Sat Mar 23, 2024 11:33 pm by globalturbo
The Coming Isolation of USDollar
By: Jim Willie CB, GoldenJackass.com
-- Posted Thursday, 27 December 2012 | [size=7] Share this article | Source: GoldSeek.com
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The
typical human reaction to any infection, vermin, danger, or toxicity is
to stand back, to isolate the agent, to trap it, to prevent its further
spread or release, then to remove it in a safe secure way if possible
using trained professionals. Eventually decisions must be made on the
level of acceptable risk on the removal, like what is willing to be lost
or damaged or killed in the process. Risk analysis, cost trade-offs,
and minimization decisions must be evaluated and executed. The toxic agent in global trade, global banking, and global bond market is the USDollar.
In 2009, the Jackass began making a certain firm point. Those nations
that depart from the entire USDollar system early will be the leading
nations in the next chapter, with stronger foundations, richer solvency,
emerging economies, healthier financial markets, efficient credit
engines, growing wealth, stronger political helm activity, and better
functioning systems generally. Imagine a contaminated blood system that
infects, corrupts, and destroys all interior organs from the spread of
the toxin. Those nations that stick with the crumbling USDollar system stubbornly will find a horrible fate with devastating effects,
rampant economic damage, broken financial markets, sputtering credit
engines, tremendous loss of wealth, wrecked supply lines, poverty
spreading like wildfire, ruined political structures, social disorder,
isolation from the rest of the world, and a fast ticket to the Third
World. That is EXACTLY what is happening in the last several months. A
division has begun, as the East has been busily installing the next
generation platforms, as related to trade, banking, and commercial
integration.
NEW ASIAN TRADE ZONE
The
division between East and West actually accelerated when the extremely
ill-advised decision for Iran sanctions was made by an increasingly
desperate United States Govt and its handler on the Southern Med. The
division continues, matures, and develops with each passing month. It
has become a story, as the Eurasia trade zone concept has been born. It
has a long way to go, but Asia however has made great strides lately in
unifying commerce. The climax event of the Asian trade zone conference
held in Vietnam could not have been more important, as they rejected the
US-led plan. The Asians
partners and players even rejected the United States from the entire
Asian trade zone, but did include Australia and New Zealand. The
incredibly stupid naive US-led plan, the Trans-Pacific Partnership,
attempted to create a trade zone with Asia which would have blocked
China. Imagine the incredibly obtuse blockheaded maneuver of trying
to have all of Asia not conduct facilitated trade with China, its
leading trade partner.Talk
about shooting both legs and genital region with a double barreled
shotgun! This is the signal flare of US political stupidity that has
turned highly destructive for the USEconomy and its people. Such failed
leadership and counter-productive initiatives will push the US into the
Third World even faster than previously thought possible. The isolation
is firming quickly. Most of Asia does not wish for strong trade ties
with the United States, most likely since they do not see mutual
benefit. They see a ravaging appetite to grab capital.
A
Paradigm Shift is taking place, and the ASEAN-China summit gave proof
positive in a seminal event of the vast changes in progress. The United
States just suffered its worst humiliation ever as a nation on the
Eastern global stage. It was exceeded only by the humiliation for a US
president personally. The story went uncovered by the lapdog inept US
press. The late November Asian
summit meeting held in Phnom Penh included 15 Asian nations, which
represent half the world's population. They decided to form a Regional
Comprehensive Economic Partnership that excludes the United States.
The Asians are pushing to isolate the United States. Regard it as
punishment for hegemony, or a reaction to prevent further capital
drainage, or to protect from central bank abuse, or to wall off
continued bond fraud export, or to defend against military aggression.
Regard it as confirmation that China is the regional leader in Asia,
even for military security. Regard it as a response to banker
criminality, or simply for being totally full to the brim of American
corruption and arrogance and abuse of position, led by creation of the
USDollar as an elaborate weapon and credit card whose balance is never
to be repaid. Abuse of power and sponsored financial corruption will
have extreme consequences in the reshaping of global commerce and
banking. The US will be isolated, so as to protect the rest of the world
from its fascist exhibitions and deep manifestations.
FLUSHED NATION
The
shift is in progress, and the American people have no idea what is
happening. They are too pre-occupied by the agency torture of the
population, urgently needed to remove guns and to create the police
state. Current events are heinous and genocide on large scale and small
scale. Any comments will be limited on the orchestrated travesty,
travails, and tragedy. They all have one traceable element, which
connects to a certain Virginia suburb where an intelligent pillbox
operates in the shadows with puppet strings to the press networks and
maybe Hollywood. The security agencies turned to the dark side years
ago, with full devotion to narcotics, money laundering, and collusion
with the castle dwellers. When the Praetorian Guard plots to bring about
a police state, the only words that come to mind are disaster,
disorder, mayhem, betrayal, degradation, death. Their tools are
psychotropic drugs, violent training, weather altering devices, and
basic sabotage. Treason is the calling card unfortunately for much of
the US leadership class, whether banking, politics, economics,
pharmaceuticals, or news networks. Think Syndicate, as my work has
described for several years. The United States with its harsh
new visa policies, molestation at airports, heavily defended borders,
sponsored gun running, has shown a vicious visible visceral fascist
streak that has begun to bring memories of the national socialists of
Central Europe 70 and 80 years ago. They are back, stronger than ever,
not having been eliminated. They were instead assimilated within the
banking and security organizations, able to plant seeds which germinated
with the sons in offspring. Two sons became presidents.
DEUTSCHE MARK GONE
In
the 1960 and 1970 and even 1980 decades, the favorite currencies off
the standardized tables of commerce were the USDollar and DeutscheMark.
At one time in the Soviet Union and the Soviet Bloc of Eastern Europe,
more USDollars and DMarks were in circulation than official Russian
Rubles or Polish Zlotys or Hungarian Forints or whatever. Those years
are long gone, as in long gone, all paper alternatives lousy. Under
a strange bizarre compromise arranged to assimilate East Germany and to
conceal the French sovereign debt, the Euro Monetary Union and the
common Euro currency was born. It is now in the process of
disintegrating. So the powerfully strong and stable German DMark went
away. Back in those decades, only limited travel was done by the
Jackass, confined to a honeymoon in France and Switzerland with a cold
woman no longer inflicting her plague-like touch in my life. The Jackass
deals exclusively in Latin currency of paper and human variety. No
exposure to alternative currency held under the table was discovered in
beach locations to the south or modest hotels in the green hills to the
north. But friends reported stories. My older brother spent two months
in Germany and Czechoslavakia, with ample stories of hoarded USDollars
and DMarks. Store owners and wise families were eager to obtain USD and
DM currency, even young kids. He and some ambitious friends heard
stories of vast black market activity in Russia, where the US$100 bill
was a favorite. In that era, Gold was not an item of pursuit or stored
wealth. Times have changed radically, and Gold is the new store of
value.
