I thought this was a pretty good assessment.

•May 12, 2015 • Leave a Comment

Submitted by Jeff Thomas via Doug Casey’s International Man blog,

In 1971, the US abruptly went off the gold standard, and in making the public announcement, US President Richard Nixon looked into the television camera and said, “We’re all Keynesians now.”

I was a young man at the time and had previously bought gold, albeit on a very small scale, but I recall looking into the face of this delusional man and thinking, “This is not good.”

However, the world at large apparently agreed with Mister Nixon, and within a few years, the other countries also went off the gold standard, which meant that, from that point on, no currency was backed by anything other than a promise.

Party Time

It didn’t take long before countries began playing with their currencies. At one time, the German mark, the French franc, the Italian lire, and the British shilling had all been roughly equivalent in value, and four or five of any one of them was worth about a dollar.

That had already begun to change prior to 1971, but following the decoupling from gold, the governments of the world really began to see the advantages of manipulating their own currencies against the currencies of other nations.

From that point on, a currency note from any country, which was already no more than an “I owe you,” was increasingly degraded to an “I owe you an undetermined and fluctuating amount.”

This fixation with monetary manipulation began much like the 1960s youths’ experimentation with drugs, and by the millennium, had morphed into something more akin to heroin addiction. Unfortunately, those who had become the addicts were the national leaders in finance and politics.

Well, here we are, in the second decade of the millennium. The party has deteriorated and is soon to come to a bad end.

As we get closer, those of us who have, for many years, predicted an eventual realisation that Mister Keynes and Mister Nixon were dead wrong and that the world will once again look to gold are, at this late date, gaining a bit of traction.

We’re seeing an increase in the number of people who recognise that all fiat currencies eventually come to an end and gold will continue to shine.

But there are two remaining questions that have even the best of prognosticators puzzling.

1. What Will the Role of Gold Be in the Future?

When currencies collapse, will there be an immediate and complete switch to gold? Unlikely.

Will further fiat currencies be put forward as solutions to paper money? Almost definitely.

Will future currencies be backed by gold? Probably, especially as so many governments and banking institutions are quietly scrambling to buy gold whilst trying not to let on the extent of their stockpiling.

Will gold-backed currencies stabilise money for the rest of our lives? Quite unlikely.

Even those countries who may agree to audits to demonstrate they own the gold they claim to own will, at some point in the future, look for ways to “do a Nixon” and once again get off the gold standard. (The short-term benefits of fiddling with currency is too tempting.)

2. Who’s Got the Gold?

Currencies come and go in the world with remarkable frequency (the last hundred years has been witness to over twenty hyperinflations worldwide).

In that quiet scrambling we were talking about, no one is being really truthful about how much gold they have. In addition, even between the foremost experts on the subject (and here, I refer not to the pundits on television, but to those economists that I personally hold in the highest regard), there is broad speculation as to who holds what.

One school of thought has it that, although the US has long claimed that it possesses roughly 8,000 tonnes of gold in Fort Knox, there has not been an audit of Fort Knox since 1953. (That’s not encouraging.) Is it 8,000 tonnes? 4,000? None? We’re unlikely to ever get a truthful answer on this question.

In addition, the US has held roughly 6,000 tonnes of gold for European countries since the Cold War.

Now that the US has become the world’s foremost debtor nation, Europe is getting a bit antsy, and some are asking to have it back. In response, the Federal Reserve has sent Germany a small portion of their gold but avoids shipping the remainder and denies them even the ability to inspect the remainder. (Again, not encouraging.)

On the other hand, we have equally astute economists—US government insiders—who state that they are fairly certain the gold is there—in both Fort Knox and the New York Federal Reserve Bank’s underground vault. In the latter case, they state that, although much or all of the gold has been leased to the bullion banks, it has never left the building.

What does this mean to the rightful owners? There are multiple legitimate claims on the very same bars of gold.

Might the Fed burn the rightful owners—the European nations—and burn the bullion banks? Might they just confiscate the gold (assuming it’s still there) to create a new gold-backed currency for the US, and thumb their collective noses to all other claimants?

And does the People’s Bank of China hold roughly 2,500 tonnes of gold, as has been suggested? Or do they hold 5,000, or even more? Certainly, it’s to their advantage to claim the lowest amount that might be believable at present. Some US government insiders have insisted that the low number is the true number.

The argument over this question may seem moot, but it is not. “Who has the gold” may very well decide which countries will recover from the currency crashes with their skin still on.

Whoever holds the most gold will hold the most real wealth and, by extension, gain the most prominent seat at the bargaining table for decades to come. Whether that table will be the IMF, the new AAIB (Asian Infrastructure Investment Bank), or any future central economic entity, the future will go to the player with the most metal, as he will be able to create the most currency, in whatever form it may take.

*   *   *

Editor’s Note: Gold and silver have served as money for centuries and across many different civilizations. They have always been inherently international assets. There is nothing at all particularly American, Chinese, Russian, or European about gold or silver. Buying gold and silver is perhaps the easiest step you can take toward internationalizing your savings. The next step is to store your precious metals in a safe foreign jurisdiction.

It is now easy and convenient to own and store physical gold and silver offshore in places like Singapore and Switzerland in a non-bank private vault. Find out how you can internationally diversify your precious metals by downloading this guide.

