GLOBAL MONEY WAR REPORT
DEBASED CURRENCY COMPETITION
SOVEREIGN BOND BREAKDOWN
CENTRAL BANK DISCREDIT

* Intro Monetary Fragments
* Surveillance Backlash
* Iran Talks = Petro-Dollar Surrender
* QE to Infinity Guaranteed
* Damage from Monetary Policy
* Bonds in Growing Disarray
* Currency Market in Hidden Turmoil
* Bank Stress Ground Level
* Bank Derivatives Unravel


HAT TRICK LETTER
Issue #117
Jim Willie CB, 
“the Golden Jackass”
15 December 2013

QUOTES ON MONEY

"The government bailed out the people and imprisoned the banksters, the opposite of what America and the rest of Europe did." ~ Olafur Grimsomm (President of Iceland, offering an explanation of why his country recovered so quickly from their financial crisis)

"The difference between death and taxes is that death does not get worse every time the Congress meets." ~ Will Rogers

"Monetary inflation (from printed money out of thin air) kills business capital. Adopted fascism (from merged corporations with the state) kills economies from the top down. Corporate fascism destroys ethics while it kills competition from the ground up (sending prices higher). The United States has all three entrenched within official policy, and faces rapid systemic failure." ~ Jackass

"The Saudis feel betrayed by the US, but as they run up against a Russian brick wall, they will fall into Chinese hands. The birth of the Petro-Yuan is near. Expect the Chinese to soon take the protector role in the Persian Gulf. Also expect the Saudis to struggle to hold their regime together, with reformists at home and an awkward partnership with China on the frontier." ~ Jackass

"On the Wahhabi Petro-Dollar front, the House of Saud's King Abdullah had already met in extreme urgency with self-deposed emir of Qatar, Sheikh Hamad bin Khalifa al-Thani and Kuwait's Sheikh Sabah in Riyadh on the eve of the breakthrough in Geneva. Imagine the reaction of Israeli Prime Minister, Netanyahu when he read those finally unfrozen reports about months of secret US-Iranian negotiations in Oman. The bottom line: Bibi was totally frozen out of the New Great Game in Eurasia by the Obama Admin. In terms of Russian foreign policy, it is now a string of victories with Syria, Ukraine, and recently Iran. Foreign Minister Sergey Lavrov is a man who can do no wrong, especially in the developing world, as the absolute majority of the Non-Aligned Movement (NAM) supports Iran's legitimate nuclear rights." ~ Pepe Escobar

"There are some people at work closing all the emergency and backdoor exits. Then they will capture the key banking criminals and process them. It is all in motion, the BaFin investigation of Deutsche Bank only being the tip of the iceberg. The weak link in the bank cartel is D-Bank and they cannot stop the fracture in several derivatives that emanates from their executive offices." ~ The Voice

## INTRO MONETARY FRAGMENTS

◄$$$ RUSSIAN ROULETTE IS BEING PLAYED IN THE OPEN ON BANKING HALLS, FINANCIAL TABLES, AND ECONOMIC SHOPS. THE BANKER ELITE APPEAR TO HAVE A MOTLEY PLAN TO EXECUTE, BUT IT WILL NOT WORK SINCE IT HAS NO END EXCEPT PRESIDING OVER COLLAPSE. THE BANKERS FIND THEMSELVES IN THE KILL ZONE. THEY HAVE NO ESCAPE ROUTE, AND THEY KNOW IT. ON THE OTHER SIDE OF THE TABLE IN MOST CONFRONTATIONS IS CHINA, HOLDING ASSETS, GOLD, AND DEBT. THEY ARE IN CONTROL FOR THE NEXT CHAPTER. $$$

The bankers have been locked during the last quarter of 2013 in an insane game of economic Russian Roulette. All remaining pistol chambers have a bullet in place. The American population still seems without a clue on the catastrophic risk from the Quantiative Easing bond monetization and the ZIRP zero bound rate distortions. They slept through Weimar history, or rationalize its exigency. Three events came and went, each with a near miss on dire risks. 1) The USFed Taper Talk in May exposed the thin facade of the USEconomy and the thinner beams for the financial structure. Markets function on the expectation of inflation to infinity. 2) The invasion of Syria demanded by the Obama Admin (led by the Nobel Peace Prize winner) would have caused extreme fallout to the energy market and foreign relations with Russia & China. US allies used chemical gas. The cause for CIA-funded Al Qaeda terrorist cells in the Middle East was not well sold, especially since the Gas Pipeline politics element was slowly revealed. 3) The USGovt debt ceiling morass has been ineffectively pushed out several months. The debt default was a virtual trial run on market implications. Death of the USDollar stood in the balance. Instead, demise of the Petro-Dollar lies dead ahead, fully assured. The financial structure hangs by thin threads held together by toxic inflation. Economic and political storms appear to be brewing with the year 2014 as a target, time having run out. Globalists seek their fascist world, a key requirement being the wreck of the US and the trampling of its sovereignty.

The new year 2014 is lined up for significant battles. The USGovt debt debate is a hot potato easily tossed around, but it will burn a hole somewhere soon. The debate itself is entangled in the failure of ObamaCare, as publicity of its wet blanket costs and nasty surprises spread. The real motives behind the national health care are to obtain financial statements, to manage death more brutally, and to administer national IDs (possibly with chip implants). Fortunately, its wheels are coming off before it left the factory floor where inept design and crony contracts are painfully evident and lies linger all over. Witness the symbol of a failed shallow corrupt Obama legacy suffering an ideological malady. Gone way over the edge of the abyss, the nation faces currency collapse, fiscal implosion, and debt failure. The politics of failure are a hard sell, especially the rebuilding part after an inevitable systemic breakdown.

The USFed is caught in a perpetual motion gerbil treadmill machine. It will never submit to a deep reduction in the bond monetization, since no buyers of significance have appeared as investors. The central bank is fast losing credibility with Taper Talk, a buzz kill of their integrity as well. QE to Infinity is assured by the likely new Janet Yellen champion, who meets the criteria on brethren, ideology, and ethnic pedigree. The USFed is stuck, forced to inflate endlessly in compensating for an insolvent bank sector that is imploding from derivative damage. The misnomer stimulus is abrasive to hear, especially since no funds are flowing to Main Street. The masses are sliding into the Third World by many measures. Banks are buying the homes en masse, as the Politburo rises.

A public relations nightmare approaches. The USFed might wish to tell more about the true state of deteriorating affairs. They might admit that QE has failed, which is what they discuss openly behind conference room walls. It is doubtful they will ever comprehend that their inflation is killing capital slowly but effectively. A blame game began in 2013, with the USFed blaming the USGovt for fiscal recklessness. Next comes the USGovt blaming the USFed for capital destruction, market distortions, and banker largesse. Meanwhile, the public hates both the bankers and the federales. Political gridlock during crisis times is no longer seen as positive. Watch out for pre-emptive attacks between the banker fortress and the federal policy asylum. A deliberate debt default might be next on the docket. Some test runs on systemic failure might have been conducted behind the scenes, discussed at length in recent Hat Trick Letter reports.

In the wings lies China. They are in final preparations. The Voice has heard from their offices of a plan to write off $1 trillion in USTreasury Bond debt securities. They have a plan in tandem to recuperate the same loss in Gold bullion gains. The direct implication is a gigantic move up in the price of Gold, the super senior currency. China as the apex investor has made plans for dramatic economic policy changes to take place in 2014. They are at the lawyer's office in the process of filing for divorce with the United States. In 2004, the Jackass called it a strained cooperative alliance. In 2006, the Jackass identified the many areas of deep friction, with a forecast made of open trade war. In 2008, the trade war was in full bloom but not widely understood by the sleepy sheeple. Around that time frame the Wall Street handlers of the USGovt reneged on the great gold lease with China, the other side of the Most Favored Nation granted status. In 2010, the war had turned hot in trade, and even military soldier deaths were scattered across the Djibouti corner of Africa that control access to the Suez Canal. The hot war had extended to the Congo in pursuit of a wide array of minerals. In 2013, the bitter conflict with China has moved to Saudi Arabia and the Persian Gulf. A parallel conflict with Russia has been fought over the many Gas Pipelines. Both China & Russia share a common interest in establishing the Eurasian Trade Zone, which effectively locks out the perennial corrupt bully in the United States. The new industrial giant is also a fledgling military powerhouse. China will decouple from the USDollar schemes, fully anticipated, and coming to pass.

China has been very busy in making strong foundation preparations. They have pushed forward with massive physical gold purchases. They have accumulated over 15,000 tons of gold in reserves, but kept the quest quiet. The Beijing bankers are paving the way for a new trade system, which will force a new bank reserves management system. Not only is gold a safe haven, it is an effective currency and banking foundation core. The Chinese know something the West does not, or else they have decided not to play the corrupt game of printing wealth any longer. They are converting USTBond paper to gold, the new alchemists. China is on pace to become the largest holder of gold in the world as early as 2014. They will have a coming out party very soon. China is busy issuing Yuan denominated bonds around the world, while buying up tangible assets worldwide also. The spike in the USDollar supply has been matched by Yuan in circulation on a global basis, the result of both Yuan Swap Facility usage in trade, and outright asset purchases (although often paid in USDollars). With ample Yuan liquidity finally present, the USDollar can finally be retired. It remains whether the retirement and sunset will be peaceful and smooth with flowers on the path, or violent and turbulent with mushrooms.

The focus by China has been the deliberate rain of renminbi currency. They have actually solicited the aid of the Intl Monetary Fun to replace the embattled and undermined USDollar as the world reserve currency. Continued USFed debasement might be part of a grand plan to ease in the Chinese Yuan as global reserve currency. The effect on the USEconomy would be profound, often warned by the Jackass. Expect price inflation from higher import costs, great supply shortage from unaccepted USD tender, and violent incidents at the pressures points. Refer to the gasoline stations, food supermarkets, and ATM cash machines.

The agents of change are upon us, the practical side to the Paradigm Shift. China might be rethinking its role as provider of cheap industrial labor for global exploit. China has built its shopping mall network across every continent, bought up port facilities, and taken control of the distribution systems for the global retail industry. China has forged deals in the Western backyard for Yuan Swap Facilities and Yuan-based bond issuance. Refer to London, Frankfurt, and Paris. China just surpassed the United States as the largest importer of crude oil. China has taken steps to assure that crude oil is to be priced in Yuan terms, starting at the futures contract barrelhead. The Chinese central bank has announced that it plans to stop all investments based in USDollars for its reserves. These decisions are part of a precise strategy executed, the implementation of the Paradigm Shift of power.

The shift is enabled and guaranteed by the tremendous movement of Gold bullion from London and Switzerland. It began in April 2012 and has not stopped. Its volume is approximately 1000 tons per month. It has not stopped, each month, every month. The wealthy Asian families working closely with the Chinese Govt are calling home their gold. The Voice confirms these shipments and volume. It is game over for the West. The float of the Yuan in fully convertible form and a global capital account is the next gambit, to be followed by the usage of Gold Trade Notes to settle in trade. When these steps are taken and the shock wears off, the Chinese Yuan will be given a debutante party, with announced gold backing. Then comes the parade of gold-backed currencies, such as the Nordic Euro, possibly even a Latin American entry.  Those nations not participating will be subject to an economic carpet bombing amidst a storm of septic proportions. They will be left outside looking in. See the excellent article by Brandon Smith of Alt-Market (CLICK HERE). The septic metaphor is Brandon's.

Brandon Smith believes the globalist bankers want to pull the debt default plug in the spring of 2014. China has been preparing for it with an historically unparalleled gold hoard. The West might play along with an end to the USFed QE lifeline as trigger, since all wise parties realize it cannot be permanent. The deceptive part of this entire theme might be that the bankers will not be in control, but rather victims of the Chinese Yuan coming out party that coincides with the Petro-Dollar funeral wake. The Western bankers will find themselves in the role of Lord of the Flies, in the New De-instrialized Third World. The banking system will collapse in a contagious string, since they do not possess the requisite gold. Within months be on the lookout for the USFed picking up all the Eastern dumping of USTbonds, as in QE doubled then tripled volume. It will signal the collapse as nigh. The US$ debt paper will become the new global flotsam & jetsam, the financial backwash to mimic the Pacific Ocean radiation damage, the dead sea life littered on over 90% of the ocean floor.

The Voice pitched in on the end game. He wrote, "These bankers, fund managers, and politicians do not know better. They have been brainwashed to the point where they believe what they are doing is the right thing in spite of actually committing serial crimes and financial genocide, with global looting. They need to be and will be put down like cows with mad cow disease. Those not put down might find themselves disappeared. This time none of them will escape and survive professionally. There is no place they can call for help, and they know it. The shit is jumping from the rat infested ships in ultimate irony. As for the systemic breakdown, everything is possible at any moment."

◄$$$ KEYNES HAD CONTEMPT FOR RENTIERS AND STRIVED TO DESTROY THE LANDLORDS OF MONEY. BUT THE MANIFESTATION OF HIS DESIRE FOR LOW INTEREST RATES PAID HAS RESULTED IN ECONOMIC DESTRUCTION. THE GREAT EUTHENASIA OF CAPITAL EQUIPMENT HAS UNWITTINGLY SMOTHERED THE ECONOMY AND DROWNED CAPITAL ITSELF. KEYNES WAS A GRAND ECONOMIC MORON, RICARDO A MINOR MORON. THEY EACH WENT TOO FAR IN ACCUSING IMPORTANT ECONOMIC ELEMENTS TO BE PARASITES. NEITHER ECONOMIST FORESAW THE DANGERS OF EXCESSIVE DEBT OR MONETARY INFLATION, OR THE ENCOURAGED SPECULATION FROM LOW RATES THAT WROUGHT ASSET BUBBLES AND SYSTEMIC RUIN. $$$

John Maynard Keynes was a brilliant fool, a revered idiot. In his working notes, he stated his anticipation of the Euthanasia of the Rentier, to be replaced by what he naively called the communal saving by the agency of the state. He wished to see it maintained at a level which will allow the growth of capital up to the point where it ceases to be scarce. He had more in common with Karl Marx than any legitimate or astute economists like from the Austrian School of Economics. They preached and preach capitalism with sound money. Keynes did not comprehend two important aspects of the healthy capitalist system. He expected the state with its banker overseers to manage the growth of capital, with no eye on theft or corruption, certainly not a syndicate fortress with ulterior motive. Keynes also did not comprehend the extreme requirement of sound money, although he did (to his credit) warn about the need to maintain minimal federal debt. He assumed sound money, again missing the presence of a criminal banker elite class that wishes to commandeer the right to print wealth, or supposed wealth, and to grant themselves gifts.

Keynes had disdain for the Rentier, the person who lived off interest income. Later the term has come to be known for any company or entity that lends capital, even machinery or plant equipment or commercial building or farmland, any productive asset. He did not include labor as rent in the extended sense. Both Keynes and his contemporary David Ricardo had more in common with Marx than any idealist toward capital formation and productivity. In the early 19th century, Ricardo promulgated the concept of free trade and mobile industries locating in such a way as to exploit wherever labor, raw materials, and land were cheapest. He believed that landlord interests ran counter to the national interest of industrial expansion. By the 20th century the theory advanced further to claim that rentiers serve as a brake on capital accumulation. Both economists saw no great danger in monetary inflation, seeing it as a device to promote economic growth, even to manage crises. They did not foresee that either the bank cartel or the war machine might emerge as criminal enterprises, with vile predatory tendencies, built upon easy credit.

Ricardo and Marx were on the same wavelength in believing that individuals who obtain their income from neither labor nor capital investment were parasites, living off the efforts of both the laborer and the entrepreneur. In the Jackass view, neither economist correctly understood the concept of Rentier, and the well deserved moderate income derived from lending capital and equipment, even buildings and land. The key was to keep the system competitive, so that exploitation was put to a minimum and under check. For example, producers of aspirin for headaches and garden shovels require competition also. Make the system competitive enough to enable the entrepreneur to construct a new building or a better piece of machinery (better mouse trap). See the Market Oracle article (CLICK HERE).

The Jackass aint impressed with much of any economists who reside and practice outside the Austrian School. The irony is incredible heavy and thick. Without the ongoing USFed monetary hyper-inflation, the system would collapse under the weight of debt and insolvency from the wrecking ball of damage from debt. The system went amok with no warnings from these admired economists from Wall Street, London, Univ of Chicago, Harvard Univ, Princeton Univ, Yale Univ, Univ of California Berkeley, and Stanford Univ. With the ongoing USFed monetary hyper-inflation, the system will continue to destroy the capital that Keynes and Ricardo sought to defend with errant viewpoints running parallel with Marx. The work of Keynes has been skewed to the extreme, where deficits grew even during good times. The work of Ricardo has been skewed to the extreme also, where outsourcing of industry to Asia depleted the legitimate income potential. Three years ago the Jackass offered complimentary light to Ricardo's work. It contains more insight than the work of Keynes, perhaps the most over-rated economist in history. My viewpoint toward Ricardo has changed to less favorable light after the massive outsourcing of industry from the USEconomy to the Pacific Rim, then to China. It seems only the Austrians have any deep insight for avoiding wrecked economies and financial systems. They also anticipate criminality with the management of fiat paper money. Without sound money, the systems eventually falter, break down, and collapse much like a human body with contaminated blood.

