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Gold closed the week out at $822.00.
The following is Jim Sinclairs thoughts tonight concerning the miscreants trying to keep the lid on gold:
I firmly believe the scams in gold, once disclosed, are going to set your hair on fire.
These will take the form of no gold gold certificates, paper gold rather than bullion confirmed as bullion to simply taking your money, sending you a confirmation without anything whatsoever behind it.
Dr. Fekete’s warning of gold scams don’t even scratch the surface of what I assure you will surface.
Just because someone says or writes what you want to believe, don’t for a second assume the author has ethics.
Gold is trading lower at $818.40 down from a high today of $830.
The latest data from the World Gold Council shows that demand for coins, bars, and exchange-traded funds (ETFs) doubled in the third quarter to 382 tonnes compared to a year earlier. This matches the entire set of gold auctions by the Bank of England between 1999 and 2002.
Last on gold, after hitting a low tonight of $804 in Asian markets, is $813.60.
The news tonight is the lower US dollar at 83.26. This is significant as it is trading under the weekly established trading range of 84-89. At the same time it is apparent that the Plunge Protection Team(PPT) and the big banks are working over-time at pressuring gold lower in an attempt to effect the dollar to recover some and rally.
It feels like a big push on gold is coming. Two days ago the cartel had one of their stooges attempt to freighten believers in the metal when he put out the story that the IMF would sell 3,000 tons of gold and in the following weeks gold would trade down to $455.
Someone is running scared with their gold and silver short positions. Putting out that type of information spells desperation.
Last on gold this morning is $829.70.
It appears that all the voodoo magic that the spin doctors have thrown at gold since late July is over for a while.
To learn more on the origin of the spin doctors, or the money mafia, view the link below.
The link in a few entries below does not work. You’ll have to go to youtube.com directly and search: Federal Reserve Scam – How It Happened And What It Means.
Last on gold is $803.20.
Tremendous Liquidity Transmutes Into Unprecedented Inflation
Jim Sinclair December 10, 2008 at 4:42 pm
Dear Friends,
I believe through the $2 trillion of fiscal intervention stimulation, a number I hear from the inside, the 8.5 trillion total so far is going to $20 trillion. Before this is all over the tremendous liquidity will transmute into inflation without precedent.
That is what you heard from Gold today.
The general equity rally in the early 30s was a humdinger so expect that rally to occur in the USA.
The only difference is when the monetary cat is let out of the bag by fiscal spending that Fat Cat will not go back into the bag. Gold will be launched into a multi-year phase of the long term bull market even when the equity rally in this bear equity market completes itself.
That encapsulates all you need to know concerning gold and the US dollar.
Respectfully yours,
JimGold is pushing higher with a last sale of $779.30. Is this the beginning of the next major upleg?
I’ve recently been hearing some disturbing speculation concerning the government’s plan in the future to enact a special tax on gold bullion profits. The numbers I’ve heard range from 70% to 90%. Concerning how people generally feel towards oil company profits when gas prices were high, I strongly feel that the majority, who will miss the expected big run up in gold values, will not oppose this new law directed at the minority who had foresight.
The Homeland Security legislation defines gold bullion as being valued at two times the last gold price and below. Could this be for future confiscation purposes?
It’s interesting to note that since the US Mint stated that they will no longer be making certain types of gold coins again that some of their past bullion coins have now taken on numismatic premiums.
One such series is the Buffalo half, quarter and one tenth ounce coins which were made just for one year. The last time I checked these coins were selling for a premium in excess of two times gold’s price. Many people believe if you are concerned about a coin’s integrity then the best way to safely buy it is in a graded state by a reputable grading service.
If you do have an interest in graded gold coins the perfect grading is MS 70. My favorite grading service is PCGS. I believe PCGS has graded over $11 billion worth of coins in their history. Also, these people grade about 100,000 coins a month.
You can search PCGS on the net and learn more concerning their services along with grading levels.
In the the time period ahead I see growing demand for gold coins in the excess value of two times the metal, gold affiliated companies with limited to no debt along with all types of gold specimens.
If the company can extract its highly valued gold specimens I see it significantly impacting our earnings along with improving our general financial health. Once income starts to flow, our valuable properties will support rich dividends to shareholders that have been more than patient over past waning years.
Alf Field recently projected a possible price on gold of $10,000. Mr. Jim Sinclair did not take issue with his projection. If it becomes reality, you don’t have to be a rocket scientist to grasp that the value of our share price would exceed $10.
The goof-ball that makes a market on the OTC Pink Sheets shows a last sale of 5 cents for our shares. To illustrate how crazy that valuation is just consider this, a reputable source has estimated the value of the Sixteen to One Mine alone at between $10 to $15 million.
If anyone wonders what would justify such a high price they need only to research the Weimar Republic experience. The parallel to the German War Reparations of Weimar in the early 1920’s is the derivatives area today.
There is no avoding the arrival of the hyperinflationary cyclone. All we can do is prepare for it.
Gold $771.70
Silver $9.97
Gold/XAU Ratio 8.10
Gold/Silver Ratio 77.38
Crude Oil $43.85
US Dollar 85.87The consensus is growing among monetary science experts that gold is nearing an important inflection point in which gold will explode higher.
The following is a retrieved section from an article entitled, “The Crisis Goes Forward As Gold Goes Backward” by Darryl Schoon that appeared on Kitco.com today:
“Professor Fekete recently posted his article, Red Alert: Gold Backwardization!!!, in which he alerted readers that for the first time in history the cash price of gold is higher than the nearest futures price, indicating that buyers value the present physical possession of gold more highly than future possession.
Professor Fekete stated that when gold recently moved into backwardization on December 2nd, a historical line had been crossed, a line which signified whether or not the present system could be saved. Now, according to Professor Fekete, with gold in backwardization, it cannot.
While the war between paper money and gold and silver is still being waged, according to Professor Fekete the outcome is no longer in doubt as the present system is now beyond redemption. This has profound implications for the future price of gold and silver and for gold mining shares.
In the last Great Depression, the shares of Homestake Mining, the world’s largest gold mine, went from $4.19 in 1929 to $495 in 1935, paying a $56 dividend that year. In the coming depression, gold and gold mining shares should do just as well—and, after the onset of the depression, just imagine what they will do during hyperinflation.
THE COMING CAPITULATION OF PAPER
Physical gold and silver, whether in hand or in the ground will be the last refuge for the trillions of dollars still invested in paper assets. With an estimated $27 trillion of wealth already lost this year, the day is coming when the last believers in paper assets will finally look to gold and silver to preserve their dwindling wealth.
But when that day comes, those owning monetary metals will not exchange their gold and silver for paper money at any price, i.e. permanent backwardization; and the last believers in paper assets will be stuck with now worthless government issued coupons which previously had passed for money.
The recent historic backwardization of gold is a clear indication that sometime in the future a state of permanent backwardization will occur—and on that day, the world will finally be free from the tyrannical slavery of central bank induced indebtedness.”
