"Since the Lehman Brother scuttle and the Fannie Mae adoption and the AIG black hole admission, the financial crisis that began with the housing bubble and subprime mortgage bust has turned virulent. The global financial crisis is better described as a global monetary war to defend the toxic USDollar, whose sunset can be seen. In the last 12 to 18 months, the monetary war has again morphed, this time into a far more serious and financially violent global Gold War. Nations are fast realizing that their only true liquid assets of value are their gold reserves, and even they have been tampered with or stolen in a vast re-hypothecation scheme."Interestingly enough I noted in the latest investment plan that the States of Jersey is to invest make a new type of investment not previously held, this is described as 'Alternative Investments Classes' and top of the list of what exactly an alternative investment might be is 'commodities'. It seems that one candidates campaigning at the last election has been listened to by someone and the States of Jersey may follow the rest of the world into GOLD.
"The Gold War is on, having moved to a higher gear, but nowhere near a climax gear. The true value of gold is being realized. The strength of gold during insolvency crisis is being observed. The resistance and rescue from the plague of insolvency is being made clear on a global stage. The new important part of the Gold War comes with the Allocated Gold Account scandal which will dwarf the LIBOR and MFGlobal scandals. The demands for repatriated gold accounts, primarily from the criminal bank sectors in London and New York, have amplified. Germany has finally joined with demands for gold repatriation. The demands will continue to grow even as tampered gold bars add to the motivation to repatriate. If only Chavez of Venezuela knew that he was to start a global trend to call gold home, in a Gran Aletazo de Mariposas. The grand butterfly flapping has caused a whirlwind that will turn into a tornado to wreck the central banks in a final death blow."In a series of Laws, the road map for the next six months is painted clearly
"The law can be stated: The Gold Standard will return from a sheer standpoint of value, stability, and resistance to storms based in failed bond auctions, debt writedowns, and insolvency consequences. Only a hard asset backed new currency can replace a fiat paper currency reserve.
The law can be stated: The Gold Bull continues unbounded with the Zero Percent Interest Policy (ZIRP) as its primary cylinder, while the artificial 0% distorts all financial markets, all assets, and all value. The Gold Bull will continue until the USGovt debt default, and until the USDollar retirement.
The law can be stated: The bond monetization known as Quantitative Easing (QE) powers the upward move in the cost structure for the global economy. The result is a shrinking profit margins imposed on the entire economies, felt in job cuts and reduced budgets for expansion, even maintenance.
The law can be stated, as a profound consequence: The combination of ZIRP & QE lead to capital destruction and systemic breakdown. Observe the fast falling Money Velocity while money supply grows at a staggering pace.
The law can be stated: The anti-Gold system continues to attempt to reinforce itself until its final implosion. Criminal means and false accounting backed by media propaganda are their tools that reinforce the current power structure. It will yield to foreign designed trade settlement systems, to the forced Gold Standard return, and to vast liquidation.
Criminal deeds have become the norm. The established norm has been for outsized naked short positions for the Big Four US Banks. They are an everyday fixture. No laws are enforced for selling enormous supply without metal. Why on November 15th, my colleague Turd Ferguson reported the following gold ambush. In the TFMetals Report, he summarized the ambush as he wrote, "Over the course of about 5 minutes, one single order was filled. This massive dump of about 25,000 gold contracts managed to move the price of gold down by nearly $20. To give you an appreciation of the size and scale of this deliberately criminal act, 25,000 contracts is the paper equivalent of 2.5 million ounces of gold, or roughly 77 metric tonnes, the paper equivalent to the alleged physical holdings of Australia or Indonesia." No end to the naked shorting. The financial press reported not a peep on order by the Syndicate, who act as advertisers on the network channels.
On November 2nd, the Silver Doctor reported a similar silver ambush. NetDania provides a service, to estimate volume from five separate market sources. It is not an exact indicator of volume data, but does shed much accurate light on the deeply corrupted market. According to NetDania, a total volume of 38,400 contracts, equal to 191.99 million ounces of paper silver were dumped on the market in only ten minutes between 8:30am and 8:40am EST. The volume for those ten minutes corresponds to nearly one quarter of annual global silver production! No response by market regulators, business as usual.
