Wednesday, November 30, 2011

Gold And Silver Lift-off: Hyperinflation At The Starting Gate

"The government that robs Peter to pay Paul can always count on the support of Paul."
 -George Bernard Shaw

Ahhhhhhh....the smell of desperation in the morning.

Ladies and Gentlemen, the shit has hit the fan. 

When we Precious Metals market watchers awoke early this morning, we were not surprised to find that Gold had lost $26 in overnight trading.  We were, however, shocked by the rapid recovery in the price of Gold that commenced at 6AM est. when Gold suddenly spiked higher by $16 an ounce in only 15 minutes.

News supporting this sudden move higher in the price of Gold quickly followed:

China Begins Monetary Easing, Lowers Reserve Ratio By 50 bps: Gold, Crude, Futures Spike
From ZeroHedge
It appears that China has already forgotten its close encounter with inflation as recent as a few months ago leading to assorted riots, and is instead far more concerned with the collapsing housing market. As a result it just announced a 50 bps reserve ratio cut, well in advance of when most commentators thought it would happen, on what is now the start of a monetary policy loosening cycle. The kneejerk reaction is for futures to surge and gold to spike, and crude to pass $100, even as the EURUSD was once again drifting lower overnight. And while this is beyond bullish for commodities, we doubt equities will remain bid unless Europe mysteriously fixes itself overnight too. Which won't happen. More from Reuters: "China's central bank cut the reserve requirement ratio for its banks on Wednesday for the first time in nearly three years to ease credit strains and shore up activity in the world's second-largest economy." Naturally, this ties Bernanke's hand even more as Chinese inflation will now be stoked internally in addition to importing any excess inflation to be generated by the Chairman, likely leading to an even faster spike in global inflation the next time we get US-based quantiative easing. Look for Chinese-based purchases of gold to surge.

Recall now, how Gold reacted late last Winter, and early this past Spring when China had acted several times to increase their banks reserve ratio...IT TANKED.  China cuts their banks reserve ratio today...and the price of Gold soars.

And if we Precious Metals market watchers were shocked by Gold's 6AM est "rapid recovery", we were most certainly awed by a $31 spike higher in the price of Gold between 8AM and 8:30AM est. 

Fed, central banks slash dollar borrowing costs
By William L. Watts and Greg Robb, MarketWatch
FRANKFURT (MarketWatch) — The U.S. Federal Reserve slashed the cost of emergency dollar loans to foreign banks as the world’s major central banks took coordinated action to prevent Europe’s debt crisis from triggering a global liquidity crunch.

The moves were announced in statements issued simultaneously by the U.S. Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan, the Bank of Canada and the Swiss National Bank.

“The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,” the banks said.

The move lifted equities, while the dollar tanked.

The announcement, which appeared to take investors by surprise, comes as European banks saw the cost of obtaining funding in dollars in the interbank market rise to a three-year high as the debt crisis prompted institutions to hoard cash. Read more: ECB fails to offset bond buys amid bank stress.

The measures are “aimed at the funding strains faced by European banks in what was becoming a modern-day run on the banks ... The world, in fact, has been playing a game of hot potato with European bank debt as well as European sovereign debt, and the only player with oven mitts to hold the hot potato is the world’s central banks,” said Tony Crescenzi, strategist at PIMCO, in emailed comments.

In Wednesday’s action, the central banks agreed to lower the pricing on existing temporary U.S. dollar liquidity swap arrangements by 50 basis points, putting the new rate as the U.S. dollar overnight index swap rate plus 50 basis points.

The pricing will apply to all operations beginning Dec. 5. Access to the swap lines, which had been scheduled to expire in August, was extended until Feb. 1, 2013.

In other words...THE SHIT HAS HIT THE FAN.

Here Comes The Global, US-Funded Liquidity Bail Out
From ZeroHedge
As expected, the Fed has just bailed out the world once again:


ECB, FED other major central bank to lower the pricing of existing USD liquidity swaps by 50BPS

And as we have been writing every single day, the worldwide dollar crunch is now confirmed:

At present, there is no need to offer liquidity in non-domestic currencies other than the U.S. dollar,

This means that the global situation is far, far more dire than the talking heads have said. Luckily, when this step fails, which it will, Mars can always come and bail us out.

Why ask why when the real question is "WHY NOW?"

Could the following three stories answer that question?

With Bank Of America On The Verge Of Breaching $5.00, Our Question Of The Day Is...
From ZeroHedge
... how many of the top 50 holders presented below, will be forced to sell once we get a 4 handle?

Bank of America, AMERICA'S LARGEST BANK, at just pennies above $5.00 a share, sits on the edge of an abyss.  Below this level, Bank of America stock is "non-marginable," meaning any stock owned on margin would need to be liquidated.  For a floundering bank owned by many of the nation's highly leveraged hedge funds, such an event could lead to an implosion of the company's stock.  Mutual funds with charters prohibiting ownership of stocks below $5.00/share would be forced to dump the stock en masse.

After the market close Tuesday, Bank of America and 14 other banks were downgraded by Standard And Poor's, including JP Morgan, Morgan Stanley, Citigroup, and Goldman Sachs:

Standard And Poors Reviews 37 Global Banks, Downgrades Bulk - Full List Attached

Did A Large European Bank Almost Fail Last Night?
From ZeroHedge
Need a reason to explain the massive central bank intervention from China, to Japan, Switzerland, the ECB, England and all the way to the US? Forbes may have one explanation: "It appears that a big European bank got close to failure last night. European banks, especially French banks, rely heavily on funding in the wholesale money markets. It appears that a major bank was having difficulty funding its immediate liquidity needs. The cavalry was called in and has come to the successful rescue." Granted the post is rather weak on factual backing and is mostly speculative, but it would certainly make sense. That said, it harkens back to our original question: just how bad was the situation if the global central banking cabal had to intervene all over again, and just what was not being told to the general public? Lastly, and most important, slapping liquidity bandaids on solvency gangrenes does nothing but buy a few days at most. Furthermore, we now expect the stigmata associated with borrowing from the Fed to haunt each and every European bank as vigilantes will now use the weekly ECB update on borrowings from the Fed as a signal to hone in on this and that weak Italian and French, pardon, European bank.

Global Central Banks Ring Gold Buyers' Bell
From the Desk Of Peter Schiff
Today’s unprecedented announcement by the world’s most powerful central banks was a loud and clear bell ringing to buy precious metals. The move, disguised as an attempt to help the fragile state of the global economy, is in reality a move to prop up failing banks in Europe and the US.
By reducing interest rates paid for dollar swaps, central bankers are in effect increasing the quantity of global dollars in circulation. The result? The dollar will weaken, inflation will rise, and gold will soar. Gold was up more than $30 today, and the dollar got crushed.

I urge you to take 7 minutes to watch the video I recorded exclusively for my subscribers a few hours ago. It explains, in plain language, what happened today – and what is the likely outcome for your portfolio. This may be one of the most important economic events of the year.

Ron Paul Statement On The Fed's Bailout Of Europe
From Ron Paul, via ZeroHedge
The Fed's latest actions in cooperating with foreign central banks to undertake liquidity swaps of dollars for foreign currencies is another reason why Congress needs enhanced power to oversee and audit the Fed. Under current law Congress cannot examine these types of agreements. Those who would argue that auditing the Fed or these agreements with central banks harms the Fed's independence should reevaluate the Fed's supposed independence when the Fed bails out Europe so soon after President Obama promised US assistance in resolving the Euro crisis.

Rather than calming markets, these arrangements should indicate just how frightened governments around the world are about the European financial crisis. Central banks are grasping at straws, hoping that flooding the world with money created out of thin air will somehow resolve a crisis caused by uncontrolled government spending and irresponsible debt issuance. Congress should not permit this type of open-ended commitment on the part of the Fed, a commitment which could easily run into the trillions of dollars. These dollar swaps are purely inflationary and will harm American consumers as much as any form of quantitative easing.

The Fed is behaving much as it did during the 2008 financial crisis, only this time instead of bailing out politically well-connected too-big-to-fail firms it is bailing out profligate government spending. Citizens the world over deserve better than this. They deserve sound money that cannot be manipulated and created out of thin air by central planners who promise printed prosperity. Fiat money caused this European crisis and the financial crisis before it. More fiat money is not the cure. The global fiat currency system has proven itself a failure, we need real monetary reform. We need sound money.

...and from National Inflation Association...

The Federal Reserve along with the European Central Bank, Bank of Canada, Bank of Japan, Bank of England, and the Swiss National Bank are all lowering their U.S. dollar swap rates by 50 basis points! This is going to create massive worldwide monetary inflation and flood the world with U.S. dollars!