Freedom, oh freedom
Someday we will be free
Freedom, oh freedom
How sweet that day will be————————————–
The day will be returning when the western flank of the Sierra Nevada range will be over-run again with gold seekers as the current recession is looking to be headed toward a depression.
A depression is a severe economic downturn. The last depression lasted 10 years in this country with gross domestic product skiding lower for a good part of that time.
Bernanke believes pumping money into the system will be able to avert the expected cataclysm but will it? Bernanke is playing right into the hands of the bankers who require more and more money to be available for their profit schemes. The best consideration for the public would have been to make gold part of bank reserves. Since this day has passed according to Antal Fakete, it will all be downhill now until the OTC derivatives forest fire burns itself out as it continues decimating everything in its path.
People become much poorer during a depression when they are unable to service debt, they are the first to fall. During the early 1930’s public debt wasn’t anything like it is today.
A time tested method to guarantee your wealth survival in these coming times is to reduce debt or completely eliminate it along with building up your expose to gold. Maintaining your wealth in dollar denominated assets is a long shot to escape the punishing depression ahead that will be accompanied with hyperinflation.
Gold’s future is almost upon us following a delay with the last futile stabbing thrust of the ruthless and evil miscreants who are the tunnel visioned purveyors of our paper and ink tender.
Well, bluejay’s writings last year have certainly reflected the truth that is upon us. Remember, “This is it, are you prepared?”
I’ll admit, I wasn’t. My personal do-over would be to invest in actual gold (not coins).
So, given the way it has played out, I reaaaallly value the input bluejay brings to the forum.
Last on gold is $754.30
“It won’t matter much if you purchase gold at $750, $800, $850, $900 per ounce, or even higher. All of these prices will be looking extraordinarily cheap in a few months. The price of our pretty yellow metal is about to explode, and it is probably going to soar, eventually, to levels that not even most gold bugs imagine. Comex gold shorts will be playing the price a bit longer, in an attempt to shake out some remaining independent leveraged longs. Once that is finished, however, and it will be finished soon, the price will start to rise very quickly.”
The above was written by James Conrad in his concluding paragraph from the article entitled, The Manipulation Of Gold Prices. The complete story can be accessed from the below link that appeared December 04, 2008 at SeekingAlpha.com.
http://seekingalpha.com/article/109210-the-manipulation-of-gold-prices
Last on gold is $754.30.
On December 2, 2008, “gold went to backwardation for the first time ever in history.”
The below provided link to the article, RED ALERT:GOLD BACKWARDATION!!!was written by Antal Fekete.
Professor Fekete’s article ends with his final projection:
If the governments of the great trading nations had really wanted to save the world from a catastrophic collapse of world trade, then they should have opened their mints to gold. Now backwardation has caught up with us and shut down the free flow in the ststem. This will have catastrophic consequences. FEW PEOPLE REALIZE that the shutting down of the gold trade, which is happening, means the shutting down of world trade. This is a financial earthquake measuring ten on the Greenspan scale, with (the) epicenter at the Comex in New York, where the Twin Towers once stood. It is no exaggeration to say that this event will trigger a tsunami wiping out the prosperity of the world.”
Prepare Yourselves.
Gold $767.40 (last $762.00)
Silver $9.56
Gold/XAU Ratio 8.60
Gold/Silver Tatio 80.25
Crude Oil $43.96
US Dollar Index 86.43Gold is off from the highs of the day at about $783 with a last sale of $768.50. In the past few weeks the gold price has been finding support in the $760 area as well as finding resistance in and about the $782 to $783 zone. This seesawing, hopefully, will resolve itself to the upside.
Most interesting today is the continuing weakness of crude oil. The last on crude currently is just below $44. Gas prices at the pump are at least at three year lows.
Lower crude is obviously benefiting the dollar as well as all net importing countries but for how much longer as it is way over-sold? If a guess were made on when bottom hits, a fair estimate would be the $40 to $42 zone. It is suspected that all oil related products should bottom along with crude.
Gold has done well against a background of lower oil prices recently being aided by a suspected major buyer, China. It seems that the paper derivatives market is playing right into the hands of Chinese interests to significantly increase their official gold reserves thanks to the artificial pressure on it being supplied by JP Morgan and their croud.
The JP Morgan interests are the main reason why crude has dropped so much creating red faces in the oil exporting nations, especially Russia. Morgan seems to control gold, silver, oil and interest rate futures by manipulating the unregulated paper derivative markets representing these products.
How much longer they can continue pushing the horse by an artificially propelled cart is anyone’s guess. Is there any wonder why investment banks and regular banks had their boys like Rubin and Greenspan push so hard against regulating derivatives?
It is absolutely amazing and shameful how paper products can influence the prices of hard assets and overwhelm those markets to scare and steal from unsuspecting investors. For simplicity purposes, it is considered that naked short selling is also a another paper product.
This subject brings back memories of Brooksley Born’s efforts as the then head of the Commodities Futures Trading Commission in 1987 to inforce regulation of derivatives through the power that was given to the Commission by the Commodities Exchange Act of 1974.
It was Ms. Borns contention along with their attorneys that the Act granted the Commission jurisdiction over all instruments with risk management functions. In 1998 Borns went head to head with Alan Greenspan during Congressional hearings on this matter and lost. Or should it be stated, the American people lost as it is now quite evident today?
Today the OTC derivatives market between banks and broker dealers is overseen by the federal banking agencies and the SEC, respectively.
Below is a link to a recent Richard Russell article discussing the value and viability of fiat money.
http://www.321gold.com/editorials/russell/russell120308.html
Last on gold is $769.30.
The following paragraph is from goldmaps.com:
A streak of gold mines and gold prospecting sites extends from near Montgomery, Alabama to Washington D.C. The gold was placed there when Africa overrode North America about 250 million years ago. North Carolina, South Carolina, Georgia, Virginia and Alabama have many gold mines and prospecting sites. These states were our main source of gold for 45 years before the California gold discovery. In 1837, the US Government established gold coin mints in Georgia and North Carolina, rather than transport the raw gold to the Philadelphia Mint.
Last Friday’s close on gold was $801.60 up $57.00.
Mint Suspends Orders Amid Rush To Buy Gold.
http://www.theaustralian.news.com.au/business/story/0,28124,24687337-643,00.html
The following excerpt was extracted from a speech given by Antal Fekete to the Economic Club of San Francisco on November 4, 2008 entitled, “Revionist Theory Of Depressions.”
Access to the outstanding speech concerning truth and markets can be made via his website at: http://www.professorfekete.com/
“Economic historians give credit to Franklin Delano Roosevelt for meeting the banking crisis head on. Only a few days after he was inagurated as president in March, 1933, he declared a bank holiday and ordered all the people under jurisdiction of the United States to surrender their gold coins.