For a final relevance check, consider the French monetary philosopher Jean-Baptiste Say and the often cited Say's Law. The GoldMoney research director Alasdair Macleod predicts that Say will be vindicated, whereby economies will continue, if inconveniently, when those in charge of money manage to destroy it. See the Gold Money article (CLICK HERE).

◄$$$ OCTOBER US INTERNATIONAL TRADE DEFICIT FELL TO MINUS $40.6 BILLION. THE SEPTEMBER DEFICIT WAS REVISED TO MINUS $43.0 BILLION FROM MINUS $41.8B. SOME CONTRADICTIONS ARE EVIDENT IN THE DATA. $$$

The USDept Commerce announced the October trade deficit declined to $40.6 billion as exports hit a record high. But the global economy is faltering almost uniformly across the world, hmmm. The story told is that an improving global economy is boosting demand for US exports. More like the ultra-low interest rate offered by the USFed is stimulating capital (machinery, equipment) demand in the Eastern Hemisphere and some conversion of USTBonds into tangible capital, hmmm. Their capital formation is much greater than in the United States. In October, exports increased 1.8% to $192.7 billion, the highest on record, which halted three straight months of declines in exports. Petroleum exports were the highest on record in October. More like domestic US oil consumption is down, Saudi oil output is no longer high quality, and US producers see better prices outside the US market, hmmm. Exports to China hit a record high as did imports from that country. Conclude two things. First, the Chinese are converting USTBonds into hard assets including black gold, using fields of oil storage facilities. Second, it indicates reduced Persian Gulf output, more than stronger global economy. Still, the trade deficit w ith China narrowed in October, despite demand growth for US products. Exports to Canada and Mexico also reached all-time highs in October. The intriguing element of US-Sino relations is brisk trade amidst active trade war.

◄$$$ THE MINIATURE FIGURE GEITHNER WILL MOVE INTO A WARBURG POST. THE BRETHREN TAKE CARE OF THEIR OWN, EVEN SMALL MEN. PAUL CRAIG ROBERTS OPENLY DECLARES THE UNITED STATES IS BEING DESTROYED. $$$

Former Treasury Secretary Timothy Geithner, a protege of Treasury Secretaries (elite) Rubin and (ne'er do well) Summers, has received his reward for continuing the bank syndicate monetary policy of supporting the large banks at the expense of the economy and American people. Geithner sought no solution for the financial crisis steeped in excessive debt and insolvent bank centers. Geithner has been appointed president and managing director of the private equity firm Warburg Pincus. Despite being a banker lightweight with no star on his entire career resume, he is on his way to a pasture of fortune. A Warburg in-law financed the presidential campaign of Woodrow Wilson a century ago. In return, Wilson appointed Paul Warburg to the first Federal Reserve Board. The symbiotic relationship between presidents and bankers war born and has continued ever since. Early in his non-illustrious career, Geithner worked for the Kissinger Associates. By the late 1990 decade, Geithner had served as a deputy assistant Treasury secretary, finally reaching under-secretary of the Treasury under Rubin and Summers. He served on the Council on Foreign Relations and the Intl Monetary Fund, again without distinction, even some botched projects (see Indonesia).

Tiny Tim moved on to New York Fed president, where he worked to make banks more profitable by allowing higher ratios of debt to capital, thus contributing to the financial crisis. Being the consummate tool and cartel team player, Geithner arranged the sale of the failed Wall Street firm Bear Stearns, arranged the taxpayer bailout of AIG, and rejected saving Lehman Brothers from bankruptcy. He strived to create the crisis atmosphere required to more fully subordinate US economic policy to the needs of the few large banks. Geithner is the most unimpressive Treasury Secretary ever. He will be eclipsed in diminution by the current Trez Secy Jacob Lew.

Paul Craig Roberts is a harsh critic of Geithner. The former under-secretary of Treasury in the Reagan Admin has been a major siren of warning and criticism. He has openly declared that the United States is being destroyed, but without offering motive or the grand plan to eliminate the cradle of capitalism and the beacon of freedom. Roberts is astute in identifying how the US nation is being destroyed. He points out how far the nation has fallen with many details. The climax of the destruction was under Robert  Rubin and Hank Paulson with theft of Fort Knox gold and mortgage bond fraud, the final leveling ruin under Tim Geithner with constant capital raids and the conversion of bank fraud to a business cost. See the King World News interview of Roberts (CLICK HERE). As footnote, Janet Yellen will provide abundant wonderful material for caricatures.

◄$$$ NETHERLANDS HAS LOST THE AAA DEBT RATING, DUE TO WEAKER ECONOMIC PROSPECTS. IT WILL LIKELY NOT REACH ITS FISCAL TARGETS. THE BIGGER AUSTERITY PACKAGE IS NOT A CURE, RATHER A POISON PILL WITH NOW RECOGNIZED EFFECTS. BE SURE TO KNOW THAT THE USGOVT IS FAR WORSE, AN ORDER OF MAGNITUDE WORSE. $$$

The list of EuroZone countries with sterling AAA credit ratings has been reduced to only three countries: Finland, Luxembourg, and Germany. In year 2011, six countries still had the best grade rating. On the last day of November, Standard & Poors stripped the Netherlands of its top rating, downgrading the country to AA+. The official statement by S&P was that the downgrade was justified from weaker prospects for economic growth than previously anticipated. The agency regards it more difficult for the government to reach its fiscal targets. Despite a stable outlook for the Netherlands, the agency said the Dutch per capita gross domestic product is persistently lower than nations with similarly high levels of economic development. The other two major rating agencies, Moodys and Fitch, have also threatened the Netherlands with a downgrade. Dutch Finance Minister Jeroen Dijsselbloem recently announced that the nation would violate the European Commission's deficit rules despite an additional EUR 6 billion ($8.16 billion) austerity package. One should always keep one foot in the reality pond. The credit ratings of all Western nations are junk, except maybe for Germany. The debt that the many Western governments have issued will never be repaid in a currency whose value is preserved in purchasing power. See the Business Insider article (CLICK HERE) and the Spiegel article (CLICK HERE).

## SURVEILLANCE BACKLASH

◄$$$ CONSENSUS GROWS THAT THE USGOVT (THROUGH THE NATIONAL SECURITY AGENCY) BETRAYED THE WORLD'S TRUST. THE OFFENSIVE PERNICIOUS INVASIVE ACTIVITY CONTINUES WITHOUT ABATEMENT OR CONTROLS. LEGAL LINES ARE BLURRED, AS ACTIVITY HAS GONE FAR BEYOND FOREIGN INTERACTION WITH AMERICANS OR US COMPANIES, AND FAR BEYOND SECURITY PROTECTIONS. A CALL TO ACTION HAS BEGUN, AS ISOLATION OF THE UNITED STATES WILL RESULT. $$$

The common knowledge is that blanket surveillance on any foreigner whose data passes through an American entity is open ground for USGovt data gathering agencies. No probable cause or original suspicion is necessary. All international users of the internet are being watched. Interaction with US parties is monitored. The urgent global call is the initiative to find alternative solutions to using US-based companies for the world's information needs. The Utah center for the NSA surveillance is home base, despite its electrical capacity problems. The cooling problems are similar to any web farm for internet service located in the San Francisco metro region, except the Utah building is gigantic and densely packed. The Fascist Business Model opened the door for the USGovt with the Patriot Act and its bank syndicate to deploy the security agency for predatory purposes. It is all part of the Grand Gestapo that has been constructed, long before the Homeland Security Agency was formed. The isolation of the United States will continue. See the speech by Mikko Hypponen on TED Talks from Europe (CLICK HERE). Yet more whistle blowing is taking place, the more the merrier. See the speech by Thomas Drake on CBC Radio (CLICK HERE). My USGovt source assures that Homeland Security was formed with each of 16 or more agencies dispatching a few workers to create the new agency. As a result, the least talented and most depraved were sent to form the new agency. Very little skill arrived, but with no small measure of psychopathic traits.

◄$$$ GOOGLE AND FACEBOOK ARE TOOLS BY THE SYNDICATE AND THEIR NEWLY CREATED FASCIST CONTROL ROOMS. HINTS AND CLUES ARE EVERYWHERE. THEY ARE PART OF THE VAST SURVEILLANCE SYSTEM DEPLOYED WORLDWIDE. $$$

In recent years, Google has been banned from China and even Cuba, along with several other countries. The snap conclusion is that they conduct surveillance in some form, to some extent as a tool. The investors of both Google and FaceBook include the Wall Street entities most despised for corrupt activities. When Goldman Sachs revealed their seedcorn investment in FaceBook, the Jackass suspicions were confirmed. No invitation from a FaceBook client has ever been accepted. For amusement, the Jackass inquired with over a dozen FB clients if their invitation to me was real. All said no, as they had not sent me an invitation. So FaceBook HQ is disseminating fake invitations to expand its network. When the Occupy Wall Street movement took root, FB clients were barred from usage in censorship when they voiced outrage against the big US banks. This also confirmed the corrupt association. In early December, two million FaceBook and Gmail passwords were reported stolen. It is time to change your password to be safe. No social network is part of the Jackass lifestyle, a caveat emptor on tracking. FB is better than a RFID chip implanted on the upper left arm, which is part of the ObamCare plan. See the CNN Money article (CLICK HERE).

Continuing in the spy vein, the NSA reportedly uses Google cookies (items stored from internet surfing) in order to pinpoint targets for hacking. The National Security Agency is secretly piggybacking on the tools that enable Internet advertisers to track consumers, using the cookies and location data to identify targets for government hacking with tracking to bolster surveillance. The proof has come from NSA internal data. See the Washington Post article (CLICK HERE). Incredibly, the USGovt security agencies are forcing so-called privacy email services (e.g. Hushmail) to shut down because the email messages cannot be properly monitored. What a slippery slope Big Brother has made for society. See the InfoWars article (CLICK HERE). Quick update, FaceBook will join the S&P500 stock index, a total travesty and absurdity. It is nothing more than a very costly disk drive rack with clever connective software that tracks humans. As a result, major stock funds must buy the FB stock, the objective.

Furthermore, the big US banks are being hit with cyber attacks every day, even every hour. The inside word is that both China and the CIA are involved in the majority of such activity. The motive for China is to disrupt the US banking system, in a very intense trade war. The motive for the Langley folks is to steal money from bank accounts and to make improper credit card transactions, then to blame it on China and Iran. The CIA fraud is done with total impunity and protection by the USGovt, and used to justify greater bank controls in the advancement of the police state. See the Before Its News article by Michael Synder (CLICK HERE). The Jackass likes the Gmail account, and will continue to use it, operating in full sight. My activities are basic and clean, conducted within the letter of the law, and my hiney is as pristine pure as a baby's bottom (perhaps in need of depilation). No conspiracies or child pornography on my computer, just historical research on the high road to sound money.

## IRAN TALKS = PETRO-DOLLAR SURRENDER

◄$$$ TWO MESSAGES BETWEEN THE CRACKS. GENEVA TALKS ON IRAN WERE THE PETRO-DOLLAR SURRENDER SUMMIT WITH STRATEGIC ARMS LIMITATIONS. THE FOLLOW-ON REPORTS ON DETAILS FROM THE AGREEMENTS ARE FILLED WITH LIES. THE PACT HAD HIDDEN DETAILS ON WHAT NATIONS WILL NOT SUFFER ANNIHILATION AS THEY PURSUE A NON-USDOLLAR SYSTEM FOR TRADE AND BANKING. ALSO, THE NEW AMERICAN FOCUS ON THE PACIFIC MEANS REDUCED FOCUS ON THE PERSIAN GULF. $$$

The Jackass will not recite the public list of Iran Accord details. My preference with a solid track record is to read between the lines, the notice the deep cracks, and to detect the changing winds. To begin with, one must decide why the United States Govt engaged in any talks with the Iran Govt. The policy has been in place for over two years. The Iran sanctions have been in place against any Western firms that do business with Iran. The SWIFT code obstacles have also been in place against any and all Iranian banks. The Iran nation has been strangled, left to suffer from a shocking price inflation, even dumped upon with US-made heroin from Afghanistan. The Jackass conclusion is that the workarounds executed by Iran, with significant assistance and cooperation by China, Turkey, India, Pakistan, and other nations, has caused tremendous damage to the King Dollar. The workarounds have centered upon creation of trade settlement systems based in gold bullion, done on a net basis. The Turkish banks have been serving as intermediaries to supply gold, a function they have thrived in doing for a millenium. The Indian trade has been a textbook in USDollar avoidance, with clever tactics. There has even been some Turkmenistan oil swaps of a technical nature. The quick irony is that Iran has served as a lightning rod for opposition to the corrupted toxic King Dollar, whose favored activities include bond fraud, financial market subterfuge, geopolitical coercion, and aggressive wars on a credit card.

Iran wishes to win the right from the American Empire and Galaxy Dictator to continue its nuclear program. It is primarily for electricity generation, with a requisite uranium enrichment central role. The propaganda has been two-fold. The USGovt and UKGovt sidekick have been declaring that Iran had nuclear proliferation plans against the key Western allies, and that Iran had secretive development of missile technology. Neither has been true. Iran appears to have won the right from the empire and nazi lord of the cosmos to proceed with peaceful pursuit of nuclear technology. The proof of propaganda is not a single piece of evidence has been produced in eight years to substantiate the claim of devious nuclear motives. The sin, the crime, the major offense committed by Iran has been to sell crude oil annd natural gas to its clients around the world outside the USDollar. Europeans comprehend this fact, but Americans do not. They do not wish to operate inside the arena run by the bank-led regimes of the West. The big workaround initiatives have developed incredible momentum, to the point that the Gold Trade Settlement is but a few breaths away. The USGovt is scared witless, frightened silly, defecating in their pants, that the world will discard the USDollar, including many firm allies like in Western Europe. The choice has been set up as clear: diversify away from the USD/USTBond system and adopt the Gold Standard in some workable form, or suffer systemic failure and economic collapse within the nation.

The nations of the world, including some US allies, are moving toward the Gold Standard solution which has been promoted and furthered by the Eastern Alliance. Watch Germany, which will indicate a tipping point toward Asia, and away from the Anglo-American axis. The nations of the world want more concrete assurance of not being attacked, either by bank weapons or nuclear weapons, for pushing initiatives toward a non-USDollar alternative for trade and banking. The Iran Talks served exactly that purpose, but without any such press releases. See the Before Its News article (CLICK HERE) for some details of the Iran Pact which include some fantasies and prepared propaganda.

Russian Foreign Minister Sergei Lavrov made his first visit to Iran since President Rouhani took office. Consistent implementation of the key Geneva agreement on the Iranian nuclear program is paving the way to regional stability and international security. The Geneva agreement on the Iranian nuclear program addresses concerns about the nature and direction of Iran's nuclear activities. The Joint Action Plan, adopted by the P5+1 (the five United Nations Security Council permanent members, plus Germany) and Iran, includes specific measures aimed at enhancing transparency, to be undertaken in close cooperation with the Intl Atomic Energy Agency. In parallel with the implementation of the first steps, the sides are to continue the work on a final and comprehensive agreement. It provides for full use of the inalienable rights of Iran as a party to the Non-Proliferation Treaty. It also suggests a gradual weakening of anti-Iranian sanctions regime. The only tangible change will be Iran freed from US-UK shackles for basically conducting energy sales outside the USDollar. See the Russia Today article (CLICK HERE). What comes next is the advancement of the Natural Gas Coop, led by Russian Gazprom, and the eclipse of OPEC as it fades into obscurity.

Expect Iran to continue to conduct oil & gas sales in USDollars in official terms, but with the major part of settlement to be carried out in gold bullion. The only difference will be some formal ass-kissing and cooperative gestures used for US propaganda purposes. Expect Iran to permit more inspections of its nuclear enrichment facilities, since it is not building any weapons or missile delivery systems. The entire Iran Talks in Geneva had a ring of surrender by the USGovt. Those who believe the official story told by the Western press come up short mentally. The more true story is being told by the BRICS press reports out of the East.

◄$$$ THE GATES ARE OPEN FOR TURKEY TO CONTINUE A FLOOD OF TRADE WITH IRAN, WHICH HAS JUST BEEN MORE LEGITIMATE IN THE IRAN TALKS. AMONG THE AMPLE TRADE IS A WIDE ASSORTMENT OFF A GOLD & SILVER MENU. $$$

The resounding victory for free trade and unrestricted banking practices in the Iran Talks is overshadowed by the grand boon to Turkey. The benefit to Tehran might be $billions in sanctions relief in exchange for mere promises to halt any hostile direction in its nuclear program. Such is the sham of the entire disclosed portion of the pact. The undisclosed aspects pertain to nuclear attack rights by the club of the global lords. The even bigger winner might be Turkey. In year 2012, despite the sanctions, Iran was Turkeys third largest export market overall. In fact, Turkey has been reportedly exporting more than 20,000 products to Iran during the last many months. Among the varied list is gold and silver bars, as well as gold and silver products of wide variety. To be sure, the Geneva deal also loosened sanctions on precious metals trade. See the Reuters article (CLICK HERE).

