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The need is urgent. The recognition is broad. Supply & Demand of
American debt paper demand price adjustment. The USGovt avoids the topic like
the plague. The billboard fact of the matter, as USCongressional politicians
like to say, is that the USDollar must be take a downward revaluation of
significant magnitude in order to even begin to offer a semblance of
equilibrium and balance. Natural forces are aligned against those in power
who resist the adjustment. Imbalances are too magnificent. They invite
continued global revolt and financial insurrection.
Coming out of the once revered New York Fed, now just
a stepping stone from Goldman Sachs to the power center, is William Dudley.
He hints of big USDollar devaluation, from a sideways message. The US
bankers have very limited options, given the perverse systemic insolvency,
and the sluggish if not moribund economy. Goldman Sachs alumnus William
Dudley hints at the endgame, rather than Exit Strategy, involving a steep
USDollar devaluation. He seems to
concede the near permanent near 0% official interest rate. Dudley
spoke of FOREX pressure to push the USDollar exchange rate down. Whether it
is planned or forced upon them, the US$
is heading lower and Dudley seems to
acknowledge the fact. The endgame is inevitable, due to colossal deficits,
huge unfunded obligations, and the desperate need to stimulate the moribund
USEconomy. He might even be implicitly urging Americans to stop saving.
Dudley lays out the failed effects of monetary policy when he said, "What I would like to do today is to
explain in some detail the logic underlying this expectation that economic conditions will warrant
exceptionally low levels of the federal funds rate for an extended period.
There has to be a further demand impulse, be it a decline in household saving
rates, a rise in business investment relative to profits, a further expansion
of fiscal stimulus, or an improvement in the net trade balance via an increase
in exports relative to imports. The
fact that our foreign indebtedness is for the most part denominated in our
own currency is a huge advantage in the event the dollar were to come
under significant downward pressure."
The New York Fed is hardly a bastion of leadership or
integrity these days, not after its prominent role in producing a Wall Street
meltdown from unbridled bond fraud in the last few years, complete with
September 2008 climax. If truth be known, that is when the US
financial structure died, never to be revived. Fresh toxic USDollars,
swirling among fresh toxic USTreasury paper, laced with improperly accounted
for mortgage securities among the financial firm assets, burdened by heaps of
foreclosed properties sitting on bank balance sheets, is NOT the formula in
the US witch's cauldron for any revival, resuscitation, or recovery in the US
banking system. In fact, the Jackass will go so far as to claim that the US
Federal Reserve and USDept Treasury have not made a single attempt to reform,
remedy, or restore health to the US banking system. They have done everything conceivable to enable vast channels to flow
to Wall Street firms, to divert away from US Main Street firms, and to steer
official reform to give the financial ruling body even more power, after they
brought about a collapse with their wondrous financial engineering. Their
reform initiatives actually tighten their grip of power and control. One of
the most funny, yet tragically true assessments in the last few years about
the financial engineering topic came from former USFed Chairman Paul Volcker.
He said the only meaningful contribution by the financial sector in the last
20 years was the automatic teller machine. He has been marginalized, if not
silenced, since he made critical remarks, as part of his counsel to reinstate
the Glass Steagal Act that separates large financial sectors.
Prospects look bleak for the USGovt finances, which
must greatly devaluate the USDollar and accept lower value for its sovereign
debt in the form of USTreasurys. Action must be taken, if not from higher
long-term interest rates, then from a lower US$ exchange rate. In fact, a
higher interest rate imposes damage to foreign creditors and Wall Street
speculators, surely to USEconomy participants. It raises USGovt borrowing
costs too. But a US$ devaluation harms foreign creditors and USEconomy
participants from higher import costs, higher commodity prices. The US$ devaluation spares Wall Street
the most pain, which can short the US DX index with advanced notice and
insider information, their speciality. Worse, the USDollar must be
devalued according to the federal guarantees for mortgage agency debt (see
Fannie Mae & Freddie Mac) and credit derivative backstops (see JPMorgan
and AIG, but also Fannie Mae). Implications to gold are immediate and
powerful, once monetization is no longer hidden. Gold is ready for a quantum jump upward in price.
