Just Another Fake News Story?

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Whilst browsing the internet, I come across many things, that deserve a wider audience, but am unable to offer any further evidence of these sometimes outlandish claims. Not so today.

This piece linked to below, really revolves around a much talked about subject, and one I have myself been involved in writing about, so this piece would appear to add further credence to the mystery.

http://themillenniumreport.com/2016/10/treason-who-did-911-and-why-did-they-do-it/

Who was responsible for 9/11?  WHY did they carry out the attacks of the World Trade Center (WTC)?  And if two planes brought down buildings one and two, how did building 7, a block or two away, across a wide expanse, collapse vertically, and yet was still upright when a BBC news anchor with a live link behind her, showing the building – that could be seen by all those sufficiently awake to notice, – was still visible, while we were being told that the building had already gone down?

The piece linked to above reads like an episode of: “The Bourne Trilogy” with a cast of characters taken from: Politics, Corporate Energy, Mafia and Banking Interests across the western world. I wrote too in the book  “The Coming Battle – 2013”  that events were spiralling out of control.

General Wesley Clark in a video interview explained that he was told in advance of plans to intervene in seven middle-eastern countries, all based on the lie of 9/11… The latest in a long line of black-ops “False-Flag” events, that were used to sway American -and in this case – worldwide opinion to permit those with their own agenda to influence events. And he also discussed what happened next and he recalled how the decision was taken back in 1991 –

It used to be that the propagandists with people inside the military and secret service industries, could modify the News agenda to get the outcomes that they wanted, and due to secrecy laws, their misdeeds would go unpunished for thirty years or more until after the secret documents could be widely accessed. BUT, the Internet has changed all that. The Mainstream News Organisations (MSM) exist to make money for their shareholders and senior management teams – and the corporations that advertise and market their wares on them, are generally large multi-nationals – the very corporations that the MSM is supposed to be keeping a beady eye on, in its role as defender of the public and the customer,  are the very same ones using politics to pursue their own agenda.

As ever, “He who pays the piper, calls the tune.”

So, as corruption apparently swirls around the world, I hear of imminent plans to rid the world of physical coins and notes – particularly in America, where many of the U.S.’s states, and institutions are seemingly hell-bent on destroying the last vestige of freedom – the freedom to spend as you like – by outlawing payment in anything other than digital means.

So will Gold and Silver be once more used to “Barter” with?

Will the closure of your bank, be the event that makes you take action?

Will the ATM closing, or your Bank closing one weekend and not re-opening again on Monday make you take action?

Will the disappearance of your pension fund make you take action?

The time has come.

 

 

 

The Last Chance Saloon…

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Then… and NOW…(upto 2014)

The big decline in the precious metals prices from 2011 to today, punctuated by a sharp reversal beginning in early 2016, appears to already be undergoing a final exhaustive bout of selling. The big decline remains to be the most important development for gold and silver investors. Why? Because this decline’s end is likely to present the ultimate buying opportunity for precious metals and for PM mining stocks over the next decade.

Before elaborating on this all-important issue, let’s briefly discuss the current events. The USD Index has rallied as it moved higher recently, due in large part to Fed jabbering about rate hikes, and the final 0.25% rise recently, after Gold reached its March 2016 interim high, with further talk of 3 more rate hikes in 2017, this dampened enthusiasm in the paper markets ensuring those with derivatives on their side could short the metals and thus drive down the price to interim lows, but the New Year will probably reverse that, as the festive season ends.

I’ve previously said that it was possible that we would see something like that in the short term. That’s exactly what happened – metals and miners moved a little lower especially in recent weeks. BUT, just before Xmas is when people are buying gifts for friends and family, not thinking about their portfolios, so markets quite often, soften at this time of year. So, for the brave, a VERY good time to buy metals and/or stocks (as I did today) in those companies with good assets, strong management and good fundamentals, with a longer term strategy for improvement in what should be a rising market for PMs – especially as the Trump win, will probably mean rising inflation for that nation in the medium term – if he keeps his promises.

Those companies who report in British Pounds, will also have a major boost to their bottom line, as profits reported in pounds sterling will reflect the recent decline in the pound’s value versus the dollar, in which many commodities are priced on international markets.

I’ve discussed the final bottom target for gold in previous posts, at circa 50% of the most recent high ($1925 – in 2011) – Here we discuss WHEN gold is likely to bottom.

Today’s price of $1129.85 is not quite at the lowest point – that was $1065 in the middle of 2015, but this pull back from the $1320 area of a few months ago, serves to mark what could be the nadir of a cup and handle formation on the Gold Chart, though it might more likely resemble a shallow bowl, as this decline extends for another year of the secular bear, in a longer term Bull market.

What may seem odd, on a quite different chart – is the one I’ve posted several times since the start of this blog, featuring the comparison of the last two decades with the late 1960s to 1981.

Why? Because, in a globalized economy with interconnected financial markets, no asset can move totally independently from other ones – and this is especially the case with gold and the Dollar. In most cases when the USD plunges a lot, gold is likely to rally a lot and when the USD soars, gold is likely to decline substantially. That’s likely to change in the final stage of the precious metals bull market, but it doesn’t seem we are quite at that point yet.

Therefore, the million-dollar question can be asked differently: when is the USD Index likely to form a very important top in the near term?

In my opinion, it’s most likely to happen in late January or early February 2017, with the second half of January being the most probable target. Trump’s Presidency begins at the peak of a long bull market in DOW stocks, due to Fed Funds Rates being as low as they are, with ESF (Exchange Stabilization fund) intervention and interest rate rises, which will begin to affect costs of doing business, in America, which will add to those corporation’s costs, yet do little to stimulate consumer spending which features so large in the overall picture in the U.S..

Let’s start with the discovery. What was the key thing that happened in the USD Index in the past few years? It rallied sharply and broke the all-important 100 level, or rather – it tried to – break above it, but failed and declined substantially. There were other attempts and they failed as well and were followed by an even bigger decline.

Since history rhymes, the big question is: “When did we see something similar?” Almost 20 years ago – in 1997. That’s the only time in the past 20+ years, when the weekly RSI was well over 80 (besides late 2014 and early 2015). This fact alone is something that should get your curiosity, but the big number of other similarities and how precise the key one is, should get your attention.

After the USD Index initially moved above 100 in August 1997, it declined sharply and it took several months before the next rally begun. The rally started after the USD moved to the 50-week moving average. That’s exactly what we saw in the more recent past – in 2015. What happened next in 1998? The USD tried moving above 100 a few more times, but finally declined substantially and this time the decline took the USD to a new low. Again, the same thing happened in 2015 and 2016. The shape of the rallies and declines was not identical, but it’s nothing to call home about – after all, very different events accompanied both time frames.

Up to this moment, the above analogy can be viewed as interesting, but perhaps not particularly important. What changes everything is an additional analogy – the size (in terms of both the price and extent) and shape of the 1975 – 1977 Gold price decline. The entire price trend, from 1968-1975, you would be able to guess by looking at the chart above, is eerily similar, to the period from 2000 to 2016, just merely extended over a few more years in these latest charts. Of course, the moves are not 100% identical, but are so close that we can view them as such.

In light of such significant similarity, we simply can’t ignore the likelihood that what followed the previous USD bottoms are going to follow these as well – especially as, so far this similarity is playing out near-perfectly.

Plotting the 1998 – 1999 rally on the current situation provides us with approximately 104 as the USD next target, but let’s focus on something different. How is the USD Index moving after the bottom?

Back in late 1998, the USD Index moved sharply higher, above the trend line and topped close to 97. Then it declined below 94, but the key thing is that it declined below the target line by approximately as much as it had previously rallied above it (in other words, the trend line continued to rally through the middle of the short-term decline). The bottom was formed more or less at the rising support line based on the previous important bottoms.

What happened earlier this year? Pretty much the same thing – the USD Index moved sharply above the rising trend line (the exact copy of the line from 1998 – 1999), then it declined below it by approximately as much as it had rallied above it previously, and bottomed. The bottom was formed more or less at the rising support line based on the previous important bottoms. The similarities are indeed extraordinary and the implications are very important. As far as the shape of the upcoming rally (the way the USD gets to its target) is concerned, we don’t have to see identical performance, just as the way in which the USD tried to move above 100 in 1998 wasn’t very similar to the way it tried to move above the same level in late 2015 and early 2016.

