Brexit Is Not The Reason; It's The Catalyst - Peter Schiff

Peter Schiff with a podcast titled: Brexit Is Not The Reason; It's The Catalyst after BREXIT, Episode no# 176, 25th JUNE 2016

Keywords: bitcoin, Brexit, economics, economics theory, economy news, gold, peter schiff, silver, silver gold, eu, europe, world economics, macro economics

European Central Bank says Recovery Underway, is Opportunity to Fix Euro's Troubles

A sustained economic recovery is finally arriving in the 19-country eurozone, European Central Bank head Mario Draghi said Monday - a recovery he says must be used to complete the euro currency union and fix its problems for good.

Draghi said in a speech at a financial forum in Frankfurt that "most indicators suggest a sustained recovery is taking hold" as consumers and businesses grow more confident and banks become more willing to lend.

The head of the chief monetary authority for the shared currency said the upturn was helped by cheaper oil prices and by the central bank's stimulus policies.

The ECB has cut its benchmark interest rate to near zero at 0.05 per cent and launched large-scale purchases of government and corporate bonds with newly printed money to lower longer-term borrowing costs and raise inflation from worrisome low levels. It says it will purchase 60 billion euros a month through September 2016 for a total of at least 1.1 trillion euros ($1.2 trillion) in added monetary stimulus.

Draghi said Monday that member countries should use the breathing space given them by the central bank's stimulus efforts. He said they need to pass tough structural reforms that would make their economies more business-friendly so they can grow and prosper - and to enshrine supervision of such policies at the EU level. The 16-year-old currency union is still struggling to overcome troubles with too much government and bank debt that led to Greece, Portugal, Ireland, Cyprus and Spain needing bailout loans from the other countries. Despite two bailouts, Greece is trying to avoid a debt default that could see it leave the euro. Eurozone unemployment remains high at 11.2 per cent and prices are falling at a 0.3 per cent annual rate.

Draghi said that "a nascent recovery provides us with a window of opportunity, with the conditions to press ahead with reforms that will make the euro area less fragile and vulnerable to shocks."

Eurozone countries must make their economies more productive and "stand on their own two feet" because the eurozone doesn't provide for budget transfers from richer countries - the way U.S. states that suffer recessions can depend on tax transfers through the federal government.

The way to do that was to create new EU institutions in which countries would share sovereignty over their economic policies instead of leaving the responsibility at the national level. Draghi said any such institution would need strengthened democratic oversight and accountability to voters.

He didn't give a detailed picture of what such an institution would look like. The current EU-level reviews of national economic imbalances such as excessive labour costs and trade surpluses "has so far not gained much traction in national decision-making processes."

Draghi praised recent efforts by Spain and Portugal to lower labour costs to businesses - for instance by decentralizing wage negotiations in Spain - had helped those countries begin to recover.

Gold Will Appreciate 30% in Line with Swiss Franc, As Inflation Plays out in Fiat currencies

Gold Will Appreciate 30% in Line with Swiss Franc, As Inflation Plays out in Fiat currencies

Gold Will Appreciate 30% in Line with Swiss Franc, As Inflation Plays out in Fiat currencies - the Swiss Franc represents gold and a monetary standard that is more prudent than the rest of the western central banks which have been engaging in quantitative easing incrementally in an increasing fashion.

We will see the result of easy money, which has recently been bought to light by the Swiss (who quit the game mid hand exposing the rest of the players playing with extra cards in the deck!) flow into gold as more easy money chases finite money like gold and silver, the price will rise accordingly.

The Swiss Franc is 30% more scarce than the euro (Symbolically - or as interpreted by the free market), so in turn will gold be - albeit in a delayed fashion.

Joseph Gale

View Inspiration Articles

http://blogs.wsj.com/moneybeat/2015/01/15/gold-spikes-on-swiss-franc-stunner/

Gold Spikes on Swiss Franc Stunner

http://www.investing.com/analysis/swiss-franc-surges-as-restraints-are-lifted-238955

Swiss Franc Surges As Restraints Are Lifted

Also - James Rickards Currency Wars

Swiss Central Bank Defends Franc Move Despite Turbulence

Switzerland’s central bank on Saturday stood by its shock decision to let the franc soar, insisting the subsequent turbulence rocking global markets and the Swiss economy since the move would eventually subside.

“This was not an easy decision... (but) we are convinced it is the right one,” Swiss central bank chief Thomas Jordan said in an interview published in Swiss dailies Le Temps and NZZ on Saturday.

The Swiss National Bank (SNB), he said, had determined that by continuing to artificially hold down the franc, “it risked losing control of its monetary policy in the long term.” Jordan’s comments came after the bank stunned markets Thursday with its decision to abandon the minimum rate of 1.20 francs against the euro that it had been defending for more than three years.

This Swiss currency has since gained around 20 per cent against other currencies and is currently trading at around parity with the euro.

The soaring franc caused panic on global markets, bankrupted foreign exchange traders as far away as New Zealand and was seen as a significant threat to Switzerland’s export-dependent economy.

The Swiss stock exchange’s main SMI index has plunged more than 14pc since Thursday’s announcement.

Swiss banking giant UBS said the SNB’s decision would deliver a severe blow to economic growth, slashing its forecast to just 0.5pc expansion this year from its previous estimate of 1.8pc.

The yield on Swiss 10-year bonds on Friday meanwhile entered negative territory for the first time, slipping to -0.031pc, meaning lenders will now have to pay to lend money to the country.

THREATENING ENTIRE SWISS SYSTEM: “The strong franc is threatening the entire Swiss system,” the Tribune de Geneve (TdG) daily lamented on Saturday, adding: “The future looks dark.”

Jordan said Switzerland’s central bankers, who unanimously agreed to scrap their long-drawn efforts to hold down the value of the franc, “were aware that this decision could have a major impact on markets.”

“The markets should gradually stabilise,” he said, admitting though that “it could take time.”

The SNB had been defending the exchange rate floor since September 2011 in an effort to protect the country’s vital export and tourism industries, even buying massive quantities of foreign currencies to do so.

The rate was introduced as the eurozone crisis sent investors scurrying to the safe haven currency. More recently, the Russian rouble crisis put renewed pressure on the franc.

Jordan insisted the efforts to rein in the franc were no longer justified, insisting the Swiss economy was in a much better place than it had been when the cap was introduced.

“We gave the Swiss economy time to adapt to the new situation. A period of three years is not negligible,” he said, stressing that “the currency cap from the beginning was supposed to be an exceptional and temporary measure.”

“It was always meant to be abandoned.”

SNB NOT ALL-POWERFUL: Now that the cap was gone, Jordan acknowledged that “following this decision, the economic situation in Switzerland is more difficult.”

But, he pointed out, “SNB cannot fulfil all wishes with its monetary policy. It is not all-powerful.”

His comments were unlikely to win over Swiss businesses bracing to see exports plunge and shoppers at home flood across to neighbouring eurozone countries for cheaper goods.

“Making products in Switzerland and selling them abroad is currently the worst possible scenario,” Syz analyst Jerome Schupp told TDG.

Swiss Franc No Longer a Safe Haven and a Possible Bottom for Gold

Peter Schiff responds to the results of the "Save Our Swiss Gold" initiative this past weekend. He explains why he thinks it is bullish for gold and might have even marked gold's bottom.




0:17 – “Save Our Swiss Franc” would have been a more accurate description of the Swiss gold initiative.

0:59 – Switzerland used to have more than 40% of its reserves in gold and was very prosperous.

1:47 – The Swiss gold initiative was a threat to the powers-that-be, because it limited the ability of the Swiss National Bank (SNB) to create inflation

2:35 – If the initiative had passed, Switzerland would have been an example of a strong economy in a sea of European inflation.

3:34 – How is it crazy to have only 20% of your assets in gold, but sensible to have 100% of your assets in fiat currencies?

4:30 – The Swiss originally didn’t want to adopt the euro, but now they’ve embraced a de facto euro standard.

5:30 – Gold and silver dropped dramatically after the vote, which was surprising since no one had really expected the initiative to pass.

6:23 – Gold and silver recovered their losses quickly once the United States started trading.

7:10 – Peter believes the “no” vote is more bullish for the long-term price of gold.

