Long, Long time ago,
I can still remember,
How the music used to make me cry.
I can’t remember if I cried,
when I read about that widowed bride,
but something touched me deep inside,
the day the music died.
So, “Bye Bye, Miss American Pie.
Drove my Chevvy to the Levy but the Levy was dry.
Them good ol’ boys are drinking whisky and rye.
Singin’ this’ll be the day that I die.
This’ll be the day that I die.
The day, the music died.”
The Gold market is at the moment a bit like the old parlour game of yesteryear, when we all played ‘Musical Chairs’ after dinner on sundays, before wall to wall TV, and other distractions began to isolate us from each other – except via digital means.
The game – for those who don’t know – involves putting together enough seats for all the participants, while playing music, and then removing one chair.
When the music stops, the last one to sit, is out.
The game continues until all the participants are out as each turn gradually reduces the number of chairs to one.
The gold market is gaily playing the game, blissfully unaware that the gold (Chairs) are being continually reduced and one day soon, the Bullion Bank Gold Vaults, will be empty, and one of the big players will want to walk away from the game, with their chair, (Gold) and the chair won’t be there.
The day that that happens, will be like the day in the song above.
For those unaware, the song was a reference to the crash in 1959, when Buddy Holly, and the other musicians Ritchie Valens, and J. P. “The Big Bopper” Richardson were killed in a plane crash near Clear Lake, Iowa. They disappeared off the radar on a snowy journey on February 3rd.
The evidence is stacking up for all to see. Those with even a small stash of Gold and silver will be the lucky ones.
Exhibits A, B, C, and all the rest are from a web-site I visit on occasion, but which in recent days has been just full of evidence that the number of chairs is quietly, and incessantly being reduced, as the Chinese take all the chairs east.
The day the music stops, will be like the story of the Emperor who was wearing no clothes, until the small boy pointed out the truth.
Gold (and silver) will be worth a whole lot more, no matter what Harry Dent Junior says:
As governments have used their ammunition in fighting to retain power for their Fiat currencies, the price of Gold and the Exchange Traded Product (ETP) or Exchange Traded Fund as it is more commonly called for Gold – the GLD has fallen.
But there comes a time in every charlatan’s performance when those watching no longer believe in the power of the magician pulling the strings behind the scenes.
In this case the arm of power behind the throne – the Central Banks – have sold or leased much of their Gold to Bullion Banks, who have sold this gold on the markets as their futures contracts came to an end, and the buyers took delivery, rather than as might have happened previously – settled in cash – it is increasingly obvious that as the number of contracts increase and more and more gold heads east to China and India, and north to Russia, and to numerous other central banks worried about their gold held in U.S. vaults, and have begun to increase their holdings, and repatriate their gold from overseas vaults, that it couldn’t go on forever.
And then this piece caught my eye…
So what will happen when the gold does really run out?
Initially, I suspect Bankers will settle for cash, but probably have to pay a premium to do so, as those who own the metals contracts extract their pound of flesh. This will probably be under the radar, at first, but it will eventually leak out, and as more and more people have to settle for cash, the premiums will rise. This will feed through into the published prices, as the disconnect between the paper price and the settle price increasingly becomes obvious.
According to figures I’ve seen there are between 100 and 200 contracted ounces, for every real ounce in existence. This is how the Bankers came to dominate the world and its economies. The left hand not letting the right hand know the truth or what it was upto.
Fractional Reserve Lending meant lending out upto 10times the amount held on deposit. Of course this assumes they hold ten per-cent in reserve. BUT in the last ten years, those same bankers have had as little as 3 per-cent and that means they were lending out in excess of 30x their reserves. And that is the reason for the boom, and the bust when we had our Bear Sterns and Lehman moments.
If the Bankers persist in this lending and futures contracts binge, then it will end in disaster for the banks (and us) but at that point, the price of gold – both official and unofficial, will explode to the upside.
Of course in the meantime, as Harry Dent has stated on several occasions, the price may fall in the meantime, as first deflation due to demographics, and his convergence waves take hold, but as has been mooted on Bloomberg today, perhaps QE4 is but a printing press away?
And if it happens, when all that money leaks into the economy?
Can you say Boom?
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To many, Capitalism, is what makes the world go round. But many others don’t really know what that is.
Where will all the food come from to feed these extra mouths?
So what is Capitalism?
Capitalism the word, derives from the word Capital – and Capital is…. “Savings”.
Of course savings, are generally stored in Banks, and that “capital” should generate interest. Of course interest is what the Banks give to the owners of Capital, and traditionally, the Bankers loaned out that capital to business people who would use that injected capital to increase profits, and those increased profits, would pay back the loan, and add value so that the expenditure of the capital is justified.
If we have a population explosion, such as happened after the second world war – the baby-boomers – we have a situation where fast approaching retirement the ‘boomers’ are now saving like crazy in their pension accounts, insurance or assurance policies, bank accounts and stock market brokerage accounts. Of course those who retire inevitably need income from their savings (some of which went into buy-to-let property which led to the boom, between 2002-2007) And yet interest rates have been lowered to zero per-cent or close to it, in Europe, the UK. and the U.S.
So as these savers are looking for yield from their savings, this has driven down Bond yields (A bond is a loan, to a country – such as aTreasury Bill, or Gilt – or a corporation, which generates interest to the holder.).And we know that to produce that interest, we need to generate growth – in the economy, and in the corporation.
