13
Reasons for Major Gold Breakout by Jim Willie, CB. Editor,
Hat Trick Letter | September 10, 2009
Before
the Hat Trick Letter was launched, a little splash was made
when a Jackass Nobody wrote “25 Reasons Why Gold Will
Rise” in November 2002. It was so many years ago that
the piece no longer appears in archives. The motive for the
article was simple. Just too much pure nonsense and genuine
rubbish had appeared in the financial press about why gold
was rising. ‘THEY’ claimed the gold price was
rising from MidEast tensions, from new global tensions due
to a False Flag attack on New York City in broad daylight,
and from other factors clearly irrelevant to gold. It was
not disinformation so much as stark ignorance and stupidity,
perhaps even compromised marketing from the fiat bowels on
Wall Street. The crack analysts in financial circles overlooked
the negative real interest rates offered by central banks,
as the miniscule official rates were overwhelmed by price
inflation, thus rendering gold a free pass profitable investment.
Stupid inane mindless drivel continues to pour out today as
to why gold has reached the $1000 level. In simple English,
THEY HAVE ABSOLUTELY NO IDEA WHY GOLD IS RISING. The faceless
‘THEY’ had no idea in 2002 and ‘THEY’
have no idea now. The main fallback factor ‘THEY’
turn to is a hedge against price inflation, the basic kindergarten
concept. The Wall Street machine still uses mental crayons,
as nothing has changed. They are too busy building leveraged
contraptions and forging collusions. Those who are aware in
the Mainstream are dead silent as to why gold rises, since
they realize their world is to vanish.
The original litany of reasons was examined
two years later in “25 Reasons Why Gold Will Rise (revisited)
+ 2 more reasons added” from August 2004 (CLICK HERE).
A couple mining factors had cropped up, worthy of inclusion.
A quick swing to the present, after the insolvent US bank
system died in September 2008, after the discredited USFed
capitulated to offer near 0% rates, after colossal fraud spewed
from Wall Street corner offices, after fraud was compounded
by the Goldman Sachs creation of Congressional slush funds
for self-dealing banker benefit, after the home mortgages
continued to hurtle over the foreclosure cliff, after the
USEconomy continued on a path of disintegration. Here we are
again with oafish hack apologist morons trying to explain
the rise in the gold price. To comprehend the golden factors
requires them to leap forward well past their Wall Street
marketing pay grade.
GLOBAL MONETARY SYSTEM BREAKDOWN
An acute lack of gold comprehension is evident
almost on a global basis. The entire system is wedded to toxic
paper. For the most part, so-called experts, industry analysts,
and network anchors have absolutely no idea why gold has risen
above the $1000 level. They are blind to the Paradigm Shift
away from the USDollar and cannot admit the breakdown of the
global monetary system. Their jobs might require them to turn
a blind eye to such catastrophic events. At best they might
have spent their entire careers inside the noxious US$ Greenhouse
Dome, unable to see from an external vantage point, in no
position to see the Dome from an outside perspective. It will
be interesting to observe how long the ‘SYSTEM’
remains ignorant of the massive changes taking place, as the
stages they sit upon and work upon are slowly vanishing. Their
claims for golden reasons are vacant shallow factors. THEY
miss the major factors. They do notice a staggering amount
of fiat money being created without basis, which would fall
generally under item#2. The actual reasons are many. The list
is somewhat debatable, subject to interpretation. Some argument
might even come from within the gold community.
Basically the reasons extend from the many
tentacles and ramifications of the Grand Paradigm Shift in
progress, the complete overturn of the USDollar global financial
system. It is being turned upside down before it goes inside
out, and finally fractures into a million pieces. This is
an irreversible process that is already one year into the
collapse process. Here are reasons according to my analysis
and perceptions. They only number 13 this time:
1.PARADIGM SHIFT away from a USDollar centric
world manifested as the global revolt against the USDollar
in reserves management and transaction settlement, extended
from bank structures
2.colossal irresponsibility of major central
banks with expanded balance sheets, money creation, and
credit growth, endorsing their government profligacy
3.failure of the central bank franchise
model, exhibited by the ongoing credit crisis, insolvency
of banks, and desperate attempt by the US Federal Reserve
to serve as the global bank
4.ruined global monetary system from the
complete debauchery of money itself
5.perversion of the USDollar from required
USMilitary subsidy, from coerced USTreasury Bond support,
and from tacit acceptance of Wall Street corruption (past
bond fraud and debt rating agency collusion without prosecution)
6.proliferation of OTC derivatives over
$1 quadrillion in value with no prospect of resolution,
no hope of regulation, and deep corruption, but with deadly
dependence
7.gradual recognition of a financial crime
syndicate having taken control of the USGovt finance ministry,
that involves official channels of slush funds, bond counterfeit,
and narcotics money laundering
8.dishonor of financial contract law, chronic
lapses in financial market integrity, and constant intervention
in those financial markets
9.expectation of mammoth price inflation
just over the approaching horizon, unless the central bank
balance sheets inflate beyond measurement in Weimar style
10.anticipation of banking system meltdown
in at least the United States and United Kingdom, likely
to result in bank holidays, useful for a forced Bank Consolidation
with dead banks capturing the system or for a climax Wall
Street theft event
11.observation of gradual economic disintegration
and the decline of global trade
12.trend toward commodity stockpiles, of
which gold is the financial commodity core element and crude
oil is the industrial commodity core element
13.specter of numerous pockets of armed
conflict, military war, and possible nuclear events, as
chaos spreads and nations desperately exploit the confusion,
and react to lost sponsorship relations, if not parasite-host
pacts.
