On his weekly podcast, Andy Hoffman discusses China, unemployment, Japan, Europe, GDP, the Fed, money printing, Janet Yellen, Russia, Ukraine, gold and silver. To listen to the audio, please click below:
Download the MP3 File: The Ukraine, Fraudulent NFP Data and Other Black Swans
Today I am featuring a very important article on China, the Federal Reserve and America’s gold. It is an impressive report, followed by an even more impressive audio presentation, which you can link to at the end of the report.
We have covered virtually every topic in this presentation at one time or another, in the past two years, but even I found it to be a jolting experience to see it all presented in an orderly fashion, in one place, at one time.
We are on very good terms with the Sovereign Investor. In fact, our office in Del Ray Beach is right down the street from their office.
Just recently they sent out a one-on-one interview with their CEO, Bob Bauman and Andy Schectman on gold and off shore storage to all their paid subscribers.
They believe that Miles Franklin is a first-rate firm, and they trust us. We believe that their newsletter is a great value and indispensable for our readers – especially our high net worth readers. If this if your first exposure to their information I think you will be impressed.
With special permission from our friend Bob Bauman, I am featuring the latest Sovereign Investor Daily article in my section today. After you finish reading it, set aside an hour or two and listen to Jeff Opdyke’s audio presentation. I started to listen to it myself around 1:30 a.m. Friday morning. I didn’t leave my computer until it was finished, after 3:00 a.m. Yes, it was that compelling. That’s how I feel about it; the ball is now in your court.
It has been my contention that either an unexpected Black Swan event (a good example being Russia dumping the dollar over U.S. sanction on the Ukraine) or the loss of the dollars petro standard would cause the dollar to lose reserve status. The result would be hyperinflation and gold at a very elevated price. I do believe what Jeff Opdyke proposes is very possible – and will happen. If not in the next month or two, still sooner rather than later. We will face this once China announces their true gold reserves. Once they have purchased as much gold as they can get, at (these) low prices, there is no reason not to make the announcement. It will happen – and I’m betting my future standard of living on it!
A New Effort is Afoot to Corner the Market in Gold – www.thesovereigninvestor.com
By Jeff D. Opdyke, Editor of Profit Seeker
No reason to dilly-dally with a trend this large. So, let’s start today with a chart …
Those bars track the amount of gold, in tons, flowing into China through Hong Kong. The data comes directly from the Hong Kong Census and Statistics Department. The most recent plot point, the green bar, shows gross imports exceeding 102 tons in January 2014.
Some of the media coverage that emerged when Hong Kong released the January figures a couple weeks ago told the story of Chinese gold demand in retreat, noting accurately though certainly not importantly, that the January imports were down from about 126 tons in December. That, certain media outlets assured, was a sign of slackening demand in the Middle Kingdom and, ostensibly an indication that China’s consumer economy is on the downslope.
That’s one way of reading the data … albeit, the wrong way.
Reality, as the chart overtly shows, is a much different animal. It’s an animal that says China has not-so-secret worries about a currency crisis in the West. And it tells me that China might just be trying to corner the market in gold.
I have joked in financial books I’ve written that “poor people plan for Saturday night; the rich plan for three generations.” You can apply a similar analogy to China. While America’s disastrous financial situation means we plan for the immediate needs of tomorrow; the Chinese are planning years in advance. We’re impulsive and reactionary; the Chinese are patient and plodding.
That chart offers a smidge of insight into what I mean.
Despite the media’s cursory and wrong assessment of January, the Chinese are methodically accumulating more and more gold. The chart shows that in every single month of 2013, the Chinese imported more gold than they did in the same month a year earlier. And the 102 tons this past January is an ongoing extension of that trend. Month-to-month comparisons are irrelevant because of changes in the way the Chinese spend. For instance, one would expect January and February to be lighter than other months of the year because of Chinese New Year preparations and celebrations.
But from a holistic view, the trend is sparkling in its clarity: China is accumulating very large sums of gold at the very moment the Federal Reserve’s actions here at home are — temporarily — keeping a boot heel on gold’s desire to push higher.
