GOLD INVESTMENT REPORT
PRECIOUS METAL & ENERGY
CURRENCIES & STOCK INDEXES


* Intro Golden Nuggets
* Hurricane Fallout
* Reshaping the Financial World
* Growing Chinese Gold Base
* Gold War Heats Up
* Official Repatriation Demands
* Gold Price Bound by Corruption
* Miner Shock (Tax, Geology, Cost)
* Economy Stuck in Quagmire




HAT TRICK LETTER
Issue #104
Jim Willie CB, 
“the Golden Jackass”
22 November 2012

"Barter and Gold are identical. People who understand this also understand what barter is. Both barter and Gold allow for free re-valuation of currencies that are blocked by central banks." ~ Dieter Spethmann, Honorary Chairman of PEL-EX Trading Ltd and former CEO Thyssen (the Gold Standard will return on the back of Global Barter Systems like the numerous Chinese Yuan currency swap bilateral deals)

"Finally, all of this begs the question: was the German writing while under the influence when he posted the official Bundesbank retort, or was he simply truly ignorant about some very simplistic facts about gold, official gold reserves and the gold industry, which anyone could fact-check on their own in 5 minutes or less. Or was he simply being disingenuous in hopes that nobody would actually question his authority and thus, his [so-called] facts? Because if anything, the Bundesbank response only opens up even more question about the credibility, not to mention the validity, of the official German stance, which logically implies that the fundamental hypothesis: that German offshore gold is in good hands, is also debatable at best and null and void at worst. We hope that this ongoing dialogue between the German Central bank and its people continues, as it is one that is urgently needed in a world in which the old form of currency (fiat) is rapidly losing its credibility around the entire developed, and developing, world." ~ Ronan

"The per person wealth in the USA is now below the per person debt level. The government debt level at $16 trillion is now above the Gross Domestic Product at $15 trillion. The nation is bankrupt!" ~ FrederickB (subscriber from California, but he actually means insolvent since it is plenty liquid from the central bank on Weimar steroids in the print shop)

"When you see that men get rich more easily by graft than by work, and your laws no longer protect you against them, but protect them against you, then you may know that your society is doomed." - Ayn Rand (Atlas Shrugged)

"My esteemed fellow gold warrior James Turk of Gold Money made an astute observation. The new Food Stamps recipients numbered 450 thousand in October, over four times as many as the supposed new jobs created at 100 thousand for the month. The job growth is fiction while the quest for food is real. The system is degrading rapidly, as the welfare state expands like a monster but its base to provide for it is shrinking rapidly. The implosion continues apace, with no potential to stop it." ~ the Jackass

Editor Note: The Monetary War has expanded (more like flourished) in the last two years, opening a major front in the Gold War. With the ongoing global financial crisis, no resolution has come since no solution has been pursued. Hence nations are looking for their Gold, the only true financial asset. The sovereign bond markets have turned into a paper mache travesty. The story on the Gold market is not about price, a main Jackass point made for a couple years. A divergence is in progress between the physical Gold price and the paper discovery price posted on the COMEX, replete with profound corruption. It is overrun by naked shorting and account thefts. The story is on the battlegrounds, not the price. When the COMEX and LBMA shut down from lack of inventory, lawsuits, and legal investigations, no price will be posted. The new trade systems will feature a Gold core, with radically higher price enforced in a quantum leap. This month in celebration, no long-term price chart for Gold or Silver will be provided. Those interested solely in precious metals price are diverted from the true battles underway. Both metals have had breakouts interrupted by repeated naked shorting, sale without metal. A climax of corruption is occurring.

## INTRO GOLDEN NUGGETS

◄$$$ FOREIGN PURCHASE OF USTBONDS PLUNGED 96% IN SEPTEMBER. THE ITEM ESCAPED THE MAINSTREAM NEWS. BOND INVESTORS ARE REACTING TO THE USFED BOND BUYING PROGRAM. THE USFED IS FAST BECOMING THE SOLE BUYER OF TOXIC USTBONDS. WITNESS WEIMAR AT WORK. $$$

Either global bond investors believe the USTreasury Bonds are toxic from unlimited central bank bond monetization, or else they need not purchase since the USFed will buy it all from the Weimar rooms. International purchases of US financial assets plunged 96% in September. The official spin is that confidence grew since Europe was beginning to solve its debt crisis. What incredible nonsense, horse puckey, and cow field apples. Net buying of long-term equities, notes, and bonds totaled $3.3 billion during the month, down from net purchases of $90.3 billion in August, according to the USDept Treasury. The key factor was obviously the QE3 announcement. The Federal Open Market Committee said on September 13th that it would undertake a third round of Quantitative Easing by purchasing mortgage backed securities at a pace of $40 billion per month until labor markets improve substantially. The next day they quietly doubled the volume purchases in a less publicized meeting. Any rise in optimism over Europe, which was indeed observed, was grossly misplaced. It has become a contest to see which sovereign bond paper has the lower acidity as measured by pH levels.

Including short-term instruments such as stock swaps, foreigners bought a net $4.7 billion worth of US$-based securities in September, down from net purchases of $63.5 billion the previous month. China bought a mere $300 million worth, a trifling amount compared to normal months. Such pace would gather a mere $3.6 billion in a full year. They remained the biggest foreign owner of USTBonds with holdings of $1.16 trillion. Japan also grew its holdings by a robust amount, with another $7.9 billion for the month. It is the second largest owners of USTBonds with holdings of $1.13 trillion. Hong Kong, counted separately from China (because it in quasi-independent), decreased its holding by $6.0 billion to $135.7 billion. Yet these nations sold atop small new reapings of toxic paper harvests bearing US labels. Foreigners sold a net $17.3 billion of USTreasurys in September, four times what they bought. See the Bloomberg article (CLICK HERE).

◄$$$ TREASURY SECRETARY GEITHNER SUPPORTS ELIMINATING THE DEBT CEILING FOR THE USGOVT. HE IS A CHAMPION OF HYPER MONETARY INFLATION AND FISCAL LARGESSE, A CLOWN TOO. HE WILL BE MISSED IN THE NEXT FOUR YEARS ONLY FOR THE OPPORTUNITY AT MOCKERY. $$$

Timothy Geithner will go down in US modern history as the smallest man to occupy the Treasury Secretary post, without argument. He expects the fiscal cliff to be avoided within weeks, which would remove a cloud over the USEconomy. It is within our grasp, a relief felt across the nation from his words. Geithner and President Obama began a new round of deficit reduction talks last week with top Republicans and Democrats in the USCongress in a bid to avoid the combination of $607 billion in automatic tax increases and spending cuts that threatens to throw the country into a recession next year. Heaven forbid spending cuts, especially military cuts. Civilian deaths in foreign lands would be curtailed. Geithner advises we live within our means, prudent words again from the diminutive figure. He estimates the USGovt needs $1.5 trillion to $1.6 trillion per year. Heck, they can seize that from private pension fund contributions, and make up the difference by selling a warehouse full of cruise missiles on the black market.

The administration must negotiate to increase the federal debt ceiling. The USDept Treasury expects to reach the limit in the month of December. It can borrow (raid) federal accounts by its usual methods of extraordinary measure so as to meet its payment obligations until early in 2013. During a Bloomberg Television interview on "Political Capital With Al Hunt" to air this weekend, Geithner urged that the debt ceiling should be eliminated, the sooner the better in his words. He did not say the debt limit problem should be eliminated by means of another limit hike. With no limit in place, the USDept Treasury could make numerous secretive bailouts of big banks, redeem their toxic mortgage bonds, even their outsized leveraged derivative machinery, and inform the public later how they saved the nation and saved the world. With no debt limit, they could extend $billion loans at 0% and no repayment schedules to the elite syndicate corps. Geithner has agreed to stay in his post until mid-January. He has been fired by Team Obama, which appear to have some new masters for the Obama II Admin. It could be a kinder gentler team of fascists, but probably not. Team Obama is reportedly to dispose of Hillary Clinton as Secy State. The purge of the USMilitary high command appears to be joined by removal of financial and state heads. See the Bloomberg article (CLICK HERE).

◄$$$ THE US-STOCK MARKET HAS SUFFERED SIGNIFICANT WEAKENING. ITS INTERNALS ARE IN DREADFUL SHAPE. BE ON THE LOOKOUT FOR A BIG DECLINE, ONE EXPLOITED BY WALL STREET FIRMS. WITH THE ELECTION PAST, THE PRIZE TAKEN, NO MOTIVE EXISTS FOR AVOIDING A DECLINE. THE WALL STREET MAESTROS COULD EASILY STAGE A MASSIVE INSIDER THEFT FROM THE MAJOR INDEXES. THE SIGNS ARE CLEAR THAT ALL IS NOT WELL WITH THE FINANCIALS, SEEN IN STOCK VALUATIONS DURING A PERSISTENT RECESSION. $$$

John Hussman commented on the performance of the US stock market during the week of the Obama re-election. He wrote, "Last week, the stock market experienced some significant damage to internals (breadth, leadership, price/volume measures, etc). As a result, our estimates of prospective return/risk have plunged lower again, to what is now the second most negative figure we have observed in a century of data.The September 14, 2012 weekly close of 1465.77 continues to mark the most negative estimate. My intent in these weekly comments has always been to share what I am looking at, and what our analysis of the economy and financial market suggests, based on extensive historical data and every analytical tool we can bring to bear. There is no need to present the case as any better or worse than it is, but the simple fact is that our return/risk estimates for stocks dropped into the most negative 1% of historical data way back in March of this year, and the estimates we have seen since September have been even more extreme."

My expectation is for a possible sizeable swoon in the major US stock indexes. The Wall Street engineering crew can easily exploit a big decline by shorting it, and pushing it lower, using leveraged trades to capture more of the assets locked in trading accounts by the unaware and unsuspecting public. The internals warn of such a decline. A quick observation from the London Siren, who although works in the London financial district, was educated in the United States and is very familiar with key events and angles in US financial markets. He makes astute remarks. He commented on Wednesday last week, "Since the election, Goldman Sachs and Morgan Stanley are both under-performing the bank index (BKX) which is under-performing the SPX major index, which is under-performing the Gold price, which is under-performing Silver. Furthermore, everything certainly is not ok in Lower Manhattan. A big powwow is taking place between Obama and corporate CEOs today at the White House. Wall Street was not invited. Things are really stirring up, but hardly noticed." Notice a nice relief rally last week, based upon nothing but a raid on the shorts, forcing them to cover.

◄$$$ A BANK TELLER AT BANK OF AMERICA WAS UNAWARE WHAT A SILVER CERTIFICATE IS, WHEN BROTHER JOHN TRIED TO REDEEM IT FOR SILVER COIN. $$$

Hilarious if not so tragic the level of ignorance. In the 1980 decade, the Jackass entered into a curious debate with a bank officer in suburban Boston. My point was that the mortgage rates were tied to the performance and fluctuations of the 10-year USTreasury Bond. The poorly informed banker insisted on the linkage to the 30-year bond since the standard mortgage was for 30 years. Some proof brought about his embarrassment. The story was recalled when reading a story regarding a vain attempt to pull silver out of a big US bank. Brother John is a warrior with a website. He approached a Bank of America teller window and requested redemption of his older Silver Certificate. Surely a collector's item nowadays. The teller did not even know what a Federal Reserve Note was. The BOA apparently does not honor bearer demands, which is the law. The Silver Certification was not converted to Silver, as Brother John walked away, proving a point. The ignorance of the American populace is overwhelming. While not to belittle the Bank of America employees for their lack of knowledge, he plans to conduct more research and to start their education soon. See the Brother John article (CLICK HERE).

◄$$$ DEBT PER CAPITA IN THE UNITED STATES IS 35% HIGHER THAN THAT OF GREECE. THE CONTROL OF THE USDOLLAR PRINTING PRESS HAS ITS ADVANTAGE, BUT WITH OTHER EXTREME RISKS. THE UNITED STATES IS GREECE TIMES 30 IN SIZE. ITS INTERNAL DEBT IS ACTUALLY WORSE. $$$

The USGovt national debt and US individual debt picture is gruesome and ominous. The US network news prefers to portray Europe as a basket case, but their motive is to lift the US image by pushing down the foreign image. The tactic is thin and amusing. The US debt crisis is accelerating in a prolonged end game. The United States is the ultimate PIIG. To be sure, Italy, Spain, and France are mired in a sovereign debt quagmire. But the United States and United Kingdom are actually worse off, standing on weak platforms on the same stage. The US debt on a per-capita basis is an astonishing $53,378 which is 35% higher than that of Greece. Notice that Germany is not on the list of troubled nations, as it did not forfeit its industrial base to Asia like morons.The Americans gleefully forfeited theirs in search of lower costs. See the Silver Doctors article (CLICK HERE).

◄$$$ IOWA FARMLAND SALES SET A NEW RECORD AT $21,900 PER ACRE. THE PURSUIT OF HARD ASSETS DOES NOT ONLY INCLUDE PRECIOUS METALS AND ENERGY DEPOSITS. THE DROUGHT HIT THE CENTRAL REGION BADLY, BUT SPARED IOWA. $$$

The sale of 80 acres of crop ground in northwest Iowa topped a previous record of $20,000 per acre set last year. Both are located in Sioux County. A cool $21,900 will buy an acre of farmland in Sioux County. An 80-acre parcel sold at auction on October 25th concluded for $21,900 per acre. The amount topped the old Iowa record of $20,000 per acre set last year in the same county. Witness the Iowa farmland boom, further evidence of the commodity rally to pursue hard assets. It boasts huge output, perhaps among the most fertile rich land on earth. A comment is warranted about the drought of last summer. Iowa was somewhat spared. Mike Duffy is an Iowa State University Extension economist. He said, "Iowa did not get hit as hard as people thought we would when the drought struck last summer." The ISU institution is home to some fine statistical brains, with a long history of strong statistical experimental design work. He cites increases in gross farm income as a key factor in rising land values in 2011, but points to other financial reasons for the boost in land values, including low interest rates. Read that as a proxy for commodity hedging against the central bank hyper monetary inflation policy. See the Farm Progress article (CLICK HERE). The father of the Jackass was born and raised in Iowa. We kids call him the corn-fedder professor sometimes. He laughs proudly. Thanks to Captain Steve for the story.

