Friday, December 9, 2011

Let Freedom Ring: Death To The Banks

 -Ludwig von Mises

Torn between a rock and a hard place these Europeans are.  Their gut says "cut spending", their global peers say "inflate away"...or else.

By Angela Charlton, Associated Press
BRUSSELS (AP) -- The leaders of the 17 countries that use the euro, plus six others, have tentatively agreed to a new treaty that enforces stricter budget rules seen as crucial to solving Europe's debt crisis and holding the currency-bloc together.

The effort by Germany and France to persuade all 27 European Union countries to agree to treaty changes failed, in large part because of Britain's refusal to give up some powers.

Following marathon all-night talks, the 23 decided to back a new treaty with strict oversight over national budgets, as they try to convince markets that the euro has a future. An agreement on fiscal discpline is considered a critical first step before the European Central Bank, the International Monetary Fund and others would commit more financial aid to help countries like Italy and Spain, which have large debts and unsustainable borrowing costs.

Britain, which doesn't use the euro, led the push against a revised treaty tying all 27 EU countries to tighter fiscal union. The others that didn't sign on were Hungary, the Czech Republic and Sweden. Britain's leaders argued that the revised treaty would threaten its national sovereignty and London's esteemed financial services industry. 

 Most EU countries had pushed for an EU-wide accord to avoid a split, but Germany and France, the eurozone's biggest economies, quickly made clear that a deal among the 17 euro countries and whoever else wanted to join was better than nothing.

Has this "agreement" really split the EU?  the 17 countries that actually use the Euro as currency agreed to it.  Britain did no because it threatens their crooked investment banks.  And why did Sweden not join...didn't they just hitch the Swiss Franc to the Euro's wagon back in August?

Is this "agreement" really a failure for the EU?  ...or is it a failure for those that are looking to profit from the EU's demise?

Euro Fudge Distracts From Global Debt Titanic; Intervention in Gold Market?
From GoldCore, via ZeroHedge

Markets reaction to the euro summit fudge was not as bad as some of the ‘end of the world in 9 days if no agreement’ theorists who fear mongered in recent days. Many of the ‘9 day’ doom merchants had banking and political interests and agendas.

European indices are tentatively higher despite losses in Asia.

At the end of the day, agreement or no agreement the fundamental challenge facing Europe and the developed world is humungous levels of debt in the banking sector and in the shadow banking system (derivatives with a value in the hundreds of trillions) and real global financial system.

The root cause of the problem is this debt, as has been pointed out by many for months and years now. The problem cannot be solved by socializing the debt and piling public debt on top of this private banking debt.
As long as the official policy response is the printing and electronic creation of trillions of dollars, euros and pounds and ‘bazooka’ style currency debasement remains the monetary panacea du jour, there will be no real resolution of this crisis.

Therefore, fiat currencies will continue to be debased and fall in value versus gold.
Myopic markets continue to have the attention span of a goldfish with the sole focus on the Eurozone crisis again in recent days while completely ignoring the global fiscal titanic as seen in the appalling finances of Japan, the UK and the US.

The iceberg approaches and we only see the tip of the iceberg.

The total net cost of the Federal Reserve’s bailout alone is now estimated at an incredible $29.616 trillion according to research from the Levy Economics Institute (see commentary).

The global debt crisis is not a short term phenomenon rather it is a medium and long term phenomenon that will challenge us for years. No magic wand solution from central bankers or politicians is possible.

With regards to an "intervention" in the Gold markets following the ECB rate cut announcement yesterday:

The story above touches on the "revelation" yesterday that the Bank of England, the Fed, and the Bank Of International Settlements ALL sold Gold to stop the rally following the ECB rate cut announcement...which, buy the way, is exactly what Gold should have done following that ECB rate cut: RALLY!

Gold traded higher after the ECB interest rate cut yesterday, prior to sharp selling that came into the market at 1335 GMT. This led to gold falling 2% on the day and it is now down 1.3% on the week – again outperforming many equity indices.

Market News International (MNI) reported that market sources said that the Bank for International Settlements, the Bank of England and the Federal Reserve have been “good sellers of gold” after it had popped to a fresh session high of $1,755.90/oz.

The MNI report has not been explored and there have not been any official denials of official selling.

From a trading perspective there is at least a ring of truth to the MNI report as the sharp fall in the gold price was counter intuitive given there was no negative gold news and indeed the news was bullish with significant risk ahead of the EU summit and continued ultra loose monetary policies and negative real interest rates.

Given the scale of the coordinated intervention in markets by central banks recently one would have to be completely naïve to dismiss the report out of hand. There is of course the historical precedent of the London Gold Pool which ended in failure.

Jim Sinclair had some choice words for those trying to halt the rise in Gold:


My Dear Extended Family:

The ECB has reasonable funds available to it that, if used in the Euro bond market, would have some impact on containing rates.

Gold rises to $1762.50 , just below the $1764 angel. The new President of the European Central Bank says yes we have the money, but no we are not going to use it. Gold goes straight down into the first area of support at $1709- $1710 where it battles all afternoon.

Bloomberg releases an article saying that concerted central bank activity to control the price of gold was utilized today. Long scalpers barf out their positions based on the above jawboning MOPE. Gold ranges $100 so far today.

  1. Now with a clear head, the ECB has the money and will be forced to use it or watch their best bond markets look like "Day After," and "Mad Max."
  2. Central banks have been throwing blocks at the gold price ever since $248 without much success.
  3. The Federal Reserve has made dollars available at cheap swap rates to the ECB. To think that is not a step in monetization because it will be used to buy non-dollar bonds is so glib that it communicated ignorance, not understanding. Systemic monetization has the same impact an insular monetization; it just uses other hands to do it.