The Fed claims that these coordinated actions will enhance their capacity to provide liquidity support to the global financial system in order to "ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity."

It was also announced this morning that arrangements have been made to establish temporary bilateral liquidity swap arrangements so that liquidity can be provided in each jurisdiction in any of their currencies should market conditions so warrant. Although the Fed said, "there is no need to offer liquidity in non-domestic currencies other than the U.S. dollar" at this time, the stage is now set to create massive worldwide monetary inflation in other fiat currencies as well. The whole entire global fiat currency system could soon come to an end. The only solution to the upcoming hyperinflationary crisis will be a global digital gold backed currency.

NIA believes China will soon announce that they have dramatically increased their gold holdings to backup their rapidly growing foreign currency reserves, which have now reached $3.2 trillion. China's central bank just announced this morning that they are lowering their reserve requirement ratio by 50 basis points to 21% from 21.5%!

Foreign Currency Liquidity Swaps (aka Global Bail Out Plan B) FAQs
From ZeroHedge
Those wondering about the global Fed bailout (this is not the first time, recall How The Federal Reserve Bailed Out The World) can read the FAQ from none other than the source of the global liquidity tsunami itself.

Frequently Asked Questions: Foreign Currency Liquidity Swaps

What is the purpose of the foreign currency liquidity swap lines?

The foreign currency liquidity swap lines are designed to provide the Federal Reserve with the capacity to offer liquidity in foreign currencies to U.S. financial institutions should the Federal Reserve judge that such actions are appropriate.

Which central banks are participating in these arrangements?
The Federal Open Market Committee has authorized arrangements between the Federal Reserve and the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank. In addition, these foreign central banks are also establishing bilateral swap arrangements with one another.

Why are these swap lines being implemented?
These swap lines are being implemented as a contingency measure, so that central banks can offer liquidity in foreign currencies if market conditions warrant such actions. These lines provide the Federal Reserve with the same ability to provide foreign currency, should the need arise, as foreign central banks currently have through the existing dollar swap lines with the Federal Reserve to provide dollar liquidity in their jurisdictions.

Why is the Federal Reserve establishing lines for these five currencies and with these five central banks?

These five currencies are used globally and account for the bulk of the foreign currency funding of U.S. financial institutions.

In what manner would foreign currency liquidity be provided?
There has not been a decision to activate the foreign currency liquidity facilities. If the Federal Reserve were to decide to offer liquidity in foreign currencies to U.S. financial institutions, the details of the operations would be determined at that time in light of the prevailing circumstances.

Will activity under the liquidity swap arrangements be disclosed to the public?

Yes, the aggregate swap activity in each currency with foreign central banks will be published weekly. They will be found on the Federal Reserve Bank of New York’s Foreign Exchange Swap Agreement webpage Leaving the Board. In addition, any liquidity-supplying operations in foreign currencies would be subject to the same disclosure requirements as the Federal Reserve’s dollar-based activities.

For how long are the swap arrangements expected to be in place?These swap arrangements, along with the existing U.S. dollar swap arrangements, have been authorized through February 1, 2013.

"Nothing has changed. The “world” is not 2% better off than it was yesterday simply because the Federal Reserve has made its own worthless paper “cheaper” for other banks."
Inflation is defined as an increase in the money supply. Deflation is a decrease in the money supply. Prices are a SYMPTOM of increases or decreases in the money supply. This is very, very basic stuff. Unfortunately, in world-improving, highly socialist "institutions" such as Harvard, Yale and Princeton the last few sentences may as well have been written in Nepalese. They speak a language called Keynesian and have a religious belief that drawing pictures on pieces of paper can make everyone rich. They probably also stomp up and down on a bag of chips to make more chips, too.

For months the Germans and Europe had everyone on edge. Would a western nation actually default, have its entire banking system collapse, impoverish almost all middle class savers and reduce the size of their monstrous socialist welfare governments by a massive amount, throwing millions into the streets unemployed and penniless? The answer, once again, was no. It was no surprise to us here, as we have always stated that was the much more likely route chosen. Every other time in history when a democratic overindebted government with a fiat currency was faced with collapse or hyperinflation they always fire up the choppers. The reason is simple. It's the easiest way out for the politicians. Obama would much prefer the dollar goes into hyperinflation - something he can blame on greedy corporations, or China, and whip the rich-haters into a frenzy - than to walk up to the Presidential podium and go down in history as the President "in charge" when the US empire collapsed.

They've been doing this for millennia. They weren't fiddling as Rome burned because the government took responsibility and undertook a self-imposed discipline. Rome was alight because the government overspent massively on military excursions, bread and circuses and used coin-clipping and other means to devalue the currency. That all might sound familiar to Americans today except coin-clipping has been replaced by computerized fiat note creation.

And so, today along with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank, the Fed announced it is cutting the penalty that it charges over a basic rate from 100 basis points to 50 basis points.

It sounds innocuous enough. But what that statement really means is that every major western money-printer will do whatever it takes to ensure that capitalism is never allowed to take place. It's no longer "too big to fail", it is "to fail is not allowed". Entire legions of zombie banks and nation states will continue to lurch forward, completely dead on the inside, but animated by endless amounts of fiat money that will only ensure a hyperinflation of all western fiat currencies.It is possible they could keep this game going for a few more years. Probably not much longer than 3 or 4, however. And it could happen much sooner than that, so to not prepare now is the height of risk-taking. We've been preparing by owning precious metals and the companies that mine or explore for gold and silver. As all the western central banks have shown their outright commitment to printing money we believe that it will ignite a gold and silver stock bubble that will be one for the ages. And, as we've outlined for subscribers over the years, we will then hope to "cash" in our stocks at ludicrous gains and look to get into hard assets once again in preparation for the final hyperinflationary crack-up collapse.

...and From James Mc on Planet GATA via

All of those newly-emboldened small spec gold shorts are getting a hard lesson in trading against the trend. By my reckoning they handed over half of their entire windfall profit from the last go-around in about 15 minutes this morning. Their short covering was also a likely contributor to the $35 rise. The good news for them is that the cartel always comes to their rescue at 2%, which today is $1,753.20 basis Feb. The bad news is they are stuck in a horrible, if not downright dangerous trade. It would be a miserable feeling always wondering if TODAY is the day the cartel fails, and gold blasts off to the moon. I'm sure too Working Group members weren't tipped off in advance on this global CB liquidity injection. It was just a total coincidence that commercial gold shorts were busy covering 12,000 contracts last week.

There's one reason why gold isn't $3,000 bid this minute: a cartel price management program which never allows a whiff of inflation (gold) to guide future expectations.

The Dec. 2013 Comex gold futures are only showing a $13 premium to spot. With all of the crises (and liquidity) being created a $400 premium would be more appropriate. Actually, a $400 higher spot price would be more appropriate right now. If the $1,780 area is indeed the yearly price capping area the cartel has their hands full the next 20 trading days. We're only $30 away, or, by their methodology, less than one more 2% day away.

A fire has just been lit under Chinese gold investors. Also Japanese, European, and all other CB nations signed on to this deal. Buying physical gold is probably a very conscious thought right now for global investors. That already tiny Comex inventory suddenly looks even tinier.

James Mc

Is the news a surprise to anyone who lives on Planet GATA? Gold was taken down from the $1900 level for this very reason. As the central bank powers make these accommodative moves, they wanted gold off the inflation radar screen and not to be a focus of attention. The same stinkin’ drill they have pulled for SO long. The same 2% drill they have implemented for SO long.

Got Gold to hold?

Got Silver to squeeze?

There are no more excuses not is not too late to accumulate.

Tuesday, November 29, 2011

MF Global: The Straw That Breaks The CRIMEX Back?

Bill Murphy commented this afternoon in his Midas Report on these silly Precious Metals Markets:

A weaker dollar is usually given as THE reason for strength in commodity markets. Today it is given for early softness. Makes no sense at all.

With the DOW so much higher, the dollar weaker, and commodity markets higher, gold and silver should have followed through on the upside much better than they did. Why not?…

*The Gold Cartel capped the precious metals rally yesterday and was there again at the same levels.

*That said, it appears they were covering their positions extensively before the capping started once again. On yesterday’s surge the gold open interest went down 12,293 contracts to 426,181. The silver open interest dropped 5135 contracts to 99,056. Specs are getting out of long positions before tomorrow’s first notice day for December rather than rolling over their positions.

*Given the general news background, which is so gold friendly, this is a bit bizarre. Then again, there is the MF Global issue. Who wants to play in a casino that openly robs you and their regulators do nothing about it?