Times
have changed with the sunset of the DMark and the toxicity of the
USDollar. The people, the shop keepers, the business men, the small
financial firms, they all have been turned upside down in recent years
as they struggle to find a safe place to store wealth. Money has been
corrupted. The purveyors of money have lost control by accelerating its
supply by central banks, lost control of bank solvency, lost control of
anything remotely acting like an honest tether to money itself. As
a result, all those people, the shop keepers, the business men, the
small financial firms, have been discovering Gold & Silver bars and
coins. Their combined actions have resulted in an implicit isolation
of the USDollar, even an isolation of the Southern European sovereign
debt. Swiss havens have grown, in parallel with Gold havens. The toxic
monetary plague has been identified, and its toxic sources too. They are
the US Federal Reserve and the Euro Central Bank. They are ruining
money, undermining wealth, and destabilizing the entire world related to
wealth, banking, commerce, and economies. The armies of people, the
shop keepers, the business men, the small financial firms, are working
to isolate the USDollar as toxic agent in a demonstration of survival.
FREEDOM FROM DELUSION
Many
bright people within the gold community cling to hope, harbor
delusions, and maintain expectations, none of which have much value in
the fast changing world of fascist entanglement and full integration. The
Jackass has operated without delusions, firmly in belief that the
corrupt systems would flourish. That viewpoint and operating principle
has proved to be correct since 2004 when the Hat Trick Letter began to
spout deeply disturbing forecasts. One after the other, most of the
forecasts have indeed occurred, to the detriment of the nation and its
systems and its society at large. No pleasure has come from forecasting a
wrecked housing market (burdened by lax underwriting and bond fraud) or
a broken insolvent banking system (from bond losses and dependent upon
money laundering) or a desperate chronically USGovt budget (dragged down
by adopted socialism and sacred war costs) or a spreading Southern
European bond crisis (addressed only by higher subordinated toxic
paper).
No
pleasure is taken from seeing vast legions of struggling Americans,
including a few close friends, who have lost jobs, lost homes, lost
savings, lost pensions, and lost a valuable sense of security, as they
continue to hang on. Many might actually find the warmth of the official
camps, only to disappear later on. Argentina and Chile had their
desaparecidos, and so will the United States. My ugly expectation is
that before their bodies are incinerated, vital organs will be extracted
for black market gains. Inoculations upon entry will assure them of
good health and fully functioning organs. Later, vaccines will infect
them, just like with the swine flu vaccine. By the way, in Costa Rica a
brief story to enlighten on vaccines. In early 2008, the Jackass advised
a couple families with numerous children and cousins in school to
reject the swine flu vaccine that was promoted by the school authorities
at the urging of US officials. They took my advice after their
confidence was won on several other matters. Only one of about 20
children took the vaccine. She has been sick with a mysterious cerebral
disease for over two years. My mention of searching for Guillain Barre
symptoms has not helped. The mothers are grateful, as they did not
understand at first my emotional outburst to discourage following the
school advice. The official US camps will involve forced vaccines. Later
on, false stories will be promulgated that the dead bodies were the
result of already sick people entering the camps for quarantine
purposes. In reality, the people would only have suffered from hunger
and exposure and despair.
Hope is not part of my forecasts, but rather the reality of the corrupt human power game mindset.
The US banking, economic, and political leaders can easily be expected
to continue their corrupt games, with easy forward calls. No expectation of USGovt regulatory agencies is part of my forecasts,
but rather the reality of their nearly perfect track record of big bank
loyalty and fraud protection. The US regulators can easily be expected
to continue their corrupt games, with easy forward calls. Clinging to precious metals mining stocks is not part of my forecasts,
a decision made back in early 2008. They are bound in paper wealth,
subject to inflation in share dilution just like the USDollar,
vulnerable to jurisdictional confiscations, and at the mercy of labor
unions whose production is increasingly halted. Unfortunately, too many
fine people within the gold community, including GATA, hold firm on
hope, regulators, and mining stocks. Not here! The major financial
networks rely upon advertisement revenue from Wall Street, fund
managers, an market exchanges. GATA has a business model that has one
key vulnerability, with strong links to the mining firms. It has tainted
their viewpoint sadly. My support of GATA is firm on challenge of
USDollar legitimacy before the Supreme Court, on challenge of US
regulators to enforce the law, on challenge of the big banks to prove
their solvency, on challenge of the central bank to reveal their
activity. But the Jackass does not expect the Supreme Court to ever rule
the USDollar as illegal, nor the US regulators to ever enforce the law,
nor the big banks to ever remove themselves from corruption, nor the
central bank to ever conduct business in opposition to the biggest banks
under supranational orders.
My
personal background has taught me well that a corrupt system never
corrects itself. Instead, it spins out of control with broken platforms,
layered mechanisms to impose its servitude and influence, complete with
side projects to illicitly support itself.
See the theft of Iraq gold and theft of Libyan gold. Their people will
never again see that wealth. The US system will remain broken until it
collapses, never to be corrected until after its collapse.
The
Jackass does not align with the expectation of mining stock rise. The
stocks are paper wealth in a new era of paper wealth implosion, during
which inflation of shares through dilution is rampant. My
full expectation is for physical metal prices for Gold & Silver to
rise, while mining stocks continue to fall in value from dilution and
reduced metal output. The leverage is a mirage when large deposits
are seized by desperate foreign governments in need of income. What on
earth is complicated about understanding this point?? The leverage is a
mirage when workers are the focal breakdown point for a higher cost of
living. If workers cannot afford to feed their families and survive,
mine output will suffer. What on earth is complicated about
understanding this point?? The leverage is a mirage when rising mine
operation costs must be handled, by the simple practice of share
dilution. Combine with regular executive stock options, and the dilution
on stock shares is huge. What on earth is complicated about
understanding this point??
POWERFUL CORRUPTION INERTIA
Corruption Inertia is a principle firmly believed in when Jackass forecasts must be made.
The corruption will continue with firm immutable momentum, without an
external force acting as agent of change. At times, this is simple
science. When colleagues introduce hope and what must be, the OFF button
is engaged quickly here in my office. Their views are out of touch with
reality. Corruption will persist as long as the Syndicate continues to
hold power. It will remain the constant while the USDept Justice
remains, while the USDept Treasury remains, while the US Regulators
remain, even while the US debt rating agencies remain. They all support
the current system. They are all subject to momentum pressures. Only an external force will result in change. When the USDollar is further isolated, that change will come.
To expect change from the inside due to internal forces is lunatic,
kind of like expecting an alcoholic to change on his own from an
awakening. Al Capone was removed not from inside the Chicago crime boss
conference of dons. He was brought down by external forces related to
income tax. The world will similarly reject the USDollar for its tax on
the system, unwanted, discarded as a toxic agent.
PROTECTION FROM THREAT TO WEALTH
Again,
delusion works well when fashioning a creepy little shell of existence
to protect oneself from the psychological damage of a predatory
government syndicate or security agency apparatus. The Jackass mocks
such defense mechanisms, since a guarantee for poverty and misery. The
vast legions of Americans will soon awaken to find their jobs are
hanging by threads, their wealth either vanished or converted to
USTreasury Bonds by force, their liberties long gone, and their ability
to seek out foreign lands for residence curtailed. In fact, one nation
after another is actually banning acceptance of Americans for bank
accounts. See Switzerland, Panama, and Hong Kong. The US subjects are
seen as persona non grata not for their own characteristics, but for the
passport they hold from the United States. The USGovt as lord acts like
syndicate bullies, agents to abuse embassy privileges, with imposed
extra legal paperwork like an extra burden. The isolation is not only of
the United States, but of its citizens, whose business is not desired.