RICKARDS, GOLD & GRAND PRESSURES
Jim Rickards is cited in the Hat Trick Letter at
times. As senior managing director for market intelligence at Omnis, he
commands respect. His viewpoint is usually high level but effective, without
too many details, but with aggregate arguments containing much credibility
and legitimate force. He describes the gold market, the USDollar, the debt
situation in the United States, and the Chinese angle. He begins with a
preface. The perverse aspect of the
USDollar is that since it is the global reserve currency, its USGovt debt is
not priced like a Third World debt security, with interest rate near 10%.
Instead, the near 0% rate creates unsustainable forces in the credit market,
while it encourages a global revolt against the USDollar. The adjustment
process will propel the Gold price much higher, multiples higher.
The following are points made by Rickards in
synopsis, elaborated upon by my commentary. He explains that obviously not enough gold & silver exists to
cover the physical demand if holders of paper certificates in unallocated
accounts demand delivery. He refers to the now open admissions that 100:1 leverage is used in gold
inventory management at the metals exchanges. For every gold ounce in
inventory, 100 gold ounces are claimed in futures contracts held. He all but describes
a plank of any Ponzi Scheme. The fractional practice mimics the commercial
banks with reserves and loans outstanding, a shared lethal flaw. For banks,
they admit their fractional banking practice, but not the gold bankers who
appear to run a criminal syndicate. Most
likely only a small fraction of claims could be covered with the practical
physical supply available, Rickards admits. Cash settlement would have to
be enforced in the majority of cases, known as technical default. The terms
of cash settlements would not be advantageous, to say the least. In fact, he
omits to mention that the widespread policy used since December in London has
been for cash settlement of long gold futures contracts, with a 25% bonus.
That item was mentioned three months ago by the Jackass, and confirmed at the
CFTC hearings. We have before us a technical gold default in London, without
the publicity. The hitmen already arrived at the London exchange, demanding
gold delivery and laying waste to their inventory, whose demands were based
upon distrust.
The price of forced cash settlement, to relieve and
unwind the huge undisclosed leverage (called fraud by most), would be set as
of a record date, limited the effect of a run on gold & silver. Rickards
points out the failure to properly reward paper gold investors with such
settlement dictums. Months of settlement for shams like the SPDR StreetTracks
GLD and Barclays SLV fund would take place, even as the gold & silver
prices would zoom upward. That
redemption price would be much less than the current physical price, which
would continue to run higher apart from the defaulted settlement of the paper
claims process. In other words, the settlement in cash would be both a
contract violation of owning physical metal and a denial that claims the best
price, basic contract fraud, a technicality Rickards spares the exchanges in
accusation. There is more here than meets the eye, based upon technicalities.
If holding metal holdings are in an unallocated account, they are likely to
be considered an unsecured creditor position and used with banker discretion
(read: leased & sold). The fractional banking techniques have been
revealed, laden with risk. The 100:1 leverage is reckless no matter what
commodity or asset it involves, leaving little room for error. The gold
bankers are in a bind of their own making.
Move to the impact on the USDollar and the official
US debt obligations. In no way can the
existing real USGovt debt be paid off without inflating the currency in which
the debt is held, even to the point of hyper-inflation. Rickards regards
the risk as unavoidable, since valuation of a national currency must
eventually reflect its fundamentals. Furthermore, if the USFed's mortgage assets were marked to market, the USFed
itself would be declared insolvent (a point made months ago by the Hat
Trick Letter, confirmed by Rickards). Anything involving paper claims payable
in USDollars (stocks, bonds) is a 'Rope of Sand' in his words, a complete
illusion that is fraught with risk. A
$5500 gold price per ounce would be sufficient to back up the money supply
(M1) as an alternative to hyper-inflation and an inflationary issuance of the
currency. Either powerful price inflation is permitted, or a five-fold
rise in the Gold price is permitted, in his opinion. A great point!! The
pressures are unavoidable, and alternative directions might not exist. He
presents a gold target price is $5000 to $10,000 per troy ounce in current
issue USDollars. The break point will
be when the US debt can no longer be rolled over, from REPOs or formal
USTreasury auctions. He does not make the comparison. This is the typical
Third World debt risk factor, which US Presidents (like Clinton & Bush
II) and USFed Chairmen (like Greenspan & Bernanke) ignored for years. The
Rubin Doctrine calls for putting off today's crisis by mortgaging the future.