BUT, all that growth relies on energy, and despite recent price falls in oil and gas, longer term, much of what happens in the sphere of energy is reliant on oil and gas production, which because of something economists are famiIiar with – EROI – Energy Return, On Energy Invested – we know that we are close to or past the Peak, and the energy cost of producing more energy, will lead ultimately to a collapse in the economy.
But few in the mainstream media, or among our politicians are willing to discuss this or how we might resolve this issue. Fracking is the U.S’s attempts, but as energy prices have fallen, the financial cost of Fracking is now placing undue strain on oil and energy suppliers, and upto 100,000 workers have been laid off in the U.S., and numerous oil companies are either in, or facing bankruptcy.
In the UK, the government has given corporations the power to search for oil and gas under homes, without the normal permissions processes, that the local community normally have, through the licensing process, and through local council control and planning laws.
This therefore begs the question, what should we be told, and if we should what we need to do about it.
This video over an hour long explains how we have been duped.
At almost two and a half hours long this video below gives a full picture of how those in power, are still duping us.
As these videos suggest, the rise of the corporation and its influence of the political process, suggests we are well on the way to neo-fascism along the lines of Hitler’s Germany. And the energy revolution I spoke of in a previous post can’t come soon enough.
And Michael Ruppert who you saw in the first film, was a man on the inside, who having been threatened and shot at by CIA operatives, left the police force to investigate how the world really works. Here he discusses his findings, shortly before his untimely death at his own hand.
According to one recent Reuters article, China has now decided to update the world with its Gold holdings on a monthly basis, and has informed us, that they have added another 19 tonnes to their holdings. Not a huge figure given what we have learned of imports and production in recent years, but perhaps it is an attempt to ratchet up pressure on those pesky western bankers in the IMF that have refused entry to the SDR currency basket?
Time you made some changes in your life?
Time to get some Gold? Or Silver? Or Crypto-currency?
Central Bank Manipulations?
The reason Gold has not exploded yet, is because Gold as a physical asset, is undervalued in the West (in general), and highly valued in the East for historical reasons. (Partly as a result of Western Central Banks, having too much power, and thus ensuring regulation gets passed to limit Gold’s usefulness as a store of wealth and partly, because the Chinese had their education in paper currency back in the 11th Century, and others in the Far-East had their education more recently, with the currency crises of the late 1990s.)
As Gold heads east, it is in the interests of those who wish to accumulate it, to play devil’s advocate and allow the manipulations to continue. As I stated in my last post, both Russia and China, are unimpressed that when they sell goods on International Markets, they receive a depreciating currency, that can be conjured up out of thin-air [or to be more accurate – digits on a computer] by its manipulators…
When the Tide goes out (to borrow a phrase used by Warren Buffet) i.e. When Gold becomes part of the process for settling International Trade again, then we will see who is wearing no shorts – (i.e. a fast-reversal back to Bretton-Woods) i.e. which countries, are spending more than they earn – Internationally speaking – and who is managing their economy well, by exchanging physical goods, for physical goods (in the form of physical Gold, or a gold backed currency which can be exchanged for Gold)
China’s approach is therefore like an aeroplane coming into land, and on the approach path to forcing the world’s trading nations to stop using currency inflation to buy up scarce natural resources, and Gold will at that time achieve its real value.
That time will happen when the first country breaks ranks, and demands Gold for its goods, and has enough Gold to withstand a draw of its currency for International Trade, and the only country that comes even close to that is China (and perhaps Russia) and therefore when China finally – officially – releases its Gold holdings – which Pravda in a recent article suggested was 30,000 tonnes, (because they have re-smelted their Gold, and re-cast it into 1Kg bars) then the value of Gold will achieve the exponential rise we have all been expecting.
By end 2015, China, has to float its currency, (WTO regulations) so perhaps is hedging its bets, by holding huge Gold reserves to act as a floor under the value of their currency. Reference – http://english.pravda.ru/news/business/21-05-2015/130683-china-0/
That to me makes perfect sense. It will also mean those countries of Africa, South America and other developing nations, who sell raw materials, will experience rapid rises in living standards, and many will end up paying their political masters huge sums, unless the corruption that has been endemic in some of those countries, suddenly vanishes. (Just as happened during the 1970s which may in itself cause other problems as it did, during the decade and the one following.)
Of course, the poor westerner, will experience rapid price inflation for all their most important needs. And those countries who use the American Dollar as their currency system, would be well advised to consider a replacement.
Food, and raw materials, such as oil, gas, copper, tin, lead, zinc, and precious metals, too will all be more highly valued.
Those with good stores of these commodities, will flourish, those who depend on government largesse for their income, will not fare so well.
And paying for things internationally, will require some form of internationally accepted money – one I have been reading quite a bit about in recent weeks is BitGold.
This manages to marry the best of both crypto-currencies, and precious metals.
To widen your reading and viewing material, you might like to visit these channels on You-tube, and search terms and web-sites.
Recommended YouTube Channels:
Ron Gibson – WhatReallyHappened 2015 (Mike Rivero),
Mike Maloney – GoldSilver.com – WealthCycles,
YouTube Search Key Words:
Dr. Paul Craig Roberts,
Jim Murphy (GATA),
G. Edward Griffin,
John Williams, (or Shadowstats.com)
Catherine Austin Fitts,