Hence the Americans will increasingly be trapped in the US along with
their money. The Jackass response to threat is not to embrace delusion,
and not to seek a blanket to cover my head in the basement quarters.
Instead, the response has been to head for the hills with pockets
filled.
People,
both clients and colleague, inquire when the Gold price will rise with
vigor, when the mining stocks will rise with gusto. They remind that
with all the central bank debasement of currency from Zero Interest Rate
Policy and Quantitative Easing, the ultra-cheap, artificially cheap,
desperate cheap money to finance USGovt debt should make the Gold price
zoom upwards with each QE official announcement. My answer is quite
simple. Each new QE program gives the dark forces more motivation to
slam the gold price with naked shorts in sale of paper gold and paper
silver. To be sure, the true value of Gold and the true value of Silver
is higher, but it is not reflected in the COMEX price. That market is
the epitome of corruption. If they were in charge of measuring fevers,
they would place the thermometers on ice. Instead, a vast divergence comes between the paper Gold price and metal Gold price.
Unless and until the Gold market is freed from corruption and freed
from the shackles of Wall Street and London and Swiss influence, it will
continue to be suppressed. My full expectation is not for the system to
correct itself from within. Instead, the COMEX seeks out new sources of
supply, like the GLD Exchange Traded Fund. It is probably far more
gutted than publicly stated. It has been converted into a bullion bank
central repository for easy raided inventory. The Gold price will not
rise from internal forces to push up value, in response to central bank
monetary policy or shortage of COMEX inventory. The Gold price will rise from external forces in USDollar isolation, along with isolation of the big banks in the US and London. Their gold inventory will be removed, returned, and drained. In time, the USDollar will widely be rejected in trade.
THE NEW ISOLATION HAS BEGUN
The
process of isolation is not just now beginning. It is a process well
along. In fact, it has been told that immediately following the Lehman
Brothers death (a deliberate exploited execution) and the adoption of
toxic vats by the USGovt in the form of Fannie Mae and AIG, the
major foreign players located primarily in the East began to feverishly
prepare for new platforms on trade and banking. They sought to develop
an alternative. For the last 20 to 25 years, a backwards principal
has been at work. It dictated that the USDollar would prevail in
reserves management, actually the USTBond as vehicle. The rules for
trade surplus recycle were constructed to lean toward usage of the
USTBonds. Therefore, the global trade would be dominated by USDollars.
In other words, banking would dictate trade settlement. That is
backwards, and keenly exhibits the brute force of the USDollar hegemony.
Also the crude oil payments have been standardized in USDollars, ever
since the Saudis cut a major deal with the USGovt and UKGovt in the
mid-1970 decade after the famous embargo. Protection came to the Saudi
regime and Persian Gulf emirates, in return for exclusive USDollar
payment on trade for oil. The
Petro-Dollar defacto standard is the primary plank behind the USDollar
global trade patterns shown for over three decades. It is coming to an
end, a sunset.
IRAN SEMINAL EVENT
The
Iranian sanctions put forth by the USGovt and adopted by the EuroZone
nations have contributed more to unwinding the USDollar trade system
than any event in decades.
It sounded the death knell for the USDollar. It hastened numerous
nations to seek a US$ alternative. It provided a fertile environment to
fashion new trade settlement mechanisms. It pushed Turkey into acting as
a gold bullion intermediary role in the provision of gold for usage in
trade settlement. See their role with India and Iran, fully described in
the December Hat Trick Letter. When an independent highly reliable gold
trader source was asked to confirm the role of Turkey as a test case in
developing gold based trade settlement, he gave a tacit confirmation.
He has mentioned Turkey in past conversations over the last couple years
frequently. Just as Turkey was a swing nation in the NATO alliance
against the Soviet Union, Turkey will serve in my view as a critical
swing nation in the movement to create a non-US$ trade settlement
system. The new system will be decentralized, meaning not funneled
through the major banks, not passing through the USFed as clearing
house. Turkey will be essential in the formation of the Eurasia trade
zone. First comes the Asian trade zone (the US excluded), and next comes
the hand shake between the Asians and Europeans to create Eurasia. Some
folks have expressed doubt toward the arrival of a vast
trans-continental trade region. They seem painfully unaware of an
incredible network of railway lines connecting Russia to Germany and
China, and of a incredible network of liquified natural gas lines
connecting Russia with all of Europe and Central Asia. Across the new trade zone and its diverse commerce, the USDollar will not be at the center.
It is in fact being isolated, since it is a toxic agent. Everything
US$-based is crumbling, from currencies to bonds to banks to credit
lines to economies.
CHINESE YUAN BILATERAL CURRENCY SWAPS
The
advent of barter has come. It has not been noticed by the incredibly
distracted, misled, deceived, poorly trained, mentally challenged, and
myopic American public. They read about a currency swap accord, give it
no emphasis or importance, and then turn to the fund manager opinions on
rotating stocks from one sector to the next. They read about a
workaround to the Iran sanctions, express some puppet-like response of
anger or disgust, and then turn to IPOs and stories on Google, Apple,
and Facebook shares. They do not even read about the failed Trans
Pacific Partnership, since it did not make it onto the financial pages.
Sadly, the Jackass is slowly adopting a cold view that vast swaths of
the US populace will suffer from a Darwinian event. Their home equity
has vanished. Their job security has vanished, unless they work for
defense contractors. Their pension funds have been damaged. Their wealth
has been over 90% dedicated to paper securities in very obedient
fashion. The great majority has dismissed the arguments for sound money
or gold investments. Some have a pitifully small portion devoted to hard
assets like perhaps some energy companies. Only those who adopt a Gold
strategy will survive the powerful storm underway, as it intensifies.
Great wealth is being destroyed, and only Gold & Silver will enable
that survival by the construction of lifeboats. Paper wealth is being
blown away, as only hard metal assets will prevail. Add energy and
farmlands.
When
people ask about the best allocation, my standard response is at least
90% precious metals, the rest to energy deposits, but not actually
stocks, perhaps farmland if possible. The best diversification in my
view is for laddering of silver purchases, starting at $10/oz and moving
to $15/oz then $20/oz and finally to $25/oz with continued accumulation
at $30/oz and above. Gold will win the monetary war, but Silver will
take the greatest gains. Gold is fine for a more stable long-term
protection against toxic paper wealth, but my ongoing objection is that
the New York, London, and Swiss syndicate centers play too many games.
Silver is subject to global shortages, vast industrial demand,
non-replaceable usage, and a much more dangerous situation that the
powerful dark forces cannot manage. Silver coins will be widely used in
commerce, while Gold bars will thrive in banking transactions. Besides,
killing werewolves is the zinger factor with silver bullets.
China
has made numerous bilateral swap accords with other nations. As the
label indicates, they are deals cut between China and another nation to
freely use Chinese Yuan from a credited account that will retain
equilibrium. So far many nations have signed up and even renewed deals.
The list of nations includes Brazil, Russia, Japan, and India. One might
be correct to include all of Asia on the list, as nations like South
Korea and Taiwan and Vietnam freely trade in Yuan transactions. The
first major signal that the bilateral swaps have taken hold
sufficiently to undermine the USDollar through a new trade foundation
will be the complete arena of Asian trade being conducted in Yuan
transactions. They have no need for USDollars in trade. They see
their USTBonds held in reserves under management as vulnerable to
serious loss. They see their USTBonds held as subject to grand
debasement from USFed central bank monetary policy itself. They see
their USTBonds held as supported by Weimar machinery in hyper-drive.
