gold wars

Gold Wars

Gold wars is the story of the decline of the US dollar, the petrodollar standard, and a system of alternative investing by Kelly Mitchell.

Invested to be Molested

My new ebook

is out – Invested to be Molested: Why you should Fire your Financial Adviser Now!. Or, for other ereaders, here.

Is your money set to ‘vaporize’?

Is your Adviser preparing for (even aware of) the next crisis?

Or does he think everything is fixed? How prepared are you? Is the system ready to skin you? According to Mitchell, the answer is a clear yes. And what you don’t know can and will hurt you. It may leave you broke.

Financial Protection enjoyed only by the Elites

Would you pay $4000 or $5000 to guard your lifesavings? That’s what the wealthy pay for specialized reports to secure their wealth in this environment.
Now you can finally protect yourself and your family with new insider information about the financial services industry thievery for under $10. Invested to be Molested is the controversial, blacklisted book you should download instantly. Join the growing community of liberated citizens who’ve broken the chains of Wall Street and live free from anxiety. The confidential information in this book will SHOCK you. you will want to take instant action because you will realize how much your nest egg is in real danger of slow drainage or sudden, catastrophic loss.

Invested to be Molested shows you a whole host of financial industry conflicts of interest and outright threats:

Every brokerage house uses your stock as collateral for speculation.

All houses commit ‘churn’ – taking your money.

All houses have a limited book to buy – and it’s low reward, high risk.

The most prestigious firms sell their clients low-liquid complex bonds, then short them and buy them back at company profit – and YOUR LOSS!

The system is arranged so that you don’t even own your stocks.

The central banks created legislation that allows for a ‘bail-in’ – putting ALL your money at risk of forfeiture.

All banks treat you – legally – as an unsecured creditor. If they go in the red, you could lose it all.

Invested to be Molested covers the secret ground of unethical, predatory, often illegal activity of the money managers in this system. Most of the information in here is unkown to financial advisors, and those that know are contractually forbidden to reveal it because it is the knowledge of how much risk your money is currently in.

Many strategies exist to ‘hedge’ or limit risk in your investments- but your financial adviser will not, under any circumstances, implement them. He probably does not even know about them, but even if he does, he is not licensed to implement them. The industry is using middle class investors as cannon fodder – and most advisers don’t even know. They may (or may not) have your best interest at heart, but one thing is for sure – they can’t do anything about it.

If you’re confused about finance, then buy this book before hiring a ‘professional.’

It covers investing for dummies, for beginners, investing basics, value investing, intelligent investing, financial planning, financial accounting, financial times, financial peace, freedom, advisor, financially fearless, personal finance, finance for dummies, finance 101, basics, scams, frauds, wolf of wall street, wall street, bankster practices, derivatives markets, derivatives explained, derivatives demystified, derivatives for dummies, derivative investing, and black swans.
It will help you if you want to do online trading and will definitely show you how to avoid the trap of the financial planner.

My wife hates the title and so does my friend Cliff, who discusses these matters with me. 100% negative sentiment about the title may not mean much with such a small sample, but I remain hopeful that it is a harbinger of a very interested readership. It’s a known truth that controversy creates interest, so you should go and buy the book now. It will help you, I promise. If not, then you can send me a registered letter via noodle mail and I will come make you nice dinner. I’m a good cook, but you’ll have to pay travel expenses.

Still, I’ll discuss investing ideas with you (in this hypothetical scenario) and make you rich (in this hypothetical scenario). If you want a print copy, let me know. When enough requests come in, I’ll get it to print.


Latest Smackdown

Okay – I admit it. I got burned in the latest multi-month smackdown. I believed the hype – sort of. I went long when silver got down to $17.50 and gold was grinding along at $1200. I did it about 5 months back and it paid off nicely when PM’s got a good bounce. SLW spiked to $26 or so and I cashed out near the top. It was a swell ride, but I paid the price this time and got sucker punched. I just figured the Chinese had put in the floor at $1200/$17.5. But they hadn’t.
I took a pretty good hit and am now dusting myself off for the next round. But at least most of my plays were very long-term – at least Jan 2016 and some Jan. 2017. So there’s time and I’m pretty sure there will be a turnaround at some point in that time. I’m not one of these gold to moon guys, but I do believe it will do much better in the next few years. Still – with manipulated markets – it’s impossible to say. It all depends on the Chinese.

Book Marketing & Selling Tips for Authors



Leverage the current smackdown

Now most of us like going long gold and silver, even though we know they’re gonna shove it back underwater. We don’t go short because we don’t want to get hit if it goes up and we all think, well, someday it’s going up to not go back down. For those naysayers, well – gold was at $900 during the 2008 crisis and now it’s at $1200 (ish). Silver is up 70% or so from $9 to $16. It’s gone up and it will happen again. But the trick is now – the manipulators have pushed into the basement by current silver price or gold price standards. Another battle in the gold wars. Here is how I am playing this.

Yamana gold and First Majestic Silver were in the mid-$20’s a couple of years ago. Now they’re below $4 and just above $5 after a huge drawdown the last few days. Sure it can go lower, but it can also go higher. The floor I look for is when the physical buying takes off from the smackdowns. And we’re there. This hit to $1150 gold and $15.xx silver (the exact prices are not worth mentioning) has caused purchases of coins to skyrocket. 2 million eagles left the US Mint in 2 hours recently – a pretty big record. And a clear message. It’s Back Up the Truck Time for a LOT of buyers. The sovereigns are hopefully getting in the mix, with a double down by China especially and the Middle East pockets.

We’re just looking for the floor, but we can’t expect to hit it just right, so we need some wiggle. Back to Yamana and Majestic. These companies have long-dated options to 2017. I suggest getting some soon. A $7.50 call on Yamana for 2017 is about $0.60. That’s over 2 years to make that hit paydirt, on a company that traded above $20 2 years ago. A strong company with a good balance sheet and solid projects. A few years back, Yamana was the darling of the mining world. And it’s a great company.
Now, if you have the stones, you can do a risk reversal and sell a put for the same amount. Be careful, it can go down and that gets painful quick. But ANV is a great candidate for that.
Allied Nevada is now at $1.05 (it was at $0.96 Friday). You can sell a long put for over $0.40 – that’s 40% of the stock price! The worst situation is losing $60 on a contract if the company rolls over – which is unlikely. And you can sell a put and buy a call with the money – giving a downside of worst case $105 loss on a contract.
The upside? Well, ANV traded at a high of $43. If it just goes back to $11, that’s a $1000 upside for $50 invested. I would recommend further out of the money calls – for maybe $0.15. A six pack is $90. If the stock cracks $25 – that $90 turns into $20,000. However, ANV only has options till 2016, january.