A number of us thought December could be quite the explosive month. The MF Global nightmare defused that possibility for sure. The open interest in both gold and silver has really tanked.

If all that is the case, then the potential for price explosions has grown substantially and still might be right around the corner … once the first notice day selling concludes. It all fits. The fundamentals are super bullish, the specs have fled the futures market on the long side, sentiment is TERRIBLE, and the gold/silver share investors are as demoralized as any time in the past decade.On that sort of note, James Mc…

Small spec shorts gone wild

Lost in the U.S. Thanksgiving holiday shuffle was another HUGE jump in the OI by the small spec gold shorts. They amazingly piled on another 12,993 short contracts as of the November 22nd report. Coincidentally (or not) the large commercial shorts reduced their short OI by a similar 12,246 contracts. This is very peculiar, and I can't ever recall such intense shorting of gold by (alleged) small spec traders. Since last Tuesday was nearing the bottom of the op. ex. gold raid they may be getting set up to get creamed this time around. If they manage to pull off another Hail Mary trade like the last time I'd definitely say there's something fishy going on. The next few days up to, and after FND may be their last chance to escape with their hides.

The small spec silver shorts also added a rather large 1,732 contracts. Keep in mind both of the additional gold and silver shorting was largely done AFTER the CME went back to full margins on all contracts. I guess the little guys are feeling flush and lucky after their last round of windfall trading profits. Hey, baby needs a new pair of shoes for Christmas. Either that or JPM Has found a new home for the ... "missing" MF client money. How bizarre would that be, stealing client's margin funds to use to go short against them?
James Mc

??? Yesterday both the AM and PM Fixes were the same at $1714. Today they were both $1717.

Gold ended higher and silver lower in a very choppy trading session.

In a blog post on Friday, November 18, 2011 I commented:

"DO NOT discount that the fallout from the MF Global fleecing of customer accounts is playing a very big part in the drying up of global liquidity. This MF Global fiasco is going to prove to be a long and pervasive story. Confidence in the "system" stands to take a huge hit because of this bankruptcy, and the SEC and CFTCs negligence in allowing it to occur."

Understand this:

The MF Global bankruptcy is no small tremor in the ongoing Global Financial Crisis...IT IS A SEISMIC EVENT!  Ultimately, "this crime", is going to lead to the complete unraveling of the CRIMEX and it's foundation of fraud. 

History will not be kind to MF Global and it's Goldman Sachs connected CEO John Corzine. 

Greek Debt Default may be the end of the beginning of the Global Financial Crisis, MF GLOBAL will be recognized as the beginning of the end of the Global Financial Crisis.  2012 WILL NOT BE PRETTY.

...a layman's explanation of the MF Global collapse by the producers of the "Silver Bears"...

No Laws Were Broken
By Greg Hunter’s
Last week, I wrote a piece called “False Narrative.” I was stunned by a comment from a guy named Jim that said, “It amazes me that you maintain the narrative of the “guilt” of private business that asked for consideration from Congress and the president and it was granted. Nobody has gone to jail because no laws were broken.” This is the most false of the false narratives. The 2008 meltdown is 70 times bigger than the S&L crisis of the 1980’s and early 1990’s. Back then, more than 1,000 financial elites were convicted of felonies. According to Professor William Black, the reason why we have “recurrent intensifying crises . . . is these epidemics of fraud from the C-Street—from the CEOs and CFOs.” Professor Black holds duel PhD’s in economics and law, but he is not just some run-of-the-mill academic. Professor Black is also a former bank regulator who spearheaded the cleanup of the S&L crisis. In a speech Black gave last week, he said, “In the Savings and Loans crisis, the inevitable National Commission said that fraud was invariably present at the typical large failure. In the Enron era, always frauds from the very top of the organization, and in this crisis the frauds came from the very top of the organization again. But what’s different in this crisis? In this crisis, the same agency that I worked with that made over 10,000 criminal referrals in a tinier crisis made zero criminal referrals. They got rid of the entire function. And so there are zero convictions of anybody in the elite ranks of Wall Street. And if they can defraud us with impunity they will cause crisis after crisis and they will produce maximum inequality. . . . And that’s why we have a crisis and it came from the very top of these organizations, and it went through—as the FHFA said in its complaint—the largest banks in the world were endemically fraudulent. It is not a few rotten apples. It is an orchard of one percenters who are rotten to the core.” (Click here to read his complete speech.)

Don’t believe the professor, then how about the “maestro” Alan Greenspan. The former Fed Chief admitted the system was fraudulent and needed to be cleaned up last November. He said, “If you cannot trust your counter-parties it won’t work and . . . it didn’t.” He was sitting on set with Ben Bernanke when he said it. Look at the video below, and watch Mr. Bernanke’s face when Greenspan dishes the dirt.

Look at the latest blowup with MF Global. There is more than $1 billion of segregated customer funds missing and not a single criminal charge. Does anyone think Jon Corzine is going to get prosecuted? I’ll be shocked if he is because he has friends in high places including the White House.

Just because nobody has gone to jail doesn’t mean everything is going to be ok and we all get a free pass. According to Karl Denninger at, the markets will be the ultimate regulator. Denninger wrote last week, “Without enforcement of the law — swift and certain — there is no deterrent against this behavior. There has been no enforcement and there is no indication that this will change. It will take just one — or maybe two — more events like MF Global and Greek CDS “determinations” before the entire market — all of it — goes “no bid” as participants simply stuff their hands in their pockets and say “screw this.” It’s coming folks, and I guarantee you this: Whatever your “nightmare” scenario is for such an event, it’s not bearish enough.” (Click here for the complete Denninger post. It’s really good!)

You cannot have a thriving economy that is shrouded in fraud and mistrust. Crimes continue to go unpunished, and mistrust is growing. No bailout, no matter how big, will ever fix that.

You Cannot Build a Financial System on Rumors and Lies

This is not a monetary Crisis; it is a Crisis of values and morals. It is a Crisis caused by the notion that you can lie about virtually everything pertaining to a business deal (the quality of the assets, who owns them, whether they’re even legitimate, etc) and get away with it.

To review how we go into this mess, Wall Street and other industries lobbied Congress to loosen regulations. However, the secondary nature of those lobbying efforts was it trained Congress to see Wall Street as the hand that feeds, thereby making it unlikely for Congress to prosecute or pursue any criminal activity on the part of the bankers.

Take away consequence and rules and you have anarchy. And that’s virtually what we had in the Financial System leading up to the Crisis. Looking back on some of the more glaring situations (AIG, Goldman Sachs, etc) it’s simply amazing the whole mess didn’t blow up sooner.

The Federal Reserve and regulators then blew a one in 100 years opportunity to reform the system. We’re now finding out that instead of doing anything positive, Bernanke literally gave away TRILLIONS of Dollars to the banks.

In simple terms, the Fed engaged in the exact same business practices that blew up the mortgage lenders: giving money away without inquiring as to the borrowers real financial position or needs.

By doing this, the Fed spread the lies (and toxic debts) onto the public’s balance sheet, thereby compromising the Republic’s creditworthiness.

In plain terms, Bernanke extended the Big Lie: that those working in the financial sector are the smartest, most capable people on earth and that they know what they’re doing (even though they almost blew up the system).

Which brings us to today.

The whole system is now built on lies. The lie that banks are solvent. The lie that the Federal Reserve actually cares about regulating the financial system. The lie that crimes will be punished. The lie that Congress will reform Wall Street. The lie that we’ll get “change” at the ballot box.

And on and on.

You cannot build a financial system on lies. It simply doesn’t work. All it does is breed distrust and resentment. And as any businessperson can tell you, without trust business cannot work.

Just When You Think It CAN'T Get Uglier Out There...

Before I get started on what I had intended to post, I want to present two items of acute interest. First, I hope everyone - Democrat or Republican - is aware of just how tight Jon Corine is with President Obama and the Obama White House insiders: LINK Not that it will matter for the Presidential race because the leading Republican candidates are thoroughly unelectable, but I sincerely hope that the conservative media makes Obama wear Jon Corzine the way that Republicans made Michael Dukakis wear Willy Horton in the 1988 Presidential race vs. George H. Bush (everyone remember that?). I am sure that we are not seeing immediat investigative actions being taken on Corzine because of his inside connections to Obama. He's not even scheduled to appear before Congress until next month. If this were a drug-dealer busted in Harlem, this case would already be before the magistrate and the perp would be waiting for his trial in jail.

