Gold and Silver – Banking

Chinese Torture?

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Anyone over 50 (at least in the UK.) will no doubt have learned of so-called Chinese Water Torture, which was discussed in the playgrounds of schools the length and breadth of the country during the 50s, and 60s – perhaps this misplaced discussion was just childish minds being over imaginative, or the result of the war films that were the standard fare of the era, or perhaps just the result of propaganda by a biased media, or just by ill-educated professionals, who had been mis-informed and we juniors picked up on it – we can but speculate.

According to the stuff of legend, this involves suspending a bucket or other recepticle full of water in which a small hole has been punctured, such that water will drip out at a fairly consistent rate over a fairly lengthy period of time.

The torture victim, is placed under this recepticle, and strapped in a fixed position. The slow but monotonous dripping, at first appears to offer no threat to the intended victim, but over time, first becomes an inconvenience, then a minor irritation, then an annoyance, then a major irritation, then downright torturous.

The slow drip, drip, drip, ratchets up the pressure on the intended victim…

Applying the Torture?



So, this analogy brings me to the reason for this tortuous piece.

As I wrote some weeks ago, China informed the world, back in May, that they had improved their Gold holdings over the previous six years from April 2009 at 1,065 tonnes to 1,658 tonnes (allegedly – since many commentators think this was significantly under-reported)

According to reports, China announced it had purchased an additional 19 tonnes in July, but news released a few days ago, says they have also now added an additional 16 tonnes in August. This now brings their total to 1,693 tonnes, and according to silverdoctors.com, they’ve imported “a whopping 112 tonnes” so far in the first half of this year from the LBMA, up from the 110tonnes in the whole of 2014.

So is this “Drip, Drip” of additional purchases the equivalent of the torture method mentioned earlier for the FEDs?

China sold some $94 Billion in Treasury Bills, which might also be sending a signal to those in the non-BRICS Banking world.

And according to Alisdair Macleod, who referenced a Zero Hedge article, he said that if nothing else, it confirms the gold market is plagued by disinformation, not limited to Comex. Besides the conflict between the bears in the futures market and the physical bulls, on one day we are told of record Indian gold and silver imports at 126 and 1,400 tonnes respectively for the month of August (Koos Jansen), and of Indian gold demand “remaining weak” (HSBC). The former is a hard number, the latter an opinion, but it is opinions that are quoted most in the mainstream market commentaries.

Also in August, Chinese public demand reported on the Shanghai Gold Exchange totalled 265 tonnes, so between India and China identified demand exceeded the world’s monthly mine output by about 56% – Over half. Given anecdotal evidence of increasing physical demand from elsewhere in Asia and also in western markets by the general public, the drainage of physical gold previously available to cover futures and forward contracts, as well as unallocated bullion bank accounts is at very high levels. No wonder there is so little registered gold in the Comex vaults.

Alisdair Macleod September 3rd 2015, interview…

Now we hear via Jim Willie interviews, that the Tianjin explosion, may MAY, have been a Langley (i.e. CIA) inspired or managed incident. Remember, this was in an industrial park, port, and the home of a chinese super-computer, which according to JW, managed not only financial transactions of the emerging Chinese Banking and Financial Services Industries, but Chinese Military, and with a footprint of 1,000 square feet is HUGE. Within days of the explosion, the whole of the North-East of the U.S. Airline databases went down. Was this a revenge attack by Chinese hackers? We shall never really know, but we can speculate.

As things stand, the British, German and American Financiers, who essentially rule western industry and politics, will have control wrested from them, when the Chinese wrest control of the Gold market, and Precious Metals are priced in Yuan/Renminbi (RMB) and Chinese currency will be required in most trade deals, and many east-asian nations may, MAY only accept Renminbi for their products, and that will help seal the fate of the dollar.

As things stand now, 32 nations have currency swap facilities with China in Chinese currency, as I suggested some months ago, when Saudi-Arabia began discussing oil deals with China, as a way of balancing the emergence of the changes in the oil markets which have driven down oil prices largely because of fracking, and deep water production made possible by cheap money loaned out in the form of Corporate Bonds, we may see oil wars, but therein lies the problem.

As oil prices have collapsed from their 2007 high of $147/barrel, those corporate bonds, and finance raised to drill for shale oil, will come due, and many of those companies, are now struggling to make money. According to Jim Willie, the oil bond market collapse could be greater than the sub-prime crisis, that exploded onto our screens in 2008.

And at this particular point in time, the world credit markets stand on $700 TRILLION worth of derivatives. When the derivatives market collapses, perhaps as a result of those oil bonds, we could be seeing the end of the dollar empire, and thus the end of Western hegemony.