And that raises a question of great significance for investors and savers: If gold is the dead commodity that so many commentators claim it is, why are the Chinese buying so much of it? After all, the 1,500 tons of gold the Chinese imported into Hong Kong last year alone represented roughly half of all the gold produced in 2013.
Are the Chinese mentally deficient? Are they so wealthy now they have nothing else to spend their money on but golden trinkets?
Or are the Chinese so clever they see something we don’t?
Follow the Leader
Officially, China has just shy of 1,100 tons of gold in reserve. Don’t believe official numbers.
That number was last reported in 2009. A lot has changed in the intervening five years. During that period, China has become the world’s largest gold producer … and the world’s largest gold buyer. Hong Kong has become the world’s largest importer of gold, the former British colony clearly doing the bidding for the Chinese.
When the Chinese next report the country’s official gold holdings, possibly this spring because China likes to do things in five-year periods, I’m betting the number will top 5,000 tons — possibly as much as 6,000 tons — based on known mining volumes inside China and the amount of gold that Hong Kong’s Census and Statistics Department says has been imported.
China has been such an aggressive gold buyer in recent years that I have to wonder, “What’s up with that?” And I think I have an idea. I think China sees that the West has poisoned itself with debt … and that the antidote the West is using to sustain life for the time being — excessively low-interest rates — will never work. China, in short, sees the West racing towards a currency crisis, most likely centered on the cancerous U.S. dollar. The fallout will clearly hurt the Chinese since the country owns roughly $1.3 trillion in U.S. Treasury paper. But how convenient will it be for the Chinese in a crisis-addled world to own possibly the largest horde of gold, the only form of money that has survived every currency crisis the planet has ever known?
As currency upheaval undermines the dollar, gold prices will rise. It’s the inverse relationship between the dollar and gold that I’ve shown here many times. And while China would lose money on its U.S. debt, the value of 6,000 tons of gold will approach half a trillion dollars or more, depending on how high gold prices soar in a world where the dollar dies.
Thus we come to the ultimate fortune cookie message: He, who follows China, follows the golden path.
Until next time, stay Sovereign …
Jeff D. Opdyke
Editor, Profit Seeker
P.S. I think a massive upheaval lays on the horizon when China finally reveals its official gold stockpile. Questions will be asked about the source of China’s gold, and it will shine a frightening light on the U.S. For more information on the chain of potentially catastrophic events we’re facing, click here.
(c) 2014 Sovereign Offshore Services LLC, t.b.a. The Sovereign Society. All international and domestic rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, without the written permission of the publisher, The Sovereign Society, 55 NE 5th Avenue, Suite 200, Delray Beach, FL 33483, Tel.: (561) 272-0413 Email: www.sovereignsociety.com/contact-us
I wanted to title this piece “what if” but I think I’ve already done that 2 or 3 times so instead…I have to ask, what exactly would happen if there were a class action lawsuit against the exchanges that trade silver and gold? What if there were also class action suits against the World Gold Council and GFMS for understating global demand while overstating supply? What if the “crazies” went so far as to sue JP Morgan for concentrating positions and cornering markets? Or maybe the CFTC for letting it happen even while being spoon fed evidence from GATA and other sources. What if it went so far that boards of directors of mining companies were sued for breaching their fiduciary responsibility by not making a “peep” all these years and for selling “assets” below true market value?
Yes I know the above sounds absurd and maybe it is but Kevin Maher of New York filed a class action suit yesterday against the 5 firms that participate (d) in the London fix from 2004 to present. Is this crazy or nuts? Yes it probably is and the odds in my opinion are stacked against him from so many different directions but…if it does not get thrown out immediately he then may have a “trump card.” This trump card is quite similar to the one that Blanchard played back in the early 00s when they took the baton from Reg Howe’s foray. Back then, Reg sued the Fed in Boston court and had a sympathetic judge that agreed with his argument but was found to have “no, or limited standing” so Blanchard stepped up and sued Barrick (with JP Morgan attached) because they did have standing. We will never know exactly what happened here because the case was settled and Blanchard was muzzled by the settlement. The thing is, “discovery” was just TOO SCARY of a thing because it meant pulling the curtain back to see just exactly what was “being done” to retard the prices of silver and gold. I think it was Jim Sinclair who said that no case of this sort would ever truly go to trial because “the discovery process is like sunlight to vampires,” he’s been right so far.
