The Truth Hurts

“The Central Bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an enemy to all banks discounting bills or notes for anything but coin. If the American people allow private banks to control the issuance of their currency, first by inflation, then by deflation the banks and corporations that grow up around them will deprive the people of all their property, until their children will wake up homeless on the continent their Fathers conquered.”
-Thomas Jefferson.

Truth would destroy U.S. economic system, Fed warns
NEW YORK -- The U.S. Federal Reserve asked a federal judge not to enforce her order that it reveal the names of the banks that have participated in its emergency lending programs and the sums they received, saying such disclosure would threaten the companies and the economy.

The central bank filed its request on Wednesday, two days after Chief Judge Loretta Preska of the U.S. District Court in Manhattan ruled in favor of Bloomberg News, which had sought information under the federal Freedom of Information Act.

"Immediate release of these documents will cause irreparable harm to these institutions and to the board's ability to effectively manage the current, and any future, financial crisis," the central bank argued.

It added that the public interest favors a delay, citing a potential for "significant harms that could befall not only private companies, but the economy as a whole" if the information were disclosed.
http://gata.org/node/7729

What is going on here? Inquiring minds want to know. Me thinks any bank fighting this hard to hide figures has something really awful to hide. This is truly laughable. Don't tell the people the truth, they might demand their money and quit doing business with the bankrupt bank. ONLY in AMERICA...

Are The Bullion Banks Losing Their Grip On Gold And Silver?
One wonders if perhaps too many people are finally catching on to the game and beating the commercials at their game, by buying gold before the COT’s have a chance to harvest what they had hoped to gain.

What if some Central Banks along with a few billionaires, together with a large number of small investors, began buying physical gold as they looked in horror at the profligate spending currently going on in Washington?

Recently I read that to get a grip on what a trillion dollars looks like, imagine a stack of one thousand dollar bills 63 miles high. If you topple the stack you can drive for about an hour before reaching the end. Now imagine driving for 9 hours to reach the 9 trillion dollar number that was just announced as the projected growth in the deficit for the next ten years, (and this number will no doubt be subject to upward revision as we go along).

This kind of ‘massive US dollar degradation’ has never happened before, and could well provide the motivation for a lot of people to increase their gold stashes, thereby denying the COT’s the gold they had hoped to scoop up.
http://news.goldseek.com/GoldSeek/1251322421.php

Antal Fekete: Dress rehearsal for the last contango
Whatever paper trading of gold is still going on in the United States, it is at best a dress rehearsal for the Last Contango in Washington, which will be followed by the regime of permanent backwardation.

The meaning of this is that physical gold cannot be purchased at any price quoted -- this time, yes, in U.S. dollars.

The U.S. dollar rubbing shoulders with the Zimbabwe dollar?

Mainstream economists and financial journalists shrug: "So what? We are not watching the basis of frozen pork bellies trading either when we make monetary policy." These gentlemen betray a lack of comprehension of the nature of the present financial and credit crisis. Whatever else it may be, this crisis, first and foremost, is a gold crisis with an incubation period measured in scores of years. It is about to reach its climax.

The world appears to be totally unprepared for it -- witness the silence surrounding the gold nexus.

Even the so-called sound-money Internet sites misread the situation. They are talking about an imminent breakout of the dollar price of gold from its holding pattern below $1,000 per ounce. Such breakouts have occurred from time to time since 2001, when gold broke through the "resistance levels" of $300, $400, etc. The coming breakout is not distinguished by the fact that $1,000 is an even rounder figure than the previous round figures that have been surpassed. It is distinguished by the fact that we are confronting a world event the like of which has never happened.

It has never happened that gold was unobtainable at any price. It has never happened that all governments have defaulted on their debt obligations simultaneously.

Still, we have to explain the relevance of this to the credit crisis. It is no secret that the bonds, notes, bills, and other obligations of the U.S. government, or any other government, for that matter, are irredeemable. That is, they are redeemable in nothing but more of the same. For example, the bonds of the U.S. Treasury are redeemable in Federal Reserve credit, which is itself irredeemable and is "backed by" the self-same bonds of the U.S. Treasury. Why is it, then, that these Treasury obligations are in demand where one might think that redeemability is a sine-qua-non of issuing them? What makes people participate in this shell game? How can such a crude check-kiting scheme mesmerize the entire population?

Come to think of it, the sight of this Ponzi scheme would shudder the Founding Fathers of our great Republic.

This is not an easy question to answer. But going through all the alternative explanations one by one, we come to the conclusion that the debt of the U.S. government is still redeemable in a sense, however limited or restrictive it may be. The debt of the U.S. government has a liquid market in which it can be exchanged for Federal Reserve credit. In turn, Federal Reserve credit can still be exchanged in liquid markets for physical gold, the ultimate extinguisher of debt, albeit at a variable price.

But if you break that final link, when gold is no longer for sale at any price quoted in U.S. dollars, then the rug will have been pulled from underneath this house of cards, and the international monetary system will collapse like the twin towers of the World Trade Center. And this is the situation that we are confronted with.

Look at it this way. There is a casino where the lucky gamblers can gamble risk-free. Their bets are "on the house." This casino is the U.S. bond market. There is only one catch. The pile of the winning chips in front of each gambler may become irredeemable at the exit when the hairy godfather waves his magic wand.

As the gold markets enter their phase of permanent backwardation, all rational basis for holding U.S. Treasury debt -- or any debt, for that matter -- will disappear. There will be a mad rush to the exits, and holders of debt will trample one another to death in trying to cash in on their winnings.
http://www.gata.org/node/7716

Looming Crisis, Golden Exits
By Darryl Robert Schoon
The current economic collapse has its roots in a crisis caused by the decline in the value of paper money over time resulting from the removal of gold and silver from global monetary systems. Previously, for much of mankind’s history, money was gold and/or silver and its value was intrinsic and fixed.

Then, following the lead of the Bank of England, the US central bank, the Federal Reserve in 1913 began issuing US dollars in the form of paper money convertible upon demand to gold or silver. But by 1971, even that artifice was no longer true as the amount of paper dollars issued by the US far exceeded the underlying amount of gold.

Today, as a consequence, the US dollar, along with all paper currencies, is not convertible to anything of fixed value; and, while others may wonder why we are having a financial crisis, I don’t. To me, the cause of the current crisis is clear as the uncertain value of money itself.

Paper currencies are now backed only by “the full faith and credit” of their increasingly bankrupt and insolvent issuing governments. Economies based on currencies of variable and declining worth are no more stable than housing developments built on quicksand. The reasons for our economic problems are clear whether we want to know them or not.

The consequences of the degradation of money over time are now with us; and because the loss of value was gradual, it went largely unnoticed, much as an undetected cancer grows surreptitiously until it is too late. What is happening now took decades to develop and its resolution is not over.

This is where we are today, in a late-stage monetary crisis where only massive doses of borrowed money from heavily indebted governments buying their own debt are keeping major economies afloat, e.g. the US, the UK, and Japan. The global economy is surviving only because it’s on full blown artificial life-support.
http://news.goldseek.com/GoldSeek/1251385200.php

...and we wait. We wait for what appears will be a breakout to the upside in Gold. With the CRIMEX fighting tooth and nail on behalf of the US FED and TREASURY, we have no choice but to wait. It's frustrating, but as they say, "Good things come to those who wait."

I will be on vacation for the next week. I will post if I have the opportunity. Thanks for reading!