what's the mixture of truth and fantasy in this piece of poison...?
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lemetropolecafe.com
9/14 Bush 1, Bush 2, The Gold Cartel, WAR and Gold
September 14 - Gold $316.50 down $2.20 - Silver $4.55 down 3 cents
Bush 1, Bush 2, The Gold Cartel, WAR and Gold
Gold gave up what it made on Thursday. Early on, gold ignored a strengthening dollar and took off for $320 after a lower opening. Refco started throwing some thousand lots at the sellers. Enter JP Morgan Chase who made sure gold did not breach the pivotal $320 resistance level. They stopped the rally in its tracks and gold fell back to slightly lower on the day. Morgan showed up in the last half hour bashing gold once again, taking it as far away as they could from pivotal $320. They are a consistent bunch.
futures.tradingcharts.com
Desperate too it would appear, based on Morgan’s share price action. It is terrible and trades like a submerging submarine. In my opinion it forebodes a coming financial market and economic disaster in the U.S. You have heard this prediction from Midas for years, but now its imminence is profoundly disturbing, as it may be the real reason President Bush is ranting and raving about going to war with Iraq in "weeks and days," not years and months.
Allow me to set the scene for the rest of my thoughts and how it relates to gold by presenting commentary from Richard Russell last evening:
I think it was about ten years ago that I had dinner with Dr. Kurt Richebacher, formerly the chief economist for Germany's Dresdner Bank. The good doctor struck me as brilliant ten years ago, and I still think he's brilliant. Dr. Richebacher is very bearish regarding the current US situation.
Here's just a bit from his latest report (The Richebacher Letter, 1 800 433 1528).
"Looking for more details, we discovered some further shocking facts. Overall, profits in the nonfinancial sector fell from 1997 to the first quarter of 2002 by 42%. This compares with GDP growth over the same period by 23%. In other words, as a share of GDP and national income, profits have literally collapsed. Apparently related to the economy's slowdown, the profit decline sharply accelerated from the second quarter of 2000.
"The present savage profit squeeze is unique in history in that it has occurred in he absence of any rate hikes on the part of the Federal Reserve. In fact, the Fed slashed its interest rates with unprecedented speed.
"Yet soaring interest rate expenses are playing a key role in ravaging profits. For the business sector as a whole, business interest expenses soared between 1997-2001, for the non-financial sector by 65%, and for the manufacturing sector by 81%. And most remarkably, they continued to rise in 2001, despite the Fed's aggressive rate cuts.
Dr. R winds up his report as follows, "America's monstrous asset bubble has left behind an array of growth-inhibiting structural dislocations -- a profit implosion, a record shortfall of savings, a capital spending collapse, a massive current account deficit, and record-high debt levels. Together they exclude any possibility of a sustained economic recovery."
-END-
I meant it when I said President Bush reminded me of Dr. Strangelove during his presentation at the UN. He did not present one new fact about crazed Saddam and the same ten-year old Iraqi problem. Hussein has been bad this entire time. Why the urgency to blow him up now?
I don’t think it has anything to do with Iraq. I believe it is all about the U.S. financial market nightmare that is upon us, oil, and the coming early November elections in the U.S. Bush is turning out to be a madman, who will risk all to keep his political standing, including the lives of brave U.S. soldiers.
Let’s go back to Morgan and its sinking share price. Some observations:
*It has 35% of the world’s 72 trillion derivatives on its books (notional value).
*We know it is a massive gold short based on its Comex trading pattern and the gold derivatives on its books (according to the OCC).
*It is facing massive lawsuits from outraged business interests and angry investors resulting from its nefarious way of doing business with the Enrons of the world.
* Fellow bullion bank behemoth Citigroup is also under pressure for its shaky financial dealings and from loans gone bad. Potential lawsuits are so large, they could do in either of these firms in a weakening financial environment.
**The U.S. financial market bubble was set in motion by rigging the price of gold, which effected former Treasury Secretary Rubin’s strong dollar policy. It disguised real U.S. inflation, kept interest rates lower than they would have been, perpetuated exaggerated confidence in the dollar and kept money flowing into a loony stock market.
*The corruption stemming from the rigging of the gold price spread from the U.S. President and Treasury Secretary (ESF activity), to the bullion banks, to some of their corporate clients, to some of their accountants. Ergo corporate scandals/crises are now engulfing America.