7:43 – If the Swiss had adopted the referendum, it would have slowed down Swiss money printing and Swiss inflation.

8:28 – When the world realizes the United States is going to return to quantitative easing, the Swiss franc will no longer be a safe-haven option. This would mean greater demand for gold.

9:36 – If the SNB won’t be buying gold on behalf of its people, the Swiss will buy gold individually to protect their purchasing power.

10:49 – Looking at historical actions of central banks, there’s a chance that gold’s low price on Sunday could end up being gold’s bottom.

Jim Rickards Death of Money

Jim Rickards interview on the World economy and the death of the current fiat monetary system.

 

We’re in a global depression. There’s a slow down in Japan, China, Europe and the U.S. — the whole world is in a global depression.

There’s enough fights to go around, but in a fight between the ECB (European Central Bank) and Germany, Germany wins. The ECB is only doing $2.5 billion worth of asset buying, while the FED has been doing almost $1 trillion a year.

So the ECB is going through the motions but they’re not doing anything like QE. They’re not buying soveirgn debt.

They’re buying some asset-backed securities, but there aren’t even enough of those to have much of an impact.

The ECB’s Mario Draghi is the best Central Banker in the world.

He understands that Central Banks are essentially impotent. When you’re impotent you have to talk a good game — so Draghi says little and does less.

 The U.S. FED is the opposite. They don’t understand how impotent they.

Ted Butler: Silver Nightmare Will Soon Be Over

Ted Butler breaks down what happened to the silver price recently



Halloween couldn't have been more terrifying for silver investors. The gray metal cracked under $16/oz on Friday, a price not seen for nearly half a decade.

For years now, it's seemed like silver was beaten up so badly its price couldn't go lower. But then it would.

Why has silver been beaten down so badly? (now down 2/3 compared to it's high in late 2011). And will it ever see brighter days again?

This weekend, Chris has a long discussion with silver expert Ted Butler on the real culprit behind the wild price slams that have plagued silver: unfairly concentrated positions within the derivatives market.

JP Morgan, corruption, silver manipulation, banks, commercials, physical delivery, short squeeze

#JPMorgan, #corruption, #silvermanipulation, #banks, #commercials, #physicaldelivery, #shortsqueeze #nakedshorting #bankrun #bullionbankrun

Fed Playbook, 2014 Game Plan All Set for Yellen

Janet Yellen - the New Federal Reserve Chairman

With the playbook already written and the 2014 game plan in place, Janet Yellen is poised to become quarterback of the U.S. economy.

On Monday, the full Senate is scheduled to vote on Yellen’s nomination to succeed Federal Reserve Chairman Ben Bernanke as head of the central bank. Her approval needs a simple majority of the Senate’s 100 members and she is expected to easily surpass that.

The playbook for the coming year basically consists of one play: scaling back, or tapering, the Fed’s monthly bond purchases, a program known as quantitative easing.

The game plan will depend on the economy. If the data continue to steadily strengthen, the Fed, as it announced last month, will gradually taper its asset purchases at intervals of $10 billion a month until the program expires later this year.


The playbook seems fairly rigid. The Fed in 2013 had telegraphed for months its intention to start scaling back its easy-money policies through a gradual tapering because that method would have the least impact on the broader economy.

Raising the key fed fund interest rate is still off the table for the foreseeable future.

The game plan needs to be flexible, however, capable of shifting in accordance with data from key sectors such as labor, housing and manufacturing. So if labor markets dramatically improve or decline, the Fed can adjust its tapering policy on the fly, increasing or decreasing the rate at which it moves away from quantitative easing.

Careful, Cautious, Measured Fed Policy

“It’s going to be a very careful Fed policy,” said Cliff Waldman, a senior economist for the Manufacturers Alliance for Productivity and Innovation (MAPI), a public policy and economics research organization in Arlington, Va.

Waldman predicted that the first year of tapering, which will coincide with Yellen’s first year as Fed chair, will be “cautious and measured.”

“We are in unchartered waters,” he said. “The Fed did during this crisis what it didn’t do during the Great Depression, and that’s a good thing. But there’s zero historical precedent for what’s going on and we’re still in a post-crisis world. The Fed realizes there are still landmines out there.”

Rising interest rates, an inevitable result of tapering, probably won’t have much impact on large U.S. manufacturers such as IBM (IBM), Parker-Hannifin (PH), Ingersoll-Rand (IR) and Sauer–Danfoss (SHS), Waldman explained.
Big, multi-national companies aren’t likely to see their borrowing costs rise very much, he said, because they’ve already established solid credit track records. Smaller manufacturers – and small businesses as a whole – will feel more of an impact because its riskier for banks to loan them money.
Most forecasters believe the U.S. economy will continue to slowly gain momentum in 2014, which will allow a Yellen-led Fed to stick to the playbook established in late 2013 under Bernanke.

Broad Fundamentals Solid

Gus Faucher, an economist with PNC Financial Services Group, said broad economic fundamentals -- consumer balance sheets, corporate profitability, government finances --  have solidified in recent years and should follow that trend in 2014.

“The imbalances that caused the recession have corrected themselves. What that means is that the economy is strong enough to continue to expand even with the tapering,” Faucher said.

Tapering’s impact on the housing sector should prove something of a double-edged sword. On the one hand, reducing the Fed’s monthly bond purchases of Treasuries and mortgage-backed securities will force mortgage rates higher. That could push some prospective buyers out of the market and decrease overall home sales.

That might not be such a bad thing, however. The most recent S&P Case-Shiller home price index for October rose by nearly 14% year-over-year, the largest gain since the collapse of the U.S. housing market in 2008 and stoking concerns of another bubble.

Faucher said that rate isn’t sustainable and that higher mortgage rates “will take a little steam out of the price growth.” He’s predicting a year-over-year home price increase of about 5% between now and 2015.
“That’s a sustainable pace, roughly in pace with income growth,” Faucher said. “Housing won’t become unaffordable, we won’t see a bubble.”

Instead of tapering having an impact on labor markets and job growth, it will be the other way around, said Greg McBride, senior financial analyst at Bankrate.com.

Increased Stock Market Volatility

In other words, if job growth accelerates and the headline unemployment rate falls sharply the Fed might consider accelerating its tapering program. Conversely, if labor markets hit another rough patch the Fed could slow the pace of tapering.

McBride sees stock market volatility spiking with tapering. All of the major stock indexes have soared for five years under the Fed’s easy-money policies. The Dow Jones Industrial average and broader S&P 500 index have both surpassed levels achieved prior to the 2008 financial crisis and both ended 2013 at record highs.

McBride doesn’t see that upward trajectory ending. Indeed, he believes stocks will end higher in 2015 than they began this year. He just sees stocks zigzagging more often as traders respond to the beginning-of-the-end of easy money.


“I think the market will end higher than it started but it will be a bumpy ride,” McBride said. “The market is going to have to recalibrate from the impetus of easy money and return to a focus on fundamentals, namely top line revenue growth and profit growth.”

Bill Still on the Keiser Report Discussing the United States Debt Based Monetary System and Explaining Freely Created Money is the Solution

Bill still author of The Money master: How International Bankers Gained Control of America, and The Secret of Oz, interviewed by Max Keiser.

Jim Rickards: No Way Fed Will Stop Easing

James Rickards (Currency Wars: The Making of the Next Global Crisis): No Way Fed Will Stop Easing

Peter Schiff on the US Dollar Collapse - Economic Collapse

Peter Schiff on FED matters discussing the Federal Reserve Monetary Policy, US Dollar Collapse, Real estate, Gold and Silver - Economic Collapse

Ben Bernanke Confessing to Oprah of the Years of Performance-Enhancing Economic Doping

The Oprah Winfrey Interview we should have seen:

Ben Bernanke Confessing to Years of Performance-Enhancing Economic Doping.

One-in-Six Chance of a Deep World Recession

The International Monetary Fund says there is now a one-in-six chance of a deep world recession next year.

The warning, in the IMF’s major World Economic Outlook report, comes as the organisation again cuts its forecasts for global growth in 2012 and 2013.

Growth this year is now expected to be 3.3 per cent – 0.2 percentage points less than was forecast in July. Growth in 2013 is forecast at 3.6 per cent, or 0.3 percentage points below the July forecast.
These forecasts show the world economy labouring just above the 3 per cent growth level regarded by the IMF as a world recession.