◄$$$ AMERICANS ARE SO EASILY DUPED AND DECEIVED AND MISLED ON THE FINANCIAL RISKS, ON DEFICIT IMPACTS (EVEN CALCULATION), ON INFLATION RISKS, ON ASSET WEALTH RISK, ON CURRENCY RISK, ON GOLD VALUE, AND ON TRUE SAFE HAVEN LOCATION. THE NATION HAS AN UNUSUAL RENEGADE PIONEER RUGGED PAST. BUT IN THE RECENT DECADES, DECEPTION AND CONTROLLED MESSAGES HAVE WORKED WITH HEAVY AGENCY INFLUENCE TO PUSH IT TOWARD SYSTEMIC FAILURE. $$$

The United States has been slipping badly over the last two to four decades. The industrialized world moves along, but the US backslides. Many clients have inquired for an opinion to explain. Hard to say precisely, because Americans as a nation were amassed as rebels, pools of huddled masses, human refuse from persecuted lands, and escapees from horrendous locations. In early years, the colonists and frontiersmen and homesteaders and those wishing to start anew were not from the elite crowd, except for the Founding Fathers. They were often a wild bunch, an undisciplined gaggle seeking fame and fortune in the New World, usually seeking a saloon before a library. They lacked refinement. They were commoners, with rugged ways of life, hard two-fisted drinkers often. They were not as intelligent as the mature older societies they departed. They were grown from a colony of misfits, outcasts, pirates, slavers, pioneers, and drunks, even indentured servants.

Nowadays the American people seem betrayed, confused, and disillusioned, as they cling to false pereceptions in order to maintain requisite feelings of safety and happiness and stewardship. Like the USGovt is protectors, like Wall Street encourages business, like central banks keep the monetary order, like the USMilitary promotes freedom and protects liberty, like the news networks report the news objectively. Many among the educated hold strange illogical assumptions rigidly. Many veterans focus on the soldiers who sacrificed, and react, obey high command, but seem to pursue vengeance rather than investigate the first shots fired to trigger events. Many economists are badly educated, and remain committed to failed Keynesianism, often funded by research grants from within the system.

Other demographic, geographic, and social reasons are important factors. The nation is isolated by two grand oceans, a vast land, and one universal language that precludes many from learning a second language. The nation in my view has the best entertainment sector anywhere (sports, movies, music). But the nation has a terrible foundational plan for public education, funded by property tax. It has resulted in a dumbing of the middle class masses. Education for the wealthy will always be a constant in plentiful availability. The Jackass was lucky, with a strong parochial school education (not without physical abuse and in high school some sexual abuse), which enabled me to continue my math & science pathway. A fellowship for most of the graduate school years was a rich reward, extremely appreciated by my alma mater Carnegie-Mellon University. Two professor relationships remain active. Memories will last forever. But even CMU has captured lucrative defense security software contracts that seem bothersome.

A major reason why the United States suffers must be mentioned. For the last century, the nation stood as a reminder of how free enterprise and civil liberties made for a powerhouse of wealth and hope. The banker cartel despised the renegade nation for its success outside the banker control. The nation in the last generation has suffered at the hands of its security and intelligence agency network of countless organizations. Many are tainted, some badly corrupted. The lead dog agency from Langley has gone absolutely and totally out of control, unchecked by law, beneath the checks & balances in the architecture of the USGovt itself. Its past directors justified the control of narcotics in the defense of liberty. It controls content for news networks and major magazines. It defends against revelations of the 911 events which enabled it to take control of the USGovt. In the process it has transformed into the largest crime syndicate in world history. It renders great harm to the population, concerning liberty, wealth, freedom, and economic opportunity. The USMilitary has forced heavy war costs that have endured, acting like a gigantic weight, as half the national debt is tied to defense and security. The incremental costs to security since 911 are enormous, with little impact except to domestic citizen liberties. History will not be kind on the assessed reasons why the United States marches toward systemic failure. It just aint that smart anymore, and its leaders have betrayed the nation.

◄$$$ NEW HARD ASSET (SOUND) CURRENCY MUST BE BROAD AND COVER THE MAJORITY OF GLOBAL TRADE, OR ELSE IT IS A VICTIM OF ITS SUCCESS FROM A FAST RISING EXCHANGE RATE. THEREFORE WHEN A VIABLE SOLUTION TAKES ROOTS OUT OF EXPEDIENCE IN ORDER TO MANAGE EFFECTIVELY THE GLOBAL TRADE SETTLEMENT SYSTEM, A QUANTUM LEAP WILL OCCUR. IT MUST BE IN WIDESPREAD APPLICATION FOR THE PROPER STEP TOWARD OVERCOMING THE CRISIS. BIG SUDDEN CHANGES ARE COMING SOON, WITH BIG PRICE MOVES UPWARD FOR GOLD & SILVER. $$$

The logic is simple. The forces are enormous. The pressures are building. The rules behind the Competing Currency War are becoming plainly evident. The effects are in plain view. The motive is to protect domestic export trade. The obstacles for implementing a viable solution are formidable. All major players are encouraged to join the Paper Chase game of fiat currencies without substance or collateral. The punishment for breaking away from the paper pack is a fast rising currency, which quickly wrecks an economy. Exports evaporate. The Jackass recalls a discussion with an Euro Central Bank advisor back in 2008. My contention was that the EuroCB would join the USFed and send interest rate down toward 0%. He disagreed steadfastly. My point was simple, that not joining would send the Euro to the heavens, like far above the 150 level. He stuck to prudent management as the ideal, but was incorrect. The Euro rose to 160 as my forecast indicated. The Europeans could not continue the prudent path on monetary policy, since they shot themselves in the export trade foot. The EuroCB cut rates in succession and furthermore, they joined the QE movement indirectly, even struggling for money printing control.

Any vestige of common sense by former turkey leader Trichet was tossed out. Any vestige of resistance by current turkey leader Draghi himself in his first month of idealist pronouncements was overrun quickly. The EuroCB President Mario Draghi lusts for printing power authority, and is obtaining it. The victim will be European capital equipment and businesses, sacrificed at the central bank altar. The ECB policy makers on September 6th made an historic agreement. They agreed to an unlimited sovereign bond buying program to wrest control of interest rates in the EuroZone in order to attempt to stem the crisis in the region. ECB President Mario Draghi has called the Euro currency irreversible. He said the new government bond purchasing program will have effective conditionality attached. Its monetization nature is hidden by the Dollar Swap Facility, running on steroids in the basement. When the Euro currency finally fails, Draghi will suffer great ignominy.

The tragic part of the new currency argument is that unless a new currency has other equally strong currencies to join, where they cover the majority of the global trade, they will be victims of their success with fast rising exchange rate. They must all be hard asset currencies together. Call it the Critical Mass Axiom of Sound Money Conversion. It is a weird world with currency. Either the major central banks all switch fast to sound currency regimes, or they all die from no imposed solution. Any isolated departure that attempts to follow a prudent path will be slapped down since the success would not be broad enough. This is an extremely important point, methinks. It means that no solution can come unless it is broadly applied in a global hard asset currency system. No paper currency regime can replace the USDollar paper currency. The quantum shift will be radical when a serious solution will be attempted. It must be a Paradigm Shift. It will act like a financial tsunami, wrecking the paper structures easily. It is urgently needed, but desperately avoided.

## HURRICANE FALLOUT

◄$$$ BILLIONS IN BEARER BONDS IN MANHATTAN VAULTS COULD BE LOST TO HURRICANE WATER DAMAGE. REDEMPTION COULD BE DIFFICULT, UNLESS AN INSIDER WITH INFLUENCE. ASSESSMENT OF THE VOLUME IS HARD, BUT THE BONDS BEAR EXCREMENT IN A LITERAL SENSE. $$$

The entire DTCC story about stock certificates for millions of personal and corporate stock accounts being flooded is false. The iron mountain vaults for such certificates is safely located in West Virginia, so claims a person who is confident about his information. However, the bearer bonds stored in Lower Manhattan are at risk. The flood waters from Hurricane Sandy inundated a 10,000 sqft underground vault on Water Street (ironic name) in South Manhattan. It apparently soaked 1.3 million bond and stock certificates. My focus is on bearer bonds that function like cash, as the great majority of stocks are not handled this way. The contractor working for the vault owner is feverishly working to restore the paper for the owner, the Depository Trust and Clearing Corp. The value of the jeopardized bearer bonds in question is estimated at $70 billion by a source. Owners are very quiet about stored wealth. Member firms have not responded except for Goldman Sachs, whose spokesman confirmed that his firm stored bearer bonds in the DTCC vaults, going on to acknowledge that redemption would be nearly impossible if destroyed. GSax claimed their risk is under $1 million, later corrected to under $10,000. What a relief, and probably a lie. They usually lie when the speak at all. To qualify for VP and partner at GSax, a documented case of fraud must be shown on a resume.

The bearer bonds act like money, drenched in diesel and sewage water from three sub-basements. Billion$ worth are soaked, being packed for processing in restoration. Some brief history. In 1990, two thirds of the 32 million notes in the vault were bearer bonds, according to DTCC records. Even as bearer bonds matured and the notes were removed, the vault continued to hold 5.4 million bearer bonds at late as 2003. Many have a speckled past, used to conceal wealth, to hide from taxes, without formal registration, usable like cash. The irony is that the markets with prevalent toxic bond paper finally has a case of bonds with excrement on them. See the New York Post article (CLICK HERE).

◄$$$ HURRICANE SANDY GIVES A CREDIBLE FACE FOR REFUSAL TO INSPECT NEW YORK FED GOLD VAULTS. THE ENTIRE LOWER VAULT AREA WAS FLOODED. THE NEW YORK FED GOLD VAULT HAS GONE DARK, EVEN CANCELED GUIDED TOURS TO THE PUBLIC. $$$

The New York City environs is underground and under the sea level. Not too intelligent to place extremely valuable vaults there for storage, but the location is certainly in close convenient proximity to the toxic USFed paper factories and Wall Street fraud centers. In the aftermath of Hurricane Sandy, the financial world is reconsidering just how smart it is to place critical pieces of infrastructure in the area. Tours have been canceled. Some 25,000 visitors tour the bank vault each year. Those visits have been canceled indefinitely due to the vengenace of Hurricane Sandy. The submerged Citigroup building at 111 Wall Strett will not be functional for several weeks. Two critical Verizon Network Communications facilities suffered extensive flooding during the storm. The estimated (but never audited) 15 million pounds of gold bricks stored at the New York Fed are under closer scrutiny. They are situated in vaults 80 feet below street level, and 50 feet below sea level, on the bedrock beneath Manhattan. With electrical power out, the high powered security systems might have gone dark. One is left to wonder if the German or Dutch gold bars will go missing, blamed on the big storm. Just imagination gone wild. See the Business Week article (CLICK HERE).

◄$$$ ANGELS DO NOT PLAY THIS HAARP. THEY PLAY GOD. $$$

The storm is the first hurricane to slam the NorthEast in memory. Some point to the HAARP weather control device to explain the inexplicable. One Hat Trick Letter subscriber who visited Costa Rica in 2010 has a trusted friend and colleague who also worked on defense projects. The friend served as researcher on the HAARP device over ten years ago, an eyewitness to its validity. It is real. It works. The device bears a signature, but not for the ignorant or those with closed eyes. With a nuclear power pack, high energy is delivered with microwaves, heating up the atmosphere, made more conducive by seeding seen in chemtrails. It might be responsible for creating Sandy, as numerous tracking sources reported extreme prolonged elevated microwave activity for two solid weeks during September in the South Atlantic. The Jackass could not care one iota about the doubts by the scientifically ignorant and the otherwise disinterested parties who live in an alternative reality. It is amazing that they believe in arthroscopic surgery or targeted genetic therapy or bio-engineered insulin product from bacteria, or even the cell-phone. They probably believe chemtrails are airline exhaust or bird feces.

My patience is nil for such people who show more scorn and contempt than intellectual power and knowledge of the scientific world, or basic investigation. The psychology profession calls it contempt before investigation. My life and paths have encountered far too many people holding a college degree but carrying miniscule knowledge in either math or science (my loves). The Tesla weapon has come to life. It was given a maiden test ride to steer Hurricane Katrina in 1995. It probably has been put to use elsewhere. For more information, do not send me emails. Research HAARP, the High Frequency Active Aurorial Research Project in the public domain, and follow the tracking website for its easily monitored footprints. Parallel striations in weather Doppler maps around big storm centers are telltale HAARP effects. They act like lanes on a highway to steer the air mass with radiated heat. The photos below do not in any way shape or form represent normal fields. Time to wake up!

 

## RESHAPING THE FINANCIAL WORLD

◄$$$ HIGH BOND SPREADS ARE PRICING IN CONSIDERABLY MORE PAIN THAN INVESTMENT GRADE BOND SPREADS. THE EXPECTED BENEFIT FROM USFED BOND PURCHASES IS NOT SHOWING UP AMONG THE MARGINAL BONDS. THEY STILL FLASH WARNING SIGNALS. $$$

Veterans are well aware that Credit Default Rates forewarn of problems in the credit markets, and the high yield bond yields forewarn of imminent problems in the overall stock market. These signals foretell of economic recession and extreme problems like liquidity drains. Credit anticipates and stocks confirm. The high yield (junk bond) signal is flashing red. Barclays has brought attention to the ratio of High-Yield to Investment-Grade bond spreads. It has jumped to its highest in three years. The investment grade index has been dragged lower by QE impact from bond monetization of the mortgages, forcing a rotation up the spread spectrum, all very artificial. Usually the central bank activity would lead to rising values of more volatile bonds, often called the high betas. That is not happening.

Something is wrong in central bank land, as paper wizards are frustrated in controlling the planetary forces. With call constraints on high-yield bonds extending from the artificially low short-term bond yields, an extreme price dislocation is underway. The high yield bonds cannot rally. They will likely render harm to investment grade bonds, regarded as a crowded trade with too many participants thinking the same way. The USFed is gradually destroying the bond market inter-dynamics. Credit Default Swap rates are not moving much, as perceived systemic problems have abated due to the free money spigot. Bonds are in trouble outside of the sovereign protective coddled arena. The junk end of the bond market is flashing a big warning signal. Few seem to notice. See the Zero Hedge article (CLICK HERE).

◄$$$ THE LONDON SIREN OFFERS GUIDANCE ON THE EVENTUAL USDOLLAR DEVALUATION. HE EXPECTS A MAJOR CRUNCH TO OCCUR SOONER RATHER THAN LATER, WITH A DOMESTIC USDOLLAR DEVALUATION OF OVER 50%. HE EXPECTS THE INTEGRITY OF FOREIGN HELD US$-BASED ACCOUNTS TO BE PRESERVED. HE EXPECTS REDEMPTION OF PRE-DEVALUATED USTBONDS TO COME IN THE FORM OF BADLY DEBASED GREENBACKS (USDOLLARS). THE SETTLEMENT WILL FINALLY REVEAL THE BROKEN NATURE OF THE ENTIRE FINANCIAL STRUCTURE, WITH EFFORTS MADE TO CONCEAL THE DEBT RESTRUCTURE, OTHERWISE KNOWN AS A DEBT DEFAULT. $$$

A correction to a story that was posted for two hours last Sunday night at the original posting of the Money War Report. It contained an error from a miscommunication, my fault, where a conclusion was made in the extended error. When the term GB was used, my first impression was Great Britain Pound, but the London Siren meant GreenBack. An awkward Jackass misstep. The following are deep cutting thoughts by the London Siren, a financial sector staff employee in London with access to information on many key markets. What follows are his thoughts presented without quotations, only my edits. He sees many events in progress. On both counts, expect at least a 50% level of devaluation of domestically held USDollars, and the preservation of the USDollars held internationally. A firewall will protect foreign holdings. Foreign accounts will face no losses, merely forced into other viable currencies in resolution.