I have no idea how far this suit might go but can you imagine if a groundswell of “plaintiffs” joined in the ranks? Plaintiffs like all the jewelers in the country? How about all of the coin dealers in the country? Or anyone who bought silver, gold or metals ETF’s? How about the miners? Can you imagine these spineless wonders joining in? Of course anyone who bought mining shares during this timeframe would qualify also. Yes I know, each group would have their own gripe and it’s possible that jewelers might even complain that the price was not “driven” low enough but the bottom line complaint would be that prices paid or received were not correct and they were interfered with.
Can you imagine how fast a settlement would be offered if JP Morgan were included and directed by a judge to open their books to discovery? Can you imagine how big the settlement might have to be if a judge were to include ALL of the players over the years…on BOTH sides? Could JP Morgan or Deutschebank or any of the others say that they were “working for” or the “agent of” the Federal Reserve or some other central bank?
Yeah I know, it’s just “dreaming.” It’s dreaming because no judge who wants to live would allow anything of the sort. I say this because it goes way too deep and way too high. In fact, it could even be claimed that much of this was done at the behest of the “President’s working group on financial markets” …which would be a free get out of jail card. Another problem is “time.” It will take too long for any suit to work its way through the courts, in my opinion a delivery failure will occur before this thing is even seen. Once we have a delivery failure, then one must ask “what can I win” if I bring this suit? I’m pretty sure that any settlement and surely any award would be in “dollars” rather than ounces… And of course, if I had to bet, I would on some if not many or even all defendants not having two nickels to rub together once the derivatives chain breaks.
I spoke about this very subject with a close friend and old client of mine, he started laughing almost uncontrollably and said, “I want to join this lawsuit, I just want my money back, never mind what I should have made.” Don’t get this wrong, he did very very well, so well that he was able to retire in his late 40′s. He was in the shares early and took metal out as profit but yes, he did however take a few very big “lickings” on the COMEX. He was referring to some of the margin hikes after the close on Friday followed by straight down moves on a Sunday night when there was no volume…followed by another margin hike which caused margin calls …which was like flushing a toilet! He is correct though, it sure would be nice to have some of that COMEX “vapor” money back …but I suspect that by the time any case or settlement were to come around we will be more interested in other things like trading beans for toilet paper or silver for gasoline.
Before I finish I’d like to recount one other thing my buddy said which had me rolling on the floor laughing and yes I absolutely remember this like it was yesterday. My buddy said to me, “Doug Gillespie (who was partners with John Williams of Shadow Stats and has since passed away) was right, he always told us that our markets are so perverse and rigged that an ICBM could be launched and the Dow will close at a new high because somehow that will be spun as bullish.” Well, sure enough, this is exactly what happened yesterday, Russia “test fired” an ICBM missile in truly classic “middle finger fashion”…and yes the Dow reached an all-time high. This is the very last and only thing left for Washington to point at as “proof” of how good things are!
I know that I rambled on with this piece but please understand that this will all end badly. Actually, I believe the coming financial train wreck to be of Biblical proportions. Will owning gold and silver “save you?” Are you going to be “rich?” No, but you will at least have a fighting chance and far better odds of surviving than without them.
P.S. We just got through another (rare until this year) 3 nights below freezing here in South Texas. My “1,200 groundhog” Principe’ started losing gobs of hair last Thursday and no longer looks like a baby chick, Spring must be right around the corner!