Second, many of you have read this by now, but here's a textbook example of the ways in which the insider elite and those connected to the insiders are raping our system wholesale and stealing what they can, while they can:

"How Paulson Gave Hedge Funds Advance Word" LINK The article goes on to describe how Henry Paulson - then Secretary of the Treasury under George W Bush - met with several large hedge fund managers - many of them Henry Paulson cronies from Goldman Sachs - and revealed the Government plans for bailing out Fannie Mae and Freddie Mac - several months before the bailout actually occurred.

Some bird-brain professors are quoted in the article as saying that this is not inside information, but that is total horse shit. If I had possession of that information when Paulson doled it out to his buddies, I would have gone out bought up every single discounted Fannie Mae and Freddie Mac bond I could find and I would have leveraged those purchases with as much money as I could borrow. I'm sure the trading records of those at the Paulson insider trading pow-wow will never be investigated. What Paulson did was unequivovally illegal and he won't be prosecuted for it. Hell, Bush signed an executive order that gave all of his cabinet members a perpertual get of jail free card. Obama was supposed to repeal that EO but never did.

This shit just keeps piling higher and higher...quite frankly, I have become unusually doomish and gloomish in my outlook for what is coming our way. And the outright fraud, corruption, raping and pillaging and theft that is actually being enabled by our Government is an obvious signal to me that very bad things are headed our way...

In fact, I'm so disgusted by the information and implications of the two above articles that I'm going to abbreviate my original post. In short, the market yesterday was all giddy about the Black Friday sales estimates and the new home sales. However, everyone should know that when the real numbers are tallied, there will be substantial downward revisions of the Black Friday initial sales estimates. In fact, one of the widely reported sales reports is based on measured foot traffic at malls not based on anything concrete, like money going into the cash register. For those of you who didn't see it, here's a fantastic summary why the Black Friday initial sales numbers are nonsense: LINK Moreover, it was pointed out today that every year more and more stores participate in Black Friday. In fact, many of them open up either at midnight or before midnight. This makes year over year same-store-sales metrics - which are the relevant numbers if you want to see real growth - impossible. Furthermore, it is highly likely that the pervasiveness of sales deals and give-aways has "pulled" a substantial portion of holiday budget spending into Black Friday and the ensuing weekend, which means that it is likely that overall sales for the entire holiday period will be anemic at best. After all, we have seen that real monthly income for workers has been declining and consumers are cutting back on credit...who is left to spend?

Regarding my gloomy outlook - look at it this way: this country is not capable of dealing with the economic and standard of living plunge that would occur IF the Government were to implement the type of policies and spending cuts required to fix the system. Just think about the implications for joblessness and the massive increase in poverty that would occur if the Government were cut itself down by the at least the 50% required to start balancing real spending. This country would look like a 3rd world country on steroids. So that being the case, the people on top and inside know this so they are looting what they can, while they can. And no one is around to stop this because the people who were voted into office to enforce the laws - of the people, by the people and for the people - are the same ones who are engaged in the mass looting of our system.

Your best shot at seeing what "the other side" of what is coming will look like is to move as much of your wealth as you can into physical gold and silver - NOT GLD, CEF or PHYS (unless you have enough money to take delivery of 400 oz bars and a place to store them safely). This includes liquidating as many of your retirement fund accounts as you can (obviously if you have a 401k and currently work at your 401k provider, you can't liquidate that). Beyond that, sailing away from this country on a boat, the way my buddy did who introduced me to the precious metals 10 years ago, is your best option.

SocGen Sees $600 Billion QE3 Starting In March 2012 Sending Gold Up Between $1900 And $8500/Oz
From ZeroHedge
SocGen has released its much anticipated Multi Asset Portfolio Scenario/Strategy guide titled simply enough "Patience: bad news will become good news" where, as the insightful can guess, the French bank makes the simple case that the worse things get, the stronger the response by global central banks will be. Here is the key quote for those worried that : "A major liquidity crisis should not occur this time, as we think we are on the eve of major QE in the UK, US and (a bit) later on in the EZ." We don't disagree and if there is anything that can send BAC higher it will be the announcement of QE3. Of course, BAC will first drop to a $2-3 handle so question is who has the balance sheet to hold on to the falling knife. The next question is "How big will QE3 be"? Well, according to SocGen, the Fed will preannounce it in the January 2012 FOMC statement, the monetization will last from March 2012 until the end of the year, and will buy a total of $600 billion. We believe the actual LSAP total (not to be confused with the "sterilized" QE3 known as Operation Twist) will be well greater, probably in the $1.5 trillion range as the Fed will finally say "enough" to piecemeal solutions. As to what to do, besides going long some financial stock and hoping it is not the one that is allowed to fail, SocGen has some simple advice: "Buy gold ahead of QE3 as money creation has a strong impact on prices" - in other words just as we suggested yesterday courtesy of the Don Coxe correlation chart. Why gold and not BAC? Because, "Gold is highly sensitive to US QE, as every dollar of QE goes into M0, triggering the debasement of the USD. Gold = $ 8500/Oz: to catch up with the increase in the monetary base since 1920 (as it did in the early 80s). Gold = $1900/Oz: to close the gap with the monetary base increase since July 2007(QE1+QE2)." So go long a bank that may well go bankrupt and return nothing before it at best doubles, or go long a real asset, which will always have value and may quadruple in short notice? The answer seems simple to us...

From SocGen:

A combination of weak Q1 2012 GDP and softening inflation could push the Fed to another round of monetary expansion.

SG economists look for a two-step easing process:

1) In January 2012, a major announcement with the Fed promising to keep rates at zero until unemployment falls below 7.5% or inflation moves above 3% on a sustained basis.

2) In March 2012, the announcement of another round of QE. We expect the next round of QE to be concentrated on MBS purchases and be worth about $600bn over six to eight months. This would increase the Fed’s securities portfolio from currently $2.65trn to $3.25trn by the end of 2012.sustained basis.

Currency Wars: The Anglo-American Century and Why the Financial Engineers Hate Gold and Silver
From Jesse's Café Américain
'Nominal GDP targeting' is a way of raising the Fed's inflation target without admitting to it explicitly.

Nominal GDP means that one can meet their growth target simply by inflating the money supply to make up the difference between 'real growth' and 'headline growth.'

NGDP targeting is so obvious and clumsy that I doubt that the Fed will try and hide their future monetization of the debt under such a small fig leaf, as Jim Rickards suggests. I think the monetization is already occurring in the Eurodollar markets, and an ongoing stealth bailout of European debt, in order to save the big money center banks at home.

John Williams: Hyperinflation Warning, Preserve Value with Gold
Source: JT Long of The Gold Report (11/28/11)
Among the specters lurking in's Editor John Williams' gloomy outlook for the U.S. are the demise of the dollar, hyperinflation and the ongoing lack of political will to take sound corrective measures. Still, as he tells The Gold Report in this exclusive interview, investors have options. Williams contends that turning to gold, silver and strong foreign currencies would protect wealth and position savvy investors to take advantage of extraordinary opportunities likely to flow out of the turmoil ahead.

The Gold Report: When we talked in May, you predicted that hyperinflation could be a reality as soon as 2014, something you addressed at length in your Hyperinflation Special Report. Have six months of euro debt crises, Middle East revolts and U.S. Treasuries' downgrading altered your outlook?

John Williams: Not a bit. We still seem to be moving down that road to a relatively near-term break toward hyperinflation. The most important thing that's happened since we last talked was the global response to the U.S. legislators' negotiations over the debt-limit ceiling and the deficit reduction problems at that time. Clearly, no one controlling the White House or Congress was serious about addressing the nation's long-term solvency issues. That sparked a panic selloff on the dollar against currencies such as the Swiss franc, and of course gold, which made the gold price rally sharply.

TGR: Did the politicos learn anything from those "negotiations," as you just described them?

JW: Not at all. In fact, I'll contend that everything that's happened since then has been just a playing out of what resulted in a complete collapse in global confidence in the dollar. The ensuing rapid shift of market focus to crises in the euro area was really more of a foil to distract the global markets from the dollar. Following that horrendous performance by Congress and the White House, the global markets indicated a major loss of confidence in the dollar that had been coming. I think that's now established and in place. The dollar is doomed to lose its reserve status eventually, and any day now, we may see things heat up again over the deficit negotiations.

TGR: What steps would we see on the way to the dollar losing its reserve status?

JW: Probably the biggest thing would be heavy selling pressure against the U.S. dollar, along with a spike in the stronger currencies such as the Swiss franc. The more the pressure builds for selling of the dollar, the more expensive and disruptive it will be for the Swiss National Bank to keep supporting the euro so I don't think that intervention will last long.