They see their USTBonds held as part of a corrupted Wall Street arena
and its vast trappings. They see their USTBonds held as prisoner to the
USGovt debt battles and a potential crush victim on a fall from the
fiscal cliff.
The
Chinese bilateral swap accords are actually barter deals. They often
represent rather balanced trade, unlike with what the nations have set
up with the United States. Unless nations purchase enormous lots of
military hardware, they have little need for US products. Hence
the end result is a bigger batch of toxic USTBonds to purchase in order
to balance the accounts and to avoid the local foreign currency
exchange rate from rising enough to damage their export trade. The
bilateral swap accords work to create numerous two-way ties as part of a
latticework that eventually will form a transnational fabric without
the USDollar as nuclear cores in each connection weld. The bilateral
swaps are barter without the name in a direct confrontation against the
USDollar and its catbird seat. That seat, once a throne, is being
dismantled. The latticework of bilateral swaps has created the critical
mass of a global blanket with no centralized control room, no choke
points with bank transactions, no SWIFT code ticket taker. The bilateral swap accords work to build a critical mass that isolates the USDollar from an entirely new foundation for trade. The USDollar is being isolated.
COMEX PRESSURE POINT
The
COMEX is under constant unrelenting pressure. They must shift around
ill-gotten precious metal inventory in order to avoid a default. That
would be embarrassing. The main device for maintaining order at the
COMEX continues to be naked shorting of futures contracts, a blatantly
corrupt practice. The naked short ambushes occur with greater frequency
in recent months. The arrival of Scotia Mocatta as a provider of gold
supply and naked short commitments will kill them eventually, as they
have made a deal with the devils. The overnight dispatch of silver from
the US to London has grown enormous. One can only suspect that the raids
of GLD gold inventory and SLV silver inventory is much greater than is
estimated even by its most ardent critics. The illicit sources for COMEX
precious metal are fast drying up.
The
new wrinkle to render damage to the COMEX is the arrival of the
Shanghai Gold Exchange. The graphic displays the differential, a basis
for potential arbitrage. Complex arrangements can be constructed that
take advantage of the differential, basically buying the gold metal in
New York, finding a way to make it available in Shanghai, where it is
sold at a $20 to $30 higher price. The end result of the arbitrage is high volume drainage of gold in New York.
The snapshot below is taken from December 7th. Several other snapshots
are available, with similar price spreads. Finally COMEX based in New
York, a major nucleus of corrupt financial markets, has some
competition. Expect the spread to widen, the opportunity for arbitrage
to grow, and pressure to build for a breakdown.
Sadly
for the evil camp, they are fast running out of sources. They stole the
entire MF Global private accounts, denied the clients their legal right
to receive silver in delivery, and received legal protection by the
USGovt and Appellate courts, after changing the law applied to financial
firm liquidation instead of brokerage firm liquidation. It was a
blatant maneuver that has depleted the COMEX of a major slice of
legitimate business. The subsequent similar raid on PFG-Best had an echo
effect, adding to the removal of COMEX clientele. The end result is
that the risk hedge trade is finding ways to conduct their business
without use of the indescribably corrupt COMEX. So the COMEX is being
isolated in risk hedging just like the USDollar in global trade.
PETRO-DOLLAR SUNSET
The
upcoming Petro-Dollar sunset has very uncertain timing indications. The
assassination of Prince Bandar in Saudi Arabia, followed by the
potential incapacitation of King Abdullah could work to weaken the
foundation of the Petro-Dollar itself. Back in April 2010, the Saudis
and other main Persian Gulf nations struck a deal with Russia and China
for protection in the gulf region. That accord was not given much
emphasis anywhere, nor publicity. But to the Jackass, who had a source
at the meeting, the event signaled the sunset of the Petro-Dollar
defacto standard. The Saudis would turn to Asia for protection and
security, at a time when their crude oil trade was growing with Eastern
nations, and when the North American production was made more available
for the US demand in markets. The
day is nigh where the Saudis accept non-US$ payments for crude oil.
They might first accept Chinese Yuan, then Japanese Yen, then Korean
won, then Gold itself through big Turkish bazaars. The Petro-Dollar
is being isolated for sunset, and will be a key event is the removal of
the USDollar as center for global trade settlement. Also, the Saudi
regime in my view does not have much longer to survive. Numerous
companies and financial firms and export facilitators have exited from
the United Arab Emirates in preparation for the fall of the House of
Saud. The Saudi Arabian royals have unstable neighbors in every border,
especially Bahrain, Iraq, and Yemen.
WILD CARD FACTORS
Numerous
wild cards float on the global trade table. Bank strictures head the
list, with imposed rules on account reporting abroad, with tax
information requirements, and with capital controls. It is harder each
month to move large amounts of funds. The forms to complete have become
onerous and imposing, acting like implicit restrictions. It is harder
each month to use simple bank cards at ATM machines. With a simple rule
change, the banks cannot complete these transactions. The organized and
patterned restrictions work to trap USDollars within the local US
borders. Consider it an internal mechanism to assist the global
isolation of the USDollar.
LOST GLOBAL RESERVE STATUS
The
described isolation on numerous fronts, whether trade or COMEX or
banks, all work toward the elimination of the toxic agent in the
USDollar. The world wants a more
just, more functional, more efficient, more equitable global trade
system. The United States has abused its global reserve custodian
position too long. The world is fighting vigorously to remove it.
The usage of the USDollar as a credit card to finance its consumption
binge without ability to pay will come to an end. The usage of the
USDollar as a device to enable powerful aggression in war to advance
syndicate interests like vertically integrated narcotics will come to an
end. The usage of the USDollar as a banking monopoly device will come
to an end. The usage of the USDollar as an instrument for bond fraud
will come to an end. The usage of the USDollar as a free lunch device to
finance the USGovt deficit will come to an end. When the USDollar is no
longer the global reserve currency, the door to the Third World will be
opened wide. When the USDollar is no longer the global reserve
currency, the supply lines will be interrupted to the USEconomy, giving
off a prominent Third World stench. When the USDollar is no longer the
global reserve currency, the price inflation effect will become a
national topic of grand debate and extreme anger. When the USDollar is
no longer the global reserve currency, the United States as a nation
will experience tremendous additional isolation and hardship, as most
Third World nations do. The level of corruption within the USGovt and US
banking corner offices is already far more entrenched than any Third
World nation. The vote fraud for US national elections is equally
prevalent, but more sophisticated.
When
the USDollar is no longer the global reserve currency, the Gold
Standard will be right around the corner, if not already in the
implementation stage.
The Gold price will react quickly to the removal of the USDollar from
its prized perch of abuse. The center of the new trade settlement system
will be GOLD, which is not even being discussed by the enlightened
denizens of the gold community. It will be the basis of the Letters of
Credit, in the form of gold trade notes. The short-term credit that facilitates trade will have a truly magnificent grand Gold core.
The common agreement will be to make the Gold price at least $5000 per
ounce, probably closer to $7000 per ounce. They will in the process
dismiss, overrun, and put into oblivion the COMEX and the LBMA,
rendering them to the scrap heap of irrelevance.
THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.