The case for First Majestic Silver (AG) is the strongest. AG recently decided to withhold 30% of its silver until the price rises. Not only does this mean they get what’s really happening, it means they CAN do that – they have real cash reserves. They’re also sticking it to the manipulators. First Majestic is the largest pure silver miner in the world, so if they withhold, then it does affect the market. And their long options are dated 2017. With past highs above $20 and above $10 only a few months ago, with a strong balance sheet and a great market position, First Majestic is the premiere target for this strategy.

The simple version? Buy $7.50 calls for Jan of 2017 – about $0.60 last Friday.


Translations of Gold Wars

Awesome news. My publisher has recently informed me that a Chinese language edition is under contract. This complements the German edition and the (not confirmed) Russian language edition.


Gold Spread



Gold Spread




Gold Spread

gold spread

Keith Weiner of the Gold Standard Institute thinks that the paper and electronic dollars will develop a s

pread. As the dollar loses its global reserve status, the number of digital dollars will be seen to ove

rwhelm the paper. Merchants will accept electronic transactions with an extra tag for the depreciation. This will, of course, spark a run on the banks to get paper, especially if the spread widens appreciably. Weiner calls it dollar backwardation.[i]

The consequences are big.

Savings and checking accounts will be drained in the search for physical,

paper dollars. The run on banks will starve them of liquidity and, because of the transformation of maturity problem, plunge them into insolvency. With no money or reserves, they are bankrupt. As long as the big banks are not liquidated, the problem will continue.

Bank runs are accelerating and bank tactics are increasing in defense. The Central Bank of Italy authorized BNI to suspend transactions without warning. Money was lost by customers as the bank failed. RBS group, a massive conglomerate, had a week-long ‘technical’ outage. Customers could not access cash at ATM’s and scheduled payments went unmet. Customers were hit hard. It appears to be a check-kiting scheme to get the big bank through a hard patch of liquidity. But is will bite back as most customers close accounts after the experience.

The essential problem is that debt is masquerading as money and as wealth. It cannot be overstressed – the ocean of ever-increasing debt is the cosmic stone around the neck of civilization. Big banks will do anything to survive, even destroy the global economy. Debt is not wealth, but it is a great temporary illusion until it fails in a spectacular crash. The Forex Trading guys will either get rich or killed.

Gold will be there. No one will want to touch debt anymore. People will understand the illusion of fiat currencies once again. Is this right? What do you think?


[i] Dollar Backwardation. Keith Weiner, May 23, 2012. Goldseek.com.


The rise of gold coming – gold suppression ending


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Gold wars current events


Gold will rise eventually.

The gold suppression will end. (the gold silver ratio will drop and we will see the current price of silver match the current value of silver, as a bonus. The silver shortage will help the end of the precious metals suppression). Here is why:

The global financial collapse and economic collapse are in full swing. When western economies roll over and the banking cartel blows up, the fiat experiment will look very unappealing to the wealthy of the world- the not insiders, that is. They will back a better horse.

Middle East Gold Wars

Iran has been taking gold for oil. This has pissed off the bankers, but they got told by Russia where to stick it and put on a big show of soft diplomacy. Why? Because they knew hard diplomacy (war) would put their ass in a sling. They LOST!
Turkey is helping them, moving gold through their time-tested market, into Iran. This is great gold support and strong linkage to the world’s prime energy market. The Petrodollar is seeing its twilight in the desert.
Saudi Arabia may even be slowly easing away from the American fold.

Europe Gold Wars

In Europe, the large bank ABN Amro was found to have pilfered their custodial gold The cash settlement was an embarrassing testimony of things to come as more and more such shortfalls and thefts come to light. Not every one will settle in cash and the scramble will go viral and big. Gold will rise.
Meantime, Germany wants its sovereign gold back from the almighty Fed -and they aren’t coming clean. The 7 year itch plan is an obvious signal to those who aren’t pudding heads. Clue in easy language – THEY DON’T HAVE THE GOLD!!!

Meantime, the Swiss, insiders claim, are running low. They cannot supply big orders. They are melting London Good Delivery bars down to fill what they can, but are running way behind. Melting London Bars is a weird thing to do – it is a high standard of gold purity. The best guess for why is to hide the ownership. Once the serial number is gone, it’s anyone’s gold. Probably, the gold is technically owned by someone else on the LBMA market. LBMA vaults may be virtually empty, too. They are definitely very, very low on supply. And when that largest spot market goes dry, there is no ‘upside cap.’

The ETF GLD is bleeding gold. Most of it is being taken by the big bullion banks, who are themselves bleeding gold from various accounts. There is a secret run on gold by the wealthy – the latest news from the gold wars.

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Asian Gold Wars

Meanwhile, the Shanghai Metals Exchange features a wicked arbitrage of almost $200 over the spot price. “Risk-free” (if the Comex/LBMA coughs up the gold) profits of 15% are unheard of. This arb alone will put massive pressure on the physical market. Gold Will Rise!

And China knows it – they are getting over 100 tons per month, possibly much more, lifted in from London. Other sources are streaming yellow metal into the giant nation. They are moving away from the US dollar, too, preferring to settle trade in Gold. Next, after they do enough currency swaps – allowing other nations to trade in Yuan – they will probably (not for sure, yet) announce a gold-backed Yuan – a gold standard. China is alos scooping up gold miners to increase supply stream. Soon enough, they will announce much higher gold reserves to the world – over 10,000 tons.

Add to this mix – JP Morgan goes long on gold, ending multi-year massive short. Indonesia, Iran and others are making moves toward the BRICS camp. They will want higher gold to end dollar hegemony. The global system is moving toward a currency paradigm shift. Of course, the monetary hyperinflation from the Federal Reserve and Central Banks is doing its work, as well. Gold will emerge as the go-to monetary unit.


In light of all this, my advice is for people to protect themselves. The financial advisor scam, the economic collapse, the financial collapse (they’re not the same), the debt crisis, investor fraud, rehypothecation, the bail-in threat, inflation, deflation, biflation, and hyperinflation are all serious threats to your savings. Protect yourself! Buy physical gold and silver. If you need more significant counsel – you should be your own analyst. You should advise yourself.




JP Morgan Gold Wars

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JPM gold wars


JP Morgan reverses course in the gold wars

In the gold wars, one bank towers over the rest for its massive intransigence. JP Morgan, the dirtiest of the dirty, the deeply nested in government monster, the Federal Reserve controller, has apparently gone long gold. It could be a ruse, a deception by the CFTC – they have permitted themselves an out in issuing accurate data. As in, their statements read – ‘data may not be accurate.’ It should be embarrassing, but it makes it obvious they are simply lying and allowing themselves legal coverage.

precious metals suppression and value of silver

It’s tough to say what the role of silver in this is. The current silver price is tied to gold and hence manipulated. Of course, the financial corruption extends everywhere, but a financial collapse will sort things out in unpredictable fashion. And a true economic collapse is in slow process now, with power steadily moving East. At any rate, the playout (which I’ll cover later) should feature a decline in the gold silver ratio, with silver rising more than gold – if gold is allowed to rise. It’s hard to lift the gold suppression without lifting the more tightly coiled silver suppression. How much is silver worth? In a hyperinflation, a lot. The silver shortage is much more acute than the gold shortage and the spot price of silver is no measure of the real value of silver.