However, the IMF estimates there is a 17 per cent probability of global growth falling to less than 2 per cent in 2013. That, it says, compares with a probability of only about 4 per cent in April.

A fall in the global growth rate to less than 2 per cent would be the result of a recession in the advanced economies and a “serious slowdown” in the emerging market and developing economies.

It would be a milder recession than experienced in 2009, when the world economy is estimated to have shrunk by 0.6 per cent. But it would be one of only four years since 1979 when world growth has fallen below 2 per cent.

For Australia, which is forecast by the IMF to grow by 3.3 per cent this year and 3 per cent in 2013, the main impacts of a global recession would be a further sharp fall in iron ore, coal and other mineral prices, a decline in real national income and an increase in unemployment.

“Downside risks have increased and are considerable,” the IMF says of the global economy in the report, released on Tuesday morning at the organisation’s annual meeting in Tokyo. 
It warns that fiscal consolidation is weighing on demand “with the impact of spending cuts and tax rises amplified by large fiscal multipliers”.

At the same time, it says, the positive impact of accommodative monetary policy “may be diminishing”.

“The financial system is still not functioning efficiently ... in many countries, banks are still weak, and their positions are made worse by low growth,” the IMF’s chief economist, Olivier Blanchard, says in the forward to the report.

“As a result, many borrowers still face tight borrowing conditions.”
The IMF’s central forecast of global growth of 3-plus per cent is based on two assumptions.

The first is that Europe will adopt policies that gradually ease financial conditions further in Spain and the other periphery economies.

The second is that US politicians prevent the drastic automatic tax increases and spending cutbacks known as the “fiscal cliff” which, it says, could push the US into recession.

Interest Rates Are Prices - Ron Paul

One of the most enduring myths in the United States is that this country has a free market, when in reality, the market is merely the structural shell of formerly free institutions. Government pulls the strings behind the scenes. No better illustration of this can be found than in the Federal Reserve's manipulation of interest rates.

The Fed has interfered with the proper function of interest rates for decades, but perhaps never as boldly as it has in the past few years through its policies of quantitative easing. In Chairman Bernanke's most recent press conference he stated that the Fed wishes not only to drive down rates on Treasury debt, but also rates on mortgages, corporate bonds, and other important interest rates. Markets greeted this statement enthusiastically, as this means trillions more newly-created dollars flowing directly to Wall Street.

Because the interest rate is the price of money, manipulation of interest rates has the same effect in the market for loanable funds as price controls have in markets for goods and services. Since demand for funds has increased, but the supply is not being increased, the only way to match the shortfall is to continue to create new credit. But this process cannot continue indefinitely. At some point the capital projects funded by the new credit are completed. Houses must be sold, mines must begin to produce ore, factories must begin to operate and produce consumer goods.

But because consumption patterns have either remained unchanged or have become more present-oriented, by the time these new capital projects are finished and begin to produce, the producers find no market for their goods. Because the coordination between savings and consumption was severed through the artificial lowering of the interest rate, both savers and borrowers have been signaled into unsustainable patterns of economic activity. 

Resources that would have been used in productive endeavors under a regime of market-determined interest rates are instead shuttled into endeavors that only after the fact are determined to be unprofitable. In order to return to a functioning economy, those resources which have been malinvested need to be liquidated and shifted into sectors in which they can be put to productive use.

Another effect of the injections of credit into the system is that prices rise. More money chasing the same amount of goods results in a rise in prices. Wall Street and the banking system gain the use of the new credit before prices rise. Main Street, however, sees the prices rise before they are able to take advantage of the newly-created credit. The purchasing power of the dollar is eroded and the standard of living of the American people drops.

We live today not in a free market economic system but in a "mixed economy", marked by an uneasy mixture of corporatism; vestiges of free market capitalism; and outright central planning in some sectors. Each infusion of credit by the Fed distorts the structure of the economy, damages the important role that interest rates play in the market, and erodes the purchasing power of the dollar. Fed policymakers view themselves as wise gurus managing the economy, yet every action they take results in economic distortion and devastation.

Unless Congress gets serious about reining in the Federal Reserve and putting an end to its manipulation, the economic distortions the Fed has caused will not be liquidated; they will become more entrenched, keeping true economic recovery out of our grasp and sowing the seeds for future crisis.

Death Knells for the US Dollar

The recent decision by the US Federal Reserve to contaminate the financial body until it responds favorably was the last straw in my book.  

Witness a declaration of permanent QE and hyper monetary inflation of the most virulent strain, unsterilized. The USFed is essentially admitting failure.  

The signal serves as the loudest death knell for the USDollar among many in a sequence. On a similar parallel note, lighter and more humorous, one might be reminded of the pirate swash buckling style of yelling at the swabbies that the beatings will continue until morale improves. The QE bond monetization of USGovt debt has turned viral and entrenched. It is sold as stimulus, when in fact it acts like a giant wet blanket on the USEconomy. It is intended as stimulus to businesses, but the effect is felt on the financial speculation and on Asian direct business investment. In the past the emergency lever device had been successful only because it was used on a temporary basis. But now the USFed high priest assures it is a permanent fixture, a sign of their failure. The public is too ignorant to comprehend the ruin. They can only see the threat to their personal ruin.

The bankers are determined to ruin the entire system in order to retain power, all while dispensing increasingly nonsensical dogma like from heretical high priests about the effectiveness of their solutions. Theirs is heresy built upon alchemy laced with arrogance, with no precedent of success in past history. A definition of insanity comes to mind, offered by a psychologist who works in a clinical practice. Let's stick with the layman translation. Insanity is defined as repeating the same action but expecting a different result. 

So the USFed conducted QE, then QE2, then Operation Twist (a deceptive QE), now is set for QE3. It expects a different result from the rising costs and debasement of the currencies. Somehow by enlisting the cooperation of the Euro Central Bank, the Bank of England, the Bank of Japan, and the Swiss National Bank, together they can pull off QE3 in a veritable ongoing QE to Infinity when all previous efforts have failed to produce a solution or economic recovery. The high priests from the central bank altars do admit that liquidity does not address the insolvency ills, yet they hit the monetary levers and accelerators more quickly. The central bankers are in a panic, and it is beginning to show clearly. Their solutions solve nothing. They will next attempt to rule more formally over the ruins.

MONEY VELOCITY

Money velocity is going down as quickly as money supply is going up. This report card is a grand contradiction of the USFed actions for a generation. The American Weimar experiment is turning into a tornado of financial ruin with inadequate recognition. As industry was dispatched and forfeited to Asia, the USEconomy lost its base for traction. New money has lost its effect in producing economic activity following a series of asset bubble busts, a spinning of capitalist gears, now stripped gears. New money is devoted to the financial sector in perverse fashion, as a reward for the past destruction of capital itself.  

The central bankers cannot dictate the speed at which money moves. They can only create it and drop it in the mix, speak their incantations, sprinkle pixie dust, offer some loony fiat prayer to the duped public, and continue with the next paper dump. The Untied States will gradually achieve systemic failure from redoubled efforts, suffer debt default from inability to manage the debt structure, and fall into the Third World. The nation will experience the monsters of high prices and acute shortage without comprehension of its source. It is toxic money.

The growth of the monetary base has been staggering high since the financial crisis broke in September 2008 with the collapse of Lehman Brothers. Since the end of August 2008, the monetary base has risen from $877 billion to $2,651 billion as of September 2012. That is a giant 3-fold rise. Witness the American Weimar era, its final chapter. The massive increase in new money has done nothing to foster growth in the USEconomy. The main reason is that fiat paper money destroys capital, a concept the hapless corrupted US economists cannot comprehend, either from compromise to their masters or lack of intellect due to years of exposure to the ass backwards preachings. The USEconomy is stuck in a powerful recession based in grotesque insolvency and bond fraud.  

As the USFed is poised to kick in another round of QE bond monetization, the money supply will ramp sharply up again. Do not expect much of any economic benefit, since the cost structure will rise again, then shrink profit margins. This capital destruction factor is a great blind spot to the hack economists who operate more as marketing harlots for Wall Street and the USGovt than analysts and advisors. The Ponzi Scheme theory dictates that an acceleration in new money is required to keep a constant speed. Expect more wreckage from the stripped gears of the USEconomic engine.