Still, the rally is very likely to end in a similar way to what we saw back in 1999 in terms of length and the size of the rally. So, when and how high is the USD Index likely to move? At the first sight we see that the target is at approximately the 104 level.

As far as time and the WHEN question is concerned, we saw the bottom in the dollar on May 3, 2016.

In technical analysis terms too there’s a big indicator. It’s the target based on the big reverse head-and-shoulders formation that started to form in late 2015 and was completed just a few days ago.

The size of the “head” in the head-and-shoulders and reverse-head-and-shoulders patterns is the size of the rally that’s likely to follow. We already saw the breakout (at about 96) so we can use this technique. We mark the size of the “head” and the target based on it. As discussed, this technique points to 104 as the next major target.

Given the likelihood that we’ll see a big rally in the USD Index in the coming weeks, there is a very good possibility that we’ll see gold at new lows. It seems that we still have time to prepare for the ultimate buying opportunity in gold, silver and mining stocks, but this time is rapidly running out. New Year’s Eve may be your last best chance.

So, will gold continue to plunge if the USD continues to rally, like it did in 1999 – 2001? Not necessarily. If could very well be the case that prolonged strength in the USD Index will not really be due to the inherent strength of the USD (or the U.S. economy), but due to weakness in the Euro (if the latter continues to exist, that is) and in other major currencies. George Soros, has reported that Brexit may cause the break-up of the Euro-area, and I have a sneaking suspicion, on this (as on many other things) he maybe right.

If this is the case, gold is likely to rally due to the demand from these other country’s Central Banks and investors fleeing the Euro. Consequently, the discussed analogy has important implications for the next few years.

The USD Index could continue to rally, but not necessarily due to the demand for dollars, but the lack of demand for other currencies. Especially if the EU implodes, then all bets are off.

One other thing that happened in recent weeks, was the events in India, where the Premier Modhi, used vague worries about the Black Market and Terrorism to attack both the currency markets, and the Gold markets simultaneously,… The abolishment of the 1,000 and 500 Rupee notes, and the slap down of the Gold markets were a sign that those behind the financial systems are terrified, that we the people will not give the government their taxes to pay down the debt, and these banksters might actually need to work for a living instead… (he said cynically)

Summing up, while the short-term indications for the precious metals sector remain range bound, the medium-term trend remains bullish and it seems that the final bottom will be formed in the first months of 2017, with the second half of January 2017 being the most probable time frame.

Meanwhile, it seems that any potential profits on my long positions will stagnate further before this trade is over and the up-trend resumes.

Here’s how we got here…

And, here, we hear how it will play out from one of the world’s best investors…

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After posting this, I came across this item in King World News web-site, that draws a similar comparison, to the one, I spotted some several years ago…

http://kingworldnews.com/worried-action-gold-silver-just-read/

In it we see the image below…Note: The image uses a logarithmic scale on the left, not Gold price… And suggests the 8-fold price rise we saw last time, from trough to peak, will be less than the next mania phase… We might conclude that it might be 10 x the low price of last year, taking the Gold price to circa $10,000… Remember where you heard it first…

kwn-goldpricecomparison1970-2000-20161021-1024x665

And Alex Jones is in sparkling form, as usual…

W.

Look Out Below…

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 The_Gold_Investment_Pyramid

I haven’t posted for some time, because to be honest, there was just so much absolutely awful news, it is difficult to know which of the dozens of major news items to include, but as the threads of information come in, the picture is clearing and coming into focus…

This, economic situation is now so overbought, that I feel the Big Drop, will occur sometime in the next 12 months, because the U.S. economy, is probably going to be propped up. The next President will be, Donald J Trump, and of course, Hilary, who was bought and paid for by the corporataucracy – Wall St., Major Banks, senior Political figures and the mainstream media.

Donald Trump, amid accusations of his improprieties from decades ago emerged triumphant despite the accusations. Yet Hilary Clinton committed treasonous fraud, and lied under pain of perjury after she deleted 31,000 e-mails on her private e-mail servers, that Wikileaks, has now posted some of, that PROVE (https://www.wikileaks.com/podesta-emails/) that she was bought and paid for, by Wall St., the major U.S. Banks, and the 6 media giants who control the message that goes out to the American public.

The consitution of America, was set up to protect the people from big government, from the surveillance state, to protect the individual, from an over-bearing and over-arching government. People claimed rights, to be free from interference, and control, and yet, the events of 9/11, which many now suspect was a false flag event, has been used to bring about the control, that those in power seek, and want more of.

Adding to the many amendments that have occurred since 9/11, which have stripped Americans of their rights, are the recent changes to the medical system in America (ObamaCare) which is moving the nation towards a European style medical system, that some say, was designed to fail, which will mean that it will be nationalised, and when it goes, there will be many on the inside, who make out like bandits…

But, here’s some other events that have happened recently – Germany’s largest Bank was threatened with a $14 Billion fine, for the manipulation of the Silver Market (They admitted this, and are co-operating with the investigators). This just so happens to be the same sum, that the EC imposed on Apple, for alleged infringements of European Trading rules. (https://www.youtube.com/watch?v=SIiJndrN1bU)

This, figure was apparently amended so that Deutsche Bank will not be forced into bankruptcy to just $38 million, but no senior bankers will do any jail-time, despite the manipulation costing everyday investors, tens of thousands, if not millions of Pounds, Euros, Dollars and many miners in poor African and South American nations of jobs to feed their families and raise kids.

The problem is, that it was agreed under EC rules, and enacted legislation, that in future, no banks would be “Bailed out” by the state, or in reality the Central Banking Authorities wouldn’t, but the Banks would have to issue bonds, which would in reality, be underwritten by the state. This also meant that depositors, became unsecured creditors, and their deposits sequestered if the bank failed – the so-called “Bail-in” option. Angela Merkel couldn’t let Deutsche Bank be bailed out, but also couldn’t allow the Bank to be Bailed in, because the bank is so big, and so highly leveraged, with a derivatives book, built on just a 0.3% capital base, that risked bringing about the demise of the German economy, and plunging the Euro-zone into a full blown crisis.

However, in recent days, Janet Yellen has also admitted that the actions of the last 8 years since the Lehman crisis, have not worked, and yet, the Q.E. that has created more and more asset bubbles, in property, and on Wall St., and it is rumoured, that through the Exchange Stabilization fund, (ESF) the Fed, has already, using dark pools, been buying the stock-market, to support the value of many of these assets.

This is moving the American state towards Corporate Fascism, so that those in power control the people, and those in the financial oligarchy benefit, as the wealth of the middle-class, will be transferred to those in this cadré of financially connected people. In a downturn, the ability to profit from rapid fall in prices, (that’s how George Soros, was able to make a billion when the pound crashed out of the ERM) means that the wealth of the majority in Pensions, Investment Trusts and savings for retirement, gets transferred to these power players on the inside.

In recent days moves have been vocalised, to create a universal basic income in the U.S., – this is the equivalent of Fascism, which history teaches us, is that this is so similar to Communism, to be almost indistinguishable from one another. The only difference will be whether you can elect a leader, or whether the corporations chose the leader… and Mrs Clinton, was their choice.

This is also precisely how Nazi (National Socialist) Adolf Hitler, took control of the German economy in 1932, and directed it, towards military spending to artificially create jobs, but this also meant taking resources from other parts of the economy, to prop up those who were closely connected to him. The growth in military spending over the 14 years he was there, meant the economy suffered, as people were forced into manufacturing military equipment, and thus away from goods and services that benefitted themselves. And once those military expenditures were made, it became obvious that they would be used militarily.