Although Roosevelt promised to return the gold after the banking crisis had subsided, this promise was apparently made in bad faith. No sooner had he confiscated the gold than he marked up its value, leaving people with paper worth 56% less. This neat piece of presidential chincanery was called “Devaluation Of The Dollar In The National Interest.”
Everyone should print out Professor Fakete’s speech, read it slowly a few times or so until you understand what our educational system saw fit not to teach us as opposed to what they taught us to our discredit.
Three more saving institutions went belly-up on Friday as the financial meltdown picks up steam. Heaven help us all.
Last on gold is $796.90
Got gold?
From Jim Sinclair’s website this morning:
Depression #2 Here We Come
Scan these 30 “leading indicators.” Each problem has one or more possible solutions, but lacks unified political support. Time’s running out. We’re already at the edge. Add up the trillions in debt: Any collective solution will only compound our problems, because the cumulative debt will overwhelm us, make matters worse:
1- America’s credit rating may soon be downgraded below AAA
2- Fed refusal to disclose $2 trillion loans, now the new “shadow banking system”
3- Congress has no oversight of $700 billion, and Paulson’s Wall Street Trojan Horse
4- King Henry Paulson flip-flops on plan to buy toxic bank assets, confusing markets
5- Goldman, Morgan lost tens of billions, but planning over $13 billion in bonuses this year
6- AIG bails big banks out of $150 billion in credit swaps, protects shareholders before taxpayers
7- American Express joins Goldman, Morgan as bank holding firms, looking for Fed money
8- Treasury sneaks corporate tax credits into bailout giveaway, shifts costs to states
9- State revenues down, taxes and debt up; hiring, spending, borrowing add even more debt
10- State, municipal, corporate pensions lost hundreds of billions on derivative swaps
11- Hedge funds: 610 in 1990, almost 10,000 now. Returns down 15%, liquidations up
12- Consumer debt way up, now at $2.5 trillion; next area for credit meltdowns
13- Fed also plans to provide billions to $3.6 trillion money-market fund industry
14- Freddie Mac and Fannie Mae are bleeding cash, want to tap taxpayer dollars
15- Washington manipulating data: War not $600 billion but estimates actually $3 trillion
16- Hidden costs of $700 billion bailout are likely $5 trillion; plus $1 trillion Street write-offs
17- Commodities down, resource exporters and currencies dropping, triggering a global meltdown
18- Big three automakers near bankruptcy; unions, workers, retirees will suffer
19- Corporate bond market, both junk and top-rated, slumps more than 25%
20- Retailers bankrupt: Circuit City, Sharper Image, Mervyns; mall sales in free fall
21- Unemployment heading toward 8% plus; more 1930’s photos of soup lines
22- Government policy is dictated by 42,000 myopic, highly paid, greedy lobbyists
23- China’s sees GDP growth drop, crates $586 billion stimulus; deflation is now global, hitting even Dubai
24- Despite global recession, U.S. trade deficit continues, now at $650 billion
25- The 800-pound gorillas: Social Security, Medicare with $60 trillion in unfunded liabilities
26- Now 46 million uninsured as medical, drug costs explode
27- New-New Deal: U.S. planning billions for infrastructure, adding to unsustainable debt
28- Outgoing leaders handicapping new administration with huge liabilities
29- The “antitaxes” message is a new bubble, a new version of the American dream offering a free lunch, no sacrifices, exposing us to more false promises
30- At a recent Reuters Global Finance Summit former Goldman Sachs chairman John Whitehead was interviewed. He was also Ronald Reagan’s Deputy Secretary of State and a former chairman of the N.Y. Fed. He says America’s problems will take years and will burn trillions.
He sees “nothing but large increases in the deficit … I think it would be worse than the depression. … Before I go to sleep at night, I wonder if tomorrow is the day Moody’s and S&P will announce a downgrade of U.S. government bonds.” It’ll get worse because “the public is not prepared to increase taxes. Both parties were for reducing taxes, reducing income to government, and both parties favored a number of new programs, all very costly and all done by the government.”
Reuters concludes: “Whitehead said he is speaking out on this topic because he is concerned no lawmakers are against these new spending programs and none will stand up and call for higher taxes. ‘I just want to get people thinking about this, and to realize this is a road to disaster,’ said Whitehead. ‘I’ve always been a positive person and optimistic, but I don’t see a solution here.'”
We see the Great Depression 2. Why? Wall Street’s self-interested greed. They are their own worst enemy … and America’s too.
GOLD $793.00 Up $48.40
It looks like the shorts and Hank Paulson’s Treasury team have gotten the MESSAGE:
China may buy 128,000,000 ounces of gold.
The big difference here is that China represents a cash buyer as opposed to a fraudulent manipulating seller.
The day is coming when gold will be back in the monetary system out of necessity not out of choice.
China’s mulling over the addition of 4,000 tons to their central bank holdings is significant.
Last on gold is $801.60.
Posted: Nov 21 2008 By: Jim Sinclair Post Edited: November 21, 2008 at 5:36 pm
Filed under: In The News
Jim Sinclair’s Commentary
There is one inviting conclusion out there. There is no way to know for sure which banks are broke, so it is better to consider they all are.
Gold $744.60 Up $9.70
Silver $8.92 Down $0.27
Gold/XAU Ratio 10.63
Gold/Silver Ratio 83.48
DJ Industrials 7552.29 Down 444.99
Crude Oil 48.70 Down $4.92
US Dollar Index 88.22 Up 0.44The big news today is the Dow Jones Averages crashing under the big 5000 day moving average support area at 7800 with a close of 7552.29.
A bit of good news for gold today was its breaking loose from its recent lock step action that had been maintained by the Treasury each time the general market sold off. The action in gold today is viewed as being quite positive. Could China have been buying gold today to account for the metals improving relative strength?
If the DJ Averages stay under 7800 during the weeks ahead there could be serious long term damage ahead for the DOW.
Some of the highly leveraged banking stocks are hemorrhaging to the point that depositors may soon be facing a crisis of their own in wondering what is safe anymore.
Last on gold is $735.20.
Gold at one time was higher this morning at $764 only to have gotten smacked again by the dark forces with paper selling at the COMEX led by the strong arm of the Treasury and Hank Paulson via JP Morgan.
The following is a youtube presentation by Mr. Max Keiser doing what he does best, calling a spade a spade.
Last on gold is $736.90.
It was reported yesterday by a Beijing paper, Guangzhou Daily, that its central bank is considering the purchase of 4000 tons of gold. This equates to their possibly acquiring 128,600,000 ounces of gold.
China currently holds $1.9 trillion in reserves mainly in US paper products. If China did commit to purchasing 4000 tons this would use up only about 5% of their reserves.
Jim Sinclair made the following comment today, “Once 21,000 bars have been taken(from COMEX) the paper gold’s reign over the price of gold is over.” 21,000 bars times 100 ounces equals 2,100,000 ounces of gold. I’m not sure if the COMEX bars are in 100 ounce lots but I figued it out that way to get total ounces anyway. If this is not correct, would someone please correct me.
