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Something
big this way comes. Events will center upon the arch-nemesis of gold, the
USTreasury Bond. Market interference is too huge, for bonds, for bank stocks,
for the entire financial sector. Banking system structures are too broken.
The pillars of the USEconomy are all in deep trouble, with profound deficits
and insolvency the rule of the day. See the USGovt federal deficit (growing
fast), the trade deficit (chronically large), the housing negative equity
(worsening gradually), and insolvent banks (worse each quarter, despite the
denials). A massive shock wave is coming. In all likelihood plans are in
place, with events already set in motion, as the plan is probably to be event
driven. Their objective is to disable the US
juggernaut, whose principal parts are a fraud centrifuge with numerous
supporting mechanisms, and an aggressive military machine with key banking
supporting mechanisms. In order to disable, derail, and bring a halt to abuse
by the US
leaders in banking, politics, commerce, and military, the foreigners (not
just perceived enemies), have turned their attention to the Achilles Heel. Timing
is critical, probably centered at the US
presidential election, or events aligned for its distraction. Details on a
possible scenario are to be found in the September Hat Trick Letter, which
will be of a simpler more succinct format this month. Typical information
flow and usual analysis seem out of place. Like with the US
system of schools and business, the new year starts in September. This will
be a strategic report.
Geopolitical
risks have raised to crescendo levels, as powerful enemies are angry. Given
false news reports, the United States
leadership and population seem incredibly confident and complacent, a big
risk. They fail to see the significance of events in Georgia
and all along the Russian border. Be sure to know that the economic decline
and faulty foundation found in numerous AngloSphere (US, UK, Australia, NZ,
Ireland, even Canada) systems has a backlash coming, which will propel some
of these nations into Third World status, or vassal positions under Chinese
rule, even ignored backwaters.
GOLDEN NEMESIS IS VULNERABLE
A
blowoff top appears evident in the USTreasury complex. The USEconomic
recession is accelerating, with confirmation in the bond market. That
statement might sound contradictory. An assumed 1.3% price inflation for Q2
was required in order to concoct a goofy story of 3% Gross Domestic Product
growth. The US
is in much worse shape than any major continental economy, bar none. If the
phony GDP figure were believed, the S&P500 stock index would not be
challenging at a multi-year breakdown. Press reporting of the USEconomy has
grown more distorted than ever before to support the US
system. In fact, the US
financial system resembles a gigantic fraudulent syndicate ring system. The
irony is that exported bond fraud in past years has been followed by
tin-cupping this year so as to secure replenishment funds to stave off
bankruptcy. Integrity of US financial firms is at rock bottom, inviting
foreign reaction. My position is that JPMorgan stands at the center of the
syndicate ring, starting with Enron involvement in 2000, extending to Cantor
Fitzgerald involvement in Sept 2001, and now with Bank of Baghdad involvement
in processing clandestine Afghan funds in clearinghouse operations. JPMorgan
might be the center of the money laundering operations that have kept Wall
Street banks afloat for years. Anyone with connections to financial officers
to these firms considers this information to be basic.
This
US
structural system has a vital channel. The bankruptcy of America
is the story of the year, as 2008 is the year the system breaks. The crowning
blow is the exported bond fraud, its lack of prosecution within the US,
and the exclusion of US banks and some corporations from the planned
‘Post-US World’ underway. Numerous summit level conferences where
important commerce and banking agreements have been recently forged on several
continents, all having excluded the United States
from participation. Big movement is seen in the US
bond market. Foreign central bank intervention has accelerated in the last
several weeks. The 10-year TNote yield is at the 3.6% level after hue &
cry of price inflation all through spring months. NO SURPRISE HERE! We might
be seeing a double top failure in the long-term USTreasurys. The historical chart
bears this out more clearly.
Along
with a USTreasury rally has come a giant swap trend, as foreign wealth
centers have traded out US Mortgage Agency bonds and into USTreasurys, adding
to the blowoff top. Some foreign entities are openly requesting bailout
redemption of impaired bonds. All corners seem to be hunkering down into
USTBonds as a safe haven. The risk of an actual default in USTreasurys must
be taken seriously, in view of upcoming intentions, however unwillingly
executed, to nationalize everything under the sun inside the US
landscape. The natural nemesis in financial markets for gold is the
USTreasury Bond. New supply puts it at great risk. The printing press with
raised lamination will produce huge USDollar output soon. Nationalization
demands it. The consequent risk to the USDollar and USTreasury Bond is deep,
profound, and stark!