As heavy selling of the dollar develops against the Swiss franc, the Canadian dollar and the Australian dollar, and the gold price rallies, we'll see a very strong effort by those who are dependent on the dollar--such as the Organization of the Petroleum Exporting Countries (OPEC)--to have the dollar removed from the pricing of oil. Along with that will come a movement to change the dollar's reserve status.

TGR: If other countries start demanding payment in alternative currencies, how can investors protect themselves against a shift from the dollar standard?

JW: I'm not a day-to-day timer in this. My outlook has been consistent that we're heading into U.S. dollar hyperinflation, and the effective purchasing power of the currency as we know it will disappear. If you're living in a U.S. dollar-denominated world, you don't want to be in dollars--you want to move to protect the purchasing power of your assets, your wealth.

To do that, I look very specifically at physical gold, preferably gold coins and silver, and assets outside the U.S. dollar. The currencies I like the best are the Swiss franc, the Australian dollar and the Canadian dollar. This is something you do for survival over the long haul because you're likely to see all sorts of volatility in the short term.

But once you ride through the storm, if you've been able to preserve your wealth and assets in terms of their purchasing power and to maintain liquidity--which the physical gold and the currencies will give you--you'll be in a position to take care of yourself and take advantage of some extraordinary investment opportunities that likely would flow out of the turmoil ahead.

In the interim, I wouldn't start betting that next week we're going to see the dollar do this or that. This is a long-term hedge strategy, an insurance policy against the hyperinflation that I view as inevitable due to the long-range insolvency of the U.S.

TGR: Is that long-range insolvency also inevitable?

JW: Severely slashing social programs such as Social Security and Medicare would be the only way it could be avoided. I don't have any problem per se with Social Security or Medicare, but you can't bring things into balance without addressing them. If you look at the U.S. annual deficit on a GAAP basis--generally accepted accounting principles--with accounting for the year-to-year change and the net present value of unfunded liabilities in Social Security, Medicare and such, you're seeing a federal deficit in excess of $5 trillion per year.

Putting that in perspective, if you wanted to raise taxes, you could take 100% of people's salaries and the government would still be in deficit. You could cut every penny of government spending, except for Social Security and Medicare, and you'd still be in deficit.

You can't escape the eventual hyperinflation if those programs are not addressed. Originally, I was looking for hyperinflation by the end of this decade. I've advanced it to 2014, and it may well come before that. I think we're already in the early stages of going through what has to happen for this to break.

TGR: But would politicians touch those entitlement programs in an election year?

JW: No one wants this, but the federal government and the Federal Reserve have backed us into a corner and there's no other way of escaping. There's no political will to address the long-range insolvency, so they kick the proverbial can down the road. They did that in 2008. They did everything they could to prevent a systemic collapse by creating, spending and guaranteeing whatever money they had to.

We're coming to another point where we face risk of systemic collapse, and we're likely going to see another round of quantitative easing (QE) as a result. That also could pull the trigger for massive dollar selling, moving us into much higher inflation. That will start the final process.

TGR: One of your recent newsletters showed that annual core inflation had risen for 12 straight months, ever since QE2. What would QE3 do to some of the indicators you watch--gold, silver, commodities?

JW: Gold tends to anticipate the inflation problems. All sorts of factors hitting gold create tremendous volatility, but generally it will continue to move higher as the broad crisis deepens. Then as we get into the high inflation, it will start soaring. People have to keep in mind that they're preserving the purchasing power of the dollars that they put into gold. If gold gets up to $100,000/ounce (oz) as you start breaking into the hyperinflation, and they bought gold at $2,000/oz, it isn't that they made $98,000 per ounce. Instead, they've maintained the purchasing power of the dollars they put into gold.

They've also lost the purchasing power of the dollars that they didn't put into gold or some other hard asset. That's a different view than most people look at with investments, but this is not a normal investment environment. Again, this is one where you batten down the hatches and look to preserve wealth and assets, as opposed to trying to make money day to day in the markets. Once you have your basics covered, then you take gambling money and go play Wall Street's casino.

As to core inflation, the Fed likes to ignore energy and food prices, using the rationale that those prices are too volatile and don't hold over time. Yet, oil is probably the most important single commodity in terms of domestic inflation. Not only does it hit basic energy costs, but it also affects the cost of transportation of all goods. Beyond what is defined as basic energy costs, oil is also the basic raw material for many products, ranging from chemicals to fertilizers to pharmaceuticals and plastics.

As oil prices rise, the Fed just takes out the energy component in so-called core inflation. But the inflation still spreads to the broader economy. When they started to jawbone on QE2 in October of 2010, year-to-year inflation on a core basis was at 0.6%. In the consumer price index reporting of October 2011, despite a drop in the gasoline prices, core inflation was at 2.1%. In response to QE2, gold rose against the dollar and the dollar weakened against other currencies. The weaker dollar, in turn, spiked oil prices. The higher oil prices spiked gasoline prices and broader inflation, which still is boosting consumer inflation in the U.S.

With the next round of Fed easing, the dollar problems will intensify again. That will put new upside pressure on oil and gasoline prices, further intensifying the spreading broad inflation pressures in consumer goods and services.

The Fed's mandate from the government is to try and sustain reasonable economic growth and contain inflation. From the Fed's standpoint, however, those are secondary to maintaining the solvency of the banking system. Nothing in the outlook for the system has changed meaningfully since the crisis in September 2008. The banking system still is in a solvency crisis, the economy continues to worsen and we've had no real recovery. The stopgap measures to prevent collapse of the system did nothing but kick the crisis a little further into the future, and now, we're coming to peak period of crisis again.

TGR: You've repeatedly said that the global economic crisis is not Europe's fault but part of a pending systemic collapse that started with the manipulation of the U.S. financial markets--the moves you've been talking about. What countries or sectors will suffer the most if the crisis continues?

JW: The more closely they're tied to the dollar, the greater the inflation impact will be in other areas, but the runaway inflation I'm talking about will be largely in the U.S. and for people living in a U.S. dollar-denominated world.

That's from an inflation standpoint. Yet, it also will have an extremely negative impact on the U.S. economy, and problems in the U.S. economy indeed will have a global impact. The U.S. economy is still the largest in the world, and you can't push it deeper into a depression without having negative economic consequences outside the U.S.

But while the global economic problems will worsen, systems can ride out bad economies. We can't ride out a hyperinflation because the currency becomes worthless. That's an ultimate crisis that forces a resetting of the system.

TGR: Can Europe or China do anything to counteract what's going on in the U.S.?

JW: Dump the dollar. China needs to delink from the dollar, and it will be forced to do so. It's importing inflation. If China doesn't want that inflation problem, all it has to do is cut its link with the dollar, and oil suddenly becomes a lot cheaper.

TGR: But how practical would it be for China to sell off all the U.S. dollars and U.S. Treasuries it holds?

JW: In terms of insulating itself against U.S. inflation, all China has to do is delink its currency from the U.S. dollar. That's true of other currencies as well. The Swiss franc is artificially linked to the euro now, but because of the general weakness in the dollar, it's ironically also intervening to support the dollar against the euro.

Whenever major holders of dollar-denominated assets decide to sell those assets, that will determine how large a loss they will take on the U.S. currency.

TGR: Will the euro survive?

JW: I wouldn't bet on a long-term survival of the euro, but I think it will survive the current crisis as long as its survival is needed to prevent a systemic collapse in the U.S. The Fed will do whatever it has to do to keep Europe's problems from imploding the U.S. banking system. It can create whatever money it wants to do that.

Long term, I would not look at the euro as surviving in its current form. The loss of the dollar eventually will force a reexamination of the global currency structure. That might be a time when other currency disorders get resolved and we may see the euro break up. It was never practical to think that all the countries within the euro would be able to align their economic and fiscal policies in a way that would enable them to operate together. The euro was doomed from the beginning.

TGR: Let's go back to gold. According to your research, the September 2011 high of $1,895/oz gold was below the historic high of $850/oz in 1980, if the 1980 figure was adjusted for inflation. The $850/oz in 1980 would have equaled $2,479/oz in Consumer Price Index--all Urban consumers (CPIU)-adjusted dollars, or $8,677/oz Shadow Government Statistics (SGS)-alternate-CPI-adjusted gold prices in 2011. Is gold underpriced if you put it into that context?

JW: On that basis, yes, it is. It also depends on when you measure it. My hyperinflation report looks at what has happened to the dollar over a longer period. Since President Roosevelt took the U.S. off the gold standard domestically in 1933, the dollar has lost 98--99% of its purchasing power. People tend to forget that. But if you look at the gold price movement since 1933, it actually has moved a little more than the government-reported pace of inflation. My estimate of what inflation should be if we had consistent CPI reporting shows that the loss of the dollar's purchasing power against gold is the same as it is measured by the CPI.