## Q.E. TO INFINITY GUARANTEED

◄$$$ ON THE QUESTION OF PERPETUAL INTERFERENCE. THE USFED WILL NOT BE ABLE TO CONDUCT BOND MONETIZATION PURCHASES FOREVER. THE GLOBAL REACTION IS TOO STRONG AND URGENT. THE INTERNAL WRECKAGE IS TOO GREAT FOR OTHER NATIONS. THE FINANCIAL WORLD IS NOT STATIC, INSIDE THE UNITED STATES OR OUTSIDE IT. THE FOREIGN NATIONS MUST FIND AN ALTERNATIVE IN ORDER TO SURVIVE. IN THE PROCESS THE CENTRAL CORE GEOPOLITICAL WEIGHT IS BEING REDIRECTED EASTWARD TOWARD CHINA. $$$


The question persists, but mainly in the US camp. Arrogance dictates that the QE bond monetization can go on forever, since it ignores the rest of the world. It cannot, since the rest of the world seeks a path toward survival, while it alters the balance of geopolitical power away from the chief offender (the United States, in the form of the USGovt and USFed). In no way can the USFed carry on forever with QE as monetary policy, putting money into the bond and stock markets, and make gold look unattractive. It cannot continue with $80 to 85 billion per month in USGovt debt support from pure monetary hyper-inflation of the most dangerous toxic variety. The effects are too nasty and broad. Furthermore, a grand blind spot from inside the US Dome of Perception, the QE inflation policy will result in a systemic failure from its destruction of capital. So the QE cannot continue due to foreign alternative pursuit, and internal wreckage, neither of which seems to be properly discussed, noticed, or even debated. To be sure, the USFed could continue forever, unless the world is willing to endure their own implosion from not working on an alternative. Therefore, Brazil, Russia, India, China, SAfrica (BRICS), as well as Indonesia and Iran will work on an alternative. They will find many smaller nations following their leadership, which will create new global leadership from the actual initiative in pursuit of an alternative solution. The USD-based system with all its spigot dollars sent into US bond and stock markets will have no effect, when the Eastern Alliance pulls the USD plug. They will pull the plug out of survival, and set up a new system.

The Iran Talks were all about the stated right of nations to seek survival routes without being ransacked and destroyed with bank blockades, viruses, even nuke mushrooms. They do not wish to be declared rogue nations, when they merely wish to overcome the financial crisis that the US, UK, and Western Europe avoid for solution. They merely wish to survive and to possibly thrive again. They must defend against financial weapons of mass destruction, namely monetized bonds filling the banking system which undermine the value of foreign held bank reserves, the oft-cited FOREX reserves. The Jackass chooses to call the Iran Talks the Petro-Dollar Surrender Summit with a sense of strategic arms limitation. Only Americans with zero sense or perception outside the US Dome expect the USFed QE to go on forever. Sir Isaac Newton was clear about a powerful action inviting a powerful reaction, causing its result. The newly designed Gold Standard is exactly that reaction to Quantitative Easing. The Eastern Hemisphere will pursue a solution in order to avoid their own clear destruction. It is that simple. They waited for five years since the Lehman collapse and bond climax events, with no sincere legitimate attempt at solution by the West. So since 2012, they have taken the mantle and moved on some powerful initiatives. The USDollar is on the way out, and 95% of Americans are clueless to this fact. They have been conditioned to believe QE is the new normal. It is like financial formaldehyde.

Through the BRICS and G-20, they are working toward a re-installation of the Gold Trade Settlement system, which will arrive on the trade side, and not the banking or currency side. The USDollar is dead, its death event only to be played out. The momentum is powerful toward the end of the Petro-Dollar defacto standard, with extreme consequences to bank reserves management. Nations of the world will no longer have a great need to store USTreasury Bonds or USDollar currency in their banking systems. The effect will be profound, as a great diversification will take place and continue with gathering momentum like a storm center vortex. Watch the Saudis for a clue, as they lean toward China and do a lot of bowing on bent knee with ass kissing along the way. The Saudis are angry and feel betrayed by the United States, are hitting a fierce Russian brick wall of resistance with stern concepts of what song tune the world should march to. As a result, the Saudis will fall into the hands of the Chinese, with greater emphasis on Yuan-based oil sales and even some new large scale Chinese projects on Saudi soil.

◄$$$ USFED HOLDS STEADY ON ITS REVEALED $85 BILLION IN MONTHLY BOND MONETIZATION. THEY ARE STUCK IN A DISASTROUS POLICY STANCE. THEIR REFUSAL TO REMOVE THE QE PROGRAM AS POLICY STANDS AS CONTRADICTION TO THEIR PUBLIC STATEMENTS. THEY DISCUSS A RECOVERY WITHOUT ANY RECOVERY DETECTABLE. ONLY FOOLS EXPECT A TAPER OF THE BOND PURCHASES, WHICH SERVES AS LOUD TRAGIC PROPAGANDA. $$$

At the end of October, the US Federal Reserve held steady on its signature $85 billion monthly bond purchase program. Kansas City Fed President Esther George continued her streak of dissenting by voting against the official decision, on the grounds that the accommodative policy could create financial instability and excessive inflation. She is exactly right. George has dissented at all seven policy meetings this year. The FOMC gave no new signals on when officials expect the acidic program to end, or when the USEconomic outlook would change. The QE monetary policy kills capital, thus works against any recovery. They are stuck in a wait & see mode, with horror expressed behind closed doors. The USFed will remain stuck until the systemic breakdown occurs internally, or until the external revolt achieves critical mass to find an alternative. The easy money they funnel will continue to serve as the primary (if not only) driving factor behind both the stock and bond markets. Each should decline in a vicious manner, except for the firm official support.

In June, the USFed Chairman Bernanke expected to start pulling back before the end of year, but that appears out of the question. The public statements undercut the USFed's credibility and even contradict their own inaction. They await more evidence of progress. They see none. They talk of the USEconomy continues to expand at a moderate pace, which is a lie. If it did, they would halt the $85 billion in monthly financial welfare with economic food stamps. They talk of labor markets showing some further improvement, which is a lie. If it did, they would halt the $85 billion in monthly financial welfare with economic food stamps. They talk of the housing sector sagging, which is an under-statement, and therefore also a lie. It is collapsing despite absurdly low home loan rates as subsidy. It is simple. As long as the USFed continues with QE and the extraordinary measures with huge monthly bond monetization purchases, they are liars when citing any recovery or growth or labor market improvement or housing sector stability. The QE continues for the basic reason that the US financial structure is fundamentally broken and the USEconomy wrecked, neither able to stand on its own.

The USFed officials surprised markets at their September meeting when they decided not to reduce their bond purchases after months of talk that promised of scaling back. The program is aimed at pushing down long-term interest rates to spur hiring, investment, and spending. The business sector struggles with shrinking profit margins from QE's effect. The business investment is in Asia, even by US firms, since the USGovt regulatory oppression continues and the marginal ObamaCare costs are set to kick in. The consumer spending is not a recovery element, never was, never will be. The requirement of recovery in the business community, labor market, and housing sector assures no change ever to the QE as policy, since the bond monetization renders harm to businesses, raises costs, and reduces profit margins. Meanwhile, housing is dead and comatose, a victim of the systemic wreckage and totally broken bubble, with far too much flotsam & jetsam littering the driveways to homes in the form of toxic worthless mortgage bonds and fraudulent leverage instruments like the CDO bonds and REMIC futures contract and MERS title database.

The fraud-ridden Fannie Mae bonds are a nightmare never to be resolved. Both the USGovt shutdown and ObamaCare loom over the policy decisions, where in WashingtonDC a quagmire and paralysis is plain to all observers, including blind men. The lesser discussed policy of short-term rates pinned near zero was voted to remain in effect. Expect almost no discussion on rates, which will be stuck forever. The zero bound rate has been stuck since late 2008. See the Wall Street Journal article (CLICK HERE). In early 2009, the Jackass predicted the 0% rate would continue forever. In early 2011, the Jackass predicted the QE bond purchases would continue forever.

My current forecast is for the QE bond purchase volume to increase by two-fold or three-fold in the next year. See the GoldSeek public article entitled "USFed QE Volume to Triple, not Taper" (CLICK HERE), which explains why the central bank bond monetization purchases will vastly expand, the exact opposite of the trumpeted propaganda spewed by the trapped institution and headquarters of the shaky banking crime syndicate. The USEconomy is stuck in a powerful recession, as the business community suffers from deterioration from toxic money, excess debt, and the effects of hyper monetary inflation, not to mention the looming strain of ObamaCare. The QE volume will rise markedly from higher USGovt debts, more financial market needs, ongoing banker welfare, urgently needed economic props, a slew of bond redemption and indirect exchange, plus all the liquidity fire hose functions that must continue to expand and never diminish. Only the brain-dead, the system wonks, and the deeply deluded believe the QE volume will taper down.

◄$$$ THE USGOVT DEFICIT WAS TEMPORARILY LOWER OFFICIALLY FOR FY2013, BUT AS USUAL A GOB OF DEBT WAS PUSHED INTO THE FIRST FEW MONTHS OF FY2014. HITTING THE DEBT LIMIT CAUSED AN EXTRAORDINARY PUSHBACK. BE VERY ASSURED THAT USGOVT DEBT HAS NOT COME DOWN, AND IN FULL YEAR 2014 IT WILL BE STAGGERING HUGE. IT WILL COMPENSATE EXTRA LARGE, AND GROW LARGER FROM THE DEPRESSED USECONOMY. $$$

Dave from Denver pitched in with an excellent interpretation of the supposed USGovt debt reduction for the fiscal year ended in September. The usual tricks were played, with delays in final costs incurred, with impressive slamming the debts into the first months of the new fiscal year. But they did so bigger this time, because of both the debt limit being reached and the government office shutdown. The USGovt debt officially increased $672 billion during FY2013. Immediately after Obama signed the temporary budget deal, the USTreasury debt jumped by $328 billion. This was money spent from borrowed trust funds, using the standard tricks seen every time the debt limit is reached. It was debt that would have been issued in FY2013 but they were blocked from issuing it. Therefore the real spending deficit was $1 billion exactly. Tack on the Fanny Mae & Freddie Mac dividend payouts, and it exceeds $1 billion. Watch the FY2014 deficit go well in excess of $1 trillion, since individual tax revenues will decline due to the depressed economy.

The budget deficit is lower this year for a few reasons, all of them non-recurring:

  • Big one-time events in tax revenues in December and January because of the tax rate hike in capital gains gone into effect on January 1st. They triggered a wave of asset sales that generated a big jump in tax revenues.
  • Removal of the Bush tax holiday for W-2 paycheck earners, which increased the general level of tax revenues. The federal tax revenues started to decline over the summer. The States are seeing tax revenues decline from individuals. This clearly reflects the actual reduction in jobs and wages that is occurring from the weakening economy.
  • One-time payments from Fannie Mae, Freddie Mac, and sale of GM stock owned by USTreasury, itself a non-recurring event. Note that most of FNM/FRE income has been generated from accounting by marking to market badly impaired assets, whose value is pumped up by USFed amplified purchases. Expect that FNM/FRE run into liquidity problems in 2014.
  • Taxes generated from real estate sales. The housing market is slowly imploding, despite the ultra-low mortgage rates. It should decline sharply again in 2014.
  • To some extent budget games continue to be played in terms on-budget and off-budget accounting. The real USGovt spending deficit will be revealed during the given fiscal year.

The consumer is badly damaged. Jobs are not secure. Disposable income is vanishing. Costs are rising without abatement. The CNBC All-America Economic Survey of 800 people nationwide painted a contradictory picture to the story about optimistic consumers constantly being bandied about. The survey predicts a 9.4% drop in holiday spending this year, compared with actual outlays a year ago. Behind the drop is a sharp falloff in spending by the wealthy. Only 26% of those sampled believe the economy will improve next year. A year ago, 37% thought the economy would improve. However, only 30% say it will get worse, down from 35% last Christmas. The entire survey runs contradictory to other recent reports and surveys that suggest a pickup in holiday sales and state expectations for an acceleration in economic growth next year. Try not to laugh, as the non-recovery recovery is in progress, a phrase actually seen in the financial press. It is illegal to discuss a recession.

◄$$$ THE FED IS INCREASINGLY MONETIZING GOVERNMENT DEBT. THE TREND IS ALREADY ESTABLISHED TOWARD GREATER SUPPORT, NOT LESS. DENIALS RENDER FURTHER HARM TO THE USFED INTEGRITY, WHICH IS AT GROUND LEVEL ZERO. $$$

With an air of futility, tragedy, comedy, and outrageous stupidity, USFed Chairman Bernanke vehemently denies Fed is monetizing the USGovt debt. That is precisely what it is doing, since $85 billion per month equates to $1020 billion per year. The USGovt deficit level is roughly that. His PhD in Economics did not cover basic arithmetic, only a passageway to Reich Finance. Simple research shows the USFed is increasing its full bore debt monetization, the repulsive Bernanke legacy in full billboard view. The implications for the USDollar and the USTreasury Bond are dire, as in a death sentence. The implications for Gold are extreme, as in a meteoric rise when the strongarm and straitjackets are removed. The implications to the FOREX currency market are simple, as in a reset with all exchange rates falling drastically versus Gold. Poor Bernanke is flailing, the unwilling designer of Weimar Amerika with marquee Zero Percent Forever and QE to Infinity. Revoke his Doctorate in Economics, as he has convincingly proved that added liquidity does not resolve the depression and widespread insolvent banking system. Dumbass Ben argues that the USTBond purchases are intended to aid the USEconomy. He is a liar. The QE bond purchases are intended as a massive backdoor bailout of Wall Street banks and Third World installation to USGovt finance.

To chart shows that since the onset of the fall of 2008, the USFed has purchased a growing mountain of USTreasurys and Mortgage Backed Securities together through the Quantitative Easing programs, some of which were disguised poorly. The result is that QE programs have financed a generous part of the USGovt debt. The claim that half are devoted to USAgency Mortgage Bonds is a lie. The volume is already almost $200 billion per month in total, as almost 100% of USTBond issuance is covered, and the majority of USTBond refundings are covered. In fact, the USFed is engaging in sufficient QE to purchase all debt issued and more.

Merk Senior Economic Adviser and former St Louis Fed President Bill Poole has adroitly pointed out that the spread between 30-year fixed mortgage rate and 10-year USTreasury Bonds has been virtually unchanged as a result of MBS purchases. From 1976 to 2006 the average spread was 1.74% whereas from May 2011 to April 2012 it was 1.76% on average. Consider that the mortgage hedge used by bankers is the USTreasury Bond itself. Therefore, the purchase of MBS bonds by the USFed is equivalent to USTBonds, a hidden proxy. The chart should be regarded effectively as USTBond volume purchases. The USFed is fast losing the confidence game. They avoid a collapse of the USTBond market by brute force, and mutterings laced in heresy. They have createe Weimar Amerika. Their integrity is long gone, ever since QE began and the hidden $23 trillion in sweet deal loans were revealed to banker kin around the world in 2009. The Bernanke Fed presided over the assured destruction of the USDollar and its toxic USTBond vehicle. See the Before Its News article (CLICK HERE).

◄$$$ THE FED NOW OWNS ONE THIRD OF THE ENTIRE US-BASED BOND MARKET. WITHOUT ALTERED PATH, THE USFED WILL OWN HALF THE USTREASURY BONDS BY END 2014. THIS IS NOT PROGRESS, NOR A SOLUTION, BUT RATHER TOXIC WASTE ACCUMULATION BOUNDED BY MONETARY HERESY WHICH REAPS PURE DESTRUCTION. $$$

The most important chart that nobody at the USFed seems to pay any attention to, is the chart that shows in clear terms the rising proportion of USFed total holdings in the bond market. The USFed has become the bond market, despite loud objection by the clown at the Chairman post. The chart shows bond market holdings expressed in 10-year equivalents. The oafish Nobel Prize hack Paul Krugman must pay attention, since the 3-year bill is not the same as a 30-year bond. The bond market liquidity equals the USFed window activity. It has no remaining liquidity alone. In early December, the USFed was taking on a whopping 33.18% of the high quality collateral in Ten Year Equivalents, up from 32.85% the week before. Otherwise stated, the broken central bank owns one third of the entire US bond market. It is toxic. At the current pace, not to be interrupted by the Yellen Fed, the once august central bank will own on the order of 50% of the entire bond market by end December 2014. See the Zero Hedge article (CLICK HERE). Beware of Ben's rocket to nowhere, as Peter Schiff aptly calls it. See the Euro Pacific article (CILCK HERE). No solution, no recovery, no sanity, no integrity, no competence, pure heresy.