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The
typical human reaction to any infection, vermin, danger, or toxicity is
to stand back, to isolate the agent, to trap it, to prevent its further
spread or release, then to remove it in a safe secure way if possible
using trained professionals. Eventually decisions must be made on the
level of acceptable risk on the removal, like what is willing to be lost
or damaged or killed in the process. Risk analysis, cost trade-offs,
and minimization decisions must be evaluated and executed. The toxic agent in global trade, global banking, and global bond market is the USDollar.
In 2009, the Jackass began making a certain firm point. Those nations
that depart from the entire USDollar system early will be the leading
nations in the next chapter, with stronger foundations, richer solvency,
emerging economies, healthier financial markets, efficient credit
engines, growing wealth, stronger political helm activity, and better
functioning systems generally. Imagine a contaminated blood system that
infects, corrupts, and destroys all interior organs from the spread of
the toxin. Those nations that stick with the crumbling USDollar system stubbornly will find a horrible fate with devastating effects,
rampant economic damage, broken financial markets, sputtering credit
engines, tremendous loss of wealth, wrecked supply lines, poverty
spreading like wildfire, ruined political structures, social disorder,
isolation from the rest of the world, and a fast ticket to the Third
World. That is EXACTLY what is happening in the last several months. A
division has begun, as the East has been busily installing the next
generation platforms, as related to trade, banking, and commercial
integration.
NEW ASIAN TRADE ZONE
The
division between East and West actually accelerated when the extremely
ill-advised decision for Iran sanctions was made by an increasingly
desperate United States Govt and its handler on the Southern Med. The
division continues, matures, and develops with each passing month. It
has become a story, as the Eurasia trade zone concept has been born. It
has a long way to go, but Asia however has made great strides lately in
unifying commerce. The climax event of the Asian trade zone conference
held in Vietnam could not have been more important, as they rejected the
US-led plan. The Asians
partners and players even rejected the United States from the entire
Asian trade zone, but did include Australia and New Zealand. The
incredibly stupid naive US-led plan, the Trans-Pacific Partnership,
attempted to create a trade zone with Asia which would have blocked
China. Imagine the incredibly obtuse blockheaded maneuver of trying
to have all of Asia not conduct facilitated trade with China, its
leading trade partner.Talk
about shooting both legs and genital region with a double barreled
shotgun! This is the signal flare of US political stupidity that has
turned highly destructive for the USEconomy and its people. Such failed
leadership and counter-productive initiatives will push the US into the
Third World even faster than previously thought possible. The isolation
is firming quickly. Most of Asia does not wish for strong trade ties
with the United States, most likely since they do not see mutual
benefit. They see a ravaging appetite to grab capital.
A
Paradigm Shift is taking place, and the ASEAN-China summit gave proof
positive in a seminal event of the vast changes in progress. The United
States just suffered its worst humiliation ever as a nation on the
Eastern global stage. It was exceeded only by the humiliation for a US
president personally. The story went uncovered by the lapdog inept US
press. The late November Asian
summit meeting held in Phnom Penh included 15 Asian nations, which
represent half the world's population. They decided to form a Regional
Comprehensive Economic Partnership that excludes the United States.
The Asians are pushing to isolate the United States. Regard it as
punishment for hegemony, or a reaction to prevent further capital
drainage, or to protect from central bank abuse, or to wall off
continued bond fraud export, or to defend against military aggression.
Regard it as confirmation that China is the regional leader in Asia,
even for military security. Regard it as a response to banker
criminality, or simply for being totally full to the brim of American
corruption and arrogance and abuse of position, led by creation of the
USDollar as an elaborate weapon and credit card whose balance is never
to be repaid. Abuse of power and sponsored financial corruption will
have extreme consequences in the reshaping of global commerce and
banking. The US will be isolated, so as to protect the rest of the world
from its fascist exhibitions and deep manifestations.
FLUSHED NATION
The
shift is in progress, and the American people have no idea what is
happening. They are too pre-occupied by the agency torture of the
population, urgently needed to remove guns and to create the police
state. Current events are heinous and genocide on large scale and small
scale. Any comments will be limited on the orchestrated travesty,
travails, and tragedy. They all have one traceable element, which
connects to a certain Virginia suburb where an intelligent pillbox
operates in the shadows with puppet strings to the press networks and
maybe Hollywood. The security agencies turned to the dark side years
ago, with full devotion to narcotics, money laundering, and collusion
with the castle dwellers. When the Praetorian Guard plots to bring about
a police state, the only words that come to mind are disaster,
disorder, mayhem, betrayal, degradation, death. Their tools are
psychotropic drugs, violent training, weather altering devices, and
basic sabotage. Treason is the calling card unfortunately for much of
the US leadership class, whether banking, politics, economics,
pharmaceuticals, or news networks. Think Syndicate, as my work has
described for several years. The United States with its harsh
new visa policies, molestation at airports, heavily defended borders,
sponsored gun running, has shown a vicious visible visceral fascist
streak that has begun to bring memories of the national socialists of
Central Europe 70 and 80 years ago. They are back, stronger than ever,
not having been eliminated. They were instead assimilated within the
banking and security organizations, able to plant seeds which germinated
with the sons in offspring. Two sons became presidents.
DEUTSCHE MARK GONE
In
the 1960 and 1970 and even 1980 decades, the favorite currencies off
the standardized tables of commerce were the USDollar and DeutscheMark.
At one time in the Soviet Union and the Soviet Bloc of Eastern Europe,
more USDollars and DMarks were in circulation than official Russian
Rubles or Polish Zlotys or Hungarian Forints or whatever. Those years
are long gone, as in long gone, all paper alternatives lousy. Under
a strange bizarre compromise arranged to assimilate East Germany and to
conceal the French sovereign debt, the Euro Monetary Union and the
common Euro currency was born. It is now in the process of
disintegrating. So the powerfully strong and stable German DMark went
away. Back in those decades, only limited travel was done by the
Jackass, confined to a honeymoon in France and Switzerland with a cold
woman no longer inflicting her plague-like touch in my life. The Jackass
deals exclusively in Latin currency of paper and human variety. No
exposure to alternative currency held under the table was discovered in
beach locations to the south or modest hotels in the green hills to the
north. But friends reported stories. My older brother spent two months
in Germany and Czechoslavakia, with ample stories of hoarded USDollars
and DMarks. Store owners and wise families were eager to obtain USD and
DM currency, even young kids. He and some ambitious friends heard
stories of vast black market activity in Russia, where the US$100 bill
was a favorite. In that era, Gold was not an item of pursuit or stored
wealth. Times have changed radically, and Gold is the new store of
value.
Times
have changed with the sunset of the DMark and the toxicity of the
USDollar. The people, the shop keepers, the business men, the small
financial firms, they all have been turned upside down in recent years
as they struggle to find a safe place to store wealth. Money has been
corrupted. The purveyors of money have lost control by accelerating its
supply by central banks, lost control of bank solvency, lost control of
anything remotely acting like an honest tether to money itself. As
a result, all those people, the shop keepers, the business men, the
small financial firms, have been discovering Gold & Silver bars and
coins. Their combined actions have resulted in an implicit isolation
of the USDollar, even an isolation of the Southern European sovereign
debt. Swiss havens have grown, in parallel with Gold havens. The toxic
monetary plague has been identified, and its toxic sources too. They are
the US Federal Reserve and the Euro Central Bank. They are ruining
money, undermining wealth, and destabilizing the entire world related to
wealth, banking, commerce, and economies. The armies of people, the
shop keepers, the business men, the small financial firms, are working
to isolate the USDollar as toxic agent in a demonstration of survival.