For once, I’ll actually agree with a Federal Reserve governor; in this case, Richard Fisher, one of the “token hawks” kept around to play “bad cop” to the preponderance of “good” ones. In a statement that “Captain Obvious” himself would endorse, Fisher said QE is “distorting financial markets,” yielding “eye-popping levels of some stock market metrics.” You mean, like the most bullish sentiment EVER – amidst the worst U.S. macroeconomic environment and highest consumer prices, since the 2008 global financial crisis?
Even “Whirlybird Janet,” in her capacity as Chief Economic Obfuscator, stated yesterday that the economy is operating “considerably short” of the Fed’s objectives; as reiterated this morning by New York Fed President Bill Dudley, who noted that “economic headwinds are likely to persist for a considerable amount of time” – and thus, “there’s still a long way to go before needing to raise short-term rates.” As in forever, given the economic implosion that every fiat currency Ponzi scheme in history has engendered. Just ask the managements of today’s earnings disasters – Costco and Staples or better yet, their customers.
In other words, the Washington and Wall Street propagandists can lie all they want about “recovery”; but the fact remains that barely a third of Americans consider themselves better off than a year ago. That, my friends, is what occurs during recessions, not “recoveries.” In fact, the White House is so fearful of this reality, it last month launched the “MyRA” confiscation plan; last week, proposed a 2015 budget that would “only” produce a $564 billion deficit (which unfortunately, the Congressional Budget Office itself vehemently disputes); and this week, delayed the Obamacare mandate into 2016, knowing full well its catastrophic economic impact will all but destroy Democrats’ re-election prospects.
In fact, I’m thoroughly looking forward to how the Obama Administration – er, the Bureau of Labor Statistics – presents tomorrow’s non-farm payrolls report. Essentially all economic data point to a third straight miserable report; not to mention, yesterday’s ADP shortfall, and the below, damning chart. And thus, we’ll have to see what its political agenda truly is – particularly as Janet Yellen’s first FOMC meeting is less than two weeks away. Trust me, there’s a reason the BLS’ “birth/death model” purposely deletes year-ago data – as you can see here; as its sole goal is perpetuating the myth of “recovery,” while simultaneously maintaining the QE necessary to prop up financial markets.
Moreover, they have to figure out how to prevent the 1.3 million of people whose long-term unemployment benefits expired in December from being deleted from the Labor Force; plus, the 3.6 million others whose long-term benefits expire this year. If the BLS reports in accordance to its own accounting standards, the “unemployment rate” will plunge below 5% in short order, making an utter mockery of the Fed’s policies – given that food stamps enrollment, poverty and other negative economic statistics clearly don’t gibe with the government’s recovery propaganda. In fact, in our year-end predictions, widespread understanding of the Fed’s cluelessness about unemployment is expected to be a major 2014 theme.
Speaking of Fed cluelessness, isn’t it amazing how former Fed Chairmen “find religion” when giving $250,000 speeches after they leave office? Yes, the man who proclaimed he was in complete control throughout his entire, catastrophic eight year term, has all of a sudden admitted he was – essentially – lying.
Elsewhere, it appears “Draghi’s Reckoning Day” has been postponed for another month. Despite vehement calls from the IMF for the ECB to not only reduce rates from 0.25% to 0.00% (or lower) but initiate outright QE, Draghi left the ECB’s ultra-easy monetary policy unchanged, while continuing to cite economic risks “to the downside.” Clearly, he is holding back his last quarter point rate cut – and more draconian monetary measures, such as QE and/or negative deposit rates – due to continued stock market strength; which in our view, relates solely to heightened inflation expectations. In other words, the second equity markets lose their mojo, you can “bet the ranch” the ECB, Fed, BOJ and other Central banks will turn up the printing presses to unprecedented levels.