TF of Turd Ferguson thinks they may be trying to puff their balance sheet back with REAL ASSETS. Maybe they’re prepping for the hurtling gold standard looming down on the world economy from the slow, steady and unstoppable Chinese / BRICS juggernaut. Maybe China has JPM under a fat yellow thumb and is squeezing the nasties for all they are worth. JPM is a conduit for Comex gold (in this scenario) straight to China. The Morgue moved off all their gold in very rapid fashion earlier this year – as in 80% or more overnight, plus a few other notable, massive drawdowns. Are they reloading for another fire to the East or to protect themselves? Or is it a fake-out to draw in the suckers?

Gold Bull resumes?

In other words, if JPM is now long gold (we know the other majors are), then the gold bull will resume soonish. No one else is there to hold it back. Most likely, they have jumped on the gold train. It’s unstoppable. So they engineered massive sell-offs in order to take advantage of the lower prices and reverse their truly gargantuan short position (75,000 contracts net short) to turn it into 75,000 net long.

They are taking delivery and it remains to be seen how. It will, most likely, be steady, big draw from the Comex and from HSBC and other bullion banks on every delivery date. Not enough to break the system, but they will (and have) elbowed all other players out of the way. In fact, they have taken delivery of 96% of the delivered gold. Is it finally time to buy gold again? If JPM is long, then we probably have a bottom in the market. And I don’t say that often. In fact, I’ve never said it before. And, as noted, it is a qualified statement.

Bad gold analysts

On thing I don’t like is when analysts claim they definitely know the bottom. They can see the technicals will send gold higher – technicals don’t matter in a manipulated market. They are used to crush the fools who invest that way. Or they say the manipulation will be overwhelmed – wrong again! Fact is – we don’t know. But the big boys own the futures market and will for a quite a while. Betting on paper gold to rise (or fall) is a big risk. That’s why most good analysts recommend physical. It will rise, and big. It may fall, but I doubt it. I think the bottom is clearly in for physical gold, and they know it. If paper gold drops much, physical will not follow. And they powers cannot survive a real separation in the price of phyzz and paper. It will blow their game wide open.

Another pet peeve is predicting timing. It cannot be done, even by the powers that be. Unless they’re ready to throw in the towel, they don’t when the Chinese will mount a counter assault. So nobody actually knows. All they know is the direction they are heading and in gold wars (or any wars) you keep your tactics and strategy secret. And you change it so your opponents fight the previous battle.
At any rate, analysts who state timing are delusional or lying. DO NOT TRUST THEM! Just buy some gold and silver and sit tight.

China Buys Federal Reserve

And, final note- JPM sold their main offices to the Chinese at a big ole’ 50% discount. J. Willie thinks that the Chinese are buying the Federal Reserve. What an awesome assault on Fortress America! What a great idea! Not that I want the US to be a Chinese colony, but the current corrupt powers (criminals) in charge of the US government corporate complex are messing the place up pretty bad, so I hope they lose soon.


In light of all this, my advice is for people to protect themselves. The financial advisor scam, the economic collapse, the financial collapse (they’re not the same), the debt crisis, investor fraud, rehypothecation, the bail-in threat, inflation, deflation, biflation, and hyperinflation are all serious threats to your savings. Protect yourself! Buy physical gold and silver. If you need more significant counsel – you should be your own analyst. You should advise yourself.


Petrodollar decline


You shall not pass – Petrodollar Broken bridge



Iranian talks in Geneva had a hidden agenda – the US masters were beaten at their long-time game. They gave in and Iran can continue its nuclear enrichment program. There seems precious little evidence that Iran is looking for weapons in any event. The main thrust of the program is for energy grade material, not weapons-grade. Iran has been invited back into the fold, but at cost. And here’s the secret rub – they have agreed to a renewed system of oil sales. Of course, the oil must be sold in US $$. That was the whole game to begin with and the reason for all the ‘nuclear diplomacy,’ sanctions and threats of war. Iran wanted to crash the Petrodollar and sell oil for, well, anything but dollars. Keeping the Petrodollar alive is priority number one in the gold wars.

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<h2>Petrodollar Warfare</h2>

Two years ago, Iran was blocked from doing business internationally by excluding them from the SWIFT system of international payments. Iran struggled and starved – the sanctions worked. The people suffered. However, Iran found a different means to get its goal. It sold oil in gold, with Turkey the intermediary. These tactics only worsened the pressure because in the age of Petrodollar warfare, circumventing the dollar props puts you in the crosshairs of the world’s most expensive military machine. Iran was lucky with its timing (compared to Iraq, Libya, etc) and savvy with its delaying tactics. They also pulled in some excellent allies – namely the Sino-Soviet nemesis to the US war machine. As part of the BRICS alliance, Iran cannot be glibly invaded like Libya. It seems the aging superpower is losing its teeth in the Petrodollar warfare department anyway – the Syrian invasion got a hand in the face. Like when Gandalf told the Balrog ‘You shall not pass.’


The US is simultaneously raising its neck hairs against China over their new Air Defense ID Zone. But this reason is camaflouge, according to analyst Finian Cunningham. The real reason is protection of the dollars reserve status – Petrodollar Warfare. China announced a plan to cut back on its dollar reserves – threatening the Petrodollar hegemony. The entire US economic structure is already wobbly. If China leaves the fold and dumps its hand, the economy goes quickly south. Worse, China is moving to import oil without using the dollar. This includes deals with Russia, Venezuala and Iran to be sure, but surprisingly, Saudi Arabia lies on the list of Petroyuan sellers. This is the back pocket kingpin of US oil ‘boyz.’ If the Saudis move away, then the US is revealed as a toothless tiger. Any move to unseat the debt-based US system is seen by the lunatics in control as an act of war. It’s really self-defense, but empires have pretty open-ended ways of defining war. So China falls under the ugly US eye and hard diplomacy is again put on the table. It will fail – my solid prediction.


In fact, the Iran accord is already falling through. It was never finalized, only made to look so in the presstitute eyes. The bill of goods was sold to the US citizens that we had won a moral victory over nuclear armaments and Iran was coming, by force, to a more sensible approach. They would curtail their nuclear programs and be ‘allowed’ to sell oil in the coveted US dollar once again. Quite the reverse was true. Iran would love nothing more than to freely sell oil for gold, yuan, rubles, Euros, or Swiss francs – anything but the burning dollar. The US is trying to force the Petrodollar to stand. However, when someone has diabetes to the point of gross obesity and loses both legs, they cannot walk anymore. The dollar is an overweight, sugar (QE and debt) junkie. The legs swelled up iin 2000-6 with the Greenspan exuberance, then turned gangrenous in the 2007-8 debacle. They never properly removed them, so the surgeons over East have to do the job before the invalid eats up the world’s supply of everything. Short answer – the dollar cannot long survive as the global reserve currency. But global currencies do not die too quickly. They tend to wither back to a more reasonable level. However, the imbalances are worse than any currency in history, so it won’t be a typical scenario.