FREEDOM FROM DELUSION
Many
bright people within the gold community cling to hope, harbor
delusions, and maintain expectations, none of which have much value in
the fast changing world of fascist entanglement and full integration. The
Jackass has operated without delusions, firmly in belief that the
corrupt systems would flourish. That viewpoint and operating principle
has proved to be correct since 2004 when the Hat Trick Letter began to
spout deeply disturbing forecasts. One after the other, most of the
forecasts have indeed occurred, to the detriment of the nation and its
systems and its society at large. No pleasure has come from forecasting a
wrecked housing market (burdened by lax underwriting and bond fraud) or
a broken insolvent banking system (from bond losses and dependent upon
money laundering) or a desperate chronically USGovt budget (dragged down
by adopted socialism and sacred war costs) or a spreading Southern
European bond crisis (addressed only by higher subordinated toxic
paper).
No
pleasure is taken from seeing vast legions of struggling Americans,
including a few close friends, who have lost jobs, lost homes, lost
savings, lost pensions, and lost a valuable sense of security, as they
continue to hang on. Many might actually find the warmth of the official
camps, only to disappear later on. Argentina and Chile had their
desaparecidos, and so will the United States. My ugly expectation is
that before their bodies are incinerated, vital organs will be extracted
for black market gains. Inoculations upon entry will assure them of
good health and fully functioning organs. Later, vaccines will infect
them, just like with the swine flu vaccine. By the way, in Costa Rica a
brief story to enlighten on vaccines. In early 2008, the Jackass advised
a couple families with numerous children and cousins in school to
reject the swine flu vaccine that was promoted by the school authorities
at the urging of US officials. They took my advice after their
confidence was won on several other matters. Only one of about 20
children took the vaccine. She has been sick with a mysterious cerebral
disease for over two years. My mention of searching for Guillain Barre
symptoms has not helped. The mothers are grateful, as they did not
understand at first my emotional outburst to discourage following the
school advice. The official US camps will involve forced vaccines. Later
on, false stories will be promulgated that the dead bodies were the
result of already sick people entering the camps for quarantine
purposes. In reality, the people would only have suffered from hunger
and exposure and despair.
Hope is not part of my forecasts, but rather the reality of the corrupt human power game mindset.
The US banking, economic, and political leaders can easily be expected
to continue their corrupt games, with easy forward calls. No expectation of USGovt regulatory agencies is part of my forecasts,
but rather the reality of their nearly perfect track record of big bank
loyalty and fraud protection. The US regulators can easily be expected
to continue their corrupt games, with easy forward calls. Clinging to precious metals mining stocks is not part of my forecasts,
a decision made back in early 2008. They are bound in paper wealth,
subject to inflation in share dilution just like the USDollar,
vulnerable to jurisdictional confiscations, and at the mercy of labor
unions whose production is increasingly halted. Unfortunately, too many
fine people within the gold community, including GATA, hold firm on
hope, regulators, and mining stocks. Not here! The major financial
networks rely upon advertisement revenue from Wall Street, fund
managers, an market exchanges. GATA has a business model that has one
key vulnerability, with strong links to the mining firms. It has tainted
their viewpoint sadly. My support of GATA is firm on challenge of
USDollar legitimacy before the Supreme Court, on challenge of US
regulators to enforce the law, on challenge of the big banks to prove
their solvency, on challenge of the central bank to reveal their
activity. But the Jackass does not expect the Supreme Court to ever rule
the USDollar as illegal, nor the US regulators to ever enforce the law,
nor the big banks to ever remove themselves from corruption, nor the
central bank to ever conduct business in opposition to the biggest banks
under supranational orders.
My
personal background has taught me well that a corrupt system never
corrects itself. Instead, it spins out of control with broken platforms,
layered mechanisms to impose its servitude and influence, complete with
side projects to illicitly support itself.
See the theft of Iraq gold and theft of Libyan gold. Their people will
never again see that wealth. The US system will remain broken until it
collapses, never to be corrected until after its collapse.
The
Jackass does not align with the expectation of mining stock rise. The
stocks are paper wealth in a new era of paper wealth implosion, during
which inflation of shares through dilution is rampant. My
full expectation is for physical metal prices for Gold & Silver to
rise, while mining stocks continue to fall in value from dilution and
reduced metal output. The leverage is a mirage when large deposits
are seized by desperate foreign governments in need of income. What on
earth is complicated about understanding this point?? The leverage is a
mirage when workers are the focal breakdown point for a higher cost of
living. If workers cannot afford to feed their families and survive,
mine output will suffer. What on earth is complicated about
understanding this point?? The leverage is a mirage when rising mine
operation costs must be handled, by the simple practice of share
dilution. Combine with regular executive stock options, and the dilution
on stock shares is huge. What on earth is complicated about
understanding this point??
POWERFUL CORRUPTION INERTIA
Corruption Inertia is a principle firmly believed in when Jackass forecasts must be made.
The corruption will continue with firm immutable momentum, without an
external force acting as agent of change. At times, this is simple
science. When colleagues introduce hope and what must be, the OFF button
is engaged quickly here in my office. Their views are out of touch with
reality. Corruption will persist as long as the Syndicate continues to
hold power. It will remain the constant while the USDept Justice
remains, while the USDept Treasury remains, while the US Regulators
remain, even while the US debt rating agencies remain. They all support
the current system. They are all subject to momentum pressures. Only an external force will result in change. When the USDollar is further isolated, that change will come.
To expect change from the inside due to internal forces is lunatic,
kind of like expecting an alcoholic to change on his own from an
awakening. Al Capone was removed not from inside the Chicago crime boss
conference of dons. He was brought down by external forces related to
income tax. The world will similarly reject the USDollar for its tax on
the system, unwanted, discarded as a toxic agent.
PROTECTION FROM THREAT TO WEALTH
Again,
delusion works well when fashioning a creepy little shell of existence
to protect oneself from the psychological damage of a predatory
government syndicate or security agency apparatus. The Jackass mocks
such defense mechanisms, since a guarantee for poverty and misery. The
vast legions of Americans will soon awaken to find their jobs are
hanging by threads, their wealth either vanished or converted to
USTreasury Bonds by force, their liberties long gone, and their ability
to seek out foreign lands for residence curtailed. In fact, one nation
after another is actually banning acceptance of Americans for bank
accounts. See Switzerland, Panama, and Hong Kong. The US subjects are
seen as persona non grata not for their own characteristics, but for the
passport they hold from the United States. The USGovt as lord acts like
syndicate bullies, agents to abuse embassy privileges, with imposed
extra legal paperwork like an extra burden. The isolation is not only of
the United States, but of its citizens, whose business is not desired.
Hence the Americans will increasingly be trapped in the US along with
their money. The Jackass response to threat is not to embrace delusion,
and not to seek a blanket to cover my head in the basement quarters.
Instead, the response has been to head for the hills with pockets
filled.