The bottom line: There is a sizable potential buyer indicating, unofficially, that they may have a need for 128,600,000 ounces of gold. Where is this gold going to come from if China goes ahead with their possible buy program? What will COMEX do if China comes knocking with intentions on taking delivery?
Last on gold is $739.10.
The following is a clear message from China to the US: get your house in order. This perceived indirect message is especially serious as it follows last weekends G20 meeting of finance ministers and central bank governors.
Adding insult to injury President Hu Jintao of China who attended the G20 gathering visited Fidel Castro directly following the meetings. China is continuing to pump money into Cuba’s economy in providing the funds for renovating and rebuilding aging hospitals and ports. China is also providing money to Costa Rica for the building of a refinery.
China PBOC Mulls Raising Gold Reserve By 4,000 Tons – Report
Wed, Nov 19 2008, 01:51 GMTChina PBOC Mulls Raising Gold Reserve By 4,000 Tons – Report
BEIJING (Dow Jones)–China’s central bank is considering raising its gold reserve by 4,000 metric tons from 600 tons to diversify risks brought by the country’s huge foreign exchange reserves, the Guangzhou Daily reported, citing unnamed industry people in Hong Kong.
The Guangzhou-based newspaper didn’t elaborate on the plan.
China’s forex reserves, at US$1.9056 trillion at the end of September, is the world’s largest. U.S. dollar-denominated assets, including U.S. treasury bonds and mortgage agency bonds, account for a big proportion of the forex reserves.
Gold $714.00 up $4.50
Silver $9.03 down $0.22
Gold/XAU Ratio 9.71
Gold/Silver Ratio 79.09
DJ Industrials 8079.24 off 203.42
Crude Oil 55.53 0ff $0.63
US Dollar Index 87.98 plus 0.33For the fist time the Treasury’s agent JP Morgan is having difficulty keeping gold in a locked step with the declining DJ Industrial Averages.
It seems that from the action of gold today from a low of $698.50 to its last sale of $714.00, while the Dow remains in minus 200 red ink, a battle of the titans at COMEX may be in play.
Rumors have been circulating that there will be a big push in contract delivery requests for physical gold and silver for the month of December. Rumors have also been circulating that these requests may bust COMEX and force it to close as their suspected inventories do not match the amount of December contracts outstanding. Time will tell.
Its seems that such an event could settle the great disparity of prices that currently exists between paper prices at COMEX versus the physical market.
If for what any reason COMEX is unable to deliver any precious metals requested that particular metal would easily advance to new highs.
Last on gold is $713.90.
Last on crude oil is 55.38It wouldn’t be surprising to find out that JP Morgan is forcing down oil prices with the blessings of the Treasury. Not only has JP Morgan become a major influence on gold and silver exchanges but it has entered the oil and natural gas markets within the past year or so, also, as a major player. In case most people aren’t aware of this, JP Morgan is now classified as a bank.
It seems odd these days that the banking industry is being allowed to effect prices in the commodities markets. JP Morgan and Goldman Sachs have close connections to the Treasury as they have been their main bullion banks to go to when they want gold lower. Since these guys are agents of the Treasury they basically have a blank check to accomplish the Treasury’s orders at exchanges with no questions ever asked relating to their substance.
As with the precious metals markets along with the oil and natural gas markets, JP Morgan has most probably been on the short side. It’s hard to imagine that the oil producing countries aren’t aware of Morgan’s exploits in oil and gas. It seems that we are sacrificing international relations just so the Treasury can bolster the economy somewhat as banks and other companies continue to suffer from capital loss.
Just as a reminder of why our economy is in so much trouble, some excerpts from Antal Fekete’s October 20, 2008 article entitled “The Mechanisim of Capital Destruction” are provided:
Liquidation Value of Bonded Debt
Falling interest rates destroy capital in a way that is more subtle than destruction through rising rates. The liquidation-value of debt, contracted earlier at higher rates, rises. “Liquidation value” is the lump sum it takes to liquidate debt, should it be necessary to retire it before maturity — for example, in the case of takeovers, mergers, shotgun marriages, bankruptcies, or the nationalization of the banking system. The point is that as the rate of interest falls, the liquidation value of debt rises. Why? Well, the stream of interest payments now has to be discounted at a lower rate. Therefore at maturity it falls short of liquidating the debt.
Here is a familiar example, the liquidation value of bonded debt. When the rate of interest falls, the market immediately bids up the price of bonds. The higher bond price represents the higher liquidation value of the underlying debt. The fall in the rate of interest, far from alleviating the burden of debt, aggravates it.
Bank capital has been eaten away by the fall of interest rates. The impairment has been ignored and, after 28 years of negligence the global banking system stands denuded of capital. Those shareholders who can read balance sheets see through the fancy values banks are putting on their assets. They dump the stock before bank capital goes all the way to zero.
This is not a real estate crisis, nor is it a sub-prime crisis. This is a crisis caused by the destruction (of) bank capital across the board, through the wrecker’s ball of swinging interest rates. In the final analysis, it has been caused by exiling gold from the banking system.
Dissipating Capital Under False Pretenses
People tend to have a religious faith in the Fed’s miraculous power to create something out of nothing. They think that the Fed is above capital requirements and accounting rules. They think that the Fed is above the law. They dismiss the idea that the Fed, too, can suffer from capital inadequacy, or that it may not be able to escape the ill effects of falling interest rates.
The Federal Reserve Act(as amended) explicitly forbids the Treasury from participating in the earnings of the Fed. The purpose of this provision is to retain the undivided surplus in the Federal Reserve System to meet emergencies precisely like the present crisis. The conspiracy of the Treasury and the Fed ignores this provision of the law. Year in and out the Fed remits about 90 percent of its earnings to the Treasury under false pretences, calling it the “franchise tax on Federal Reserve Notes.” No sooner had the Treasury received the remittance than it spent the proceeds, and more, on consumption. As a result, the Fed is left with no undivided surpluses and no cushion to fall back on in hard times. And the Treasury has debt far greater than it has resources to retire. This high-handed disregard for the law is motivated by the desire to foster a public image of the Fed as an institution with supernatural powers. The Fed has the magic wand and can wave it to solve any problem by throwing money at it. In this view the Fed is not a bank, but the embodiment of divine power.
Gold $717.80 off $13.60
Silver $9.39 off $ 0.39
Gold/XAU Ratio 9.10
Gold/Silver Ratio 76.44
US Dollar 87.26 up 0.07
DJ Industrials 8395.52 off 298.44The selling by the suspected banks and the Treasury(aka PPT) continues to have its effect on the price of gold. No fundamental or technical positives seem to effect the large amounts of paper that are being thrown at gold on the COMEX Exchange in NY. The whole scenario from the Exchange, to the CFTC to the Treasury represents a rigged game which is a far cry from free markets.
