Zinc Dimes, Tungsten Gold & Lost Respect
Use the above link to subscribe to the paid research reports, which include coverage of several smallcap companies positioned to rise during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.
In 1964 the USGovt introduced the zinc dimes clad with silver. They at least admitted the debauchery publicly. Now pre-1964 silver coins are all considered different, and valued differently too, higher. Rome committed the same coinage fraud 1900 years ago. Their Empire went bust as the city burned almost concurrently. Ayn Rand is a guiding light for Alan Greenspan, the enabling destroyer of the US banking system, destroyer of the US household archipelago, and dispatcher of the US industrial base to Asia. He is the hero icon worshipped by Wall Street. The irony is thick, that his career was spent following Old Europe orders that delivered the slow motion coup de grace to the American Empire. Ayn Rand wrote "If you want to know when a society is set to vanish, watch the money. Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of moral existence. Destroyers seize gold and leave to its owner a counterfeit pile of papers." The Chinese are learning this lesson the hard way, challenged to convert their USTreasury Bonds and USAgency Mortgage Bonds into true wealth before the paper becomes untradable. Actually, the bonds will eventually be redeemed by the USFed with newly printed money, when an avalanche occurs of foreigners seeking redemption en masse. For almost ten years they have been exchanging their finished products to the US & West for paper with ink on it, in questionable stored wealth. The Chinese are cashing in on their paper, trading it for new global power.
NEW TUNGSTEN MINE DISCOVERY
The tungsten deposits come in very high grade ore, located in shallow rectangular deposits dispersed widely across the world, segregated in unusual vault heap leach mineralizations. In October, the Hong Kong bankers discovered some gold bars shipped from the United States were actually tungsten with gold plating. This is the exact same Modus Operandi as the silver clad zinc dimes from 45 years ago. History repeats itself. The parallels to mortgage bond fraud with either subprime borrowers or multiple property titles used in bond securitization is easy to spot. A consistent theme runs through the American management of finance and dissemination of fraudulent assets on a global basis. Tungsten gold bars is a feat difficult to surpass. Credit must be given for not leaving any potential for fraud untapped. Refer to insider flash trading, naked shorting of bank stocks, commodity trading on behalf of the USGovt, and much more. No disrespect is intended for the trillion$ counterfeits of superstar grade. Refer defense appropriations, USTreasury Bond sales beyond issuance, and missing Fannie Mae funds. These are legacy crimes.
The initial discovery was something like four gold bars, which the Hong Kong bankers drilled invasively to test the contents. Reminds me of drilling the earth and measuring how many grams of gold per tonne. The HK bankers hoped to have 99% gold yield in their drill program for the resident bars. They found something like 1% instead and 99% tungsten. By the way, tungsten sells for less than $70 per ton, which makes its swaps for gold to be 60x more profitable than silver bar swaps. Another handy usage for the Gold/Silver ratio in calculations. The hunt was on. Now not a single assayer on the planet is available, as all are tied up. They have been commissioned to test the gold bars shipped from the United States of Fraudulent Banker America in their own bullion vaults. They use basic methods of four drill holes with direct assay of shavings, but also less invasive methods like electro-magnetic waves to examine the metal lattice structure. When highest level methods are needed, they turn to mass spectrometry. NOW ALMOST NO GOLD BARS WILL LEAVE THE LONDON OR NEW YORK METALS EXCHANGES WITHOUT SOME AUTHENTICATION, AS DISTRUST IS WIDESPREAD.
The global bankers must deal with toxic bonds and phony gold bars. Talk circulates that the entire contents of Fort Knox might have swapped a decade ago. Evidence is being accumulated and compiled. The assayers have also been commissioned to assist in authentication of gold bar delivery the world over from the US exchanges. Current estimates among the gold trader community run well past a few hundred thousand 'salted' gold bars, maybe over a million. So the introduction to sophisticated Wall Street methods of currency management during the Decade of Prosperity had a side game running simultaneously. In an age where the lines between patriotism and treason are blurred, this tungsten episode brings new meaning to the word HEIST.
