Outline on Collapse End Game
Many are the events, signals, and telltale
clues of a real live actual systemic failure in progress. Until the last
several months, such banter was dismissed by the soldiers in the financial
arena. But lately, they cannot dismiss the onslaught of evidence, a veritable
plethora of ugly symptoms of conditions gone terribly wrong and solutions at
best gone awry and at worst never intended in the first place. My theory has
been steady from the TARP Fund scandal and the Too Big To Fail mantra of
deceit. The plan all along since the breakdown began in September 2008 has been
to preserve power, to maintain intact the insolvent banks an operational crew
of zombies, to aid the financial sector bound in Wall Street, to pay benign
neglect to Main Street and businesses (expect for symbols like General Motors),
to expand the propaganda of a fictional recovery, and to maintain the endless
wars. The wars serve two purposes, to enable significant fraud from overcharged
services, and to hold open the gateways for sizeable money laundering flows
into the Wall Street banks, those hollow structures that closely resemble a
coke addict with dark teeth, wretched bones, wasted organs, lost attention, and
a listless gait. The Greek showcase is coming to a neighborhood near you in
Western Europe and Great Britain, soon to feature debuts across North America.
No, the United States is not immune from the horrors of ruin since its marquee
billboards read Zero Percent. It only means the wrecking ball works from the
inside out, serving as the central needle in the Black Hole. An outline of the
End Game can be written. This article is not comprehensive by any means. But it
serves as a decent posting on an outhouse wall. Consider the following as
musings in observation of Uncle Sam on death row. They bear no logical flow,
just random concepts.
OPERATION
TWIST IS Q.E.
Operation
Twist cements ZIRP and closes the door on any Exit Strategy. Nothing exists in
the twist of substance, a mere shift of the shell game movement. The most
powerful effect of a maintained Zero Percent Interest Policy is that it ensures
a systemic failure with capital destruction, rising costs, falling profit
margins, and deterioration in the USEconomy. It guarantees growing federal
deficits without any potential of resolution, and finally a USGovt debt
default. Just one year ago, the travesty of political failure was in full view
with the Super Committee charged with spending reduction. It folded like a
cheap tent. Deficits have been written in stone. The nation has moved from a
permanent housing decline and lost legitimate income (factory exodus to China)
as principal cause for systemic failure, to a failure based upon capital decay
and absent profitability. Absent legitimate income fostered rot from within. The
USFed in its growing desperation (hardly infinite wisdom) has been attempting
to control the rising cost structure by means of a steady concerted effort to
render deep harm to final demand through economic damage. They will
succeed, but cause a downward spiral that cannot escape the powerful clutches
of capitalism gone into reverse. The central bank clowns will win a USTreasury
Bond rally to bring about the final collapse all in a Black Hole. As the
10-year TNX yield zips below 1.5% and heads toward 1.0% in the future months,
as the recession gallops along and enjoys recognition, the systemic failure
will be more evident.
TRILLION$
AS POCKET CHANGE
From December 2011 to April 2012, the
Dollar Swap Facility released $3.2 trillion for European bank aid. It
accomplished nothing, since their banks are a field of Greek-like ruins still.
The money went into the LTRO funds, the ill-planned knucklehead Draghi plan.
The banks bought overpriced government bonds, lifted in value by the Euro
Central Bank itself. The same banks are worse off than before the application
of LTRO funds. What irony! Draghi has no credibility left. Harken back to 2009
when a similar Dollar Swap Facility released over $1 trillion to the same
European banks. It solved nothing either. The tragedy is accentuated by the
realization that central bank clowns learn nothing, attempt the same vacant
solutions, only to repeat their errors at a later date. The public seems incapable
to recall the past failures, holding out hope. Now we hear of a possible $2 trillion plan to recapitalize the European
banking system. In Weimar terms, this is pocket change. Counting the US
fixes, the London fixes, and the previous DSFacility, the total is closer to $6
trillion already wasted in a massive debasement series of whiffs. So another $2
trillion is pissing in the wind of Weimar flatulence, the stench to be noted by
next year.