But this is of course all speculation…

However, when this collapse happens those who have savings in Banks, Savings in Stocks, Savings in Pension Funds, IRAs, SIPPs and bonds, will all suffer. When all those savings – excess savings as “Conant” once in the late 1890s called them, sought out productive assets overseas, in the round advocating a dollar Empire in the process, rush for the exits, from assets with counter-party risk, to assets with none, then the long awaited price reset in Precious Metals will begin.

And this price reset, will cause a spike in metals prices as many of those manipulators, who are currently shorting the price using leveraged shorts in such products as ETFs, ETPs, Options, Covered Warrants, CFDs, Spread-Betting accounts, and Binary options accounts, will all be rushing for the exits at the same time.

And where will the carnage lead them? To the one asset class with no counter-party risk.

Have you got yours yet? The sand in the hour-glass may be fast running out, as reports emerge of severe shortages in small denomination coins and bars. 100 Kilo bars are still plentiful in Silver, and larger bars. This may be a fabrication issue – i.e. refineries struggling to keep up with coin and small bar demand, or it may be that there is an emerging shortage of silver in the supply chain. If you were a miner, would you sell your ore into a falling market?

Remember, no-one will sound the bell identifying that now is the time to act. If you haven’t already begun to prepare, time may be fast running out.

It will be prudent too if Jim Rickards and Bill Bonner are correct, who have been following this inevitable crisis from its inception in the 1970s to its current conclusion, advise us to take currency from our bank account, and keep it outside the banking system, while we still can. About a month’s currency should suffice.

The banking crisis in Cyprus, in 2013, and Greece in 2014/15 were just stepping stones on the way to this one. Legislative changes forcing European Banks to seize their depositors’ currency rather than hit tax-payers for another bailout have been put in place. The digits on the banks ledgers are now theirs, not yours. You have been warned.

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A New Russian Winter, or the Calm before the Storm?

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Some weeks ago, before Xmas, I floated the proposition that “The West” might be about to shoot itself in the head, heart, AND foot, just to make sure.

My reasoning was that Russia, might be about to demand payment in Rubles for their gas and oil and other things, which would effectively shoot the west in the aforementioned organs, as they sought to ratchet up pressure on President Vladimir Putin.

The U.S. through its monetary influences and power in International Organisations – the World Bank, the IMF, BIS, Federal Reserve, and of course the ECB, Bank of England, U.N. and Bank of Japan etc, is waging a war against Russia, in a vain attempt at defending and extending its influence in the middle-eastern region, and throughout the near east, ostensibly to protect itself from the rise of China and a resurgent Russia. (more of which later)

The beginnings of this madness began with the end of the Soviet Union. The west in NATO, and through European organisations made agreements with the Soviets, to not encroach into former soviet countries, yet many of those countries, in order to avoid the risk of re-colonisation, chose to join the North Atlantic Treaty Organisation (NATO) and/or the European Union. (E.U.). This was also of course to strengthen the U.S’s Federal Reserve backed monetary system, which as I’ve mentioned numerous times is now no longer backed by physical precious metals.

Of course, when the U.S., under its attempt to extend its influence in the region, encouraged the western larger part of Ukraine to throw off its recently elected leader as it were, to rub Putin’s nose in it, and incurred the wrath of the Crimean Russians, and the Russian speaking ethnic Russians east of the Dneiper River, it essentially wandered into Russia’s back-yard, and that was the straw that broke the camel’s back.

The Crimeans, who are predominately ethnically Russian, were backed into a corner, as the new western backed government in Kiev, made the Russian language illegal.

Imagine if you were a Welsh speaking Welsh person, and the incoming British government, made your language illegal? Or Irish? or Highland Scottish and they tried to make Gaelic illegal?

You’d be pretty PO’d too…

The Crimeans, who felt Russian, spoke Russian, and historically WERE Russian – If we remember our history – Balaclava, near to Sevastopol, on the western coast of Crimea, is where the British Light Brigade, charged the Russian guns, to such detrimental effect, in 1854, and it is remembered in the rousing poem by Alfred, Lord Tennyson. So, a hundred and fifty years ago, this part of the world, was as Russian as it surely is today.

The President, of Russia, kept a low profile recently, and even disappeared from view for ten days, prompting mass media speculation by western media about his health. Of course, when he reappeared, the President issued a wry smile, and joked about “gossip”.

But behind the scenes, the Russian bear is fighting back against the Dollar hegemony. Of course the war of words is being ratcheted up as American military conduct war games in Estonia, this week-end, a former Soviet satellite nation, and right next to the Russian mainland.