Things just got a little worse with the recent naming of Larry Summers as the new Secretary of the Treasury. According to sinbob at agoracom.com Larry runs with “Geithner, Corzine, Volcker, Fisher, Phil Gramm, Bernanke, Hank Paulson, not to mention Alan Greenspan, al al are buddies; they play golf together; they have links to the Council on Foreign Relations and the Bilderbergs; they act concurrently in accordance with interests of Wall Street; they meet behind closed doors; they are on the same wave length; they are Democrats and Republicans.”
Going on sinbob states, “While they may disagree on some issues, they are firmly committed to the Washington-Wall Street Consensus. They are utterly ruthless in their management of economic and financial processes. Their actions are profit driven. Outside of their narrow interest in the “efficiency of markets,” they have little concern for “living human beings.” How are people’s lives affected by the deadly gamut of macro-economic and financial reforms, which is spearheading entire sectors of economic activity into bankruptcy.(?)
The complete article with some specific history concerning Summers in available by using the following link:
http://www.agoracom.com/ir/ECU/messages/999759.
In 1991 Larry was the Chief Economist at the World Bank and made some disturbing commments on why dumping our waste in third world countries made perfect economic sense.
Sinbob has done some excellent research into Larry Summers involvement in the 1997 Asian Crises and in the 1999 Financial Services Modernization Act that permitted OTC derivatives to blossom into the world’s current financial meltdown.
Sinbob titled his presentation as, “Putting the Fox in Charge of the Chicken Coop.”
Nothing could be closer to the truth.
Gold $742.20
Silver $ 10.19
Gols/XAU Ratio 8.39
Gold/Silver Ratio 72.84
US Dollar Index 85.81Gold is higher today by $8.30 but is down $25 from its early morning high at about $767. One wonders, when all this watering down of the metal’s price will end on practically every show of strength?
Once the current administration leaves office we will have a new captain in the control seat at the Plunge Protection Team and possibly less pressure on gold.
In the paper this morning is more bad news coming from the Treasury Department and its banking industry buddy, Hank Paulson. It is absolutely amazing how much money Paulson is costing the taxpayers and no one is slapping his hands.
Now it is being reported by Amit R. Paley from the Washington Post that the Treasury is circumventing Section 382 of the tax code and thus costing us an additional $140 billion.
According to George Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartian congressional authority on taxes said, “They (the Treasury) basically repealed a 22 year old law that Congress passed as a backdoor way of providing (more) aid to banks.”
Basically, the Treasury is saying it is all right for banks to buy shell companies with losses and apply those losses against their earnings(thus avoiding income taxes).
This was sneaked by while all eyes were on formulating the relief plan funding. This is the same as taking advantage of a diversionary event to steal. How many times have we watched movies where the bank robbers create diversions for police to respond to while these same people empty the vaults of a financial institution in another part of town?
In this case, the bankers representative at the Treasury, Paulson, just handed them over $100 billion in saved tax expenses by ignoring #382. Paulson should be brought up on charges and the tax code inforced by the IRS against these bankers.
Write your Congressional representatives and Senators and complain, I did.
Last on gold is $726.90.
John Embry on paper gold versus physical gold:
http://envast.blogspot.com/2008/10/john-embry-golds-game-changing-moment.html
Last on gold is $758.40.
Rumor Flash
It has been reported from Lichtenstein, Germany that our 1933 gold coin melt bars are showing up in world markets.
The following was reported to the Agoracom.com’s ECU forum page by member ESL:
“My colleague in Lichtenstein confirmed the proliferation of these bars on the European market and I just received information that dealers in Dubai are seeing them all over the place.”
If this is true, all responsible should be put in jail. Putting Paulson, the great gold liquidator of the 90’s, in charge of the Treasury was like putting the fox in charge of the hen-house.
How much money have all the ex-Goldman Sachs employees stolen from taxpayers since they became employess of the U.S. government at the Department of the Treasury?
Is there any wonder when Paulson first pushed his way into Nancy Pelosi’s office looking for billions that he also requested immunity from prosecution?
Gold $762.40 up $40.40
Silver $10.51 up $ 0.71
Gold/XAU Ratio 8.49
Gold/Silver Ratio 72.61
Dollar Index 85.01 off 1.39Gold is higher today following a weak dollar. Strong long term overhead resistance on the dollar chart is located at the 90 to 91.50 area. The dollar’s high on its recent three month surge has been about 88.30. It is suspected that the dollar has already topped from its recent fast moving bear market rally.
It appears that too many dollar holders are falling over themselves as they become more aggressive in exiting their positions in the 87 to 88 area. Time will tell for them if they should have begun to liquidate their holdings sooner and at lower levels.
It’s a great time to be considering selling the U.S. dollar and buying the Canadian dollar at .8621, the Australian dollar at .6996 and the Swiss Franc at .8661. The Canadian dollar is already up smartly from its recent lows in the .78 area.
As the U.S. dollar regains its terminal slide gold will benefit. We just have witnessed over the past months one of the most vicious bull market shakeouts in precious metals, base metals and their shares in recent history.
Historical charts clearly show that new intermediate bull markets, within major bull markets, spawn from the ashes of these types of breakdowns.
Last on gold is $756.80.
Last on gold is $727.70.
The following is an excerpt from a news release issued today from Emgold concerning the publishing by the city of Grass Valley of its environmental draft report:
The Idaho-Maryland mine was historically California’s second largest underground gold mine producing 2.4 million ounces of gold from 1862 to 1956 at an average grade of 0.43 ounce per ton grade. It is adjacent to the historic Empire mine, which was Newmont Mining Corp.’s first operating mine. The Empire mine produced 5.8 million ounces of gold from 1850 to 1956. Newmont retains the mineral rights to this property. The Grass Valley mining district produced over 17 million ounces of gold and is historically one of the richest gold districts in North America.
Last on gold is $723.70.
The following article clearly reports the the debt abyss that is consuming the nation.
National Debt Soars $500B In Under A Month
Financial Bailout Plan The Primary Culprit In Record-Setting Debt Accumulation
Nov. 1, 2008(CBS) This story was written by CBS News White House correspondent Mark Knoller
It’s the surge you won’t hear anyone boast about.
Never before in U.S. history has the national debt increased as much and as rapidly as it has over the past month.
Since September 30, the day the national debt hit the $10-trillion mark for the first time, the government has run up over $500 billion in new debt.
That’s more than the federal deficit for the entire 2008 fiscal year, which ended September 30. And it’s the most rapid increase in the national debt ever: over half a trillion dollars in less than a month – 23 days to be exact.
The government’s latest calculation of the national debt stands at $10,530,893,033,778.21 – that’s $10.5-trillion for short. It took less than four months for it to rocket to that level from $9.5 trillion on July 21.
Less than four months! To put it in perspective, consider this: it took the U.S. government over four decades, from 1940 to 1982, to run up its first trillion dollars of debt.