When the paper mache artisans start talking
about a total of $10 to $12 trillion for Western Europe, the United Kingdom,
and the United States combined, then they will be seriously planning a banking
system recapitalization. They prefer the futile incremental approach, with the
proviso of not liquidating the big banks. The
hilarious factor is that even $10 trillion would not work, but it would indeed
buy another couple years, maybe three years. So if an alcoholic has the Delirious Tremens,
the consensus stupidity calls for feeding him a higher proof Jack Daniels whisky
and from a vat for intravenous application, which will revive him, when a mere
few liters would not. It is utterly amazing that Bernanke and Draghi are given
any respect at all. This is utterly absurd, since the wrong-footed solution is
going to be simply higher volume of what does not succeed in reviving the
system. WHEN THEY START TALKING ABOUT BIG BANK LIQUIDATION AND A NEW
GOLD-BACKED MONETARY SYSTEM, THEN EXPECT SOME TRACTION. But such a plan would
involve plowing the system under and removing the bankers from power. Until
then, plan for a bigger killing field. The great tragedy is that the killing
field is the entire Western monetary system, attached at the hip to the Western
Economic system. Witness the gradual collapse.
BASEL
RULES LOOKS TO GOLD
If the Basel castle dwellers decide to make
Gold a Tier-1 asset, banking capital adequacy ratios would be adjusted by a
dictated order. In response to the global banking crisis, based upon paper
foundation turned toxic, the Basel rule changes have aggravated the banking
woes. As rules are tightened according to assets held and their type, the move
could potentially be favorable toward Gold. New encouraging rules that declare
Gold to be a reserve asset could result in between 1700 and 2000 tons in
purchase. Think of it as bank ballast in a storm of toxic seas. The issue is
the so-called Basel III rules. The ultimate
central bank is on the verge of declaring Gold to be a Tier-1 asset for
commercial banks with 100% weighting. Curiously, it is currently a Tier-3 category with just
a 50% risk weighting. Like gold is only half money, how absurd!! It took a 50%
downgrade of sovereign bonds to bring about such progress. They are set to
increase the amount of capital banks also must set aside, a double win
potentially. The incentive away from Gold toward risky assets such as stock,
currency, and debt-related assets resulted in disasters. A category upgrade
in Gold would effectively drive up its value relative to other competitive
qualifying assets. By elevating Gold to a bank reserve asset, stability
would enter the equation, since the yellow stable metal moves inversely to the
risky paper assets that have crumbled. Gold is ideal as it bears no credit
risk, and has no counter-party risk, only theft risk (due to desirability) and
shell game risk (from certificate games).
An
upgrade to Tier-1 asset would make a triple win: 1) An endorsement of wealth
preservation and store of value from the syndicate penthouse, 2) inducement for
significant gold purchases by major financial institutions, and 3) reappraisal
of gold's value with respect to other Tier-1 capital such as quality sovereign
debt. Under the new rules, Gold could find a significantly larger proportion
of a reserve pool pushed into sudden growth. The Bank For Intl Settlements
might turn chicken, as time will tell. The calculus is appealing. If 2% of
total current Tier-1 capital held by commercial banks globally were to be
converted into gold, a suggested 2% of the $4,276 billion would amount to
$85 billion in gold purchases. That comes to the neighborhood of 1700 tons
of gold bullion. Hence banks would be encouraged to hold gold with similar
motives to central banks, which hold 16% of reserves in gold. One might wonder
if the BIS is tightening slowly in order to swing the wrecking ball left and
right, with more technocrats in wait to fill prime minister posts like Monti in
Italy. But politics is not an area for the Jackass to wander.