The money velocity chart shows a deadly decline since 1980, and a powerful decline since the 2007 outbreak of the absolute bond crisis. The new money is going to the big banks in bond redemption, derivative coverage, and Black Hole (Fannie Mae, AIG) fills under the USGovt supervision. 

The money is not finding its way into the USEconomy for further circulation. The plague is insolvency, soaked by endless applications of tainted money from central bank fire hoses.

 The velocity of money has been falling for years, in reflection of an economy that is not turning over much at all. Think of a car missing its cylinders, spinning its gears, burning itself out, going nowhere. The above chart serves as pictorial evidence that the root cause of ruined money was the war. In the current decade, the wars are endless. America chose war over industry. A fuller explanation is offered in the September Hat Trick Letter.

Three eras are worth identifying in my view. The Vietnam War era and its aftermath saw huge expansion in money supply, huge nominal income growth, and huge increases in price inflation. The USFed did not interrupt the expanded USGovt debt from reaching Main Street, simply put. For consecutive years, the Consumer Price Index rose over 10%, which led to big worker pay hikes. 

The result was that US corporations began to send industry overseas. It started with Intel going to the Pacific Rim. The money velocity fell, as income fell on a real basis. The climax event was China being given the Most Favored Nation status in 1999, which released the gates for foreign direct investment. China made a deal with the Wall Street devils that has yet to gain publicity.  

The hidden motive was for Wall Street firms to borrow the Chinese gold hoard from the Chairman Mao era, so as to continue the great gold suppression game that has bankrupted the Untied States and betrayed the nation. US and London bankers skimmed and stole the gold.

HOUSE OF SAUD STARTS TO UNRAVEL

More loyal Jackass wannabee followers will recall a story (repeated often) that on the Easter Sunday weekend of April 2010, a secret gathering of over 200 Arab billionaires convened in Abu Dhabi. They arrived in unmarked jets. My source was one of only two or three white faces in the crowd, invited by his clients. One result of the meeting was an accord struck between the Persian Gulf oil producers, led by the Saudis, to work toward a pact with Russia and China as protector of the gulf in return for financial cooperation, economic construction, and forward progress. 

The implicit message was that the Untied States would be phased out in the protectorate. In the balance would lie the Petro-Dollar defacto standard as victim. Events continue to this day in movement toward that end.

However, since the Syrian uprising, a new lethal element has entered the mix. Account will be kept brief, since so volatile and controversial. Just some bare notes. The Assad family in Syria has suffered some assassinations. Apparently, the Saudis had a hand in the killings.  

HezBollah has vowed retaliation. Their ties to Iran might be longstanding, but perhaps are exaggerated. My view is their home is in Lebanon. In August, Prince Bandar was assassinated. He was the Saudi head of security, and long-time ally to the USGovt. The Saudi regime is concealing his death, with outdated photos and false statements. 

They are working toward a transition. The House of Saud has been unstable from threats to the south in Yemen. It is unstable from internal threats tied to the fundamentalists. Although cooperation and respect has been shown between Riyadh and Tehran, the Bandar hit has created an entirely new environment. The Saudi regime with high likelihood is in its final months.

More importantly, the Petro-Dollar is losing its all important Saudi leg. 

Implications are vast. The US public takes the USDollar for granted, with almost no concept of FOREX exchange rates. If the House of Saud falls, when it falls, the impact crater will include the entire waistline of the USEconomy and its financial dog tail that wags it. 

The USGovt and its banker handlers have relied heavily upon the Petro-Dollar in general, and on the Saudis in particular, ever since Henry Kissinger signed an accord that governs over the grand surplus recycling back in the 1973-1974 era. Watch the Saudis convert USTBonds to Gold, then bug out of the desert to their new mansions in Southern Spain.

CHINA AS INTERMEDIARY AGAINST PETRO-DOLLAR

Reports swirl that China is attempting to act as intermediary in global oil transactions, for Yuan currency settlement. The rebellion globally is picking up momentum against the USDollar. The Petro-Dollar defacto standard is slowly unraveling. The denizens of the Untied States have no idea the ravaging impact of a lost global reserve currency. It will unleash price inflation when the USFed central bank is letting loose the monetary flood gates. 

This declaration is an act of financial war directed at the US by China. To fortify the rear flank, Russia has promised to meet all requests for crude oil made by China, with settlement in Yuan and Ruble currencies. Take the pledge as a protection from any sudden USGovt threat or retaliation. The Russia-China Axis is forming more clearly in opposition to the USDollar, the Syndicate behind it, the many Embassies that offer sanctuary for espionage, and the global rules that enforce its hegemony.

Crude oil payments are the critical core of global trade. The rest of global trade will follow in non-USDollar payments, all in time. Entire banking systems will gradually make a transition away from the USTreasury Bond in its reserves managements. The banking practices will follow the trade payment structures, as it should be. 

The profound effect on the USEconomy will be clear, as blame is shifted as usual to external factors, even to extremists. In reality the US is up against vengeful Cossacks and the angry Mongol Horde. The entire world is moving against the USDollar, seen increasingly as a toxic agent within their internal domestic systems. They see the lack of solutions, the spreading bank insolvency, the accelerated debasement of currency, and the corrupted grants of multi-$trillion banker grants. They are taking action in response. They are following the Chinese lead with the Russians acting as a quasi-Rasputin.

Gerald Celente reported in early September, "On September the 6th of 2012, China officially announced that any country in the world that wishes to sell crude oil using its currency the Renminbi instead of the USDollar can do so. The following day September the 7th, Russia announced that the nation will sell China all the crude oil they need, no limitations whatsoever.

 They will not use the USDollar for their trade." The claim by Celente is far reaching. The USDollar is dying a slow death. Its antagonists do not wish to speed the death process too rapidly, for fear of quickening the ravage to their own nations. They also do not wish to invoke the wrath of the USGovt, which since 2003 has enforced the USDollar as global reserve currency via its war machinery.

What China is offering is an intermediary clearing house role to sidestep the Petro-Dollar, where crude oil payments can be made in the Chinese Yuan currency. 

This offer is a financial act of war against the Untied States currency, where China will backstop all transactions. It is a violent offer to disrupt the USDollar. Look to see if any Saudi oil sales are settled in Yuan currency as alternative, even the Euro currency as expedient. The superpowers are openly attempting to isolate the USDollar, the clear victim to be the USEconomy, the land of consumption excess. The move is a tacit push of the US into an isolated place where it can very easily slide into the Third World.

MEXICO CUTS A DEAL WITH CHINA FOR OIL

Mexico is in the process to make concrete a major deal to sell crude oil to China, but not in USDollar terms. The Chinese declaration of financial war against the Untied States has reached both the northern border in Canada and the southern border in Mexico. To be sure, the Canadian oil is not sold outside the USDollar. But other factors are hard at work. 

The bulk of Athabasca oil produced from the oil sands in Western Canada (Alberta) output is directed to China, by way of the Vancouver ports owned 100% by China. In fact, the Chinese influence is so strong in the beautiful city on the Pacific coast that it has earned the nickname of Hongkouver. Some shallow analysts attribute a wayward motive to the decision by the USGovt to abandon the Keystone Oil Pipeline several months ago. The more realistic hidden motive was to assure the Western Canada oil output would be sent to China. The cutoff to the pipeline came with spurious official accounts, all quite humorous to the informed.

 The pipeline was abandoned to accommodate China, owner of significant USTBond holdings. They are the largest USGovt creditor. The tipping point was passed many years ago when the majority of USGovt debt was held by foreign creditors. Its consequence is vivid and unmistakable. The Untied States is converted into a colony, a killing field, as pathways are fashioned for entry into the Third World.

China through closed door negotiations is sealing deals to purchase Mexican crude oil without using USDollars as its trading currency. 

The Yuan is slowly moving toward global reserve status, not by a summit meeting and signed accord, but rather by numerous bilateral deals. Consider the bilateral swap accords signed by China with partners in Brazil, Japan, and elsewhere. The list grows, and beyond oil trade. As it does, the net is cast over the USDollar in isolation. Officials claim meetings were held with the Mexican Govt and PEMEX, the state owned oil giant. They are in progress with a brokered secret deal to purchase crude oil using currency means other than the USDollar. 