BREAKDOWN AT GOLD EXCHANGES
The bust cometh, and it will be spectacular. The stories told in the press will be peculiar, since not told objectively. The headlines might be a comedy, with phony reports of foreign subterfuge, when the perpetrators are home grown. The focal point for attacks is actually London at their metals exchange. The early October events included numerous offers by exchange officials to settle gold contract deliveries in cash with a 25% extra vig bonus. Much gold was drained from London on demanded delivery, thanks to a small army of lawyers, a small blizzard of contracts, and a few key judges at the courts. They were all Asians, the majority Chinese. Gold was taken, thus enforcing futures contracts, which happen to be binding contracts. The pressure at the end of November will be worse to make good on gold contract deliveries. Recall the stories back in April for a Deutsche Bank rescue by the Euro Central Bank with a very large (over one million oz gold position) provision made. DBank was in trouble. The pressures are mounting every couple months. Next March will be a climax of the breakdown, or else June.
Breakdowns come from extreme pressures. Each delivery month event includes more gold removed from the London exchange, more gold demanded from it, and more movement toward a breakdown. So the next events have even more pressure, with less gold supply and continued relentless demand. Recall also that the exchange, along with the COMEX in the Untied States, exempt certain parties from maintaining 80% collateral when they short gold & silver with paper contracts. Thus the name suppression, or better yet corruption. They are being caught in their naked shorting game. The December 1st events surrounding settlement delivery demands will be more contentious and stressful than October 1st. In sequential manner, the March event will be even more pressure packed, with precious little physical gold in store and more targeted Chinese delivery demanded. The June event will be even more pressure packed still, a backup date for a potential breakdown if it does not occur in March.
The common denominator for the parties demanding gold delivery in London is simple: they are all Asians, all, as in all, and the great majority are Chinese. One can safely conclude that the US and British banks will be broken with the nexus being their gold management, which underpins the USDollar. Other pressure is sure to mount. Not the kind of pressure you might imagine. Pressure is mounting for senior bank executives and politicians to start revealing the identities, deeds, locations, and dates of the gold tungsten swap, the mortgage bond firehose, and other pervasive frauds protected by the USGovt and British Govt.
GOLD & SILVER BREAKOUTS
The gold & silver prices are moving in lead fashion, and have done so among the currencies for at least the last three months. The major currencies fiddle and diddle, but gold & silver continue to rise. The Chinese, according to word from connected sources, intend to push the gold price and the silver price relentless upward without explosive parabolic moves and without painful huge selloff corrections. That way, the army of public investors will not lose heart, and will remain on the path, in full phalanx support of the Chinese Govt initiative. The Euro currency has hit the 150 level in mid-October and in mid-November, only to fall back a little. The Euro is not ready for a powerful move to 160 just yet. Such an advance would bring with it a painful effect to German exporters again, not desired. As a result, the gold price in Europe has made significant moves, and is in the process of challenging the 785 high from February. The key to a massive gold bull market is confirmation in terms of other currencies. The gold breakout is being led globally in US$ terms, since it is the weakest currency among the majors. GOLD IS TAKING ITS RIGHTFUL PLACE AS THE PREMIER GLOBAL CURRENCY, AFTER A BREAKDOWN IN THE MONETARY SYSTEM AND INSOLVENCY IN THE BANKING SYSTEM.
My 1130 midterm target for gold has been hit, stated at least three times this summer and autumn in public articles. One must wonder if a sizeable selloff in gold is coming. My view is that given the lack of sudden sharp upward thrusts in the gold price, the prospect of a sharp correction is lessened. Charts tend to show symmetry oftentimes. Besides, the Beijing Put is becoming well-known in the financial circles. The Chinese are using some reverse technical analysis, buying heavily when the gold chart indicates imminent weakness. That way the clueless Western gold sellers will be denied their cheaper re-entry, and will be forced to buy at higher levels. The Chinese are employing an unusual pattern. They are accumulating gold. The Chinese will continue to buy gold with both hands until the supply is exhausted of turkeys who fail to comprehend the Paradigm Shift, fail to comprehend the USDollar revolt, fail to comprehend the broken Western banks, fail to comprehend the endless stimulus, and fail to dismiss the mindless gold bubble argument that seems to be floating around in recent propaganda ploys. Its author overlooks the USTreasury bubble of gigantic proportions.