The second and third trillions were racked up much more quickly – each in just four years. And it only took from 1990 to 1992 for the national debt to hit $4 trillion.
On the day President Bush was sworn in, the debt stood at $5.7 trillion. Less than eight years later, the it’s within days of having swelled $5 trillion dollars on his watch – an embarrassing milestone for a president who considers himself a conservative and an advocate of fiscal discipline.
What’s to blame for the most recent surge in the debt? Above all else, it’s the federal government’s response to the financial crisis.
“It’s the Supplementary Financing Program being run by Treasury to provide cash for the Federal Reserve,” says Corrine Hirsh, spokeswoman for the White House Office of Management and Budget.
By that, she means the billions of dollars disbursed by the Fed to keep the financial markets at home and abroad from collapsing. It includes the $124 billion used to keep insurance industry giant American International Group from going bust.
And this week, the Treasury Department started to spend the $700 billion dollars in the congressionally authorized bailout program, so the national debt can be expected to soar even more rapidly in the coming months.
But on January 20, it becomes another president’s problem. And unless he slashes federal spending or enacts major tax hikes, the ballooning deficit and debt leave no money for any of the big ticket programs he’s promised to deliver.
Instead, the 44th president will have to deal with the problem of how to pay the interest on the expanding debt. If past practice holds, it’s a good bet the government will just borrow the money.
Just a taste of what is coming.
The News Today
Posted: Nov 02 2008 By: Jim Sinclair Post Edited: November 3, 2008 at 1:24 amFiled under: In The News
Jim Sinclair’s Commentary
Between 400,000 and 1,000,000 STILL cannot get access to their savings.
Don’t follow the spin, and let your guard down. This is the beginning, not the end. This could have been you!
The primary target that should be faced has not been even been aimed at. That target is called over the counter derivatives.
Part of the rescue is the use of an OTC derivative by the Federal Reserve – a swap.
Reserve Funds investors still waiting for their money
30 Oct 2008 11:53 amThis isn’t good:
At least 400,000 people, and perhaps as many as a million, can’t get access to their savings, a problem that has quietly persisted in spite of widely publicized federal efforts to restore confidence in money-fund investments.
Some of these customers — who, like most Americans, assumed their money funds were as safe and accessible as bank accounts — are getting desperate.
“Longer term, I just don’t know how we’ll deal with it,” said John Oakes, a retired engineer in Austin, Tex., who can’t tap $20,000 in a Reserve account to pay his mother’s nursing home bill. “They say we may get some money this week, but we don’t know if we’ll get 100 percent, 90 percent or 30 percent.”
Sandra and Lawton Dews, a retired couple in North Myrtle Beach, S.C., had more than $250,000 — 35 percent of their retirement assets –invested in the Reserve US Government Fund.
“They even bragged that you could sleep at night if you invested in their funds,” Mrs. Dews said. “In the past month and a half, we don’t sleep at all.”
Her insomnia began soon after Sept. 15, when the Reserve Fund was hit by a wave of redemptions, apparently because its largest fund had a stake in notes backed by the newly bankrupt Lehman Brothers.
Last on gold is $723.70.
Extortion 101
Paulson’s Swindle Revealed
By William GreiderOctober 29, 2008
The swindle of American taxpayers is proceeding more or less in broad daylight, as the unwitting voters are preoccupied with the national election. Treasury Secretary Hank Paulson agreed to invest $125 billion in the nine largest banks, including $10 billion for Goldman Sachs, his old firm. But, if you look more closely at Paulson’s transaction, the taxpayers were taken for a ride–a very expensive ride. They paid $125 billion for bank stock that a private investor could purchase for $62.5 billion. That means half of the public’s money was a straight-out gift to Wall Street, for which taxpayers got nothing in return.William Greider: United Steelworkers Union prez Leo Gerard cracks open the sweetheart deal that bailed out nine banks–and likely lined the Treasury Secretary’s own pockets–with billions of taxpayer dollars. Does anybody care?
These are dynamite facts that demand immediate action to halt the bailout deal and correct its giveaway terms. Stop payment on the Treasury checks before the bankers can cash them. Open an immediate Congressional investigation into how Paulson and his staff determined such a sweetheart deal for leading players in the financial sector and for their own former employer. Paulson’s bailout staff is heavily populated with Goldman Sachs veterans and individuals from other Wall Street firms. Yet we do not know whether these financiers have fully divested their own Wall Street holdings. Were they perhaps enriching themselves as they engineered this generous distribution of public wealth to embattled private banks and their shareholders?
Leo W. Gerard, president of the United Steelworkers, raised these explosive questions in a stinging letter sent to Paulson this week. The union did what any private investor would do. Its finance experts vetted the terms of the bailout investment and calculated the real value of what Treasury bought with the public’s money. In the case of Goldman Sachs, the analysis could conveniently rely on a comparable sale twenty days earlier. Billionaire Warren Buffett invested $5 billion in Goldman Sachs and bought the same types of securities–preferred stock and warrants to purchase common stock in the future. Only Buffett’s preferred shares pay a 10 percent dividend, while the public gets only 5 percent. Dollar for dollar, Buffett “received at least seven and perhaps up to 14 times more warrants than Treasury did and his warrants have more favorable terms,” Gerard pointed out.
“I am sure that someone at Treasury saw the terms of Buffett’s investment,” the union president wrote. “In fact, my suspicion is that you studied it pretty closely and knew exactly what you were doing. The 50-50 deal–50 percent invested and 50 percent as a gift–is quite consistent with the Republican version of spread-the-wealth-around philosophy.”
The Steelworkers’ close analysis was done by Ron W. Bloom, director of the union’s corporate research and a Wall Street veteran himself who worked at Larzard Freres, the investment house. Bloom applied standard valuation techniques to establish the market price Buffett paid per share compared to Treasury’s price. “The analysis is based on the assumption that Warren Buffett is an intelligent third party investor who paid no more for his investment than he had to,” Bloom’s report explained. “It also assumes that Gold Sachs’ job is to protect its existing shareholders so that it extracted from Mr. Buffett the most that it could…. Further, it is assumed that Henry Paulson is likewise an intelligent man and that if he paid any more than Mr. Buffett–if he paid $1 for something for which Mr. Buffett would have paid 50 cents–that the difference is a gift from the taxpayers of the United States to the shareholders of Goldman Sachs.”
The implications are staggering. Leo Gerard told Paulson: “If the result of our analysis is applied to the deals that you made at the other eight institutions–which on average most would view as being less well positioned than Goldman and therefore requiring an even greater rate of return–you paid a$125 billion for securities for which a disinterested party would have paid $62.5 billion. That means you gifted the other $62.5 billion to the shareholders of these nine institutions.”
If the same rule of thumb is applied to Paulson’s grand $700 billion bailout fund, Gerard said this will constitute a gift of $350 billion from the American taxpayers “to reward the institutions that have driven our nation and it now appears the whole world into its most serious economic crisis in 75 years.”