Operationally, from an IT perspective, it will essentially mean moving the decimal point by one place for the pricing of most things within the United States! He is being facetious, citing a devaluation gone amok. But the process will come slowly. If the US is similar to Spain and Greece as most people realize, expect the broad range (65% to 90%) for a devaluation. Look at some past devaluations. A few big ones come to mind, like Russia, Asia, and Brazil in 1997/98, Turkey, Vietnam, Iceland, all at least hit by 65% in magnitude. Any person who owes money today in USDollars will not receive any relief whatsoever from the devaluation. Instead ability to pay back debt will decrease, due to being redeemed in badly debased USDollars. Their value will continue to fall as price inflation stuns the United States, with widespread shortages. Income will be dealt deep damage.

Obama has been tasked with the job of presiding over the USDollar devaluation, one of his main missions. The USFed may remain but its private money will be history. Their balance sheet is a wrecking field with toxic vats scattered. It is game on and the chips will fall into place in due time, probably sooner than many expect. The USFed formal USGovt contract comes up for renewal in January 2013. Many sharp folks speculate that the USFed might be folded under the USDept Treasury. That would enable a vast monetization project with redemption rescue bailout for their $3 trillion balance sheet loaded with toxic paper. They have served as buyer of last resort, thus accumulating the lowest quality bond assets in existence within the US$ sphere. The Jackass doubts the USFed will come under the USGovt financial ministry. It will continue on its hyper monetary inflation mission, and likely spin out of control as it monetizes the entire assortment of indebted USGovt appendages (like FHA, Food Stamps, USPostal Service).

Jim Sinclair expects the 2015-2016 timeframe to be crunch time for the USDollar devaluation. If the wealthy in the United States start selling USTreasurys and buying Gold, the main event will happen much faster than even the most aggressive forecasts. Expect some very unusual historical events to come in the next several months. The USFed will not come under strain on its present course, since so destructive. Its owners are angry, frustrated, and might not be permitted to executive their end game plan. An event driven scenario is underway which cannot be stopped, extending the worldwide implosion of paper money, paper assets, and paper management regimes. The USFed will not be in control of its destiny.

The Jackass is largely in agreement that a sizeable domestic devaluation is near, but a foreign held US$-based account preservation will be the norm. The London Siren did not offer details on preserved foreign-held US$ accounts, only saying their value would be kept intact. This viewpoint is in synch with my best source who has been a guiding light through a 4-year storm with a phenomenal track record. In other words, a bank account in Latin America or Switzerland arranged in US$ terms (full accounting) will not lose any value. It might be forced into another currency at a fair exchange rate. The dichotomy is consistent with the expectations of The Voice, whose calls and viewpoints have been spot on for over four years. A grand wake-up call comes to the American people, but only a portion will even recognize it when the hammer hits. They will be too busy searching for milk & bread, gasoline, and other supplies, and hearing grand distortions of facts on the news.

◄$$$ MANY EVENTS ARE IN PROGRESS TOWARD A MORE DEFINITIVE SOLUTION. THE LEADERS AMONG THE ELITE ARE AT WORK. THEIR HIDDEN HAND ACTS LIKE GIGANTIC EARTH MOVING EQUIPMENT, EXCEPT THAT THE CONSTRUCTION IS WITH GLOBAL FINANCIAL STRUCTURES. $$$

A contact with an ear to the ground on the ultimate wealthy elite of the world added a comment. In past conversations like in 2008, he pointed out that 30 multi-billionaires controlled the table of wealth on decisions. Ten were evil, ten were good, and ten were neutral to be swayed to create the majority for decisions to be made. For instance, Rockefeller is evil, Bilderberger is evil, Bill Gates is neutral, certain unnamed Eastern elite are good, etc. The evil cabal pursue a global genocide plan. He has added more light on the power table. He wrote recently the world has been run for centuries in a hierarchical system with the elite serving on a committee like a board. He explained in layman terms. It is 9 people who call the shots. The 9th occupies the chair, who only intervenes if the other 8 do not properly align themselves according to agreed upon objectives. Right now it is not a happy band of brothers around that table, since the system has broken and solutions are avoided. Three additional people sit behind each primary elite member at the table, kind of apprentices in service. Only one will ever make it to the table. Terms run for 15 years in a very sophisticated rotation system that ensures absolute continuity. It has been like this since recorded history. They are executing a complex agenda as the world turns during this unresolved crisis. Events are in progress that cannot be stopped until true change results in a grand paradigm shift, of extremely disruptive type. Many apparent leaders in politics and banking are simply following orders, carrying out actions on stage.

◄$$$ THE VOICE SPOKE ON THE ONGOING POWERFUL FINANCIAL STORM ABOUT FUTURE EVENTS. CONSIDER A GLOBAL TEMPERATURE READING. BIG CHANGES ARE COMING. MANY LEADERS DO NOT SEE THE CRISIS PROPERLY. THE YOUTH OF TODAY ARE AN IMPORTANT INFORMED FACTOR. TIMING IS DIFFICULT BUT PREPARATION IS URGENT. PRECIOUS METALS ARE THE LIFEBOAT SINCE PAPER WEALTH WILL CONTINUE TO VAPORIZE. THE WEST SOLD THEIR LIFEBOATS LONG AGO. $$$

What follows is taken from a few messages passed over a single day in a stream of thoughts to guide and recalibrate impressions and perceptions. They were evoked by the Jackass and a couple key colleagues, like The Voice was holding court. They come from my European gold trader contact, so named affectionately. Minor edits are given to enhance flow without altering his message without quotations. The people in power have de-facto lost control and require guidance with direct commands. The breakdown climax is a bit like waiting for the financial Hurricane Sandy storm to make landfall. Many people in power seem uneducated as to what is unfolding in a stunning display on the issues that are of crucial importance. The majority of bankers are mere foot soldiers, often as clueless as the top puppet politicians. Even people out of the loop are starting to get a funny feeling that something is terribly wrong and that the current system will have to yield. In Germany people in droves are sell all their investments and turning to residential real estate and precious metal instead.

Interestingly, the mortgage volume on the banks balance sheet has not changed. People are often buying with cash and not taking out mortgages. The real estate prices in AAA locations are increasing like crazy, the safe havens. Property without debt is a safe haven. Unlike Americans, the Germans have the Weimar gene that leads them to remember what happened in the 1920 and 1930 decades. The Euro Monetary Union is going to break apart, with full assurance as we have discussed. Its demise could be dragged out in time delay. A high risk factor must be noted on disorder. The youth unemployment in Europe and elsewhere is way up, dangerously so, along with deep frustration. Today's youth is well educated, computer savvy, and operate within connected networks all over the world. They are obtaining real-time information about what the global situation. Recently, the Ford workers from Belgium was stormed where its factories were shutting down. Also, angry workers stormed the Koeln Ford factory in Germany, causing considerable damage. The disorder will grow worse over time, on an order of magnitude like seen in Greece at its worst moments. Smart well run companies are shifting out of lines of businesses that require cooperative work with other groups and organizations. They are structuring and running the businesses with the priority of getting things done.

The food chain is key. The agriculture and food processing is a local business. It cannot go beyond a radius of 300-400 km radius in its structured distribution. The system as we know it will collapse, never to return or be rebuilt. Something totally new in global commerce will be coming, or else we shall see some old established systems like formalized barter make a comeback. It is a stable fair system without the curse of stored notes as wealth to build in grotesque imbalances. Timing of events as always is difficult. Events are accelerating along with the breakdown and desperation in applying worthless patches, with recognition of the futility behind most solutions. People must organize in a way that major disruptions do not cause severe impact. The chance of some cataclysmic events is high. Survival even in finances is all about being prepared and not freezing in inaction from shock. Those who are well invested in Gold & Silver physical vehicles will fare well. Those who defiantly and ignorantly cling to paper investments will see their wealth vaporize in the massive series of storms to serve as climax. They will be the serfs of tomorrow.

## GROWING CHINESE GOLD BASE

◄$$$ CHINA HOARDS ITS GOLD, AND IMPORTS A GIANT SLICE OF GLOBAL OUTPUT. THEY ARE PREPARING FOR THE NEXT CHAPTER. THE WEST IS NOT, AND THUS SHOWS ITS TREMENDOUS VULNERABILITY. EMBRY OF THE SPROTT FUND BELIEVES CHINA MIGHT BE TAKING ONE THIRD OF ALL THE GLOBAL GOLD OUTPUT. CHINA ALSO HAS A HIDDEN CARD. $$$

China is likely importing one third of outside gold production, the mining output of the rest of the world. So claims John Embry of the stellar Sprott Asset Mgmt firm. He expressed his opinion on an interview hosted by King World News. He marvels at the pace of the Chinese accumulation of gold, a nation on a mission to become a world leader. The road will be paved in gold bought from the misguided West. The US/London roads are being corroded by acid, emitted from ruined putrid decomposing rot of paper money and paper assets. China draws in all of its domestic production, keeping it all at home. Much of the gold moving into China from points in foreign location come from Western central banks, which Embry believe is a source drying up. It probably will not be able to supply much more to China. My source confirms the empty source, but emphasizes that the gold is largely coming from London, the Bank of England, backed up by the Swiss repository in Basel. See the King World News interview (CLICK HERE). When the Western source dries up completely, with no more Swiss backstop to the London docks, my belief is that China will deploy its planned new gold-based trade settlement system. The banking system will follow trade, as it should be. China has a hidden card, developing African sources for gold. From mine to loading ramp, in a vertically integrated supply line, developed from nothing, sources blossom. It adds significant volume to their reserves without the watchful eye of New York and London banksters, all from the hidden back door.

◄$$$ CHINA IS ACCUMULATING GOLD RAPIDLY. IN FOUR YEARS IT WILL HOLD MORE GOLD THAN WHAT ONCE WAS STORED IN FORT KNOX. THE BIG QUESTION IS HOW MUCH OF THE USTBOND RESERVES IS BEIJING USING TO ACQUIRE THE GOLD. ALSO, THE OTHER CHINESE GOLD BY OLD WEALTHY FAMILIES AND SOVEREIGN WEALTH FUNDS IS OF UNKNOWN QUANTITY. THE PARADIGM SHIFT IS WORKING OVERTIME, WEALTH MOVING FROM WEST TO EAST. WITH IT GOES GLOBAL POWER. $$$

◄$$$ CHINESE GOLD IMPORTS FROM HONG KONG CONTINUE, HAVING RISEN 23% FROM A YEAR AGO. SHIPMENTS HAVE ALMOST TRIPLED FOR THE FIRST NINE MONTHS OF THIS YEAR. THE UPWARD TRAJECTORY IS STAGGERING. CHINA IS PREPARING FOR THE NEXT CHAPTER AS A LEADER, WHILE THE WEST DIGS OUT FROM PAPER IMPACT CRATERS. THE RUIN OF MONEY IS A MAJOR INITIATIVE BY THE UNITED STATES, JAPAN, AND EUROPE IN COORDINATED MOVEMENT. THEY CANNOT EXTRICATE THEMSELVES FROM THE DESTRUCTIVE FIAT PAPER CORRIDOR TO A DEAD ZONE. $$$

Gold imports to China from Hong Kong continue the torrid pace. They climbed 30% in September from the previous month. Central banks in the East are shoring up their gold reserves rapidly, while those in the West sheds its gold. The West continues to play charades, shell games, and other toxic crafts with their gold bullion held in reserves. Mainland China purchased 69.71 metric tons of gold in September, including scrap and coins, compared with 53.5 metric tons in August. Shipments were 23% more than the same month a year ago. Data is from the Census & Statistics Dept of the Hong Kong Govt. On a more periodic basis, the growth in movement is equally impressive. Shipments almost tripled to 581.8 metric tons in the first nine months, compared to 203.6 metric tons a year ago. The direction is primarily out of HK into China. However, small traffic goes the other direction. Exports of gold to Hong Kong from China were 28.2 metric tons in September, up from 26.5 metric tons in August. A year ago by contrast, shipments were 6.8 metric tons.

A rallying cry the world over is heard from the corrosive chambers of the USFed itself, which announced QE3 with expanded mortgage bonds to buy. The clarion call was followed by the Bank of Japan, which expanded its bond purchase program for the 23rd time, echoed by the Euro Central Bank, which will buy truckloads of toxic bonds of indebted nations. The Japanese wish to avoid a rising Yen currency. The Europeans wish to cover toxic bonds in extreme volume, like the Americans. An educated observer must wonder whether central banks have any actual solution in mind other than to destroy the monetary system and the global economy from their unchecked debasement. My belief is that they have no choice but to continue a futile path, and besides, they know nothing else but inflation.

◄$$$ CHINA AND HONG KONG PLOT TO BRING LEGITIMACY TO THE SILVER MARKET. THE HONG KONG GOLD AND SILVER EXCHANGE SEEKS A WAREHOUSE NETWORK IN CHINA. GREATER MORE MATURE TIES ARE FORMING WITH THE MAINLAND. THE CHINESE GOLD & SILVER EXCHANGE SOCIETY WILL SOON SHOW ITS STRENGTH, AS IT BEEFS UP THE NATIVE INFRASTRUCTURE. BY LIMITING HONG KONG PROPERTY INVESTMENT, THE AUTHORITY IS ENCOURAGING DIRECT SILVER INVESTMENT. THEY COULD BE PAINTING A TARGET ON JPMORGAN INDIRECTLY. $$$

The Chinese Gold & Silver Exchange Society (CGSE) based in Hong Kong has begun talks with Chinese officials to create a bonded warehouse on the mainland, the move seen as a bid to boost business with exchanges and traders. The CGSE is a leading physical gold marketplace in Asia. The exchange seeks to set up a warehouse for gold and silver in Qianhai, a new financial zone in the southern city of Shenzhen. The Chinese Govt in Beijing does not permit foreign exchanges to set up storage on the mainland. The fact that the HK-based CGSE is considered a foreign entity is Jackass proof that Hong Kong is NOT in China or part of China, but rather an experimental region operating with near autonomy for the benefit of China. Look for a change in the policy. Almost 25%of the Chinese Gold & Silver Exchange trade came from the mainland in 2011, a figure expected to grow this year. In a maneuver to further boost business and liquidity in the mainland, the CGSE is in talks with the Shanghai Gold Exchange. The goal is pool accredited gold bar providers with the leading physical gold marketplace inside China.