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Is Russia Planning a Gold-Based Currency?

•February 9, 2015 • Leave a Comment

Is Russia Planning a Gold-Based Currency?

Russian gold Ruble

 

 by Marcia Christoff-Kurapovna, Mises

The “perfect-storm” of geopolitical instability, diplomatic isolation, severe currency depreciation, and economic decline now confronting Russia has profoundly damaged Moscow’s international standing, and possibly for the long-term. Yet, it is precisely such conditions that may push the country’s leadership into taking the radical step that will secure its world-player status once and for all: the adoption of a gold-exchange standard.

Though a far-fetched idea at first glance, many factors suggest that remonetization in gold may be a logical next step for Moscow.

First, for years Moscow has been expressing its unwillingness to remain at the monetary mercy of the US and its NATO allies and this view has been most vehemently expressed by President Putin’s long-time economic advisor, Sergei Glazyev. Russia is prepared to play strategic hardball with the West on the issue: the governor of Russia’s central bank took the unusual step last November of presenting to the international media details of the bank’s zealous gold-buying spree. The announcement, in sharp contrast to that institution’s more taciturn traditions, underscores Moscow’s outspoken dismay with dollar hegemony; its timing suggests coordination with the top rungs of government to present gold as a possible currency-war weapon.

Second, despite international pressure, Russia has been very wary of the sell-off policies that led the UK, France, Spain, and Italy to unload gold over the past decade during unsuccessful attempts to prop up their respective ailing economies — in particular, of then-Prime Minister Gordon Brown’s sell-off of 400 metric tons of the country’s reserves at stunningly low prices. Moscow’s surprise decision upon the onset of the ruble’s swift decline in early December 2014 to not tap into the country’s gold reserves, now the world’s sixth largest, highlights the ambitiousness of Russia’s stance on the gold issue. By the end of December, Russia added another 20.73 tons, according to the IMF in late January, capping a nine-month buying spree.

Third, while the Russian economy is structurally weak, enough of the country’s monetary fundamentals are sound, such that the timing of a move to gold, geopolitically and domestically, may be ideal. Russia is not a debtor nation. At this writing in January, Russia’s debt to GDP ratio is low and most of its external debt is private. Physical gold accounts for 10 percent of Russia’s foreign currency reserves. The budget deficit, as of a November 2014 projection, is likely to be around $10 billion, much less than 1 percent of GDP. The poverty rate fell from 35 percent in 2001 to 10 percent in 2010, while the middle class was projected in 2013 to reach 86 percent of the population by 2020.

Collapsing oil prices serve only to intensify the monetary attractiveness of gold. Given that oil exports, along with the rest of the energy sector, account for 45 percent of GDP, the depreciation of the ruble will continue; newly unstable fiscal conditions have devastated banks, and higher inflation looms, expected to reach 10 percent by the end of 2015. As Russia remains (for the foreseeable future) mainly a resource-based economy, only a move to gold, arguably, can make the currency stronger, even if it does limit Russia’s available currency.

In buying as much gold as it has, the country is, in part, ensuring that it will have enough money in circulation in the event of such fundamental transformation. In terms of re-establishing post-oil shock international prestige, a move to gold will allow the country to be seen as a more reliable and trustworthy trading partner.

The repercussions of Russia on a gold-exchange standard would be immense. Above all, it would mean the first major schism in the world’s monetary order. China would quite likely follow suit. It could mean the threat of a severe inflation in the United States should rafts of unwanted dollars make their way back across the Atlantic — the Fed’s ultimate nightmare. Above all, the country will avoid the extreme debt leverages which would not have happened had Western capitals remained on gold.

“A gold standard would be politically appealing, transforming the ruble to a formidable currency and reducing outflows significantly,” writes Dr. Enrico Colombatto, economics professor at the University of Turin, Italy.

He notes that the only major drawback would be that the imposed discipline of a gold standard would deprive authorities of discretionary political power. The other threat would be that of a new generation of Russian central bankers becoming too heavily influenced by the monetary mindset of the European Central Bank (ECB) and the Fed.

As Alisdair MacLeod, a two-decade veteran of off-shore banking consulting based in the UK, recently wrote, Russia (and China) will “hold all the aces” by moving away from any possible currency wars of the future into the physical gold market. In his article, he adds that there is currently a low appetite for physical gold in Western capital markets and longer-term foreign holders of rubles would be unlikely to exchange them for gold, preferring to sell them for other fiat currencies.

Mr. Macleod cites John Butler, CIO at Atom Capital in London, who sees great potential in a gold-exchange standard for Russia. With the establishment of a sound gold-exchange rate, he argues, the Central Bank of Russia would no longer be confined to buying and selling gold to maintain the rate of exchange. The bank could freely manage the liquidity of the ruble and be able to issue coupon-bearing bonds to the Russian public, allowing it a yield linked to gold rates. As the ruble stabilizes, the rate of the cost of living would drop; savings would grow, spurred on by long term stability and lower taxes.

Foreign exchange also would be favorable, Mr. Butler maintains. Owing to the Ukraine crises and commodities crises, rubles have been dumped for dollar/euro currencies. Upon the announcement of a gold-exchange, demand for the ruble would increase. London and New York markets would in turn be countered by provisions restricting gold-to-ruble exchanges of imports and exports.