As for PMs, they were again “capped and attacked” yesterday, in typical Cartel fashion. In yesterday’s “just like Cyprus?,” we discussed TPTB’s typical, relentless attempts to downplay major geopolitical events in the minds of safe-haven seeking investors. Thus far, a joint effort between Washington, Wall Street, and the MSM has produced the desired effect – in that PM prices are just marginally higher then when the crisis broke out last weekend, whilst equities and Treasuries haven’t lost a step. However, even the past two days’ “2:15 AM” and “cap of last resort” attacks (the latter, at 12:00 PM EST) haven’t succeeded in preventing gold from reaching its highest level of the year; which should at least modestly scare the Cartel, given that – if anything – the Crimean revolution is worsening, with the prospect of another “anything goes” weekend upcoming.
Which brings me to today’s topic, “silver anniversary”; quite apropos, given Miles Franklin launched its 25th anniversary celebration this week. Once again, I’m drawing from my good friend Steve St. Angelo of the SRSRocco report; in my view, the best PM-focused mining analyst on the planet. Yesterday, he wrote of how U.S. Mint silver Eagle sales are “stealing the show” this year, whilst mining companies continue to hemorrhage money by selling well below their respective costs of production.
These concepts are nothing new to Miles Franklin readers – and certainly not those of “Admiral Sprott,” who for some time has noted how silver to gold purchases – in absolute dollars – have far exceed the silver/gold price ratio; which thus, cannot be sustained at such depressed levels.
However, something Steve wrote really drove the point home of a pending silver shortage, right under our noses. That is, regular email dialogues he has had with U.S. Mint representatives, who have recently spoken of weekly “rations” of saleable silver Eagles. As you can see below, 2014 has started at a blistering pace, with silver Eagle sales on pace to shatter last year’s record levels. And this, despite January sales of 4.8 million ounces being well below January 2013 record levels of 7.5 million ounces (which should tell you how brisk February and early March have been).
Yet, when one views the January sales figure – of the aforementioned 4.8 million ounces – it’s quite apparent that the 1.2 million or so of weekly “rations” Steve speaks of came into play. In other words, sales would likely have been much higher if the product were not SOLD OUT. Fast forward to February’s sales figure of EXACTLY 3.75 million silver Eagles, and it appears quite apparent that for one week, product was sold out; while during the other three weeks, 1.25 million ounce allotments sold out as well. As for March, Steve was told that the first week’s sales “allotment” was just 1.1 million ounces – of which an incredible 903,000 sold in the first two days (figures below, as of March 4th).
In other words, it appears that silver demand is not only “strong,” but much stronger than the already blistering sales figures connote. Never before has the U.S. Mint been forced to allocate silver Eagle sales on a weekly basis, during a “non-crisis” situation; and thus, the current, comically low prices – both absolutely, and in relation to gold – appear to be on their last legs.
Last week, I wrote of how I personally sold some of my gold Maple Leaf coins – held at Miles Franklin’s Brink’s storage facility in Montreal – in lieu of new, limited edition silver Peregrine Falcons from the Royal Canadian Mint. I doubt many Falcons remain to be purchased at today’s prices; i.e., roughly the same as generic silver Maple Leafs – and thus, encourage you to call Miles Franklin and inquire. But aside from the Falcons specifically, the aforementioned evidence of a potentially imminent silver shortage should be considered, as it has by myself. A year ago, my personal gold/silver ratio – in dollars – was roughly 63% gold/37% silver. However, due to the aforementioned factors, I spent 2013 – and early 2014 – reducing that ratio to 53% gold/47% silver, which I intend to maintain as long as the gold/silver ratio remains above the minimum, arbitrary threshold of 40:1 I am utilizing. Ultimately, I expect the gold/silver ratio to fall to at least its historical average of 15:1; and eventually, significantly lower once the world realizes that “poor man’s gold” is in far shorter supply.
Yet again, on the theme of Miles Franklin’s 25th anniversary, I hope you’ll give us a chance to earn your business; as above all, you can count on our providing “honesty in a world of lies.” Just call us at 800-822-8080, and we’ll be happy to answer any and all questions about Precious Metals you could possibly have.
In the past 12 months, business in our industry is way down. There are a few firms out there that many of you are familiar with that have business models that may have worked 10 years ago, but don’t work now.