◄$$$ THE USFED, THE BANK OF ENGLAND, AND THE EURO CENTRAL BANK ARE STUCK IN AN EQUITY TRAP WITH THE QE TO INFINITY INITIATIVE. ANY POLICY CHANGE WOULD RESULT IN CALAMITY AND SUDDEN SYSTEMIC SHOCKS. THE MAJOR CENTRAL BANKS HAVE NO CHOICE BUT TO CONTINUE QE TO INFINITY. THE MASSES ARE SLOWLY REALIZING THIS STARK WEIMAR CLOUD THAT HOVERS AND WILL NOT GO AWAY. $$$

The major Western central banks are caught in what many regard to be a benign QE trap, dispensing easy money. It is not benign, but rather devastating like a monetary cancer. Economies of the (former) industrial world face very easy money far into the future. The central banks are convinced that the current QE bond monetization spigot is the least harmful of all policy options. They have no good policy options. Despite rumblings of dissent about the financial bubbles and inequities associated with zero interest rates (ZIRP Forever) and money printing (QE to Infinity), the close of 2013 has brought a remarkable consensus on the certainty among global investors that cheap money is to be a near permanent fixture. Even if the USFed does reduce asset purchases in 2014, the added liquidity torrent from the Bank of Japan or European Central Bank could be ramped up significantly to offset it, using Dollar Swaps. The reaction appears to be distasteful resignation that the entrenched inflation is necessary, but with blatantly clear risks. This aint progress.

◄$$$ MONEY MANAGERS AT REUTERS CONFERENCE WIDELY EXPECT Q.E. FOREVER. THEY PERCEIVE THE RISKS OF NORMALIZED POLICY TO BE FAR GREATER THAN FOR CONTINUED BOND MONETIZATION. THE PROSPECT OF COLLAPSE HAS ALTERED PROFESSIONAL OPINION TO EMBRACE HYPER MONETARY INFLATION LIKE AN OBNOXIOUS RELATIVE TO THE FAMILY. THE ASSOCIATED RISKS ARE SEEN, BUT NOT THE CAPITAL DESTRUCTION. THE FINANCIAL SECTOR IS LOADED WITH PEOPLE WHO FLUNK ECONOMICS AND FAIL TO COMPREHEND CAPITALISM (EITHER CAPITAL FORMATION OR CAPITAL RUIN). THE JACKASS FORECAST OF QE TO INFINITY MADE IN EARLY 2011 IS BEING MORE WIDELY ACCEPTED. HERESY IS ADOPTED, AS IN REICH FINANCE. $$$

Money managers of the Western nations finally see the super-easy money as both essential and lasting far into the future. The consensus is that the current central bank policy of free endless money is the least of all policy evils. Despite rumblings of dissent about the financial bubbles and distortions linked to zero interest rates and amplified money printing, cheap money is going to be around for the long haul. The money managers are all cheerful about the prospect. Many who spoke at Reuters Investment Outlook summit doubted its long-term effectiveness and feared its social and political fallout. They quietly enjoy the waves of easy money pushing up stock markets to new records, in the face of crushing recession and rough business climate. The monetary pumping surely exaggerates already disturbing wealth and earnings inequality in the United States, Britain, and Western Europe, admittedly. Regardless of widespread misgivings, most assume zero interest rates, bond purchases, and extraordinary credit easing form the only anticipated horizon from the halls of monetary power. The financial market reaction to the hint of USFed cutback in its QE bond purchase program has conditioned the moneyed crowd into a crystallized perspective based in exigency (necessity). None wished to see a market collapse, the likely outcome of a real tapering. Witness the acceptance of Reich Finance, born of necessity in the Western tragedy.

Avuncular imbecile and congenital ne'er-do-well Larry Summers preached of extended sluggish growth and ultra-low interest rates, with the inevitable asset bubbles being an accepted by-product. Witness heresy settled into mindsets. He actually saw positive signals in the absent price inflation in products and wages, even the slack factory capacity, an implied green light to continue with hyper monetary inflation. What lunacy! This is a spokesman from the monetary high priests who preach heresy from the Weimar School. With reluctance and pause, even PIMCO posited in 2009 that nil growth and rock-bottom interest rates was the New Normal, with a sidebar of asset prices fueled by the monetary pump. Such is defeatism, in response to unwillingness to liquidate the big broken criminal zombie banks and write down USGovt debt in a grand restructure.

Pascal Blanque from Amundi bets on the central banks as an industry, seeing fears of a return to normalized monetary policy as way overdone, but with possible high risks nonetheless. He sees a DNA change in central bankers, where the non-conventional has become part of theory and practice. Didier Saint-Georges from Carmignac Gestion described a QE trap to inflict itself as payback over many more years into the future as the price of preventing economic catastrophe five years ago. He believes fine tuning and expert driving skill by the USFed bus can manage the difficult sharp turns when faster growth is the goal, the guard rails bound by higher rates.

Marino Valensise from Baring Asset Mgmt believes that if the USFed cannot pull the plug on QE, then the stubborn outcome will be highly annoying. Philip Saunders from Investec Asset Mgmt is mindlessly backwards, concerned about years of QE if the price inflation slips below an unstated favorable level. He sees the potential to exaggerate some of the distortions in financial markets. Wisely though, he regards QE as counter-productive. The social impact would be indefensible, resulting in the wealthy becoming richer through asset price inflation. He actually calls for some wage inflation to be allowed, after five years with the clamps on.

Implied is the accepted consensus of avoiding the bust with banker welfare and chronic insolvency with constant threat of systemic breakdown, rather than the obvious alternative of dissolving the big banks that contributed a significant role in creating the endless crisis. The money managers buy into the elongated growth story, a pure fantasy. They are caught somewhere between delusion and submission. They are the pathetic by-product of lousy economics taught in the US universities. None of them can properly see that USFed bond monetization kills capital, from the natural reaction to hedge against the amplified inflation, manifested in higher costs, shrinking profit margins, and retired capital equipment. As a bunch, these fund managers flunk economics, just like the economists, just like the bankers. See the Reuters article (CLICK HERE).

## DAMAGE FROM MONETARY POLICY

◄$$$ THE USFED MIGHT HAVE CREATED AN INFLATION TIME BOMB. IF THE SHORT-TERM USTBILL YIELDS RISE MUCH MORE, THE CENTRAL BANK MIGHT BE COMPELLED TO INCREASE THE YIELD PAID ON EXCESS RESERVES. BANKS WILL WISH TO MOVE THESE RESERVES OUT OF COLD STORAGE AND TOWARD MORE LUCRATIVE PURPOSES. AT THE SAME TIME, THE REVERSE REPO TOOL HAS BEEN HATCHED, TO MANAGE RISKS FROM LOWER YIELDS THEY WISH TO PAY ON EXCESS RESERVES. $$$

As the USFed embarked on its falsely labeled monetary policy to monetize USGovt debt (called stimulus), the excess reserves held by banks on the USFed balance sheet exploded from $1.9 billion in August 2009 to over $2.2 trillion as of September 2013. The excess reserves earn a paltry interest yield, but more importantly it masks the grotesque insolvency of the USFed itself. In fact, these Excess Bank Reserves make up almost 84% of the monetary base, fully sequestered, an extreme absurdity. Banks do not direct this money into the economy by lending it to consumers or businesses. Instead, they follow the directive of the USFed, as the central bank has discouraged the USEconomic recovery in a very loud manner. The USFed decided in October 2008 to pay them interest on reserve balances, for the first time in history. Suspect the darker motives. Banks see the risk-free 0.25% rate as preferable to lending the funds to consumers or businesses, during the chronic recession with no attempt to remedy the insolvent bank logjam. Robert Auerbach is a former economist with the House of Representatives Financial Services Committee and the USTreasury's Office of Domestic Monetary Affairs. He believes the time bomb of excess reserves might rise dramatically if the USFed increases the offered rate, in the event that price inflation increases. If short-term interest rates rise above 3%, the Fed might be compelled to pay between 1% and 2%, perhaps more on the Excess Bank Reserves in order to prevent the time bomb from exploding into the USEconomy. The big banks, which hold the majority of these reserves at the USFed, would naturally seek to invest in more lucrative income earning assets. See the Money News article (CLICK HERE).

These central bankers are in a real bind. US Federal Reserve officials have renewed a debate over cutting interest paid to banks on excess reserves, intended to convince investors that tapering its bond purchases is not the same as tightening its monetary policy. Such thinking is delusional, and paints the trapped policy corner clearly. Lowering the rate (now 0.25 basis points) is among ideas floated at the central bank as it seeks to improve the way it communicates the outlook for interest rates. The debate was revived as the USFed tests a new policy involving so-called reverse repurchase transactions that would give it greater control over short-term borrowing costs. The device eases concern that cutting the interest rate on excess reserves could cause unwanted problems, like pushing money market rates to zero. Holdings in money market mutual funds total about $2.7 trillion. Many FOMC members believe the reverse repo tool has the potential to minimize some of the risks that have arisen often over the past years. They are becoming tangled in their own devices. See the Bloomberg article (CLICK HERE).

◄$$$ THE TAPER WOLF REMAINS AT THE DOOR. THE EMERGING ECONOMIES RISK ANNIHILATION FROM LACK OF STURDY SYSTEMS. CURRENCY DEVALUATION HAS SEVERAL CONSEQUENTIAL EFFECTS, ALMOST ALL DETRIMENTAL. HIGH DEBT COST AND REDUCED CREDIT ACCESS WORK WITH LOWER ASSET VALUES AND HARMED BANKING SYSTEMS TO WREAK HAVOC. THE SPRING TAPER TRIAL RUN EXPOSED THE RISKS ONCE AGAIN IN CLEAR TERMS. $$$

The Taper Talk by the USFed was indeed a trial balloon. The detrimental effect on financial markets in the US and West was clear, but so was its harmful effect on emerging economies. The drain on funds hit uniformly across the world. Questions remain fixed on the effect and risk that linger, three months after the reprieve in September from the USFed backtracking. It reversed with tail between legs, the prestige vanished like a fart in the wind. The substantial capital inflows since 2010 to emerging markets have caused notable asset price increases and rapid credit expansion in a wide range of countries. Three important transmission mechanisms are at work. 1) Any currency exchange rate decline would raise of the real cost of outstanding debt, wreak havoc on financial balance sheets, and reduce foreign  lending, while in offset potentially expand the export trade. The biggest risk is the higher potential cost of external debt from domestic currency devaluation. It can be devastating. The nations can find themselves with credit shut off. Some emerging markets have reduced their US$-based debts, but not enough to reassure markets. During the May-June panic that followed the Bernanke Taper test, the nations with large external deficits (for example India, South Africa, and Turkey) suffered the sharpest selloffs.

2) Asset prices stand at risk for serious declines. The easy money capital inflows have boosted demand for local land and stock markets. The available collateral has spawned further credit flows with successive rounds of asset price appreciation. When capital flows stop, this entire process unwinds and big declines result. It is like removing oil from car engines. The collateral damage causes lower domestic credit flows. Then come the company job cuts, as business investment is cut back. Hong Kong, Singapore, Brazil, and China are four locations where land and real estate prices have risen sharply in recent years. Lastly, 3) public debt impact is direct and quick. A government that cannot borrow will have to cut spending or raise taxes, with consequences felt in economic contraction. But the indirect impact can be nastier. Emerging market nations hold large tracts of domestic sovereign bonds. When they fall in value, the entire banking systems are affected adversely and severely. Lending is curtailed.

Andres Velasco concluded, "All of these mechanisms have one thing in common: they operate through financial markets and can cause a credit crunch. Such crunches, history shows, are an omnipresent feature of the aftermath of sudden stops in capital flows. When credit is scarce, recoveries are inevitably slow. Of course, all such worries would be dispelled if the International Monetary Fund or some other entity would serve as a fast and effective global lender of last resort. But that will not happen for many years to come. In the meantime, several emerging economies will remain places from which you wish you could emerge in an emergency." See the Dutch economic weblog featuring the former finance minister of Chile, a visiting professor at Columbia University (CLICK HERE).

The Voice pitched in with his adept viewpoint on emerging markets. He wrote, "Countries like Kenya, other African and emerging market countries elsewhere will get crushed and wiped out financially and then socio-economically, due to lack of appropriate measures being taken to protect themselves from what is unfolding. Certain decision makers for years [have received counsel], but hardly any of them really understand. They will wait until the runaway freight train hits them head on. However, there are a few very smart Africans, who have and are now listening. They are prepared to take the future into their own hands, showing the door to international players who keep them cornered and attempt to squeeze them. It is now a matter of timing to move swiftly before the time window closes and traps the emerging countries in the kill zone."

◄$$$ DAVID STOCKMAN FEARS PANIC WHEN THE LUNATIC USFED LOSES CONTROL. THE ENTIRE FINANCIAL SYSTEM IS A PONZI, AND ALMOST ALL MARKETS ARE IN ASSET BUBBLE MODE. HE HAS BEEN A LOUD VOICE ACTING AS TROUBADOUR. $$$

Recall that the US exported its lunatic housing bubble and economic dependence on the asset bubble to the entire Western Economy. The disaster was tremendous. In the last three years, the USFed has exported its lunatic monetary policy and financial market dependence to the entire Western world in the aftermath. These major nations of the world also refuse to liquidate their big insolvent banks, except for Iceland which has recovered nicely. The Western nations are suffering from blackmailed monetary policy, while trapped. If they raise interest rates, their currency would rise very quickly. Then would come the damage to their economies from lost export trade. The tireless and fearless David Stockman is the outspoken author of "The Great Deformation" book. He warned, "It is only a question of time before the central banks lose control, and a panic sets in when people realize that these values are massively overstated. The Fed is exporting its lunatic policies worldwide, for either good reasons of defending their own currency and their trade and their exchange rate, or because they are replicating the Fed's erroneous policies. There are bubbles everywhere. [The Russell 2000 index] makes no sense. It is up 43% in the last year, but earnings of the Russell 2000 companies have not increased at all. I have not seen too many bubbles in history that have not ended violently." Reverse the double negative to say that almost all bubbles in history end violently.

Stockman extends his viewpoint to the silly stock market with more prudence. "[The US stock market is showing] the kind of speculative froth you get at the top of a cycle where valuation loses any anchor in the real world from earnings or the prospects of the economy. Owning stocks here is very dangerous. It is a question of who has taken whom hostage. It is a co-dependency; it is very dangerous. Wall street demands that the Fed keeps dishing out the liquidity, keeps dishing out the monetary heroin. They have a hissy fit if the chairman of the Fed even suggested they might begin to taper four years into a recovery. So it is a co-dependency. It is a very dangerous thing." What recovery, we ask? See the Zero Hedge articles (CLICK HERE and HERE). The USFed has morphed into the American Politburo, managing the value of US stocks from top to bottom, favoring the banks, hindering the mining firms, while Wall Street deploys High Frequency Trading to help maintain absurdly lofty valuations during a chronic recession. The stock community openly desires ample monetary inflation, as they falsely view it as the means to become wealthy. Fund managers are making big fees.

## BONDS IN GROWING DISARRAY

◄$$$ USGOVT FINANCES ARE IN WORSE FISCAL SHAPE THAN DETROIT, ACCORDING TO PROFESSOR LAURENCE KOTLIKOFF. THE DEBT IS BOTH ENORMOUS IN A STRANGLE, AT A HIGH BUDGET PERCENTAGE. HE EXPECTS SOME EXTREME BREAKDOWN IN A GRAND SENSE, OR IN A SPECIFIC LOCATION. $$$

Boston University Economics Professor Laurence Kotlikoff has been an outspoken critic of most USGovt financial policy. He estimates the nation's long-term debt and liabilities are more than $200 trillion. He is spearheading a bill in USCongress called The Inform Act, which would more thoroughly apprise the population of the dire financial situation. The hope is to create initiative toward fixing this intractable problem, starting with more awareness. He stated, "The country is in worse fiscal shape by many miles than Detroit. So the country is essentially bankrupt. The bill has been endorsed by over 1000 economists, including 15 Nobel Prize winners in economics. Never in the history of this country have this many top economists from all political persuasions endorsed a piece of legislation like this. The country needs to do honest accounting, [since the government is] disguising the true problem. The government is printing mountains of money to pay its bills. The Fed is printing 29 cents of every dollar that Uncle Sam is spending. Eventually [the global bond market] recognizes this and starts dumping the bonds, and interest rates go up, and inflation takes off, and were off to the races. This is going to crash, but there are different ways for cancer to kill you. It can be very gradual, or it can attack some organ and you can die overnight. Either of those outcomes can happen." See the USA Watchdog interview with Greg Hunter (CLICK HERE). The professor faces a crime syndicate. His cause is noble. If he is too effective, he will go down the same route as Ron Paul. They marginalized him until he went away.

◄$$$ TNX CHART SHOWS 10-YEAR USTBOND YIELDS RISING. THE TREND IS UP ON IMPORTANT CYCLICAL MEASURES. THE TNX IS READY TO MAKE ANOTHER RUN AT THE 3.0% LEVEL OF RESISTANCE. THE USTREASURY BOND CHART IS THE MOST CRITICAL IN THE ENTIRE FINANCIAL WORLD AT THIS TIME JUNCTURE. REJECTION OF THE USDOLLAR IS TO BE EXECUTED WITH THE USGOVT DEBT. $$$

TNX refers to the 10-year bond yield for USTreasurys. It rises when bonds decline in principal value. Support for TNX rebound (higher rates) was seen in October at the 2.5% level, where the 20-week moving average gave strong support. It ended a profit-taking pause as expected in the Hat Trick Letter. The challenge of 3.0% will be watched across the world, the renewed challenge also expected. The USTBond is the direct object of the central bank hyper monetary inflation with QE, the financial heroin application, whose dependence has permeated thoroughly. The USTBond will be the object of global rejection. It is abused. It will be rejected. It will be dumped. It will be avoided. Its toxic nature is becoming fully recognized. Third World nations monetize their sovereign bonds.