Next comes development of the Silver product vehicle. To expand its silver business, the CGSE plans to launch an electronic platform to trade the precious white metal in Hong Kong Dollars in 1Q2013. It currently offers electronic trading for Loco London gold and silver, which are denominated in USDollars, and the Renminbi kilobar gold. President Haywood Cheung shared his forecast, that the spot Gold price would rise to $2000 per ounce in the first quarter of next year, and spot Silver price would rise to around $40 per ounce in the first quarter of next year. Cheung added that jewelry manufacturers in Asia were using more silver and platinum in their products, boosting physical demand. See the Reuters article (CLICK HERE).

China is screwing with JPMorgan and USGovt bank maestros who lord over the Silver market. The enhanced Hong Kong exchange is a carefully designed torpedo to ram up the JPM hind parts and convert them into JPMorgue. The Rothschild family will not be given an opportunity to tamper with this exchange. Traditionally the carry trade would be to sell USDollars wrapped in USTBonds and to buy HK stocks or real estate. With restrictions being put on HK property to curb speculation, the Chinese/HK authorities are indirectly steering speculators in HKDollars toward Silver. They are implicitly encouraging the investment community to provide powerful assistance in killing JPMorgan with plausible deniability. Two years ago, JPMorgan owned an $8.4 billion net short Silver position. Today it is $18.5 billion. They are highly vulnerable, badly extended, hanging on a weak branch. Jamie Dimon might soon need an ample supply of adult Depends diapers.

## GOLD WAR HEATS UP

◄$$$ APMEX AND PROVIDENT ARE CLEANED OUT OF PAMPS. THE SUPPLY SHORTAGE IS QUICKLY TURNING ACUTE. INVESTMENT DEMAND OUTPACES SUPPLY. PRICE SUPPRESSION DOES THAT EFFICIENTLY. $$$

APMEX and Provident Metals have been completely cleaned out of the popular small bullion gold bars, known as Pamps (Suisse PAMP gold bullion bars). Usually thousands of these highly reliable bars are in stock, but not anymore. The physical gold market is well aware that these are the most popular and widely held small bullion bars held worldwide. In the Middle East and India, the predominant demand is for PAMPs. Supply has been cleaned out, soon after APMEX began delivery to over 50 countries. See the APMEX displays (CLICK HERE) and the Provident Metals displays (CLICK HERE). This is shocking, and confirms the investment demand has outpaced supply. The demand is red hot in India. Households want protection. See the ICICI Bank website for online purchases (CLICK HERE). The reliability is high and recognized as high, with assured worldwide liquidity. The 24-karat ICICI Bank pure gold is imported from Switzerland. This Gold carries a 99.99% assay certification, signifying highest level of purity, as per international standards. See the gorgeous PAMP products, from left to right, the 10-oz, the 1-oz, the 10-gram. PAMP is an acronym for Produits Artistiques Metaux Precieux (artistic precious metals products).

◄$$$ THE RESERVE BANK INDIA HAS BANNED BANK LOANS FOR GOLD PURCHASES. THE INDIAN CURRENT ACCOUNT DEFICIT HAS GROWN IN BIG JUMPS, ENOUGH TO CAUSE PROBLEMS. THE GOLD SUPPLY IS IMPORTED. REGARDLESS OF THE LACK OF DELINQUENCY IN GOLD LOANS, THEY WILL BE HALTED. HOUSEHOLDS AND BUSINESSES WILL BE FORCED TO PROTECT THEIR WEALTH BY OLD-FASHIONED MEANS, LIKE THE BLACK MARKET AND SMUGGLING. $$$

In a surprise move, the Reserve Bank of India (RBI) requested that banks not finance the purchase of gold. A stench of desperation rises from the central bank offices. New Delhi wishes to avoid a worse Rupee currency decline. The motive spun is to dissuade people from indulging in speculative activity. But protection from savings erosion is not speculation. The official statement read, "No advances should be granted by banks against gold bullion to dealers or traders in gold if, in their assessment, such advances are likely to be utilized for purposes of financing gold purchase at auctions and/or speculative holding of stocks and bullion. In this context, the significant rise in imports of gold in recent years is a cause for concern as direct bank financing for purchase of gold in any form viz, bullion, primary gold, jewellery, gold coin could lead to fuelling of demand for gold for speculative purposes." Several days later, it repeated the ban. "It is advised that no advances should be granted by banks for purchase of gold in any form, including primary gold, gold bullion, gold jewellery, gold coins, units of gold exchange traded funds, and units of gold mutual funds." It is interesting how the word speculation is abused.

The RBI policy still permits banks to provide finance terms for genuine working capital in the jewelry business. The decision was taken in view of the significant rise in imports of gold in recent years, which affected the Rupee currency. Renewed pressure on the nation's Current Account deficit has resulted, since the gold is usually imported. In the 2011-12 fiscal year, Indian gold imports stood at $60 billion to ship 1067 tons. In quarter ending in June of the current fiscal, gold imports had contracted by 18.4% year-on-year to $13 billion. The policy directive came after a study by a working group to study issues relating to gold imports and gold loans by Non-Banking Financial Companies (NBFCs) in India. The working group submitted its draft report in August 2012, whose suggestions were enacted into policy. Another side to the story prevails.

Indian households own a huge pool of gold. They want even more as protection from the harsh economic environment. Many banks and non-banking finance companies have competed with each other intensely, resulting in a substantial rise in the gold loan portfolio within the country. However, almost no delinquency is associated with such loans. No matter. The issue is strictly a national current account drain. The Indian central bank wants to stop the widespread price inflation from growing worse, an extension of the decline in the Rupee exchange rate. See the Indian Express article (CLICK HERE).

◄$$$ TURKEY HAS TURNED ITS ATTENTION TO THE EAST, WITH EMPHASIS ON GOLD. DURING THE SOVIET COLD WAR, TURKEY WAS A CRITICAL ALLY. IT SUPPLIED THE INCIRLIK AIRBASE TO THE N.A.T.O FORCES. HISTORY REPEATS, AS TURKEY IS ALIGNING WITH CHINA AND THE EAST. THE IRAN SANCTIONS PUSHED THEM TO CHOOSE SIDES. THEY CHOSE THE EASTERN ALLIANCE. $$$

Turkish Prime Minister Erdogan went to the Fifth Bali Democracy Forum. The message at the forum was like an implied resurrection against the USDollar. Some believe the forum bears the banner: Abandon Dollar for Gold. The Eastern nations in attendance were precisely those who are working to establish an alternative to the global reserve currency and a new trade settlement system. Since 2008 the group has convened for its annual conference which focuses principally on democratic developments within Asia. The outspoken Erdogan recently enraged the Western establishment with a series of critical remarks directed to the Intl Monetary Fund. He openly questioned the value of cross-border transactions being denominated in a currency belonging to any single nation, or select group of nations (like the SDR basket promoted by the IMF). Erdogan said the world should consider switching "to a monetary unit such as Gold, which is at the very least an international constant and indicator which has maintained its honor throughout history. This is something to think about." Strong words from the swing nation of Turkey. With sovereign bonds collapsing in Europe, with the USTreasury Bond supported by USFed monetizations and the interest rate derivatives, the fiat paper monetary system is losing faith and favor. The East is gradually turning to Gold.

Turkey is losing faith in the United States. While Turkey has generally excellent relations with the USA, the future looks very cloudy on both the military and financial front. Erdogan's Deputy Prime Minister Ali Babacan at the 2012 Istanbul Finance Summit in September made some bold statements. He said, "When we take a look at the United States, we particularly see an ambiguity in its finance policies. After the election, if [the new American government] does not take quick decisions about the debt ceiling and automatic [spending cuts] and does not carve out a reliable program for 2013 and the period after, 2013 may be a year that the economy of the United States is debated. Governments cannot rely on central banks that provide liquidity to markets by printing money and declare WE HAVE OVERCOME THE CRISIS." The conclusion is slowly being formulated, that Turkey is ditching the West. Watch them make closer ties with China and Russia, in the process embrace Gold.

On a cultural basis, Turks value gold much more than people in the West. They have a nasty recollection of persistently devalued paper currency during the republican period since 1923. Turkey is a country where gold vending machines, gold-based mutual funds, and deposit accounts point toward a solid belief in gold as a store of value. As previously reported in the Hat Trick Letter, an estimated 5000 metric tons of gold resides within Turkey, most of which is held privately. See the Mediolana article (CLICK HERE). One should understand that Turkey is caught in the middle with intense battles related to both neighboring Syria and Israel. It is struggling to maintain its alliance with the United States on several key battlegrounds. The cord is frayed.

◄$$$ THE GOLD COMMUNITY IS LACKING BADLY IN SOME INTELLECTUAL AREAS. THE DAMAGING EFFECT OF 0% ON CAPITAL IS DEVASTATING TO THE USECONOMY. THE MINING STOCK WRECKAGE FROM INFLATION AND RISING COSTS. A THIRD SHORTCOMING IS APPARENT AS WELL, THE TRUST THAT THE C.F.T.C. WILL EVENTUALLY METE OUT JUSTICE. IT WILL NEVER HAPPEN. NUMEROUS ANALYTIC POT HOLES ARE ROUTINELY STEPPED IN BY THE GOLD COMMUNITY MEMBERS, WHICH CAN BE IDENTIFIED. $$$

The Jackass never wishes to seem arrogant or to mount the high horse, but something must be stated clearly. The lack of the intellectual prowess in certain corners of the gold community is worthy of note. Although perhaps a shrinking minority, some people still believe the GLD and SLV exchange traded funds are viable promising vehicles. They ignore how the banker cartel controls them. Not so, as each is a paper mill to deceive and defraud investors who are too lazy or too gullible to notice corruption in their face. Some people expect simple high volume printing of money to automatically enter the economic system and push up wages, thus price inflation. Not so, since it is locked and hogged by the financial sector. Besides, the presence of China makes business expansion unlikely and unfeasible. So domestic response is nil. Some people actually expect the commodity regulators to enforce the law, to bring the big banks into line, and permit the precious metals prices to soar. Not so, since the regulators are clever tools with a hidden agenda to serve the banks and utter drivel to lift hope. They always disappoint. Many people expect the official ultra-low 0% with heavy bond monetization to stimulate the USEconomy with invigorated activity, but plagued by price inflation. Not so, since the primary effect is rising cost structure, sure to drag down the USEconomy interminably. The widespread response to ZIRP & QE is to hedge with commodities like energy, which drives up costs including food prices. Please, let's avoid the entire Deflationary collapse argument, which fooled colleague Rick Ackerman for two full years. There is both inflation and deflation at work, always has been both, always will be both. What an incredible blind spot of blunder that debate was!!

Many people actually believe the flight to safety in the USTreasury Bonds is real. They regard the past rallies as having significant armies of actual buyers. Not so, since the interest rate derivatives were put to work in the $trillions to fabricate the phony USTBond rally precisely when the USGovt debt structure was at double risk. The QE programs were beginning, the most egregious of currency violations. Concurrently, the debt rating agencies were in the process of downgrading USGovt debt. It deserved junk rating far below investment grade. Worst of all, the majority of people expect the mining stocks to rise since leveraged to the gold price. They ignore the profound global crisis in all assets with paper dependent price structures. Not so, as the mining stocks suffer from share dilution (price inflation), higher costs, difficult deposits, shortage of engineers, greedy foreign jurisdictions, and lately, hostile workers who suffer from a higher cost of living. These misconceptions are not basic, to be sure. They involve complex concepts.

Not 5% of the gold community comprehends the collection of such points. In fact, even as evidence mounts to the contrary of the popular misconceptions, those who fall victim to the wrong notions maintain their positions only to repeat them more loudly. As if suddenly the gates are open for them to be correct, after past misreads are forgotten and mean nothing. They never seem to be capable of forecast post-mortems, to answer the basic question of what went wrong up to now. Many continue to believe London and Switzerland are safe places to store gold. They will be disappointed when no redemption is possible except for cashouts. Because of this realization, the Jackass urges the gold community to sharpen its focus on key constructs, and to exhibit better mental power. They are on our team, but some actually work against the enlightened, like when buying GLD & SLV funds. They are steadfast but unaware why a proper interest rate is important. They just know that a negative real rate is a big factor for feeding the Gold bull, without knowing of economic damage.

Our fellow gold warriors are unaware of the primary effects of the ZIRP & QE double dose monetary cancer, like capital destruction. The gold community has not caught onto the paper equity cancer that continues to under-perform, the mining stocks. It was identified in early 2008 in the Hat Trick Letter, when mining stocks were forecasted to do poorly since paper, subject to inflation and paper distrust, and also subject to Wall Street corruption (e.g. GDX fund run by Goldman Sachs, and broad collusion with hedge funds). Those who invested in physical Gold saw 100% gains, and in Silver saw 200% gains since 2008. We must remain vigilant to false signposts. Most gold investors mis-read many signposts. But they are on our team. The lack of economic savvy is a liability for gold investors, as is misplaced trust in paper assets. Then again, the entire US population suffers from economic ignorance. The Hat Trick Letter is not arrogant. It is just deeper and ahead of the crowd. Its detractors are nowhere to be seen long after calling a forecast outrageous or kooky, months before it turns correct.

◄$$$ THE FINGER IS BEING POINTED AT SCOTIA MACOTTA AS THE NEW ENTRY IN SILVER MARKET MANIPULATION. THIS IS UNFORTUNATE SINCE IT IS A LEADING REPUTABLE CANADIAN FINANCIAL FIRM. TO DATE, CANADA HAS NOT BEEN IMPLICATED IN THE PRECIOUS METALS MARKET CORRUPTION, EXCEPT THAT IT SOLD ITS ENTIRE GOLD RESERVES IN TRUE MORONIC FASHION IN THE LAST TWO DECADES. THE SALE COULD ONLY HAVE BEEN DONE ON ORDER FROM THEIR BIG TORONTO BANKS. $$$

ScotiaBank is likely the new manipulative short in the Silver market. Ed Steer wrote in very early November on his daily newsletter for Casey Research that Scotiabank has been dodging his questions about the bank's involvement in the Silver market. He therefore concludes that Scotiabank is likely the new NON-USBANK entry, joining JPMorgan Chase as a big manipulative silver short. The longstanding gold bullion bank function of ScotiaBank is under scrutiny and suspicion. The stable but corrupted gold accounting has contained the usual suspects for a few years. Suddenly, a non-US bank is cited as the new player. It is well known that the big US banks are under siege.