Guyane Chichakyan a journalist for RT, posed an interesting question to one of the U.S. government’s PR spokespersons today (Saturday) when she asked Jeff Rathke of the U.S. State Department: Why was it that when Russia conducted military exercises on their own soil, it was supposedly raising tensions, but when Americans conducted military exercises several thousand miles away from home on Russia’s borders, it was in the guise of international peace and security.

The PR guy nearly choked on his reply, denying that they had ever said such a thing, to which, RT showed a clip of Jen Psaki of the U.S. State Department, on August 14th, 2014, doing just that, when referring to events in Ukraine and close to the Ukrainian border. As I mentioned some months ago, the next world war has already begun as a war of words, and for people’s hearts and minds. Every channel, both public and private will be used. It will in all inevitability end in a military war, though perhaps not on such a full-scale as the last one in 1939.

But perhaps also the anti-U.S. state of mind is gathering steam… As I mentioned some weeks ago, Britain applied to become a founding member of the AIIB (Asian Infrastructure Investment Bank) the alternative to the U.S. dominated World Bank and IMF, and we hear from the New York Times, that now Germany, France and Italy wish to join in defiance of U.S.’s (cough) “requests”.

Perhaps the dollar’s end as a major world currency is finally coming to an end, as a result of the mass Q.E. exercise of recent years.

It is time we all engaged our brains.

And then last week, I read this… http://russia-insider.com/en/2015/03/19/4696 which discusses just that.

If a shooting war does begin in earnest, money – hold in your hands money – will allow you to survive the inevitable inflation that will ensue, and the grey market will offer up far more than the government enforced, and controlled ones. If you value your freedoms, liberties, and the health and well-being of your family and friends, I strongly suggest you begin preparing – if you haven’t already.

Gold and Silver coins and widely accepted silver and gold ingots of widely known mints will prove to be good ways to secure your own future “essentials”. And Bitcoin, and other [Alt-coins] will enable international transactions. You can begin your own FREE collection of these precious [Alt-coins], when you set up an account by merely supplying an e-mail address.

World War 3.0? The End?

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An important anniversary slipped quietly by last month without any fanfare, on August 15th, as the anniversary of the day, that President Richard M Nixon, closed the Gold Window, and put the world on the path to financial armageddon.

From that day to this, the U.S. has essentially been able to print up as many dollars as it felt it needed to pay for things it wanted, and forced the rest of the world to accept “funny money” – aka. – Fiat Currency.

The fact that they were able to strengthen the dollar in 1973, temporarily when it convinced Saudi-Arabian leadership to accept an offer it could hardly refuse is still highly relevant…

America would back the House of Saud, with the full military might of its national forces, and the Kingdom of Saudi-Arabia (KSA), would accept only U.S. dollars for its oil, forcing dozens of other countries to trade for dollars, to pay for that oil, and the KSA, would re-invest those surplus dollars in Treasury Bills. Eventually the rest of OPEC would be forced to follow suit or commit commercial suicide.

Over the last 9 months, events in the precious metals markets and geo-political and economic circles, world-wide have been making headlines.

As geo-political tensions rise around the world, I wonder out aloud what is the end game. To learn where we are going, it’s important to know where we’ve been, and we have to look back 40+ years.

If we look at the ageing baby-boomers who are retiring in droves here in the west, (Of which I am one) and as our spending patterns change, we need to understand why this has such a big impact on economies.

In my experience, young people spend their money on a handful of things – Music, Fashion, Booze, travel and generally having fun, primarily in their pursuit of their partner in life – irrespective of their sexual proclivities.

As these people mature, they buy a bike/car, and their first flat or small starter home, and all the essentials of normal urban life – beds, tables, chairs, sofas, kitchen gadgets etc.

Then as they pair and begin to settle down, their partner now safely esconced in their home, perhaps 5 years have passed, and two incomes in one household means for a while they can experience a rise in social status and maybe buy a bigger home or have more expensive holidays. (though things are a little different in recent years as gap year students take the young to the far-flung corners of the globe.)

With women now making up more than half the working population in the west, women are now leaving “bonding” later, and perhaps seeking someone who meets and exceeds their expectations, and thus probably for professional women (i.e. those with degrees and/or professional qualifications) they’re leaving the having of children until they are in their early 30s, or as late as early 40s causing problems for over-stretched maternity departments, and over-stretched National Health Services, as increased age introduces greater risks and higher costs.

By their mid-thirties, people are climbing the corporate ladder, getting increases in pay, generally as their productivity rises in line with their experience.