At the pace seen, the USGovt will not be in any position to finance its debt
or honor its future obligations without taking drastic action on the backing
or nature of the currency. Debt must be discounted via the US$ currency in
denomination.
The gold picture in China has turned powerfully
positive for the Gold price, in the view of Rickards. China needs about 4000
tonnes of gold for a proper reserves ratio, but only has 1000 tonnes today in
possession. China cannot fulfill this goal even by taking all of its domestic
production for the next 10 years. They wish to take the IMF gold from
pledges, but political resistance is clear. They wish not to push up the Gold
price from open market accumulation in gigantic volumes. He overlooks that
official Chinese gold ownership extends far beyond the Peoples Bank of China
and Sovereign Wealth Funds. My sources tell of the Chinese owning 3x to 5x
more gold than 'Officially' proclaimed, something either overlooked or
ignored by Rickards. The Chinese people are showing a strong preference to
hold gold personally, not as part of lunatic funds managed and corrupted by
fund managers as in the West. Their public purchase investment is mammoth, a
major element of global gold demand, outlined in the Hat Trick Letter.
An aside. The Chinese do not favor or
manage Exchange Traded Funds, the greatest single device in the last ten
years to control, corrupt, and negate the public demand factor. Just look
at the natural gas price and its ETFund performance, that does not reflect
any parallel track path. The ETFunds lately have served as great price
control devices, principally by Goldman Sachs. Toss in their GS Commodity
Fund, whose abusive control was demonstrated in the summer of 2004 leading to
the presidential re-election. The GLD gold Exchange Traded Fund is widely
criticized for defrauding at both ends. They provide gold bullion to London,
thus assisting in gold delivery demands, which constitutes the illicit
removal of investor gold. They provide GLD shares to the London and COMEX,
thus offsetting gold short contracts, which constitutes illicit share
dilution. Investor GLD lawsuits should come, but their investors in my
opinion are among the most lazy and dopey and gullible in existence. The fine
print of their ETFunds might actually contain murky language that permits
such burning the fund at both ends, with metal and shares. In time, the GLD
and SLV funds will be gutted. Greenlight Capital had a recent epiphany and
exited GLD in favor of real physical gold rather than its illusion. Others
will follow, unless they remain lazy and dopey and gullible.
From 1950 to 1980, Rickards mentions how the
USTreasury gold supply declined from 20,000 to 8000 tonnes, basically moving
a large amount from the United States to Europe, where the elite reside who
control the US central bank. The
Chinese are frustrated that they cannot obtain sufficient gold at reasonable
prices as Europe did. Beijing leaders wish to survive the currency wars
and the reworking of international finance. Private ownership of gold is of
paramount importance to their entire society at all levels of power. Rickards believes that holding
investor gold in a bank correlates the investor to the banking system, and
puts the investor at the mercy of the banker whims, the very risks
which must be avoided. These are the points made by Rickards.
RESPONSE TO RICKARDS &
LONG-TERM CAPITAL MGMT
My response is one merged with the thoughts of Aaron
Krowne of the Morgage Lender
Implode website (CLICK HERE) that branched into other
imploding entities like home builders. He is an informal trusted colleague.
The Rickards argument contains two major oversights. One cannot call them so
much flaws as important points not mentioned, maybe overlooked, but certainly
important. My focus has been steadily on the second point, the grotesque
extension to debt through obligations beyond what Rickards describes. Permit
Krowne to make the points, which will be elaborated upon.
Aaron Krowne said, "Rickards is
extremely generous on two points: (1) that the USGovt actually has 8000
tonnes of real non-debased gold, (2) that M1 is a useful numerator against
which to measure dollar solvency, given the USGovt's short-term liabilities.
Even just at the federal, public, acknowledged level, these liabilities
already well exceed M1. Then start adding in Fannie & Freddie
obligations, AIG, other bailout obligations, the general deficit spending,
state & local government obligations, and the picture darkens
considerably." Notice the term non-debased gold to mean not tungsten
bars with gold plating. The tungsten issue is slowly turning red hot. Hong
Kong banks have been the initial fraud victims. The industry response has
been quiet, calculated, and thorough. The Germans have revealed some actual
tungsten gold bars. Evidence and pathways have gradually been determined. Details
are not best presented publicly, since dangerous. Some parallel pathways
exist with narcotics routes since the 1992 time period.