Ed Steer wrote the following. "I am pretty much of the opinion that ScotiaBank is the new Non-US bank that showed up in the CFTC's October Bank Participation Report. As Ted Butler pointed out many weeks back,'JPMORGAN NOW HAS A CO-CONSPIRATOR.' It appears that we now know who that is. As a Canadian, I must admit that I was most unhappy that the Bank of Nova Scotia/ Scotia Mocatta would be involved in a price fixing conspiracy of this size, as it is flat out illegal. I was hoping that our banks were above this sort of thing, but obviously not. Although I reserve the right to be wrong about this, it is my opinion that the Big Four shorts in silver are: JPMorgan, the Bank of Nova Scotia/ Scotia Mocatta, HSBC USA, and most likely Citigroup. JPMorgan is the tallest hog at the trough, and is short 33% of the futures market in silver. ScotiaBank is second with a bit over 11%. HSBC USA might be 5%. And Citigroup would be something less than that. What the [group commonly called] 5 THROUGH 8 among Commercial short positions holders have is immaterial. I would also be pretty close to the mark if I considered these four bullion banks were the Big Four shorts in Gold as well."

In countless discussions with certain Canadian expert analysts, my position has been scolded, that Canadian banks are not much different from the New York banks. If they were better, with more integrity, and less corrupt activity, then the Canadian Govt would not have sold 100% of its gold reserves. They did so at the behest of their big banks to manage corrupt but very profitable trading operations. It has not ended. It only has become more visible. Furthermore, Rob Kiby told me numerous times about how the Toronto banks took orders from Wall Street all too often in the management of Interest Rate Swaps that rigged the USTreasury Bond market.

Consider the chart made by Nick Laird's on the concentration of Silver short positions. The unit is expressed in terms of the number of days of world production to cover their short positions. It was presented at the end of October, with data at that time. The entire red bar in Silver is most likely made up of the above named four bullion banks. The other four banks among the largest eight short holders comprise a group with relative tiny total short volume. The giant load is the Big Four, which are responsible for the majority of the short positions, and thus the corruption of the Silver market. See the Ed Steer daily from late October (CLICK HERE), where one must scroll to the bottom of the document.

## OFFICIAL REPATRIATION DEMANDS

◄$$$ CREDIT MUST GO TO HUGO CHAVEZ OF VENEZUELA FOR STARTING THE PROCESS OF GOLD REPATRIATION. SINCE THEN, NUMEROUS NATIONS ARE SUSPICIOUS OF LONDON AND NEW YORK FOR THEFTS OF OFFICIAL ACCOUNTS HELD IN CUSTODY. THE ALLOCATED GOLD ACCOUNT SCANDAL IS MOVING ALONG, THE CLIMAX TO COME IN THE NEXT COUPLE YEARS. $$$

No doubt Chavez is a miscreant tyrant scoundrel thief. He has stolen much of his nation's wealth, principally from their national oil accounts. He has also nationalized a considerable amount of Western property. He has gutted the state owned petroleum company. But he started a process that has become significant, for nations to demand return of their gold from the belly of the beast, the New York and London bank cartel, regional offices of the Syndicate. Many reports indicated that acting on advice from the Shanghai Coop Organization, Chavez made his demands for London to return the gold held on account. However, my European gold trader was part of the process. The Voice was a broker working on behalf of the Venezuelan Govt to force the return of gold bars held in London. He reported that without help in emergency shipment of vast gold supply from the Swiss vaults in Basel, the London bankers would have been exposed as having pilfered the Venezuelan account. Chavez demanded the repatriation of the 211 tons of gold from the Venezuelan official account. Call it the Butterfly Effect, the Mariposa Phenomenon. A small player flapped its wings, and demand catches on, gathering more players, more wings flapped, and finally a monetary tornado strikes in the whirlwinds.

Bankers are stealing Allocated Gold accounts, covering their tracks. At least they leave behind an IOU certificate with a signature scribed by the thief. The boldness of the thefts is matched by the deeply destructive impact on the global financial system's integrity. The upcoming scandal will be one for the ages. The Jackass is on record as stating that the banker scandals will soon present the Allocated Gold Account thefts as the new chapter to the ongoing banker criminal skein, complete with investigations and prosecutions and lawsuits, leading to enormous implications. The LIBOR scandal will extend into two directions, the allocated gold and to narco money laundering. This scandal will take the Gold price past the $5000 mark and the Silver price past the $100 mark. The foundation for the scandal is being laid, even as awareness builds. The financial community is awakening to the notion that the allocated gold is not there. See the Washington Blog article (CLICK HERE).

◄$$$ THE ENTIRE FOREIGN GERMAN GOLD ACCOUNT IS GONE, CLAIMS TURK. THEY LEASED HALF OF THE HOARD THEMSELVES. THE OTHER HALF THEY PERMITTED THE US-BANKERS TO LEASE UNDER COLLUSION TO SUPPRESS THE GOLD MARKET. TURK WAS A MEMBER OF A 2001 AUDIT. $$$

James Turk is founder of Gold Money and in my view a foremost expert on gold vault services, exchange traded fund integrity, and auditing functions. He gave a revealing interview with King World News on the status of the official German gold account. He stated, "The entire German gold hoard was gone because it had been leased into the marketplace. Meaning, the vaults holding German gold were emptied by 2001 because of the Bundesbank leasing activities. Half of the gold the Germans leased themselves. The other half of Germany's gold hoard was eventually leased into the market as well through complicated swaps with the United States. But the reality is that as of 2001, all of that German gold was gone. Meaning all German gold worldwide, which was supposed to be stored in vaults, the vaults were emptied of German gold and the gold was leased into the market. It is uncertain if any of that leased gold has ever been returned to those vaults. Meaning, the vaults which are supposed to be storing the German gold hoard may still be empty." Turk speaks as an expert with first-hand experience on this particular account. To the point, 11 years ago James Turk had diagnosed the problems of the missing German gold hoard. He provided details in a report from 2001 entitled, "Behind Closed Doors" in which he exposed the German gold was in fact missing. See the King World News interview (CLICK HERE), which contains a lengthy portion of the 2001 transcript.

Put the blame on Deutsche Bank, which for years operated in close contact and cooperation with the New York and London bank cartel. D-Bank betrayed its people for years, just like the New York bankers betrayed our people. For the record, the claim by Turk goes counter to comments made by a German banker source. Perhaps the entire German account held by foreign custodians is gone, a big distinction. The core gold account that resided in Germany in the west province mountains never moved, from the comments. Time will tell if the core German Fatherland gold hoard remains in a safe location. My contact says yes.

◄$$$ THE GERMAN REPATRIATION OF GOLD IS MOST LIKELY RELATED TO THE GORDON BROWN GAFFE, THE SALE OF A BIG BLOCK OF GOLD AT THE MARKET BOTTOM. THAT INFAMOUS DISPOSAL OCCURRED FROM 1999 TO 2002. THE FLAGSHIP DEUTSCHE BANK IS AT THE CENTER OF THE BROWN INCIDENT, BUT WELL HIDDEN. THE BANK OF ENGLAND USED THE PRE-ANNOUNCED SALE OF BRITISH GOLD TO CREATE A CLIMAX WAVE OF SELLING, THUS FORMING THE GOLD BOTTOM. THEY EXPLOITED THE WAVE TO SECURE MORE GOLD IN THE MARKET. $$$

To fully understand the Gordon Brown Gaffe, or the mark twain of the Brown Bottom in the Gold market, go back in history just eleven years. Some detection reveals that Germany repatriated 1000 tons of gold from England from 2000 to 2001. In the midst of a recent demand for full accounting and return of official German gold from New York, a stench has arisen. A previously classified report leaked to the public in late October. It has revealed a much larger German gold repatriation took place from 2000 to 2001. At that time the Bundesbank withdrew nearly 1000 tons of physical gold from the Bank of England, decreasing the German gold holdings in London from 1440 tons to 500 tons. The enormity and profundity of the withdrawal must sink in for a moment. Germany withdrew 1000 tons of physical gold from the Bank of England at the exact time that gold bottomed and began its decade long bull run. The easy conclusion is that the German central bank pulled the carpet out from under the cartel's gold leasing frenzy, which resulted in igniting the secular Gold bull market in 2000. But London was forced to act quickly to prevent publicity on the incident, and to cover their tracks from the extensive gold leasing.

A full 25% of entire German Govt gold reserves were repatriated over a decade ago. They might have concluded that the tech-telecom bust in the United States was the start of a long degrading process that would take the Western world to the crisis of today. They might have been ahead of the game. By declassifying the documents, it seems the Germans wish to expose New York and London, to reveal their banker crimes. Thus the Jackass calls the battle the Gold War, as part of the larger Monetary War. See the Silver Doctors artic le (CLICK HERE). The culpability of Deutsche Bank is not fully certain. They might have participated in the gold leasing in London, but decided to halt the practice, realizing its volume had gone out of control. They might have been fully complicit. My German source claims D-Bank was an active gold lease partner with London with full knowledge, an important player in the criminal process and gold price suppression.

A colleague not to be identified pitched in with some astute comments. The following are his thoughts with minor edits. Sometimes a look back in history is needed to connect the dots. In 1999, Gordon Brown started selling England's gold into the marketplace. The official sale was done by auction and announced in advance. The fact that the sales were fully tipped off means they wished to create front run selling. It was coordinated as if it was meant to keep prices low, to create a bottom. Most people think Gordon Brown was just stupid. Instead, he was corrupt and devious. It would now appear that we have now found the reason for this market manipulation of Gold at the time. If Germany was demanding its gold of roughly 1000 tons, which likely had already been re-hypothicated, it would have caused a rocket in prices to accumulate that much Gold to cover Germany's demand, as replacement in the empty London vault account. England was obligated to assure its safe return. They coordinated with its Bullion Banks the delivery, but the banks were in trouble, as they had already sold it into the market place. England publicly announced the sale of its gold, which caught the market by surprise and pushed the Gold price down more. In the process, the Bullion Banks accumulated enough gold from unaware sellers to honor Germany's request of the return of 1000 tons. Once all the dots are revealed, they start to make sense.

My comments. The above account of events probably is very accurate. The Jackass heard from my great gold source that the Gordon Brown sale was to cover an enormous exposure by Deutsche Bank. It is hard to call it a favor to help D-Bank, more like a deception to conceal leased sales by the Bank of England. The London bankers thus prevented an international incident. The timing is too perfect not to be related. Remember, there are no $billion coincidences, as they are connected always.

Back to the present in 2012. German legislators have demanded their gold in return. "All the gold must come home. It is precisely in this crisis that we need certainty over our gold reserves," said Heinz-Peter Haustein from the Free Democrats. The jig is apparently up, as most allocated gold is essentially paper. Peter Hambro is chairman of the UK-listed gold miner Petropavlovsk. He said the Bundesbank may have withdrawn its bullion in self-protection since it did not have its own specifically allocated bars in London. He said, "They may have decided that the Bank of England had lent out too much gold, and decided it was safer to bring theirs home. This is about the identification. Can you identify your own allocated gold, or are you just a general creditor with a metal account?" Much more on this developing banker scandal is to come.

◄$$$ THE BUNDESBANK CLAIMS NEW YORK FED WILL HELP MEET ITS GOLD AUDIT REQUEST. REGARD THE FORMAL STATEMENT AS A LAME COMMENT TO GIVE THE CRIMINAL NYFED SOME COVER. $$$

The fire was lit in September in the most recent chapter. A group of German lawmakers was turned away from viewing the 1500 tons of German gold reportedly held at the privately held New York Fed. Few people are aware that the entire US Federal Reserve system is a private corporation having no direct affiliation with the USGovt. It operates under contract with the USCongress to operate a central bank for the supposed benefit of the United States banking system, economy, and nation. It has turned into a parasite and resident coordinator of dark functions, owing to its criminal syndicate conversion over the years, perhaps from the start in 1913 when it won the contract. For its history, see "The Creature from Jekyll Island" which is a famous historical account. The contract was won a century ago during a poorly attended session of the USCongress during the Christmas holiday. In fact, that vote caused the quorum rule to be put in place. The fledgling nation was an easy victim target.

The Bundesbank claimed the Federal Reserve Bank of New York will help it meet auditing requirements related to its gold reserves that were demanded by Germany's Audit Court. A statement was made by the Bundesbank to the German Parliament budget committee. It read, "We have been in discussions with the Federal Reserve Bank of New York about the Bundesbank's holdings of gold. The discussions have been fruitful and the Federal Reserve has expressed a commitment to work with the Bundesbank to explore ways to address the audit observations, consistent with its own security and control processes and logistical constraints." A battle is on between their central bank and Parliament, which demands that it take stock of its gold holdings outside Germany. The agreement is part of a compromise between the German central bank and the Audit Court. The auditors have clout. They have made public statements that the Bundesbank has never verified the existence of their foreign gold account. See the Bloomberg article (CLICK HERE) and the RT News article (CLICK HERE).

◄$$$ THE HORNET'S NEST HAS BEEN STIRRED INSIDE THE GERMAN CHAMBERS. THE PARLIAMENT DEMANDS FULL ACCOUNTING. THE BUNDESBANK IS ON THE DEFENSIVE. THE BATTLE IS ON WITH THE GOLD WAR. THE CENTRAL BANK IS FIGHTING IMPORTANT BATTLES WITH DRAGHI AT THE EURO-CB AND WITH ITS OWN PARLIAMENTARY AUDITOR. $$$

Peter Gauweiler is a Bundestag member from Bavaria. He said, "The Bundesbank monitors its domestic gold in an exemplary fashion, and this makes it all the more incomprehensible that the bank does not look after its reserves abroad." Trust between allies is fizzling as casualty of the global financial crisis, better described as monetary war to preserve phony fiat paper currency. For decades, German central bankers have contented themselves with written affirmations from the New York Fed that the gold still remains where it is claimed in vault storage. According to the report, the bar list from New York stems from 1979/1980. The report from their Parliament noted that the New York Fed refuses to allow the gold's owners to view their own reserves. Sounds like it has gone missing. The Bundesbank is under siege to make full account.

Carl-Ludwig Thiele, from the executive Board of the Bundesbank, called the debate rather grotesque. The once venerable institution currently has more pressing problems, so he claims. It is fighting hyper monetary inflation by the upstart Euro Central Bank under Mario Draghi. The Bundesbank head Weidmann is desperately fighting the EuroCB decision to purchase unlimited quantities of sovereign bonds from the broken peripheral nations in the South. In addition, the Bundesbank has already funded EUR 700 billion (=US$900 billion) into primarily Southern European countries as part of the EuroZone central bank transfers known as Target II. The entire German gold reserves are currently estimated at EUR 144 billion. Thiele is angry and feisty. He shot back that the German gold is not stored with dubious business partners, but rather with highly respected central bankers. Hmmm, methinks not. Look for Thiele to become a casualty. See the Spiegel article (CLICK HERE).