EFFECT OF ABSENT GOLD ON
BIG U.S. BANKS
A
hidden massive sinkhole effect like seen many times in Florida could be close
at hand. The financial press reports absolutely nothing on the tremendous loss
of gold bullion in Western banks since February. Heck, the gold community seems
largely unaware also that around 6000 metric tons of gold bullion have departed
Western banks (mostly London) in recent months. The effect will be felt
somewhere and soon, by sheer laws of nature. The big US banks might have only
one asset of undeniable value, Gold. As they lose that asset during the process
by which Eastern entities strip gold via forced demands during margin calls in
off-exchange transactions with extreme pressure applied, some big US banks are
being pushed closer to a death event. A string of bank failures could be
nearby. These banks are far more hollow as structures than perceived. Continued
television advertisements, sports sponsorship, and billboard lights do not
demonstrate solvency, only zombie activity that lacks vigor. Begin the death
watch for Morgan Stanley, which has endured the debt downward. As is the usual
mantra by shamans, it was not as bad as expected. All hail.
To
prevent the sinkholes from causing the next damage, in a hidden desperate
maneuver, many cartel banks will attempt to move gold bullion from private
executive accounts to save themselves. They will surely continue the illicit
practice of raiding allocated accounts, replacing them with gold paper
certificates. They will complete the trifecta by draining the SPDR Gold Trust,
removing inventory by privileged shorting practices. The entire migration of
gold creates an extreme risk for the Western banks, the true asset evacuated.
They have many assets on their balance sheets, mostly toxic paper from
USTreasury Bonds, Euro sovereign bonds, mortgage bonds, mortgage loan assets,
corporate bonds, commercial paper, and commitments tied to derivatives. The
great majority of such assets on balance sheets is toxic paper, in a fast-paced
process of imploding in value. Those balance sheets also used to contain gold
bullion in high volume. That is no longer the case, the bullion having been
leased & sold in past years and raided in a massive systematic scale in
recent months. The bank balance sheets have been thus hollowed out, leaving
their structures to stand on toxic paper, and much less on sturdy inert gold
metal. Recall that insolvency plus illiquidity forces bank failure. The many
bank runs are like a grand final hollowing process that affects the entire
banking sector in lost reserves, large and medium sized banks alike. The
absent reserves remove liquidity, amplified by the fractional system.
The
big US banks are left vulnerable to failures. The event is coming. Continue the
death watch on Morgan Stanley despite their continued walking status. Zombies
walk too, but they look funny and have ugly skin with many ghastly blemishes.
The extreme risk for Morgan Stanley is two-fold, never having gone away. 1)
They are a primary executor of the high-risk Interest Rate Swaps that defend
the USTBond artificially low yields. 2) They have significant European
sovereign bond exposure. They extended a huge private USDollar swap to big
European banks until the USFed stepped in a few months ago.
STRANGE EXTREME
STORIES AS WARNING WIND
Numerous
stories are circulating of vast cyber bank thefts. The locations appear
initially to be European. The volume is reported as EUR 2 billion so far. The
authorities will not discuss it in the open. The bank glitches might be more
about kiting of funds at best, or cover for internal raids of accounts at
worst. The much juicier story pertains to 600 highly paid accountants on a
Wall Street assignment. It is too large to be kept a secret, since it is
draining the sector of its accounting staff for hire. The rumors are as thick
as black clouds. They are busily attempting to determine the financial
status of a large Wall Street bank loaded with a mountain of complex derivative
contracts. The toxicity is openly mentioned. No secrets can be maintained.
It is surely Morgan Stanley. The next Lehman Brothers event is just around the
corner. One is reminded of an incident several years ago, where Ashanti Gold
had to hire a battalion of financial accountant experts in order to assess the
value of their crippled balance sheet overloaded by complex gold forward sale
derivatives. In other words, they needed to conduct a formal study to determine
if they were indeed dead. The same is happening with Morgan Stanley, dragged
down by a mountain of financial derivatives. The better question is who ordered
the accounting to be done, to determine if a Wall Street firm was dead? And why?
CHINA RECASTS GOLD BARS
China
is well along an ambitious plan to recast large gold bars into smaller 1-kg
bars on a massive scale. A major event is brewing that will disrupt global
trade and assuredly the global banking system. The big gold recast project
points to the Chinese preparing for a new system of trade settlement. In the
process they must be constructing a foundation for a possible new monetary
system based in gold that supports the trade payments. Initally used for
trade, it will later be used in banking. The USTBond will be shucked aside.