Debate is spirited over the actual gold in possession
by the USGovt and USTreasury. Harken back to the Boss Tweed and Tammany Hall
corruption within the New York City halls. The cartoons helped to bring down
the Tweed ring. The New York Post featured an excellent cartoon themselves.
Reports from parties directly involved indicate that Fort Knox contains no
gold anymore. Reports indicate that what little gold remains is being guarded
at West Point, the USArmy Academy. A close look at the official USGovt gold
ledger reveals massive exports of Gold Equivalents, supposedly of recycled
floor droppings at the USMint and elsewhere. They probably refer to payback
on gold leased last decade from Europe, a nice cover-up. A close look at the
official USGovt gold ledger reveals the mysterious 'Deep Storage Gold' which
might imply gold bullion held in vault facilities half a mile underground.
The ugly truth is that the deep storage gold claimed by the USGovt is unmined
gold in the form of raw mineral ore, housed in mountainsides, yet to be
processed. So the USGovt backs the USDollar with unmined gold ore at 1 to 10
grams per metric tonne contained under the Rocky Mountain range and the
Sierra Nevada range. What a sham! What a shame! Notice the trend of foreign
nations demanding the return of their gold bullion from US and London, held
in custodial accounts. See Switzerland, see Dubai, see Hong Kong. They
suspect, based upon direct independent audits (not revealed) that their gold
bullion had been illegally leased, sold, and replaced with paper
certificates. Thus the gold physical shortages lately. Thus the hidden war
with Union Bank of Switzerland.
The debt that must eventually be
monetized is not just its partial reflection in the money supply, but all
federally guaranteed debt.
The commitment of USGovt debt must go beyond running federal debt total, and
into nationalization of agency debt and credit derivative risk. They must be
factored also into the USDollar and Gold price. So far, it has not in any
scintilla or meaningful way. Thus the destabilizing events to come in a
US$-based monetary crisis. Check the recent colossal Fannie Mae losses,
funded by the USGovt. Check the recent colossal AIG losses, funded by the
USGovt. Check, if you could, the ongoing recent colossal JPMorgan losses from
credit derivatives, funded by the USGovt. The complexity of the fraud has
become a cross between a tragedy and comedy. The monetization of USTreasurys
is obvious to any analyst or auditor with any professional skill. The
official USGovt bond inventory has in recent months contained an unusual
suspect ledger item. They actually claim that close to $100 billion in new
USTreasury purchase has come from a new party called 'Household' which one is
led to believe is Fannie Mae or large pension funds, or even US households
buying bank certificates of deposits. The mortgage sewage plant and pension
funds and households are after all flush with billion$ in cash, what rubbish!
This is naked USTBond monetization accounting. The April Hat Trick Letter
contains much more information on the fires burning possibly out of control
on credit derivatives, a point raised in the last article about Dangerous
Signposts, namely the long-term interest rates and the crude oil price.
The conclusion is that grossly
insufficient gold exists to back the USGovt debts, and those debts must
include USGovt obligations to direct funds into the nationalized Black Holes,
thus resulting in tremendous extraordinary pressure for a significant
USDollar devaluation.
The cutting edge is the ongoing endless outsized USTreasury auctions. To call
it a heavy weight of oversupply is a gross under-statement. It is 20 tonnes
of bricks dumped on the 3-bedroom house from a construction crane, which
itself might soon be subject to bank repossession. This is where the pressure
is exerted. This is where the monetization relieves the pressure. This is the
area next exposed, for both overwhelming debt issuance in supply, and hidden
monetization revealed. Recall that before the USCongress, USFed Chairman
Bernanke stood before them and claimed the USFed was not printing money to
purchase new debt. This was a bold lie, but not under oath.
