people read the press to inform themselves-and the better the teacher, the better the student body.”  — ?

Who, at one time, said that?  Warren Buffett!, the man who took a $5 billion stake in a bank it appears he knew was about to pull a heist—and he wanted a piece of that action with a sweetheart deal of preferred shares (as recommended by his bathroom friend, Mr. Rubber Ducky) while at the same time killing the other bird with his $5 billion stone by playing the role of JP Morgan of the Great Depression, the sequel.

The other mob bosses were happy with Warren, while the media, then, running with the story with “if Camel cigarettes are good enough for doctors, they’re good enough for you” advertising pitch for this up-and-coming pump-and-dump scheme—not too dissimilar to the GM pump-and-dump scam replete with other accounting gimmicks of channel-stuffing inventory figures touted as actual sales.

“Let blockheads read what blockheads wrote,” Buffett has been quoted as saying.  As Buffett masquerades as a creatively contrived noblesse oblige kinda common man, and not an evil “Let ‘em eat cake” gazillionaire kinda guy.  Well, the American people have a quote for you, too—you phony coward, AIG bailout recipient, who now sits in an unique position of history to prevent these neo-feudal barbarians from pissing on the U.S. Constitution.

“Eat sh*t, Warren  Buffett.” — OWS, the second revolution

Dexia Collapse further demonstrates Case for Gold

At this point, during the third year of the Kondratiev Winter, the politicians’ blueprint to hide another global Lehman-like collapse of the financial system should be clearly evident to anyone even remotely paying attention to the mentally-exhausting saga in Europe.

With this weekend’s collapse of the Belgium/France retail bank Dexia Group, the obfuscations, misinformation campaign and downright lies surrounding the imminent fall of this behemoth financial institution could easily serve as yet another textbook case for owning gold.

The kickoff to gold’s rise to prominence, once again, began this Sunday with the fall of Dexia and events leading up to its fall as not reported by media, a leading Wall Street institution and a credit agency.

“A severe crisis in Europe could cause significant damage by undermining confidence and weakening demand,” Treasury Secretary Tim Geithner told the U.S. Senate Banking Committee.

Taking politicians’ comments as worthless is obviously a given, but when those paid in the private sector to provide the heads up continue failing time and time again, gold shines—as it always has throughout history’s enumerable variations on the same play, but performed by different actors.

Here’s how the Dexia collapse was handled by those worthy of the big bucks:

First, the European banking system ‘stress test’ was performed to demonstrate the health (or lack thereof) of individual banks to absorb an impact of debt write-offs during the crisis.  Bogus results, either intentional, or not, were dressed up in  pomp to an ‘elite’ audience of financial shamans last week.  The irony of the conference in London wreaks of Captain Smith’s ‘unsinkable’ Titanic.

At the Bank of America Merrill Lynch Banking & Insurance CEO Conference held in London on October 6—three days before the Dexia bankruptcy announcement—America’s most destined to fail financial institution (that, for three days, shut down its Web site, presumably to prevent a run on Warren Buffett’s bank) assured the crowd of money ‘experts’ that Dexia would withstand a direct hit to an iceberg.

The now infamous ‘slide 9‘ of the presentation revealed that the champ of the rough financial seas was, indeed, Dexia Group.  The bank ranked No. 1 after the stress test.

Meanwhile, through the mainline arteries of financial information reporting, Moody’s eased itself into proving it was worthy of handicapping Dexia’s chances, decided on Oct. 3 to place Dexia on ‘review of a downgrade’ —fearing, again, it, too, would be placed on investors’ watch list for another credibility downgrade in the rating agency business.

“Moody’s Investors Service has today placed on review for downgrade the standalone bank financial strength ratings (BFSRs), the long-term deposit and senior debt ratings and the short-term ratings of Dexia Group’s three main operating entities — Dexia Bank Belgium (DBB), Dexia Credit Local (DCL) and Dexia Banque Internationale à Luxembourg (DBIL),” the credit reporting agency released in a statement.

“The review for downgrade of Dexia’s three main operating entities’ BFSRs is driven by Moody’s concerns about further deterioration in the liquidity position of the group in light of the worsening funding conditions in the wider market.”

Goldman Sachs, in its mission to do “God’s work,” almost missed warning investors of its concern for the Belgian/French bank by taking a full two days after Moody’s to figure out that its Buy recommendation may appear foolish days before the collapse.

“Our thesis was that, given time, Dexia’s legacy assets should run down, its unrealized loss pull to par (independently of credit spreads), in turn boosting equity growth and reducing funding requirements,” stated Goldman in a October 5 release.”

It continued, “The opposite took place: a deepening sovereign crisis increased the riskiness of these assets, resulting in a wider AFS negative reserve and forcing higher losses on disposal as well as higher than anticipated funding requirements. The headroom to progressively delever is therefore taken away and forced immediate action, as announced by the bank on October 4.”

After careful review, Goldman reported that Dexia was a tossup—downgrading the bank form a Buy to a Neutral.  Water was coming in at the bank’s hull, but the ship was already deemed unsinkable.

On Sunday, Dexia was reported as sinking to the ocean floor.

“Gold will eventually rally exponentially and investors who don’t own the precious metal are ‘insane,’ and may be showing ‘masochistic tendencies,’ Robin Griffiths, technical strategist at Cazenove Capital, told CNBC on Jan. 11.

Who’s Cazenove Capital?  It’s been rumored for decades to be the financial institution to the British royal family.