Socio-Economics History Blog

Socio-Economics & History Commentary

Max Keiser: America is on The Slippery Slope to Economic Collapse! Currency Revaluation Based on Gold is Inevitable!

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September 10, 2009 Posted by | Economics | , , , , , , , , , , | Comments Off

Spotlight: End of the US Dollar Dream?

September 10, 2009 Posted by | Economics | , , , , , , | Comments Off

Greenspan: Gold Rally Signals Move Away From Currencies

  • Alan Greenspan is the wizard who caused the real estate bubble with his low interest rate policy after 9/11. He is however, correct in saying that the current gold rally signals the flight from fiat currencies. Bloomberg reports :
      
    Gold prices that jumped above $1,000 an ounce this week are signaling that investors are buying metals to hedge against declines in currencies, former Federal Reserve Chairman Alan Greenspan said. The gains are “strictly a monetary phenomenon,” Greenspan said today at an investment conference in New York. Rising prices of precious metals and other commodities are “an indication of a very early stage of an endeavor to move away from paper currencies,” he said.
     
    The price of gold has jumped 13 percent this year as rising government debt coupled with declines in the     dollar spurred demand for the metal as a haven. Silver, platinum and palladium also gained. “What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment,” Greenspan said.
     
    Yesterday, gold futures for December delivery touched $1,009.70 an ounce on the Comex division of the New York Mercantile Exchange, the highest for a most-active contract since March 18, 2008. The metal touched a record $1,033.90 an ounce on March 17, 2008. As of 9:42 a.m., gold traded at $988. China, the world’s fastest-growing major economy, will continue to be a “large consumer” of commodities, including energy and metals, Greenspan said.
     
    “China is turning out to be the 900-pound gorilla in the energy and commodity market,” Greenspan said. “The increase in oil consumption in China has been quite extraordinary.”

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September 10, 2009 Posted by | Economics | , , | 1 Comment

Richard Gage: Was 9/11 an Inside Job?

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September 10, 2009 Posted by | GeoPolitics, History | , , | 19 Comments

Bob Chapman: Implications of the Chinese Reneging on Derivatives Contracts on Precious Metal

  • The derivatives problem is far from over. It is hardly mentioned in the MSM. The financial fraudsters/banksters running America seem to want to continue the off balance sheet derivatives shenanigans forever. The FedRes is rumored to be holding US$500T of toxic derivatives. This problem looks like coming to a meltdown soon.
     
  • Bob Chapman, of International Forecaster, explains what the implications are of the Chinese walking away from their OTC derivatives contracts.
      
    …. The Chinese government is actively touting both gold and silver as an investment to the Chinese public, and with good reason.  The yuan, like the dollar and virtually all other paper currencies, with the exception of the euro, are one hundred percent fiat currencies backed by absolutely nothing but government promises which aren’t worth the powder to blow them to hell.  Even the euro’s gold backing is pathetic at best.  Initially it was a respectable 15%, but the backing is probably now about half of that due to Washington Agreement gold sales and surreptitious gold leasing.
     
    The Chinese government knows that if they do not allow the public to protect their new wealth with gold and silver, a decline in the yuan due to hyperinflation caused by massive government stimulus and an ongoing bailout and subsidization of mass failure in their banking and corporate sectors due to declining exports and trillions of dollars worth of spurious loans undergoing increasing rates of default, loans which often were given to Chinese communist party members, could very well lead to revolution.  Chinese government officials are now attempting to protect themselves by dumping large portions of their dollar denominated reserves for gold and silver, as well as for commodities such as copper and oil, and they want the Chinese public to be able to do the same with gold and silver, for maximum possible protection – and, more importantly, for avoidance of revolution.  …
      …
    Now, suddenly, we hear that China is considering walking away from responsibility on certain OTC derivative contracts held by foreign banks as counterparties, which contracts cover various commodities, in the event that those contracts result in losses to their sovereign wealth funds. ……  these unlisted OTC derivative contracts include massive short positions in both gold and silver, but especially in silver, and are used to back the listed COMEX short positions of the large commercials in both gold and silver.  In other words, the CFTC is allowing COMEX commercials to justify their ludicrously concentrated short positions in both gold and silver by backing those positions with contracts about which the CFTC has no direct knowledge, over which they have no regulatory authority thanks to the Commodity Futures Modernization Act, and which the CFTC knows are backed by foreign governments outside the jurisdiction of the US who can renege on those contracts with impunity!!!  How’s that for reckless regulation of commodities by the CFTC?!  And now everyone’s worst fears are about to be realized as China announces its intention to renege!!!
      ….
    These two developments, namely the Chinese government’s promotion of gold and silver to its public as an investment, along with its intention to renege on its OTC derivative contracts covering certain commodities, are obviously interrelated.  If you are going to ask your public to invest in gold and silver in a massive way in order to save both your and their bacon, while at the same time diversifying a goodly portion of your trillions worth of dollar-denominated paper assets into physical gold and silver, you might expect that this would put massive upward pressure on gold and silver prices.  But if you also had massive holdings of short positions in OTC derivative contracts covering both gold and silver, would you not be shooting yourself in the foot?!!!  So now we can understand why the Chinese have decided to renege.  Otherwise, they are caught in a trap!  
     