Regard the Chinese project as preliminary to a collapse in the debt-based
USDollar system. The Chinese are removing thousands of metric tons of gold bars
from London, New York, and Switzerland. They are recasting the bars, no
longer to bear weights in ounces, but rather kilograms. The larger Good Delivery
bars are being reduced into 1-kg bars and stored in China. It is not clear
whether the recast project is being done entirely in China, as some indication
has come that Swiss foundries might be involved, since they have so much
experience and capacity.
The
story of recasting in London is confirmed by my best source. It seems
patently clear that the Chinese are preparing for a new system for trade
settlement system, to coincide with a new banking reserve system. They
might make a sizeable portion of the new 1-kg bars available for retail
investors and wealthy individuals in China. They will discard the toxic
USTreasury Bond basis for banking. Two messages are unmistakable. A grand
flipped bird (aka FU) is being given to the Western and British system of
pounds and ounces and other queer ton measures. But perhaps something bigger is
involved. Maybe a formal investigation of tungsten laced bars is being
conducted in hidden manner. In early 2010, the issue of tungsten salted bars
became a big story, obviously kept hush hush. The trails emanated from Fort
Knox, as in pilferage of its inventory. The pathways extended through Panama in
other routes known to the contraband crowd, that perverse trade of white powder
known on the street as Horse & Blow, or Boy & Girl.
MONEY & DEBT ARE
FAILING
The
rabid rapid creation of new money and new debt are failing in the system
finally. The perpetual Quantitative Easing has arrived, with failed traction.
It is failing just like perpetual 0% and the slipped stimulus, which has no
traction since the USEconomy lacks a critical mass of industry and factories,
those value added centers forfeited eagerly to Asia for three decades.
Diminishing returns on bond yield support dictates that bond monetization must
accelerate more quickly. The effects are turning nil on short maturity bonds,
but still minor on effect with long maturity bonds. The concept perversely goes parallel
to negative returns on Gross Domestic Product from new debt application to the
system. Not only is debt failing, but debt monetization is
failing. Slippage is broad and becoming worse. Quantitative Easing like the
ZIRP are tools to apply sparingly since they are toxic tools. The 0% policy
wrecks capital broadly and alters all pricing models. The bond monetization discourages
creditors, inducing them to leave the room. As both are needed in increasing
exponential quantities, the paper shamans cannot keep pace. They lose the
battle from inability to apply ever growing magnitude, while attempting to
conceal their high volume activity. In time, like now, traction is lost and
benefits vanish. The USFed is stuck, and cannot stop expanding the money supply
to cover bond sales. The
USFed intervention in the form of bond monetization can never stop, period.
Arguments on the other side as illusory, meaningless, and distracting. To claim
that the size of their balance sheet is irrelevant, whether 10 billion or $10
trillion, is truly contaminated thinking. However, almost all teachings and
dogma from the central bank has been toxic since 2007, founded in pure heresy,
acclaimed by all authorities.
Consider a Goldman
Sachs analysis of the benefits of Quantitative Easing along the yield curve. An
analysis was done to identify the effect at individual maturities, using a
flexible approach to protect from other marginal effects. See the graphic for
the results, which should send shivers to readers. An insignificant effect is
seen on short and intermediate maturities, like up to 20 years, but negative
and statistically significant estimates at the ultra-long end of the curve with
21-30 years maturity. Flow effect from bond monetization is felt only on the
ultra-long end. The results suggest that a $1 billion purchase at the
ultra-long end of the curve tends to lower bond yield by 3.3 basis points at
that part of the curve. Robustness checks resulted in similar results with a
simple split of 1-10 year maturities and 11-30 year maturities in two test
groups. Another check was done that removed the 1-3 year maturities since so
bound by FedFunds control and guidance language. The results were unchanged.