◄$$$ MAJOR BOND FUNDS ARE SEEING AN EXODUS BY INVESTORS, NOT JUST THE FLAGSHIP PIMCO. THE DOUBLELINE TOTAL RETURN BOND HAS HAD SIX CONSECUTIVE MONTHS OF OUTFLOWS. THE HARMFUL EFFECT FROM THE USFED TAPER THREAT HAS NOT GONE AWAY. THE REJECTION OF THE USTBOND WILL BE UNIVERSAL, INCLUDING FROM BOND FUNDS BASED IN THE UNITED STATES. AMERICAN INVESTORS WILL CONTINUE TO CHASE WHATEVER IS SUPPORTED BY CORROSIVE INFLATION LACED IN POLICY UNTIL IT TURNS AGAINST THEM. $$$

The DoubleLine Total Return Bond Fund managed by Jeffrey Gundlach had $811.2 million in outflows in November. The uncertainty over the USFed plans for reducing its bond buying is front and center. Undermining the bond integrity is the hyper monetary inflation. Undermining the bond stability is the foreign rejection in many forms. Morningstar measured the outflows, noting the sixth straight month of withdrawals from the fund. The primary bond fund from DoubleLine Capital LP out of Los Angeles suffered the most withdrawal damage from the firm. The firm's total withdrawals were $823.1 million from all its mutual funds in November. The Total Return Bond Fund now has roughly $33.3 billion in assets. Many bond funds have fallen out of favor since the threatening talk by the USFed to end its corrosive cancer laced in monetary policy from the Weimar chambers. Investors have continued to pull cash out of bond funds since June on fears of a spike higher in interest rates on the propsect that the US Federal Reserve begins scaling back the $85 billion in monthly bond purchases known as Quantitative Easing. It is called an economic stimulus program when it is instead a massive backdoor Wall Street bailout and universal USGovt debt prop. No stimulus exists whatsoever in any economic sense. Low rates are not passed onto consumers except with mortgages, which the USGovt has a big vested interest in. The QE & ZIRP is all about supporting the financial structure with deep syndicate penetration.

Across the entire US-based fund arena, investors removed $21.8 billion from bond mutual funds and related exchange traded funds in November, marking the biggest outflow since $36.8 billion in August. The TrimTabs tracker identified November as the fifth highest monthly outflow on record. The yield on the benchmark 10-year USTreasury Note (TNX) rose 20 basis points to 2.74% last month. The TNX is at currently at 2.85% and making a move on 3.0% again. The proximal cause was the FOMC official talk of further QE bond purchase volume, the minutes revealed on November 20th. The deeper structural cause is the lost integrity of the USGovt debt security, supported by bond monetization to the extreme. Foreigners have noticed, a dumping process well along since mid-year. The US-based bond investors seem to respond only to the USFed comment stream, while they ignore the lost integrity of the sovereign bond and the intractable deficits that are spewed. They call the QE program a new normal support mechanism of necessity, and respond as bond investors in kneejerk manner to the financial heroin applied in sector arms. That inflation has become a necessity is testament to the systemic failure. See the Reuters article (CLICK HERE).

◄$$$ AN EXECUTIVE AT GEN-RE (THE BUFFET REINSURANCE GIANT) HAS ISSUED A WARNING ON DISTORTIONS IN THE BOND MARKET. THE USFED HAS CREATED A DISASTER THAT HAS NO INHERENT SOLUTION. THE CENTRAL BANK LOOKS TO SERVE THE AMERICAN FRONT, IGNORING THE FOREIGN ELEMENT WITH EITHER BENIGN NEGLECT OR DISDAIN. THE BOND RISK SPREADS ARE WIDENING, WHICH USUALLY PRECEDES A COLLAPSE. GLOBAL REACTION COMETH. $$$

USGovt behavior has created widening risk spreads that warn of potential collapse. Nothing has been learned from past history. The General RE subsidiary of Berkshire Hathaway is a main player. Its Chief Investment Officer John Gilbert has issued one of the most dire proclamations in the form of a USTreasury Bond warning. He blasted the USFed for its role in creating the biggest disaster in financial history. Those who believe that protection from loss comes by following the central bank for easy profits, they have learned little from history. Risk spreads are widening, the seminal alarm. Gilbert described the huge risks created by the USFed QE program, which should be regarded as a gigantic surrender to failure. They preside over ruin, and shredded integrity of the central bank itself, better recognized lately as a crime syndicate fortress lodged in the financial sector. Gilbert wrote, "This is a major component of the downside to the Fed's program. They have created a systemic risk in the world financial system for which they take little or no responsibility, because that which happens outside the United States is not their assignment. But as custodians of the reserve currency, it ends up that way." See the Zero Hedge article (CLICK HERE), which includes some accounts from history, like the last major bond market disaster in 1998.

◄$$$ CHINA SEEKS STRONGER TIES WITH FRANCE IN YUAN-BASED BOND MARKETS. VERY ACTIVE ROLES ARE BEING TAKEN TO FURTHER THE DEVELOPMENT OF FINANCIAL AND ECONOMIC TIES, DONE ON SEVERAL FRONTS THAT INCLUDE BROADER YUAN-BASED BOND TRADE AND BUSINESS CREDIT SUPPORT. CHINA IS ESTABLISHING A FEW BEACH HEADS IN EUROPE, LIKE IN LONDON AND FRANKFURT. $$$

Senior officials of China and France have agreed to promote the development of the offshore Yuan market in Paris. The Chinese wish to expand their bond market, thus lifting the global status of the Yuan currency across Europe. Closer bilateral economic relations are sought. The agreement was noted in a joint statement after the First China-France High Level Economic & Financial Dialogue held in Beijing. Vice-Premier Ma Kai said that China will take the steps at the appropriate time, using the qualified foreign institutional investor mechanism in the French capital. Beijing recognizes the active role played by Paris in promoting the cross-border renminbi business, it was stated. The two sides will soon assess clearing and settlement arrangements in Paris. The French minister for economy and finance Pierre Moscovici assured that France supports the internationalization of the Chinese currency. He urged more financial institutions to obtain approval for expanding their offshore Yuan business in Paris, which can broaden bilateral investment and trade channels. The dialogue represents a significant advance for the bilateral relationship. The prestigious professional association Europlace expects the city to strive to become a leading offshore Yuan trading center. It has lifted the renminbi (RMB) strategy in priority, such as consolidating offers in RMB terms, increasing services in Paris for European companies, growing the number of French RMB bond issuers and Chinese Euro issuers on the EuroNext, according to its chief DeBres son. Paris is eager to develop an efficient offshore RMB liquidity pool to accompany its flows, including African business flows, which are traded through Paris. They will need to promote channels for the rape of Mali on backflow from the conjured war.

The Peoples Bank of China and the Euro Central Bank signed a bilateral swap agreement for CNY 350 billion (=US$57 bn) in October. That pact is expected to spread support for the Paris offshore RMB market development through the strong liquidity backstop offered to banks in the EuroZone. Chinese and French banks in Paris have developed diversified instruments and services for clients including bank deposits, trade finance, cash management, cross-border transfers, and corporate banking. Total Yuan deposits stand at CNY 20 billion in Paris, which is no small amount. French companies have issued CNY 10 billion worth of RMB-denominated bonds. Last year, bilateral trade reached $51 billion, of which about 20% was settled in Yuan. The Chinese Deputy Finance Minister Zhu Guangyao assured the continued improvement within the reform agenda at their Third Plenary Session, which will result in more investment opportunities created for French companies. China will also support efforts by its companies to invest in France and help increase employment (probably shopping malls to sell Chinese-made products). Senior officials from both countries agreed to boost cooperation in key industries such as aviation, nuclear energy, and vehicle manufacturing. They also agreed to strengthen macro-economic policy coordination, to expand bilateral trade, to create a fair trade environment, and to support the global economy. President Xi Jinping and French President Francois Hollande will continue its high level dialogue on economic and financial matters that began in April. See the China Daily article (CLICK HERE).

◄$$$ THE PUERTO RICO IMPLOSION CONTINUES APACE, A LIKELY CANDIDATE FOR USFED BOND MONETIZATION TO BE EXPANDED. THE ISLAND PROTECTORATE HAS OVER $70 BILLION IN DEBT. IT IS EFFECTIVELY SHUT OUT OF THE BOND MARKET, AND FLAILING. IT SEEKS AID AND SERVES AS A GOOD TEST FOR THE NEW YELLEN FED TO EXTEND ITS BOND PURCHASES TO COVER US-CITIES AND THE PROTECTORATE PUERTO RICO. $$$

Puerto Rico has a population of only 3.7 million, less than Costa Rica. With the nation staring at $70 billion in debt that cannot be financed, the island nation confronts a rising economic misery. The economic recession has reached PR, reducing tax revenue and lifting the jobless rate to nearly 15%. Given the shared practices as the BLS in the USGovt statistics lab, one could conclude that their real jobless rate is close to 30% when counting people out of work (a novel approach). When counting the young, like over 18 years of age, the real jobless rate might be in the 40% to 50% range. The disruption from cities like Detroit and corporations like General Motors are easy to ponder. But disruptions from a Puerto Rico bankruptcy could have unusual and far reaching implications. Officials in San Juan and WashingtonDC are adamant that a federal bailout is not on the table, but the situation is being closely monitored. The White House recently assigned an advisory team to help their officials to navigate the crisis, which means a Goldman Sachs and JPMorgan vampire appendage.

The island's problems have ignited another human exodus. It is as extensive as the last major exodus in the 1950 decade, when half a million people left for jobs on the US mainland. The majority ended up in New York City, New Jersey, and Miami Florida. Recall that Puerto Ricans are of full US citizenship status. They are again leaving in droves to seek better pastures. It is doubtful that PRGovt actions will be sufficient to fend off the crisis. In November, the rating agency Fitch warned that Puerto Ricos general obligation bonds could be downgraded to junk status next summer, due to inability to borrow within the bond market. Some other unusual measures have been adopted. The PRGovt has changed its capital gain tax laws, in a broad appeal for hedge funds to locate on the island. John Paulson is one such fund manager checking out the benefits for fund HQ relocation. See the Washington Post article (CLICK HERE). Look for the Yellen Fed to extend the QE bond purchase to cover municipal bonds that might include the Puerto Rican munis next year.

## CURRENCY MARKET IN HIDDEN TURMOIL

◄$$$ LINDSEY WILLIAMS HAS BEEN GIVING WIDE PUBLICITY TO HIS PERSPECTIVE ON THE UPCOMING GLOBAL CURRENCY RESET. GREAT MYSTERY SHROUDS THE EVENT, WHICH WILL INSTALL MANY PLANKS TO A NEW GLOBAL SYSTEM. RESISTANCE ABOUNDS. CHANGE RULES. SOME MIGHT REGARD THE RESET AS THE DEMOTION OF THE KING DOLLAR TO ROGUE PRINCE, AND THE USHER INTO THE PASSAGEWAY TO THE THIRD WORLD FOR THE UNITED STATES. $$$

The following is from Lindsey Williams, who has deep ties to the ruling elite from the US-UK oil kingdom from his many years of service as their pastor at remote sites around the world. He has some legitimate credibility. He has a decent track record, with many explanations of past important events that make sense. However, he has zero known or inferred contacts or references to Eastern entities, where many decisions are being executed. The shift in power to the East is sharply clear. The BRICS nations with G-20 forum are forcing a Paradigm Shift and move away from the USDollar as the global reserve currency. Despite having no linkage to the East, the picture painted by Williams has some merit. It is missing some pieces and strokes. Williams might have some valid contacts, but they are more obsolete every year. His insiders say the world is going to install a Global Currency Reset in the next 90 days, and the USDollar will be devalued 30% lower. The statement is as powerful as it is vague, but the figure jibes with the Jackass reports. He claims the IMF will determine the value of a nation's currency according to their assets. His pronouncement appears to explain COMEX Gold and ETFund Gold heading to China in large volumes.

Lindsey Williams seems intrepid but incomplete. The IMF will not have much of any role, since totally discredited and largely ignored. It bears repeating, that Williams has zero contacts in the Eastern Hemisphere, which is driving the process. The US assets will surely count 8500 tons of gold which is not in possession, a myth and accounting ledger book item built of fantasy in the form of Deep Storage Gold. Examine some key items that have gone without followup explanation or consideration by Williams. For the USDollar to fall, one must address what it falls against. The Voice has indicated in as clear terms that all the major currencys will fall versus Gold. In other words, Gold will be the beneficiary of the great reset, in a much higher USD-based price for the stalwart yellow metal super currency. The official story is rubbish, that the big banks will be recapitalized in the process, a point Williams sidesteps. The only way for that to happen is if the banks own substantial amounts of gold. However, in recent months the biggest US banks with USGovt links are accumulating gold rights, via the futures contracts.

The Jackass is firm in belief that the USD splits and the New Dollar devalues versus all major currencys. Williams evades the entire issue of what the USD devalues against. So in Old USD terms, the gold price will rise big. But in New USD terms, the gold price will rise tremendously. Word has circulated that pressure is to devalue the USD by 30% at minimum. Again, one must be clear on what exchange rate the devaluation is to take place. The Jackass expects that the current USD remains a foreign held and international currency, unchanged in nature. It will see a sudden rise in the Gold price versus this current USD. Other major currencies will see an equally sudden rise in the Gold price. On the other side of the table, the New Republic Dollar (name arbitrary) will be created, and it will be devalued versus the major existing world currencies, like the Euro, the British Pound, the Yen, and the Swiss Franc. Think import price inflation for the USEconomy, businesses, and consumers.

The Global Currency Reset contains three gigantic tangles. A) The USGovt has resisted any cooperation unless and until the world agrees to forgive its $17 trillion in debt. Such event will never happen without mindboggling concessions. B) The big US & London banks must continue in some form. Their solvency must be restored, but to accomplish that feat, they must possess high volume gold tonnage in reserves. C) The USEconomy must adjust to a debt restructure upon the New Republic Dollar. Point to home mortgages, corporate debt, commercial debt, consumer debt, and much more in a very confusing mess. The details of the Global Currency Reset indicate that USD debts will adjust to protects the banks, so that individuals will be required to repay debts at higher real cost. The debt repayment part is not very clear at all, subject to feverish speculation and conjecture. The reports on the Global Currency Reset discuss very complex geopolitical aspects that involve several important difficult factors, including nuclear proliferation. If the casual observer can ponder four or five factors, then half are overlooked. The complexity of Global Paradigm Shift is indeed overwhelming and difficult.

Williams was specific on a wide range of topics regarding the Reset as it applied to the United States. The mock name of Untied States might finally apply in spades, the dismantle process soon to come, at least planned as imminent. Consider the several areas and put aside the implied issues that crop up. His points are far-reaching and disturbing, with a promise that the mainstream news will not touch the entire story. 1) The currency reset will be based on the quantum of each country's assets. The US has plenty of tangible assets, but certainly no FOREX reserves. The USDollar will be 30% devalued versus the other currencies immediately upon the reset, since the US has a poor asset showing. The US is all debt, no assets, huge military. 2) The 5% locked currency band afterwards will mean that the USDollar global reserve status will be lost. So hyper-inflation will right away strike at the USEconomy. 3) A new reserve currency will be created and announced, backed by Gold, but without specific details. The insiders are dumping their USDollars and USTBonds, buying into the new reserve currency secretly. Indeed, all the countries owning USTreasurys (especially China and Japan) are dumping them in obscene volumes, the bonds lapped up by the USFed in QE with much greater volume than reported. 4) Reset is to occur within the next 90 days, maybe sooner. 5) Within the next year afterwards, at least 30 to 50% of all US-based pensions will be confiscated. The funds will be used to pay down the USGovt national debt. Think pension bail-in. 6) ObamaCare for big business triggers in January 2015. The collapse of the banks will not occur until then. ObamaCare is better described as an impoverishment bill with a financial audit attached. 7) No USFed taper of QE will take place, no reduction in U SFed official monetized bond purchases.

Williams went on to mention the installation of smart home electical meters, made mandatory by legislation. The resonator at 905 mhz is designed to cause notable loss of intelligence. If true, the anticipated resistance, rioting, and other reluctance to follow the lords of fascism will be reduced. Conclude that chemtrails harm the air quality, Monsanto genetic modifications harm food quality, flouride harms water quality, and finally the resonator. See the YouTube video (CLICK HERE).

◄$$$ JEFF BERWICK ON USA WATCHDOG BELIEVES THE WORLD IS IN THE VERY END STAGES OF THE CURRENT FINANCIAL SYSTEM. THE OPINION IS ACHIEVING CONSENSUS. $$$

Financial editor Jeff Berwick is a Canadian entrepreneur, and writer on economics, finance, and investments, in addition to being an avowed libertarian activist. He focuses on the fragile US financial situation. He predicts the world faces "the end of the monetary system as we know it . We are in the very end stages of this system because of the amount of USGovernment debt. The debt is going up over $1 trillion per year. If actually accounted for properly, it is really going up more than $5 trillion per year. If they allow interest rates to rise, it will effectively make the USGovt bankrupt and insolvent, and it would make it collapse. They are preparing for a major societal collapse. It is obvious and it will happen, and it will be very scary and very dangerous." He refers to the preparations for martial law inside the United States, which not 10% of the population seem aware of. He publicly proclaims a preference for gold in wealth preservation, and BitCoin in transactions. Expect inflation, shortage, chaos.