Back to the immediate reality. China’s air corridor coveres the Persian Gulf. It’s moving to become a Saudi protector – an OPEC daddy, supplanting Uncle Sam from that key role. If China becomes the new protectorate – bolstering corrupt regimes in exchange for oil – then the Yuan soon enough becomes the Petro-Yuan, challenging the dollar. And they won’t need to force their money militarily. Like the US did many years ago, they will have a real currency that everyone wants. And it will be backed by gold for a double-whammy.

A recent summit in Kuwait created a combined military command, opening the door to coordinated security with the nations. According to J. Willie, the touted reason of defense against Iran smoke-screened the real reason – laying the groudn for a post-US, post Petrodollar dominated world. He thinks the change and rapid decline of the Petrodollar is early next year.

A new Persian Gulf common currency is being issued, the Gulf Dinar. Currently pegged to the US dollar, it may transition to something less US friendly. China will have its way and the currency will migrate steadily to a heavier Yuan basis. This is part of the end of the Petrodollar’s reign of infamy over the global economy. The Saudis are making separating noises from the Western Cartel – the dog deserting a bad master.

Meantime, Russia is now the largest oil producer on Earth, hence the controller of the price. For the time being, China is client #1, so the price is contained. But look for a shift away from buying oil in US paper soon. As in the coming year. Think major changes, a tidal wave of changes striking the US shore afterwards.


In light of all this, my advice is for people to protect themselves. The financial advisor scam, the economic collapse, the financial collapse (they’re not the same), the debt crisis, investor fraud, rehypothecation, the bail-in threat, inflation, deflation, biflation, and hyperinflation are all serious threats to your savings. Protect yourself! Buy physical gold and silver. If you need more significant counsel – you should be your own analyst. You should advise yourself.







silver shortage silver price

silver shortage

The global supply chain is almost out – the silver shortage is a war drum beating against the banksters. China sucked in a boatload and more – so it appears. The melters in little Switzerland are taking longer and longer to turn impure Ag into refined, trade-worthy silver. The current price of silver is not real – the value of silver is much higher. Even scrap silver and relic coins are drying up. It might just be typical suppression playing its game. When the price is suppressed, everybody wants a bit. However, it looks like a bigger game might be happening. According to expert C. Jubert, China has drawn in more than her share (and exceeded the world’s capacity, too.) Jubert’s network reports silver as being almost impossible to find. That’s the Europe story all over. Refiners are giving the shoulder shrug and upturned palms – big operations, too.

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Several companies were contacted with an order for a 32k order – sizable for a private order. All three said they could not comply right away, but one could in a couple of weeks. All cited a massive Chinese order drawing supplies to nil. Amounts were proprietary, but it probably came from the Sino-governmental body.
Combine this with a surging inflow of 4000 tons for India and the Ag supply is a stream in the desert – no water. Allowing the price to reset to a more reasonable place – north of its all time high at $49 – would release a lot of the strain. But the boys can’t do that, for whatever reason. Previous gold orders stopped the refiners from doing silver all summer. That’s the primary supply chain blocked.

Older silver coins are gone, too. Who knows why? But the dealers normal sales volume is way down – not because no one wants it, but because they can’t source it. (CLICK HERE).



Spot Price silver and current value silver

As of this writing, the spot price of silver is $20.67. It’s bounced from the $19 lows it slogged through for a week or so. It may return, it may not. But the important point is – this is an artificial construct. As you can read in Gold Wars, silver is suppressed. It’s the most critical industrial metal on the planet with the most varying uses by far. The gold silver ratio in price is 65 to 1. In production it’s 10 to 1. In above-ground stores, it’s around 3 to 1. Why is it so low? Indeed.

Financial corruption is the high-rising star of Wall Street, the main product of Goldman Sachs, JP Morgan and all the mega-banks, and the winked eye from the Federal Reserve. What is financial corruption? Many things, but for me it means no safe haven allowed. Legitimized investor fraud, stamping on any alternative investing (which is far better than most securities), and legalized – make that enforced – financial adviser scam as systemic operation. The shadow banking industry must feed – and your savings are its entree. Protect yourself before it’s too late.

How much is silver worth? Advise yourself. Read up on the Gold Wars and learn about how you are being mauled by the financial services industry. If you invested in the white metal – know that the current spot price of silver and the current value of silver are out of whack by orders of magnitude. Silver would be trading at $125 or more with normal inflation since 1990 or so. But the current silver price is a mere fraction of what it should be.


In light of all this, my advice is for people to protect themselves. The financial advisor scam, the economic collapse, the financial collapse (they’re not the same), the debt crisis, investor fraud, rehypothecation, the bail-in threat, inflation, deflation, biflation, and hyperinflation are all serious threats to your savings. Protect yourself! Buy physical gold and silver. If you need more significant counsel – you should be your own analyst. You should advise yourself.





China plays out the Gold Wars

China Gold Holdings

Debt Crisis

was called out by Xinhua,  China’s state news, wrote about a “de-Americanised world”calling for a replacement to the FRN’s as the reserve money. The piece was scathing in its condemnation, lacking the usual restraint of Chinese politics. They want a “super-sovereign reserve currency” in light of the deplorable US government fiscal concerns and currency management. “It is perhaps a good time for the befuddled world to start considering building a de-Americanised world,” the agency said. “The world is still crawling its way out of an economic disaster thanks to the voracious Wall Street elites. The cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising the debt ceiling has again left many nations’ tremendous dollar assets in jeopardy and the international community highly agonized,” The Central Bank head proposes a reserve basis that is not tied to a single nation because of American mismanagement of its privileged position. Zhou Xiaochuan, head of the People’s Bank of China, suggested a new reserve currency in 2009, citing stability as the goal. Gold could be that currency. “A self-serving Washington has abused its superpower status and introduced even more chaos into the world by shifting financial risks overseas, instigating regional tensions amid territorial disputes, and fighting unwarranted wars under the cover of outright lies. Such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated, and a new world order should be put in place, according to which all nations, big or small, poor or rich, can have their key interests respected and protected on an equal footing.”

Gold Wars

It’s a long-standing idea that QE – money creation – should drive up the gold price and drop the US dollar value. Indeed, some call current QE hyperinflation – not in prices, but in creation. A currency crisis could be in the offing with the gold suppression coming to an end. A gold standard might be coming as a result of the international gold wars. The loss of reserve standing for the US money is going mainstream. People are worrying about it/celebrating as per their situation. (As a side note, it’s key to understand the role of the Petrodollar Standard.)