So over time--and this is true over millennia--gold tends to maintain purchasing power, which means it holds its value net of inflation. Not that you'd break a piece of gold down to a small enough unit to buy a loaf of bread, but if you did, it also would have bought a loaf of bread in ancient Rome.

TGR: For the same amount of gold.

JW: Same amount of gold. Gold has a long tradition as store of wealth. That's why--globally--gold generally has been viewed as such. It only got bad press in the U.S. because private ownership of gold was outlawed after Roosevelt's action. It became legal for Americans to own gold again after Nixon abandoned the international gold standard. Yet, even today, some on Wall Street discourage investment in physical gold, largely because they cannot make a commission on it, as they do with stocks and bonds.

Given the gold ownership limitations after 1933, those in the U.S. who wanted to buy gold turned to buying gold stocks. But because of what happened in the 1930s--that's now two generations or so ago--gold as an investment and as a hedge to protect wealth lost some of what had been its commonly recognized value in the U.S. Outside the U.S., almost everyone views gold as a traditional hedge.

TGR: That's physical gold. What about exchange-traded funds and gold equities in the juniors? Will those investments also preserve wealth?

JW: I wouldn't count on the financial system working as it should. I look at physical gold, preferably sovereign coins, not only as a store of wealth, but also for purposes of liquidity.

Gold stocks also should preserve wealth over time, but I would look at them as longer-term holdings. There could be periods of systemic failure with resulting interim liquidity issues.

TGR: You talked about hyperinflation coming as early as 2014, or even before that. But 2012 is just weeks away. What can people expect next year in terms of the data you watch and maintain versus some of the government-issued statistics?

JW: I can tell you that the economy is weaker and will remain weaker than the government reports. We don't have an economic recovery in place. We'll tend to see higher inflation.

TGR: Something to watch out for. Thank you, John.

Auerback, Naylor-Leyland cite gold suppression; Turk expects silver blastoff

Submitted by cpowell on 08:15PM ET Monday, November 28, 2011. Section: Daily Dispatches

11:25p ET Monday, November 28, 2011
Dear Friend of GATA and Gold:

Interviewed this week by Kevin Michael Grace at Resource Clips, Pinetree Capital's Marshall Auerback says central banks are manipulating the currency and bond markets and possibly the equity markets, so they well may be manipulating the gold market too. Auerback says that without a lot of gold lending by central banks, the gold price would be much higher, and he suspects that central banks eventually will reclassify the gold loans as sales and write the gold off as lost.

GATA has maintained that only this sort of conversion of irretrievable gold loans to sales can explain gold's steady rise in price over the last decade despite constant announcements of sales by central banks. That is, no gold was really being sold at all and no new gold was hitting the market; rather, gold borrowers were being let off easy, allowed cash settlement on terms that essentially expropriated the publics to which the gold really belonged, because demanding return of the gold would have exploded the price and devastated the currencies of the central banks doing the lending.

Auerback also wonders whether U.S. market regulators allowed the MF Global brokerage to fail as a way of punishing investors in commodities.

His interview can be found at Resource Clips here:

Meanwhile, in a video interview today with Bloomberg News that has been posted at the Washington Post's Internet site, Cheviot Asset Management Investment Director Ned Naylor-Leyland, who spoke at GATA's Gold Rush 2011 conference in London in August, was allowed to mention gold price suppression, if in a very polite way. Bloomberg's reporters have yet to discover this story, but maybe it will be a little harder for them to ignore it now that it has slipped out onto their own video feed:

And interviewed today by King World News, GoldMoney founder and GATA consultant James Turk, who also spoke at Gold Rush 2011, said silver's price chart is foretelling a relatively quick doubling, even as gold also looks ready to break out again:

“What a great way to start the week, Eric.  This move is going to catch a lot of people by surprise as evidenced by the extremely low sentiment readings.  Those low readings are a clear indication that there is a lot of money on the sidelines that is waiting to jump on board.”

In any case, fiat justitia et ruant coeli -- and may they fall most heavily on Wall Street, the corner of 20th Street and Constitution Avenue in Washington, and Threadneedle Street in London.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Only skullduggery explains falling gold price amid turmoil, Embry writes

Submitted by cpowell on 09:07AM ET Tuesday, November 29, 2011. Section: Daily Dispatches

12:02p ET Tuesday, November 29, 2011
Dear Friend of GATA and Gold:

Sprott Asset Management's John Embry writes in his latest column in Investor's Digest of Canada that only surreptitious market intervention can explain the collapse of gold prices since September even as the world financial system has been teetering on the brink of collapse. But Embry also notes growing awareness of the market manipulation issue, as represented by the recent acknowledgement of GATA by the Financial Times. Embry's commentary is headlined "Collapse of Gold and Silver Points to Skullduggery" and you can find it at the Sprott Internet site here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Got Gold you can hold?

Got Silver you can squeeze?

Did JP Morgan Just Convert 614,000 Ounces of MF Global Clients' Silver into JPM Licensed Vaults?
From SilverDoctors
Blythe just tried to sneak a massive 613,738 ounce silver adjustment past the market this afternoon on one of the thinnest trading days of the year, but The Doc's all over it like white on rice- and WAIT TILL YOU SEE WHERE THE RABBIT TRAIL THE DOC JUST RAN DOWN LEADS!

The Morgue adjusted 613,738 ounces of silver from eligible vaults into REGISTERED vaults on Wednesday!
Not to be beaten, Scotia topped its 1.2 M oz deposit reported Wednesday, by receiving a massive deposit of 2,395,835 ounces!
Rather coincidental seeing Brink's had a nearly identical withdrawal Tuesday of 2,346,587 ounces!


*Delaware had a small withdrawal of a single bar (999 ounces) from eligible vaults

*HSBC had a small withdrawal of 2,035 ounces from eligible vaults

*No Changes for Delaware

*Scotia Mocatta reported a massive deposit of 2,395,835 ounces into eligible vaults!

*JP Morgan adjusted 613,738 ounces out of eligible vaults and into REGISTERED VAULTS!
Don't forget this number, we'll get back to it at the end up the inventory update.

*TOTAL COMEX REGISTERED SILVER increased to 34,051,874 ounces
*TOTAL COMEX ELIGIBLE SILVER increased to 73,893,167 ounces
*TOTAL COMEX SILVER INVENTORIES increased to 107,945,041 ounces

Ok. Now back to the 613,738 ounce adjustment by The Morgue. This silver is the 613,738 ounces that was deposited into The Morgue's eligible vaults last Friday, Nov 18th.
Where might this silver have come from?
This is not an ignorant client depositing his phyzz at The Morgue, because it was adjusted today into REGISTERED inventory-meaning its silver that is available for Blythe's delivery needs.

We have been updating readers that 1,420,916 of registered silver is currently unavailable as it is nowhere to be found in the aftermath of the Corzine/ MF Global scandal.
With today's update from The Morgue, The Doc decided to break down the numbers of the unavailable/stolen silver .

Here are the numbers again:

*Registered ounces of metal currently not available for delivery
as of 11/4/11 due to MFGI bankruptcy. Included in above totals.

Brinks 210,320
Delaware 65,706
HSBC 793,734
Scotia Mocatta 351,156
Total: 1,420,916
Now I'm not sure why I never noticed this previously, but isn't it interesting that in the wake of the MF Global client silver theft, there is registered silver missing from EVERY SINGLE VAULT EXCEPT JP MORGAN'S!?!

The Doc decided to break the numbers down one step further, by removing the missing MF Global silver in the HSBC vault (HSBS is the other big bullion back allegedly manipulating the price of silver to the downside) from the totals.

Outside of The Morgue's manipulation buddy HSBC, there are 627,182 ounces of MF Global clients' silver that remain missing.

Now for the timeline:
MF Global is taken down on Oct 31st/Nov 1st. About a week later the CME begins reporting that 1.4 million ounces of registered silver is unaccounted for and unavailable for delivery-including 627,182 ounces from non-cartel banks.
Roughly 7-10 days afterwards, JP Morgan suddenly reports a deposit of 613,738 ounces into eligible vaults.
Exactly 7 days later, JP Morgan adjusts this silver into registered vaults.
JP Morgan has not had a significant silver deposit in MONTHS prior to this 613,738 deposit if my recollection serves me.

This is not an allegation:
Make your own conclusions, I've made mine.

Still think that your silver is safe ANYWHERE OUTSIDE OF YOUR OWN POSSESSION!?!
The F***ing Morgue can burn- this is BANKSTER WAR PEOPLE!