MYOPIA & THE GOLDEN
TIDE
This process would be almost amusing, observing
cartels suffering at the hands of their own financial devices,
if not so tragic by the hordes of bystanders and affected
citizens. Some respected pundits will soon make fools of themselves
as they awaken to explain events and their complicity. THEY
do indeed comprehend item #2, but hardly anything more. Some
shallow souls like Karl Denninger actually state that one
cannot eat gold, and thus is has no structural value. What
a truly moronic point of view by a fine forensic analyst.
Stick to your knitting, Karl! Then again, he is half blind
and a high school dropout from chemistry and physics (see
his 911 Event drivel commentary). One cannot eat crude oil,
cement slabs, steel beams, or human undergarments, and these
surely have structural value to gird a foundation. Before
1971, few financial crises occurred during an era ruled by
gold as the foundational scepter. As the tide turns, THEY
will expound on the virtues of gold, without benefit of comprehension,
in a laughable climb onto a fastmoving bandwagon. Every pundit
wants to join a winning parade. Ron Insana of CNBC states
he does not understand why gold is rising, in supercilious
manner, as though gold is somehow impudent. He had no idea
that structured financial assets would implode in 2006 when
he left the monopoly CNBC network that acts like a Wall Street
marketing platform. He must have expected housing prices to
climb without end. He must not have received word that even
Goldman Sachs was shorting mortgage bonds heavily. He is neither
enlightened nor connected.
Such myopic vision is typical of bright people
who have no insight into the current Paradigm Shift, a dismantle
of the stage they stand upon. We are witnessing the demise
of the US-UK empire, a era built upon banker monopoly, engineered
inflation, Wall Street power, economic mythology, and military
prowess. The US$-based structures are vanishing, a gradual
process to date, but as times passes, more sudden shocks are
sure to arrive as entire floors simply crumble beneath the
feet of the wizards and their harlots. Some technical analysts,
the eerie bunch who follow price patterns, volume trends,
and cyclical measures, care little about reasons. They notice
extremely positive patterns in the gold stock index and gold
futures prices. Such analysts expect much higher prices ahead
from power evident to perceive. See the Bloomberg article
(CLICK HERE) from the mainstream press. They notice strength
and energy building. They care not why! There is genius at
times in such simplicity and designed distance from wretched
rationalization.
Just a quick aside, for the benefit of half-blind
Karl and others. The last command for Major General Albert
Stubblebine was head of all Army Strategic Intelligence worldwide.
Note his comments about the ridiculous story of an commercial
aircraft hitting the Pentagon, a story he mocks openly. Stubblebine
disputes by simply pointing out that the 5000-lb engines would
have left a very very big mark on the Pentagon building facades,
something that remarkably receives little discussion. No such
aircraft impact happened, since a missile hit the Pentagon.
Just try to imagine a jetplane that evaporated and incinerated
without any debris, an utterly absurd tale. Imagine an advanced
metal alloy fuselage incinerated and vaporized, even hundreds
of seats turned to dust while strewn. Let’s all hail
the first airline crash in modern hisotry without any debris!
It is a miracle! The retired Stubblebine should be careful,
but he must know the risks. This entire story is an insult
to our intelligence. See the YouTube video clip (CLICK HERE).