The rhetoric being waged against President Putin of Russia, who have had a long standing alliance with Syria, dating back to the time of the Soviet Union, in the early 1960s, has a naval base on the Mediterranean Sea there, and is proof that those who are propagandists for Mrs Clinton, have an agenda, that was not being discussed. The mainstream media channels, do little to show how those opposition forces have blocked egress to the 250,000 Syrians living in eastern Aleppo, by blocking the streets, and allowing no humanitarian aid in, while ISIL/Daesh, is lobbing RPGs (Rocket Propelled Grenades) and mortars onto those of Western Aleppo – all which appears to be being supplied by Western supporters in Washington, who are ostensibly saying that they want to fight these opposition forces.

It also appears that when American forces attacked and killed the convoy of Syrian Troops (allegedly accidentally), the ISIL supporters appeared to have already been aware of this in advance, and simultaneously launched an attack, suggesting either prior information, or weak security over communications links.

These Islamic Militants, have a world view, that in America, would be challenged with the full force of the law and the increasingly militarized police forces that have been supplied with ex-military equipment, as if the police are being prepared for all-out unrest at home, amid rising disquiet from the public, about policing tactics.

So, why are these forces aligned against the Syrian Government? Why is the U.S. government so keen to ensure that the Syrian government falls, and the country descends into chaos, like the other multi-faith states of Iraq, Egypt, Libya and Afghanistan that have collapsed on the wake of western intervention? Is it to protect its major ally in the middle-east Israel? In recent years, Israel has been attacked on all sides by islamists protesting against the imposition of a jewish nation in their midst.

Israeli Oil and Gas industry was negligible ten plus years ago, but is now increasing as the Eastern Mediterranean is discoved to hold increasingly large amounts of gas and oil. Is the objective therefore to reduce these states to penury to create the conditions where the Oil majors can swoop in, “all in the cause of aid and inward investment – you understand” to buy up these assets while they are on the cheap, and to appoint puppet governments, and political systems supportive of the west?

As the rise in oil and Gas prices grew in the early 2000s, we saw that Russia was able to re-build its shattered economy, invest in new technology, and threaten the global hegemony of America, and its dollar control over the world of resources.

This obviously threatens the Neo-cons, who now control the so-called Deep State – a group of connected and powerful government insiders using their position in government departments and Corporate Headquarters, to enrich themselves, and press an agenda, that is skewed towards keeping America as the only super-power, while pushing the world towards a major World War, as they attempt to deny the rise of China, Russia, and to some extent India, with huge populations, increasing economic power, on the back of that increasing industrial and technological might. Witness that China now has its own Space Station, that 2 Chinese astronauts went to in recent weeks, and conducted experiments on silk worms while in the zero-gravity of space. This increasing confidence and ability obviously threatens the Americans who appear to be unwilling to give up their global leadership status without a fight – probably at the expense of its population.

This world view is based on the King Dollar, and the King dollar means suppression of alternatives such as precious metals, and other currencies. We saw that Libya was attacked because of Muammer El-Qaddaffi’s attempt to create a Golden Dinar, to circulate in North Africa especially for oil, while Iraq’s Saddam Hussein, began to sell oil for Euros in 1999, and plans were instigated as U.S. 4* General Wesley Clark, says in this widely reported interview that Washington had made the decision – “to take out 7 countries in 5 years”, and use the CIA created organisation – ISIS to destabilize these nations, so that the U.S. military can be called in.

And of course, those who promote war and financially back it such as the Rothschilds and Rockefellers of this world, further enrich themselves as they fund both sides, and the expenses created on the back of them. But these countries also, it should be noted, do not have a Rothschild controlled Central Bank.

President elect, Donald Trump explained to the American public, why they should vote for him, and he summed it up in one objective sentence, saying: “The current system favours the insiders, and they want to keep it that way – Donald Trump has no special interests except the people of America.”, and if you think, that the institutes of government have only your interests at heart, then you need to see this video… if you have young kids. I urge you to resist the urge to go out and commit medicide… Most of the medical professionals along with the American public have been misled too…

So, if President Trump expands the government spending on infrastructure, when will this take effect? And who will benefit. Whatever your political persuasions, this opens up investment opportunities, and I will attempt to uncover those Corporations who will be on the receiving end of this largesse.

But, if this increased spending begins to create inflation pressures, will the Fed raise rates, or will they continue to inflate this bubble, until it POPS!

And when it does? You can bet that the rush for the exits, will mean people rush to the only asset class, that has no-one else holding the bag… GOLD; (and its baby brother – silver!)

And of course, the miners, that have already risen well into double, and in some cases triple figures this year, will explode, even as the recent gold price has pulled back from its 2016 rise, catching its second breath. But who is listening? Maybe these guys know who are?

Until next time.

W.

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Why is the Fed so scared of Gold and Silver?

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gold-buyingI began the process of preparing for this piece, by going back to some older documents, and videos that I’ve seen, but which have long since been dismissed into my subconscious.

My reason for being interested in this, is largely because I have begun thinking about American hegemony which arose in the ashes of the second world war with its manufacturing industry still intact.

As a result of the Marshall Plan arrangement, a large debt of $12 Billion was created to enable the Europeans to rebuild their shattered economies. (And don’t forget, this was back when we still talked in millions for national economies)

This was owed to the U.S. by European nations, by giving them a line of credit to enable them to purchase American made goods, whilst rebuilding. At the time, America, who had raided the US citizens for their gold, had over 20,500 tonnes of Gold in its various vaults at Fort Knox, and under the Chase Manhattan Building, that the Chinese recently purchased. This gave the Americans the hegemony over Europe, who were the leading nations before that time.

This world hegemony, was cemented when the Soviet Empire collapsed in 1989, with the acceptance by those former communist states, that liberal democracy and private ownership were the way forward. When finally these nations began un-burdening their populations with rules regarding ownership of scarce resources, or manufacturing industries, and sold off these former state owned enterprises, (SOEs) the world was unipolar. And the dollar (formerly backed by gold) had given the U.S. immense advantages, in a world of rapid change.

Back in 1965, President de Gaulle of France told the world, that the current financial system, benefitted the Americans, because whereas the world had to pay for “stuff” such as oil, and food, and manufacturing goods, as well as the immense technological products that America seemed to have in the world of computing etc, with U.S. dollars. The Americans though, could just print up more dollars to buy that stuff. (Those technical advantages it has been argued by some, were as a result of the reverse engineering of captured alien technology, by America’s scientists such as Von Braun, who were former German engineers who departed for U.S. shores, after the fall of Hitler, and who themselves were alleged to have had visitations from the cosmos, but that’s another story, for another day.)

That link though, between America’s gold, and its place as the world reserve currency, ended on 15th August 1971, when President Nixon, got fed up with us Brits, and the French asking for some of their Gold back for pesky dollars, and closed “temporarily” the Gold window, ending the world’s right to return those dollars for something more tangible. The Central Bankers of the Fed, therefore, were keen not to let the world know just how much actual gold they had, as they massaged the books, by lumping together “Gold” and Gold Receivables” in a one line item in their balance sheet statement. In fact one commentator, Jeff Opdyke has already discussed document FT900, as giving clues to this. And Louise Auchincloss-Boyer, had told the world in 1974, that “All the gold in Fort Knox had gone” just days before she fell from her 10th floor apartment window – verdict probable suicide – Nothing to see here…(The Coming Battle)

But in the last few years as the amount of currency created by these banksters has flooded the world, those with an eye to the future have been stealthily, and not so stealthily buying up the ultimate insurance.

In fact the East – China, India and Russia to some extent have been the most avid purchasers, but a report emerged recently from Sprott Money, that now Norway’s and Switzerland’s Central Banks, are joinng the fray, when after the last 20+ years we’ve been led to believe that Gold was a barbarous relic of a bygone era, yet these two central banks, have each printed up $1billion and used it to buy Gold mining companies shares… So, printing up monopoly currency, to buy real assets is not just a Fed trick?

https://www.sprottmoney.com/blog/switzerland-and-norway-begin-to-massively-accumulate-precious-metals-mining-shares-nathan-mcdonald.html

So, Why is the Fed so scared of Gold?

The answer to that question is simple: Gold’s price, tells you all you need to know about the value of currencies…particularly the dollar.

For 5,000 years, Gold has been exchangeable for other things, and money evolved from it, because they could make gold into small pieces for smaller purchases, and those pieces could be made into forms of adornment, making your wealth portable, durable, divisible, fungible and a unit of account, (which is all that real money is).