The geopolitics of gold also figure into Russia’s increasingly close relations with China, a country that also has made clear its preference for gold over the dollar. (Russia recently edged out China as the world’s top buyer of the metal.) In the aftermath of the $400 billion, 30-year deal signed between Russian gas giant Gazprom and the China National Petroleum Company in November 2014, China turned its focus to the internationalization of its own gold market. On January 15, 2015, the Shanghai Gold Exchange, the largest physical gold exchange worldwide, and the World Gold Council, concluded a strategic cooperation deal to expand the Chinese gold market through the new Shanghai Free Trade Zone.

This is not the first time the gold standard has been seen as the ultimate cure for Russia’s economic problems. In September 1998, the noted economist Jude Wanninski predicted in a far-sighted essay for The Wall Street Journal that only a gold ruble would get the the country out of its then-debt crises. It was upon taking office about two years later, in May 2000, that President Putin embarked upon the country’s massive gold-buying campaign. At the time, it took twenty-eight barrels of crude just to buy an ounce of gold. The gold-backed ruble policy of those years was adopted to successfully pay down the country’s external debt.

As a pro-gold stance is, essentially, anti-dollar, speculation about how the US would react raises the question of whether an all-out currency war would follow. The West would have to keep Russia regionally and militarily marginalized, not to mention kept within the confines of the Fed, the ECB, and the Bank of England (BOE).

Nor is that prospect too far-fetched. As Dutch author Willem Middelkoop has written in his 2014 book The Big Reset: War on Gold and the Financial Endgame,

A system reset is imminent. Even before 2020 the world’s financial system will need to find a different anchor. … In a desperate attempt to maintain this dollar system, the United States waged a secret war on gold since the 1960s. China and Russia have pierced through the American smokescreen around gold and the dollar and are no longer willing to continue lending to the United States. Both countries have been accumulating enormous amounts of gold, positioning themselves for the next phase of the global financial system.

– See more at: http://thedailycoin.org/?p=18060#sthash.mqu1NZ4h.dpuf

Tsunamis Most Often Come Without Warning

•January 25, 2015 • Leave a Comment
I thought this a useful read. Ed

By: John Browne
Senior Market Strategist, Euro Pacific Capital, Inc.

— Posted Friday, 23 January 2015 | Share this article | Comment – New!

On Thursday, January 15th, the Swiss National Bank (SNB) discontinued its three year effort to maintain its minimum currency floor of the Swiss franc. In a single day the move sent the Swiss Franc (SWF) climbing a massive 21% against the U.S. dollar and 41% against the euro. The move sent shockwaves of unprecedented ferocity through the massive foreign exchange (FX) market, which is by far the largest, and most highly levered, trading market in the world. The monetary tsunami threatened both FX participants and even their brokers. But more importantly, even as the rest of Europe looks to suffocate itself in a blanket of debased currency, the Swiss have opened a window of reality on the massive central bank scheme. Hopefully some of the fresh air will spread throughout the rest of the world.

Most of the so-called developed world has followed the U.S./UK-led ‘Anglosphere’ in pursuit of Keynesian economics, focusing on consumption-based economic growth that can supposedly be stimulated by currency debasement.

On the other hand, the Germans and the Swiss have long been seen as the champions of Austrian economics, which favored an economic growth based on savings, production and sound money. During the second half of the 20th Century this philosophy lent tremendous strength to both currencies and led private investors and corporations to rely on the Swiss Franc and the Deutsche Mark as highly liquid and interest-yielding alternatives to gold as a store of wealth. It is interesting to note that both economies developed strong exports in the post-War years despite the consistently strengthening currencies. The Germans entered the Eurozone in part to protect their exporters. Outside the EU, the Swiss had no such shield.

But the financial crisis of 2008 and the Eurozone crisis of 2011 inspired investors to seek safe haven assets. But with the larger Deutsche Mark out of the picture, the Franc emerged as the only viable currency alternative to the U.S. dollar. This sent the Franc soaring in 2010 and 2011. Panicked that the surging currency would hurt its exports, the Swiss National Bank (SNB) decided to introduce a cap to prevent the euro falling below SWF 1.20. To maintain this peg, the SNB had to expend hundreds of billions of Francs in order to buy euros on the open market, a policy that became increasingly unpopular among Swiss citizens (for more on the this see Peter Schiff’s recent commentary).

As deflation spread within the Eurozone in late 2014, a greater consensus began to build that the European Central Bank (ECB) would finally unleash Fed-style quantitative easing. The euro then began to tumble. On January 14, 2015, the highly politicized European Court of Justice hinted that despite expressed prohibitions in the European Treaty, it would allow the ECB to buy Eurozone-member government bonds.

Furthermore, the Court opined that the ECB should dictate monetary policy, not the judiciary. This appeared to be a deliberate swipe at the German Constitutional Court, seen by many as the EU’s last bastion of honest money. It appeared also to give Draghi a free hand over unlimited QE, possibly in the trillions of euros. This caused the euro to flounder, threatening the SNB with spending even more billions of its peoples’ hard-earned Francs to add to its vast hoard of debased euros.