For every action, there is an equal and opposite reaction. .
We had the bubble, now we see the reaction to that craziness. Check out history when it comes to what the aftermath of a financial market bubble bursting looks like.
I suggest to you that President Bush knows that is just where we are right now. U.S. financial markets are flying into the nightmare stage of the bubble-breaking zone. I have already reported that one of President Bush’s most highly regarded financial advisors told a Café source that the economy and the U.S. stock market are in bad shape. Greenspan is on the record in recent speeches as trying to distance himself from the coming market debacles as fast as he can. This is what the President is hearing from supposed big shots.
Back to Morgan, gold and their derivatives positions. We know Morgan is a mega-short gold. What we don't know is if these positions are for the bank, or are in some way guaranteed by the U.S. Government? That size of a short position seems to be way too risky for the credit committee to allow without some sort of higher-up backing. The same holds true with their interest rate derivative position, which is even more obscenely huge. What kinds of counterparties are out there to take the other sides of these trades if Morgan has to downsize?
The problem for U.S. financial markets is that the gold and interest rate derivative problem of Morgan alone may be too big to fail and too big to bail. They will need emergency measures to handle a problem this grandiose just waiting to erupt. Ergo, the U.S. might be going to WAR as their excuse to implement perceived emergency financial market measures.
The gold problem alone for bullion/central banks is one of epic proportions as the banks are trapped, prisoners of their own shorts:
*The yearly gold supply/demand deficit runs anywhere from 1300 to 1700 tonnes per year.
*Mine supply has shrunk to 2500 tonnes per year and is headed lower no matter what the price of gold does.
*Central bank gold loans/swaps have soared to 12,000 to 17,000 tonnes, around half of all the central bank gold reserves. In other words, half of the gold that central banks are supposed to have in their vaults is not there anymore. It is gone.
*European central banks are limited to selling 400 tonnes of gold per year, which means at least 1,000 tonnes of gold must be supplied by The Gold Cartel to keep the price of gold from soaring. As a result, the cabal is like a heroin junkie. It needs its "fix." If it stops supplying that 1,000 tonnes to the physical market, there will be financial market convulsions. Therefore the Cabal's addiction is GROWING and will probably be fatal for some of the banks and various counterparties.
*They must be running out of physical sources of gold supply to continue their fraud.
My colleagues and I have asked each other for years what could their end game possibly be? What kind of lying pretense would The Gold Cartel come up with to hide the truth from the world?
Would Bush actually go to WAR as part of that pretense? I hope I am totally wrong. But, if any of the following occurs, you will know that is the case:
*The Comex is shut down.
*Gold goes to a cash settlement on the Comex and for all U.S. counterparty transactions.
*Some sort of gold control action is taken to supposedly thwart terrorist activity.
You will also know the GATA camp is right if gold explodes after closing above $330!
I wish is wasn't so. But, everywhere I turn, it becomes clear to me that the U.S. is run by and for the big banks and the big money crowd of the world. Not for the American public. It is just what Thomas Jefferson warned Americans about over 200 years ago.
When GATA first came into being, we were all over the Clinton Administration for their role in the rigging of the price of gold. When Bush won the election, Midas said give the guy a chance to show his true colors and right this terrible wrong. The cynics in our camp said NO WAY; he would be in no way different than Clinton. They said it was the bankers who ruled Washington. It did not matter who was president, as the president did not really run the show.
They were right. I was naïve and wasted my time trying to be of help to Bush. That includes meeting with one of his biggest supporters in Dallas and going to the State Capitol Building in Austin, Texas to meet with two boyhood friends of the President from Midland, Texas. For that matter, a GATA delegation wasted our time meeting with the Speaker of the House, Dennis Hastert, on May 10, 2000; Spencer Bachus, the chairman of the House Sub-committee on Domestic and International Monetary Policy; and Dr. John Silvia, the chief economist of the Senate Banking Committee.
Bush has shown his colors and the primary one is black, if you can even call it a "color." The following was written two years before GATA came into existence. If veteran Café members will take the time to read some of these articles, it will almost take your breath away in the sense that GATA has independently come up with many of the same cast of related characters who have been rigging the price of gold.
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