Expect a public announcement soon by Chinese Govt and PEMEX firms. In the past decade, China has planted seeds in trade while ignoring politics with numerous major players in global trade. The USGovt prefers the heavy handed financial banking games, backed by the heavy handed military maneuvers, all part of the sickening Full Spectrum Dominance that has blossomed in ruin. The Chinese have responded with an archipelago of trade pacts, best viewed as a Full Spectrum Encirclement of the USDollar. It cannot be conquered. So their plan apparently is to isolate it, to starve it, to let it suffer the Weimar consequences of its own high pitched debasement, and to permit it to become a Third World currency by default.

Over the past ten years with new trade agreements China has invested $billions inside Mexico. China has helped the Mexican Govt create jobs and has financially supported investments in the privatization of ports and infrastructure throughout Mexico. As the movement toward privatization of large sectors of its economy continues, China is in line to benefit from additional investments inside Mexico. Since the 2009 global economic crisis, Mexico's central bank has been quietly purchasing large quantities of gold. 

In fact, some of the recent boost in May for Mexico Central Bank gold holdings was gold purchased from Chinese sources. The gold sales belie a closer relationship building with Mexico on the southern US border. 

While the USGovt is occupied with the Mexican Govt on matters pertaining to gun running, to handling illegal immigrants, and to shielding vast narcotics sales, the Chinese are busily working on trade, with a gold foundation and crude oil blood system. Those are the stuff of a stable currency. Perhaps Mexican leaders are preparing for the imminent and unavoidable devaluation of the USDollar. In more practical terms, regard the movement as the collapse of the USDollar in a vast sea of liquidity, better identified as toxic fiat paper currency.

STRIKES HINDER GOLD OUTPUT

Not in sufficient focus is the radical impact on gold supply. The gold investment demand has been on a tear in recent months. A sinister effect has been realized from the vast QE bond monetization conducted by the USFed and its partners at the Euro Central Bank and the Bank of Japan. The effect is of rising food and energy costs. The impact is particularly hard felt in poorer areas of the world. The great majority of major gold and silver mines are located in the poorer nations. 

The labor strikes at mining facilities are as much based upon unsafe worker conditions as they are based upon a higher cost of living, centered on food costs. The workers need more to survive at home, as they provide more precious metal output that satisfies mining company production targets. The end result is lower output in pockets of South America such as Bolivia, but more importantly in South Africa. A whopping 39% of South African Gold production has been taken offline. The impact on global output will be seen in the next few quarters.  

The fast rising investment Gold demand will be met by a significant decline in Gold supply.

  Price pressures will force a much higher Gold price. But first comes the depletion of the COMEX, as its paper contract merchants continue to ply their trade. Their new specialty is stealing client accounts that stand ready for contract delivery. See MFGlobal and the JPMorgan thefts, all fully blessed by the tainted US Court system.

THIRD WORLD THREAT

The implications are vast. A lost Petro-Dollar standard would mean a grand shift in payment for oil transactions, the most important of all global trade. In the last 20 years, all has been turned upside down. A global phenomenon of a powerful nature has been at work since the Lehman Brother failure, the Fannie Mae adoption, and the AIG redemption in 2008. The entire world is losing trust in the USGovt and its financial institutions. 

Personal email exchanges cite a regular occurrence of US corporations not receiving return phone calls, and of open disrespect in Europe for American businesses. The debt rating agencies do their part in upholding the paper fortress walls, but they must over time deliver the downgrades. An important catalyst took place when the USGovt imposed trade sanctions against Iran. The result was angering US trade partners more than anything else, well, except for causing severe price inflation on the Iranian Economy. 

The movement in reaction has been swift by global trade partners, in establishing bypass routes for payment systems between nations. The workarounds against the SWIFT bank payment system have been remarkable. The climax will be the non-US$ payment system to emerge, with no centralization, complete independence, relying upon non-bank devices like mobile communications.

Another bypass event just hit the news wires. 

The Swiss-based Vitol is the latest oil firm bypassing the USGovt sanctions against Iran. 

They exploit a legal loophole in Swiss law, since the nation did not abide by the US-led sanctions, a notable resistance. Vitol boasts being the largest oil trader in the world. It buys and sells Iranian fuel oil, undermining Western efforts to choke the flow of flow of money to Tehran. In August alone, Vitol purchased two million barrels of fuel oil, used for power generation, from Iran and offered it to Chinese traders. The Vitol firm is not obliged to comply with a ban imposed in July by the European Union on trading oil.  

The tale of the cargo for Iranian fuel oil involves tanker tracking systems being switched off, frequent ship-to-ship transfers, and the blending of the oil with fuel from another source to alter the physical specification of the cargo.  

How crafty.

Global finical markets are acutely aware that oil trade outside the USDollar will rapidly destabilize the USDollar even further. With Russia and China having entered into an agreement to trade crude oil using their own currencies, the Mexican news of a Chinese oil deal has potentially devastating consequences. The eventual effect is that the USDollar will lose its prestigious reserve currency status. In the process, it will lose value gradually.  

My view is that the defense of the USDollar will lead to all major fiat paper currencies to implode, step by step, taking down the banking systems and economies of major nations. 

The prevailing currency will be what is used in global trade. All signposts point to Gold. A new global trade system is ready to be installed, based upon gold in special notes. The transition awaits further collapse of the current currency regimes, the further collapse of the sovereign bonds, and the further collapse of the banking systems, which all assures the collapse of the global economy.

The QE fallout by the desperate central bankers has been seen in fast rising demand for gold bars and gold coins. The phenomenon is primarily in the Eastern world but also in Europe. The American crowds remain transfixed on their dwindling paper assets locked in stock accounts, many not easily altered due to tax rules. They remain transfixed on home equity losses, in a mindnumbing effect that the Jackass described in years 2005 and 2006 and 2007. 

The American Home was not a hard asset at all. Since its value was largely determined by the mortgage loans and mortgage bonds, together with the vast network of devices like MERS among bankers and the hidden caches with slush funds at Fannie Mae. The entire criminal history of Fannie Mae has been safely buried under the USGovt roof. Ten years ago, people would laugh at comments that the largest and most powerful criminal syndicate was operating under the USGovt label. They do not laugh anymore, including my own family. They protect themselves with the real deal currency for storing life savings, GOLD. They will soon enjoy the benefits, safety, and efficiency of trade systems based upon GOLD also.

 

GOLD PRICE READY TO EXPLODE UPWARD

Gold market instability could be a tremor before a burst upward. The same appears true for the silver market. On a single day last week, JPMorgan dumped two years worth of US silver mine output in the form of paper silver supply on the COMEX market. The corruption went largely unnoticed. They defend the important $36 level. Volatility has returned to the Gold price. 

The current pause could be interrupted very quickly with a strong upward leg in both precious metals. The announced QE3 bond monetization program cannot be sterilized any longer. A powerful USDollar decline is imminent. As the USDollar reserve status is threatened, the gold price will zoom upward. Notice the occasional propaganda and basic lies regarding sterilization of new bond purchases. The USFed is fast running out of short-term USTBills to fund long-term USTBonds in the Quantitative Easing shell game that is more reminiscent of the Weimar Republic. 

Fortunately for the USFed paper mache artisans, the American public is a lousy student of history and especially the concept of money, even the nature of economics and capitalism. The dumbing down of the public has reached a critical mass, but hope lies in the Gold sanctuary if people have any savings left after the busted bubbles and the parade of banners to join. They joined asset bubble parades instead of lines to enter factories. Across the world, an army of Gold soldiers is awakening after a 16-month slumber. They react to the stark awareness that QE not only ruins money, but its purpose is to redeem the toxic bonds owned by banks.  

The QE programs are not intended to bolster, stimulate, or fortify the economy. In fact, they render the USEconomy incredibly deep harm by raising the cost structure, reducing profit margins, wrecking business segments, and killing jobs. But the hard sell sure is fun to watch, as the central bankers squirm. The Jackson Hole conference was a gathering of buffoons without the clown suits. The public must seek refuge in Gold & Silver or face personal ruin.