China Gold Holdings

China claimed 1000+ tons of gold in 4/2009. That could be much higher – easily surpassing 3000 tons. And the giant has taken all its domestic production as biggest gold miner in the world since that time. Of course, the public is buying a lot, but China has been estimated to have as much as 10,000 tons of gold, maybe more, by highly credible analysts. Don’t doubt it. China no longer takes in US dollars. They are converting their holdings in rapid succession to gold, real estate, and viable businesses – many in the US. In fact, China recently bought the JPM headquarters for less than half its appraised value. So-called ‘dumb money’ doesn’t get the problem of US currency devaluation. These thumbtack investors see gold as a commodity or speculative trade, not as a means to secure wealth long-term. Debt is not a safe-haven, no matter who issues it. Precious metals are and have always been. The smart money will be ready – capitalizing on the low current silver price and high value of silver, for example. They will watch out for hyperinflation signs and deftly get out of the currency beforehand. Crisis investing will the watchword and they will be prepared for an emergent gold standard based on Chinese actions. The gold/silver ratio will revert to its norm soon and they will leverage the difference by having a savvy allocation of gold to silver. What will be the long-term result of gold’s large decline? It will head East – the Chinese are buying more than ever in the teeth of the major drop. They will force the end of the gold suppression. The world is changing, the gold wars are heating up – are you ready?


Dollar Decline 2013, Part II

Click here for Part I.

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gold wars


Financial Corruption

Citibank wrote House Resolution 992 – a regulatory measure on derivatives. It rolls back the mediocre, but semi-legitimate Dodd-Frank Act and permits the financial creeps to engage in off-balance sheet shenanigans in massive force yet again. Global economy threat alert! Mainly it legalizes the questionable, destabilizing processes currently underway. No collateral will be needed for ‘instruments.’ If they lose, the taxpayer/Treasury debt complex foots the bill slushing up the FDIC. If they win – hooray for them.
It’s an oblique angle in the gold wars, but it does signal hyperinflation – eventually. It is hyperinflation in issuance soon, but in price, later. It will first be seen in commodities, then food, then consumer goods. Later will be houses, cars and the like and they will inflate the least, maybe none. Last will be wages, which will never catch up to energy, food and commodity increases, but will beat out debt asset increases. The hyperinflation signal is from the mega-banks needing huge cash infusions as they blow up (double entendre) their balance sheets for the third time in a decade. They are ‘zombie banks,’ as they say, desperate. The Cartel is instigating rapid financial collapse, following the more gradual, but debilitating economic collapse.

Why are they pushing for updated regs? According to the Golden Jackass, a recent spike (80%) in Treasury rates whamped the world’s largest hidden market – Interest Rate Swaps. These amount to over $300 TRIL- (you know the end of that word, the new billion.) They were counting on keeping rates well under 2% – their swaps demanded it. They lost big-time and one wonders how they lost control. It might have been a spot of sovereign revenge, or a testing attack by the Chinese. The banks are most likely being topped up regularly as their positions get killed – up to $200 billion per month.


Hyperinflation by any other name

The Euro Central Bank and the Fed are on the horns of a painful dilemma. Let the mega-banks (tail wagging dog) wash out in a tidal wave of insolvency (good for the public after a short period of pain), or go for hyperinflation. The policy is as it has been – print like a 3rd world despot and cross fingers. The dollar decline will surely follow.


The washout may happen in any event – the leverage may be just too high. The Morgue (JP Morgan bank) sits in the sites of 8 government investigations, all high-level. They are in distress, for sure. The bank sold its headquarters for a song – less than a billion. Why on Earth would the largest bank in the US sell its primary headquarters for half the value? That amounts to some heavy pressure from someone (*cough* China). Across the Atlantic, the megas have a startling $3+ trillion in failed loans. The Western Cartel is falling apart onstage. A serious mega-bank failure could be around the corner.

gold wars

China has opened new doors to gold trading. It wants its citizenry to ‘go yellow’ and own gold on several points.
It prevents ‘bubbles’ in asset sectors – stocks especially. Big gold buying provides inbuilt social security and takes stress off that overtaxed function of the government. Second, it shields the people from the ravages of inflation. In fact, gold owners typically thrive from inflation as gold beats out the inflation rate by a good percentage. This strategy de-escalates social discord from economic collapse. Third, it gives their Central Bank a ready source to quietly increase supply by purchasing gold internally. They are using the ongoing gold suppression (and silver suppression) to arm their citizens in the gold wars and deplete the enemy. Draining the gold supply hurries the Western financial collapse and allows for a stable gold standard. If the citizens own gold, they will be able to weather the storm of having their currency transition from an internal bookmark to the global reserve currency on a gold standard. By pushing silver as a second-tier investment, they increase the force on the opposition and allow less wealthy citizens to profit from the gold silver ratio as it moves strongly in silver’s favor. The current value of silver is not reflected in the current silver price and China (India, too) is using that to hedge against mass uprisings. They want to make their people much wealthier as they move to the front of the global currency pack. The precious metals suppression is being used against the shadow banking cartel, especially the silver shortage.

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Currency Wars

Russian people may (if the law passes) have to shuck over their US dollars in account for rubles. Even the data will be destroyed! After a year, such paper items found by the po-po’s (police) would be seized, possibly reimbursed in Rubles.
The idea, on paper, is to unblock the Russie currency from entering the sovereign reserves market. The bill sponsors claim, with merit, that wide-scale ownership of dollars risks a sudden, catastrophic loss within 3-4 years as the dollar catches fire and burns up. Russian savers would be decimated and become wards of the state. They may be right, but there’s probably a hidden agenda. Pulling in those dollars gives Russia a potent weapon and a reserve surplus for a printing operation. The gov’t can buy – well – gold and silver, for a start, not to mention US real estate, equities and businesses.

China will support the US from collapse for another couple of years, using heroic measures. The reasons? China has a trillion $$ T-Bond portfolio with a 2 year maturity date. The Eastern giant wants to turn these reserves into physical assets as they mature, not selling them in the open market earlier – that would crash the market and make remaining holdings far less valuable. By holding to maturity, they get $$, which can be turned into ports, mines, real estate, and precious metals.



Meantime, the Petrodollar is disintegrating in mid-air. US detente with Iran has created backlash from Saudi Arabia, already on shaky legs for its regime.The Saudis are unhappy with the Syrian outcome – no US military prowess spent cracking Syria. Russia just stopped it cold. With Saudi-US relations cooling, China will step in to support Saudi Arabia. With a rising currency, and a voracious oil appetite, China will become the Saudi preferred big brother. Yuan will gush into the Middle Eastern nation and $$ will flow steadily out. See this article on Economic Collapse blogspot.