Any firm that gives their product away, when volume drops off, is a risk. If the owners have deep pockets and don’t mind losing money (could be over two years now), you may experience delays in receiving your product. That is the first sign that the firm you sent your money to could be having cash flow issues. That’s how it starts.
One of the “big name” firms that I will not name has logged 42 BBB complaints during this slow down. They give their gold and silver away! So, this is no surprise to me, but it may be to you if you end up with the short end of the stick like so many of Tulving’s customers did. And even those who did get refund checks or deliveries in the last two or three months may be forced to return the money and/or product to the Bankruptcy Judge, assuming Tulving files for Bankruptcy.
More and more of these issues are on the horizon. Please, be very careful whom you send your money to. Check us out. Check everyone out. This is a bad time to be lax…
Meanwhile, I thought I would save you some time and present the following Better Business Bureau results for Miles Franklin…
We have ZERO complaints in the last three years. Zero closed cases in the last 12 months. No Advertising or sales issues. No billing or collection issues. No problems with product or service. No delivery issues and no Guarantee or warranty issues. And we also offer very competitive pricing – not much above the firms that are falling by the wayside or who’s BBB ratings are sinking like a rock.
Russian Presidential Adviser Sergey Glazyev told RIA Novosti said:
Russia will abandon the US dollar as a reserve currency if the United States initiates sanctions against the Russian Federation.
-Information Clearing House, March 5, 2014
Our foreign policy has been a total disaster under this Administration’s leadership (what leadership?). If they make this mistake, then John Williams’s prediction is set into motion.
Here is an article below that I want to call to your attention today. Greg Hunter interviews John Williams, who as you know, I have a great deal of respect for.
Russian Dollar Dump Could Crash Financial System-John Williams – www.usawatchdog.com
By Greg Hunter On March 5, 2014
By Greg Hunter’s USAWatchdog.com http://usawatchdog.com/
Economist John Williams says if Russia sells its U.S. dollar holdings, it could trigger hyperinflation. Could it collapse the financial system? Williams contends, “Yes, it certainly has a potential to do that. Looking outside the United States, there is something over $16 trillion in cash, or near cash. That’s about the same size as our GDP. . . Nobody has wanted to hold the dollar for some time. The dollar, fundamentally, is weak. It couldn’t be weaker. All the major factors are against it. It’s just a matter of what would trigger the massive selling. Nobody wants to hold it. The Russians start selling, and you have China indicating a general alliance here in terms of what’s transpiring. If the rest of the world believes this is what’s going to happen, people who have been wanting to get out of the dollar for some time very easily could front-run the Russians. The scare is on. People will try to get out of it as rapidly as they can.
What would happen if there was massive dollar dumping globally? Williams says, “It would be disastrous for our markets. All those excess dollars coming in, with bonds being sold, interest rates would spike. The stock market would sell off and we’d see inflation. To prevent that and try and keep things stable, the Fed would tend to buy up those Treasuries. It would intervene wherever it could to stabilize the circumstance. It’s going to be very difficult, and it’s going to be very inflationary. Williams goes on to say, “You have to keep in mind, back in 2008, we had one of the greatest financial crises the United States had ever faced. The system was on the brink of collapse at that point in time. What the Fed and the federal government did was spend every penny they could, anything they could create or anything they could guarantee. They did everything they could possibly do to keep the system from crashing. They guaranteed all bank accounts. So, they saved the system, but now what they did has not borne fruit. We have not seen an economic recovery. We have not seen a return of health to the banking system. So, the system is very vulnerable; and if the Russians carry through with their threat, you have, indeed, the risk of it collapsing the system.”
Continue reading on USAWatchDog.com.
Jim Willie is on the same page as John Williams. I have underlined his Ukraine/dollar comments below:
RUSSIA CANNOT BE ISOLATED.