◄$$$ THE CHINESE PLAN TO QUIT THE USDOLLAR HAS INFURIATED THE UNITED STATES. THE GLOBAL REJECTION OF THE USDOLLAR IS LED BY CHINA, WITH MANY NATIONS TO FOLLOW UNDER THEIR WING. THE USGOVT RESPONDED WITH A MILITARY DISPLAY IN THE SOUTH CHINA SEA REGION, NATURALLY, SINCE THE USDOLLAR SUPPORT COMES FROM THE USMILITARY. THE CHINESE YUAN HAS SURPASSED THE EURO ON GLOBAL TRADE USAGE, TO BECOME THE SECOND MOST POPULAR CURRENCY. THE CHALLENGE IS ON. $$$

Gradually and unstoppably, the Chinese Yuan currency is gaining ground in commercial trade usage. This is a key requirement for presence in bank reserves management and global currency recognized status. According to SWIFT, the Yuan recently surpassed the Euro in trade, the all important capital flow measure that will return in prominence. The Yuan is the second most used currency in trade finance for settlement purposes. The Chinese currency had 8.66% share in letters of credit and collections (i.e. trade finance) in October, the Society for Worldwide Interbank Financial Telecommunications reported in a statement. The Euro share in trade finance was 6.64% in October. The top 5 countries using the Yuan for trade finance in the month were China, Hong Kong, Singapore, Germany, and Australia. The USDollar still maintains a giant lead, with an 81% share in trade finance. However, trade payment itself is only a small part of the global $5.3 trillion per day foreign exchange market. While the so-called developed world (more like de-industrialized world) is pre-occupied by printing wealth with no sweat or work to cover its consumption in fiat toilet paper, with a redoubled effort in annual currency dilution and debasement for making its exports cheaper, their beggar thy neighbor policies are set to backfire. They cannot legitimately inflate their debt away, or kickstart their economies. See the Zero Hedge article (CLICK HERE).

The gauntlet has been dropped, as China is taking its challenge. The decision by the Central Bank of China no longer to accumulate foreign exchange reserves in USD terms has infuriated the United States. As usual, the response was military, since the USDollar's chief support comes from military weapons and their threat of usage. The number of precedent events is innumerable for the past 20 years or more. Prominent Irish international analyst Finian Cunningham commented on PressTV that the USGovt response appears to be escalation of tensions between US and China over Beijing's enforcement of an Air Defense Identification Zone (ADIZ). He does not mince words, being direct and full of insight. He wrote, "The escalation of military tensions between Washington and Beijing in the East China Sea is superficially over Chinas unilateral declaration of an air defense zone. But the real reason for Washingtons ire is the recent Chinese announcement that it is planning to reduce its holdings of the US dollar. Their move to offload some of its 3.5 trillion in US dollar reserves [poses] a mortal threat to the American petro-dollar and the entire American economy. China, the second biggest economy in the world and a top importer of oil, has or is seeking oil trading arrangements with its major suppliers, including Russia, Saudi Arabia, Iran, and Venezuela, which will involve the exchange of national currencies. But, in the imperialist, megalomaniac mindset of Washington, the threat to the US economy and indebted way of life is perceived as a tacit act of war. That is why Washington is reacting so furiously and desperately to Chinas newly declared air corridor." He concluded that the Chinese defection from the USD fold threatens the Petro-Dollar and its global reserve status. Their intention to shift foreign exchange holdings from USTreasury Bonds in favor of other currencies is a harbinger of extreme hardship coming to the USEconomy, due to USD devaluation. The result will be higher import prices and more difficult supply chains. See the PressTV article (CLICK HERE).

Despite any symbolic meaning, a strong dose of tangible mettle comes with the waterway confrontation. The Chinese Govt seeks control of the gateway to the open Pacific. The regional map shows China is largely locked in by Japan and Korea. The US sheep are not properly told about the advances in Chinese Military technology and approaching equitable position. The Voice back in 2011 told of an event, where the Chinese used an Electro-Magnetic Pulse weapon to fry a US Naval vessel. The ship was scrapped. The incident happened in the Indian Ocean, done as a demo. The Chinese refuse to permit either the United States or Japan to control their outlet to the open Pacific Ocean. They strive to maintain their own control of the important passageways. See the Gulf News article (CLICK HERE).

◄$$$ USDOLLAR AT CRUCIAL POINT, FACING POSSIBLE REVERSAL. THE TREND IS DOWN ON IMPORTANT CYCLICAL MEASURES. THE USDOLLAR INDEX IS READY TO MAKE ANOTHER CHALLENGE OF THE 79 LEVEL OF SUPPORT. THE KING DOLLAR IS AT A CRUCIAL JUNCTURE, FACING GLOBAL REJECTION FROM CENTRAL BANK ABUSE AND RECKLESS DEBT MANAGEMENT ON THE USGOVT FISCAL SIDE. $$$

The US DX index still is heavy on its Euro weight. A curious phenomenon continues at work, as most bank derivatives are priced in USD terms. Refer to interest rate derivatives, currency derivatives, and to some extent corporate bond derivatives. As the derivatives fail, their repayment in settlement is done in USD, which creates an artificial USD demand. It is not from economic forces backed by real demand. Support for US DX quickly faded away since July when the Taper Talk trial balloon fell to the ground, after which the 20-week moving average gave tepid support. A new challenge of the critical 79 level awaits, which will be watched across the world. A very reliable Head & Shoulders reversal pattern has begun to show itself, which should add to momentum in breaching the 79 level. The USDollar is being debased by the central bank hyper monetary inflation. The undermine might make the defense difficult. The global rejection of King Dollar is underway, as the Eastern nations seek a viable alternative for managing both trade and the banking system. The USDollar will be rejected. It will be dumped. It will be avoided. Its inflation dependence is becoming fully recognized. Third World nations authorize such hyper monetary inflation.

◄$$$ ASIA WILL COOPERATE INCREASINGLY AS A REGIONAL UNIT ON THE EXPANDED USAGE OF THE CHINESE YUAN CURRENCY. THE HONG KONG AND SINGAPORE EXCHANGES PLAN MORE YUAN USAGE. $$$

The two largest Asian exchanges have agreed to swap notes on Chinas currency, in the form of currency instruments. The Hong Kong Exchange & Clearing Ltd and Singapore Exchange Ltd will promote Yuan internationalization by working together on areas including new technology, finished products for trade, and financial regulatory matters. The deal between the rivals is interesting in that it centers upon the Chinese currency usage as common ground, the medium of exchange in competition, which has grown between the two important centers. Hong Kong is currently the dominant offshore center for trading Chinas currency. London and Frankfurt are posturing for a greater share of activity, replete with fees. The HK officials hope to aid regional investors as they deploy a growing pool of investable offshore Yuan. The Singapore officials are actively promoting the Asian Gateway, so as to enable easier access to Chinese capital markets with widely available regional exchanges and platforms for investors across Asia. The city state expects to provide services such as raising funds and make stock listings on their exchange. The agreement between the HKEx and SGX coincides with growing evid ence that Chinas currency is extending its reach. The Yuan is fast rising in trade and bond issuance. See the Wall Street Journal article (CLICK HERE). For additional perspective, check the YouTube video on the need for a global unit of account (CLICK HERE).

◄$$$ IMPLOSION OF THE USDOLLAR IS WRITTEN. IT WILL BE DONE IN OUR GENERATION, OR NEXT YEAR, MAYBE IN JUST A FEW MONTHS. THE SIGNS ARE EVERYWHERE. THE IMPACT WILL BE TREMENDOUS. THE EVENT WILL BE LED BY THE DEMISE OF THE PETRO-DOLLAR, OR THROUGH A GLOBAL CURRENCY RESET, OR BOTH. GERALD CELENTE EXPECTS THE USDOLLAR COLLAPSE TO BE ACCOMPANIED BY MARTIAL LAW IMPOSITION. THE JACKASS EXPECTS A SUDDEN SHOCK AS THE UNITED STATES SLIDES INTO THE THIRD WORLD, WITH PRICE INFLATION, SUPPLY SHORTAGE, AND VIOLENCE AT KEY SPOTS. $$$

It will happen in our lifetime. It might happen in the next several months. The preliminary signals are everywhere to see. The entire world is preparing to discharge the USDollar, regardless of reason. The Hat Trick Letter has cited hyper monetary inflation, bond fraud, bank insolvency, economic imbalances, consumption on credit card, military aggression, espionage, and general hegemony. The demise of the USDollar is near, its sunset nigh, to be led by the Petro-Dollar fade over desert sands, and the altered balance of power in the Persian Gulf. See the Before Its News (CLICK HERE). The bold and indefatigable Gerald Celente expects the shock wave from global USDollar rejection to result in martial law. The Jackass agrees. Watch for violence at gasoline stations, food supermarkets, and ATM cash machines.

◄$$$ THE SAUDIS HAVE FINALLY ANNOUNCED A GULF DINAR TYPE CURRENCY VEHICLE, BUT OFFICIALLY PEGGED TO THE USDOLLAR. THE PROJECT HAS BEEN ON HOLD FOR AT LEAST FOUR YEARS. THE USGOVT RESISTANCE IS GOING AWAY. THE FOUNDATION IS BEING BUILT FOR THE PETRO-YUAN. FOUR ARABIAN GULF COUNTRIES ARE PLANNING A COMMON CURRENCY. WITH A QUICK DECISION, ITS BASIS COULD CHANGE FROM USDOLLAR TO YUAN. THE NATURAL GAS COOP LED BY RUSSIA WILL BE USED AS A GIANT CROWBAR TO PUSH THE OPEC CARTEL INTO THE SHADOWS. $$$

Although four Gulf Coop Council nations have announced a common currency by the end of December, expect its arrival to come in early 2014. The logistics are difficult, and the last vestiges of USGovt resistance will fall away only stubbornly. The common currency is to be shared in usage by Bahrain, Kuwait, Qatar, and Saudi Arabia. It launch will see it pegged to the USDollar, the official obsequious word, a source told the Akhbar Al Khaleej newspaper. The official statement reeked of a last ditch pressure tactic, loaded with submissions. "The decision to peg the Gulf currency to the dollar is political and is not related to the economy. From an economic point of view, it would have been better to peg the new currency to a basket of currencies, because the volume of trade of the Gulf states with the countries of the European Union is much larger than that of their commerce with the United States. Gulf exports of oil to the European Union are estimated to constitute about 70% of European imports. [There is no] need for a common Gulf currency, if it is not sovereign. Even though the GCC states have huge financial reserves, their currencies are not listed on the world's reserve currency list because they are not producing states." The last comment is painfully obscure. To claim sovereignty and a USD peg is contradictory. Thus reading between the lines is urgent.

So to deflect pressure on a USD linkage, the Euro is put on the billboard defense. The story source is believed to be close to Gulf decision making circles. Oman and the UAE, the other two renegade members of the six-nation Gulf Coop Council arranged in 1981, are not likely to join the common currency. They are sternly independent, the UAE a bastion of commerce, Oman a loner tribe. The GCC group has been discussing a currency union similar to the EuroZone for more than 15 years. The pressures applied by the USGovt have been enormous since 2008, since the Petro-Dollar essentially means their currency has been the USDollar. Any move even to a basket of currencies would force diversification away from the USTreasury Bond, not desired. Internal pressures are strong, resilient, broad, and robust. Widespread counter pressures like from several economists in the Gulf region have been calling for removal of their longstanding peg to the USD. They strive for a system with a more flexible exchange rate that would enable them to defend against inflation risks and regular economic crises. What must come next to solidify any new common currency (even an IMF-like basket) is a clear common objective with an understood political consensus. See the Gulf News article (CLICK HERE).

The Jackass viewpoint goes beyond the news story details and into speculative ground with inference. No GCC common currency would be announced unless the USGovt had fallen totally out of bed with the Saudis, who clearly drive the process. Its installation is far more important than a USD peg, which should be viewed as a political expedience and very temporary royal wax seal. So the mission was to put the Gulf Dinar vehicle on the road, then install a CNY transmission later. With any new pact signed with China for a military protection role, even if shared with the United States, the peg can be altered. Besides, watch the basket have a notable Chinese Yuan weight. Furthermore, with the Shanghai futures contract going into force in Yuan terms, the Saudis can later claim a necessity to increase the Yuan weight within the Gulf Dinar structure out of market expedience. This is what the Petro-Yuan birth looks like. In fact, with stiff backbone call it the oil-based Gulf Sunni Dinar, to stand opposite the Shiite Gas Pipeline on the geopolitical battlefield. It has relevance in a new currency, apart from any specific currency peg. Those who can think outside the box realize that a new currency can switch to Yuan in its peg with the next decision, replete with military assurance in overtones. Since the Egypt fiasco with overthrow of the US puppet, and the Syrian fiasco with Obama retreating tail betwixt legs, the US has made very visible steps away from the Saudi tent and the Persian Gulf camp. The full impact of the retreat will be reflected in the Petro-Dollar, which will fracture in steps. Regard the Gulf Dinar as an attack directed at the principal flank of the Petro-Dollar fortress. See the PressTV article (CLICK HERE).

EuroRaj offered some excellent strategic points on the Persian Gulf developments. The following are his thoughts, my edits. The Saudi Riyal (their standard national currency) has been pegged to the USD for ages. Therefore nothing new in the khaleeji being linked to the USD. The peg should be taken to be a meaningless extension of present policy. The Saudi Arabia juggernaut is no longer the marginal producer of crude oil, hence no longer the dominant price setter. The banker cabal that arranged for the Petro-Dollar structure four decades ago are in a state of flux. With all the de-leveraging and new rules, they can no longer manipulate and set the price of crude oil. Russia is the biggest producer of oil and hence the effective price setter. Russia is selling oil to China now, settled in Chinese Yuan, a direct assault on the Petro-Dollar which has gone unnoticed. Such oil trade is core to the Eurasian Trade Zone. The world is moving towards using natural gas as the marginal element of supply in large pipeline networks. New Gas Pipeline geopolitics are the rage, and the US is on the defensive, a meddlesome player on the outside looking in. Russia has formed its own OPEC equivalent so to speak, called the Nat Gas Coop, led by Gazprom. It will displace OPEC in importance, influence, and prestige. The transition from OPEC to the Nat Gas Coop will crystallize the death of the Petro-Dollar and the shift of Saudi support for Yuan-based sales to Asia, even to parts of Europe.

In the meantime, the Persian Sulf nations agreed on a pact for military security. They must not assume the USMilitary protector role any longer. Expect for China to step in and join the alliance. Months later comes the Petro-Yuan, manifested through the futures contract arena but dictated by the largest Saudi oil customer, namely China. An event went largely unreported in the sleepy tilted Western press. Saudi Arabia and its Gulf Arab neighbors recently completed a summit meeting in Kuwait. They agreed to establish a joint military command, paving the way for tighter security coordination. The proximal reason was to guard against the ambitions of Iran. The concealed reason was to prepare for a post-US epoch in the Persian Gulf. The Gulf Cooperation Council also agreed to lay the foundations for a joint Gulf police force and a strategic studies academy. As relations warm with Iran and cool with the United States, important changes will take place. The Petro-Dollar will not be a firm fixture in global finance within months. Any welcome of Iran will be done with great caution, since centuries of distrust are part of the Moslem DNA. The Iranian Foreign Minister Mohammad Javad Zarif made official visits to four of the six Gulf nations in an effort to improve ties. The Saudis and Iranians are sick of being Western pawns.

◄$$$ RUSSIAN FINANCE OFFICIALS WARN THE RUBLE CURRENCY COULD SLIDE FURTHER. THE NATION IS KEENLY DEPENDENT UPON A STRONG CRUDE OIL PRICE. REFORM IS URGENTLY NEEDED IN THEIR BANKING SYSTEM AND RULE OF LAW, IF THEY WISH TO BE A RESPECTED WORLD LEADER BEYOND COMMODITY SUPPLY. $$$

Russia is moving toward a more liberal Ruble currency as part of a shift in monetary policy priorities. The Bank of Russia has widened the corridor in which it sells or buys its currency six times in November. The nation is moving toward a free-floating Ruble as part of a shift in monetary policy priorities. Bank of Russia deputy chairman Ksenia Yudaeva stated that the Ruble decline has been caused by external factors, such as the run on emerging markets. But some analysts have linked the decline to rise distrust in the Russian banking system, as well as its court sysetm with rule of law. The Russian Economy is beset by some strong price inflation, which had reached the 15% level. The posted inflation target will be missed. It is dependent upon a strong crude oil price. The effect is felt on the Russian trade figure and balance of payments. The former Finance Minister Alexei Kudrin said that Mother Russia needs a strong oil price to keep the Ruble firm and inflation at bay. See the RIA Novosti articles (CLICK HERE and HERE).