Whether or not a notable pullback correction comes for gold, who knows? who cares? This is not a time to go in & out, selling & buying back a gold position. It is a time to acknowledge a powerful global shift that will send the USDollar into the dungeon, and deliver gold to unheardof heights. The next target for gold is 1300. The targets for gold are dictated by the size of the jumps from the head and shoulder of the inverted Head & Shoulders pattern. The lost respect from the gold bullion bar fraud, the Weimar output of printed money, the monetization dependence from global isolation, and the lack of leadership all tend to pull the USDollar down. More accurately, these factors will push gold up into a dominant currency position fully recognized, as nations struggle to rebuild their banks after toxic US infection that does not end.
G-20 CONFIRMS PARADIGM SHIFT
The Scotland gathering of bankers had some key signals to report. Note the signal how they ignored the USDollar as a topic in the open chambers. Conclude they wish for benign neglect, where the US$ can find its true value much lower, and eventually depart as the global reserve currency. Note the signal how they urged continued global stimulus. Conclude they wish for the major governments to continue to debauch, undermine, and destroy the major currencies such as the USDollar, British Pound, European Union Euro, Swiss Franc, and Japanese Yen. Conclude they wish for the emerging market economies to be given massive assistance by the industrialized submerged market economies. The more the prominent older nations render harm to their banking systems, economies, and balance sheets, the easier it will be for Brazil, Russia, India, and China to conduct the business of walking the earth as new leaders. The new BRIC nations will build their dominant positions one brick at a time. The Paradigm Shift is away from the USDollar, with power shifting from West to East and in particular toward the BRIC nations. Their most recent visible victory is killing off the G-8 Meeting, which does not convene anymore. Not only does the G-20 serve as the global banker conference forum, but the Chinese have a lead voice, precisely as they demanded. Creditors win their way.
The commodity currencies are in a different earth zone. My analysis has stated that the prominent older nations, the so-called industrialized nations, will not raise their official interest rates. They will only talk, since their banks are insolvent and their government debt securities are caught in asset bubbles. The Euro Central Bank is the most likely to raise interest rates, but only as part of a more diverse strategy to split the EU iteself. The German nation has been drained by $40 billion per year for each of the last ten years, and resentment is strong. The Australians and Norwegians hiked their official interest rates in recent weeks. They have commodities to fortify their national economies, and do not concentrate on the sale of inked paper in tainted export.
The Paradigm Shift is toward a more legitimate group of currencies. It is toward currencies backed by hard assets. The currency basket from the Intl Monetary Fund seems like the temporary device. It is actually a Straw Man carrying a straw basket. Before the grand shift is complete to at least one hard asset currency, the doomed currencies will be bound together with IMF twine. The bankers believe the IMF straw basket will give them the power to control the decline of the USDollar, or protect themselves from that decline. The strategy might succeed. It will surely enable the gold price to climb versus all currencies. Gold will be like Moses in a basket as a baby, except moving upstream. The candidates for hard asset currencies are the New Russian Ruble, the Gulf Dinar, maybe even a New Nordic Euro. The process will take time, as some bumpy roads lie ahead, and military protection is required.
EXIT STRATEGY & WEIMAR DOLLARS
No exit strategy is available either to the Untied States or the British. The USFed conducted its helpless display to announce the USEconomy remains weak with slack capacity, and that an ultra-low official interest rate would be firmly fixed for a long time still. No surprise here! What they did not say is that, like with Japan, they have no possible exit plan. Now almost twenty years later, Japan is stuck with a near 0% rate. If the USFed raises interest rates, they pop the biggest financial bubble on the planet, USTreasury Bonds. The USFed is further hindered since Wall Street is playing the Dollar Carry Trade. They are borrowing 0% money in US$ and investing in commodities like crude oil and US stock indexes. Other players are using the free borrowed money to invest in gold. In fact, just today St Louis Fed President Bullard stated his expectation of no further USFed rate hike until year 2012.