Apparently, with an economy performing significantly better than those within the Eurozone, the SNB decided that it was time to protect the savings of its people and their way of life. Even at a serious cost to its own exporters, the Swiss felt obligated by national interest to take no further part in the ECB’s scheme of inflation by any means necessary. Time will tell whether the decision is an act of salvation or suicide. Certainly share prices of Swiss exporters like Swatch sold off dramatically with the announcements (at least in Franc terms, but they strengthened if priced in dollars or euros). The world should now pay close attention to the balance sheets of these Swiss corporations. If their earnings persist, the lie that a weak currency leads to growth should finally be laid to rest.  On the other hand, Swiss banks that have lent vast sums in Swiss Francs to foreign borrowers at low interest rates now may experience serious default levels.

But more important than Swatch’s income statement is the effect that the surprise move will have on the world’s foreign exchange markets. Normally, major currencies move only in fractions of a percent in a day. High leverage therefore has been seen as acceptably prudent. In London, where almost half of international currency transactions occur, participants can leverage at 100 percent, if not more, should certain creditworthiness conditions prevail. Gearing up so tightly leaves very little margin for error.

The carnage on January 15th was gruesome. In London, Alpari, in New York, FXCM, and in New Zealand, NZ Limited, were just some of the brokerage firms set to follow many of their customers, like Everest Capital’s $830 million Global Hedge Fund, into vaporization. Perhaps these casualties are just the first in what could become a massacre if currencies were ever to emerge more freely from the control of central bankers.

SNB President Thomas Jordan attempted to soften the impact saying that, “We have a free exchange rate once again.”  Meanwhile, market participants and the central banking establishment were apoplectic.

Possibly, the worst damage has been to the credibility of central bank pronouncements in general. In the future, so-called ‘forward guidance’ on low interest rates likely will become increasingly difficult. Further, the Swiss may be perceived as having ‘left’ the Eurozone. If so, their departure may lend a certain legitimacy for actual members such as Greece to leave also, precipitating fresh concerns about the future of the euro, now the world’s second fiat currency.

In the meantime, gold has rallied considerably, reflecting increasing investor concern. Perhaps investors still heavily committed in bubble markets, and trusting in a well-timed exit if danger threatens, should remember the speed with which the stunning Swiss announcement hit the markets. Although the SNB had denied that any such move would happen, even just days before the knife was thrust, it should reveal to all just how important denial has become in the lexicon of the modern economy. Seismic events occur usually with savage suddenness and seldom gradually. Investors would be well served in looking ahead to future shocks, and structuring their portfolios accordingly.

John Browne is a Senior Economic Consultant to Euro Pacific Capital. Opinions expressed are those of the writer, and may or may not reflect those held by Euro Pacific Capital, or its CEO, Peter Schiff.

THE RESET HAS ALREADY BEGUN!

•January 21, 2015 • Leave a Comment

I think this will interest you.

EAP

 1  1  0  0  3

by Bill Holter, Miles Franklin

For several years there has been talk of a financial and economic “re set” coming, this is no longer speculation as the reset has already begun!  The Swiss have suppressed the price of their currency, the franc, since late 2011.  They pegged the franc versus the euro with a “floor” versus the euro at 1.20.  After confirming this floor publicly on Monday, they abandoned it Thursday only to see the euro depreciate through the par level.  What you saw on Thursday and Friday was the work of Mother Nature as the Swiss decided they would be better served by no longer battling her.

The ramifications of this move by the Swiss are almost infinite when you consider the chain reactions they have now started.  Several large FOREX firms including the largest retail firm in the U.S., FXCM, were rendered bankrupt overnight.  Even Goldman Sachs and Citi admitted to being offside and sustained large losses.  As of right now, we have no idea who “won” and who “lost”, nor do we know “how much?”.  We heard almost nothing from Swiss or European banks on Friday, “who what and how much?” will begin to surface this coming week.  As I have written for years now, if the loser goes bankrupt, the winner does not get paid…thus turning the winner into a loser.  This is a very big problem the markets ignored on Friday but will not be able to ignore as the dead bodies begin to surface.

Think about this point very seriously, many investors (and firms) went to bed Wednesday evening with no stress at all on their portfolios (or their business), in just five minutes Thursday morning they were insolvent.  Just FIVE MINUTES!  We are only talking about “investments” here, how many other real businesses in the import and export area are now broke?  Broke because they hold euros but need francs or they export from Switzerland or import to Europe and now their business model makes no sense?  How is this even possible in just five minutes time?

Another aspect to what and how the Swiss moved on Thursday is that of “central banks” themselves.  Did the Swiss not know they were going to float the franc on Monday when they confirmed the peg publicly?  Did they or did they not inform the IMF prior their actions?  What about the BIS which is headquartered within their borders in Basel, surely they tipped them off?  Christine LaGarde claimed in an interview with CNBC that she had no prior notice, really?  If this is true then it shows the Swiss central bank has moved in an “every man for himself” type of action.  It also shows the “united front” of central banks is not so “united” anymore!  If Ms. LaGarde is not telling the truth and in fact the IMF did have prior knowledge, what would this mean?  It would mean the central banks are finally losing control of the rig.  It would also mean the central banks have distorted currencies, interest rates etc. so badly that once Mother Nature takes over, we can expect repeat performances all over the world and amongst all assets and currencies.  How can I say this?  I would simply ask if it is “normal” for two trading currencies to revalue 30% in five minutes or if it is not normal, what was the cause?  We of course know, the cause was the actions of the ECB and SNB over these last three+ years.