◄$$$ A MOVEMENT HAS BEGUN TO DEMAND FULL ACCOUNTING OF THE DUTCH NATIONAL GOLD TREASURE. AGAIN THE FINGER IS POINTED AT THE NEW YORK FED. ITS CRIMINAL ROOTS ARE BEING EXPOSED. THE NEW YORK BANK CARTEL MIGHT SOON BE FORCED TO SCRAMBLE TO FIND A RATHER LARGE AMOUNT OF GOLD TO PREVENT EXPOSURE OF THEFTS. $$$

The Dutch and Germans are close cousins, genetically and with commerce, sharing a long history. Even their languages have close overlaps. More strategic waves have come in the wake of the landmark decision by the German Federal Accountability Office that Germany must repatriate and audit 150 tons of its gold reserves from the New York Fed over the next three years. The NYFed criminal hive is being exposed, turned inside out slowly on the global stage, the light shining inside. A Netherlands citizens committee has filed a petition making demands of the Central Bank. The signatories demand the release of information "on the quantity and storage location of the Netherlands physical gold, and on the extent and nature of the gold claims." A leader of the civil movement is Tom Lassing.

The Dutch National Bank possesses the 10-th largest gold reserves in the world at 612 metric tons. A large portion is believed to be held in the basement of the New York Fed. In a statement, Lassing cited the lost trust in the financial system, with numerous deceptions. The petition demands full accounting. The implied message is that the New York bankers have leased out the Dutch gold account. The battle is raging in the Gold War. If the New York bank cartel is forced to repurchase gold to supply the Dutch with their account in full, and the German account in full, they will spark a gold bull market to $2500 per ounce in price. However, watch the Bank of England and the Swiss repository in Basel respond as they usually do, with supply arriving in the back door. Before long, the Swiss dons will lose patience as supplier of last resort to London. The Jackass is on record as stating that the banker scandals will soon present the Allocated Gold Account thefts as the new chapter to the ongoing tale.

◄$$$ ROMANIA WANTS RETURN OF 93.4 TONS FROM RUSSIAN VAULTS. THE GOLD REPATRIATION MOVEMENT RATCHETS UP AND BROADENS. THE RUSSIANS IN ALL LIKELIHOOD DID NOT STEAL IT. THEY DO NOT SHARE THE LONDON GENETIC CORRUPTION THAT EXTENDS FOR 1000 YEARS. INSTEAD, THE GOLD IS CAUGHT IN THE CENTER OF THE DUBIOUS AMERICAN MISSILE DEFENSE SHIELD. $$$

The Romanian Govt wants its gold treasure back from Russia, where it is stored at the Kremlin. The trend accelerates for countries to repatriate gold. The Gold Wars ratchet upward. The Romanian gold hoard was transferred during World War II into safe haven. Two railway carloads, containing 93.4 tons of gold, were transferred to Russia as German Wehrmacht troops rampaged during World War II. The demand is not frivilous, and reflects past frustration. Apparently, all previous governments of Romania since World War I, no matter than their political type, have tried unsuccessfully to negotiate a return of the gold. The nation has a rich history with gold. The Roman Emperor Trajan around the year 100AD found gold and silver in great quantities in the Western Carpathians in what is modern-day Romania. Resulting from this conquest, Trajan brought back to Rome over 165 tons of gold and 330 tons of silver. Nice booty!

The Kremlin has refused to cooperate with Romania's demand for its gold so far. Experts observing the chess game note that Vladimir Putin objects to cooperation by the Romanian Govt with the USMilitary missile defense shield over Eastern Europe. The defense shield is a direct violation of the NATO treaty signed with Russia, but erected by the Bush-Cheney team. According to the Huffington Post, in 2011 the US Secretary of State Hillary Clinton signed the agreement with Romanian Foreign Minister Teodor Baconschi. Within the pact, the United States is expected to deploy interceptor missiles at a Romanian Air Force Base in approximately four years. See the Wealth Cycles article (CLICK HERE). Watch Eastern European support for the USGovt defense shield slowly wash away, exposing the USGovt for its treaty violations and further isolating the United States geopolitically.

◄$$$ ECUADOR HAS DEMANDED A PORTION OF ITS OFFICIAL GOLD, IN ORDER TO MEET FOREIGN DEBT REQUIREMENTS. THE REPATRIATION MOVEMENT IS GATHERING STORM. $$$

Two weeks after the German Parliament demanded return of its official gold account from London, Ecuador joined. They demand repatriation of one third of its gold holdings. The scramble is on to recover gold located supposedly in some vacant vault in London and New York. They will find in time an empty storage room with written IOU letters in the place of 1-kg gold bricks. The letters are called gold certificates, the calling card of the bank cartel, a vast crime syndicate. The Ecuador Govt demands the nation's gold to be repatriated. Actually they demand the return of one third of their foreign holdings.

The stated reason is to support national growth, according to the head of the tax agency SRI. Director Carlos Carrasco believes that Ecuador lenders could repatriate about $1.7 billion in gold in order to fulfill obligations to international clients, thus canceling some debt. He spoke to the national Congress in Quito. To be sure, Ecuador with its 26.3 tonnes of gold is a smaller player in the grand scheme of gold things. But the process is gaining momentum. If 20 such smaller nations, including Venezuela and Ghana, demand return of their gold from official repositories, the movement will gather significant momentum to force the London and New York banks into exposure of criminal behavior. The Gold price will be liberated, as the chains are falling to the wayside. The tragic fact is that the global monetary system has little of no collateral. The solution will center on a Gold Standard, but not until the bank cartel is fully exposed for raids of official allocated accounts. See the Zero Hedge article (CLICK HERE).

◄$$$ A RUSSIAN VESSEL HAS GONE MISSING WITH 700 TONS OF GOLD ORE. IT WILL BE RECOVERED SINCE THE LOCATION IS KNOWN. $$$

A Russian cargo ship carrying 700 tons of gold ore has vanished in late October in the Sea of Okhotsk in the Northwest Pacific region. A distress beacon was reportedly activated a couple weeks ago, but Russian rescue operations had no success locating the wreckage or survivors. A sonar distress beacon was automatically activated near Feklistov Island in the Shantarsk Archipelago, according to the Russian Emergency Ministry. The rescue operation was complicated by severe weather, with waves up to four meters high. The cargo carrier Amurskoe disappeared in the Sea of Okhotsk while carrying 700 tons of gold ore. No report of foul play was reported. Be sure that a Russian recovery mission will be ordered, since the location is known and the booty is large. Water depths is unknown at this time. See the NBC News article (CLICK HERE). The event is repatriation of a different kind, to the deep blue sea.

## GOLD PRICE BOUND BY CORRUPTION

◄$$$ UNIVERSAL GOLD PRICE BREAKOUT IS IMMINENT. ALL MAJOR CENTRAL BANKS ARE UNDER POLITICAL CONTROL AND REEKING OF DESPERATION TO COVER THE BREAKAWAY DEBT. THE CURRENCY DEBASEMENT IS ASTONISHING AND GLOBAL. A CUP & HANDLE PATTERN IS EVIDENT IN ALL GOLD PRICINGS, A SIGN OF BREAKOUT. THE ACTUAL INITIAL BREAKOUT EVENT WAS SEEN WITH THE EURO GOLD PRICE, AS PREVIEWED THIS SUMMER. THE NEXT WILL BE IN THE YEN GOLD PRICE AND GBPOUND GOLD PRICE, POSSIBLY IN SIMULTANEOUS FASHION. THE CLIMAX WILL BE IN THE DOLLAR GOLD PRICE TO CAPTURE WORLD ATTENTION. $$$

The Gold price is about to burst out. The major central banks of the world are truly out of control, debasing their currencies at a horrific pace. The Bank of Japan recently lost its independence, now explicitly under the control of politicians. They are desperately trying to weaken the JPYen as their large corporations (Toyota, Sony, Panasonic, Sharp) are under great pressure. The Japanese election on December 16th assures more money printing. The Bank of Japan is acting like a feverish money printer, just like the Bank of England, just like the Euro Central Bank, just like the USFed. Their central bank franchise system is imploding. Hyper monetary inflation is their primary role, the new standard, the new normal.

A second domino is falling. The Gold price in Euro terms started breaking out in early October. The Gold price in GBPound terms is next. It is now a matter of when (not if) the Gold price in USDollar terms breaks out. One certainty is the death of fiat currency, given the dependence of central banks on covering debts and redeeming toxic bonds. Money is being ruined at rapid speed. Their end is nigh. The highly reliable Cup & Handle formations are quite consistent across all four Gold prices in these currencies, signaling a strong reversal with gathering momentum.

◄$$$ REDUCED MARGIN REQUIREMENTS FOR PRECIOUS METALS HAS COME, OCCURRING IN A CURIOUS MOVE. MARGINS ARE BROUGHT DOWN FROM ABSURD HIGH LEVELS, MAYBE A LURE TO PAPER GAME ADDICTS FOR FUTURE CANNON FODDER. TIME WILL TELL. PERHAPS JPMORGAN NEEDED MORE BREATHING ROOM. MAYBE EVEN THE CARTEL IS PREPARING FOR A BIG MOVE UP IN GOLD AT YEAR END, AND WISH TO PARTICIPATE. $$$

The CME lowered margin requirements for Gold, Silver, and Copper. Gold was lowered 18.50% in margin requirements; Silver lowered 9.1% in margin requirements; Copper lowered 9.1% in margin requirements. GATA member James McShirley postulates the following, "This is very curious. I would have expected the exact opposite with what is going on. History has shown nearly all margin moves, up or down, are for the benefit of members and cronies. In this case they apparently just added overnight a whopping 20% extra leverage to Gold (from 18.43-1 to 22.10-1) and about 10% more to Silver (9.10-1 to 10.00-1). While still not extreme by CME standards the timing is stunning, with both Gold & Silver at historically very high Open Interest. Why extra leverage, and why now?"

McShirley cited some possibilities. Maybe the Boyz wish to lure in more weak longs for a much bigger ambush. If the Gold price rises up toward $1800, a long file will enter to join the apparent breakout. Perhaps the move is to benefit their own leader. It could be to give margin challenged short players more breathing room. Easier margin rules could be to give the giant JPMorgan more room to roam and maneuver. He pointed out that there must be a few cronies on margin call after the recent Apple/general equity selloff following the Obama re-election. Perhaps the move was designed to stem the steep exodus of trading revenue. He lastly ponders whether the Boyz and their cronies are actually firming positions to make a killing on a monster move higher in the Gold price. They always bend the rules to their favor.

◄$$$ A MAJOR DUMP TOOK PLACE IN THE SILVER MARKET ON NOVEMBER 2ND, FULLY PERMITTED BY SUBSERVIENT USGOVT REGULATORS. THE ONGOING GOLD WARS CONTINUE, ANOTHER NAKED SHORT AMBUSH ON RECORD. $$$

NetDania provides a service, to estimate volume from five separate market sources. It is not an exact indicator of volume data, but does shed much accurate light on the deeply corrupted market. According to NetDania, a total volume of 38,400 contracts, equal to 191.99 million ounces of paper silver were dumped on the market in only ten minutes between 8:30am and 8:40am EST. The Boyz chose to execute the raid precisely on the day of the gimmicked Non-Farm Payroll data release. They smelled a potential for a precious metals price move up, and snuffed it. The volume for those ten minutes corresponds to nearly one quarter of annual global silver production! Not the US output, but global output. No response by market regulators, business as usual. The screen shot of the paper dump is shown below.  See the Silver Doctor article (CLICK HERE).

◄$$$ ON THE SAME NOVEMBER 2ND DATE, A RAID TOOK PLACE ON THE GOLD MARKET ALSO. NO LARGE SCALE GOLD SUPPLY EXISTS IN THE OPEN MARKETS. THE GOLD PRICE WAS CONTROLLED LOWER IN ORDER TO FACILITATE A VERY LARGE TRADE. IT RECOVERED THE LOSS TWO DAYS LATER IN A MIRROR IMAGE JUMP UP. $$$

It is always interesting, sometimes with intrigue, to hear of his perspective. The European gold trader has been a strong influence for almost five years in providing his shared insights. Correct forecasts and tipoffs of extreme events are his usual fare. The Voice recently wrote a message, the following his main thoughts. Edits are mine, the thoughts his. He mentioned that his team is involved in the physical Gold market only, not the futures clown show. The gold market is extremely tight. To be sure, some blocks of physical are available. They change hands readily. However, within the physical market, investment grade transactions are not high volume. There simply are not larger quantities being offered right now. Supply is tight. In the raw Gold arena, the business from the hillside to the refinery, there is a constant supply. Today's drop in the Gold price must be the result of two Titans having clashed over a contract settlement issue. The price came down to complete a big order, nothing more. To push the price down that much only requires 2 to 3 metric tons to be visibly moved on the screen. Our team had nothing to do with it, and neither did our close friends in Hong Kong.

◄$$$ A MAJOR DUMP TOOK PLACE IN THE GOLD MARKET ON NOVEMBER 15TH, FULLY PERMITTED BY THE SUBSERVIENT USGOVT REGULATORS. THE ONGOING GOLD WARS CONTINUE, ANOTHER NAKED SHORT AMBUSH ON RECORD. $$$

In the TFMetals Report, my colleague Turd Ferguson summarized the ambush. He wrote, "Over the course of about 5 minutes, one single order was filled. This massive dump of about 25,000 gold contracts managed to move the price of gold down by nearly $20. To give you an appreciation of the size and scale of this deliberately criminal act, 25,000 contracts is the paper equivalent of 2.5 million ounces of gold, or roughly 77 metric tonnes, the paper equivalent to the alleged physical holdings of Australia or Indonesia." No end to the naked shorting. The financial press reported not a peep on order by the Syndicate, who act as advertisers on the network channels.

The flip side is that the artificially low Gold price attracted a throng of buyers who sought to capitalize on the discounted price. That is precisely the problem of the price suppression. It will drain the London bank cartel, or else drain the patience of the Swiss repositories that backfill the gold supply to the City. The massive raid occurred before the London PM fix, which ended up coming in at $1710 per ounce. It resulted in some extremely large physical purchases, which brought about price stability. In the following days, the price recovered above the $1725 level. The cartel plays games in market control, trying to cover many shorted contracts before the Commitment of Traders is released each week to identify their trails. See the TFMetals Report article (CLICK HERE) where he discussed the iron dome. It is a hard ceiling at the $1730-1740 level that the cartel is trying to defend on price. The quick recovery from the November 2nd pounce is clearly displayed.