Rob Kirby is much less generous, and provides an
angle to a greater perspective. He assists in revealing the past track record
of Rickards, who must be careful in what he says. Kirby implicitly reveals
why Rickards speaks in such general tones. Kirby said, "Rather humorous that Rickards, former legal counsel to LongTerm
Capital Mgmt, would be giving all of us talking points regarding the root of
our financial problems and how to patch things up, ten years or more after
his former firm nearly brought down the world's financial system. His LTCM firm was bailed out, allegedly,
because they were SHORT some 300 tonnes of borrowed sovereign Italian gold
bullion, something which nobody from LTCM has ever addressed publicly, to the
best of my knowledge. [Some research reveals that] Goldman Sachs
employess literally made a MAD DASH from the doors of LTCM and SCOFFED all
the computers and relevant data when they were placed into receivership. When
low lifes Greenspan & Rubin assembled a vaunted team of banks and
investment banks at the New York Fed and read them the riot act how LTCM had
to be BAILED OUT, they were told they would all share proportionately in the
costs. It was BEAR STEARNS who said,
NOT A CHANCE we participate in bailing out this renegade firm."
Fast forward ten years later, and Bear Stearns was targeted, destroyed, and
carved up, labeled by Wall Street a failure. The LTCM episode provided motive
to kill Bear Stearns, which retained its maverick status. Kirby mentioned
further than Rickards is sworn to secrecy, sold out to the Dark Side years
ago, and might be a prominent figure if he ever wrote his memoirs to recount
those days late in the 1990 decade. My view is more generous, that Rickards
is attempting to promote gold without angering his former Wall Street masters
and earn banishment from the financial world or worse, a hanging in his own
living room like the Chief Financial Officer of Freddie Mac in early 2008.
GOLD ON EDGE OF SPRINGBOARD LEAP
UPWARD
Events in the last few weeks have conspired to create a powerfully
explosive environment, one hostile to currencies in general, the USDollar in
particular, and favorable to the Gold price. Major changes have occurred in
the psychology of the gold market. Slowly
over time, and with much unmasking in the last month, the gold market is
being perceived as yet another Wall Street conjured Ponzi Scheme. It is
no different from the privately run Madoff Scheme. It is no different from
the Mortgage Bond Scheme. It is no different from the TARP Scheme. It is no
different from the Iraq Reconstruction Fund Scheme. It is no different from
the Credit Derivatives Scheme. The US financial sector is an amalgam of
fraudulent Ponzi Schemes. The gold market has price rigs, price suppression,
naked shorting, pitifully low inventory, and protection offered to the Wall
Street perpetrators by the USGovt and UKGovt. The Gold price has begun to
rise despite the USDollar holding its ground against very weak alternative
currencies. The primary locus of foreign revolt against the corrupted US ship
at sea, listing badly and taking on water, might be the Gold price. It is
both the nexus and weak link in the defense of fiat paper money.
The MACD (moving average convergence divergence) cyclical indicator
shows great promise with an upward bias. The moving averages in general have
offered support, the 100-day MA (in red) and the 200-day MA (in green)
showing upward trends. The major change in gold psychology is apparent to the
alert observers, soon to the entire investor community. A reversal pattern is
evident, from the Dubai and Greek debt response in January, February, and
March. The reversal Cup & Handle contains a positive strong neckline, a
loud bullish signal. A perverse benefit given the USDollar early in 2010 will
be seen soon as a loan of goodwill to be paid back in full, amidst the
backdrop of recognized Wall Street fraud led by Goldman Sachs. The curious
aspect of the revelations has been how much JPMorgan had escaped the
spotlight of fraud, until the CFTC hearings where their illegal activity and
arrogant boasts made the news. Next comes the backlash!
LACK OF EXIT STRATEGY OPTIONS
The Euro Central Bank and Bank of England held
interest fixed in the last couple weeks, amidst the Greek crisis. The EuroCB
is trapped, just like the USFed. Europe is trapped by sovereign debt. England
is trapped by its federal debt and need for stimulus. The United States is
trapped by mortgage debt and its own federal debt, as well as need for
stimulus. The Australians saw fit to hike by 25 basis points, a world apart,
as commodity prices remain firm. The European Central Bank left its benchmark
interest rate at a record low of 1.0% for the 11th month in a row. Recession,
sovereign debt to the South, and the need for stimulus are the dominant
themes for continued accommodation. The spread between Greek and German debt
is widening, in fact worse than the first glimmer of the credit crisis a few
months ago. The Greek Govt 10-year bond yield went over 4.4% points above the
German Bund benchmark, the highest level ever since the Euro currency was launched
in 1999. Adding stress to strain, the Greek 2-year bond spread has moved up
1.2% in consistent manner. A key point was made in bank policy by Trichet. The EuroCB head told the European
Parliament that so-called collateral crisis measures will not be abandoned at
the end of 2010 as originally planned. The EuroCB will continue to accept
lower rated government bonds as collateral from banks. It will swap garbage
for government backed debt securities, but soon no more US$-based toxic
bonds. Watch the Credit Default Swap
data and one can see the next target nation might be France, not Italy
and Spain as many analysts have anticipated.