The Saudis cannot hold together the Petrodollar alliance any longer, at any rate. Iran is an emergent power and with powerful allies (China and Russia), the country can begin to knock out the legs of the almighty Petrodollar. And when it goes, the Reserve currency status goes with. Because the global finance system has long rested on the dollar and its armor of Treasury Bonds, the T-Bond complex will stagger, shedding paper as it bursts into flames. The Fed will put it out with massive buying of T-Bonds (read EPIC buying, never seen before), but that will strain the dollar’s value. And the dollar is looking like a peanut under a long lever – about to pop.


In light of all this, my advice is for people to protect themselves. The financial advisor scam, the economic collapse, the financial collapse (they’re not the same), the debt crisis, investor fraud, rehypothecation, the bail-in threat, inflation, deflation, biflation, and hyperinflation are all serious threats to your savings. Protect yourself! Buy physical gold and silver. If you need more significant counsel – you should be your own analyst. You should advise yourself.



Dollar Decline, Part I

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Jim Willie’s latest report is out and, as usual, it’s uncompromising. I hope he’s right about the pending demise of the Western Cartel – in my opinion, they are dragging down humanity in innumerable ways. His top-level premises: 4 events will signal the end of the dollar (presumably as Reserve Currency, but not as a currency per se.)
First is a coalition of other heavyweight currencies (with the Yuan foremost) in a gold standard. Second is the ‘Saudi flip’ – when the world’s (now) 2nd largest oil producer begins to accept non-US dollar instruments for oil. Third, multiple nations issue bonds in Yuan instead of dollars. And 4th – when the US dollar splits into an external (non-devalued) and an internal (devalued) currency.

Looking at these one at a time, I’d say the first is almost inevitable at this point. Timing is everything and really impossible to predict. It’s more a gradual process, already underway. The BRICS bank is beginning its first siege against the buck. China and Russia are clearly stockpiling massive amounts of gold. Also, this quote from the newsletter-


a CIA source, straight from Langley, taken verbatim. “China released this afternoon an official statement that it will stop stockpiling USDollars. China will cease adding to its US debt to hold the total of USDollars at or below current levels.

China’s debt is coming to maturity mostly within a year. That gives a very short timeline in potentia. They want this debt to mature without devaluation. They don’t want to crash the US Treasury complex and lose their reserves. They want to ease out of them and into hard assets and real property. They’re done with paper (for now and years to come.) Moreover, the yuan is escalating rapidly as a trade currency, up to 8.6 Trillion Yuan. Swap agreements – which exchange yuan for another countries currency for trade purposes – are numerous and large enough to establish a major foothold in global trade. They have wasted little time, but made moves without too much fanfare. The yuan is almost ready to go to head to head with the dollar. The gold wars may go public very soon.


Next is the Saudi flip argument. The Iran sanctions backfired – Iran was unable to sell oil in dollars, but her trade partners swiftly (pun intended) moved to give the major oil producer an end-run. She can take, and is taking, gold for oil – more gold wars. It’s all tied together at some level. But the Western Cartel despises gold. They have been neutered militarily (don’t worry, they’ll be back), as of Syria and the Russian finesse by Putin. They have to backpedal on Iran to slow down the rising fire of the gold wars. They need detente with Iran since they are the #1 hydrocarbon sales outlet sans US dollar. Knowing the hostility to Iran won’t work anymore, they must cowtow and make nice. The days of pretending that Iran (which has not attacked another nation in over 200 years) is a nuclear threat are fading. We hope so – the Iran entanglement has a scary real name – World War III.
Unfortunately, this has cooled the Saudi bunk-buddy relationship with the West. In fact, the Saudis now sell more oil to China than the US. They have a vested interest in the East. Soon, they will flip and accept Yuan for oil. This will play out before 2020, with a fully vested Saudi Arabia in the Chinese pocket by then. It may be much sooner, but at least 2-3 more years until a token Chinese protectorate is in place and the US protectorate is being shown the door. The US will fight this battle mightily – it is their ‘queen’ of the chessboard. (Another theory has it that the current powers are deliberately dismantling the US power as the symbol of ‘democracy’ and capitalism.’ I don’t subscribe to this theory overmuch because the power is obviously going to China and Russia, not to the international banking cartel – they will be shoved aside in the paradigm shift.)

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3rd criterion of dollar collapse – Foreign nations issue sovereign debt in Yuan instead of dollars. That should happen soon, imo. While countries stand to benefit from issuing dollar based debt because of the flood of dollars, China will sweeten the pot with trade deals. The enticement of borrowing a currency that is hyperinflating will be very appealing to some nations – the real value of the debt becomes far less as the currency devalues. It’s easy to get dollars to pay off the debt when the world is choking on them and nobody really wants them. However, the cost of financing the debt will likely go up quickly for the same reasons. Fewer investors want a dollar investment. Thus there may be a perverse, medium term boost for the dollar as interest rates remain low. Countries may (and it’s a sound strategy) borrow loads of dollars on longish bonds (5 years or so), then spend (or convert to gold and hard assets) and wait for the decline. China may even facilitate the process by loaning out her dollars and demanding a partial repayment in Yuan – a clever way to slowly flip the switch.

4th – the dollar will split into internal and external dollars. The internal will be devalued by 50% (suddenly everything will cost twice as much) and the external will hold its value for foreign nations. This will be forced by the foreign nations. This is part of the kick-the-can overall inflation policy. The financial collapse will be driven home to the US – the principal cause. The economic collapse happened long ago in the US – the manufacturing base was destroyed.
I honestly don’t know what to make of this hypothesis. It’s interesting, but I don’t see how it can be logistically managed. How do all the electronic dollars get rebranded as external dollars? The powers that be risk serious societal upheaval in such an event. I suppose if the BRICS can force it down the US throat, it could happen. I don’t think it will. I think that China is in the driver’s seat, with her favorite passenger Russia helping to power the car. These two will divest of their US dollar holdings, then simply let the ship sink while other nations scramble to chuck all their dollars. Two separate dollars sounds like it would quickly devolve into a mess on Forex and other exchanges. If such a situation were forced, the instigator (China) would be blamed. And that nation is being careful to let the West hang itself – which it’s doing very well, thank you. I think China will have enough US reserves left to make it ‘hurt,’ so that the emerging giant is a well-intentioned victim in the world’s eyes. they can, quite rightfully, cry foul on the US for abusing its dollar perogative. They will be the official good guy and the US will be the official bad guy.


So much for the dollar death criteria. Now for the most important causes. There is no more limit on US government debt. This will make nations run for the hills – the Yuan hills, that is. Over a trillion in new debt rolled out of Congress since the new fiscal year starting October 1. The new year always brings huge debt issue because of delayed debt from the previous year to improve the fiscal appearance. However, there is a much larger intragovernmental debt (from various trusts like medicare and social security) this year which needed repayment. Once this flushes through the government fiscal toilet, spending should slow down somewhat. However, the US is probably on track to top $20 Trillion by the end of the 2014 fiscal year.