The West is in for a gigantic surprise in the sequence of events to unfold. They have placed criminal oligarchs into top government positions in Ukraine. Doing so might suit the West but not the Ukrainian people. The political brain trust in Berlin shows extremely errant strategy, still kowtowing to the USGovt and London Elite in an incomprehensible manner. The West cannot isolate Russia, which is the latest absurd bone-headed strategy. They need Russia in vital ways that will become apparent when the West faces energy supply cutoff or forced Gold payments during an open global USDollar rejection. The US will quickly feel the lost Petro-Dollar gear mechanisms. China has already aligned itself beside Russia, which makes isolation impossible. Consider the Russian commodity supply and Chinese industrial power, the new axis to the Eurasian Trade Zone. The West cannot continue to bully Russia & China. Poking a stick in the bear’s face will not work for long.
Disrespecting the Chinese creditor is deep folly. The risk that coincides is for the two Asian superpowers to threaten or actually execute a dumping initiative of USTreasury Bonds, and force the United States to use its last card in a grotesque display of hugely amplified monetary expansion. The US would collapse by falling on its own sword, the event occurring in the Weimar chamber. A super high volume bond monetization machine to cover globally dumped USTBonds is a strong likelihood as climax event, with a broken derivative mechanism that is revealed during its fracture. The London banker murders (another Jackass correct forecast, made in mid-2011) indicate a motive to keep covered up the extreme $100 billion JPMorgan derivative losses at the hands of the London Whale Bruno Iksil, first sighted in May 2012. The accelerated hyper monetary inflation in response to Russian & Chinese joint retaliation would finally kill the USDollar. The echo event, born from failure, would be for the USGovt to launch the new split Scheiss Dollar. Then the USGovt could have its domestic currency finally, and then wreck it with an assured painful sequence of devaluations. The fundamentals for the US domestic only currency are truly horrible, typical of a Third World nation. Ukraine is about the last gasp of the USDollar. It has no viable defense.
UKRAINE AS WATERLOO FOR THE USDOLLAR.
Ukraine is the Waterloo event for Team Obama and the Wall Street handlers, the true controllers of the White House puppet. Ukraine will lead to wreckage to the USDollar and its USTBond partner in crime. Witness the death of the USDollar and the Birth of both the Gold Trade Standard, on the new Eurasian Trade Zone landscape. Neither Russia nor China will cooperate on the IMF super sovereign reformed currency basket at this point, not during extreme hostility and conflict. Hope and pray for cooler heads to prevail, since already many serious military attacks have occurred with advanced weapons off the Syrian coast. The Western Press prefers to frame the Ukraine situation as one more curious Orange Revolution event staged in Eastern Europe, akin to the other deceptive Arab Spring events. The old Soviet Union was trapped years ago, forced to use hyper monetary inflation in defense, as the nation imploded financially. The United States is now trapped in an ironic parallel manner, and will be exposed for its heretic inflationary response that ramps up to obscene volumes, followed by financial implosion. In fact, the events from here onward are the final hurrah for the USDollar regime and the criminal cabal. Now has never been a better time to own a big stack of gold & silver coins & bars, stored in a secure place outside the United States, outside England, outside Switzerland, even outside Canada. The people must defend against a climax of systemic failure, led by arrogance, stupidity, desperation, and delusion, even armed aggression. It remains to be seen whether the Kremlin has some secret allies who might emerge in time, from other worlds. But that is an entire other story to be told someday maybe. We earthlings will all find out soon enough. Times are changing fast, and better to be alert than to get hurt.
– Jim Willie, Hat Trick Letter, March 4, 2014
It is precisely because Black Swan events – like the topic above, which are always unexpected and come out of nowhere and would have an immediate and profound affect on the dollar and gold – that you cannot make the mistake to sit on the sidelines and fish for a bottom (ya hear me Edelson?)
After writing my piece yesterday, “Who Will Suffer The Most?” the following article appeared on Drudge report. This very short article speaks of the Russians “turning the tables” on the U.S. and basically saying that they may discontinue any business with the U.S. if sanctions are imposed. This would also mean that they will stop using dollars which got Saddam Hussein, Qaddafi and seemingly Chavez into some water that was too hot to survive in. This article was followed by another one in the Telegraph where the author mocks Russia’s ability to ever stop using dollars. He says that Russia could not survive without using dollars and that the world uses dollars by “choice.” Before going any further I would like to state the obvious, IT IS NONE OF OUR BUSINESS anyway!