Output on a national scale rises but this is only temporary unless higher investment in capital goods (new vehicles/machinery etc., that gets goods to market quicker, and/or cheaper) increases productivity further, these gains are not carried through indefinitely though. This is where political mistakes are made, as politicians think that the growth will continue.

As people hit their forties and early fifties, their willingness to learn unless pushed, seems diminished as they become experts in their field, just at the time newer technologies are adopted by the young first.

By the time people hit their mid 50s and early 60s, their abilities are beginning to decline; health issues begin to rise on average and national governments see a fall off in taxes, as some retire early, or die young – though the demands on their national budgets increase as improvements in health-care put additional burdens on national budgets.

Intermittent overseas wars also add to these burdens as those apparently with historical empires adopt the role of world policemen.

This adds further financial burdens on countries, and leads to overspending to maintain prestige, or to appease emotional electorates, or to maintain their leadership role, allowing those with more quiescent military to improve and begin spending in increasing amounts.

This was the nature of things in the west when Britain began losing its pre-eminence, and the U.S. took up the political and economic cudgels.

As a result, we now see the extent to which Britain, and America have over-spent in recent years, as the U.S. deficit grows to 105% of national income, and its budgets become overstretched as its military tentacles have extended now to over 145 countries.

The role of World policeman is an onerous one, and like all great empires this eventually causes a collapse at home, due to excessive spending as tribute (the term used by the Romans to refer to taxes) begins to lessen.

As demographics affects all economies, those with rising populations have greatest demand for housing, food, water and the other essentials of life, and when economics fails to meet those requirements, people look for scapegoats. Those with the most usually get the most scrutiny and criticism.

But to get back to the title of this piece, where will this ultimately lead us?

As Vladimir Putin, and Xi Jinping, grow their economies, and grow increasingly wary of U.S. dollar hegemony their actions have consequences for all of us.

China has in recent years agreed bi-lateral trade deals with a rising number of countries to reduce the dollar from its trading, and China in particular has used its excess dollar reserves to buy increasing amounts of Gold and Silver, and overseas resource assets with precious metals and other precious resources for its industries.

Russia too has sought to lessen its dependence on dollars, and the BRICS Development Bank recently announced, will wean these emerging economies off the dollar as the $100billion in Capital gets used to help out economies in difficulties. Will some of this capital be used to buy Precious Metals? It would appear so, as China now trades more Silver in physical metal form, than the COMEX, the former leader in precious metals derivatives trading.

This will ultimately lead to a dollar collapse, and like a wounded animal, this may lead to the U.S. lashing out to protect its interests, as it has been in the middle-east and in Ukraine, where fights to protect access to middle-eastern oil, paid for with dollars, and for access to Ukrainian agricultural land are being waged by proxy military. But the collapse of the dollar unless mitigated by the increasing energy production, may cause the whole world economic woes, or worse.

This involvement in the middle-east has caused many of the problems as those with a different view of the world seek to eliminate western ideologies from their countries. These skirmishes though, may grow to encompass those other major economies – China and Russia.

James Dines, the economic mind behind the Dines Letter and Dr Paul Craig Roberts former adviser to Ronald Reagan, also thinks that we are on the verge of a major conflagration and James Rickards a CIA adviser on financial matters, in a recent interview claims the U.S. is staring down the barrel of an economic gun.

(See: KingworldNews.com)

But also in January 2014, the United States government entered into a deferred prosecution agreement with JPMorgan Chase which is the biggest bank in the United States and one of if not THE biggest banks in the world giving those who have benefitted most from the financial mess the U.S. has gotten itself into essentially a free pass.

The recent prosecutions of Financial Institutions has resulted in fines being paid, and JPM – probably the biggest offender, has paid approximately $29 billion in fines – yet not one senior banker has done any jail time.

When Janet Yellen begins the next round of Quantitative Easing (which might be called something else) all hell will break loose in the precious metals markets.

Buying Silver… Why NOW?

The reasons are not so obvious.

Silver is collectively, a monetary metal, an investment vehicle, and an industrial material.

Silver’s role in international finance has been prominent over several millennia, as this shiniest of metals was used in Roman currency, and only when Emperors devalued the money by reducing the silver content of coins, did they suffer the wrath of the people. (See: The Coming Battle – 2013)

Industrially, silver is the most widely used commodity on the planet, reputedly used in 10,000 applications and rising. Second only to oil in importance, but its price has been walked lower for decades, as silver was first taken from its pre-eminent role in both American and Chinese money with its removal from the dollar, to junior partner, to minimalist role, and finally in 1964 to negligible role as U.S. currency removed the last remnants of the metal from American currency.