We have already speculated the Swiss made this move for one of two reasons.  First, they may have decided the amount of euros necessary to purchase (and thus the amount of francs created) will go exponential this coming week when the ECB goes full on QE (printing).  We also know that euros already make up more than half of their balance sheet.  The other possibility is they know the Greek election is coming up, (the Greek banks are already experiencing bank runs) and they see the very real possibility of the Eurozone fracturing or even dissolving.  Another possibility is maybe they just decided “their first loss is their best loss”?  Maybe they have watched as the core of Europe has asked for their gold back and understand that “trust” amongst central bankers is waning?  Maybe they simply decided to front run the obvious and necessary re set and do it on their own terms?  It is very hard to say what exactly the motivation was, the important thing to understand is their action has started a re set in motion which will not be stopped!  In plain English, the Swiss just yelled FIRE …while standing in the exit!

I have several other questions but first I want to point out the obvious.  Oil was cut in more than half in dollars over 6 months, could you say the price of oil was “re set”?  How about copper?  How about other foreign currencies?  Could the huge moves in so many assets qualify as being “re set”?  The collapse in oil and copper prices are black swans pointing to a rapidly slowing global economy.  The Swiss removing their currency peg is another black swan event and in reaction to the ECB moving toward hyperinflating their currency.

My biggest question now is this, what will happen when China allows their currency to float?  The Swiss are one thing, China is whole different story!  Think of the ramifications when it comes to trade?  Another, maybe even more important question is what will happen when the Chinese “force” the price of gold and silver to trade freely?  Let me explain this further.  The Chinese know full well that gold IS money, otherwise they would not have spent the last several years buying almost every single ounce that came from the ground.  They know it is artificially priced by New York and London.  They can “float” gold in several manners.  First, they can simply bust the COMEX and LBMA by bidding for and purchasing both their entire inventories within a 24 hour window.  Another possibility would be to simply put out a “global bid” and state some price (much higher than current) they are willing to buy any and all gold, presto, COMEX and LBMA would be busted without them doing it directly!

I recently wrote of a “Global Margin Call” where because oil and other assets, currencies, etc. have moved so rapidly, many derivatives traders have surely been thrown “offside”.  This move by the Swiss is nothing different except it was done “officially”.  Actually, the funny thing is they moved to suspend what they were “officially” (and artificially!) doing.  The move by the Swiss has only made the global margin call that much bigger!  The global re set which was already in the works is now publicly and officially happening before your very eyes.  You can close your eyes or not believe this fact, it will not make it go away, nor will it insulate you financially from what is coming.

To finish, and I plan to follow up maybe even tomorrow, the most important re set will be that of gold and silver prices.  I say “most important” because these are the only “tools” available to you as an individual to protect your wealth.  If the Swiss franc and the euro can change in value by 30% within five minutes, what do you think the revaluation of gold and silver will be when the 100 ounces of “paper metal” come looking for the real thing?  At what price will the market clear?  Add a zero?  Two zero’s?  Please understand this, when the margin call is issued worldwide, there is only one money where the call will work in reverse, precious metals.  The “call” will be for real, yet non existent metal.  Gold had already sniffed this margin call and re set out a couple of months ago.  No matter how much paper was thrown at it, it simply stopped going down.  Even while the dollar strengthened synthetically, gold went higher versus the dollar.  Gold has clearly been THE best money, what do you think will happen to real metal when it turns out that 99% of the supposed global supply is proven as counterfeit?

We will soon witness the greatest margin call in all of history.  We will also witness the greatest transfer of wealth and re set in all of history!  My only question is whether what so far has been “rolling re sets” becomes an official market/bank/finance closure and announced …or, do the markets continue to trade and force re sets in market after market.

As an additional note, we have one last question to ponder which may or may not be connected.  Koos Jansen put forth a “mystery guest’s” theory that the Swiss went short gold in Sept. 2011 which marked the top in gold.  He asks in the following link, “did Switzerland just cover their short“?

I believe there may be some credence to this theory but would go one step further.  Zerohedge asks the question and speculates Japan may be the next “Switzerland” and pull the plug on Abenomics.  Personally I see it a little differently, more importantly, what if the Chinese were to react to the coming QE4 by doing two things?  What if China just walked away and sold their dollar holdings …and at the same time revoked their current peg of the yuan to the dollar?  Will China some day ratio back their yuan with gold?  I think this is likely.  Would the dollar collapse 30%  like the euro just did versus the franc or will the re set be much larger?  Of course the next question would be “how high would gold be marked up”?  An unpegging of the yuan by China would be more important and (current) system ending than nearly anything else I can imagine.  For China to break their peg, the paper short positions in gold and silver would finally be exposed for what they are, counterfeits!

Regards,  Bill Holter

– See more at: http://thedailycoin.org/?p=16291#sthash.Wes83iMJ.dpuf

After Swiss Move As Bank Runs Accelerate And Financial System Begins To Implode

•January 21, 2015 • Leave a Comment

Panic At Davos After Swiss Move As Bank Runs Accelerate And Financial System Begins To Implode

Today a man who has been uncovering critical information for 25 years told King World News there is panic in the air at Davos as the shocking Swiss move has bolstered record attendance at a time when the bank runs in Europe are accelarating and the global financial system is beginning to implode.