People,
both clients and colleague, inquire when the Gold price will rise with
vigor, when the mining stocks will rise with gusto. They remind that
with all the central bank debasement of currency from Zero Interest Rate
Policy and Quantitative Easing, the ultra-cheap, artificially cheap,
desperate cheap money to finance USGovt debt should make the Gold price
zoom upwards with each QE official announcement. My answer is quite
simple. Each new QE program gives the dark forces more motivation to
slam the gold price with naked shorts in sale of paper gold and paper
silver. To be sure, the true value of Gold and the true value of Silver
is higher, but it is not reflected in the COMEX price. That market is
the epitome of corruption. If they were in charge of measuring fevers,
they would place the thermometers on ice. Instead, a vast divergence comes between the paper Gold price and metal Gold price.
Unless and until the Gold market is freed from corruption and freed
from the shackles of Wall Street and London and Swiss influence, it will
continue to be suppressed. My full expectation is not for the system to
correct itself from within. Instead, the COMEX seeks out new sources of
supply, like the GLD Exchange Traded Fund. It is probably far more
gutted than publicly stated. It has been converted into a bullion bank
central repository for easy raided inventory. The Gold price will not
rise from internal forces to push up value, in response to central bank
monetary policy or shortage of COMEX inventory. The Gold price will rise from external forces in USDollar isolation, along with isolation of the big banks in the US and London. Their gold inventory will be removed, returned, and drained. In time, the USDollar will widely be rejected in trade.
THE NEW ISOLATION HAS BEGUN
The
process of isolation is not just now beginning. It is a process well
along. In fact, it has been told that immediately following the Lehman
Brothers death (a deliberate exploited execution) and the adoption of
toxic vats by the USGovt in the form of Fannie Mae and AIG, the
major foreign players located primarily in the East began to feverishly
prepare for new platforms on trade and banking. They sought to develop
an alternative. For the last 20 to 25 years, a backwards principal
has been at work. It dictated that the USDollar would prevail in
reserves management, actually the USTBond as vehicle. The rules for
trade surplus recycle were constructed to lean toward usage of the
USTBonds. Therefore, the global trade would be dominated by USDollars.
In other words, banking would dictate trade settlement. That is
backwards, and keenly exhibits the brute force of the USDollar hegemony.
Also the crude oil payments have been standardized in USDollars, ever
since the Saudis cut a major deal with the USGovt and UKGovt in the
mid-1970 decade after the famous embargo. Protection came to the Saudi
regime and Persian Gulf emirates, in return for exclusive USDollar
payment on trade for oil. The
Petro-Dollar defacto standard is the primary plank behind the USDollar
global trade patterns shown for over three decades. It is coming to an
end, a sunset.
IRAN SEMINAL EVENT
The
Iranian sanctions put forth by the USGovt and adopted by the EuroZone
nations have contributed more to unwinding the USDollar trade system
than any event in decades.
It sounded the death knell for the USDollar. It hastened numerous
nations to seek a US$ alternative. It provided a fertile environment to
fashion new trade settlement mechanisms. It pushed Turkey into acting as
a gold bullion intermediary role in the provision of gold for usage in
trade settlement. See their role with India and Iran, fully described in
the December Hat Trick Letter. When an independent highly reliable gold
trader source was asked to confirm the role of Turkey as a test case in
developing gold based trade settlement, he gave a tacit confirmation.
He has mentioned Turkey in past conversations over the last couple years
frequently. Just as Turkey was a swing nation in the NATO alliance
against the Soviet Union, Turkey will serve in my view as a critical
swing nation in the movement to create a non-US$ trade settlement
system. The new system will be decentralized, meaning not funneled
through the major banks, not passing through the USFed as clearing
house. Turkey will be essential in the formation of the Eurasia trade
zone. First comes the Asian trade zone (the US excluded), and next comes
the hand shake between the Asians and Europeans to create Eurasia. Some
folks have expressed doubt toward the arrival of a vast
trans-continental trade region. They seem painfully unaware of an
incredible network of railway lines connecting Russia to Germany and
China, and of a incredible network of liquified natural gas lines
connecting Russia with all of Europe and Central Asia. Across the new trade zone and its diverse commerce, the USDollar will not be at the center.
It is in fact being isolated, since it is a toxic agent. Everything
US$-based is crumbling, from currencies to bonds to banks to credit
lines to economies.
CHINESE YUAN BILATERAL CURRENCY SWAPS
The
advent of barter has come. It has not been noticed by the incredibly
distracted, misled, deceived, poorly trained, mentally challenged, and
myopic American public. They read about a currency swap accord, give it
no emphasis or importance, and then turn to the fund manager opinions on
rotating stocks from one sector to the next. They read about a
workaround to the Iran sanctions, express some puppet-like response of
anger or disgust, and then turn to IPOs and stories on Google, Apple,
and Facebook shares. They do not even read about the failed Trans
Pacific Partnership, since it did not make it onto the financial pages.
Sadly, the Jackass is slowly adopting a cold view that vast swaths of
the US populace will suffer from a Darwinian event. Their home equity
has vanished. Their job security has vanished, unless they work for
defense contractors. Their pension funds have been damaged. Their wealth
has been over 90% dedicated to paper securities in very obedient
fashion. The great majority has dismissed the arguments for sound money
or gold investments. Some have a pitifully small portion devoted to hard
assets like perhaps some energy companies. Only those who adopt a Gold
strategy will survive the powerful storm underway, as it intensifies.
Great wealth is being destroyed, and only Gold & Silver will enable
that survival by the construction of lifeboats. Paper wealth is being
blown away, as only hard metal assets will prevail. Add energy and
farmlands.
When
people ask about the best allocation, my standard response is at least
90% precious metals, the rest to energy deposits, but not actually
stocks, perhaps farmland if possible. The best diversification in my
view is for laddering of silver purchases, starting at $10/oz and moving
to $15/oz then $20/oz and finally to $25/oz with continued accumulation
at $30/oz and above. Gold will win the monetary war, but Silver will
take the greatest gains. Gold is fine for a more stable long-term
protection against toxic paper wealth, but my ongoing objection is that
the New York, London, and Swiss syndicate centers play too many games.
Silver is subject to global shortages, vast industrial demand,
non-replaceable usage, and a much more dangerous situation that the
powerful dark forces cannot manage. Silver coins will be widely used in
commerce, while Gold bars will thrive in banking transactions. Besides,
killing werewolves is the zinger factor with silver bullets.
China
has made numerous bilateral swap accords with other nations. As the
label indicates, they are deals cut between China and another nation to
freely use Chinese Yuan from a credited account that will retain
equilibrium. So far many nations have signed up and even renewed deals.
The list of nations includes Brazil, Russia, Japan, and India. One might
be correct to include all of Asia on the list, as nations like South
Korea and Taiwan and Vietnam freely trade in Yuan transactions. The
first major signal that the bilateral swaps have taken hold
sufficiently to undermine the USDollar through a new trade foundation
will be the complete arena of Asian trade being conducted in Yuan
transactions. They have no need for USDollars in trade. They see
their USTBonds held in reserves under management as vulnerable to
serious loss. They see their USTBonds held as subject to grand
debasement from USFed central bank monetary policy itself. They see
their USTBonds held as supported by Weimar machinery in hyper-drive.
