Author: gork

Thank You Jamie Dimon for Illegally Smashing the Gold Price Again   [Copy link] 中文

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Post time 2013-7-8 21:46:52 |Display all floors
40% Hyperinflation Rate

So the ECB has adopted the "extended period" phrase and China is talked down in all the propaganda. Meanwhile, Mark Carney has deployed "forward guidance", meaning announcing a more dovish stance; an unprecedented several months in advance of the supposed occurance. That Carney is being hailed as a messiah shows the extent of the confidence trick that's coming. That's also why Japan announced it would double its monetary base over the next two years: While the Fed is signaling it may begin tapering its $85 billion in monthly bond by the end of this year, the Bank of Japan is aiming to double its monetary base to 270 trillion yen by the end of 2014 from 138 trillion yen.
- China Enters Nomura Danger Zone as Fed Tapers: Cutting Research

This is to combat deflation which was last reported as 0.1% over ten years and that's using the B.S. measure that excludes food and fuel. In other words, just jawboning the markets to support the dollar as the FED announces a tapering IF its rigged statistics continue to show improvement. The unemployment figures were lower than the propagandists claimed predictions but whilst 360,000 part-time and low-wage jobs were created, 240,000 full-time jobs were lost, the unemployment rate remained at 7.6% and the "under-employed" increased from 13.8% to 14.3%. This is similar to the "OXO" job-sharing scheme during the last Great Depression. GDP was revised lower, which the markets appear to have interpreted as rigging of the stats. to show the next GDP figure to be higher.

The FED will increase it's monetary base from $800bn to $4trn by the end of this year or a five-fold increase over five years. The BoE has increased its monetary base from £94bn to £354bn over the last four years and onward to £469bn or (also) five-fold when the current round of QE is finished (and suggesting the UK must massively inflate to catch up by the end of the year). This carefully arrived at number of 5 is identical to that used during the last Great Depression and is from the finger-in-the-air economic model where you stick your finger in the air and guess the direction of the wind.

In all three cases, BoJ, BoE and FED, then, the rate of hyperinflation is just under 40%. Instead of being "competitive devaluations" or the "currency war" that the propagandists claim, they're co-ordinated, mutually supportive devaluations and will become the permantly higher level of paper money inflation or the "new normal".
As for all those currency swaps, their purpose is to stabilise exchange rates.

With ZIRP, there is nothing to compensate holders of fiat currency for their loss from currency debasement. Bear in mind too, that the currency markets are huge; the largest of all.

The only reason to taper is that they fear a run on the currency with the gold rush still continuing in India and China and JPMorgan and now the CRIMEX running low, whilst the LBMA, ABN Amro and some swiss banks defaulting on gold. Once (if) the "inflation expectations" are reined in, the FED will increase QE Infini-3 and QE 4-Ever once again.
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Post time 2013-7-11 01:52:37 |Display all floors
The US has massive unpayable debts. It has to produce price inflation. At the same time, it has to keep interest rates low to defraud pensioners with the ERISA law. This, in turn, requires limited lending and high unemployment to avoid a hyperinflationary run on the currency and this would cripple the US and UK if it were held for the decades that is required to cover the Baby Boomers. So stagflation with low interest rates, except the level of debt means a Volcker hike of overnight rates to 21% is not possible.

A further complication is the transition away from the USD as a reserve currency, as happened with Sterling in the 1950~70s. Then as now, various currency swaps are being used to stabilise exchange rates and instead of a guarantee of 90% of reserves in USD as the UK had to do back then, Japan (and probably China) has agreed not to dump. Sterling fell from 87% in 1947 (IMF estimate) of reserves to 3% today. Then as  now, China now represents a far larger economy than the US, GDP statistics being "man made". China accounts for most of the World's copper, steel, grains etc. consumption, whilst the US has the worst deficits in all of history despite the highest nominal GD "product".

Options to default on the liabilities include:

a shorter bout of inflation is required or even a deliberate hyperinflation with much lower standard of living because the devaluation makes everything a luxury,
kill off the Baby Boomers,
parasite off the rest of the World,
steal the cash,
default, and
all of the above.

Hyperinflation could be a one-off revaluation then pegging to gold as FDR did in 1934. Inflation will be the main way that the US (and UK) defaults.

Killing off Baby Boomers could be via pandemic, war or simply sending Amerikans to the UK's National Health Service where the "Liverpool Care Pathway" simply starves victims to death and the "Do not resuscitate" policy also lets elderly victims die. A spate of flu-like pandemics suggests that the Great Satan has been developing these diseases and is trialling them on the RotW as they did to France a while back. These psychopaths are genocidal not suicidal.