An asterisk is
required for the analysis. Results are somewhat confounded (mixed, confused)
with stock market shifts and European crisis developments. Lastly, do not be
fooled by arguments that QE has targeted the long maturities in Operation
Twist, scheduled to phase out at end June. The QE program never ended, as it
went global. The QE to Infinity has been ON for over a year. It affects
all bond maturities and does so month in and month out, even if only to provide
replacement demand. The twist story painted a phony billboard, as usual. The
real story is that Operation Twist was designed to help the Asians diversify in
risk decisions on their massive portfolios. The Chinese and Japanese wanted to
shift their long-dated USTBonds into shorter maturities. Also, a solid argument
can be made that Operation Twist was designed to buy ALL of all auctioned
30-year USTreasurys ever issued, from inception. Cute trick! A review of the
volume for bond buys and past bonds issued bears this out, as the figures are
almost exact. Prior to the Oliver Twist fast hand chicanery, the invisible hand
was buying most of them in a visible manner anyway. The program merely made the
task official. The actions have turned more bold, with official bond purchases
done by the USFed immediately before auctions on the same day. That reeks of
pure desperation.
USDOLLAR
BACKWARDATION
A fascinating but
challenging concept has been put forth. A USDollar backwardation might soon
show itself. It would precede and preview a violent removal of the USDollar as
global reserve currency. Contract commitments might be avoided and shunned, in
favor of hard cash. Demand for the physical paper bills is likely to reach
acute levels, as the USDollar approaches the day of actually losing its
privileged global reserve currency status. That privilege has been abused in
historically unprecedented manner, with a climax of bond fraud, central bank
hidden loan grants, a financed endless war, even construction of underground
cities (see Virginia, Denver).
LTRO: DRAGHI
STILLBORN BABY
The story not told
adequately is the extreme failure of the LongTerm Refinance Operation installed
by Mario Draghi as his first act and deed at the Euro Central Bank. He has in
the process lost all credibility before his first year of tenure is over. The
Southern European sovereign bonds did not take well to the LTRO solution at all.
It caused an immediate vomiting episode that continues to this day. The
solution wrecked the banks further, applying a supposedly better quality elixir
of fiat paper bonds to replace a dismissed toxic bond. The Draghi solution of
LTRO funding was a stillborn baby. The Spanish Govt Bond yield is stuck at
alert levels. The Italian Govt Bond is fast approaching the panic levels, while
experts attempt to explain that Italy is in much better condition. The failure
of bond auctions in Rome will put aside such silly notions. The bond yield in
Spain will remain near 7% to keep the pressure on. The bond yield in Italy will
push past 6% to apply renewed pressure. Nothing changed, nothing fixed, and
worse, no real attempt to remedy or reform. As long as big bank liquidation is
avoided, the supposed solutions are all empty cans of hope and heretic games.
Clearly to anybody
with a good solid mental pulse, Italy is next on the big bailout trail. My
German banker source assured me back in February that it was the failing
prospect of Italy, and its totally unmanageable volume of debt, that led the
German bankers to obstruct all additional aid to Southern Europe. Italy is
next, and even the Austrian finance minister Maria Fekter admitted as such. Her
words angered Monti in Italy, a confirmation of their validity. The stakes in
the European debt crisis are rising fast. Italy is the EuroZone's third largest
economy. Reality bites, as Europe is far from ending its credit crisis turmoil.
BANK RUNS SPREAD,
NOT YET LIKE WILDFIRE
Europeans are
seeing scattered and growing bank runs, in at least four nations. The United
States and London have not seeing anything similar. The bank run phenomenon has
hit Great Britain though, in their colonial bastion of Northern Ireland. The
three identified locations of bank runs, complete with anecdotal evidence, can
be delineated. It includes Bankia in Spain, which is a well-publicized story of
halted withdrawals, followed by a nationalization plan, then an absurd display
of honesty. The bank revised the full 2011 fiscal year to overturn a small
profit, and announced instead a gargantuan loss in the $billions. One should
suspect all big Spanish bank balance sheets as a shelf of dishonest accounting,
hiding their grotesque insolvency and wreckage, with deep rot in the cupboards.