The bond vigilantes are alert. They will look for ‘cloaked’ redemptions form the Fed to exit the trade without mucking up the ginormous bond market.

In light of all this, my advice is for people to protect themselves. The financial advisor scam, the economic collapse, the financial collapse (they’re not the same), the debt crisis, investor fraud, rehypothecation, the bail-in threat, inflation, deflation, biflation, and hyperinflation are all serious threats to your savings. Protect yourself! Buy physical gold and silver. If you need more significant counsel – you should be your own analyst. You should advise yourself.


Click here for part II.





Gold Wars and Cartel on the defensive

gold wars gold suppression

Gold Wars

There is a stir in the ether – not unusual in the gold wars. Those on the underdog side say the Western Cartel is going down soon. They’ve said it before, and it hasn’t happened yet, but the footprints are indeed there. The logic is right, but the tenacity of these players is underestimated. There are reasons for the false game of low gold and silver price to remain so for a time. Both sides are happy without seeing a huge gold run-up. Ditto for the false value of silver. It allows the rising forces to accumulate and the falling forces to pretend they can weather the storm. How does it end?


gold suppression weakness

The LBMA and Comex dark alliance will be overturned when demand for phyzz overwhelms supply of same. It’s so simple and so repeated, but it bears more repeating. Investors demanding delivery will drain the supply to zero and then it is game over. The Cartel has pushed people into unallocated holdings for some (decades) time now. These suckers (who often manage BIG money) think they have gold, but it’s just paper. Allocated (audited, examined) accounts costs real bucks to do, so penny-wise and pound-foolish money managers save a nickel to own paper instead of real assets. The funds get a ledger receipt and voila – they are not gold investors, but creditors who have loaned unsecured moneys to the most conniving crooks. Moreover, they don’t have clue how the money is used to undermine their holdings.

They have no gold and their money is used for the gold price suppression. These receipts are then re-used by the banks (who don’t own them) as collateral for other ventures. Rehypothecation, which killed the MF Global investors. They are leveraged to the sky.


Precious metals suppression challenged

But the game is changing. The deep sovereign and private pockets of Shanghai and Beijing wealth funds have cracked the code. They are snafuing the Cartel operations by hyper-leveraging the exchanges. A crack-up is on the horizon – perhaps still a year or more away, but coming nonetheless. The LBMA and Comex are sitting on a default. The forceful ramp-up in paper to physical leverage is now eating the Cartel it formerly served so well. Their ability to manage events is declining rapidly, soon to be gone. The Chinese are demanding delivery and not giving into a quick, profitable cash settlement.

They are taking away the perpetually rolled-over forward contracts, stepping into the market and snatching them out of the Cartel’s tight circle. These over-collateralized contracts must be marked to market, as they say. That means the physical must be supplied. They have to pony up real metal, and that’s been in short supply. The Chinese timing is interesting, because the talk was that it could have been done before, but I don’t think that’s true. The Cartel still had enough supply from new and stored gold to roll over their gold wars opponents. The physical side was not organized enough to overcome the resistance, and when they tried, they lost big-time by going long into a falling market. They tried to catch a falling knife and lost a thumb. Now they’re back, reorganized, and ready to reverse the long-standing precious metals suppression.

If reports of 100 times the leverage are true, this puts the Cartel in a bad position. The leverage is whipsawing against them. They will have to unwind their nasty positions. But there ain’t enough gold in the world to do it.


Silver Price

All this goes as well for silver. What is the current value of silver? It’s not in line with the current price of silver, that’s for sure. How much is silver worth? Don’t look to the silver price for that information, it’s managed. There is an acute silver shortage, by all accounts. The shadow banking cartel has worked around this for a long time, but the birds are coming home to roost. The gold/silver ratio – seriously out of whack, is going to come unsprung and hit them in the face, then the ‘nads. They will be neutered – many hope.


Crisis Investing

It’s time for the man on the streets to look at real crisis investing. With this much investor fraud happening, with current silver price being drummed on a daily basis, with the ongoing gold suppression, with the possibility of hyperinflation even coming around, it’s important to ‘check your stack.’ Do you have some precious metals in hand? Or in a very secure place.


The LBMA exchange (and the Comex) will be buried, but when is an open question. It is inevitable. The deep short squeeze is being played by the Chinese. It’s a death ground game, with the forces of corruption fighting for their lives.





Economic Collapse


Hat tip to Pawel Kuczynski for the great panel. Banksters getting fat off corruption, triggering hyperinflation and conducting their gold wars to harm the rest of us. As they conduct silver suppression, hammering the  current silver price and distorting the true value of silver, they create a massive silver shortage by the pig tactics. But the Petrodollar Standard will see its sunset soon.  Then we may be (a bit more) free.



India gold price suppression

India is restricting its citizens ability to buy gold. The Indian gold wars have been going on for over a year. It’s only driven up demand. Buying is strong. Perhaps there would be more buying if restrictions were lifted – it’s impossible to tell. At any rate, people are buying at the equivalent of $1600/ounce against a global spot price below $1300. This could be seen as a more accurate price because it’s what people are willing to pay when they can’t find it at suppressed prices.

On a side note – it could be seen as an arbitrage opportunity. A well-connected trader could bring in gold at a quick 20% plus profit. Of course, part of the problem is the loss of value in the Indian rupee.

More to the point on the global situation, India seems to be in a conflicted position, a la Germany. Germany has ties to the West, but seems to be relating more and more to the BRICS coalition – especially Russia with her energy reserves. India is the eye in the BRICS and has a prominent place in that sphere. The BRICS, by all measures, are moving covertly but steadily to a gold-based economy. China and Russia are bringing in boatloads of gold, while the Western Cartel is hotly suppressing the gold price and demand.

What is the game for India? Why is it (seemingly) going against the grain of its coalition? This is speculative, but there are several possible reasons. First, a divided leadership – some members are expressing allegiance to the West and are owned by the Western banks. They have personal vested interests in the system. The other possibility is a deeper game going along with China’s lead.

China could be accused of assisting in the scheme to suppress the price of gold. Their interests are completely different. The Western Cartel wants to suppress gold to favor the Western currency complex and maintain their massive shorts in gold without a problem. China, by contrast, wants to accumulate as much gold as possible as cheaply as possible. It must do so secretly, or its huge buying will drive up the price in a bull market frenzy. Thus China has been buying gold covertly for a decade and a half now.

India may be going along in order to accumulate state gold at citizen expense. It’s the same tactic the US used in the 30’s under FDR to accumulate the most massive gold stores in world history. Or perhaps it’s just a test to see how the public responds..