The USFed mandate on inflation moves next to an absurd mandate on jobs. They will fail on both. Inflation will be permitted by the USFed central bank in order to produce jobs, in the most heretic and misguided folly ever seen in modern times. The 0% rate will stick until economic growth arrives, but it will never arrive, due to the damaging effect from the 0% rate itself. 

The dog's tail is eating the entire dog in a perverse reverse effect of modern alchemy. The USFed ignores all Weimar chapters, after having rewritten the Great Depression chapter. The nation emerged from the depression only due to the Gold Standard and ample industry. The nation has neither today, and will therefore plunge into a systemic failure. The Third World awaits. Watch for the pressure points of tens of thousands of gasoline stations and food supermarkets, certain to erupt as the frustration and disorder spread.

The response in the Gold price has smelled a QE3 in bond monetization since the summer months.  

The difference is that this time, unlike the deceptive Operation Twist, the bond purchases will be unsterilized with new money injected into the system. 

That is a Golden supercharge to recognizable inflation. A major intermediate reversal is underway, with a 1570 base, a 1780 top, which indicates a 1990 Gold price target. The kicker in the market is the broad mining industry strike, which extends from South Africa to South America. Gold supply will be inhibited. Expect some regrouping with a pause at the 1720-1770 area, as a critical consolidation takes place before a breakout that captures the world's attention. The right side handle is being formed, carved out. During this time, the doubters are tossed off the train. 

The new believers join. A recycle process is underway, as the monetary dumb are unloaded and new intelligent soldiers join the ranks. The renewal will permit a run over $2000. Once over 1800 price level, the 1900 resistance will be overrun like a paper fortress by angry mobs bearing torches and sticks. But in the meantime, a big battle is being waged at the right side handle, a consolidation before breakout.

Press Conference with Chairman of the Federal Reserve Bank Ben Bernanke

Press Conference with Chairman of the Federal Reserve Bank Ben Bernanke

Most Major World Economies Slowing: OECD

MOST of the major world economies are slowing, with Britain the only country to see tentative signs of a pick-up, the OECD says.  
  

The Organisation for Economic Cooperation and Development said on Thursday its composite leading indicators continued to point to "an easing of economic activity in most major OECD economies and slowdowns in most major non-OECD economies".

The individual indicators for Japan and the United States "show signs of a fading growth momentum," the Paris-based OECD, which groups the world's most developed countries, said in its latest report.

The signs from the eurozone, Germany and France "continue to point to weak growth", except in Italy where they point "more strongly to a slowdown".
Data for Britain, however, shows "tentative signs of a pick-up in economic activity", making it the only country to show improvement.

In Canada they point to "continued weak growth".
In the emerging markets of China, India and Russia, the indicators "continue to point to a slowdown" while in Brazil they suggest "a more moderate pick-up in economic activity than in last month's assessment".

Banker Brushfires Risk Jumps

As preface, consider that the USTreasury 10-year yield went below 1.4% this week. Some unenlightened celebrate the asset appreciation and point to a successful asset in performance in an otherwise dismal financial market. The Jackass said in the June 6th public article "USTBonds: Black Hole Dynamics" that such a success is a marquee billboard message of economic meltdown and systemic failure.

As the rally continues, possibly the onliest rally outside of corn and soybeans in yet another disaster, people should focus on whether the systemic collapse will occur before the 10-yield hits 1.0% in my warning. Focus on four major points:

• The unspoken effect of ZIRP (0%) is the powerful ongoing destruction of capital, as the entire cost structure rises
• As equipment goes off line further, the USEconomy will weaken further, in a powerful vicious cycle
• The official Zero Percent Interest Policy is the calling card of the Gold Bull Market, powered by negative inflation adjusted returns on savings

• The USTBonds will fail from their own success, unleashing the Gold Price when the investment community and global creditors realize no further potential appreciation in the most massive asset bubble in modern history, supported by Interest Rate Swap derivative machinery. Money will eventually fly out of bonds and seek true safe haven.

Fear not. The USTBond 10-year yield (TNX) will not and cannot reach below 1.0% as all ponderings of a world with 0% on 10-year yield are divorced from reality. The Black Hole is working hard, gathering force, amplifying the gravitational field. It is happening right on schedule, no surprise here, a very easy correct forecast.

The original supposed Flight to Safety in the USTBonds was totally fabricated and phony. As mentioned at least a dozen times by the Jackass, the last half of year 2010 saw the dutiful Wall Street outpost Morgan Stanley devote a fresh $8 trillion in interest rate derivatives, fully documented by the Office of the Comptroller to the Currency. Their reports never make the headlines, since they are so chock full of rancid fetid scum.

As the TNX marches down the swirling pathways within the vast USGovt debt sewer-like cisterns, their energy will be derived from the massive recession that has engulfed the USEconomy. Not only is the flight to safety in the USTBond complex a total fabrication falsehood, but the USEconomic recovery is also a fiction written on political propaganda posters. The followon flight to the bubble ridden USTBond is based upon economic wreckage and broad disintegration of the entire periphery and surrounding core to the bond market. The great sucking sound can be heard, much like during the non-earthquake in Virginia in September 2011. Experienced traders are looking at each other, in full recognition that the TNX rally is indeed an endgame signal.

THE BRUSH FIRE PHENOMENON

The LIBOR scandal unleashed brush fires. They started in London but extend throughout the entire Western banking treeline. The scandal that started at Barclays and Lloyds has hit Deutsche Bank, as well as Citibank and JPMorgan. Many more pages will be written on the LIBOR brush fire, as the damages are delineated by those on the opposite side of the price rigging table. The USFed, Bank of England, and Euro Central Bank are directly implicated, casting corrupt light on the central bank franchise system.

The clownish supposed economic expert Larry Kudlow actually attempted to claim the crime scene had no victims, as all benefit across the system. The naive Wall Street defender (carnival barker) must not be aware of the damages claimed by the mortgage underwriters in the lending industry, by corporations seeking stable bond yields, and by the swap recipients in countless state government agencies. A figure was put forth this week that caught my eye.

For every single basis point in the LIBOR price rig, fully $50 billion in effects result. The market is huge, involving a staggering $370 trillion in worldwide debt. Expect hundreds of high profile lawsuits. Expect dozens of class action lawsuits. Expect well over $1 trillion in total declared damages from the legal attempts at remedy. LIBOR will not go away, since it is actually the heart & soul of the entire lending industry, and of the shadowy derivative market. LIBOR funds the vast derivative market, which is becoming frazzled in a slow disintegration. The brush fire will burn down the USTBond Tower and render useless its Interest Rate Swap buttress structural support, both of which are in an implosion mode.

This article is not about LIBOR and its inner workings, the damage suffered by mortgage underwriters, the short changing of corporations and state agencies involved in swaps. Instead, this article is about the serious jumps in the brush fire, jumps to new areas of scandal, which will take down the system. In no way is the list of potential new fire zones comprehensive. Perhaps a few more will result, since large burning tree branches have a way of being lifted by the high winds of controversy fanned by deep suspicion.

The entire document discovery process will be exploited to the fullest, a vast crowbar. Once the lid is lifted via legal discovery of LIBOR criminal collusion, all is fair game to be viewed and pulled out of the vast sea of scum, filth, and rancid paper floating within the big bank balance sheets. It is all admissible evidence.

Then there are the communications often shown to be highly revealing to establish motive and paint the pictures in more detail. No longer are those analysts like the Jackass considered biased, tilted, and off the mark when they cite financial corruption as an ongoing theme year after year. The corruption is coming to the surface, fully visible, in a manner to render perhaps fatal damage to the system. My theme has been systemic failure from the inefficiencies and corruption wrought by the Fascist Business Model. Witness it!

My focus is on jumps in the big brush fire that escalate the financial criminal exposures. Entirely new areas of criminal exposure, investigation, and prosecution will emerge.

LIBOR was the center, and Barclays was the banker's bank, which owns sizeable equity shares of numerous global banks. Leave aside the difficult questions as to why and how the LIBOR fraud was revealed, and why and how the crime was not shoved under the rug as usual, and what higher power is controlling and orchestrating the maneuvers. LIBOR and Barclays lie at the heart of the Western banking cartel and power structure, labeled corrupt to the core. The big banker brush fire has begun. It is raging, but it will spread to create several other nasty brush fires. The jumps will occur easily, the process having already begun.