They see their USTBonds held as part of a corrupted Wall Street arena
and its vast trappings. They see their USTBonds held as prisoner to the
USGovt debt battles and a potential crush victim on a fall from the
fiscal cliff.
The
Chinese bilateral swap accords are actually barter deals. They often
represent rather balanced trade, unlike with what the nations have set
up with the United States. Unless nations purchase enormous lots of
military hardware, they have little need for US products. Hence
the end result is a bigger batch of toxic USTBonds to purchase in order
to balance the accounts and to avoid the local foreign currency
exchange rate from rising enough to damage their export trade. The
bilateral swap accords work to create numerous two-way ties as part of a
latticework that eventually will form a transnational fabric without
the USDollar as nuclear cores in each connection weld. The bilateral
swaps are barter without the name in a direct confrontation against the
USDollar and its catbird seat. That seat, once a throne, is being
dismantled. The latticework of bilateral swaps has created the critical
mass of a global blanket with no centralized control room, no choke
points with bank transactions, no SWIFT code ticket taker. The bilateral swap accords work to build a critical mass that isolates the USDollar from an entirely new foundation for trade. The USDollar is being isolated.
COMEX PRESSURE POINT
The
COMEX is under constant unrelenting pressure. They must shift around
ill-gotten precious metal inventory in order to avoid a default. That
would be embarrassing. The main device for maintaining order at the
COMEX continues to be naked shorting of futures contracts, a blatantly
corrupt practice. The naked short ambushes occur with greater frequency
in recent months. The arrival of Scotia Mocatta as a provider of gold
supply and naked short commitments will kill them eventually, as they
have made a deal with the devils. The overnight dispatch of silver from
the US to London has grown enormous. One can only suspect that the raids
of GLD gold inventory and SLV silver inventory is much greater than is
estimated even by its most ardent critics. The illicit sources for COMEX
precious metal are fast drying up.
The
new wrinkle to render damage to the COMEX is the arrival of the
Shanghai Gold Exchange. The graphic displays the differential, a basis
for potential arbitrage. Complex arrangements can be constructed that
take advantage of the differential, basically buying the gold metal in
New York, finding a way to make it available in Shanghai, where it is
sold at a $20 to $30 higher price. The end result of the arbitrage is high volume drainage of gold in New York.
The snapshot below is taken from December 7th. Several other snapshots
are available, with similar price spreads. Finally COMEX based in New
York, a major nucleus of corrupt financial markets, has some
competition. Expect the spread to widen, the opportunity for arbitrage
to grow, and pressure to build for a breakdown.
Sadly
for the evil camp, they are fast running out of sources. They stole the
entire MF Global private accounts, denied the clients their legal right
to receive silver in delivery, and received legal protection by the
USGovt and Appellate courts, after changing the law applied to financial
firm liquidation instead of brokerage firm liquidation. It was a
blatant maneuver that has depleted the COMEX of a major slice of
legitimate business. The subsequent similar raid on PFG-Best had an echo
effect, adding to the removal of COMEX clientele. The end result is
that the risk hedge trade is finding ways to conduct their business
without use of the indescribably corrupt COMEX. So the COMEX is being
isolated in risk hedging just like the USDollar in global trade.
PETRO-DOLLAR SUNSET
The
upcoming Petro-Dollar sunset has very uncertain timing indications. The
assassination of Prince Bandar in Saudi Arabia, followed by the
potential incapacitation of King Abdullah could work to weaken the
foundation of the Petro-Dollar itself. Back in April 2010, the Saudis
and other main Persian Gulf nations struck a deal with Russia and China
for protection in the gulf region. That accord was not given much
emphasis anywhere, nor publicity. But to the Jackass, who had a source
at the meeting, the event signaled the sunset of the Petro-Dollar
defacto standard. The Saudis would turn to Asia for protection and
security, at a time when their crude oil trade was growing with Eastern
nations, and when the North American production was made more available
for the US demand in markets. The
day is nigh where the Saudis accept non-US$ payments for crude oil.
They might first accept Chinese Yuan, then Japanese Yen, then Korean
won, then Gold itself through big Turkish bazaars. The Petro-Dollar
is being isolated for sunset, and will be a key event is the removal of
the USDollar as center for global trade settlement. Also, the Saudi
regime in my view does not have much longer to survive. Numerous
companies and financial firms and export facilitators have exited from
the United Arab Emirates in preparation for the fall of the House of
Saud. The Saudi Arabian royals have unstable neighbors in every border,
especially Bahrain, Iraq, and Yemen.
WILD CARD FACTORS
Numerous
wild cards float on the global trade table. Bank strictures head the
list, with imposed rules on account reporting abroad, with tax
information requirements, and with capital controls. It is harder each
month to move large amounts of funds. The forms to complete have become
onerous and imposing, acting like implicit restrictions. It is harder
each month to use simple bank cards at ATM machines. With a simple rule
change, the banks cannot complete these transactions. The organized and
patterned restrictions work to trap USDollars within the local US
borders. Consider it an internal mechanism to assist the global
isolation of the USDollar.
LOST GLOBAL RESERVE STATUS
The
described isolation on numerous fronts, whether trade or COMEX or
banks, all work toward the elimination of the toxic agent in the
USDollar. The world wants a more
just, more functional, more efficient, more equitable global trade
system. The United States has abused its global reserve custodian
position too long. The world is fighting vigorously to remove it.
The usage of the USDollar as a credit card to finance its consumption
binge without ability to pay will come to an end. The usage of the
USDollar as a device to enable powerful aggression in war to advance
syndicate interests like vertically integrated narcotics will come to an
end. The usage of the USDollar as a banking monopoly device will come
to an end. The usage of the USDollar as an instrument for bond fraud
will come to an end. The usage of the USDollar as a free lunch device to
finance the USGovt deficit will come to an end. When the USDollar is no
longer the global reserve currency, the door to the Third World will be
opened wide. When the USDollar is no longer the global reserve
currency, the supply lines will be interrupted to the USEconomy, giving
off a prominent Third World stench. When the USDollar is no longer the
global reserve currency, the price inflation effect will become a
national topic of grand debate and extreme anger. When the USDollar is
no longer the global reserve currency, the United States as a nation
will experience tremendous additional isolation and hardship, as most
Third World nations do. The level of corruption within the USGovt and US
banking corner offices is already far more entrenched than any Third
World nation. The vote fraud for US national elections is equally
prevalent, but more sophisticated.
When
the USDollar is no longer the global reserve currency, the Gold
Standard will be right around the corner, if not already in the
implementation stage.
The Gold price will react quickly to the removal of the USDollar from
its prized perch of abuse. The center of the new trade settlement system
will be GOLD, which is not even being discussed by the enlightened
denizens of the gold community. It will be the basis of the Letters of
Credit, in the form of gold trade notes. The short-term credit that facilitates trade will have a truly magnificent grand Gold core.
The common agreement will be to make the Gold price at least $5000 per
ounce, probably closer to $7000 per ounce. They will in the process
dismiss, overrun, and put into oblivion the COMEX and the LBMA,
rendering them to the scrap heap of irrelevance.
THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.
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But then, the universe strives for equilibrium and all will eventually
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has been my hope that the financial collapse would occur within a
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Jim
Willie CB is a statistical analyst in marketing research and retail
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Thanks to: http://news.goldseek.com
-- Posted Thursday, 27 December 2012 | Digg This Article
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