That said, didn’t I just “wonder” yesterday what Russia and China might do if the U.S. pressed sanctions? “Would they…could they” turn the tables on the U.S. and treat us to our own medicine? What it comes down to really is who will suffer the most. The author from the Telegraph suggests that it would be the Russians, I disagree for several reasons. First and foremost, China has sided with Russia and they also happen to be our “banker.” Also as I wrote yesterday, the Russian people already know hard times first hand, could a global meltdown be any harder on them than what they went through back in 1990?
In my opinion, Vladimir Putin is simply “toying” with the West. He knows, the Chinese know, and yes even you should know if you use a little common sense…the West is still standing only out of “confidence” and nothing else. If confidence somehow broke (or was “broken”), then you have the Humpty Dumpty scenario. To this day, 5 years after the GFC we are treated daily to Washington fingers pointing to the stock market…”See, everything is great, just look at the stock market.” As I have said for over a year now, China can on their own “end the game” whenever they choose and almost however they’d like to do it.
China can simply sell Treasury bonds. They can sell dollars. They can put orders in for gold that cannot be filled…or, they don’t even have to do any of this. All they have to do is refuse to transact any business in dollars. Could Russia tank our system by shunning the dollar? Would they really follow through on the threat of defaulting and selling all of their Treasury holdings? Maybe not, but would the chess playing Putin have threatened this if he did not have Chinese assurances that they will also play this game? I sort of view this situation as “muscle” (Russia) and “money” (China), sort of like a Sicilian operation where Mr. Putin is akin to “Luca Brazzi.”
I ask you this, with respect to imposing sanctions, what exactly can Washington do that would injure Russia? Could they freeze deposits? Does Russia have enough capital outside of their control which if lost, would make them think twice and withdraw from Ukraine? Do we transact enough business with them to make a difference? Is Europe going to say, “No, please don’t send us your natural gas. We’d rather freeze?” One must also wonder what would happen if Mr. Putin in turn asked for payment of said natural gas in gold, how the Germans might respond. “We can pay but we’ll have to wait 7 years until the NY Fed sends us OUR gold back?”
I want to point out that this has a very high possibility of being our “Achilles heel” moment. I say this because those running the circus in Washington know that the gold is gone and running low. Mr. Putin knows this as do the Chinese. In fact, I believe that everyone knows and also that everyone knows that everyone else knows and this is exactly why we cannot impose sanctions. Mr. Putin will do whatever it is that he chooses because he knows that we cannot do anything in return. Nothing militarily nor financially. Is he “bluffing?” I don’t think so because he looks to be actually “re assembling” the old Soviet Union. In my opinion, he is doing this out in the open and daring the U.S. to respond or retaliate because he knows that if we act at all, we end our own charade.
Russia also launched a test ICBM missile yesterday. Why? I truly believe that it’s because of the “dirty little secret” that everyone knows but no one (in the West) wants to admit and few are willing to talk about …we are running and for all intents and purposes have run out of gold. There is also speculation that Saudi Arabia which had stored much of their gold in London has had their stash “borrowed” and even that is now gone. Is this true? Could be but we will know the answer to MANY questions the moment that “someone asks anyone for payment for anything in gold.” We will find out who has it and who doesn’t. We will immediately see a new pricing structure and the “issued” fiat of whoever it is that has no gold …will no longer be accepted. The “dirty little secret” may have been kept secret from the unsuspecting public but it is well known amongst nations. Mr. Putin is a Master chess player…with position and backing, we are playing poker with a jack high and our cards showing. I believe that there will be no “sanctions.” If there are they will be meaningless. I also believe that if assets are frozen it will be viewed as outright theft. No matter how it plays out, please understand that you are watching the creation of a “new world order” in real time. Though it’s not the one envisioned by George Bush back in 1990.