So, the value of a currency can be measured in gold – and vice versa. One troy ounce of Gold (31.15gms), currently buys around $1,334 of paper currency or circa £1,031 (as at 26th Sept, 2016 – $1.2937:£1) and Silver around $19.40, and those bits of paper and ink buy other things of value too, – oil, copper, tin, lead, bismuth, boron, Lithium, Gallium, Arsenic, and a myriad of other things. Coffee from Brasil, Uranium from Australia, Runner Beans from Kenya, Pop-music from Great Britain, i-Pads and i-Phones from China, Mercedes cars from Germany, and wine from France and Italy. The volume of stuff goes up in line with production and technological advantages, and the number of people producing them. Whilst the number of Dollars, Pounds Yen and Euros, goes up in line with those nations printing presses.

The problem for the American Federal Reserve is that Americans have got used to living on the cheap, and that means having King Dollar. But if other people don’t value that dollar, then they won’t give away as much “stuff” as the Americans would like, and in the final analysis, the value of any currency, is really only worth the amount of stuff it will buy, based on the labour, intellect, and materials, that go into finding or making that stuff… And Gold and Silver, take enormous capital injections, and immense energy and labour, with the appropriate management to find, smelt into doré bars, and finally to refine them into fine bars.

So a currency that is printed up in the Trillions on printing presses or computers, that only the Federal Reserve has access to, means those pieces of paper or electrons, shouldn’t really buy that much, unless they can be exchanged for Gold or some other valuable item from the rest of the world at a rate that is acceptable to both parties; and that is not likely to lose its value as fast as the pieces of paper – and therein lies the problem. America has little gold left. It has been used to manipulate the dollar, but the game is almost over. Dr. Jim Willlie says that the “End is Nigh.”, and dozens of others outside the Fed, and its MSM apparatchiks, agree.

With a gold backed dollar, the U.S. economy would have to compete on a fair basis world-wide, value for value, and not just use “funny money” to buy up scarce resources, or the time and talent of foreigners that have developed and built products. And America, would not be able to afford to station its forces in 147 different countries, nor wage wars on the scale they have hitherto either. And it would appear, the world is waking up to this injustice too…

Here below, Mike Maloney talks to Chris Martenson, and explains in simple terms how the Fed can magic up digital currency, and then use that new currency, to buy up assets that other people have sweated over, thought and laboured over, for huge amounts of time. And that is just not only immoral, but in the Fed, is called “Keynsianism”… And Mike in his inimitable style suggests the FED, is guilty of “manslaughter” at the very least.

Here also, Jim Sinclair, says emancipated gold, will ultimately reach $50,000 oz. It might, I suspect, but we are probably at least half a decade away from that, if not a generation (or two). Though if the SDR gets floated soon and becomes widely available as other currencies collapse, then it may – sooner, rather than later.

In one video, Dr Jim Willie discusseed with Elijah Johnson, the current state of affairs with respect of the American Dollar, and its status on international markets, including a mention I think that should be given wider prominence, a small matter of how the U.S. Navy fleet based in the Persian Gulf is having to pay for its diesel for its warships, with silver, as the Arabs, got tired of the depreciating asset – the dollar., or Treasury Bill, verging on negative yield, as the Fed does everything in its power to stimulate inflation, and more spending… However, for some reason, the video mysteriously disappeared from You-Tube; but Jim Willie suggests that Silver will be the straw that breaks the back of this Financial Camel…

So, what drives the price of Gold?

Obviously the difference between buys and sells, so the demand and scarcity of Gold has a bearing, but unfortunately, so do the paper derivatives used in the manipulation of the Gold price and the ratio of buys versus sells there too.. Which allows the major trading desks of the senior bullion banks, who are largely both the client banks, and owners of the Fed, to control the price to some degree – unless, they have no gold left to deliver, when a large buyer issues a buy order, and requests delivery. Which until now no serious buyer, has been prepared to do, though China, has been hoovering up gold around the world, in increasing amounts, and from its own mines, as well as those it owns overseas direct to its vaults since 2010.

JP Morgan-Chase Bank of New York too has been quietly buying, and has (according to Ted Butler of Butler Research) reputedly bought circa 500 million ounces of Silver – real physical silver, which presumably it will use to make major profits from in the fullness of time, but this might also be used to maintain price stability, if and when the derivatives markets blow up – which is increasingly likely, given the Shanghai Gold Exchange, which is tied to the physical market more closely, because participants must deposit gold (and presumably silver) in order to be able to sell on that marketplace.

This is likely to happen based on other factors.

So what are those other factors?

Those of use who follow commodities markets cannot fail to have noticed that price inflation, and Gold and Silver markets generally follow the currency volumes, which since 1970s, followed the price of oil, and which over a 12 year period from 1995, to 2007 went from circa $12/bbl, to $147/bbl briefly. Gold and silver followed on a little while later, peaking in price in late 2011, as the Fed flooded the world with dollars post the 2008 credit crunch. This action, largely echoed the events in the 1970s, when the oil price rocketed as a result of unrest in the middle-east and North Africa, as political machinations occurred there then too. Later, after the second line Banks went under, and the government, instructed the BoE to increase the money supply by 25%, we had inflation of 26.9% in Britain, and almost 25% in America. Back then we had powerful unions, who ensured their members were protected from these price rises by raising their wages, and industrial unrest reached a peak.

There’s a gold price chart in this piece that compares the 1970s price rises, with those in the period from 2000 to 2014, that shows you how the Gold prices have been shadowing the changes in that period, just circa 10x higher. Which gave rise to my confident prediction back then, that we would see $8,500 for Gold, and $500 for silver back when I first noticed it.

https://moneymatterstoo.wordpress.com/2014/10/28/transition-vamp-or-how-the-crash-will-be-won/

This time, the political changes, and plethora of service industries, has reduced that pressure, as people from Europe and further afield, immigrated into the UK, in large numbers, but as the Brexit vote showed, maybe now the people of Britain from the industrial heartlands, are fighting back, and even I have noted increased pay rates being offered at the bottom end of the pay spectrum as employers battle for the limited supply of labour as supplies from overseas dry up.

So, if the oil price drives the PM markets, what’s happening with oil?

I found this response to an item by Dr. Kent Moors, Professor at Duquesne University, and energy industry commentator, and governmental advisor on energy matters, articulating that the frackers in the American South-West are all leveraged to the price of money (interest rates) as well as the price of oil, so  interest rate rises or low oil prices, will cause them to fail, if the price of oil falls much further, to below circa $40. Dr Moors suggested we could see a slew of bankruptcies later this year, as many as 130. I speculated in a previous piece, and even Wickipedia has mentioned this. According to – John England, Vice-Chairman Deloitte LLP, a statement on February 16, 2016 that – roughly 175 companies are at risk of bankruptcy and have more than $150 billion in debt, with the slipping value of secondary stock offerings and asset sales further hindering their ability to generate cash.

A crisis of this size, would help make the glut at the cushing oil terminal, and elsewhere disappear. The response below though has an interestiing perspective. In allowing the price of oil to climb the oil majors face issues, and a commentator obviously by someone close to the action wrote this, and which goes some way to suggesting where the price of oil, and thus where Gold and Silver are going.

http://oilandenergyinvestor.com/2016/09/what-energy-experts-dont-want-you-to-know-about-oil/comment-page-1/#comment-138051
————
September 15th, 2016 at 23:03 | #1Reply | Quote – Bob Schubring

I fully expect to see some volatility on the way up. Historically, Saudi Arabia has held the price of oil, such that between 10 and 20 barrels of oil, sold for the exact number of US doilars, that would buy 1 troy ounce of gold in the current-month futures contract. The Saudi Crown would intervene in either the gold or oil markets to achieve a correction, keeping the exchange rate between 10 and 20 bbl oil per oz gold, from 1985 until 2014. Over the past year, that price range shifted dramatically, remaining consistently above 20 bbl per oz and making three sharp peaks above 30 bbl per oz, at which point major trend changes struck oil, gold, silver, and currency markets, usually accompanied by a sell-off of stock. Since it’s record peak of 38 bbl per oz set this year, oil prices have risen against gold.