Criminal deeds have become the norm. Money laundering has kept the entire major US banks afloat, the money laced with narcotics. Overnight satisfaction of loans is sometimes done with heroin paper packets the size of bricks. For the last 20 years, the New York and London bankers have illicitly (nicer word than illegally) leased official gold accounts. Those nations are one by one demanding their gold repatriation. Hot war has been justified in order to win the release of official gold held in accounts. Plenty of Arab despots sit in power, but the Libyan seat was targeted as special for its 144 tons of gold. The London bankers pilfered the Libyan gold account in the Qaddafi name, offering flimsy requirements for its return to their people, demands which will never be met. The stolen private accounts at MFGlobal waiting for silver delivery served as another criminal deed. The crime scene was protected by the US regulators and the courts. Apparently, the wrong interpretation of bankruptcy law matters little. MFGlobal was a brokerage firm, not a financial firm. Therefore, the private accounts should have been held first in line for redemption, not last.
The most prominent criminal practice has been challenged, the illicit usage for leasing of official gold accounts in the name of sovereign governments. The challenge will make for the grandest banker scandal in modern history. My source estimates that over 40 thousand metric tons have been vacated from the official accounts over the last two decades. Clearly, the volume indicates a lot of unofficial unaccounted gold, which nonetheless exists. The pressure has finally come to the London bankers largely responsible for the happy fingers. The New York and Swiss banks have been working overtime, often in midnight emergency shipments, to avoid a direct default. That would be both embarrassing and an invitation for prosecution which would be difficult to prevent, given the public outcry. As the London bankers struggle to meet the repatriation demands, the pressure will not relent. They must replace the leased gold or see their crime scene exposed.
The law can be stated: With Gold goes the geopolitical power. As huge amounts of Gold are shipped Eastward, with huge tonnage leaving London for points East like China, so goes the important shift in geopolitical power. A Paradigm Shift is in progress, at work.
ADVENT OF THE GOLD WARS
Since the Lehman bust in September 2008, the global financial crisis has been a fixture, without solution. My preference is to call it the Global Monetary War, whose unspoken main objective by the powers in control is to maintain power, to preserve the big banks as fortresses of power, and to protect the USTBond & USDollar in their primary perches. Two important events have altered the crisis. The first was the breakdown of the Southern European sovereign debt structure. The Greek Govt Bond went into crisis mode in late 2009, which spread to Ireland, Portugal, and lately to Spain, Italy, and France. It will consume the Euro currency, despite all their best efforts NOT to fix anything, despite their best efforts to alter the bond subordination in new bond issuance. The Europeans are guilty of kicking the debt can down the road, just like the Americans. The victims that topple the system will be the big national banks in the affected nations of Europe, even the German banks. Their flagship Deutsche Bank has been dead for years, full of hollowed corridors.
The second important event was the widening demands for repatriation of official gold accounts. It might have begun with Chavez in Venezuela, but it has continued. The Ghana Govt made their gold account repatriation demand, but a mysterious death of their leader halted the process. The Germans are spearheading this revolt. The Dutch will follow. The Austrians are next. Even little Ecuador wants one third of their gold account returned. Others will join.
An extreme wild card has surfaced. It began to be in play when Saudi Prince Bandar was assassinated a couple months ago, at the hands of HezBollah. Of course, the event was kept secret, but the Saudi Minister of Security was killed as revenge for the Saudi role in the high level Syrian assassinations. Phony photographs and other doctored official accounts have been produced by the Riyadh crowd to conceal the damage. The House of Saud, so the Jackass has claimed for two months, is in danger of falling, along with the Petro-Dollar. Well this week, reports have come out that King Abdullah faces death. He underwent a mid-November back surgery but has not recovered, or even come into consciousness. His entire set of organs has shut down, no longer functioning. The risk to the Petro-Dollar was high with the Bandar killing. The risk just went double acute with a succession to the throne imminent. Domestic challenges by an increasingly aware population, beset by higher cost of living, will come. The great Saudi oil surplus is slowly dwindling, what with higher domestic usage in a higher standard of living. The foreign challenge will remain from HezBollah, with roots from the radical and very powerful Shiite sect. Expect the Petro-Dollar defacto standard to fall in the coming months, as only weak successors remain in the line of surviving brothers. Think bottom of the family barrel (of oil). The teetering USTBond and confronted USDollar make for a poor foundation on which to keep the Petro-Dollar in place. Imagine the impact if the Saudis announce that Euros, Pounds, Swiss Francs, and Yen, even Gold are accepted for crude oil transactions. The Petro-Dollar is walking dead.
For the past few days I have been looking at why the Jersey Finance Industry will move to Singapore, well here is on further reason... as the hegemonic power shifts to China, where better to be based than Singapore, a jurisdiction with a history of banking, that yet protects the identities and actions of its clients from those desperate Western governments eager to rob what little wealth remains to their citizens. A jurisdiction largely ethnically Chinese which speaks mandarin fluently.
As the wealth flees the City of London so it will flow from Jersey to the welcoming arms of Hong Kong and Singapore and the protections of the new global superpower China.