CRUSHING WEIGHT OF LOST INTEGRITY
The stream of events in the last four years casts
extremely bad light on the US financial system, soon to reflect lower value.
The subprime mortgage bonds were not isolated in damage done or loans gone
bad. The prime mortgages, the Option ARMs, the second mortgages, the
commercials, they almost all sport delinquencies and defaults that rival the
subprimes. Details are shown in the last few Hat Trick Letter reports. The
TARP Fund episode was an open extortion exercise, perpetrated on a hapless
yet compromised USCongress, which now makes its own futile efforts to at
least achieve disclosure of what the $700 billion or $500 remaining billion
went. The US Supreme Court appears to be running interference for the US
Federal Reserve, in blocking legal attempts to force disclosure of the USFed
balance sheet, and disclosure of the TARP Fund disbursements. The overseas
wars involve their own black eyes, what with $50 billion missing from the
Iraq Reconstruction Fund. The United Nations drug task forces have pointed a
finger at the US Security Establishment as funneling money into the US
banking system, without which they claim the US banks would have collapsed in
the autumn 2008. The nationalizations of Fannie Mae and American Intl Group
took place amidst widespread charges of fraud, both in mortgage bonds and
credit derivatives. Lawsuits were thwarted. The Credit Default Swap, an
invention of Wall Street, has come under fire. It is being blamed for some
distress in the European Govt debt markets. The CDSwap contract is under fire
inside the United States even more so. Imagine a financial instrument that benefits
from the implosion of financial firms, caused by policies and actions taken
by the designers of the instruments. Only in America!
Now we have the Goldman Sachs fraud civil suit case.
A closer check would raise suspicion from numerous corners. Five key red flags are raised, each
worthy of future investigations. 1) The Securities & Exchange
Commission announced the fraud charges during a time when the Inspector
General report was due for release. 2) The SEC fraud charges were announced
during the time when a vote is soon coming for the Financial Reform Bill
before the USCongress. 3) The SEC fraud charges were announced during the
middle of the day, during stock market trading activity, a sharp break from
proper information release. 4) Worse, the SEC gave Goldman Sachs a tipoff in
the two weeks beforehand of the fraud charges to be made public. 5) Goldman
Sachs has been privately accused of profiting from the adjustment in stock
price due to its own problems. Stories are numerous of large S&P stock
index puts purchased. Stories are numerous of a suspiciously high volume of
'Out of Money' stock option puts on GS, the Goldman Sachs stock share. They
turned out to rise 140-fold, yet not much official talk about them.
In the following weeks we will see how much Goldman
Sachs earned from their own legal challenges. In fact, a source informs me
that his legal beagles regard the
Paulson Abacus case as perhaps the weakest of all potential fraud cases
against GSax. It might be designed to fail and be rejected by the courts.
In fact, they mention that GSax might revert to a private investment bank,
now that the TARP Funds were taken and returned, its commercial bank sham
status no longer needed. The need instead is for privacy and no more prying
eyes. GSax will not escape the lawsuits, but might face criminal charges.
Watch the Germans, who are angry at being defrauded. Germany seems in many
ways to act as the spearhead to disrupt, dislodge, and dismantle the US-UK
streak of corporate fraud perpetrated by those wearing USGovt & UKGovt
suits. The Goldman Sachs fraud case,
and cases to follow, will render severe damage to the image of the USDollar,
the USTreasury, and the USGovt leadership that is dominated by the GSax
alumni. My belief is that the fraud charges have opened Pandora's Box,
for other complaints, other lawsuits, even class action lawsuits to be
handled in federal court. The whiff of Pandora will be next seen in Germany
from a broad swift response.