The tale told for the World Trade Center exploits the ignorance
of Americans, who largely failed physics and chemistry in
high school. See gravity (11 seconds for demolition freefall,
not a pancake staged collapse). See chemistry (jet fuel burns
2000 degrees too low to melt structural steel). Next resort
to Aesop Fables (third WTC building fell after saddened by
the collapse of its two big brothers). It is difficult to
insult the intelligence of a nation that has little. If a
2x4 lumber slab were slammed against half-blind Karl’s
blockhead, my guess is that it too would leave no mark, just
like at the Pentagon.
GOLD PRICE BREAKOUT BEGINS
The move to kiss $1000 gold was the foreplay,
the first dance, the initial step to capture global attention
and to preview the next much bigger move. Some important less
visible factors are at work to push the gold price up, somewhat
hidden from view. The Intl Monetary Fund and the London G-20
Meeting bear on the gold forces. The full breakout is imminent.
It could be days, or a couple weeks, probably not more than
a month. Ramadan ends in ten days, and Chinese anger is spilling
over. Underlying structures are breaking with each passing
week. Bank ripples are being felt. Insolvency is spreading
like a disease, while corruption spreads like a cancer. Central
bank money creation occurs like from a garden hose. Stories
will be told about these days for decades. This is history
in the making. They are accumulating gold bullion here. The
fools are still selling gold, unaware of its 100% rise in
price upcoming. Actually, what comes is a quasi-global 50%
currency devaluation. China is cutting deals with the I.M.F.
to secure central bank gold in huge blocks, much like geopolitical
horse trading amidst grand power shifts for global control.
If the West wishes to enjoy the benefits of Chinese credit
supply, then China must be given much of what it demands.
In short, the gold price will break out past 1100 and past
1200, toward a 1300 target, WHEN CHINA DECIDES TO GIVE THE
ORDER.
This has come to a Financial War between China
and the United States, waged in the USDollar and Gold marketplace.
The war chest held by China was essentially given to it by
the United States and other Western nations, with all the
foundation from direct business investment in factories. The
Great Economic Fools within the United States will be fodder
for historians for many decades. The conflict will inevitably
morph into a Big Trade War, and probably into a military hot
war. Few believed my warnings made in 2005 and 2006 that China
and the US will be locked in a Trade War within two to three
years. Watch the tragedy of armed military conflict unfold,
as the US makes one error after another, mixed with defiant
disobedience of its credit master China. The Beijing leaders
have giving the Obama Administration orders. The Wall Street
(errrr, Obama) decision to reappoint USFed Chairman Bernanke
to another term went in direct contradiction to Beijing orders.
Is it any wonder that gold hit $1000 in just one month after
White House meeting, and just two weeks after the Bernanke
reappointment? Not here!
Sir Alan Greenspan, architect of the failed
central bank franchise system, who offered monetary and political
cover for the Rubin-Clinton pillage in the 1990 decade and
for the Bush-Paulson pillage in the 2000 decade, has come
to the stage to give two messages. He just will not go away!
Greenspan seems to be one of his best historical critics,
without recognition of his new role. He cannot help but offer
criticism, a process that undermines his own legacy. Greenspan
warns about inadequate bank capital. He should instead declare
most big banks as insolvent, and even cadavers. He spoke via
teleconference to the Antique India Markets Conference in
Mumbai, an obscure forum.
Meanwhile, closer to home at a US-based economics
conference, Greenspan admitted that the gold price gains are
strictly a monetary phenomenon in his words, which should
send shivers through central banker spines. He believes that
rising prices of precious metals and other commodities represent
an early move to shun paper currencies. He genuflected before
the gold altar, when he said, “What is fascinating is
the extent to which gold still holds reign over the financial
system as the ultimate source of payment.” He always
did love gold! Economists should spend less time at conferences
and press interviews and more time learning and studying their
own field, so as to develop some expertise.
CHINA DECLARES A SUBTLE FINANCIAL
WAR
China made three major announcements in the
first week of September, each highly disruptive, enough to
add thrust to the Paradigm Shift, enough to usher in the nasty
phase (see Trade War escalation). The timing of late August
and early September for disruptions and onset of instability
has not been a disappointment. Some are disappointed, and
will remain disappointed, unless the sun does not rise at
all. They will never be satisfied. China has shaken the global
system in three key ways, resulting in a grand challenge to
the power structure. China announced:
1.permission granted for state owned firms
to selectively dishonor OTC derivative contracts by means
of self-administered Stop-Losses in reneges
2.Hong Kong demands the return of its gold
bullion held in custodial accounts held in London, to make
its own airport vault facility (the Zurich Switzerland model)
3.Mongolian rare earth metals will no longer
be exported to the West, an assault against hybrid cars,
certain electronics, and military weapons (missiles).