Any near-term rise in market volatility (eg a 10% correction in the stock market) will push up the dollar price of gold, thereby reversing what Saudi rulers consider a favorable trend. Even the very looniest nut-cases among them, see the futility of throwing away the Gift of Allah (their phrase for oil reserves) to get a wee bit of gold bullion, when by producing less oil, they historically bought more gold for the same amount of oil.

I really don’t think there will be a consensus amongst the Saudi rulers, if oil trades back to 35 barrels per ounce of gold, as the result of continued overproduction and overselling. The hardliners will recognize they cannot defeat the US by giving away cheap oil.

Whereupon, the younger and more pragmatic of King Salman’s brains trust, will focus on allowing spot crude prices to normalize, in time for the ARAMCO IPO. They’ll get that done, (insh’Allah), as soon as hardliners allow it.

What many in that Saudi brains trust actually want, is to acquire some distressed assets of struggling US shale and off-shore producers. The only cheaper place to wildcat for oil, than the New York Stock Exchange, is the office of the US Bankruptcy Trustee…and there will be a bumper crop of such bankruptcies this year. I won’t be at all surprised to see a sharp correction in November, in which crude prices retreat back toward $40/bbl before resuming the climb to the $60/bbl range in 2017.

————-
So, that suggests we will see a pull-back in the Gold price, until then, before it begins its meteoric rise to our longer-term targets.

Money manager Michael Pento wrote a book a few years ago warning of “The Coming Bond Market Collapse.” All the signs say this calamity is very close. Pento explains, “Global central bank balance sheets have risen from $6 trillion in 2007 to $21 trillion today. That’s the increase in the size of central bank balance sheets. . . . I can prove to you when this bubble breaks, it’s going to be disastrous. . . . Just that they (European Central Bank-ECB) didn’t hint at expanding QE and look at what it has rendered us. That’s proof positive that everything that has happened since the 2008 collapse, that it’s just been artificial and ephemeral in nature. Once central banks even hint at pulling back from their QE programs and ZIRP and NIRP go away, bonds will crash, and when those sovereign bonds crash on a global basis, it’s going to take everything else down with it concurrently.” which will mean people flee into the only safe haven assets left – Gold, Silver and other precious metals.

http://usawatchdog.com/catastrophic-bond-market-collapse-approaches-michael-pento/

In the meantime, those of us interested in shares in the junior commodities space, might be interested in some of the producers that are just about profitable at these low prices, with good resources, and an optimistic future if events turn out for the better. One – ASA Resources, a micro cap, with operations in several countries recently bought a slaughterhouse in South-Africa, which perplexed me, but it will in the longer term provide regular income, and some stability in terms of price, though may take the edge off the commodity space as their Gold and Nickel assets in Zimbabwe are about to erupt.

That said, Zimbabwe’s President Robert Gabrielle Mugabe, is suffering his own problems, as his brand of black socialism (he himself termed himself a Black Nazi) delivers the expected outcomes – a failing economy. Mugabe is now struggling for currency, and only the miners, with producing assets such as ASA, currently producing just short of 60,000oz p.a., are bringing in hard currency. But Mugabe’s problems go deeper. The Police and armed forces, that have traditionally supported Mugabe, are now turning against him, as the economy implodes because of a lack of currency for salaries. In fact hundreds of thousands are fleeing to South Africa, and over 3million have already fled..

When Mugabe goes – however or whenever that is – and at 92, that cannot be before much longer, the value of all profitable businesses will reach their true value. As I’ve mentioned to those that know me, the assets that ASA controls if fair value (i.e. cost price) were met, the company could be a £500-750 million Corporation. Given that it is currently valued at about £32m, that is a great deal higher than its value today.

Good luck and happy hunting.

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Note: We are not investment advisers, and nothing in this should be considered as such. Share Prices can go down as well as up, and you should not risk more than you can afford to lose. You should also take appropriate investment advice from a professional adviser.

Is A Ban On Gold Ownership Coming?

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The fightback begins.BenFranklin-LibertyAndSecurity

August 27th, 2016

With several countries already having negative interest rates in place and more considering a move in that direction, people around the world are becoming increasingly concerned about the possibility of gold ownership being banned, particularly in the West. This would represent a decisive move by those elite who wish to impose a New World Order, where they are the Kings, and we are the subjects, cut-off from one of the last vestiges of safety for investors against the monetary madness unfolding across the planet.

“When you recall that one of the first moves by Lenin, Mussolini, and Hitler was to outlaw individual ownership in gold, you begin to get a sense that there may be some connection between money, redeemable in gold, and the rare prize known as human liberty.”

— Howard Buffett

However, according to reports, at least one nation, is considering backing a new currency with Gold, and from a very unlikely source – Robert Gabrielle Mugabe’s Zimbabwe. The only questions that follow from this are: Where will Mugabe get that gold? And what will he use to acquire it? Legally? By contract? Or by sequestration or nationalisation?

But this right to own Gold, and/or Silver and to use these as money, is under threat all over the world, the Bankers wish to impose their divine right to rule. With anonimity, comes liberty. Only when we have to provide a Chip based card, or have a RFID chip inserted in your arm or provide your identity card, and be part of some vast people database do we give up that liberty. As Mayer Amschel Rothschild (née Bayer) once famously said:

“Give me control of a nation’s money, and I care not who makes its laws.”

And  Benjamin Franklin once said:

“Those who give up their liberty for more security neither deserve liberty nor security”

When, we allow those in power to reduce our choice of money to only that which the Bankers will allow, then we become nothing more than serfs, who will be condemned to serve these Banking and Financial wizards.

It is time to take back our freedoms. President Lincoln in his inaugural address said this:

“This country, with its institutions, belongs to the people who inhabit it. Whenever they grow weary of the existing government, they can exercise their constitutional right of amending it, or their revolutionary right to dismember or overthrow it.”

– Abraham Lincoln – Mar 4th 1861

This desire to control us involves, a desire to control countries too, for the furtherance of the globalist goals. This involves forcing multi-culturism on people and extends to member states of Europe, which is why those who objected to this in Britain, voted with such rare clarity.

Here below, the Prime Minister of Hungary, in a speech that has been sub-titled in English for the five-eyes crowd, tells of the real agenda in Europe

IF, we abolish the Nation State, those Bankers and the people who own those Banks, can control the people by controlling the money. If we take back our right to accept money (not just currency) then we fight against domination by a self-styled oligarchy of cabalistic omnipotence.

This video below, lays out in immense detail why we need to have access to precious metals, in the coinage, and in denominations that we can use for everyday purchases – including government payments and payments of taxes.

In times of monetary experiments, gold represents essential insurance.

Governments that destabilize their own currencies have always been aware of gold’s significance in this particular regard. In order to prevent capital flight into gold and the associated further devaluation of their fiat currency, they have banned gold ownership at times throughout history. In the framework of the audacious monetary experiments taking place around the world, potential gold bans due to its safe haven status should be on the investor’s radar screen as well.

Gold buyers need to know what could potentially be in store for them, should governments which regard safe haven currencies as a thorn in their side once again decide to restrict access to them. For this reason we have taken a look at historical precedents.

Roosevelt’s ban of gold ownership

Gold is a safe haven commodity, i.e., it defends personal wealth when legal tender is no longer capable of rendering this service.

In the course of the Great Depression, president FDR (Franklin Delano Roosevelt) signed the Emergency Banking Act of March 9, 1933. As an amendment of the Trading with the Enemy Act of 1917, which prohibited trade between US citizens and declared enemies of the state, the Emergency Banking Act empowered the government to confiscate all gold coins, gold bars and gold certificates held by the population, under the precondition that this was necessary for the protection of the US currency system.

This precondition of course provided plenty of leeway in terms of its interpretation, and consequently citizens were asked just one month later already to hand their gold over to the US government. Compensation was set at the then prevailing fixed gold exchange rate of $20.67 per ounce. Once collected, it was revalued to $35.00 – resulting in a huge 69.3% gain for the Fed.