Is it significant, that just 7 years later, on August 15th 1971, the last vestige of precious metals, was removed from the American financial system?

If the death of President Kennedy, and Louise Auchincloss Boyer are anything to go by, I think so.

But silver’s western denouement, means that the East has been able to accumulate this most precious of precious industrial commodities at prices unlikely to be seen again, after this financial collapse begins in earnest.

Silver historically was bought in ratios circa 16:1, compared to gold. We see evidence of this still all around us – 16 ounces to the pound, in the U.S. – 16 fluid ounces to the Pint and this ratio has varied in recent years as silver’s role in monetary matters has been slowly extracted, but its time will come again – it always does…

And with the current Silver/Gold ratio of circa 65:1 when it does go up, because it currently comes from the earth at circa a 9:1 ratio, then its rise will be meteoric.

And if that wasn’t reason enough to be accumulating…

These links should help you make up your mind…

http://blog.milesfranklin.com/dont-be-surprised-if-silver-is-the-target

http://www.caseyresearch.com/articles/top-7-reasons-im-buying-silver-now-1

And this page shows you were you can STILL buy silver coins and bars at VAT free prices, and have them discreetly shipped to your door.

www.libertysilver.eu

And you can get further news on these matters at:

http://kingworldnews.com/

 

W.

99 Years and counting down…

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So, tomorrow is a VERY special birthday. The Fed set up by a cartel of banking families, in total secrecy is 100 years old tomorrow.

The Fed grew out of a crisis that occurred in 1908. The whole story would take far too long to describe fully here, but suffice to say, the financial crisis we’ve just experienced, is widely accepted to have been as a direct result of excessive lending on property which in a market that was growing due largely due to demographics, but also because spurts in population growth occur at regular intervals.

If you have access to that data, you can time your entry to the market with precision, or even take advantage of the panic when it occurs.

Of course when you are a Bank, and you have personal data on birth-dates on hundreds of millions of accounts, that data can prove invaluable. You can agree to lend, driving up house prices, then when they begin to rise, you can relax your lending, giving 4, 6, 8 or 10 times current incomes, driving prices up even more. Then as house price inflation rears its head (as it inevitably must) you can raise interest rates driving hundreds of thousands into negative equity, as property prices become depressed.  Of course only a conspiracy theorist, would think they would do that… Wouldn’t they?

The 1908 Banking Crisis

The crisis of 2008 had several outcomes. Property prices would crash, many would lose their jobs, and politicians would agree to more spending. All (they say) to overcome the further progression into recession – depression even. 

Exactly a hundred years ago, a similar crisis occurred. Are we to believe we have learned nothing? Are we to believe that our leaders have not read anything on Political economy, have not read any Economic History, have no advisers who have? Or are they only concerned with their own political futures?

To see, we need to go back a hundred years, perhaps even a little further. to find the cause of the crisis.

The turn of the century ushered in the era of the Oil revolution. A second wave of the industrial revolution, that was originally brought about by the use of coal in steam engines. OIl would enable greater productivity, and usher in the era of the motor-car. Yes, oil had been found before, and was in widespread use since 1859, oil had been used in oil lamps for lighting, given away by Standard Oil – the baby of the Rockefellers.

But in 1901, a new well in Texas spudded. On January 10th, 1901, Spindletop oil well in Texas gushed forth, reaching peak production of over 100,000 barrels of oil per day. It took over a week to bring it under control. Over the next few years over a hundred oil companies would be formed, and thousands of new wells drilled. The wealth created spread out into the wider economy, and the Bankers who had loaned these new corporations the capital made hundreds of millions in new profits. Then, just as now, people speculated on these corporations, and bankers pay became the stuff of legend.

F. Scott Fitzgerald, who would later write the great novel – “The Great Gatsby” would bring this world to a wider audience, but in 1906, a crack in the world – along the San Andreas fault would usher in a period of tumult. 

An earthquake at just after 5:10 am on April 18th, measured by various estimates as between 7.7 and 8.25 on the Richter scale shook San-Francisco and the state. The Newspapers all wrote a collective piece the following day headlined: “The City that was”, as almost 300,000 of the 400,000 inhabitants were left homeless. Barely a building was left untouched.

The epicenter of the quake was reportedly two miles off-shore, but it radiated up to almost 300 miles away, as its effects were felt as far north as Oregon, and as far east as Nevada. The loss of output from San-Francisco, and the disbursements laid out by insurance companies, who had to collect on their own insurance through the re-insurance markets led ultimately to a shortage of capital which helped precipitate the shortage of funds in the markets for speculative purposes.

And that caused the crisis. but its what happened next that matters.

To be continued…