Eric King:  Steve, as you know there is going to be record attendance at the meeting in Davos and there is definitely great concern after the surprise Swiss move.

Steve Quayle:  “The derivatives market is now crumbling in the background.  What the Swiss have basically done is shattered the hall of mirrors.  Meaning, the illusion has now disappeared and we will see panic in the markets over the next two to four weeks….

UPDATE: To hear the man with over 40 years of experience in the resource
markets and how he is positioning his clients to weather
the current financial storm click on the logo:

“When you have a 30 percent currency move in a matter of minutes, no chart could have predicted that stunning event.

Shocking Swiss Move Bolsters Davos Attendance

There is a massive fleet of 1,700 private jets flying into Davos, Switzerland right now.  It’s interesting that the panicked and record attendance at Davos, a town of only 11,142, coincides with the stunning Swiss move from last week.

The bottom line is this has left the markets in shock and the panicked attendees are looking to prepare themselves to deal with the coming chaos.  In many ways the Swiss move is just an indicator that the global financial system is beginning to come apart at the seams.

Bank Runs Accelerate As Global Financial System Disintegrates

Meanwhile, we have accelerating bank runs taking place in Europe.  You spoke with the former White House official, Dr. Philippa Malmgren, about Europe now being in danger of mega-bank runs.  Eric, that’s why you viewership is expanding — because they can get the truth at King World News, while the mainstream media continues to simply spew out their controlled propaganda.

But circling back to the bank runs in Europe, what you are seeing now is merely a warm-up to what will take place in the future when panic really begins to take hold.  And the record number of attendees meeting in Davos own the global mainstream media and they are not going to tell the public what they are really discussing in these private meetings.  Many of the leaders attending Davos care nothing about their citizens or their countries.  They are the global elite and as far a they are concerened the world is their playground to plunder.

Time Is Running Out

Time is running out for people to take action to protect themselves and their families.  If you understand that the governments and their leaders will not be able to aid, protect, or provide for everyone as the next global crisis breaks out, then you grasp the fact that you must be positioned to weather the coming global turmoil on your own.

People will either be victors or victims, and the nice thing about owning precious metals is that you can sleep well at night while everyone else will be pulling their hair out as the ultimate derivates nightmare unfolds.  People need to remember that the agenda of the mainstream media during this secular bull market in gold and silver has been to constantly bash the metals and tell people not to own them.  So essentially the propaganda arm of the elite talks the metals down while the elite are accumulating all the physical gold and silver they can.” If you are interested in purchasing physical gold and silver for delivery you can call Steve Quayle or his staff at (406)586-4842, or you can email them at info@sqmetals.com

THE DEATH OF MANIPULATION

•January 14, 2015 • Leave a Comment

Ah, those “deflationists.” Whether “wave theorists”; “cycle theorists”; or my favorite of all, “proprietary technical analysts,” they continually claim that any price that’s falling must continue to fall –forever. That includes gold and silver as well, although unerringly such “experts” claim to be “short-term bearish, but long-term bullish.” I’ve been observing this fear-mongering phenomenon over a 26-year career as a CFA-chartered bond trader, stock trader, stock analyst, investor relations officer, and blog commentator. But nowhere more so than in Precious Metals – due to the relentless, covert actions of a manipulative “Cartel” intent on maintaining the status quo of history’s largest fiat Ponzi scheme.

After 13 years of watching the U.S. government and its Central bank and Wall Street minions – i.e., the “1%”- cap every advance; enhance every decline; and orchestrate hundreds of enigmatic waterfall plunges, I’m as versed in how markets really work as anyone on the planet – as are Bill Holter and David Schectman. Yet, incredibly, 99% of fellow Westerners are not only financially and economically clueless, but in a perpetual state of denial. Onlywhen a 2008-style crisis occurs do they even acknowledge something’s wrong; and even then, want little to do with truth-tellers like the Miles Franklin Blog. This is why TPTB work so hard to manipulate perception with unrelenting market manipulation and propaganda; although thankfully, “Economic Mother Nature” has never been defeated, and never will be. To that end, I long ago learned that “those who will not see” are not worth wasting time and energy on – which sadly, includes the vast majority of “family, friends, and colleagues.” My goal – and Bill’s and David’s as well – is to save perhaps 1% of the population before it’s too late; which is probably all that’s “savable” anyway, given the extreme shortage of actual, available-for-sale precious metals.

It’s Tuesday morning, and even I am in awe of the carnage. Not that what is occurring is not EXACTLY what I predicted – in forecasting collapsing commodities, currencies, and interest rates. And oh yeah, rising gold and silver prices – which per last month’s “end of the gold ‘bear market’,” are EXPLODING worldwide, care of the global currency contagion signifying the terminal stage of said Ponzi scheme; i.e. the “single most Precious Metals bullish factor imaginable.” Gee, I wonder what those “deflationists” will have to say of PMs surging whilst all commodities plunge, from oil to base metals to even many agricultural products. Frankly, the “death by deflation” I wrote of last week – based on the horrific overcapacityfostered by decades of unfettered money printing and Wall Street financial engineering, will likely be so catastrophic, even the so-called “survivalist savior” farmland is purported to be may well become largely worthless – with only real money guaranteed to maintain its purchasing power. In the past, we’ve written ad nauseum how gold and silver are the “Achilles Heel” of the global monetary system; and last week, how plunging oil prices are the Achilles Heel” of U.S. economic and political hegemony. Following that logic, the title of a Charles Hughes-Smith article yesterday, “Deflation, the Achilles Heel of the Global Status Quo,” speaks volumes of just how close we are to the end game of worldwide economic collapse, and subsequent Central bank hyperinflation.