MONEY LAUNDERING & NARCOTICS DEPENDENCE

Just in the last ten days, the brush fire jumped into the drug money laundering forest. Permit an imagery jump as well, even though mixed imagery is a cardinal sin of composition. But since on the topic of jumping, a shift in the blaze of imagery might be appropriate. The money laundering of narotics funds is a vast industry.

The United Nation task force identified the United States as being unduly reliant upon the benefits of drug money infusion into the banking system following the 2008 Lehman bust, sufficient to prevent a collapse. The UN document reports were published in 2009 and again in 2010. What better place to funnel the money than into the primary banking system from the USGovt agencies responsible for the vast clearing house functions. Representative Ron Paul has addressed this problem in direct accusations. Here is the imagery jump.

The operations of money laundering are like a collection of wires without insulated coatings laid out on dark basement floors, one from each bank. The participating big banks do not always have full knowledge of the other and their activities. Many countries are involved, as the distribution rings are vast, like with Mexico in the recent incident. So the wires occasionally cross each other and cause troublesome sparks. The High Scandal in Bank Collusion has already caught fire in the money laundering rings.

The bank in the spotlight has been encouraged to align its wires properly, according to the Cooperative Installation Alignment codes from the Underwriters Lab south of WashingtonDC. They will comply, or else resignations will be the least concern of the bank executives. Their lights might go out. This is a topic loaded with risk. The message to take away is that all the major US banks are deeply committed to narco money laundering, which tie in with defense contractors who serve as errand boys and delivery hosts.

INTEREST RATE SWAP & FALSE USTBOND SAFE HAVEN

The next jump in the banker brush fire might be the revelation of the primary role played by the Interest Rate Swap derivative contract device. The JPMorgan chief investment office is tasked with fabricating the USTreasury Bond rally. They must maintain the near 0% bond climate despite chronic $1.5 trillion deficts to securitize and largely absent foreign creditors. They farm out the duty to their Morgan Stanley outpost. Hundreds of $billions in artificial USTBond demand can be produced, with trumpets blown by strumpets calling the flight to safety in toxic USTBonds.

Recall that the cost of funding the IRSwap mechanical abuse is the ultra-cheap LIBOR rate. Notice the tight correlation between the US FedFunds official rate and the LIBOR rate. The price rigging in the LIBOR came about since the banks refused to lend at the absurd 0% rate dictated by the USFed, working in close concert with the Bank of England. The banks were willing to speculate at that rate, but not to lend at that rate. The target could not be sustained. So the participants to the consensus procedure lied to each other, complete with memos, adorned by winks. The practicality of the ZIRP could not extend into the real world without further collusion.

The scandal will hit the Interest Rate Swap devices and reveal the artificial nature of the entire flight to safety in the USTreasury Bonds. They will be more visible under document discovery amidst the LIBOR investigations. The heavy machinery of the IRSwaps has been exposed to some extent from the May losses suffered by JPMorgan, as reported by the Jackass and confirmed by CEO Dimon.

They lied and gave blame to the European sovereign debt fluctuations, when they were actually stable during the focused period of six weeks. Big fluctuations were seen in the USTBond market though, identified in my past analysis. Expect further revelations and documented evidence of vast rigging process in the USTBond market, using the IRSwap devices. The flight to safety will be revealed as a sham. It is only natural in the brush fire jumps.

INSOLVENT BANK RECOGNITION & FASB ACCOUNTING

Another jump in the banker brush fire might be the revelation of the deep insolvency within the big US banks, managed and kept hidden by vast accounting fraud. Recall that in April 2009, the USCongress passed a law to bless FASB rules which allow for accounting fraud. The big banks were permitted to declare any value they wish for all manner of toxic and rancid assets lying within their balance sheet.

So they went on course to choose the original book value for many imploded toxic assets like mortgage bonds, like worthless collateralized bond obligations, and many other wonders of financial engineering devised by the wrecking crew on Wall Street. Imagine a raft of memos from bank executives like the chief financial officers, admitting that they are all too aware that balance sheet items were being declared as having untrue values, during quarterly earnings reports. The Sarbanes Oxley violations are too numerous to count.

Imagine the stream of memos expressing concerns over revelation that the banks were aware of the false values disclosed. They will be more visible under document discovery amidst the LIBOR investigations. Imagine mention with relief that the officially sanctioned FASB accounting rules permitted the fraud, replete with fictional values set for assets to share holders in the legal exercise. The giant banks are almost all dead zombies, insolvent to the core.

The scandal will likely hit the Financial Accounting Standards Board (FASB) methods and the coverup of deep insolvency. The banks are not performing their normal lending function, since they are insolvent, citing tighter borrower requirements. Tragically, both the borrower is impaired and the lender is insolvent. Expect further revelations and documented evidence of vast falsification of the accounting process in the legally required financial reporting, using phony FASB rules. It is only natural in the brush fire jumps.

NON-US$ TRADE SETTLEMENT & BANK RESERVES MGMT

Another jump in the banker brush fire might be the revelation that the big US banks are preparing for a Paradigm Shift. The Eastern nations are well along a path to settle trade outside the USDollar. The Chinese have arranged for bilateral currency swap agreements with a gaggle of nations, mostly from the East, but also Brazil in the West. Consider such agreements to be the foundation for barter systems coming into vogue. The key is their non-US$ nature.

The entire loss of global trade settlement done in the US$ terms is being elevated in importance. Some day soon, it might become the majority of trade. The tipping point could come when over 50% in trade excluding crude oil is managed outside the US$ settlement. Later, like in a year or so, maybe a bigger tipping point could come with over 50% of all trade including crude oil being managed ouside the US$ sphere. The big banks must see the trend, unless they wear blinders, unless their arrogance is so thick, or unless they are so pre-occupied with other brush fires that they leave themselves vulnerable and unprepared.

A very important tenet of global trade and banking is that trade dictates banking activity, not the other way around. It used to be for decades that the USDollar global standard required all trade to be settled in its reserve currency. The banking structures must reflect the reality of trade settlement methods and practices. However, the mortgage bond crisis laden with banking fraud in mortgages and foreclosures rendered damage. The TARP Fund patch job with bait & switch in executive largesse rendered damage.

The USFed bond monetization (called euphemistically Quantitative Easing) went out of control, causing a global rise in energy and food prices. The result was great damage rendered. The endless foreign wars on a credit card have caused deep resentment, replete with fraud among the service contractors, also rendered damage. The Iran sanctions, further distracting from the basic violation of Iranian oil sales outside the US$ sphere, have resulted in tremendous insurrection against the global reserve currency.

The major Paradigm Shift in trade has been the emergence of non-US$ trade settlement and the development of devices to facilitate the skirting end around process. Therefore, the banking system must adapt or be left isolated. The big US banks might soon be caught in revelations that they are preparing for shunning of the USDollar in trade payments and satisfaction.

They might reveal processes already in place to dump USTreasury Bonds at their artificially lofty values, maintained by high powered Interest Rate Swap machinery during a falsely engineering flight to safety. Imagine open communications about demanded IRSwap usage to maintion artificially rigged high bond principal values. They will be more visible under document discovery amidst the LIBOR investigations.

If the big US banks are shown to be diversifying out of USTBonds during the current crisis, it would indeed be devastating news against the Dollar Fortress. Expect further revelations and documented evidence of diversification away from the bubblicious overvalued USTBonds, as the trade settlement pathways avoid the US bull chits. It is only natural in the brush fire jumps.

ALLOCATED GOLD & 40 THOUSAND METRIC TONS SHORT

An assured jump in the banker brush fire will be the revelation of massive raids on Allocated Gold accounts done systematically over two decades. The big Western banks have been illegally grabbing the gold bars via unauthorized leasing, then selling them in the open market in order to maintain the artificially low Gold & Silver prices. The process of revelation is already well along, with important major lawsuits in Switzerland. The Matterhorn case where Von Greyerz pointed out the long delays for his fund investors to receive their gold bars from Allocated accounts has added to the controversy.