Exports are limited because of the krudware produced. Only the natural produce from the land thieved from the native American such as gas and crude oil will sell. Agricultural produce is tainted by the GM krud, which is also probably a scam to make the RotW dependent on the Great Satan for food supplies when the GM krud contaminates and/or wipes out your natural crops.

The Great Satan will also try to continue the parasitic system of tribute via fiat currency as long as it can.

Wholesale thieving from the sheeple is already under way.

Outright default will have to occur too as happened in 1933 when gold clauses were universally repudiated and gold confiscated and in 1971 when, again, gold was defaulted on "temporarily".
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Post time 2013-7-13 17:22:52 |Display all floors
This post was edited by gork at 2013-7-13 17:36

The transition from the US dollar as the sole reserve currency is obviously well under way. A falling gold price requires suspension of disbelief in the face of world-wide hyperinflation.

Jim Rickards continues to peddle the "Currency Wars" as a competitive devaluation, whilst admitting that if the UK, US and Japan all devalue at the 40% rate that they have been doing, then there is no price advantage for exports. Never mind that exports are usually denominated in dollars. He also talks of "exporting deflation"; a strange concept. Whilst claiming a new gold standard is a long-shot, he admits that central banks are accumulating and repatriatiing gold to back their currencies. Rickards recommends the sheeple hold only a small fraction of their savings in gold. This is socialism as the sheeple need to be fleeced and Rickards wants everyone to pay their "fair share".

Sterling is the most vulnerable as there's nothing supporting it. Already it's fallen from $1.6 to below $1.5 and will probably implode which is why Mervyn King refused to hyperinflate any more even with Danny Blanchflower and Adam Posen's vitriol. Mark Carney has probably been brought in to take the fall, which may be why he's only going to stay for five rather than eight years and demanding a large salary, whilst his performance at the canadian CB is hyped and his failures at the BIS covered up. In other words, in reputation, he has nothing to left to lose. With only 310.3 tonnes remaining, Sterling has a long, long way to fall. The US, UK and Japan are all hyperinflating their monetary base at a 40% rate and have little gold. The eurozone, meanwhile, is contracting its monetary base, has thousands of tonnes of gold and the euro already accounts for over 40% of international trade against the dollar's less than a quarter; the renminbi about an eighth.

Meanwhile, is up to its usual dirty tricks. With a graph that clearly shows Friday's closing price clearly above $1280 (close to $1285), the closing price is reported as $1279.90. The Dollar is finished as a reserve currency and Sterling will simply implode!
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Post time 2013-7-14 15:31:24 |Display all floors
Let's also not forget that there are trillions in FX reserves around the World and now that the dollar is losing its status as a reserve currency, those dollars will be repatriated, adding to the monetary base as well. However, Catherine Schenk argues that it took decades for Sterling to decline (see The Retirement of Sterling as a Reserve Currency after 1945: Lessons for the US Dollar?"

Today there is about 64% in USD and 3% in GBP on central bank balance sheets, about $7100bn and £200bn. This would be added on to the monetary base which by the end of 2013 would amount to $11trn and £670bn; MASSIVELY hyperinflationary and Sterling is likely to be ousted completely, leading to a hyperinflationary implosion.
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Post time 2013-7-15 18:50:08 |Display all floors
This post was edited by gork at 2013-7-15 18:52

Desperate Propaganda from Telegraph

Here's the usual hilarious BS from the Telegraph: Yet inflation in the real economy continues to be negligible.
. . .
However, if we multiply the price of gold in 1968 of $35 per ounce, every year since, by the annual US rate of inflation, then we can calculate a fundamental value of gold based on purchasing power.

Such a calculation results in a fair value for gold today of just $240 an ounce, only a fifth of its current price of $1,280 an ounce.

- If the US economic recovery keeps its present pace, goldbugs and miners can expect bad news

Inflation is far higher than the BS propaganda claims and as everyone knows. Yet this shyster takes the BS official figures at face value. Prices have doubled for staple foods in the last five years in a carefully managed and illegal cartel across the UK's supermarkets. Furthermore, the massive debt guarantees further increases in price inflation.

However real inflation is the increase in the monetary base from £94bn when QE started to today's £354bn; just under 40%p.a.

This should return the US dollar to its status as undisputed global reserve currency, particularly as the dollar may pay a more attractive interest rate in the future than the recent past.