FAILURES & STRESSES
As the
USEconomic recession has taken grip, capital gains tax revenues and payroll
income tax revenues are way down. Almost no specific story supports the
growth story told. Even the export trade will be tripped up by global
slowdown. The USGovt federal budget deficit will be enormous, even without
the nationalization demands. The collection of sectors seeking imminent
bailouts in the nationalization theme include Fannie Mae & Freddie Mac,
General Motors and Ford, Wall Street banks, and some airlines. Add to
that demand some staggering funding requirements for the Federal Deposit
Insurance Corp (covering failed bank deposits) and the Pension Guarantee Fund
(covering failed corporate pension funds), to raise strain to a crescendo. Did
PIMCO actually hint they wanted a bailout too? Of course, never overlook the
sacred military budget demands, never to be challenged or reduced, but always
adding great USTBond supply.
During
the past two decades, foreigners have accumulated gigantic USTBond holdings. Now
finally, too many foreign enemies hold huge amounts of USTBonds, a risk my
work has mentioned steadily. The US
no longer controls its destiny. The risk to sovereignty has built to a point
of recognition as capital sale replenishment deals abound, a frequent
occurrence for big banks. The USDollar is rallying when its financial
condition is imploding. The driving force for the deteriorating crippled US
condition is the housing decline. Just today, more dreadful home foreclosure
and delinquency data was released. The story of US
relative strength is absurd on its face, and yet another important chapter in
the US Economic Mythology treatise. Such a contradiction invites a reaction.
Watch
the South Koreans not invest in either Lehman or Merrill Lynch, since they
are not fools. Did Lone Star actually sue the Koreans so as to block this
rescue effort? Look for one or both of these Wall Street crippled firms to
fall into bankruptcy soon. The climate will change radically as a result. The
end of the Q3 quarter is nigh, and admission of renewed larger bank losses is
a cinch. They are nowhere near the end of their mortgage nightmare. Watch
Citigroup and AIG for matching failures. The Credit Default Swap
conflagration is located on the AIG doorstep. The sovereign risk to the United States
is now overshadowed by a risk of pre-emptive financial attack from foreign
locations. The point here is that a mountain of new USTreasury supply is
guaranteed to come soon. The new supply flies in the face of rising price. The
timing for a bond
attack is soon possibly perfect. For years, nobody has questioned the USTBond
as the only viable parking lot for surplus capital, the largest and most
liquid market in the world. Times will change. Third World bonds do not flourish!
The
price inflation front is another big risk for USTreasurys. A CPI over 5% for
back to back months represents a threat, but it is allayed by dormant wages. Next
year, many sharp analysts expect the US Consumer Price Index to top level 10%
level. Already the jobless rate surpassed 6% in the US,
amidst a strange admission. Recognized in the open was how the extension of
state jobless benefits resulted in counting more of the jobless! The return
of gold used as an inflation hedge will be realized soon. As trade friction
grows with China,
in Post-Olympics times, the US
will be less the beneficiary to lower wages from globalization. Gold will be
the ultimate safe haven vehicle soon.
THE PROVOKED BEAR
A
scenario must be laid out for theories of discontinuous nonlinear events and
solutions whose fallout will alter completely the global geopolitical
chessboard. The September Hat Trick Letter will focus on this topic from
numerous angles. The next global chapter will have the United States
isolated into a ‘Glorified Third World’ surreal land. What many
analysts fail to comprehend is that the current situation cannot continue,
characterized by Third World
finances, unspeakable bank fraud, and aggressive military behavior, whose mix
is totally incongruous. Continuation of the status quo is untenable. The most
recent events to upset the geopolitical balance in a state of constant flux
is the attack by the US and Georgia forces against Russia,
portrayed in opposite fashion. The US
even had some help from allies on the battlefield, with dead soldiers behind
the Russian lines held in freezer chests as bargaining chips and tangible
proof. This all is avoided by the intrepid deceptive US
press. To seek sanctions against Russia
for its own defense seems ludicrous. The Russian bear has been goaded, poked,
and provoked in a systematic fashion. It will respond. Behind the scenes,
plans have been made. The USMilitary is funded increasingly by foreigners,
many of whom are considered enemies. It is almost tragic that so-called trade
partners at the beginning of this decade 2000 have turned into enemies. Russia and China will become uneasy
essential allies, whose common trait will be their opposition to the United States.
They each want a formal seat at Global Finance Minister Meetings, routinely
denied. The fragile trade relationship that the US
depends so critically upon hinges upon continued USTreasury Bond support. Do
not consider it assured. The USTreasury Bond is the quintessential point of
vulnerability to the entire US
financial, economic, and military system. A pre-emptive attack against the
USTBond must be taken seriously. That is the story that has come to my desk
in recent weeks.
Europe is the key prize. The US is attempting to push
Europe into a conflict with Russia, so that the
Russian emerging giant does not forge closer ties with Europe, to the
exclusion of the United States.