The gold bars arrived with stamps and dates much younger than the original bars owned, lifting the veil of fraud. The scandal has not yet reached the public eye, but it will very soon. Some Gold experts call it The Mother of All Gold Scandals. Several class action lawsuits totaling several $billion are underway in the elite banker nation of Switzerland. So far, the coopted press has kept a lid on the story. The leaks will be natural, like an overflow of chocolate from the vat. The documents concerning the serious illegal activity will be more visible amidst document discovery during the LIBOR investigations.

My best source shared in 2010 that at least 20 thousand tons of Gold had improperly been taken, leased, and replaced with gold paper certificates in vaulted locations. The bullion bankers were dangerously short. In 2011, he admitted that the criminal activity had easily surpassed 40 thousand tons of Gold illegally leased, resulting in a massive short position for the bullion banks. In 2012, he increased his estimate to between 40 and 60 thousand metric tons of gold illegally seized from Allocated Gold accounts, the short position totally out of control and absolutely impossible to bring into balance with short covering.

In the last week, he passed along a communication with a veteran Gold expert with decades of savvy experience. They concluded that remedy for the vast gigantic short position by the gold bullion bankers will send the Gold price well over $10,000 per ounce. They believe probably by the end of the criminal prosecution remedy, the resolution of the defrauded Allocated gold accounts, and the installation of the new trade system alternative, the Gold price will find a natural value at least twice that elevated value. Expect further revelations and documented evidence of vast Allocated Gold account raids, and improper raids to gut the Exchange Traded Funds (GLD, SLV). It is only natural in the brush fire jumps.

The Gold Bull will hit on all eight cylinders, and adopt another four cylinders, when the Allocated Gold account fraud is revealed and hits the news. Only then will public calls for broad criminal prosecution be accompanied by equal calls by the very wealthy. By then, speculation will extend to how high the Gold price can go, and to what limit.

Think at that point, unlimited extensive money growth, a gaggle of futile bank aid packages, and currency debasement abuse from the hyper monetary inflation underway for over four years.

The Gold price must match the abuse stride for stride, when at the same time react to forced bullion banker purchases of Gold in order to replace the raided Allocated accounts. A frenzy will come.

2011 BANK HEIST & DISPOSITION OF ASSETS

A potential disruptive jump in the banker brush fire would be the revelation of disposition of World Trade Center vaulted assets. Only a moron would believe they vanished. Refer to the enormous amount of purported missing gold bullion, the enormous amount of purported missing bearer bonds, the enormous amount of purported missing diamonds from the infamous 911 event. The political implications would be vast, far more damning than the smoking guns by scientists. They would eclipse any and all claims made by engineers and architects (see AE1000 Group) that undermine the official poppycock story.

The documents concerning the flow of gold, bonds, and diamonds might be more visible under document discovery amidst the LIBOR investigations, if a bank heist were to be demonstrated. It is a difficult task to conceal the movement of $100 billion in gold bars, $100 billion in bearer bonds, and $100 billion in diamonds, if indeed it was a bank heist. The Jackass scientific background has consistently brought attention to the vast inconsistencies due to gravitation pull in freefall, to the inadequate burning temperature of jet fuel to alter structural steel, and the absence of aircraft debris on the Pentagon lawn. All official stories have seemed like music on the other side of logic and physics.

Only flag waving morons sporting red white and blue jockey shorts believe the official story, in addition to diehard types who hold scientific evidence in contempt, along with senile veterans well past the octagenarian mark. No disrespect is meant to veterans, who often seem incapable of sorting evidence or even identifying a financial fascist out of uniform. Even the 911 Commissioners admit they were coerced to omit widespread evidence, including testimony from the New York Police Dept captains.

They could not voice their objection too loudly, or else lose their jobs and likely pensions too. Whereas in 2003 and 2004 the critics seemed like crackpots, no longer do they seem so wild-eyed and lunatic. Some very well informed people believe the 911 event was actually a bank heist. The odd new twist is the reports that many people at the World Trade Center who were eyewitnesses have died mysterious deaths. Harken back to the Grassy Knoll from that infamous November 1963 event in Dallas. By the 1990 decade, a few dozen people had died from mysterious deaths, many being violent deaths, to the point that no eyewitnesses had survived. A mission accomplished in the sordid history of the United States.

The bond trails already cast extremely suspicious light on Cantor Fitzgerald, which curiously moved all its data storage backup facilities to New Jersey only a few months before the incident. Perhaps further potential revelations and documented evidence toward disposition of WTC site assets will surface during the never ending discovery process. It is only natural in the brush fire jumps. One can only wonder what George Washington, Thomas Jefferson, John Adams, and Benjamin Franklin would have to say about these events, or even Dwight Eisenhower and Douglas MacArthur. The notion of patriotism has been redefined by force. Many patriots prefer to think and use the brain stem, turning away from the goose step. Then again, perhaps several hundred discrepancies, inconsistencies, and contradictions to the official story are just a coincidence and the work of our enemies.

MUTUALLY ASSURED DESTRUCTION

A very unusual phenomenon is at work. The three banker camps from the United States, London, and Western Europe are naturally going to protect their own pillboxes. A well connected banker source from Central Europe has shared that Deutsche Bank has already begun to cooperate with the International Court of Hague, working with Interpol officers, bank examiners, experienced attorneys, and judges to assist the prosecution of London and New York bankers.

But Deutsche Bank cannot stop the assault by USGovt officials and their army of legal prosecutors, who will tear D-Bank apart. The London bankers have been exposed, laid bare, for the entire world to attack them. The resignations will continue like a parade, soon to involve the privileged groups among the Anglo elite. Expect far more lawsuit effects than prosecutions, since the USGovt legal staff is loaded to the gills with Wall Street friendlies.

The CFTC and SEC and FDIC and FBI have to date been attack dogs and protectors to the Syndicate in the entire scandalous decade. They are the Fascist Business Model soldiers in the field. To be sure, each of the three camps will attack in round after round, bringing charges, seeking remedy, forcing executive sacks, levying fines, and more.

They will each enable high ranking bank executives to turn state's evidence, to flip, but the lines of jurisdiction cannot be altered. Each region will protect its own, and attack the other two. A fight to the death might have begun. The banker attacks will not put each other's executives in jail, as much as wreck the Western banking structures. Witness the Competing Currency War in a late stage, as it has reached a new level of financial violence. The Wall Street marketing corps, and the noble financial press, have chosen to trumpet the message that European weakness translates to American advantage.

It is like Al Capone competing with Bugsy Moran. It is like John Gotti pointing a finger at Michael Corleone. In the end, they will both succumb to the pressures and the light. Their ships at sea are listing and taking on water. They will all sink. The life boats are made of Gold with Silver linings

GOLD IS THE TRUE SANCTUARY

The concept of solutions for the global monetary system, the global currency system, and the global banking system, have become outright laughable and an insult to the intelligence of observers. The paper system has become weighed down by toxic assets to the point of rendering the entire system insolvent and sinking its future prospects. No new debt can repair and provide remedy for the fatally sick and current overly indebted dying system.

The new trade settlement facilities are ready to put in place, based upon a Gold & Silver core. That word has come from a source directly involved in the preparation process for the Eastern Fortress. The trade notes will provide the lubrication to complete trade, which will have a hard asset core. The USDollar will gradually fade away from trade settlement, except for the United States, Canada, the United Kingdom, and possibly Southern Europe. The great tipping point approaches, whereby over half of global trade will be settled outside the domain of the crippled toxic USDollar. The foreign participants can no longer tolerate the bank bond fraud, the central bank debasement, and the usage of bank devices as weapons.

Major changes are coming. A return to a certain type of Gold Standard is right around the corner, awaiting the Western collapse that is in a late stage of pathogenesis. The jumping brush fires that the London, New York, and Western European bankers must contend with will eventually envelop them, doling out massive smoke inhalation. Worst of all, the jumps will expose new areas of corruption every few weeks, sufficient to bring down the system. After all, it is a fiat faith based system. The faith has long ago vanished.

All that remains is power politics, arrogance, and corruption. The new system will force the Gold price above $5000 per ounce on a conservative basis. It is all part of the plan not yet revealed. The Gold/Silver Ratio will revert to 20:1 in time. That translates for the math impaired to a $250 per ounce Silver price. These are conservative figures.