Is anyone angry? Will anyone look into these very serious accusations? Congress is off campaigning. The financiers at Treasury probably assume any public outrage will be lost in the election returns. I hope they are mistaken.
About William Greider
National affairs correspondent William Greider has been a political journalist for more than thirty-five years. A former Rolling Stone and Washington Post editor, he is the author of the national bestsellers One World, Ready or Not, Secrets of the Temple, Who Will Tell The People, TheLast on gold is $733.50.
For a behind the scenes analysis on what’s up and where gold is going, go to http://www.jsmineset.com and read Mr. Jim Sinclair’s commentary, “The Beginning Of A Great Economic Drama.”
Also, in another commentary Mr. Sinclair states that he is buying gold future contracts and will be taking deliveries of the 100 ounce contracts on a monthly trading cycle basis.
Last on gold is $734.40.
In another daily vain attempt at approaching the $775 area gold has failed to hold and has slid back with renewed selling pressure. The move above recent resistance at $748 or abouts is now moot.
An anticipated major low on gold will apparently take its time and on its own terms to establish. At the moment, $680 is its recent down spike low.
Yesterday the Fed reduced its benchmark interest rate lower by one half point from 1.5% to 1.0% to lessen major threats to economic growth and did not rule out more reductions to follow.
Lower interest rates eat up bank capital as it stimulates the redemption of higher interest debt. This occurs when the redemption amount is higher resulting from lower interest rates. When rates go down bonds go up, as an example, thus retiring the original debt becomes more expensive and eats up capital in the process. The bailout package is intended to replenish lost bank capital.
The banker’s and the Treasury’s greatest fear is that the banks will go belly-up for lack of capital. The derivatives mess only adds to their problems. Reacting to banking troubles, people have been pulling their funds out of these institutions and into U.S. Treasuries and into gold and silver. The threat has been so great that the FDIC has recently announced doubling the insurance levels for funds on deposit at banks.
On an important note, people must know exactly what insurance means. In the worst case scenario, what are the mechanics of returning your insured money?? One possiblity that some folks might not like is how the money is returned to them. Will it be in restricted Treasury instruments? Will it be in another short term irredeemable form of some sorts?
This is the main reason that the western central bankers became part of a major price suppression scheme in July to effect gold and silver prices. It seems that the Asian markets have been buying gold when they are open for business and as trading switches to London and in the U.S. at the infamous COMEX Exchange prices fall on a somewhat, regular basis.
Paul Van Eeden of Canada has generally stated that the approximate area of $650 is a rock-bottom low price for gold based on current monetary expansion. Some months ago Paul correctly forecast lower base metal prices based on his projection of reduced economic activity.
These unanticipated lower prices in gold and silver should continue to be considered a rare purchase opportunity and certainly, not a time to sell.
Gold $754.00 Up $10.20
Silver $9.83 Up $ 0.64
Gold/XAU Ratio 9.53
Gold/Silver 76.70Gold is higher today as it has pushed above some recent daily resistance in the $745 area. Gold reached higher into the vicinity of the previous important low spike reached some weeks back at $675 where China was reported to have taken gold from two failing hedge funds. Reaching this level awoke the bear element in the market as the attack dogs were unleashed chasing the buyers and driving the price back down to about $752. Hopefully, the $745 level holds which is now short term support.
We read in the paper that every asset has been effected by margin calls, failing hedge funds and fearful selling but never is it mentioned in the general news that there are entities out there that have agendas for twisting people’s minds concerning the banking industry by trashing gold and silver. Sure, it’s reported that the public is leary of banks these days but no reports concerning the US Treasury’s efforts to depress the precious metals prices.
It’s been the belief here that all along that a great transfer of wealth is taking place from the public into the hands of connected people or entities and foreign countries, especially China. One just has to take note of all the shenanigans that have taken place to force all the gold and silver related stocks down to the bottom of the pit.
Unbridled savage attacks of the exploration sector in Canada have left that group devastated with percentage declines of 80% and more common. The naked short sellers have been ravaging shareholder’s assets as if they were prey locked in a cage. What has been permitted in Canada says very little of the country’s regulators. The regulator’s up there run a “so-called” honor system with the naked shorts, they just have to state that they have intentions to deliver sold stock and THAT IS IT. One would have a difficult time proving that the regulators weren’t crooks themselves.
In this country the SEC has allowed the gold stocks to be pummeled unmercifully by naked short selling, effecting lower prices without delivering any shares. Not many in Washington care to admit this. The gold and the gold stock shelling is working on the minds of the public and is putting money into the pockets of thiefs.
The trading norm of the relationship of the XAU Gold & Silver Index to gold was, with a few minor exceptions, 3 to about 6. Each time the Index reached the neighborhood of 6 the gold stocks were a buy and when they returned to the 3 to 1 ratio with gold it was time to sell them for followers of this intermediate to long term trading approach.
Last week the Index hit 11.50. Where did this come from? It’s all the naked shorts looking for more and more of the investor’s blood. Hello, Mr. Cox are you there? Cox is the head of the SEC and is the worst do-nothing Chairman of all-time.
Jim Rogers has said other guys in government along with their handlers, the banks, have messed up the system far more than the average person comprehends. Like Jim Sinclair says, no one wants to talk of OTC derivatives. They are all sucking the system dry in their final attempt to make off with all the silverware before their day comes to an end with disgrace and a lot big money stuffed into their pockets.
Unfortunately as has already been established from the Blanchard-Barrick lawsuit in New orleans the governement and their agents are immune from prosecution, how convenient. So that just leaves the banks and certain connected people to answer.
Jim Sinclair has said that the massive OTC derivatices disaster can’t be remedied. All the Treasury can do is hide the problem and hope that it goes away. Fat chance! The Fed buys the junk contracts in exchange for more taxpayer debt and the banks get a free pass with massive infusions so they can start over again. This is the biggest crime of the century, all at our expense. Even the banks have influenced their buddies in government to lower generally accepts accounting standards to put a value on all the worthless derivatives that they still hold.
In Japan the banks did the samething 18 years ago with all their junk real estate loans. Banks that lie about their real worth are known as “zombie banks.”
In this country all the banks are basically bankrupt. Why do you think the government is giving them all this money, our money? There capital has evaporated with 28 years of declining interest rates as Mr. Antal Fekete has so brilliantly described in past articles.
Golden Sachs and J.P. Morgan recently reclassified themselves as banks and now the both of them are in line with the other banks milking us of our long term financial security as a country.
When this mess finally ends, if ever, all these criminals will be holding gold, silver and all the related companies and they will have secured them at fire-sale prices that they, themselves, created. That is why it is important to just tune out from all these temporary, ridiculously low prices.
What do you do when a burglar approaches your home at night? You lock all the doors and windows, hunker down and be prepared, you most certainly don’t run away crying in hysterics.