◄$$$ A SILVER PRICE FORECAST, UP 400% IN THREE YEARS. THE JUSTIFICATION IS EASY BUT THE SURPRISE EVEN TO PRECIOUS METALS INVESTORS WILL BE A JOY TO WATCH. $$$

Investment specialist Ian Williams of Charteris Treasury has put his hat in the silver forecast ring. He expects the silver bull run to continue with a vengeance. Silver will increase in value five times over the next three years, according to Williams. He plies his trade as a mixed asset fund manager. He said, "Silver is about to enter a sustained bull market that will take the price from the current level of $32 an ounce to $165 an ounce and we expect this price to be hit at the end of October 2015. This forecast is based entirely using technical & cyclical analysis. It is in keeping with the mathematical form displayed so far in the bull run that has taken Silver from $8 an ounce in 2008 to its current price of $32 an ounce, having hit $50 an ounce in 2011." That is rather specific on price and timing, boldly presented. He regards the advance from the $8 level to the current $30 level to be part of a much bigger move, with the last 18 months serving as a consolidation period. Williams reminded that the silver price was more volatile than gold, but that he expected silver to continue to dramatically outperform gold. He brought attention to what he called the macro fundamentals that are supportive for the silver price, such as the re-election of President Obama, who supports Ben Bernanke's policy of Quantitative Easing.

Darius McDermott of Chelsea Financial Services agreed that QE means good news for precious metals. He wrote, "Strong demand for precious metals will remain as long as we have QE, which do well with each round of money printing. QE is bound to lead to inflation at some point and at that time, real assets will do best. Investing in a fund that holds a range of precious metals gives you positive diversification and less reliance on just Gold." See the UK Telegraph article (CLICK HERE). My best gold trader source expects the $150 price level to serve as yet another consolidation area for the Silver price en route to the $400 level later on. Nothing is being solved. Crisis and breakdown are the norm. Sovereign bonds are all turning toxic. Monetary growth (money supply) is growing totally out of control. Solutions are not pursued, only patches on the debt-based fiat paper system. A new trade settlement system is coming with a Gold Core. A grand Paradigm Shift is underway, with gold being shipped from London to the East. A new chapter is soon to be written, unlike the past. New platforms are being constructed by new masters.

Add Eric Sprott to the list of Silver bulls. He and his partner John Embry have been outspoken on the precious metals price prospects. They both agree that the Silver upward flight will be breaktaking. Recently Sprott have a presentation to some Manhattan investors. It was tracked. See the account in a Yahoo Finance article (CLICK HERE).

◄$$$ THE SILVER COIN SPREAD OVER THE COMEX PAPER SILVER PRICE HAS BEGUN TO DIVERGE, UP TO 40% OVER THE SPOT PRICE. MASSIVE DISCOUNTS OF PHYSICAL PRODUCT ARE OFFERED, WHICH RESULTS IN POWERFUL DIVERGENCE BETWEEN THE PHYSICAL PRICE AND PAPER FUTURES PRICE. AN EVENTUAL DEFAULT COMETH. $$$

At one point two weeks ago, the price of Silver Morgans was almost 40% over spot on the APMEX website mart. We are seeing enormous demand for physical Gold & Silver. The divergence from the corrupted paper price will grow worse over time, as long as the bank cartel continues to suppress the price. Naked shorting is their game, backed by propaganda. See the APMEX website (CLICK HERE) and the King World News interview of Haynes (CLICK HERE).

Bill Haynes is President of CMI Gold & Silver, a 40-year veteran in the game. In an interview, he explained the powerful precious metals demand by the public and official accounts. He said the following. "This massive buying came in from many people who are brand new to the Gold and Silver markets. But at the same time, investors which own physical Gold and Silver at much lower prices were stepping up and adding aggressively to their existing positions. Across the board, buyers expressed that they were deeply troubled about the deteriorating financial condition of the United States and other Western nations.

This was a huge week for us in terms of Gold and Silver sales, but half of our sales came today (Friday, November 2nd). Buyers poured in on the [severe price] drop. These people were just content to buy the dips. There are a lot of people sitting on dollars and they are finding Gold and Silver. They are getting out of dollars. Gold was down $40, and Silver was down $1.40 (on Friday). That action came on those phony employment numbers, released in the US. This is an ideal climate to invest in Gold and Silver.

Central banks around the world are printing money, and central banks will increase their Gold purchases to nearly 500 tons this year, as they keep expanding their reserves in this inflationary climate. If you look at the central banks with the largest paper reserves, you are looking at the Bank of China, the Bank of Japan, and Taiwan. However, they hold incredibly low percentages of gold reserves. For example, the Bank of China's gold reserve holdings are only 1.7% in gold. The Bank of China has the world's largest paper reserves, somewhere in the neighborhood of $2 trillion. The Bank of Japan, 3.2% of their reserve holdings are in gold, Taiwan, 5.7% held in gold. If we just have a small shift from this 1.7%, 3.2%, and 5.7%, up to 10%, you are looking at huge buying pressure on gold. Those three central banks right there are putting a great floor under the price of Gold somewhere at this level." The Chinese reserves are over $3.0 trillion, correction.

◄$$$ THE FORWARD CONTANGO IN SILVER AT THE LONDON L.B.M.A. HAS GONE DARK, WHICH MIGHT CONCEAL THE FACT THAT THE SUPPLY FOR SILVER HAS GONE INTO A DISCONNECT. HUGE PRESSURE IN THE SILVER PRICE IS LIKELY BUILDING. SUPPLY IS AT RISK. EXTRAORDINARY MEASURES HAVE KEPT LONDON IN SILVER SUPPLY TO AVERT DEFAULT. PROBLEMS ARE PUSHING TO THE SURFACE. SO THEY TURNED OFF THE LIGHTS. $$$

Indications are becoming clear about a scramble behind closed doors at the LBMA in London. Silver supply is at risk of default, the evidence mounting. Darkness is evil's best friend. For weeks heavy shipments from the United States have been the norm to keep London supplied. Finally, evidence has shown up with the contango, the spread from the forward futures price versus the spot price. A blogger on the TFMetals website pitched in with an astute observation on November 8th, with focus on the 3-month forward chart for silver. See the LBMA website glimpse (CLICK HERE) and the TFMetals article (CLICK HERE).

"The LBMA silver forwards website which provides indications of the contango/ backwardation status of Silver (which have proved very useful in predicting likely short-term pressures on price) has frozen on November 2nd, the rate having bled downwards prior to that. The LBMA are still permitting us to see the front month contango for Gold, which is collapsing quickly by the standards of Gold. We all know that the Silver movement usually leverage those of Gold. This suggests to me that something is happening and we are not being permitted to observe it. Despite a careful search of the entire internet, it appears that absolutely nobody has noticed the above fact, which I find completely astounding. So I am sitting here impatiently waiting for a knowledgeable and well-connected person to remedy it and tell us just what is happening at the LBMA. It is so interesting they will not allow us to see it. Link to the offending page, which has updated faithfully with this juicy data at approximately 06:30 EST for the last year or so. But suddenly it stopped last Friday."

◄$$$ A QUICK SUMMATION ON THE ALLOCATED GOLD SCANDAL. IT WILL BE A GIGANTIC SCANDAL. THE BANKERS WILL NOT ESCAPE WITHOUT LEGAL DAMAGE. THE EVENTS WILL PUSH THE GOLD PRICE TOWARD $5000 PER OUNCE. PRESSURE BUILDS FOR THE SCANDAL TO SURFACE. NUMEROUS FLANKS ARE UNDER SIEGE, WITH NO RELENTING. A CRISIS CONCLUSION COMES, BUT UNCLEAR WHEN. IT IS ASSURED. $$$

Focus on an event calendar, not a time calendar, since the banker cartel so easily violates the rules and push events out over time. The gold bars in London are being vacated, 6000 tons since March confirmed by my source. The silver is desperately being moved around to meet London demand. Much is shipped from the US, and recently perhaps from Canada. A global silver shortage has been in effect for almost 10 years. All major central banks are in permanent 0% with unlimited QE bond buying. The Saudi minister of security Bandar was killed by HezBollah. As a result, sure to happen eventually, the Petro-Dollar will fall with the House of Saud. Their regime has maybe a year or two more to go. The permanent ZIRP & QE laced within major central banks assure gold will surpass $2000 and silver surpass the $50 to $60 level. The Germans are a strange bunch, chess players. They have repatriated most of their gold already. They are trying to screw the London bankers hard with repatriation demands. Recall that Deutsche Bank turned state evidence (flipped) and has been working with Interpol and Intl Court Hague since June, a little known fact.

The many nations demanding full accounting if not return of their gold will erupt into the ALLOCATED GOLD ACCOUNT scandal. The improper usage of client gold on account is a major fraud felony. They will work to replace the absent gold in the usual way, by means of Swiss repository refills, from Basel at the Bank For Intl Settlements. They will also probably buy on the open market before long. The combination of open market purchase and revealed account pilferage will propel gold past $5000 and silver past $200. The resulting Gold/Silver Ratio will be back to the 25:1 ratio, closer to the historic norm. Nobody knows when, but it is unavoidable. Its occurrence is assured since large powerful forces are building, enough to move the system. It is not a concern for the Jackass when it happens, since it is assured to happen eventually. Long ago, my sentiments changed to care on timing.

The banker cartel and the Syndicate know they are ruined, and must renegotiate their position in the next chapter. They must bargain to avoid prison. The entire financial tragedy has a comedy aspect to it. The officials within government finance ministries and central banks are not even attempting to work toward a solution, only preservation of power and filling holes. The propaganda remains as thick as a fog. It is not confidence as the problem, but rather insolvency. It is not uncertainty as the problem, but rather deep destruction of capital. It is not volatility as the problem, but rather markets lacking integrity. Make preparations for Gold & Silver to assure future survival, gold to hold large accounts in savings, silver to hold in pockets for commercial purposes.

◄$$$ SOME ANALYSTS ARE DEAD WRONG ON THEIR GOLD ONLY THEORY. THIS CROWD IS ANTI-SILVER AND MISSES ITS UPCOMING ROLE IN THE TRADE SETTLEMENT SYSTEM. AS THE GOLD DEMAND RISES OUT OF CONTROL, IT WILL LIFT THE SILVER PRICE ALSO. IN FACT, THE SILVER SUPPLY SHORTAGE IS WORSE THAN THAT OF GOLD. NEVER OVERLOOK THE FACT THAT SILVER IS THE OTHER MONETARY METAL WITH LONG HISTORY OF PRECEDENT. $$$

A gold & mining stock analyst has taken the wrong road. Stewart Thompson, who is sometimes quoted on the Silver Doc website, is quite obnoxious and wrong at the top of his sarcasm. Rather than dignifying his errant view with quoted remarks, they will be summarized. The following are his thoughts, with my edits. Silver continues to struggle, a terrible situation of the silver bugs only beginning, not ending. The problem is that during the economic duress, the industrial demand for silver has caused a horrific error in silver bug assumptions about ratios and price. Thompson expects the Gold/Silver Ratio to rise in a further extension in extreme, not drop, over the life of this bull market. He mentions the hinge factor for a success in the Silver runup to be India. Only when India joins China on the industrial revolution front will Silver have a demand oriented bull market.

Thompson completely misses the investment demand factor. The USMint is running overtime to meet coin demand. As James Turk and Eric Sprott point out reguarly, the physical Silver demand is so large that it equals the Gold demand in US$ volume. That means 50 times as many silver coins are bought per gold coin by weight. Thompson likens the silver investors to Elmer Fudd, whom he does not expect to line up around street corners to buy silver coins. He instead believes the Elmers will be appearing in bread lines. He expects food and shelter to be a higher public priority than buying silver. Thompson makes a moronic remark about Silver unable to take out the $50 price (from 1980 high) after twelve years of super crisis. He anticipates Gold will resume its monetary role, but Silver will be crashing at that time.

Some Jackass rebuttals. In past Hat Trick Letter reports, it has been shown that investment demand has risen in a huge way, to become a far more important factor in the Silver demand calculus. Focus on industrial demand is highly spurrious. The global economy could falter badly, but Silver will be in high demand. Gold will accommodate storage and movement of large amounts of money, but Silver will accommodate the movement in transactions for large amounts of goods & services. The commercial aspect of Silver will be plain when the ATM machines at banks are turned off. Next, while India is an important nation for Silver, so is the entirety of Asia, Europe, and North America. Across the world, silver demand is on the fast rise.

My gold trader source pitched in. The Voice wrote, "Gold & Silver are both monetary metals and there is nothing that will change that. So is Copper, but Platinum is not. Those interested in this debate should take the opportunity to watch Eric Sprott's New York presentation, where he explained in clear terms the factors behind the powerful bull market in both Gold & Silver. We should also not care what the FOFOA people and others like them have to say. They are of no concern."

## MINER SHOCK (TAX, GEOLOGY, COST)

◄$$$ THE AUSTRALIAN MINING TAX IS ON COURSE TO CAUSE BIG PROBLEMS. THE COMMODITY SECTOR IS WIDELY EYED WITH LUST BY GOVERNMENT OFFICIALS. THEY DESTROY ALMOST EVERYTHING THEY TOUCH WITH HIGHER TAXES. THIS CASE IS NO DIFFERENT, FINALLY RECEIVING SOME HARSH PUBLICITY. THE BUSINESS SECTOR REACTION TO THE SUPER MINING TAX HAS BEEN QUICK AND NASTY, ENOUGH TO AWAKEN THE NITWIT POLITICIANS. PROJECTS HAVE BEEN HALTED. THE TAX WILL BE RECONSIDERED AND REDESIGNED. $$$

The Mining Super Profits Tax at work in Australia is a disaster in progress. Its enormous economic damage was easy to predict, with harmful long-term effects having quickly become reality. The movement to protect national natural resources is being dubbed Resource Nationalism. Unfortunately the attention goes hand in hand with taxing it in order to relieve fiscal problems. A bad example is being set by Australia. Numerous governments have begun to extort money from mining companies in a sequence of shakedowns. The wealth is obvious, hard assets in major projects, but sitting ducks to oafish politicians desperately seeking to raise new tax revenue. The large deposits and huge capital investments cannot escape since trapped in the lands. Bad judgment also was seen. The Australian Govt was obviously in error when it believed that the commodity boom induced by China would go on forever. It went on until the financial problems crashed the economies that were responsible for demand of Chinese finished products. The Chinese quagmire actually is worse than the Jackass forecasted in 2009 and 2010.