Due to the government’s inflationary monetary policy, depreciation pressure on the dollar increased quite quickly. in 1934. At the time of the compulsory conversion many Americans accepted the new regulation without demur, as they believed that it would help to improve the economic situation and their money would therefore not be debased.

The penalties for illegal gold ownership were horrendous. There was either a fine of up to USD 10,000 (equivalent to approximately $190,000 today) or a jail term of up to ten years. In spite of this, the population is estimated to have delivered only around 30% of its gold holdings and the black market in gold flourished.

As it was almost impossible to control all households to find out whether they were in possession of gold, holding it was relatively safe. Many US citizens moreover stored gold overseas, such as in Switzerland, or bought numismatic coins, which were exempted from the ban. President Dwight D. Eisenhower subsequently expanded the ban on gold ownership to include gold held abroad and President John F. Kennedy tightened the noose even further. He prohibited the ownership and purchase of numismatic coins that were minted before 1933 as well. In addition, all gold coins stored by US citizens abroad had to be repatriated. The rather flimsy pretext for this was that the government had to protect US citizens against counterfeits.

But silver, silver will be gold on steroids. 75 years ago, after the confiscation of silver from America’s currency, and other nations began the process of taking away our liberty, 5 BILLION ounces were stored in vaults. Those silver ounces have been used over the intervening period, and in the world’s silver vaults now – the NYMEX, the LBMA etc, are barely enough to furnish industry for 3 months, let alone 10 years without mining another ounce. It now has 10,000 uses and counting, with the PV cell, Electronics, Plastics, Glass, Ceramics, Surgical Instruments, Anti-bacterial, anti-fungal and disinfective with hundreds of other uses, and it now comes out of the ground in the ratio to gold of 9:1 compared to the 15 or 16:1 of history. In fact the British Pound Sterling was just that – a pound weight of Sterling Silver (925), and it will never be any cheaper, than it is today.

Other gold prohibitions in the 20th century took a roughly similar course, such as for example in the Weimar Republic in Germany in 1923, in France in 1936, in India in 1963 and even in Great Britain in 1966. The next year Prime Minister Harold Wilson, devalued the British pound from $2.80, to $2.40:£1.0.0.

Not all gold bans were the result of misguided monetary policy. While the ban in the Weimar Republic was tied to the great inflation, in France the reason was capital flight in the wake of the election victory of socialist politician Leon Blum. In India the trigger for the gold ban was capital flight as well, in the wake of the Sino-Indian border war of 1962; in Great Britain it was connected to rising industrial gold demand and the associated increase in the scarcity of gold.

What happened prior to the 20th century? In antiquity and the Middle Ages private gold ownership was often prohibited as well, such as e.g. between 1292 BC and 1186 BC in ancient Egypt. This privilege was reserved to pharaohs and priests, as they performed their religious duties as representatives of the gods. In Sparta gold ownership was prohibited because the population was not supposed to take part in business life at all. In 404 BC gold ownership even became punishable by death and raids on homes were a daily occurrence.

The ancient Romans under Julius Caesar were slightly more modern by comparison: An upper limit for gold ownership decreed in 49 BC can be seen as a reaction to “misguided interest rate policy”. After Caesar suspended all interest payments, Romans started hoarding their money, which was of course not the decree’s intention. The gold ban in the Chinese Empire was also closely tied to monetary policy errors. The Middle Kingdom created fiat money in the 11th Century and in this context immediately prohibited gold ownership. Some years later, a currency reform was enacted in the wake of massive inflation. The intention of the ban was to keep Chinese citizens from saving their wealth with the help of gold. Now, the Chinese government, perhaps reminded of the possible outcome of such a decree, extol their populations to hold between 5-10% of their monies in precious metals.

However, in the context of these gold bans we should keep in mind that gold still had an official monetary role in most of these cases. The Bretton Woods system remained in force almost 30years, from 1944, until 1971, when the Gold Window was closed, though it wasn’t fully abandoned until Dr Henry Kissinger’s discussion wiith King Faisal, to use dollars for the purchase of oil, and only thereafter the global monetary system’s ties to gold were cut completely. As gold no longer plays this important role, a gold ban is less likely, but from the perspective of governments trying to pay down impossible debt loads, not outside the bounds of possibility. However, what IS ever more likely in view of governments’ rising need for revenue is more taxation of gold trading. Governments certainly have the option to lower the attractiveness of investing in gold in this way.

Conclusion

Since gold has currently no official monetary role, a prohibition of gold ownership appears unlikely, but not impossible, especially if any of the major currencies collapses, and the price of precious metals rockets. Repressive measures with respect to gold ownership and trading will only become more likely once the gold boom gains significant momentum and its impact broadens to the point of becoming a veritable gold rush. Such a development would naturally go hand in hand with a loss of confidence in paper currencies.

If voices start to raise the issue that “Similar to cash, gold is used to finance criminal activity.” or that gold “is damaging the economy”, alarm bells will ring. However, in the event of a gold ban, it shouldn’t be expected that governments would be able to confiscate all gold, as this would require conducting comprehensive house to house searches, and thus uneconomic controls. If one wants to be on the safe side, one can purchase gold in forms that have traditionally often been exempted from bans, such as numismatic coins or smaller denominations.

This sense of impending doom though, took on a new urgency in recent days, as a report on the BBC, was made that the German government, suggested to its citizens, prepare for the unexpected. This vague statement, was suggested by some that the reason was because of potential terrorists threats. And the people were encouraged to stock up on food, water, flashlights, money/currency, batteries, sterilizing tablets etc. etc.

But… Is this because in reality, it is rumoured that a certain huge bank is on the brink of failure?

– Reluctant Preppers – In the long run, we are all dead…
But in the meantime, we WILL suffer. (KirkbyAnalytics.com)

After posting this piece, I came across a piece by Hugo Salinas-Price, that made me think, there is hope…

The piece begins as follows:

The Night That Is Upon Us and the Dawn of a New Era – Hugo Salinas Price
A speech by Hugo Salinas Price at the inaugural ceremony of the Fourth Convention of the Association of Mining Engineers, held in the city of Durango, State of Durango, Mexico, on August 25, 2016.
At what point in History does humanity find itself? Where are we? In the course of the past centuries, the study of the physical sciences, born in the 16th Century when the Englishman Francis Bacon established the “Scientific Method”, has had such enormous success and has so greatly influenced humanity, that Science has become a materialist world-religion.
The central problem of our times is that official economists attempt to apply the “Scientific Method” when designing economic policies for governments, and this method is not applicable to human activity. The “Scientific Method” cannot be applied to social concerns, because physical matter and human beings behave in totally different ways. Matter cannot choose, and human beings do choose their behaviour. So, while action applied to matter produces predictable results, action applied to human beings must consider the fact that human being do choose, they do have options, and thus their behaviour cannot be predicted successfully, cannot be quantified nor expressed correctly in equations. The world’s economists ignore this fundamental fact, and so they formulate economic plans for the State that always turn out as counter-productive, because their plans produce results that are always quite the opposite of what they expected.[More…]

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Cheers.

Bloomberg: Russia’s Only Escape From More Deficit Pain Is Economic Growth

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Bloomberg – Russia’s Only Escape From More Deficit Pain Is Economic Growth http://bloom.bg/2aWh4Tf

Of course, to grow any economy, and  improve the living standards of an economy’s citizens, the economy must grow over and above the growth in population.

When an economy stagnates, but the population does not, the citizens are essentially sharing a cake amongst more people, so all other things being equal, everybody gets a smaller slice – which means they get poorer.

When people invest in businesses, and raise the output of goods and services, the economy grows, and people are richer, but ONLY, if the rate of growth in output is more than the population growth.

This conundrum, is at the heart of economists problems. The rate of growth of the economy.

During the early Industrial Revolution, the increase in automation added lots more goods and freed up people who were moving from agriculture, to industry. These individuals were released from agriculture because it too was mechanising..

In a service based economy, it is difficult to grow the output, because it is more difficult to automate.

A restaurant frees up people from the drudgery of cooking,  setting and laying the table, and washing dishes, but it produces not much additional value, because those citizens, cannot improve their own output by not doing these tasks because they are involved in waiting for food, between courses etc..