Again, we cannot emphasize more what we wrote three months ago; i.e., before oil prices plunged from $95/bbl to this morning’s catastrophic level of $44.50/bbl. Which is, that “2008 is back, with one temporary exception”; that “exception” being maniacal government support of stock markets – in some cases, overtly– as a tool to mask the horrific implosion of global commerce, and “kick the can” as far as possible. In the case of U.S. stocks, their relentless, PPT-supported surge has become so ridiculous, they have decoupled with global equities in historic fashion; and watching European stock rocket higher this morning, as commodities and the Euro (and Swiss Franc) implode, you’d think the ECB is not only going to announce sovereign bond QE at next Thursday’s meeting, but Bank of Japan-like equity QE!

Yesterday (Monday) morning, the EXACT same thing happened, with Dow Futures surging whilst commodities and currencies plunged. The PPT was forced to actively work to slow the subsequent equity plunge – whilst the Cartel desperately capped PM gains; but by day’s end, oil had plummeted 5% and the CRB Index 2%, whilst the Bloomberg Commodity Index hit a new 12-year low. Gold rose – what do you know – by EXACTLY 1.0%; silver rose a percent as well; and the 10-year Treasury yield, which this weekend I said might never see a “two-handle” again (until hyperinflation inevitably arrives), had plunged to 1.91% – just above the October 15th “flash crash” low of 1.89%. And for the coup de gras; with oil closing at just above $46/bbl; rig counts plunging at their fastest rate EVER; commodity currencies in freefall; and even Wall Street starting to admit the horrific ramifications of plunging oil prices we wrote of three months ago; perma-cheerleader Yahoo! Finance issued perhaps the most idiotic headline in its long sorry history. Yes, those “retail investors”; that no longer exist – and have, on average, ZERO financial expertise, are predicting a “bottom” for oil. Frankly, even I am speechless at how moronic the MSM has become; albeit, highly reflective of the consensus “group think” noted above.

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Well here we are Tuesday morning, and yesterday’s trends havedramatically accelerated. Oil is down another 3%; the CRB index is in freefall – as exemplified by copper, i.e., “Dr. Death,” down 2.5%, to a new five-year low; the dollar index is absolutely exploding, with the Euro hitting a new ten-year low and the Ruble in utter freefall, to name a few. Gold and silver are again surging (albeit, in typically capped manner); again, defying said “deflationists” – who don’t understand PMs are not “commodities,” but money; and the 10-year Treasury yield briefly fell below the aforementioned 1.89% “flash crash” low, to 1.88%. In other words, deflation is winning the day, making it more and more likely that hyper-inflationary monetary policies will be initiated globally in short order; and this, with gold and silver already at or near all-time highs in the vast majority of worldwide currencies. And oh yeah, guess what else is in freefall mode this morning? Yes, the so-called “savior” of the monetary system – BITCOIN – which not only plunged 18% overnight, but has a chart that looks as ugly as the worst of the 1999 dot com frauds.

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But amazingly, not only are stock futures up again, but I kid you not, the “National Federation of Independent Business” just posted its highest “Small Business Confidence Index” reading in nine years! Yes, just as the “National Association of Home Builders” is historically “confident” despite plunging home sales and prices amidst record low mortgage rates; and the Fed unerringly “confident” in the economy, calling the oil price plunge “transitory”; the small business trade group claims to be “confident” despite historically high levels of business failure, historically low levels of business formation, plunging real wages, and the lowest labor participation rate in 38 years! I mean, seriously, you just can’t make this stuff up!

That said, the reason today’s article is titled the “death of manipulation” is because the “unstoppable tsunami of reality” has become so powerful, it is swamping essentially all manipulative efforts to disguise it. Per the aforementioned article, I have written of this phenomenon for some time. However, it was this must read article by Raúl Ilargi Meijer that catalyzed this piece. In other words, whilst I have focused principally on collapsing commodities, currencies, and bond yields as proof that global economic activity has completely detached from rigged Western financial markets, he describes the cataclysmic impact on “emerging” markets of the explosive outflow of capital, relentlessly seeking safe haven as history’s greatest economic storm arrives. In other words, the aforementioned, historic deflationary trends has been felt inordinately in the currencies of “lesser” nations, more so than even the products they seek to buy. Thus, whilst deflation of commodities and consumer prices engulfs an oversupplied world, price inflationdominates in these nations, due to the even greater collapse of their currencies. In other words, a cycle of hell that worsens as said safe haven flows increase; which, in turn, causes “stronger” nations to accelerate their money printing in an attempt to “win” the “final currency war,” exporting still more inflation to emerging markets.