Banks in Central America shine by comparison.
Reports
circulated a couple weeks ago of blocked withdrawals from Banque Postale in
France. Online bank wire transfers were completely halted. The Hat Trick Letter
reported in May that high wealth accounts had been vacating Paris in search of
Scandinavian safer grounds. The run has continued. Other reports have come that
BNI depositors in Italy were told of blocked withdrawals. The bank went bust,
without any decency to give any warning to its own clients. Instead it cut off
its depositors from accessing their money. The Bank of Italy (cental bank)
authorized the suspension of payments by Bank Network Investments without
communicating anything to the depositors. They are mere pawns in the process,
whose interests are secondary to supplying banks. The Bank of Italy extended
receivership of the bank. Compulsory clean-up exercises followed. In addition
to BNI, depositors of Banca MB were also affected.
Bank runs have
finally begun in Spain, Italy, and Greece in earnest. The savings accounts are
being depleted within a broad vanishing act. Argentina is the lesson few learn.
The latest is a report that NatWest within the RBS Group in the UK has suffered
computer meltdown. Millions of customers had been unable to move or withdraw
money from their accounts. A widening suspicion has come that the supposed
technical glitch was instead a disguised kiting scheme designed to save the big
bank conglomerate million$ in delays while clients were denied access to their
money. It is theft by another name. The Ulster and Belfast bank interruptions
blocked over 100 thousand account holders from access in Northern Ireland.
GREEK FLASH POINT
FUSE
The Greek debt
default is inevitable. It lies somewhere between tragic and funny to watch the
futile extraordinary measures to stave off the day when big European (and
London) banks must suffer their losses. The tragic comedy continues to turn
pages. The Germans will not fund anything more, period. If another bailout is
fashioned, it will be a pure shell paper game concocted in Brussels. When the
inevitable Greek default comes, it will be like a Lehman Brothers crash times
ten. A default is best for the Greek nation, unless they prefer to see the
entire national wealth shipped to foreign lands. A default is a dreaded event
for the bankers, naturally. So they spin the story about popular benefit,
stated in pure backwards form. The extreme risk is being recognized for its
contagion across borders, a process begun. To think that Greece would topple
the larger nations of Southern Europe was a laughable concept two years ago,
but that was the Jackass forecast clearly stated without hesitation, only
early.
Companies must be
cautious not to enter into binding contracts, thereby aggravating the recession
in Greece. If not the poison pill of austerity to satisfy bailout demands, then
caution on contracts will send the nation into a halt. The government deficits
recorded in Athens are making the history books. And a strange footnote,
businesses are springing up in Bulgaria across the border, owned by Greek
interests, simply to avoid the toxic Euro currency. A smooth transition with a
Greek Govt debt default would cause a 20% to 25% devaluation in assets in
Greece, from bank accounts to home values to business value. That level of
downgrade is what the new Drachma would require upon conversion from Euros. A
disorderly transition could result in a 50% devaluation. Expect disorder. Thus
the motive for capital flight, bank runs, and smuggling cash across borders. No
officials are pursuing solutions in the best interest of the citizens. The
other larger PIGS nations are not strong. France is an unrecognized PIGS
nation. It is a PIGS dancer falsely posing in Teutonic clothing. It has been
acting like a strong German banking resource, in a pretender’s role. By
extending so deeply in PIGS loans, it became a PIGS nation.
DEBT CONTRADICTED
AS WEALTH
The industrialized
nations are the primary abusers of debt, in order to sustain their standard of
living even as they have discarded or forfeited their industrial base. No need
to work, just invest and speculate, all clean industry. It is no coincidence
that Germany remains wealthy, since it made a concerted effort not to lose its
industry to Asia. Important deals were struck in the 1990 and 2000 decades, to
preserve jobs, to cut pay, and to refuse outsourcing and offshoring. The United
States embraced both practices, and has suffered a systemic failure as a
result. The final chapter is playing out. The financial markets perversely
treat debt as an asset, trading it actively in many forms, like sovereign
bonds, corporate bonds, mortgage bonds, and municipal bonds. Now enter LTRO
bonds, more toxic junk paper. The process of downgrading the bond paper is well
along, not yet having hit climax. The home foreclosure chapter will be followed
by a sovereign debt default chapter, complete with numerous debt restructure
events. It will play out in a series of falling dominos.