In any event, the outcome is clear. This pushdown of gold buying and price is temporary. For one thing, nothing lasts forever. Second, the forces against the Cartel’s suppression are becoming too great – something has to give eventually. Third, the BRICS approach is intentionally temporary. It is a phase of the long game. It would be meaningless to create huge stockpiles of gold (as a policy change) in a fairly short time frame in order to hide it. There is a plan to reveal the gold supply and use it. Probably it will back a currency and/or a new global trade system.


Kelly Mitchell is the author of Gold Wars: the Battle for the Global Economy. He can be found at www.gold-wars.com.




Keith Barronn on top-tier hyperinflation happening now

Today a man who has lived in 18 countries around the world, and witnessed collapses in many of these countries firsthand, From King World News “I don’t think the rest of the world is really appreciating what’s happening right now, but portable wealth, and I mean at the very top-end, is going ballistic.” Keith Barron, who consults with major companies around the world and is responsible for one of the largest gold discoveries in the last quarter century, also stated, “I need to clarify here that this unbelievable situation appears to be being fueled by a great many Chinese buyers who are aggressively exiting US dollars.”

Barron: “The situation in Europe continues to be fairly grim. S&P has lowered the credit rating of France in the last week. We have also seen the general strike in Greece, the transport strike in Portugal, and the employment rates are not being improved at all in the PIIG countries….

“So, the situation remains very dire, and if they don’t start to throw massive amounts of QE at the tragedy in Europe, from the ECB, things could really get out of control in a hurry. We are talking about major civil unrest, especially in places like Greece.

While all of this is happening, today we had another all-time high in the stock market in the US. But even as the stock market continues to roar, we have yet another city in California that’s contemplating bankruptcy, just like Detroit did not too long ago.

Now, here is what is really interesting: Luxury goods, meaning portable wealth, are hyperinflating around the world. This situation is really quite astounding. Christie’s just had an auction of contemporary and post World War II art, and they shattered the all-time record for an art auction.

The total sales from just that one auction were a staggering $691 million. That is a truly outlandish number. Christie’s crushed the record for a single work of art at that auction as well. The $142.4 million art piece appeared, to me, to be purchased by a Chinese buyer.

At another auction, there was a 14.8-carat diamond that sold for $35.5 million. As KWN reported, the next day there was a pink diamond sold by Sotheby’s, also in Geneva, for a breathtaking $83 million. This is truly remarkable what is taking place here.

I don’t think the rest of the world is really appreciating what’s happening right now, but portable wealth, and I mean at the very top-end, is going ballistic. I need to clarify here that this unbelievable situation appears to be being fueled by a great many Chinese buyers who are aggressively exiting US dollars. They literally want to get rid of their holdings in fiat currency altogether and place their wealth into tangibles, particularly portable wealth.

As KWN also reported, this is not just a case of ‘fat cats’ wanting to brag to everyone about their latest acquisitions. These are people who are greatly concerned about the massive printing of fiat money, and they are looking to preserve their wealth.

People should understand that this is a warning of things to come. The super-wealthy aren’t buying these hard assets because they are going to go down in price. These people are connected and they know what the end game is going to be, and so they are moving extremely aggressively to preserve their wealth and their purchasing power from the coming Great Inflation.”

Barron added: “Gold has simply been marking time in a trading range, but it will break out as soon as it gets a catalyst. You can’t have the super-wealthy bidding up the price of hard assets into the stratosphere and have the price of gold staying depressed. It just goes against all logic. At some point the gold bears will be overrun and the next leg higher in this bull market will begin in earnest.”

via My Blog.


The Coming Collapse of U.S. & World Conventional Paper Assets : SRSrocco Report

According to the Towers Watson 2013 Global Pension Plan study, the majority of the world’s pension funds were invested in equities & bonds. A good portion of the other category (in grey) was invested in the real estate market.

So, the majority of global pension funds are allocated in equities, bonds and real estate. Isn’t that amazing that these three investment classes have shown some of the highest rates of returns in the past several years?

Furthermore, the majority of global mutual funds are invested in equities & bonds and the overwhelming percentage of the largest insurance companies in the world have their assets allocated in real estate.

In a recent article by Brighton House Associates:

Real estate, an asset class that has traditional been a mainstay of insurance company portfolios due to its relatively steady, predictable returns and tangible nature, represents 60% of the asset allocation mix of large insurers.

It’s no wonder that the central bank’s monetary inflation has been siphoned into these assets rather than the precious metals. I have republished the two charts below from one of my previous articles to show just how little currency is flowing into the precious metals than the typical conventional assets.

Global Gold Investment

Global Silver Investment 2007-2012

In 2012, world gold investment was $234 billion and silver was $7.9 billion for grand total of $242 billion. In contrast, total investment in global conventional assets under management grew to $7.5 trillion the same year (2011 – $79.7 trillion to 2012 $87.2 trillion). Thus, total gold & silver investment in 2012 was only 3.2% of these global convention assets.

Why Global Conventional Assets are a Ponzi Scheme

The reason why these global convention assets are the largest Ponzi scheme in history is due to the ability to liquidate these assets in a short period of time. If everyone in the world who was invested in these assets wanted to cash them in for currency today, there would not be enough equity value or currency for the massive claims.

Furthermore, the redemption or massive liquidation of these conventional assets would certainly drive their asset values to a fraction of where they stand today. Of course this would not occur, because these assets are set up to be liquidated by a small amount on an annual basis for the investors-retirees.

The real problem for these conventional assets in the future will be the peaking of global oil production. These assets derive their value from a growing economy which occurs due to a growing energy supply. Once the energy supply peaks and declines, it will put severe stress on the $trillions of conventional paper assets.

The reason why gold and silver are much safer assets to own than pension plans, insurance funds or mutual funds is due to the “Economic Energy” store of value they contain. Once and individual purchases an ounce of gold or silver, held in one’s possession, the individual contains the highest quality of this stored “Economic Energy” that can be readily traded for economic energy in the form of goods and services.

Unfortunately, conventional assets do not contain economic energy, rather they are paper versions of “Energy IOU’s” that need to be liquidated, exchanged for fiat currency (another debt based Energy IOU) than traded for goods or services.

The peak and decline of world oil production (forecasted to occur soon by some in the oil industry) will put a huge strain on the already weak global economy. As the global economy disintegrates, we will see a collapse in the values of these conventional assets. Investors wise enough to see this coming will transition out of pension plans, insurance-mutual funds and into physical assets such as the precious metal to protect their wealth.

Because the world only invested 3.2% of its currency in gold & silver in 2012 compared to conventional assets, any significant move into the precious metals will push their values up to levels never imagined.

There are many important aspects of the energy supply equation that will be addressed at the SRSrocco Report in the future. The more investors understand these energy details, the more they will understand why it’s wise to switch out of paper assets and into physical ones such as the precious metals.

via The Coming Collapse of U.S. & World Conventional Paper Assets : SRSrocco Report.