It's Official: Obama Is Now The Worst American President As His Approval Rating Plunges Far Below Carter's
From ZeroHedge
We doubt many will be surprised by the latest presidential polling update from Gallup, and certainly not the record nearly 50 million Americans on foodstamps, but here it is nonetheless, from US News: "President Obama's slow ride down Gallup's daily presidential job approval index has finally passed below Jimmy Carter, earning Obama the worst job approval rating of any president at this stage of his term in modern political history. Since March, Obama's job approval rating has hovered above Carter's, considered among the 20th century's worst presidents, but today Obama's punctured Carter's dismal job approval line. On their comparison chart, Gallup put Obama's job approval rating at 43 percent compared to Carter's 51 percent." One can only imagine what would happen to Obama's ratings if indeed the Iranian hostage situation escalated and the president was forced to get involved, in addition to oil spiking to "doomsday" levels of course as Pimco's worst case predicts: "Back in 1979, Carter was far below Obama until the Iran hostage crisis, eerily being duplicated in Tehran today with Iranian protesters storming the British embassy. The early days of the crisis helped Carter's ratings, though his failure to win the release of captured Americans, coupled with a bad economy, led to his defeat by Ronald Reagan in 1980." And while some may say this is merely a one time blip, a longer-term average shows otherwise: "Gallup finds that Obama's overall job approval rating so far has averaged 49 percent. Only three former presidents have had a worse average rating at this stage: Carter, Ford, and Harry S. Truman. Only Truman won re-election in an anti-Congress campaign that Obama's team is using as a model." On the other hand, neither Ford nor Carter has such erudite opponents as Herman "I did not sleep with those 999 women" Cain

Friday, November 25, 2011

Give Thanks For The Gold And Silver You Hold Today

....and buy more during this Black Friday Sale.

...while supplies last.

Currency Wars - Russia Officially Adds 19.5 Tonnes of Gold Reserves in October Alone
From ZeroHedge
Market participants continue to be surprised by gold’s continuing weakness and some are even questioning gold’s safe haven status. However, the fundamentals of broad based global physical demand remain very sound as evidenced by the central bank gold buying data today. Russia bought 19.5 metric tons of gold in October bringing their total gold reserves to 871.1 tons according to IMF data released today. Belarus increased holdings by 1 ton, Colombia by 1.2 tons, Kazakhstan by 3.2 tons and Mexico by 0.9 ton, the data show. Germany reduced reserves by 4.7 tons and Tajikistan cut reserves by 0.4 ton, the data show. Thus, Russia, Kazakhstan, Colombia, Belarus and Mexico added a combined 25.7 metric tons of gold to reserves in October, after gold prices corrected from record highs...Might Russia and China use gold in order to undermine U.S. political and economic dominance? There is certainly the possibility that they may use gold as a geopolitical weapon against the U.S. and as a way of furthering their growing global political and economic aspirations. Putin's endorsement in 2005 of the Russian Central Bank's plans to diversify the Russian reserves out of fiat currencies and debt instruments and into gold bullion was seen by some as as much a political act as an economic one.

Is the U.S. About to Invade Syria … and Pick a Fight with China and Russia?
by George Washington, via ZeroHedge

War in Syria: Gamble for US
by People's Daily Online

The U.S. State Department recently withdrew its ambassador in Syria Robert Ford because of serious concerns about his personal safety.

It seems that the recent changes of situations are proving that Syria will be the next Libya. Since Qaddafi was killed, the contradictions between the Untied States and Syria have been intensifying. Both countries have withdrawn their ambassadors. As the U.S. ambassador in Syria was being withdrawn, the severity of United Sates' accusations against Syria is also escalating. John McCain, a senator of the Republican Party of the United States, said that Syria is a focal point of the United States' attention and the military operation is an option for the United States.

According to the current situations faced by Syria, including the sanctions and intimidations from the United States, United Kingdom, France and other countries and the prepared Syrian rebels, it seems that Bashar al-Assad will be the next Qaddafi.

Though it may not have the same natural resources as Libya, Syria is important for its strategic geographic position. If the West launches a war in Syria, it probably will have to pay a price that is much higher than the price it had paid for the Libyan War. The war probably will even turn into a blasting fuse and lead the entire Middle East to an irremediable chaos. Therefore, it is a gamble for the West to launch a war in Syria, and it is uncertain that whether the West will win or not.

Russia Arms Syria With Missiles To Defend Against NATO Attack
By Paul Joseph Watson
We now know what those six Russian warships that reportedly entered Syrian territorial waters last week were carrying. Aside from representing a show of strength to discourage NATO powers from launching a military attack, on board were Russian technical experts ready to help Damascus set up a sophisticated missile defense system sold to them by Moscow.

“Russian warships that have reached waters off Syria in recent days were carrying, among other things, Russian technical advisors who will help the Syrians set up an array of S-300 missiles Damascus has received in recent weeks, a report in the London-based Arabic language Al Quds-Al Arabi said Thursday. Citing sources in Syria and Russia, the paper said that Moscow sees a Western attack on Syria as a “red line” that it will not tolerate,” reports Arutz Sheva.

The S-300 missiles, which according to the report will be used to “deflect a possible attack by NATO or the U.S. and EU,” are long range surface-to-air missiles developed by Russia in 1979 for the purpose of protecting large industrial and military bases from enemy attack aircraft and cruise missiles.

The system is widely regarded as one of the most powerful anti-aircraft arrays in modern warfare, having the ability to track up to 100 targets and engage 12 at any one time. Russia recently tried to sell the same system to Iran but the transaction was halted after pressure from the U.S. and Israel.

Arming Syria with such a proficient means of aerial defense would obviously not bode well for any prospective “no fly zone” being planned by western powers. Reports have been circulating this week that fighter jets from Turkey and other Arab states would soon enter Syrian airspace under “humanitarian” pretenses with logistical aid from the United States.

Does the American Government Consider Economic Rivalry to Be A Justification For War?
By WashingtonsBlog
Secretary of Defense (and former CIA head) Leon Panetta may have implied last week that Brazil, Russia, India and China (the “BRIC nations” are a threat to the U.S. because they are doing well economically, while the U.S. isn’t doing so hot:

While terrorism remains a threat to national security, it is joined by cyber attacks, nuclear weapons capability and a number of rising powers among the world’s nations, Defense Secretary Leon E. Panetta said in an interview broadcast last night.


“We also are living in a world in which there are rising powers, countries like China and Brazil and India, not to mention obviously Russia and others, that provide a challenge to us not only in trying to cooperate with them, but making sure that they don’t undermine the stability of the world,” he added.

Panetta said his role in meeting those threats is leading the Defense Department in effective national protection.

“It’s about being in charge of the services, our men and women in uniform who have to actually go out there and do the mission,” the secretary said.

Panetta’s statement could be read to imply that the U.S. is willing to use force – i.e. “men and women in uniform … to actually go out there and do the mission”, in order to provide “effective national protection” against the BRIC’s threat to “the stability of the world” … i.e. U.S. economic dominance.

Hopefully, we are misinterpreting his comments.

But the Iraq war was really about oil, according to Alan Greenspan, John McCain, George W. Bush, Sarah Palin, a high-level National Security Council officer and others.

Former CIA director George Tenet said that the White House wanted to invade Iraq long before 9/11, and inserted “crap” in its justifications for invading Iraq. Former Treasury Secretary Paul O’Neill also says that Bush planned the Iraq war before 9/11. (The government apparently planned the Afghanistan war, and most of our current military and intelligence policy, before 9/11 as well. See this, this and this).

So the government’s stated reasons for war may not hold much water.

And Ellen Brown argues in the Asia Times that middle eastern wars in Iraq, Libya, and elsewhere stem from those countries’ leaders challenged the supremacy of the dollar and the Western banks:

Later, the same general said they planned to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran.

What do these seven countries have in common? In the context of banking, one that sticks out is that none of them is listed among the 56 member banks of the Bank for International Settlements (BIS). That evidently puts them outside the long regulatory arm of the central bankers’ central bank in Switzerland.

The most renegade of the lot could be Libya and Iraq, the two that have actually been attacked. Kenneth Schortgen Jr, writing on, noted that “[s]ix months before the US moved into Iraq to take down Saddam Hussein, the oil nation had made the move to accept euros instead of dollars for oil, and this became a threat to the global dominance of the dollar as the reserve currency, and its dominion as the petrodollar.”

According to a Russian article titled “Bombing of Libya – Punishment for Ghaddafi for His Attempt to Refuse US Dollar”, Gaddafi made a similarly bold move: he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar. Gaddafi suggested establishing a united African continent, with its 200 million people using this single currency.