The climax will be
the fall of the House of Morgan, as JPMorgan fails and the USGovt debts
default. Many regarded the concepts as unthinkable in 2008. Not anymore. The
JPMorgan fortress of USTBonds and Interest Rate Swap supporting structure will
surely topple, as the Credit Default Swap contract shop floor erodes and
disintegrates, as the sovereign debt tied to it crumbles. The JPMorgan episode
will bring down the house of cards, with the Interest Rate Swap machinery
caving in. The wreckage process started with the weakest nations in Greece,
Portugal, and Ireland. It will end in France, London, and the United States.
The advanced
nations carry between three and ten times as much total debt as they have
economic activity, as measured by Gross Domestic Product. The worst offender is
the United Kingdom, whose debt is about 9.5 times its annual economic activity.
With a string of bank welfare programs and endless empty economic stimulus
(little more than reshuffling taxes and extending doles), the UK piles more
debt upon debt without a remote hint of remedy and solution. The United States
is piling up debt at an extremely rapid rate, as is Europe. Notice the Japanese
debt at over six times GDP after two decades of Quantitative Easing and endless
stimulus. The cost of 0% policy is heavy but hidden. The pervasive systemic
problem is founded in the misconception that debt is wealth. Debt can be used
as collateral. Debt is securitized into bonds that are avidly traded on
exchanges as items of value. With such transfer of debt to securities, the
cancer is spread from the banking industry under its regulatory oversight. To
support debt valuations, and to prevent massive writedowns during the global
financial crisis in its fourth year, the central banks of the world have been
willing to swap out bad debt for good money. The counter-party risks have been
overlooked and shoved under the carpet. As conversion of debt to hard assets
continues, with a gold wave included, the asset downgrade will be conducted
until its conclusion.
GOLD, THE LAST ASSET
STANDING
In
no way can the current ambushes and nasty schemes conclude quickly within the
Gold market. The desperation of the gold cartel and their partner big bankers
is visible. The naked shorting of Gold & Silver is done more openly. Their
oversized positions cannot stand simple scrutiny as being hedges. The timing
of attacks is clear, to coincide with vast expansions of the money supply or
USFed public appearances with speeches made. The imbeciles that cry outward
about Deflation are pathetic, as they fail to comprehend much of any of the
formidable factors at work. They observe but one table, while at least seven
are bustling with movement. The time honored correlation between the Gold
price and the money supply is being strained, much like the USTBond tower and
its supporting Interest Rate Swap buttresses. The game is futile. The
bankers will play it to the end. They will soon be forced to play without much
of any gold in their arsenals. Not until the Western banking and bond system is
fully wrecked will the new Eastern Coalition system of trade settlement be put
into place with trumpets blasting to herald arrival. The Eastern architects do
not want the blame of ruining the Western fiat paper system. Until that day,
the Gold price will be subjected to openly criminal activity, fully permitted
illegal steps to keep the game going, and nothing but lipservice to maintain
the rule of law. Some powerful events are coming, which will provide such
incredible disruption, that they will make history. Do not expect justice to
handle the criminals. Expect the new gold-based system to sweep them aside.
They will vanish with a dragon’s breath. When the new day dawns, the Gold price
will be multiples higher, as will the Silver price. A grand divergence
between the paper Gold price and the physical Gold price is happening exactly
now, with great forces at work to pull them apart. The events in between
contain the mystery and intrigue and confusion. A day will come before long
when the paper discovery Gold price will not be reported at all, because their
market will contain no gold, as in zero gold!
THE
HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.
subscribe: Hat Trick Letter
Jim Willie CB, editor of the
“HAT TRICK LETTER”