On another note, the Chinese have been recently more vocal with their thoughts on our continuing meltdown. The “People’s Daily” the official newspaper of China’s ruling communist party recently stated the following, “Growing chorus of Chinese disdain for Washington’s economic policies and financial dominance in the wake of the credit crisis.” “The U.S. has plundered the world’s wealth.”
China is quite worried and with the recent strength of the dollar inspired by financial unrest in Europe who could blame them for quietly reducing their masssive exposure to the dollar. This is one significant reason that the recent strong rally of the dollar is doomed and gold’s rebound is near.
One reason that Fannie Mae and Freddie Mac were temporarily saved is that China holds one fifth of their total agency debt. This amounts to $447.50 billion as of June of 2008. China also for the same period holds $502 billion in US treasuries.
One thing the Treasury doesn’t want and that is a panic out of the dollar of which China would not really want to be part of. China is more of a methodical buyer and seller. It would be quite naive if anyone would assume that China is not buying gold, silver and many of the bigger precious metals companies along with base metals and their producing companies and relieving themselves of their excessive dollar holdings.
Go Gold!
Last on gold is $768.10.
Check out this 80 year view on the sell-offs in the Barron’s Gold Stock Index.
Last on gold is $766.30
The following in an eye-opening article concerning China’s future and our worsening status in the eyes of the world.
Quotable
I’m fed up to the ears with old men dreaming up wars for young men to die in.
– George McGovernSource: antiwar.com
October 28, 2008
A Win-Win Situation for Chinaby Sascha Matuszak
China currently stands alone in its ability to weather virtually any storm the banking crisis in the U.S. whips up. With almost $2 trillion in foreign currency reserves, China can afford to be unconcerned about an economic decline in the West that spreads throughout the world, hurting dependent and emerging economies from Pakistan to Panama.China is not completely insulated from the economic crisis – a slowdown in orders from abroad and a credit crunch at home will hurt the Chinese economy like it hasn’t been hurt before – but the difference is preparation. China is prepared, socially and economically, for a slowdown. The U.S. is not.
The calls are beginning for China to step forward as a responsible stakeholder and shore up the currencies and liquidity of the Asian economies and help ease the pressure on European banks as well. China, in turn, assures the world that it is “seriously” considering its options and the proposals of near-desperate bankers hoping that China’s 20-year economic rise will help defuse the West’s 20-year economic decline.
China is now in a position of power that it may have been enjoying for years, but it is now becoming even more apparent. The talk of China taking over the world has always been a “what if” scenario accompanied by calls for social and political reform and sidelong glances at the U.S., still considered by many to be the preeminent power in the world. The next few years will see more and more nations gathering under the umbrella of Chinese solvency and leaving the Coalition of the Willing(ly Misled) behind.
For now, China is taking care of its own through land reform that should give peasants in China the freedom to “lease their land use rights to other individuals or companies, such as big farm contractors, or to exchange them” and send hordes of country folk flocking toward the cities with their loot looking for fortune. This is the latest in a development, started after Deng Xiao Ping took over in 1979, that will bring the peasants of China into the social fold and eventually urbanize the nation.
China hopes to protect its domestic and international interests through increasing the sophistication of its military. In the final frontier, the U.S. is “apoplectic” over the success of a Chinese space program that has now “changed the game” with the recent Shenzhou manned space mission and the addition of a surveillance satellite that passed within 30 mi. of the International Space Station. According to the Richard Fisher in the Asia Times:
“By the middle of the next decade the PLA [People’s Liberation Army] will have a robust surveillance satellite network that will allow a many-times daily target tasking on a global level. It will also have the ability to perform ‘information operations’ by being able to give a range of clients updates on global U.S. military activities multiple times a day.”
China might be getting those rushes of adrenaline one gets when victory is nigh and your opponent lies struggling in your dust trail. America’s irresponsible, immoral leadership in the White House, on Wall Street, and by extension throughout the world has finally come home to roost with this economic crisis. Now, with the giant of the 20th century down and in trouble, all of the nations in the world that have suffered under America’s benevolent hegemony are looking for somewhere to hide.
This is exactly what the Chinese leadership has hoped and prayed for and most likely expected: the return of China to the center of the world.
Supposed allies of the U.S. are looking to China for help in these days of crisis, with Thailand’s deputy prime minister, Olarn Chaipravat, who is attending the Asia-Europe Meeting, stating in the Sydney Morning Herald:
”The message of this initiative is for China to consider whether or not China would open up its banking system and allow the strongest currency in the world, which is the Chinese yuan, relative to anybody, to be the rightful and anointed convertible currency of the world.”
Pakistan’s President Ali Asif Zardari just finished a visit to China in which he declared that he would be ready to “visit every three months” and that Pakistan’s economic and security crises are best solved through cooperation with China, not with the U.S.
The whole Asia-Europe Meeting is a sign of times to come. Nobody trusts U.S. leadership anymore, and despite China’s list of thuggish buddies (Burma, Sudan, Iran, North Korea, etc.), protest-strangling Great Firewall, and tendency to sell counterfeit and/or tainted goods, world leaders are choosing China. What an incredible statement about the influence and reputation of the U.S.
The bailouts engineered by the central banks of Europe and the U.S. represent the desperation of thieves caught in the act together, not sympathy and goodwill between two staunch allies. The collapse of Wall Street is the last act in the tragedy of America’s fall from leadership in the world.
So What?
What we will see is the decisive triumph of the merchants in the low-level battle over what to do with China. Many of the campaigns to halt human rights abuses in China will migrate to the fringe of U.S. policy, if they haven’t already, and the tone will ease.
The U.S. will not be able to confront nations with the arrogance of a world leader and the righteous indignation of a moral compass. For many of us, this is a development that has been a long time coming, but for most of America, it will be something very new.
What Americans lack more than anything is a concept of history. It is absolutely natural and normal and desirable for a nation to go through hardship and struggle and eventual transformation. The era of the American Imperium, dependent on historical ignorance and determined action, is over.
What is needed now is a domestic revival and a more nuanced and intelligent approach to international relations. This means talking with people before we bomb them. This means an emphasis on cooperation, not obedience.
China’s sound economy and pragmatic, if despotic, leadership make whatever happens in the coming American election into an opportunity to gain political capital or financial assets. It’s a win-win either way.
Last on gold is $741.30.
A link is provided to the December 08 commodity chart where you can get an idea of trading volume in the most popular month. This does not include the electronic market.
It is difficult to pinpoint volume. Dan Norcini does a commitment of traders volume chart about every week at jsmineset.com with comments.
Over here in Europe Gold is trading at US $ 720,00 per ounce right now.
The traders say that Equity Funds are unloading large amounts of gold to cough up cash for withdrawals and to meet stiff margin calls.
As far as I can see, Scoop, no purchases are possible at US$ 600,00. Not yet – at least.- AuthorPosts
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