However, if we replace these waiters and waitresses with automatons, (Artificial Intelligence servers) and an experienced waiter to resolve difficulties, then those staff are released to produce more goods, and services elsewhere. THIS is the way to improve productivity in the economy.

However, when people are released from one industry to work in another, they have to be able to move their skills easily, and in an increasingly technological world, the time to retrain may take years. It is simply not cost-effective to retrain a 55+ year old, if he or she is going to retire perhaps two years after gaining the skills, but has (or would have) taken 4 or more years to gain the necessary expertise.

This is the problem, for economists, and politicians, because money can flow like water from one part of the economy to another, but people don’t move quite so easily.

That is at the heart of the European Union’s (EU) freedom of movement dictum. As one economy expands, people moving in, will dampen wages, and lower output per person. That’s the theory anyway,.

However, large corporations, when they use cheap money to merge with, or to take over in a hostile fashion, other corporations, do not add much value, if the people displaced do not have capital to build businesses, because their savings have been depleted by poor wages, poor interest rates, high taxation or other methods of losing value.

But, in the near future, we are about to see a positive explosion in technological advances, that will likely revolutionize the world economy. Artificial Intelligence, Virtual Reality, Augmented Reality, Robotics, Spintronics, Thorium Energy production,  and Solar Energy production coupled with storage technologies to move the energy that hits the Earth during the day, to those parts of the energy demand curve usually later at night,  to heat or cool homes, or to drive factories such as Tesla’s Giga-Factory in Nevada.

This factory, which Elon Musk, has committed to producing 500,000 vehicles per annum in, by late 2017, will catapult demand for Lithium Carbonate, critical in building the batteries for his car for everyman.  Warren Buffet, who made a major investment in China’s BYD a similar automotive corporation with aspirations to produce huge numbers of electric powered vehicles using Li-ion cells, will also require huge amounts of Lithium Carbonate.

By the end of the year, according to Reuters, BYD should have 10 GWh of battery production capacity, which it expects to increase to 34 GWh by 2020 with a new factory in Brazil—about the same capacity as Tesla’s.

Other Tesla rivals rushing to the battery production scene will be iPhone manufacturer Foxconn and LG Chem, which is already one of the top three battery makers.
Samsung is also hot on the trail, having just acquired Magna’s battery production division.

According to Credit-Suisse, the lithium industry is “poised for significant volume growth,” which could lead to shortages of supply.  As a result producers of lithium are set to enjoy significant earnings throughout the decade.

Elon Musk’s aspirations, if met, will require as much Lithium as is currently produced world-wide, and such demand will also be required by BYD, and the other major manufacturers working to catch up, such as: BMW, Mercedes, General Motors, Ford et-al.

“The key drivers of the continued growth in the market are electric vehicles (“EV”), which have been pioneered in Nevada in recent years, but the larger catalyst for global mass market uptakes is EV technology in China.

Deutsche Bank has forecasted that global sales of EVs in 2025 to be 16 million vehicles per annum (current sales are just 2 million).

This increase should lift lithium consumption in EV’s 8-fold from 25-kilo tonnes (Kt) of Lithium Carbonate Equivalent (“LCE”) in 2015 to 205Kt in 2025.

This along with the other increases in global lithium demand is expected to increase LCE demand to around 535Kt of LCE by 2025.

This new demand is being driven by the improved economics of electric vehicles and energy storage products.

In particular in the last five years lithium-ion costs have dropped from US$900/kWh to US$225/kWh.”

In the world, there are essentially 4 major producers of Lithium. Albemarle being the biggest in Nevada, but right next to it, is a junior Lithium explorer,  with capital from major investors, who see this as a huge financial opportunity to grow output to meet this expected demand. And at a mere $1.66-1.70 range on the day I was writing this, it values the business at $114.27m (Source: Bloomberg)

Some Lithium miners, are lying about their resources, and others, simply lack the expertise to bring the Lithium salts to production.

From this small company’s web site they have this to say:

[Our Company] has an option to become the largest claims holder with over 15,020 acres (6,078 hectares) in Nevada’s Clayton Valley and land positions both north and south of Albemarle’s Silver Peak mine, North America’s only lithium producer.

Clayton Valley North covering approximately 5,480 acres (2,217 hectares) in northern Clayton Valley, Nevada. The claims are contiguous to private lands and placer claims belonging to the lithium production facility of Albemarle Corporation. Historic drill information and a geophysical survey show the Property covers basin-fill sediments which are similar to the sediments currently producing lithium brines. Two Albemarle production wells lie along the boundary. Two holes are proposed within the Clayton Valley North claims as offsets to the production wells to test the complete stratigraphic section. Drilling and exploration are active in the basin and the permitting process is well established.

[Our Company] has also acquired the Clayton Valley South Expansion, totalling approximately 9,540 acres (3,861 hectares). The property is strategically located between and contiguous with the Silver Peak lithium mine operated by Albemarle Corp. on the northern boundary, the Clayton Valley South project operated by Pure Energy Minerals Ltd to the east and the Neptune property owned by Nevada Sunrise Gold Corporation to the west.

But Eric Anderson, CEO of the lithium engineering consultancy TRU, was bearish on lithium investment as early as 2009, when a flood of new projects were being planned.

“I made this statement that people snickered at—that plants would be built and closed . . . because of the hype surrounding the industry,” says Anderson.

Anderson’s lithium predictions have been largely vindicated. Demand rose more slowly than some expected—still currently between 5 and 10% per year—and new operations have been plagued by problems.

In 2012, Galaxy Resources suspended production at its Mt. Cattlin mine in western Australia. In 2013, RB Energy Inc. opened a new lithium carbonate plant in Quebec, only to suspend operations in 2014.

Nevada-based Western Lithium, which has been repeatedly floated as a potentially convenient supplier for Tesla, has taken shareholders on a very bumpy ride, and is not yet online.

According to Anderson, Western Lithium, like many new lithium operations, simply aren’t working with the right raw materials.  Though lithium isn’t rare in the environment, the cost of extraction varies greatly with its concentration and form.

With existing technology and present prices, truly profitable lithium comes only from the evaporation of highly concentrated brine.  Those sorts of brine deposits are nearly all in southwest South America, and controlled by established players.

The three biggest lithium producers are Sociedad Quimica y Minera, based in Chile, American FMC Lithium, which controls the ominously-named Hombre Muerte mine (Dead Man Mine)  in Argentina, and the U.S. based  Albemarle, which recently acquired competitor Rockwood Holdings.  Albemarle is developing lithium brine holdings around Magnolia, Arkansas too—the only American deposits that Anderson thinks might make economic sense in the near future.

Together, these three companies provide more than 90% of the world’s lithium, and have absorbed much of the rising demand simply by bringing untapped capacity online.

A dearth of technical talent seems to be another widespread problem. The Bolivian state has faced serious management and technical hurdles in extracting the massive, high-density lithium deposits in the other-worldly salt flat Salar de Uyuni.

Similarly, Chinese producers Quinghai Lithium and Citic Guoan MGL, hoping to exploit sources near Tibet, have experienced major hurdles, and plans to expand Chinese capacity to 60,000 tons a year by the end of  this year have been revised downward by half.

Elon Musk however, is eyeing a “complete transformation of the entire energy infrastructure of the world to completely sustainable zero carbon,” and what he’s talking about here is lithium-battery production on a mind-blowing scale.

Tesla is planning to produce more lithium-ion batteries in this factory than in the entire global marketplace combined.

Lithium—the lightest and most versatile of the metals—is the backbone of this exploding battery market.

Lithium is already a key part of our everyday lives, but as batteries become the rule of the day in a new global energy picture, demand for lithium is soaring—and we are only at the beginning of this curve.

Battery manufacturers across the board are moving to lithium because it has the highest electric output per unit weight.

And nowhere will this demand soar more than with the production of hybrid, plug-in hybrid and electric vehicles used by everyone from Toyota, Honda, Nissan, Renault, and Mitsubishi to Ford, Chevrolet and GM.