◄$$$ EAST AFRICA PLANS TO LAUNCH A USDOLLAR ALTERNATIVE. IT WILL SERVE AS REGIONAL CURRENCY FOR 135 MILLION PEOPLE, WHICH PUSHES AN $85 BILLION COMBINED ECONOMY. THE USDOLLAR IS IN DIRE TROUBLE IF AFRICAN NATIONS ARE DISCARDING IT. $$$

Kenia, Tanzania, Uganda, Ruanda, and Burundi are working to create an alternative to the USDollar. The presidents from these five East African nations have made a pact to create a common currency, where 135 million people reside. In the next ten years, they will form a central bank to coordinate monetary and fiscal policy. They will strive to form a common market as well, with shared customs and measures. They will prepare for energy exploration together, encourage investment, and even seek foreign investment. Perhaps the USGovt will declare all five nations to be terrorist havens, and impose sanctions. Wait! The US & UK security agencies already have taken action, as they instigated the Nairobi shopping mall attack. One must pay attention to hidden hands, and surely ignore Western press reports. My source indicates that Western colonialists wish to destabilize the Kenyan Govt, so as to rewrite huge lucrative mineral supply contracts across the region.

Kenya recently launched a railway construction project at a cost of $13.8 million, using Chinese design and labor. Both Kenya and neighbor Uganda recently discovered a large oil deposit, but require its transport to coastal ports. Likewise Tanzania relies upon natural gas reserves, but without adequate infrastructure to ship it for usage. These nations openly state their desire to unite currencies in order to avoid the dangerous monetary games practiced by Western banks which affect their economies, their businesses, and their lives. A regional monetary union would reduce their risk for the five nations whose combined GDP is estimated at $85 billion. See the RT News article in Spanish (CLICK HERE). Eee Gadz! Even the Africans are avoiding the toxic USDollar.

◄$$$ JAPAN RACKED UP A HEFTY TRADE DEFICIT, A NEW RECORD. HEAVY IMPORTED ENERGY IS LARGELY RESPONSIBLE. DECADES OF SURPLUS HAVE GONE INTO REVERSE. THE CHINA FACTOR LOOMS LARGE. PRESSURE ON KEEPING THE YEN DOWN WILL BE DIFFICULT TO MAINTAIN. PAST STRATEGIES ARE COMING UNDONE. $$$

A weaker Yen currency and costly fuel have led to a record trade deficit in Japan. The Land of the Rising Sun has been accustomed for over two decades to outsized trade surplus, but the advent of China altered the trend in a big way. The Bank of Japan policy, together with Abe Admin initiatives, have brought a weaker Yen. It serves as a doubled-edged samurai sword. A sliding Yen supports exports by making Japanese products cheaper abroad. It boosts the value of overseas revenues in Yen terms. But it also increases import prices, energy being the large item. Japan depends on imports for more than 90% of its energy needs. Notice its nuclear generation capability has been deeply damaged. All of Asia comprehends the Fukushima plant attack on March 2011, not a natural event. Even Russian President Putin called it an open attack. Japanese citizens comprehend aspects of the attack. Only the US-led Western press calls it a natural event of earthquake followed by tsunami. The secrets are revealed in seismic readings, which reveal a tactical underground nuke attack followed by a HAARP earthquake.

Japan is set to post a record trade deficit in fiscal 2013, the deficit expected to expand to JPY 12.1 trillion (=US$120 billion) for the fiscal year through next March. The trade deficit is expanding fast, compared to the JPY 8.18 trillion deficit in fiscal 2012. The economy will log a trade deficit for the third straight year. The new deficit will register a record since data became available in fiscal 1979. Exports in fiscal 2013 are forecast to rise 9.8% from the previous year, sustained by the cheaper Yen, while imports are expected to climb 14.1% from the previous year. The key item remains imported oil & gas. The robust demand from utilities comes to bolster fossil fuel-based power generation as an alternative to nuclear power since the 2011 inception of the Fukushima disaster, better called a syndicate attack. Just one month before the attack, Japan announced plans to align with China in working toward a regional currency with a departure from the USDollar regime. See the Japan Times article (CLICK HERE). The Japanese model is backwards. For two decades, their powerful finance ministry has been able to keep the Yen down by deploying a vast volume of trade surpluses in sequence. It is gone. Thus the weaker Yen is harder to maintain with market interventions. In backward terms, the Yen is due to rise considerably due to the trade surpluses. They have less ammunition to defend with, while past intervention strategies are coming unwound. If the Yen declined by 50% during decades of surpluses, it will rise significantly during a new decade of deficits.

## BANK STRESS GROUND LEVEL

◄$$$ THE GOLDMAN SACHS PARASITE IS QUICKLY RUNNING OUT OF BLOOD TO SUCK FROM ITS WORLD OF HOST VICTIMS. THE GIANT VAMPIRE SQUID IS GRADUALLY BEING RECOGNIZED, AND BEING MORE WIDELY THE OBJECT OF LAWSUITS. THEY ARE THREATENING TO LEAVE LONDON, AN IDLE THREAT. GSAX IS THE OBJECT OF LEGAL ACTION IN SOUTH KOREA AND SINGAPORE. FINES AND AWARDS WILL BE MERE BUSINESS COSTS. $$$

Goldman Sachs is actually pondering a departure from London, if Great Britain leaves the European Union. The venerable crime center GSax threatened to move its European operations to Paris or Frankfurt if Britain leaves the union. Only these two cities are cited. The Wall Street giant firm currently employs a staff of 7000 people in Europe, around 85% based in the City of London. The debate over the UK role in Europe intensifies, with Prime Minister David Cameron pledging to hold a national referendum on the nation's membership in the EU. The implicit statement by GSax is that the City would be better off without Brussels and its annoying regulation, the latest being a new controversial cap on banker bonuses across the EuroZone. A new requirement would limit bonuses to 100% of annual salary. The UK bank authority has filed a lawsuit against the European Parliament and its member states, arguing that reduced compensation will not make the banking sector safer, but it would surely result in the City losing its competitive edge to rivals. See the UK Independent (CLICK HERE).

EuroRaj has a fine perspective, since the ruckus is in his back yard. He wrote "Goldman Sachs will not be welcome in France or Germany. Nobody in Europe wants to deal with them any longer, since they are prominently revealed on so many criminal fraud fronts. Their biggest clients these days are central banks, a long list of hedge funds, and a few stupid corporates. It is not a certainty that GS will remain a solvent entity if UK leaves the EU. The air is starting to get thinner for GS." More pressures are being applied to Goldman Sachs across the world. In South Korea, the regulators are deciding on a fine for malfeasance on derivative sales of Malaysian bonds without proper disclosure. See the Bloomberg article (CLICK HERE). In Singapore, the venerable GSax is the object of a lawsuit by a powerful client. At issue was a Japanese Yen currency bet that went bad. Oei Hong Leong severed relations with Goldman Sachs in 2011 after the firm profited from his losing trade they persuaded him to make. He resumed transactions after senior executives Gary Cohn and David Ryan visited him personally in April 2012, assuring his interests would be placed first. Naturally, GSax took the opposite side with profit, and likely used heavy leverage to force the client loss. The fund manager Oei accused the investment bank of fraudulent misrepresentation, breach of fiduciary duty, fraudulent inducement, and unjust enrichment. The lawsuit was filed in New York City. See the Bloomberg article (CLICK HERE). It is possible to produce a long list of opposition to GSax even without citing Matt Taibbi.

◄$$$ JPMORGAN TO ENFORCE PETTY RULES ON CASH DEPOSITS. TRACKING OF CASH DEPOSITS IS THE NEW ITEM OF SCRUTINY, SINCE MANY PLAYERS USE HIGH COUNTS OF SMALL TRANSACTIONS TO MOVE MONEY. $$$

As of December 1st, the giant JPMorgan Chase now requires a photo ID for all cash deposits. In addition, a person can only deposit cash into the account of the signatory (person making the deposit with signature). It seems petty and silly, if not meddlesome, but there is a telltale purpose. We could be seeing a trial balloon by a leading bank to force the end of cash transactions. At least they are attempting to limit cash movements. Some players, it has come to my attention, are working around rules by moving a tremendous amount of money in total, in the form of numerous small transactions. Organized crime has long relied upon cash in its functions, with little trails. Thanks to JamesS in Ohio for the JPMorgue update. Also, perhaps JPM is working to preserve its cash held in deposits in order to stay afloat. One is left to wonder if the same cash rules apply to their Baghdad bank office operations. Refer to the Iraqi Export Bank clearing house operations for Afghan heroin produced by the USGovt security agencies.

◄$$$ MAJOR US-BASED LENDERS COULD PAY AN ADDITIONAL $104 BILLION IN LEGAL CHARGES. WITNESS THE ADVENT OF DOMESTIC INDIRECT FEDERAL FUNDING WITH NO LEGAL LIABILITY. $$$

The big US financial firms are lined up like ducks to be shot at, with huge fines ordered to be paid by the courts. They are indeed sacred, but they are succumbing to a minor amount of bloodletting. Several detailed stories have been provided in recent Hat Trick Letter reports. They face $104 billion in more fines and legal costs, perhaps some investor restitution. The eight biggest US banks, including JPMorgan and Bank of America, must settle mortgage related malfeasance, misrepresenation, bond fraud, and even contract fraud. The sum cited amounts to two thirds of $154.9 billion in their collective reserves. Standard & Poors estimates the total penalties and payouts could be as small as $56.5 billion, but could stretch to $104 billion. In clever prose, Stuart Plesser of A&P wrote that "Notably, mortgage related litigation has recently gotten a second wind and has expanded beyond investor claims." True to form, the big banks will not suffer debt downgrades to junk status, possibly because narco funds enter their balance sheet. They will be downgraded very slowly, so the rating agencies maintain their credibility. See the RT News article (CLICK HERE). However, view the phenomenon from a different angle.

Consider a different angle. It seems the big USGovt has discovered a new business model that is being developed and implemented, with a circular nature. The volume is large to the observer, but small to the insider. The litigation has proved only marginally effective in reinstating investor losses. But the USGovt stands to reap in large penalties and fines. It has become highly profitable for the USGovt to pursue the very same big banks that the USFed and USDept Treasury provide slush funds for keeping afloat. The USTreasury holders might be enforcing it to be repaid on their collateral. The shark tank grows more bloody as survival becomes key into the end game with reset, with blood being well circulated. Rob Kirby wrote, "Naturally, these charges will be paid and settled without anyone admitting any guilt and no one being charged with any criminal wrongdoing. All parties working with regulators included want their cut of the illicit money laundering that the banks are involved in." To be sure, the amounts of the federal intake benefit are tiny compared to the gargantuan $1000 billion in annual deficits. Keep in mind the insider legal beagle teams who earn huge cuts.

◄$$$ JPMORGAN IS CLOSE TO MAKING FINAL A $2 BILLION CRIMINAL SETTLEMENT IN THE MADOFF PONZI CASE, WHICH WAS BLOWN OPEN FIVE YEARS AGO EXACTLY. AGAIN THE BIG BANK WILL ESCAPE WITH DEFERRED PROSECUTION, BASICALLY A FREE PASS. THE LIKELY DEAL IS $1 BILLION IN VICTIM RESTITUTION AND $1 BILLION IN FINES. JPMORGAN WAS WITNESS TO THE FRAUD, A BLIND EYE CITED. $$$

JPMorgan Chase and federal prosecutors are close to striking a settlement at long last over the giant bank's complicity to the reprehensible fraud committed by Bernard Madoff. The tentative deal struck calls for around $2 billion in penalties and a rare criminal action. Half the amount would go to compensate the Madoff victims, which include a Squirrel Hill foundation in the Jackass youth neighborhood in Pittsburgh Pennsylvania, and Sandy Koufax (hall of fame baseball pitcher). The settlement would fault the bank for turning a blind eye to the massive Ponzi scheme. A settlement with federal prosecutors in Manhattan would feature a deferred prosecution agreement and more than $1 billion in penalties to resolve the criminal case. The investigation continues to probe broader gaps in the banks money laundering safeguards. If they look closely, or are permitted to look at all, they will find hundreds of $billions in narco money laundering. Beware that JPM has regularly been shifting loan loss reserves to the profit colum on quarterly reports. They need more reserves urgently. The challenge in such cases lies in proving the guilt in banker complicity with Madoff and his small staff. Smoking guns are not typically found. Two items to share. The stolen funds were well protected by the bank cartel, all through the charade from the onset. The money was never searched for, because it was hidden in Israeli banks located in Switzerland, protected by bizarre bank laws that favor a certain entrenched ethnic group that merged long ago with the nazi bankers. The amount of the fraud was not $50 billion as widely reported, but rather $150 to $160 billion. The victim list is extensive and reaches worldwide. See the New York Times article (CLICK HERE).

◄$$$ THE NEGATIVE INTEREST RATE DEBATE CONTINUES. CENTRAL BANKS KNOW THEY ARE STUCK ON POLICY. THEY WANT TO END THE EASY MONEY SPIGOTS. THEY ARE THREATENING TO ORDER NEGATIVE INTEREST RATES SO AS TO ENCOURAGE MORE COMMERCIAL LENDING. IT IS AN IDLE EMPTY THREAT. THE MAIN POINT OF DAMAGE WOULD BE MONEY MARKETS AND THEN SHORT-TERM USTREASURY BILLS. $$$

Case in point the Money Market. The entire bond market is upside down and deeply distorted. Two years ago the MM rates went negative. They actually resulted in a negative return on investment, with net asset values under 100 par value. See GE Money for instance. The event freaked out the bank policy makers. They realized those funds would close, and in the process dump absolutely huge amounts of short-term USTBills on the market. It would have caused a runup in short-term yields. Janet Yellen in her testimony even mentioned this risk factor. But she turned away from any suggestion of negative rates, even though in March 2013 she spoke positively on the subject. When put on the pedestal for the USFed Chair post, opinions change, after exposure to deep slush funds and the Weimar operating manuals. The reason nominal interest rates cannot go negative is that the money markets would lose money. People would suffer negative returns and abandon the banks. The money markets would disband. The effect on USTreasurys indirectly would be enormous and difficult to defend against. The publicity would damage faith in money itself. The total Money Market funds are $2.7 trillion, as estimated by the Investment Company Institute. See the Reuters article (CLICK HERE).

◄$$$ BANK DEPOSITS SOAR DESPITE ROCK-BOTTOM INTEREST RATES. BANKS DO NOT WANT THE CASH. DEPOSITORS ARE RECEIVING ALMOST NOTHING IN YIELD. FEES ARE STACKING UP IN POLICIES DESIGNED TO DISCOURAGE MORE DEPOSITS. LENDING PROFITS ARE TIGHT. DEPOSIT INSURANCE IS STEEP, THE MAIN PROBLEM. $$$

The US public is pumping money into bank accounts at a feverish pace this year. The deposits are up to record levels near $10 trillion, as fears escalate that the USEconomy is on the verge of another implosion. In just the last three months, accounts at US commercial banks have increased $429 billion, a hefty 10% rise, almost double the increase for all of last year. The flood into checking, savings, and money market accounts shows no sign of slowing down. The financial press is nowhere in reporting the anomaly, since it goes contrary to the recovery story promoted. However, the banks do not want the money. Banks and credit unions are actively trying to rid themselves of the cash, everything except to approve and to make loans. They refuse to renew CDs at higher rates. They are reducing CD rates. They impose fees on checking accounts for depositors who stay clear of other more profitable financial services, as in idle cash. The banks see it as a flood that could quickly reverse and exit the bank accounts if the economy improves. They see it as an unwanted flight to safety.

The banks do not see the promise of profitable lending in the current USEconomic environment. The large amount of cash adds to expenses such as paying for deposit insurance premiums. With lending standards strict, quality of borrowers lousy, the demand for loans is meager, the profits from lending tiny. The banks have been doing everything they can to demonstrate how little they need new cash. The ugliest case is Bank of New York Mellon, which is forcing institutional clients to pay fees if they deposit more than $50 million into an account. See the LA Times article (CLICK HERE). As footnote, keep in mind the risk of bank bail-ins. All the sheeple money would be available for confiscation. The public consistently goes in the wrong direction.

◄$$$ OCTOBER SAW A HUGE DECLINE IN EUROZONE BANK SYSTEM LIQUIDITY. LENDING HAS FALLEN DRAMATICALLY IN THE SOUTHERN NATIONS. WITNESS THE BITTER FRUIT OF AUSTERITY MEASURES, A DISASTROUS APPROACH. $$$

New data from the Euro Central Bank shows that the money supply in the EuroZone declined catastrophically during October. The liquidity levels have turned dangerously low. The overall figure for loans to non-financial companies shrank by 3.7% overall in the month. The Southern PIIGS showed the most dire condition. Societe Generale reports the total lending was down by 5.7% in Italy, down 6.6% in Portugal, and down a horrendous 19.3% in Spain. Such is the effect of austerity measures imposed in the last two years, which the Jackass has consistently called poison pills. In fact, not only are austerity budgets suppressive on economic activity, but they do not even reduce deficits. Expect the EuroCB to continue its bond monetization, or expand it, in response. The effect will be to kill capital further on the monetary side of the table, while the governments reduce spending on the fiscal side of the table. Policy makers have their heads up their asses all across the Western world.