And that brings us back to the puzzle of the Libyan central bank. In an article posted on the Market Oracle, Eric Encina observed:

One seldom mentioned fact by western politicians and media pundits: the Central Bank of Libya is 100% State Owned … Currently, the Libyan government creates its own money, the Libyan Dinar, through the facilities of its own central bank. Few can argue that Libya is a sovereign nation with its own great resources, able to sustain its own economic destiny. One major problem for globalist banking cartels is that in order to do business with Libya, they must go through the Libyan Central Bank and its national currency, a place where they have absolutely zero dominion or power-broking ability. Hence, taking down the Central Bank of Libya (CBL) may not appear in the speeches of Obama, Cameron and Sarkozy but this is certainly at the top of the globalist agenda for absorbing Libya into its hive of compliant nations.

France is pushing for a European oil embargo on Iran, breaking a diplomatic taboo that could have significant ramifications for the energy market and global economic growth, the FT reports. Paris has made the proposal to European Union members preparing a new round of sanctions following the release of a UN nuclear agency report this month.

Has the euro reached a tipping point that will benefit gold and silver prices?
By: Peter Cooper, Arabian Money
What began as the eurozone sovereign debt crisis now morphs into a crisis for the euro which is devaluing against the dollar. The question for gold and silver investors is whether all this capital flow will go into the dollar and its many pegged currencies like the UAE dirham, for example, or whether a part of it will now go into the very much smaller gold and silver markets.

There is probably a tipping point for the euro:dollar rate at which money flows far more heavily into precious metals. There is good logic to this. For what is happening to the euro today could happen to the dollar, UK pound and other currencies tomorrow.

After all the same heavy debt burdens and budget deficits are weighing on the US and UK. Just as Germany was reminded yesterday the bond markets are all linked and money shifts in and out like waves on a beach.

Besides the fundamentals of huge debts point to high and not low interest rates if market forces are allowed to operate. And the central banks are losing their grip as the German bond auction illustrates.

Where do investors park their money if the entire global financial system is cracking apart under excessive debt accumulation? All the past historical examples that we have point to gold and silver as the currencies of last resort and these markets are so small that prices will go very much higher.

The Blue Bus Is Calling US

By James Howard Kunstler
Zeez European politicians unt economists all zound like rocket scientists wiss all zeir charming euro-chatter. But zey must be quite dumb to machen zuch an unglaublich scheiße sturm of zee système financier. Che cazzo è?

Surely all the pretending nears its dire conclusion. Everybody is broke and everybody is in hock up to his prefrontal lobes and everybody is whirling around the drain over in the grand continental theme park of lovely cities and great eats. I'm sorry, but I don't see how they can stop the hemorrhaging as we slide into the season of holiday enchantment.

Every bank (and its uncle) is dumping everybody's sovereign bonds as though they were discovered to be croissants imported from a leper colony. Feh...! Folks of all stripes and accents desperately seek to move their money to some safe harbor - but where is this cozy mooring? To the US for the moment perhaps; but what happens Monday morning when the markets react to the weekend news that the US Senate super-committee has been utterly unable to agree on decisive action that would forestall the scheduled massive automatic budget cuts built into this red-white-and-blue doomsday machine - not to mention the ratings agencies threats to knock UST-paper down another notch upon such failure. Oy yoy yoy!

Just to be plain here: nothing is working. The global system of accounting control fraud has completely unraveled. Nobody will lend money to anybody anymore because everybody suspects everybody else is lying about their ability to meet any obligation. The whole world has become a daisy chain of schnorrers and schmiklers. All those hundreds of trillions of dollars in credit default swap insurance (ha!). Worthless and pointless, because now that a Greek default of at least 50 percent, officially, has failed to ignite a payout, then no default will. Instead, you'll just get cascades of un-hedged defaults. All the lawyers who ever lived could litigate until the sun turns into a red dwarf and they will never resolve these swindles, and the money represented in them will be so far gone that not even Ray Kurzweil in full Singularity mode will encounter a trace of it in his eternal travels through a zillion parallel universes.

So much for the hedge fund industry. I hope the folks who ran those cute operations enjoyed their years in Fairfield County, Connecticut, and Saddle River, New Jersey, because in a few weeks they'll be disguising themselves as OWSers in some makeshift urban encampment in order to line up for three-day-old bagels. Personally, I look forward to test-driving a few $5000 "must-sell" pre-owned Lamborghini Sesto Elementos, not that I'd actually buy one. The nimble might even score some bargain beachfront property in the Hamptons.

It's been about a fortnight now since John Corzine's MF Global fund went up in a vapor, including a reported $800 million or so (rumored to be actually more like $2+ billion) filched out of clients portfolios that cannot be accounted for - though there are additional rumors that it constituted a batch of collateral that was liquidated a micro-second after its arrival at JP Morgan, which had lent Corzine's firm enough money to buy the rope that it hung itself with. Notice, the story has completely disappeared from the mainstream news media (while the Kardashians soldier on).

Even poor Gerald Celente, chief of the Trends Journal forecasting group, arch-nemesis of "the white-shoe boys" got snookered in the action when MF Global somehow ended up with custodial care of the Gold ETFs Gerald was collecting and his shit just vanished! I heard him fulminating over it on a podcast and he is not somebody I'd want to be on the bad side of. Up until now, Celente was only commenting on the prospects for revolution in the streets. Now, I daresay, he'll be out in front leading it (or perhaps rappelling down Jamie Dimon's security wall with a straight razor clenched in his teeth).

The MF Global case has fast-tracked the evaporation of trust in all the places, large and small, where American One-percenters stash their cash. The redemption orders must be flying through their transoms like radioactive black swans. By lunchtime tomorrow this could include all the TBTF banks. That's what the pundits mean by "contagion." Where will that money go now (if they can get it out)?

I don't see where else it can go now except to shiny yellow and white metal, and maybe some oil positions. But the mechanisms of the precious metals trade have also been monkeyed with, and you'd best be careful where you place your order. As for oil, if lending really does seize-up, then letters-of-credit will not be issued and tankers will not be moving any product. More to the point, the global revolving debt system has depended on colossal transfers of ultra-short-term borrowed money. If short-term borrowing is simply unavailable, things could go south very quickly - and by that I mean food stops arriving at the supermarkets, which hold just a three-day supply. Wouldn't that make for an interesting Thanksgiving?

I have admittedly painted an extreme picture this week. But this week presents the most extreme convergence of events the world has seen since September of 2008, and perhaps a good bit worse.

Richard Russell last night…
November 22, 2011
At the La Jolla Rehab Center I still read 10 papers and maybe 25 magazines every week, and let's be honest. The news is so confusing that it is absolutely impossible to come to any sort of intelligible conclusion. I'm embarrassed to say that for the first time in six decades I don't really know what's going on. The Dow the last few months has traveled thousands of points and ended up nowhere -- actually as of yesterday's close the Dow and the S&P were down for the year showing net losses for all the frantic activity. My advice, is to stay with gold, some cash, and Permanent Portfolio (PRPFX). I also think silver is particularly interesting here, and I advise the purchase of 10 oz silver bars. Buy them and pile them up in your bank vault.

And that's the story from Richard Russell whose two arms and right leg are becoming ever stronger, as they must be if I'm ever going to walk again -- which I intend to do.

Pimco’s El-Erian Says U.S. Economic Setting ‘Terrifying’
By Cordell Eddings and Betty Liu
Nov. 22 (Bloomberg) -- Pacific Investment Management Co.’s Chief Executive Officer Mohamed A. El-Erian said U.S. economic conditions are “terrifying” as the nation struggles to recover from recession.

The odds of the U.S. returning to recession are as much as 50 percent, El-Erian said during an interview on Bloomberg Television’s “In the Loop” with Betty Liu. U.S. economic growth was worse than expected and congressional policy makers are gridlocked over what to do about the economy and the deficit, which risk exacerbating an already weak recovery, he said.

“We have less economic momentum than we thought we had and we have no policy momentum,” said El-Erian, who also serves as co-chief investment officer with Pimco founder Bill Gross at the world’s largest manager of bond funds.

“What’s most terrifying,” he said, “we are having this discussion about the risk of recession at a time when unemployment is already too high, at a time when a quarter of homeowners are underwater on their mortgages, at a time then the fiscal deficit is at 9 percent and at a time when interest rates are at zero.”

The economy in the U.S. expanded less than previously estimated in the third quarter, reflecting a drop in inventories that points to a pickup in growth as 2011 comes to a close.