Implications are enormous. The OTC abrogated
contracts for crude oil and metal contracts, ripe with corruption
and entirely unregulated, could wound deeply Goldman Sachs
and JPMorgan. The demand for Hong Kong gold is more a symbolic
threat, adding thrust to what already has begun. Germany,
Switzerland, and the United Arab Emirates have demanded a
return of their gold from US and UK storage locations, the
corrupt centers where the gold was routinely leased illicitly.
The trend puts considerable pressure on the COMEX, which could
be deeply wounded from lack of underlying metal, as its corruption
is exposed and shorting without collateral backfires. Neither
the USGovt nor the USMilitary have accumulated stockpiles
in rare earth metals, a clear lapse. The distraction of profits
from bond fraud and narcotics trafficking must be too great.
Rare earth metals are critical for weapons programs, and their
absence could put further strain on the over-extended and
generally strained USMilitary. See scandium (21), yttrium
(39), and 15 elements from lanthanum (57) to lutetium (71),
whose atomic numbers are cited in paranthesis. Skip over this
part, Karl, as the elements up the scale are all just a blur
to you. By the way, copper, silver, and gold are all in the
same column for the periodic table of natural elements, a
key point, since they share unique traits in their valence.
The Chinese actions border on extreme, but
are part of a grand mosaic of change, if not rebellion amidst
a Paradigm Shift. THE CHINESE ARE EXTREMELY ANGRY. They are
angry about amplified USTreasury debt monetization. They are
angry about outsized USGovt deficits. They are angry about
USFed Chairman Bernanke being reappointed. They are angry
about the battle waged by the USGovt against Swiss bankers.
They are angry about Yuan currency manipulation charges. They
are angry about being given second class seats at the global
banker tables. They are angry about being set up as US debt
bagholders. They are angry about the slow retreat of USMilitary
presence in Asia. The entire foundation will undergo powerful
changes from these three salvos, and more to come, likely
even more defiant and elevated. The US-UK wizards who wrecked
the banking system will soon be driven over the cliff, victims
of their own devices, falling into a deep pit, weighed down
by their own insolvency. That bank system insolvency grows
worse by the month, as fresh credit portfolio losses still
outpace USGovt ‘gifts’ and new capital infusions.
SAUDI BANKS READY TO TOPPLE
Saudi banks are beginning to topple, soon
to cause deep ripples across the globe. Meanwhile, Saudi royals
are under threat of assassination. The Saudi Arabian central
bank announced it will not purchase the debts from two family
businesses after a major default. The Saudi Arabian Monetary
Agency will not cover the debt from Ahmad Hamad Algosaibi
& Brothers and Maan al-Sanea’s Saad Group. The debt
is owed to local banks. Units of the two groups have borrowed
at least $15.7 billion from more than 80 regional and international
banks. About $5 billion of that is owed to Saudi banks, Standard
Chartered stated in an August 26th report. See the Bloomberg
article (CLICK
HERE). On August 30th, a suicide bomber injured Saudi
Prince Mohammed bin Nayef, son of the interior minister and
nephew of King Abdullah. The incident took place in Jeddah
Saudi Arabia. Reports indicate the motive might be tied to
Saudi involvement in the civil war in Yemen. A check reveals
that Ramadan ends on September 19th. Expect all hell to break
loose in the Persian Gulf after its end. Mayhem will be permitted
at that time.
In a Jackass public article entitled “US
Bank Enemies at the Gates” from late August (CLICK
HERE), the risk of broad Arab bank failures was mentioned.
“But the Persian Gulf bank failures represent the clear
and present threat… A bank panic in the Persian Gulf
could ensue very soon, a back door threat. It would clearly
have origins in the United Arab Emirates, spread to the entire
Persian Gulf like to Saudi Arabia, Kuwait, and elsewhere.
From this global toehold, the bank panic could then spread
to London, New York, and points in Europe.” Perhaps
the origin of Persian Gulf bank shocks will be both Saudi
Arabia and the United Arab Emirates. The construction project
bust in Dubai, rescued by the Abu Dhabi bankers, will deliver
massive shock waves soon. They own a boatload of USTreasurys
and US bank stocks. The ugly geopolitical secret is that the
reign of the Saudi regime has days that are numbered. The
Saudi Royals are already constructing their new enclaves in
Southern Spain and Los Angeles. The Saudis have even hired
the European Aeronautic Defense & Space Company (EADS)
to complete a large MidEast security project, to construct
a fence which will encircle Saudi Arabia at a cost of $3.5
billion. These are the same geniuses who created the Airbus
flying tomb. Can you say Maginot Line? No students of history
in that room!