I know such explanations can at times sound complex. However, in “layman’s terms,” I am simply describing the terminal stage of history’s largest financial Ponzi scheme. In other words, global suffocation on debt, printed currency, and suicidal financial, monetary, and geopolitical policies – yielding poverty, social unrest, and draconian government responses.

Clearly, time is running out rapidly on not TPTB’s ability to control the uncontrollable. In many markets – like commodities, currencies, and sovereign bonds, “the death of manipulation” has already occurred; and frankly, only Western equities and paper gold and silver have not yet overcome government attempts to maintain their respective ruses. To that end, I could not care less if the “Dow Jones Propaganda Average” hyper-inflates or crashes – as either way, real purchasing power will inevitably be annihilated. However, with global physical gold and silver demand at record levels – and going parabolic care of the aforementioned global currency contagion – it’s only a matter of time before the “New York Gold Pool” is permanently destroyed. To wit, if yesterday’s news that the U.S. Mint sold nearly three million one-ounce Silver Eagles in the first 12 days of January doesn’t demonstrate just how powerful demand is becoming; frankly, I don’t know what will!

Crazy World Out There….

•December 15, 2014 • Leave a Comment

By Robert Fitzwilson of The Portola Group

December 15 – Is The Madness Of The Elites Pushing The World To The Brink?

While many are familiar with Einstein’s famous quote about what World War 4 will look like, it bears repeating.

— “I do not know with what weapons World War 3 will be fought, but World War 4 will be fought with sticks and stones.”

With the announcement this weekend of new sanctions against Russia and the provision of funds to rearm Ukraine, the elite have taken new steps toward World War 3. It’s madness, but the people in power keep pushing the world to the brink….Einstein lived in an era when the nuclear weapons of war that he dreaded were present and had already been used at the end of World War 2. What none of us could have imagined are the new weapons of war that have emerged since his era. Among them are lasers, drones, miniaturized reconnaissance devices, “dirty bombs” and weaponized diseases (although catapulting deceased and diseased animals over fortified walls in ancient times was a common tactic). Computerized theft of wealth and intellectual property as well as computer viruses such as Stuxnet (first seen in the attack on the Iranian nuclear facilities are additional modern tools for warfare). Disinformation in social media sites and global government surveillance operations are pervasive as well.

The ease and severity of the ongoing computer attacks against Sony Pictures by the North Koreans should be a warning to every government and individual that protecting against such intrusions is probably a lost cause. It was also reported that the Russians recently demonstrated jamming devices never before imagined against a U.S. destroyer in the Black Sea. The story was that all systems, including the weapons systems, were repeatedly disabled by a single aircraft which then staged mock bombing runs on the destroyer to demonstrate the point. The destroyer supposedly was equipped with the most sophisticated systems in the U.S. weapons arsenal.

The Chinese have also been testing a plane that can fly at unheard of speeds. If the plane advances to deployment, it could deliver nuclear weapons in a fraction of the time thought possible. Anti-satellite systems are probably in place by the competing countries as well. Our national electrical grids remain dangerously exposed to the possibility of an electrical magnetic pulse attack (EMP). It was recently suggested that 100 million people could lose power if such an event occurred in the United States.

For the central planners, their weapons of choice include the dreaded derivatives that can manipulate and destroy companies and global markets. Their most favored weapon is wealth confiscation. Among the tools are unrelenting taxes, shakedowns of corporations into forced settlement agreements, and massive, unrestrained creation of fiat currencies and credit. Leasing of gold on deposit for safekeeping, over-hypothecation of that gold, and sometimes even flat out confiscation seen in the case of Ukraine’s gold are also arrows in their quiver. Central bank purchases of stocks, bonds, mortgages and sovereign debt to the tune of tens of $trillions can only be seen as another form of wealth confiscation. It is quite a scam. Truly “money for nothing” as the song goes.

The other weapon that the central planners favor is to create a “crisis”. One is certainly developing in oil. There was a parade of announcements coming from OPEC, the IEA, and government officials that the demand for oil was weak or that the estimates for next year will be down. This weekend, another oil minister suggested that even $40 per barrel would not trigger a supply reduction by OPEC.

If you look at the projected reductions by OPEC and the IEA for next year, the amounts are minuscule, yet the headlines suggest that the sky is falling. Also, unless the OPEC ministers are suicidal in an economic sense, parading out these comments is not what a self-interested person would say, unless there was something else afoot. We believe that there is, and that is a deliberate attack on the U.S. Shale industry.

An implosion in the high-yield debt market triggered by the shale oil industry would spill over into all of the financial markets. Could it be that is the reason that the U.S. Congress hastily added a provision to the new spending bill to transfer hundreds of $trillions of derivatives exposure to the U.S. taxpayer? Something does not smell right, and a contrived crisis could well be in the making.

Since the announcement by OPEC, the 20-Year Treasury has risen by about 4%, gold by 3%, while the major stock indexes have declined by 3%. Light sweet crude dropped by 16%. It is a good sign for precious metals investors that gold and silver are holding up so well. The investor group is small compared to those seeking safety in U.S. Treasuries, but the size could expand rapidly if the precious metals are finally released from their chains. Perhaps the sizable circuit breakers adopted last week by the Nymex and the CME might relate to that. We’ll see.