Well, events have already overtaken this. B.S. Bernanke now admits interest rates will remain low for a long, long time. It now becomes obvious that his earlier statements were the fig-leaf for JP Morgan's illegal smashing of the gold price, probably to exit a short-squeeze. The "undisputed" reserve currency now accounts for less than a quarter of international trade, whilst the euro is over 40%.

Normally, the marginal cost of production of a commodity acts as a floor to the commodity price. There are a number of reasons why this is not relevant to gold.
. . .
. Moreover, if no gold were mined, unlike the production of other commodities, it would not prevent the global economy from functioning perfectly well. Those who argue that the marginal cost of production of $1,200 an ounce should act as a floor on the gold price are deluded and should be ignored.

Hilarious switch from gold to the "global economy"!

The LBMA and ABN Amro have already defaulted on gold and swiss banks are delaying delivery of customer gold. Meanwhile gold is in backwardation, premiums have covered the fall in the paper gold price and GOFO rates are negative.

In the absence of a meaningful pick-up in inflation, its price needs to fall another $1,000 an ounce before offering a buying opportunity.

Barry Norris is CEO and Fund Manager of Argonaut Capital Partners

And full of it!
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Post time 2013-7-16 00:44:41 |Display all floors
Watch Out For 2nd Smashdown

Reports of JP Morgan taking delivery of physical silver may be a precursor to another attempt to smashdown prices and herd the sheeple out of precious metals, i.e. JP Morgan is taking physical to dump on the market. Presumably, they no longer have any gold then can dump onto the markets.

However, the reason they want you out of gold is obviously because it provides protection. The desperation to herd you out of gold could be because they're about to do the big one-off revaluation as FDR did in 1934 after confiscating the gold in 1933. In other words, they're herding you out of gold can only mean it's about to go much higher.
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Post time 2013-7-16 20:04:59 |Display all floors
One of the things that occurs to me is that this is my fourth major market cycle.  The three previous down-cycles that I’ve been through previously were the cause of my personal wealth, and Eric Sprott’s personal wealth....

“It’s interesting that at age 60 I have a lot more patience than I did when I was age 30.  And I think one of the things that’s happening right now is the fact that markets and conditions have caused me to be a 3-to-5-year thinker, and most of the people I compete with, who are 20 years younger than me, have a 2-to-3-week time frame.

- Rick Rule - The Secret To How Eric Sprott & I Became Wealthy

It's much easier to say this when you're already wealthy and losses, even large ones, don't affect your lifestyle. Also, this is often what the fund manager banksters say whenever their clients have lost money. However, in this instance, Rule is correct. The fundamentals for gold point to a FAR higher price and only because gold is the kryptonite that banksters fear is it being smashed down. The waiting game for gold to rise much higher is what the banksters are betting on. They believe they can wait longer than the sheeple and they're mostly right.

There was the farce of the dual gold price in the 1960s and today we have the farce of a physical and paper gold market diverging too.

At some point the US will have to back its new issuance of debt with gold in order to maintain a low interest rate.

Meanwhile, a news blackout seems to have been imposed. The Telegraph reports that the BoE may be sued because it doesn't have any women featured on its bank notes. Was that what the Levenson Enquiry was all about? This enquiry was the cart before the horse. There was no scandal beforehand. Instead the scandal was exposed as part of the Levenson enquiry. Given that it was an attack on newspapers, perhaps they were unwilling to expose their own wrongdoing. But this hasn't stopped them before.

It's clear that the transition away from the dollar is a delicate time. In the 1970s, the UK had to go to the IMF for a loan as the gold price hit a trough in 1976, during a two year interuption to the gold bull market and there was a big one-off devaluation as sterling was dumped.

The bump in treasury yields seems to be an enticement to lure investors away. It could be from gold. Meanwhile, First Data employees have been bailed-in to their company: A few hours ago First Data Corp., a KKR portfolio company, announced that it will suspend 401(k) contributions to employees and replace cash bonuses with stock "as part of its new chief executive's strategy to return the credit-card processor to profitability."
- A Glimpse Of Things To Come: KKR Suspends First Data's 401(k), Replaces Cash Bonuses With Stock

The Telegraph's threat of gold miners "hedging" (selling forward to supress the gold price) as they did in the 1990s is a joke. If these bankster controlled companies were going to hedge, they should have done so at the higher prices of Sep11, not now that the price has been smashed below the cost of production.

This may be why they struggle to smash gold. Crude oil fell from $147 in Jul08 to $30 in Jan09, far more than they can smash gold. Demand for physical gold is still high after the April smashdown in both gold and silver.
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