Gold is headed in the $2000s. The low in the accordion chop has been established in the drop toward $1530. It does not matter if gold launches from $1710 or $1650, what matter is that it will.


Embry comments to King World News about today's intervention against gold 

Submitted by cpowell on 10:59AM ET Thursday, December 8, 2011. Section: Daily Dispatches
2p ET Thursday, December 8, 2011

Dear Friend of GATA and Gold (and Silver):

King World News just got an interview with Sprott Asset Management's John Embry about today's central bank intervention against gold. Embry takes it a little more calmly than some of us do, remarking:

"That's just the nature of the gold market right now, but in the fullness of time, it's just building a larger and larger base, which will carry it much higher when it goes, and it will most assuredly go." The market riggers "know it's going to go, because the only out they have is excessive money printing and so, consequently, they want gold to move from the lowest possible level."

An excerpt from Embry's interview is posted at the King World News blog here:

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

Yesterday's "intervention", while somewhat blatant, pales in comparison the accusations that Jim Willie has thrown into the public discussion about MF Global, particularly with regard to our Banking Cartel and the CRIMEX:

Exclusive Interview – Jim Willie: “The Public Will Not Wake Up Until At Least One Million Private Accounts Are Stolen”

December 5, 2011 | By Tekoa Da Silva 
As we began discussing the MF Global collapse, Jim articulated his belief in a financial slight-of hand originating from “notice to deliver” requests for gold and silver submitted through MF before the collapse, which had the potential to cause a Comex delivery default. “Comex was ready to default on gold and silver in November, and rather than honor the notices for delivery, JP Morgan stole the funds in the accounts that were calling for delivery…notices for delivery were replaced by stolen accounts.”The evidence of this according to Jim is that, “JPM increased the amount of silver in their registered vaults by precisely the amount that was suppose to be delivered…JPM effectively averted both a Comex default and a European Sovereign Debt implosion.

Interview with Jim Willie

Could Jim Willie's assertions be accurate?  Harvey Organ in his Daily Gold and Silver Report wonders what the hell is going on over at the CRIMEX as well:

It is extremely strange that we are in the biggest delivery month of the year, we are looking
at deliveries of 58 tonnes of gold this month coupled with 1.77 tonnes last month and yet no gold enters the dealer.  How on earth are the settling? Are they settling with paper GLD?   Are the CFTC/CME overlooking this criminal behavior?

Thus the total number of gold oz standing in this delivery month is as follows:

1,792,500 oz (served) + 72,800 (oz to be served upon) =   1865,300 oz ( 58.01 tonnes)
..coupled with last month's 1.77 tonnes we have a total of 59.78 tonnes of gold settled.
The registered gold total is 3.34 million oz or  103 tonnes of gold.
Thus the totals for the non delivery month of Nov plus the delivery month of Dec equate to  57% of the total dealer gold inventories.  Yet the inventory levels remain constant through the year at around 3.3 million oz or 103 tonnes.

Where IS all the Gold coming from to meet delivery demands?  That's a very, very good question....  I'm pretty confident of one thing...not much real physical Gold is being sold, and a lot of paper is about to go up in smoke!

Hinde's Davies talks with MineWeb about intervention against gold 
Interviewer: Geoff Candy
GEOFF CANDY:  The risk-on, risk-off trade is an interesting dynamic because there is almost a to-and-fro between that and the notion of safe haven buying.  So sometimes for example we get a sense of gold as a safe haven and at other times it seems to be trading as a risk asset and it seems to go between the two of these.  Has the notion of gold as a safe haven almost not necessarily run its course but now become so much part of the discussion that it's now built into the market?

BEN DAVIES:  The reason why I am invested in the gold market...I think gold is money.  The way I value gold is based on money and when I look at fair currency in the monetary base, to go back to what we believe is a fair value, it is not inappropriate to have a gold price of $4500  - what we're experiencing now is a resetting of gold in the financial system as a monetary asset.  People talk about safe havens because they are trying to reduce liability risk.  Certainly if you want to be Machiavellian, you could say the central bank intervention in order to get co-ordinated action through, they didn't need the gold price shooting through $2000 and then rocketing up to $3000 because that would be very suggestive that the financial system was very unstable.  So certainly I needed to keep the lid on it and the reality of that situation is that yes some people have gone "oh maybe gold isn't as safe as I thought" but those who really understand and as people like myself educate more people who are not so familiar about gold and what it really means within the financial system - that will come to pass.  People will understand the volatility in gold is actually a function of the currencies but when you have got all currencies debasing it's just the to-and-fros between the dollar/euro/Yuan and the gold just gets caught up in that mix.

"I'll gladly pay you Tuesday, for a hamburger today."

The counter intuitive action in the Precious metals has certainly be confounding.  It most likely represents the desperation of our fiat money masters to preserve their crooked and ill begotten wealth.  That jig will soon be up. I rest assured with my accumulating metals that this will be so.  There is no other option for the bankers than to inflate their currencies to pay down their debts and try to hold back the rise in Gold, or accept the inevitable, and simply revalue the price of Gold higher, and repudiate the debt.

The banks are fighting for their lives, literally.

"The global debt crisis is not a short term phenomenon rather it is a medium and long term phenomenon that will challenge us for years. No magic wand solution from central bankers or politicians is possible."

How about all world leaders agree to eliminate all debt? I mean, isn't it all just  'paper' anyway?. Then start over...

Sure, why not?

If they repudiated all the banks debt, and Gold was revalued higher the banks would be wiped out.


It's the 21st Century, do we really need banks?

...and therein lies the rub.

The bankers are trying to convince us that the world can not live without them...they are fighting for their lives.

If freedom means anything at all, we must let the banks perish, along with their debts...or the future will never know freedom.

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