The White House connection to Goldman Sachs is not as
clear as the USDept Treasury control by GSax. While GSax lawyers negotiated
with the SEC over the high profile risk filled civil fraud charges, the GSax
CEO Lloyd Blankfein visited the White House at least four times. White House
logs show that Blankfein traveled to the national capital for at least two
events with President Obama. Furthermore, the Obama 2008 presidential
campaign received $995 thousand in donations from the GSax political action
committee, its employees, and their relatives. The response included
appointment of yet another GSax alumnus as Treasury Secretary, Tim Geithner.
Worse, GSax has retained former Obama White House counsel Gregory Craig as a
member of its legal team. The GSax connections to the White House and the
Obama Admin are raising a lot of eyebrows. Influence is clear, as it might be
bought. Watch the financial regulation overhaul grant even more power to Wall
Street firms and more impunity for their actions. See the McClatchy
Washington Bureau article entitled "Goldman White House Connections
Raise Eyebrows" (CLICK HERE).
The crushing weight of lost integrity is vast. My suspicion is that the greatest impact
from the Goldman Sachs stream of lawsuits and felony charges, complete with
potential restitution attempts, will be on the USDollar and not the GS
stock price or its balance sheet. What comes next is the survival reactions
by nations under deep distress, weakend by sluggish if not moribund
economies, weakened by exported toxic bonds from Wall Street, weakened by
Credit Default Swap attacks lodged by Wall Street and London firms, weakened
by years of accepted USTreasurys as legitimate payment for exported finished
products, weakened by broad usage of the USDollar within their banking
system. The Jackass maintains a firm conviction that the first few nations
that break ranks from the USDollar embrace will become the leading nations in
the next chapter. A shock this way comes, from a Paradigm Shift in progress, recognized across the world, but not in
the United States or England. A sudden USGovt-led devaluation could come
soon, ordered by the United States banking and government leaders. It might
turn out to be a vain arrogant maneuver to achieve instant stability, to
maintain chokehold control, and to attempt to prevent creditor abandonment.
A grand backfire comes, since numerous platforms and
paper support beams can no longer bear the weight of US insolvency, US
dishonesty, and US arrogance. A grand
backlash comes. My best sources warn to expect flash events. Either the US
will attempt to control the sudden rash of events, or foreign sources
(dominated by US creditors) will pull the rug from under the US-UK
controllers. The maestros in New York and London are fast losing control and
credibility. The next victim front
& center is information flow. The CFTC hearings to reveal the
gold & silver market rigs is one item. The empty gold vaults at the
London Bullion Market Assn is another item. The insider trading schemes in
flash trading mechanisms by Goldman Sachs is another item. The involvement of
Wall Street firms in European debt machinations is another item. The revealed
USTreasury monetization and accounting is another item. The usage of the IMF
and World Bank as financial weapons is another item. The narcotics
trafficking under USGovt and USMilitary aegis is another item, complete with
Wall Street money laundering. These highly important factors are all recent
exposures of the US information machine losing its grip. These factors
combine to invite a global response. It will be felt and realized eventually
in the USDollar. The Euro is nowhere near as weak and fraught with insolvency
as the USDollar, not to mention deep pervasive fraud. Time will prove
this out.
Jim Willie CB
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system, urgently pushed after the removed anchor of money to gold. Analysis
features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics
with the US Economy and US
Federal Reserve monetary policy.
THE HAT TRICK LETTER PROFITS IN THE CURRENT
CRISIS.
From subscribers and
readers:
At least 30 recently
on correct forecasts regarding the bailout parade, numerous nationalization
deals such as for Fannie Mae and the grand Mortgage Rescue.
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will also be an excellent chronicle of these times for future
researchers."
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and have subscribed to numerous investment newsletters over the years. Your
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have gotten the most value from."
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information you put forth in your newsletter. I read a lot of newsletters,
blogs, and financial sites. The accuracy of your information has been second
to none over the past couple of years."
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(ShawnU in Ontario)
Jim Willie CB is a statistical analyst in marketing
research and retail forecasting. He holds a PhD in Statistics.
His career has stretched over 24 years. He aspires to thrive in the financial
editor world, unencumbered by the limitations of economic credentials. Visit
his free website to find articles from topflight authors at www.GoldenJackass.com . For personal
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