◄$$$ ROYAL BANK OF SCOTLAND IS BEING ACCUSED OF UNDERMINING THEIR CLIENTS IN A PREDATORY MANNER. THE MOTIVE IS TO CAPTURE ASSETS, THEN SELL THEM TO FAVORED INVESTOR FRIENDS. THE FASCIST BUSINESS MODEL SHOWS ANOTHER SCUMMY SIDE. THE DEVIOUS CRIMINAL BANKERS ARE RUNNING WILD WITH ALMOST NO PROSECUTION. $$$

The Royal Bank of Scotland is the huge lender and people's bank in Great Britain. They are also loaded with crooks and predators. Recent reports are egregious in accusations of impropriety. Small and medium-sized businesses in the United Kingdom and Europe are accusing RBS of actively undermining the businesses to which it lends with direct motive. Allegedly the bank stresses borrowers by layering on fees when businesses are struggling. They also pull credit lines. The apparent motive is to trigger covenants that allow the bank to actually dismantle the borrower. Worse, the action is done to the benefit of advisors who have close relationships with the bank, in a closed loop. The RBS bank is 81% taxpayer owned, a result of its bailout during the 2008 financial crisis. Rather than helping to restructure loans to companies in trouble, the Global Restructuring Group apparently jacks up fees to the troubled borrowers, stressing them to the limit. The GRG has dismembered businesses under eventual control by means of loan covenants which the desperate client firms agree to, then proceeds to sell business assets and critical elements to the same advisors it hires. The predatory nature of the practices is astonishing, egregious, and appalling. Witness yet another Fascist Business Model bitter fruit. These big banks are criminal enterprises. See the Wall Street Insight article (CLICK HERE).

◄$$$ ITALY HAS BACKED AN 8 PERCENT MINIMUM BAIL-IN FOR AILING BANKS, BUT WITH THE HAIRCUT GOING TO THE BANK BONDHOLDERS. $$$

Italian Economy Minister Fabrizio Saccomanni has pushed for public intervention on troubled banks, but with a positive twist. He suggested inflicting losses on bondholders through a minimum bail-in of 8% of total bank liabilities, as a preliminary step before other confiscations. Yet, the minister warned that usage of bail-in clauses could spread risks across the EuroZone banking sector. He cited the risk of contagion, as in bank runs and bank failures. Most bail-in plans leave the sacred bondholders intact and directly attack the depositor accounts. So the concept has an equitable nature to it. See the Reuters article (CLICK HERE).

## BANK DERIVATIVES UNRAVEL

◄$$$ DEUTSCHE BANK FACES HEAVY FINES RELATED TO THE LIBOR RATE PRICE RIGGING, MOST LIKELY A LONG STRING OF FINES, BIG FINES. THEY HAVE DIRTY HANDS IN ALMOST EVERY FINANCIAL CHAMBER. MANY BANKS WERE CITED, BUT D-BANK WAS HIT WITH THE LARGEST FINE. THE LIBOR SCANDAL WILL BE FOLLOWED BY MORE EQUALLY LARGE SCANDALS, LIKE IN FOREX AND ALLOCATED GOLD ACCOUNTS. $$$

Since acquiring Bankers Trust in the late 1990 decade, Deutsche Bank served a purpose withing the banking cartel. They carried a great load from the Western European continental shelf. With only minor help offered by big French banks, the D-Bank ship bore the burden and recently suffers the exposure. They are being exposed for participation in almost every scummy side of finance. Wherever supervisory authorities have probed on crooked deals of the past, Deutsche Bank comes up. The scrutiny has come in subprime mortgages, currency trading, interest rate fixing, and gold suppression, with leveraged derivatives often in the mix. Germany's biggest bank must pay its first big fine. Many more will follow. Last year, the Jackass focused on D-Bank as a vulnerable piece in the bank cartel. This summer, focus was given to D-Bank, Barclays, and Citibank as vulnerable for sudden potential failure. The focus remains on D-Bank for failure, uniquely among the big Western banks since they have been targeted for prosecution and exposure of profound criminal fraud that includes falsified FOREX trades to conceal sovereign debt as part of the Maastricht qualifications for the European Monetary Union. More than one Southern European nation was involved. Major high level investigations are ongoing, most assuredly to have important fallout as consequence. High crimes cannot go any higher.

The CEO tagteam at Deutsche Bank feature Anshu Jain and Jurgen Fitschen. They are on the extreme defensive. Their attempts to limit the damage to the firm's image and integrity are made more difficult, given the frequency of newly emerging scandals and the leadership positions each man has held in the past. Both men have dirty hands. The European Commission in Brussels had slapped record fines totaling EUR 1.7 billion (=US$2.3 bn) on six international banks. The portion directed at D-Bank was almost half the entire total at EUR 725 million. Analysts expect Deutsche Bank to reach a final settlem ent next year. The charge was cartel participation to manipulate the EuriBOR benchmark interest rate, and its cousin wholesale equivalent rate fix in London and Tokyo. The banks had admitted their misconduct and agreed to a settlement. It is the first giant fine Deutsche Bank has been levied for its serious malfeasance. More will follow. The Voice has assured that numerous VPs have flipped and are cooperating with the Interpol Serious Fraud Division. D-Bank will be the broken link in the Western bank cartel. Momentum is growing.

The bank is embroiled in many lawsuits around the world, most related to events leading to the 2008 financial crisis climax. D-Bank is in line for claims that could run into the $billions for controversial bundling of mortgage backed securities from home loans. JPMorgan Chase alone has been fined $13 billion for its subprime mortgage violations. Several other banks will face similar fines. The FOREX market violations have brought scrutiny by BaFin, the powerful German Federal Financial Supervisory Authority. Although a BaFin spokesman claims no indication of D-Bank malfeasance, past investigations plus a new FBI front indicates otherwise. D-Bank is the world's largest currency trader. In a curious case, D-Bank also faces a hefty fine in its inexhaustible battle with the heirs of the late media tycoon Leo Kirch. A Munich court has ordered the bank to pay compensation, the case under appeal. The Kirch team blames the bank for the media empire's collapse in 2002. They seek EUR 2 billion in compensation. The bank has already set aside EUR 4.1 billion in loss reserves to handle costs for the past malfeasance. Internal reforms have been rocky, resulting in the release of seven traders, but also their rehire amidst lawsuits. The firm's internal structure and criminal culture was cited as reason for their return to staff positions. See the Spiegel article (CLICK HERE).

Supervisory authorities in countries including the US and UK are also investigating the case. Switzerland's UBS, Britain's Barclays, the Royal Bank of Scotland, and Dutch Rabobank had to pay a total of almost $4 billion. These banks were fined for making profits or masking their problems by fraudulently rigging the rates that reflect the cost of lending money to each other. The LIBOR crime is insider profiteering on rigged wholesale money rates. Also cited and fined were Citigroup, JPMorgan, Societe Generale, and RP Martin. The Swiss bank UBS and Britains Barclays bank were both forgiven their fines of EUR 2.5 billion and 690 million respectively, as a result of playing a key role in alerting authorities to the existence of the cartel, under a clause within the Commissions 2006 Leniency Notice. The antitrust penalties make for record setting fines. Manipulation of the LIBOR rate is perhaps the largest scandal to hit the finance industry ever. Expect more gigantic scandals related to FOREX derivatives and to Allocated Gold Account abuse. See the Haines Word Press article (CLICK HERE).

◄$$$ THE LONDON GOLD FIX HAS DRAWN CLOSE SCRUTINY, IN LONG DELAYED REACTION TO THE LIBOR PRICE FIXING SCANDAL. THE PARTICIPATING BANKS ENGAGE IN A FLURRY OF GOLD DERIVATIVE ACTIVITY DURING THE LONDON FIX PROCESS, BEFORE THE PUBLIC IS PERMITTED TO PARTICIPATE. THE COLLUSION AND INSIDER ADVANTAGE ARE OBVIOUS. THE GERMAN GOLD PRICE PROBE HAS EXTENDED TO DEUTSCHE BANK. $$$

With a delay over about 18 months, the fallout from the LIBOR bank scandal might finally have reached the London Gold Fix. Every business day in London, five banks meet to set the price of gold in a ritual that dates back to 1919. Information derived on those calls surely provides some participating traders an unfair advantage when buying and selling the precious metal. The UK Financial Conduct Authority has decided finally to scrutinize how prices are set in the $20 trillion gold market. The source of this revelation is an insider. The London Gold Fix is the benchmark rate used by mining companies, jewelers, and central banks to buy, sell, and value the metal. The London Gold Fix is published twice daily after a telephone call involving Barclays, Deutsche Bank, Bank of Nova Scotia, HSBC Holdings, and Societe Generale of France. Its posting essentially starts the golden day in the Western trading world. The potential for foul play is obvious and in the open. The fix procedure itself allows for gold to be bought and sold, taking a few minutes to more than an hour. They decide on the bid & ask gold price to open the day's trading activity.

It is becoming widely known, the subject of renewed controversy, that immediately after the fixing begins, trade activity erupts in gold derivatives. The details have been revealed according to research published in September. Four traders interviewed by Bloomberg News said that is because dealers and their clients are using information from the talks to bet on the outcome. This is the epitome of insider trading. Thorsten Polleit is chief economist at precious metals broker Degussa Goldhandel GmbH in Frankfurt, and a former economist at Barclays. He said, "Traders involved in this price determining process have knowledge which, even for a short time, is superior to other people's knowledge. That is the great flaw of the London gold-fixing." The participants can trade the metal and its derivatives on the spot market and exchanges during the calls. It is exactly like betting on baseball or football games during the game. See the Bloomberg article (CLICK HERE) and the Economic Times of India article (CLICK HERE).

Germany's financial regulator has demanded documents from Deutsche Bank as part of an investigation into potential manipulation of Gold & Silver prices. The probe from the German BaFin watchdog comes as regulators around the world step up their scrutiny of benchmark market price rigging. The BaFin officers have grilled D-Bank staff and made several on-site inspections in the past few months. Expect that the flipped VPs at D-Bank are working with BaFin closely. Finally the German regulatory bodies are bringing serious scrutiny to the precious metals markets. See the Financial Times article (CLICK HERE).

◄$$$ THE BIG US-BANKS ARE CRAZY OVER-LEVERAGED IN THE US-STOCK MARKET. THEIR LEVERAGE CONTROLS IN THE DERIVATIVES ARE WELL HIDDEN. THEY HOLD UP THE MAJOR STOCK INDEXES, AS LAST DEFENSE FOR THE PUBLIC INVESTMENTS IN MUTUAL FUNDS AND PENSION FUNDS. MOST ANALYSTS POINT TO BANK DERIVATIVES AS THE BIG PILLAR OF RISK, BUT THE WEAKEST LINK ACROSS THE FINANCE SECTOR FOR THE BIG US-BANKS MIGHT BE STOCK EXPOSURE. $$$

Colleague George from Chicago has been useful in explaining the MF-Global crime scene and scandal with coverup. He has also provided excellent data on futures contract logistics and agricultural layouts. It is his longstanding friend who serves as head of Fort Knox security, where nerve gas is stored (no gold). He offered a glimpse into the Wall Street participation in the US Stock market. The Wall Street banks are the biggest player, responsible for propping up the major stock indexes during a time when many institutions are reluctant to be too committed, reliant upon the obvious USFed QE indirect props as support. He described several sides to the Wall Street bank support, with huge attendant risks. What follows are his thoughts, with my edits.

The banksters hold monstrously large equity positions, which are hidden by extremely short-term derivitaves. They use S&P option puts against long positions, put in place for the few days covering quarterly ends. That effectively hides their plays from stock holders. The bank accounting lets them offset the reporting of those positions. Almost all of retail investors, the little guys, have pulled out of stocks. More and more people are drawing on their retirement money from 401k and IRA funds, not funding them. With the economy reeling, fewer contributions come in also. The rest of the world is increasingly cautious about any US$ investments, including stocks. They prefer direct investments in commercial property or elsewhere, as a monster foreign property purchase binge wave is underway, especially in New York and Los Angeles.

There is no way out. A massive stock index devaluation is coming upon a morning wakeup. Apparently a currency devaluation could be simultaneous. The USGovt might no longer be against it anymore, as they simply want to delay and control it, even exploit it. However, by definition, they will not be able to control it. They are bound next to the desires to steer the inherited power, and by their ability to control the events during a breakdown in the market. We are at a major pregnant pause in history, the clock ticking. Regarding timing, no clue here, but we are not talking several months and years. Instead it could be several weeks. Expect fecal brown matter to hit the fan by the end of the first quarter of 2014, when the USEconomy is seen flagging again, despite the increasingly rigged economic numbers and huge undercover spending for props. Another step down the ladder will be taken, with another downleg for the US Stock market. Somewhere in the mix is the trigger that trips the charade, still unknown. But the breakdown is noted in many insider conversations as being inevitable.

The Jackass has called it the global USDollar rejection, running parallel to what George describes. Every possible action will be taken in the West to avert the actual trigger, including war (see Syria), since the stock bust will cause additional bank failures. In a real sense, the lashing among banks includes not only derivatives but the stock markets. The focus has been on bank derivatives, but the clear and present danger might be more imminent with stock exposure. The public has been handed hopium, increasingly fostered on the deluded sheep. The crash site will extend beyond the United States to the West and Northern Hemisphere nations.

◄$$$ THE NEW YORK FED OPERATES THE US-STOCK MARKET CONTROL ROOM. ANOTHER AMERICAN POLITBURO COUNCIL CHAIR IS HARD AT WORK, FEW NOTICING THE PARALLEL TO THE OLD SOVIET UNION. TAMPERING WITH STOCKS IS OFFICIALLY NOT PERMITTED BY THE NYFED OFFICES. THE REALITY IS THAT THE NYFED HAS AN EQUITY RESEARCH TEAM WITH DIVERSE FUNCTIONS. A CONFLICT OF INTEREST IS LACED THROUGHOUT THEIR OPERATIONS AT THE HIGHEST LEVELS. $$$

The Russian word for Council is Soviet. The US financial sector is loaded with councils, boards, commissions, regulatory bodies, and cabal conference desks, even flash computer trading offices that seem very soviet. A peek behind the curtains at the New York Fed usually brings witness to scum, probably the most important Soviet Council. Pete Peterson was head of the NYFed for years, with an office on the second floor of the stock market, where he ran the Plunge Protection Team in real time. Calling it the Working Group for Financial Markets did not give it any less foul an air. Now High Frequency Trading robots at the NYFed office make the operation more streamlined and efficient. They put to use free digital money in what could be described as Wizard of Oz arm movements done behind the curtain. Although the USFed has denied it, financial columnist John Crudele has been arguing the case against the USFed for involvement in US stock market control and intervention. Tampering with stocks is off limits officially, but in the Fascist Business Model, no rules apply and certainly none are enforced.

The New York Fed is the only one of the 12 regional Federal Reserve Banks with a stock trading floor deploying highly sophisticated trading platforms. No photographs are permitted. Kathleen Kolchin works for the New York Fed doing equity research on the large cap US and European banks. She is on record stating that the New York Fed has an internal equity research team, where she is the senior analyst. Kolchin claims that she has "developed a sell-side style research platform, including work product branding, distribution strategy, and internal client marketing presentations." One should spot the red flag, since branding, distribution, marketing, and analysis of stock and bond prices should fall under Wall Street duties. The NYFed employs almost 3000 people outside its internal audit function. It has a past record of large scale interventions. The NYFed funneled over $2 trillion in below market rate loans to Citigroup in order to prop it up during the 2008-2010 financial collapse. That came on top of other government assistance totaling over $345 billion in equity infusions and asset guarantees.

Conflict of interest is ripe. The American public believes Wall Street traders are expert at earning outsized profits every quarter, when instead they are criminals neck deep in insider trading and market rigging. Sandy Weill was CEO of Citigroup at the time of the collapse and following events. He also served on the NYFed Board from 2001 to 2006. Chairman & CEO of JPMorgan Chase Jamie Dimon served on the NYFed Board from 2007 to the end of 2012. In addition to managing the monetary policy for the entire US Federal Reserve, the New York Fed also functions as an examiner of the big banks, the same banks whose chief executives sit at the top of its power structure. They will therefore find no wrong.

To expedite its monetary policy, the NYFed must engage in open market trading operations with primary dealers, which include all of the largest Wall Street banks. The President of the New York Fed is William Dudley, who comes from Goldman Sachs. He stunned Wall Street by accusing them of an apparent lack of respect for law, regulation, and the public trust. However, zoom in on Dudley's tailored suits. His wife Ann Darby was a former Vice President at JPMorgan Chase and has been receiving $190,000 per year from the bank as deferred compensation. The hefty payments will continue until 2021. The venerable corrupt fortress, the NYFed claims that Darbys fixed deferred compensation from her previous employer neither posed a conflict nor required a waiver, in their words. See the Wall Street Parade article (CLICK HERE).

## THANKS

Thanks to the following for charts StockCharts, Financial Times, UK Independent, Wall Street Journal, Zero Hedge, Business Insider, Calculated Risk, Shadow Govt Statistics, Market Watch, and more.