The Exit Strategy will lead to a road paved by Weimar Dollars. The world's major financial centers outside the central bank accomplices are ditching their dollars. They are diversifying out of US$-based bonds of all types. They are accumulating gold. Some are investing in facilities that are vertically integrated with commodity production, transport, and trade. Like China! The USGovt is investing, by contrast, in clunker cars, still more houses, dead car industry, spoiled AIG insurer, a mortgage cesspool Fannie Mae, pork projects (see unused airport in Johnstown Pennsylvania), and a dubious war on terrorism. Quite a contrast! With the news spreading globally about tungsten-laced gold bars, or actually gold-plated tungsten bars, the reputation of the Untied States will grow more tarnished.
In time, the only friend of the USDept Treasury to finance its steady stream of Trillion$ in debt will be the Printing Pre$$. Without the printed money to pull off the auctions, they would be utter loud failures. Without the USDollar Swap Facility, foreign central banks would not have funds to use in Treasury auctions. Without the funds from foreign USAgency Mortgage Bonds sold to the USFed for freshly printed USDollars, the foreign central banks would not have funds to use in Treasury auctions. Without the Permanent Market Operations used to scoop up all the unsold bonds stuck with primary dealers, one week routinely after each auction, dealers would be unable to participate in the next Treasury auctions. They would suffer from bond constipation. The key event in the next few months, pushed by the foreign disgust at fraud more pervasive than ever conceived by ordinary man, is THE EXPOSURE OF MONETIZATION for support of the USTreasury Bond. The debt monetization remains a dirty secret, well concealed by the USGovt and the financial press. What comes is isolation, and to those isolated, their best friend will be a Printing Pre$$.
Exposure comes, with detrimental impact to the USDollar. The resulting tarnish to the USGovt image and Wall Street reputation will be reflected on the USDollar. In time it will fully resemble a Third World currency. The process will take time, but hyper-inflation is coming to US shores. Where are the Deflation Knuckleheads who tended to dominate the web journals last spring and summer, in incredible dense vapid clueless fashion??? What a tremendously misguided group. They follow religiously the deteriorating economies, miss the twin storm, ignore the power of the unprecedented monetary inflation, and somehow overlook the entire global movement if not revolt against the USDollar in a grand Paradigm Shift. They represent the worst economists in the alternative media on web journals. Their tunnel vision on the falling asset price effect left them vulnerable to missing a tsunami on their own doorstep, incredibly. They still do not offer an explanation of why crude is at the $80 price level again. Supplies of oil are nowhere as great as the false USGovt statistics indicate, but the entire world is hedging at the same time against the US$ with oil assets.
OBAMA VISITS THE LEAD US CREDITOR
During the president visit to Beijing, Obama has been reminded of who the master creditor is. It is China. In public no discussions are made of the Chinese concentrated pressure in London at the metal exchange. Taboo topic. The US President has slipped on three key topics, with mention of the human rights issue, currency manipulation, and the future of communism. The US has no place to lecture any other nation. China is actually moving toward capitalism, while America has forgotten what capitalism is, and marches with right foot in fascist mud and left foot in communism mud.
The Chinese serve as the spearhead to displace the USDollar from its perch as the global reserve currency. They realize fully that the battle that must be won is over the Gold-Dollar fiery rod. The Chinese might be orchestrating a gold price move to 1150 and a silver price move to 19 just to slap the US face a little during the state visit. Creo que si!
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Jim Willie CB
Editor of the "HAT TRICK LETTER"
Hat Trick Letter
November 05, 2009
Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a PhD in Statistics. His career has stretched over 24 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors at www.GoldenJackass.com . For personal questions about subscriptions, contact him at JimWillieCB@aol.com