    If the Chinese government pushes to bail out of dollar-denominated paper assets by plowing these assets into purchases of physical gold and silver, and then proceeds to ask their public to do the same, they will suffer massive losses on the OTC derivative contracts, totally defeating the whole purpose for diversifying into precious metals.  This trap was intentionally set for them by the Illuminati in their never ending battle to suppress gold and silver prices.  Your government, both shadow and official, lured the Chinese into writing OTC gold and silver short contracts ostensibly to hedge domestic precious metals production, but most likely to take advantage of planned gold and silver takedowns, and then used those contracts as a form of extortion against them to prevent them from diversifying out of the dollar and into gold and silver, among other assets.  They probably told the Chinese that they were going to do a big takedown of gold and silver, and that they could greatly profit from these short positions and at the same time protect the value of their domestic precious metals production.
      ….
    So now the COMEX gold and silver commercial shorts, the owners of the COMEX exchange, and all the past CFTC officials who allowed this nefarious paper fraud in gold and silver to rise to new criminal heights based on bogus backing by unregulated derivative contracts written and guaranteed by an often contentious and even hostile foreign government, are all doing double shots in their knickers.  If the very angry, and very duped, Chinese renege, the entire COMEX is going down, big-time baby!!!  The whole system is about to blow if the Chinese renege on these contracts!!!  We wonder what the Chinese want in return for not reneging!  Whatever it is, we can guarantee you that the US government is not going to like it very much.
     
    Without the Chinese OTC derivative backing, all COMEX gold and silver positions would be totally naked.    That is because COMEX inventory reports for both gold and silver are a total fairytale fraud.  Despite many hundreds of requests for physical delivery which were satisfied over the course of many months, the gold and silver inventories reported by COMEX have remained unchanged.  The COMEX even had to enlist the help of the ECB and the Canadian mint to satisfy those requests for delivery, thereby demonstrating that what the COMEX reports as inventory is nothing but a phantasm.  We recommend that any and all COMEX gold and silver positions be abandoned as being outright naked and fraudulent.
      
    Take physical delivery of your gold and silver bullion from COMEX if they have any, or take your ETF share in lieu of physical delivery and convert it into bullion immediately, and take physical possession of it.  Do not trust any bank, any mint or any ETF or pooled fund to hold your gold and silver.  Otherwise you potentially face a total loss of principal. 
      
    When the COMEX goes down in a blaze of glory, which is now inevitable, everyone who owns any ETF gold and silver shares, and especially those who have received these shares in settlement of their imploding COMEX contracts, are going to ask for physical delivery from the ETF’s because all confidence will be lost in the system. Then comes the implosion of the ETF Ponzi schemes as everyone finds out that not only did the COMEX have no gold or silver to back its contracts, but that all the gold and silver ETF’s were nothing more than gold and silver naked-shorting, leasing and price suppression schemes.  We now predict that the requests for physical delivery from the ETF’s will far exceed what they planned for, and further that the whole nefarious scheme will be exposed as being a Madoff-like Ponzi scheme, because their touted gold and silver bullion holdings have all been sold off, leased or otherwise encumbered.
      …
    The magnitude of this paper gold and silver scam will even exceed that of the Madoff Ponzi scheme.  The Stanford scam will look like chump change by comparison.  You should own only physical gold and silver, which is in your possession.  The only paper gold and silver you should own are the producer shares, period. All futures contracts, ETF shares and mint certificates are now potentially bottomless capital loss pits.
      …..
    The media has focused on the Chinese long side of OTC oil derivatives, and has suppressed the news about their short side of OTC gold and silver derivatives, because the Illuminati, who own all the fane-stream media outlets, know just how explosive this news could be for gold and silver, and for them and their cabal, a gold and silver rally is the biggest of all no-no’s.  The Illuminati allowed the news to leak on the oil derivatives, because they believe they can patch up the resulting problems for the much larger oil market, but the gold and silver markets are far too small and volatile for the cartel to be able to control the potential fallout, and as far as the US branch of the Illuminati is concerned, gold and silver must be suppressed at all costs because rallies in gold and silver expose the vulnerability of their seat of power, namely, the reserve status of the US dollar and the status of the US treasury bond as the ultimate safe-haven.
     
    The implications of the Chinese abandonment of their responsibility under derivative contracts are nothing short of tremendous and the entire derivatives market could collapse.  Once derivative players understand that any person or entity powerful enough to thumb their noses at the owner of the other end of a derivative contract can do so with impunity, the whole derivative market will go into a major uproar and will become completely unviable.

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September 10, 2009 Posted by | Economics | , , , , | 2 Comments

   

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