The NATO accords have been twisted and dishonored, used as a US
convenience. Some might argue that NATO is dead, remaining only as a sharp
stick to poke Russia
with. The Russian-German relationship is natural and historical. Even
Catherine the Great from Russia
was from German royal bloodlines. The Russian-European energy supply
relationship is natural and efficient. President Putin, and now his sidekick
Medvedev, have grand resource and energy deposit wealth, and full willingness
to use it as a powerful weapon. They might soon exclude the US in the supply chain,
in favor or China,
all the while keeping the tap flowing to Europe. The German leaders seem to be
talking honestly with Russians, but engaging in lipservice to the Americans,
winking across the Urals in the process. The next stage of conflict is Ukraine, where more US
color revolution meddling is deep. What many US tacticians fail to
comprehend is that the USMilitary machine is on the verge of depletion (both
troops & machinery), at a time when Russia
has developed some key tactical superiority. The USMilitary is left with
missiles, aircraft, and drones. See the anti-ship Sunburn and Onyx missiles
in Russian control, each supersonic. The US Cruise missile is not. An attack
on Iran,
whether warranted or not, will immediately prompt a harsh and lethal
financial counter-measure by Russia
and its allies. The hapless US
leaders are left to squirm and wonder who their allies are these days. Iran
could be the grand trap.
THE GOLD ANGLE
Encircling
the Big Bear has led to a powerful reaction, one that comes. It is planned,
and awaits execution in an event-driven scenario. Quietly, physical demand
for gold & silver has grown to monumental levels. Do not be deterred or
distracted by the falling gold & silver prices. The price mechanism has
totally broken, as supply is absent and vanishing. Since Russia, China,
and the Arabs own so much gold, they are motivated to endorse the plan that
comes, the plan in place, the plan that needs only the trigger events. Powerful
foreign entities are increasingly angered by the price decline in gold,
as US paperhanger conmen fraud kings have intervened to do harm to foreign
savings accounts. Perhaps foreign entities will hatch an event, whose
trigger remains unclear. Perhaps they will permit unwitting reckless US
leaders to proceed down the path, where they continue to fall into traps,
where doors continue to close behind them. In any newly established vacuum
could quickly come new gold-backed currencies. Two are already planned, whose
launch date is uncertain but clearly tied to the upcoming plan. The Arabs,
Chinese, and Russians have accumulated gigantic reserves, much of which is
held in the form of US$-based securities. These nations and peoples are not
friends of the United States.
Recent friendship has been a convenience for them and a trap for Americans. Arabs
have an extremely uneasy alliance with Americans, who continue to trumpet
their war against (Islamic) terrorism.
Big
changes are coming. The euro currency will not continue in its present form
for long. The Germans refuse to join fortunes with wrecked Latin southern
nations. The split is sure to lift the euro remaining in the German corner
and lift gold in the process from extreme disruption. When the plan is
hatched and put into action, the extreme disruptions to the US
Achilles Heel will lead to a historically unprecedented beneficial
discontinuity that favors gold, since its paper-based bond alternative will
have been relegated to the basement. The USTreasury Bond must soon
reflect its Third World
characteristics. The flipside of the American Peso (Dollar) is the USTreasury
Bond. It is the feeder system to too much that cannot justifiably continue. So
many dangerous assumptions are made by arrogant complacent folks. As a bright
German colleague recently said to me, “People do not embrace change,
but change will embrace people.” Change comes. If your stomach is
not churning by recent events, you are not in possession of a stomach.
The gold
& silver markets are downtrodden in a harsh correction, when their safe
haven status is actually improving. Something is soon to erupt, and it will
change the world, especially the United States. The gold & silver prices will
suddenly find themselves at 50% to 100% above their current prices, after the
upcoming planned pre-emptive event staged against the USTreasurys. As
numerous US
financial instruments are defaulting, one must examine the potential for
USTreasury default. Some must wonder what attack could come about. Imagine a
steady large batch of sell orders, of larger size than the recent buy orders
from central banks. The sell orders are repeated each day. The USGovt would
not permit its continuation and extremely damaging effects. Unwittingly, the
central bankers have taught the powerful adversaries to the United States
how to cripple the national financial structure.
Amidst
profound changes soon to be forced upon the United States,
the principal losers will be the USDollar &USTreasury Bond, with the big
winners being gold & silver. Foreigners, some with newly forged
alliances, are preparing for the next global chapter. That new era will NOT
have the United States
at the helm, or even at many tables for decision making. The US
has earned through fraud, bullying, and arrogance a banishment. The US
will be isolated and relegated to the backwaters, which can be properly the
New Third World. It will be glorified by US leaders and US press. DO NOT SELL
YOUR GOLD & SILVER. RATHER, TRY TO BUY SOME IN PHYSICAL FORM, IF YOU CAN
FIND IT!!!
Jim Willie CB
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Jim Willie CB is a statistical analyst in
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