By the end of the year, according to Reuters, China’s BYD should have 10 GWh of battery production capacity, which it expects to increase to 34 GWh by 2020 with a new factory in Brazil—about the same capacity as Tesla’s.

Other Tesla rivals rushing to the battery production scene will be iPhone manufacturer Foxconn and LG Chem, which is already one of the top three battery makers.
Samsung is also hot on the trail, having just acquired Magna’s battery production division.

According to Credit Suisse, the lithium industry is “poised for significant volume growth,” which could lead to shortages of supply.

As a result producers of lithium are set to enjoy significant earnings throughout the decade.

Therefore, this little company, stands to be able to produce Lithium Carbonate, even quite possibly at the Albemarle facility which we know meets Tesla’s Standards, and it has even  been suggested, Musk might be interested in buying the whole company to guarantee Lithium for his Nevada Giga-Factory, and his future plans.

And, the name of this Lithium junior placed to take advantage of this rapid surge in demand is: Lithium X (TSXv.LIX) and LIXXF in the U.S.) .

And remember, we’re not Investment Advisors, so nothing in this piece should be considered a recommendation. Prices of shares can go down as well as up. We do not hold, and have no short-term intentions to do so.

 

 

Lehman 2.0 – The End.

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Breakdown Over the last few days, I have been reading, and hearing some concerning stories, that suggest the end of the Dollar as World Reserve Currency is merely weeks, or at most months away.

As of late, certain banks were recently being bailed out, because the banks loaned out currency to people to buy property, which collapsed in price in the aftermath of the 2008 crisis – Italian Banks were the most recent recipients of ECB largesse. But most large Western Banks, are in an impossible position, Deutsche Bank being the most recent one facing the threat of failure, but perhaps even one of Wall Street’s grand-daddy banks.

That bank, even now, according to one economic and geopolitical forecaster is on the brink of failure with a derivatives book of 349:1 leverage on its assets – If you were aware and remember, Lehman Bros, was a mere, a MERE 73:1 when it finally failed.

BUT, as to how this dollar problem has affected the International Trade scene, has remained largely ignored by the financial media and journalists.

Countries who sell to the U.S., have been getting paid in, as one commentator put it – “toilet paper”. Indeed, Fed Chairman Ben Bernanke said as much, at the time of the 08 crisis, when he said that they have a printing press, that can create dollars essentially at zero cost, which means, that that, is ultimately their value. But, those dollars, because of the Bretton Woods agreement, are used to settle International Trade agreements, between for example Saudi-Arabia (for its oil) and India for its I.T. services, or Brazil, and its coffee, in exchange for Australian wine. As a result, China has told the U.S. that the International dollar has to go, and a U.S. treasury dollar has to replace it, but that its value will have to be halved over a period of approximately 2 years.

I hear that circa 20 International Container Ships are anchored off-shore in the Pacific, because the providers of those goods, now do not want the U.S. dollar in payment, and that other reasons are being given for the lack of access to Port Authorities in Los Angeles and points north.

In its place for International Trade, will be the SDR, which will be partly (circa 40%) backed by Gold, as I mentioned in my last piece, the Americans, who have been trying to control the price of Gold on the COMEX, will have to have Gold revalued on International Markets, and as at this particular point in time, the price is under negotiation. However, my finger in the air best guesstimate, would be circa $5,000/oz, with a rise to closer to $10,000 as the world economy adjusts, and people rush to buy.

The revaluation will be an overnight affair, rather as FDR’s gold revaluation took place once it was safely stored at the Fed, after he issued his now famous Executive Order 6102 on 3rd April 1933, confiscating the nation’s gold, forcing Americans to surrender their gold (excluding jewellery) on pain of a $10,000 fine, and/or 10 years in the pokey. Silver was also confiscated the following year. But even then, it is estimated that barely 30% fully complied.

However, because of International Trade, this revaluation of Gold and SDR currency introduction, needs to take place in a safe, secure, standard way to minimize shocks to the world economy, and trade.

In the wider world, all International Trade would now be carried out in SDRs, which would include the Chinese Yuan, and as stated would be valued based on a basket of currencies as per my previous post, but backed ultimately by Gold.

It is not widely known, but there are families in the Far-East, who collectively, like the Rothschilds and Rockefellors, have huge dynastic wealth, which some estimates put at 100,000 to 150,000 tonnes of Gold. (I think this is slightly exaggerated but not by much)

In fact one Japanese Army officer, claims to have discovered some of this wealth hidden, in a cave system, when they invaded other islands and nations in the second world war. A solid gold buddha of circa 24″ high, and weighing hundreds of pounds was one such piece, reputed to have been discovered. Details of all such finds are obviously viewed suspiciously by those behind the veil, and generally have scorn poured on them, in efforts to hide these truths that might embarrass the legal owners, if nothing more than but for their sheer ostentatious displays of wealth.

When these events unfold, the price of both Gold and Silver, and to some extent all commodities, will shoot up on international markets, at least when priced in Fiat currency terms. But derivatives books, will also be affected, meaning banks will undoubtedly be affected. Bank Accounts that in Britain and America are currently backed by insurance, that the British Banking Regulator – the FSA – has been pushing on local radio, and the FDIC supposedly insures for Bank accounts in the U.S., may be “bailed in” as happened in Cyprus, as banks fail, and we are likely to see a change to International trade of the major contracts into the SDR, to make trade more equitable.

America currently has a $500 billion annual trade deficit. Britain too, has just suffered a further imbalance to our trade book, and costs and inflation, can only go one way, if events transpire as I suspect. But at least Brexit, will make things easier for us to adapt as a nation.

In the events leading up to this introduction, we could see an overnight re-valuation of gold, to an unprecedented level, with further rises as those with huge sums of money, rush to transfer their wealth from Federal Reserve Notes, to Gold (and silver). Rumours suggest an initial price of circa $5,000/oz, but if that occurs, we may see a stampede towards precious metals from other asset classes. And what price silver? Possibly $400-$500 per oz.

Which brings me to the other concerning development suggesting these events are moving apace. It has come to my attention that Bank Accounts with large sums of money in them, are being frozen by the Banks, and their “Anti Fraud” departments. Two such acquaintances of mine have informed me that they cannot access their accounts and when questioning this, they have been told, that they are under investigation. Nothing else is divulged. No further information given.

Is this the first step in the events leading up to the re-liquidating of the Western Banking System to stop those with large sums from spreading them around several banks, and thus limiting the FSA’s and the FDICs liabilities? We can at this point but guess…

BUT… are the Banking elite, attempting to ensure that the banks remain in service post crisis? Moving large sums from one account to another, could be the straw that breaks the camel’s back… Is that why access has been frozen?

Imagine for a moment, you are unable to access your bank account, and your salary for a moment…

How would you fare if your Bank-Card and your Credit card stopped working?

How would you buy groceries, purchase milk, bread, fuel for your car? breakdowns Pay the children’s school meals bills? How would you pay the Window Cleaner? The Taxi Driver? The Bus Company? Would these people and companies, still provide their services and goods, on a credit basis until things get back to normal?

For one person, they perhaps could do that, but when the whole local economy is cashless… How do they, and you just survive?

Whilst I am not advocating mass panic, it would be prudent to have available (however you define that) at least one month’s money (currency) at your disposal. If you haven’t bought Gold or Silver, in a reasonable quantity yet, there may be still a little time. Crypto-currencies too, because a banking collapse is a very real possibility, on the scale of 2008 or worse, much worse.

The people of America will feel the pain the hardest, but Britain, Japan and Europe too – excepting perhaps the northern germanic nations, and close neighbours, who will suffer considerably less. We even may see a figure similar to Donald Trump, advocating that he (or she) alone has the solution, all the people need to do is follow them, and then we will have travelled back in time to 1932, when Adolf Hitler arose to great acclaim, and sealed the west’s and his nation’s fate.

Of course, having sufficient staple foods, water, perhaps fuel – like bottles of Gas for camping stoves etc. – tanks of fuel for the car, and candles, matches, canned fruit, vegetables, and batteries as well as water purification tablets, will all make life more liveable, if the SHTF moment arrives.

Time to prepare, and that is not an idle request.