The super mining tax targets iron ore and coal. It has already faltered a few months after the tax was introduced. Given the major risks involved in mining, expanded investment in new mines and continuation of current projects have hit the wall. Reaction has been quick. Many mining companies have decided to put on hold their planned expansion projects and investments in Australia. Lower commodity prices have been a factor, but that part of the business is customary and well managed. Look for rethinking of the mindless tax on mines. The mining tax movement will sweep the entire world, as many nations have such impositions in the planning or execution stage. South America and South Africa are prime examples. See the Acting Man article (CLICK HERE).

◄$$$ THE GOLD INDUSTRY FACES MINE DISCOVERY CHALLENGE, CLAIMS BARRICK. WITH GOVERNMENT ABOVE ON TAX AND CONFISCATION, WHILE NATURE BELOW ON CHALLENGING DEPOSITS, THE MINING INDUSTRY STRUGGLES MIGHTILY. PERHAPS ONLY MAJOR FIRMS HAVE TROUBLE DISCOVERING ORE DEPOSITS, FROM INHERENT INEFFICIENCY. TO BE SURE, GOLD DISCOVERY IS MORE DIFFICULT, DESPITE HIGHER BUDGETS FOR EXPLORATION. $$$

Discovery rates of Gold deposits are decreasing even though exploration spending in the industry reached a record $8 billion last year. So claims Jamie Sokalsky, the chief executive officer of Barrick Gold Corp, who spoke in Hong Kong at a global conference. They are the world's largest producer. Only three discoveries were recorded in 2011, compared to eleven in 1991, none of which can be described as super-giant, defined as holding more than 20 million ounces. Breakeven costs are rising on projects. The rising cost structure felt in the global economy touches the mining industry also, resulting in less gold output. This is great for maintaining the gold shortage and extending the gold bull market for a long time into the future. But not for mining stock investors.

Global gold mine output is expected to rise by 0.7% in 2013, the slowest pace since 2008, according to Barclays. The net total physical supply (after demand) could shrink by 0.4% next year. Sokalsky made a remarkable comment. He said, "I do not see a surge in gold production if we saw a gold price of $3000. At a higher gold price, we would still be experiencing the same challenges. I would suggest there would be very limited response to that higher gold price. It is getting harder to find large deposits, and to get those deposits into production takes at least twice as long as it might have taken a decade ago. We are not going to see new mines coming in as fast as we thought to replace old mines that are closing. Getting mines permitted, dealing with the government and the communities, environmental issues, all of that [red tape] takes so much longer. It also costs multitudes more to build a mine and to finance that." See the Bloomberg article (CLICK HERE). One must wonder if a $5000 gold price would change the dynamics for discovery.

Sounds precisely like strong justification for a permanent Gold Bull Market, my forecast. When the next global trade settlement system arrives, it will have a gold core designed to properly and efficiently manage the short-term finance requirements. When in place, the Gold price should be set in price to between $7000 and $10,000 per ounce. Even with the installed new settlement system, if an inadequate amount new gold can be brought into the core trade bank, then the Gold price will rise further in the next chapter. As footnote, Barrick started the Pascua Lama project in 2009, unaware its costs would triple in three years. The vast deposit in the Andes straddles the Chile and Argentina border. Mining costs are sinking gold miners. They urgently need higher gold prices, to offset higher operational costs. The photo is of Pascua Lama site in the wilderness. Deposits sitting in extreme wilderness and remote locations add to cost.

◄$$$ NEWMONT REVEALED A BIG JUMP IN MINING COSTS. THE COST FACTOR WILL CONTINUE TO HAMPER OUTPUT AND PROFIT. THE PHYSICAL INVESTMENT OF COINS AND BARS IS FAR SUPERIOR, WITH LESS RISK. $$$

The global economy struggles with higher costs. In the case of Newmont, higher costs took the shine off their most recent earnings report. The largest US gold producer  reported Q3 profit that missed analyst estimates, after costs increased more than expected. Sales fell 9.6% to $2.48 billion. Net income dropped 26% to $367 million, equal to 74 cents per share, from $493 million (at 98 cents per share) from a year ago. Pro-forma earnings were 86 cents per share, which exclude costs related to restructuring and other one-time items. Company officials said costs applicable to sales were $693 per ounce of gold and $2.38 per pound of copper, compared with $622 and $1.10 a year ago. That represents a substantial cost rise for gold of 11.4% and a massive cost rise for copper of 116%. See the Mining article (CLICK HERE) and Business Week article (CLICK HERE).

◄$$$ THE WISDOM OF INVESTMENT IN PHYSICAL GOLD & SILVER IS BECOMING MUCH MORE APPARENT AND OBVIOUS, AS FORECASTED IN 2009. THE GOLD COMMUNITY WILL EVENTUALLY ARRIVE AT A CONSENSUS, THAT OWNING PHYSICAL GOLD & SILVER IN THE FORM OF COINS AND BARS IS THE BEST INVESTMENT. $$$

Mining costs will be a constant factor to sink gold mining producers. Before it was covering their hedge book of forward sales, which removed capital from the balance sheet. Now it is higher costs. The more nimble smaller exploration firms are quicker afoot and more efficient, smarter too. That is why the little firms (Canadian Juniors) will be gobbled up for pennies by the majors, which is a phenomenon coming soon. The wave of takeovers by the majors will cause great frustration to the small mining stock investors, who will not see the big payday. They will instead be new proud stockholders of the unwieldy, awkward, lumbering inefficient giants Barrick and Newmont that conduct the acquisitions. The best gains will be with coins and bars of the physical variety. Boring but highly profitable, and without dilution risk or business risk or local tax risk or labor strike risk or jurisdiction risk. Also, no leverage risk or counter-party risk from the investment side.

## ECONOMY STUCK IN QUAGMIRE

◄$$$ US-BASED NATIONAL RAILWAY TRAFFIC HAS TAKEN A DOWNTURN, ANOTHER CONFIRMING SIGNAL AT THE CROSSINGS. THE HURRICANE MIGHT HAVE RESULTED IN A 5% LOSS OF RAIL TRAFFIC IN THE ENTIRE EASTERN REGION. $$$

The Assn of American Railroads reported declines in rail traffic for the week ending November 3rd, but the data included the impact from Hurricane Sandy. In the week, US railroads originated 278,230 carloads, down 6.8% compared with the same week last year. The inter-modal volume for the week totaled 224,467 trailers and containers, down 6.2% compared with the same week last year. This measures the railroad containers loaded on trucks. Ten of the 20 carload commodity groups posted increases compared with the same week in 2011, with petroleum products up 61.5%, farm products excluding grain up 46.4%, and lumber & wood products up 24%. The groups showing a decrease in weekly traffic included iron & steel scrap (down 25.8%), metallic ores (down 22.9%), and non-metallic minerals (down 22.5%). Weekly carload volume on Eastern railroads was down 12.7% versus the same week last year. In the West, weekly carload volume was down 3.0% versus the same week in 2011. Regard the West as a control group, to conclude the storm might have resulted in almost 5% traffic decline in the East. Only the northern half of the Eastern seaboard was badly affected. See the Business Insider article (CLICK HERE).

◄$$$ WATER LEVELS ON THE MISSISSIPPI RIVER MAY DROP TO HISTORIC LOW LEVELS NEXT MONTH IN THE MIDWEST, DELAYING BARGES CARRYING GRAINS, COAL, STEEL, AND PETROLEUM. THE EFFECTS OF THE MAJOR DROUGHT HAVE NOT PASSED. AN ECONOMIC EFFECT PERSISTS. HIGHER FOOD PRICES COULD ARRIVE IN 2013. $$$

The Mississippi River is a spectacular waterway, often called the Muddy River. It is the busiest commercial waterway in the United States. It could become too shallow to navigate by December 10th in a stretch from St Louis Missouri to the south extending toward Cairo Illinois 180 miles (=290 kilometres) to the north. At that point, the great Mississippi meets the Ohio River. The potentially impassible segment is being watched by the American Waterways Operators & Waterways Council. The weather condition is expected to continue as a winter drought. It began by parching the dry farmland from Ohio to Nebraska, soon expected to spread to Texas. The extreme condition will persist at least through February in most areas, according to the US Climate Prediction Center in Maryland. The traffic is enormous, like the national aorta artery. The United States is the world's largest shipper of corn, wheat, and soybeans. The river is critical for the entire agricultural community of the nation. Barges on the Mississippi handle about 60% of grain exports that exit into the Gulf of Mexico through New Orleans. A shutdown to barge traffic would interrupt 300 million bushels of agricultural product worth $2.3 billion from reaching its destination. A higher food price response would be very much anticipated. See the ABC News article (CLICK HERE).

More disruption to the USEconomy, in addition to the Hurricane Sandy. If only the public were more aware of the HAARP device. A very intelligent souce with reliable information believes the US weather gods within the intelligence agency attempted to create a mild winter last year. They succeeded, but caused a drought in the ensuing months, as they seriously disturbed the water system and the ice pack. Their recent project was to stir up a hurricane for the NorthEast, where no such event has occurred in centuries. The absurdity of the Mayan Calendar story provides some idiotic cloud cover, cited by intelligent fools. The agency in my view is looking to sabotage the USEconomy in order to facilitate the imposition of martial law. The Jackass is not the least interested in rebuttals from people who know little about the weather control device, nor possess much scientific training, nor research anything except their stock portfolio caught in a revolving door of value erosion. They might be advised to research certain concepts like cell phone towers and microwave ovens, if inspired. As mentioned elsewhere, a client has a friend who worked on the HAARP project. It is real, and it is potent. Indications are that it has caused some drought in China by direct plan, to render harm to a rival nation.

◄$$$ THE US-BASED FOOD STAMP APPLICATIONS SURGED, THE REPORT WITHHELD UNTIL AFTER THE ELECTION. NO POLITICAL MOTIVE OBVIOUSLY, SINCE THE DELAY WAS BLAMED ON WHATEVER, MAYBE THE DOGS EATING HOMEWORK. THE JOB GROWTH DURING THE OBAMA ADMIN IS NEAR ZERO. THE FOOD STAMP PROGRAM HAS GROWN DURING THE OBAMA ADMIN BY 16 MILLION. IF A MARXIST STATE IS DESIRED, SOME POWERFUL MOMENTUM HAS BEEN ACHIEVED. $$$

The Food Stamp program known as SNAP, which uses debit cards in the modern society, surged in October. The rise was the most in a single month in the past year. The number of Food Stamp participants has reached a new all-time record. The delayed release managed to avoid any potential embarrassment for the Obama re-election mission, since he was selling a recovery story. The total number of Americans on the USGovt food assistance relief program reached the 47.1 million level. Furthermore, the monthly increase of 420,947 announced by the USDept Agriculture was four times greater than the number of mythical jobs created in the most recent tallied (gimmicked) month. It is not clear the nation can withstand for more years of growth, in the Food Stamps program. The USEconomy is moving fast toward the the land of Mad Max. See the Zero Hedge article (CLICK HERE). Let's not venture into the program extension to families in Mexico, a lunatic concept.

◄$$$ THE US-POSTAL SERVICE FACES THE BRICK WALL. THE UNITED STATES CANNOT AFFORD THE SHAME OF A DISSOLVED MAIL DELIVERY SYSTEM. IT WILL BE BAILED OUT AT THE 11-TH HOUR. ITS FAILURE WOULD CONFIRM THE THIRD WORLD HAS A NEW MEMBER. THE FAST EFFICIENT INTERNET HAS CLAIMED A VICTIM IN THE ELECTRONIC AGE. $$$

The United States Postal Service is a dead company. It moves, but not as proof of life. Its movement is evidence of either inertia or liquidity. It has 530 thousand employees, but is dragged down by $15 billion in debt. It is in the process of defaulting on $11 billion in legacy debt. The snail mail professionals deliver 355 million packages per year, up 25% year over year. They do get the job done. They are very reliable, not losing mail. However, they belong to a different era, along the genetic line of dinosaurs. The Jackass operates under an assumption. If it cannot be sent via attachment on an email or faxed, then it is probably junk. At one point several years ago, between 15% and 20% of all USPS mail delivered was junk mail paid by discount meters. No thanks, but my father still loves it. Mail call!! On a humorous note, the postal service is responsible for expanding the English language slang. If somebody goes crazy at work, shoots people, then commits suicide, the person is said to have gone postal. The lexicon addition is well established. All too many such cases, as their work force is somewhat unstable.

◄$$$ THE US-LABOR MARKET IS DEPRESSED, AS THE PARTICIPATION RATE IS DOWN HARD OVER THE LAST FEW YEARS. RAISING TAXES IS NOT THE SOLUTION. OBSERVE THE OBAMA ADMIN CLAIM OF CREATING 2 OR 3 MILLION NEW JOBS, NOT BASED IN FACTS. NO RECOVERY IS VISIBLE WITHOUT ROSE COLORED GLASSES. MORE LIKE ALMOST 5 MILLION JOBS WERE LOST IN THE REAL WORLD. $$$

◄$$$ PREPARE FOR A SUBPRIME CRISIS REDUXAS THE FEDERAL HOUSING ADMIN IS RUNNING OUT OF MONEY QUICKLY. THE F.H.A. HAS BEEN OPERATING AS THE LIMITLESS SUBPRIME USGOVT LENDER, MAKING SURE THAT 5% DOWN PAYMENTS REMAINED THE NORM. NO PUBLICITY HAS BEEN GIVEN THE UNRESTRAINED USGOVT AGENCY FOR ITS RECKLESS LENDING. $$$

The Federal Housing Admin is on the verge of exhausting its reserve account because of rising mortgage delinquencies, according to the Wall Street Journal. They cited insiders familiar with the reckless management practices. The agency will need to draw on more federal funding for the first time in its 78-year history. The debate will probably avoid a public forum to expose the FHA, the Fannie Mae drunken  parent. Regardless, it picked up the mantle from Fannie Mae, and continued with wanton unrestrained slipshod management in the underwriting of mortgages. The FHA converted the USGovt into the largest subprime lender, in a process that never actually halted. Any decision would have to wait until February on further FHA replenishment. The USCongress would not need to authorize any funding because the FHA actually has permanent and indefinite budget authority. See the Market Watch article (CLICK HERE).

◄$$$ THE OFFICIAL US-PENSION INSURER RAN A RECORD $34 BILLION DEFICIT, BIGGER THAN LAST YEAR. THE USECONOMY IS NOT IN RECOVERY, AS BUSINESSES ARE DYING AND MAKING CLAIMS TO RECOVER A PORTION OF GUARANTEED PENSIONS. $$$

The Pension Benefit Guaranty Corp is a federal agency that guarantees bankrupt pension funds across the USEconomy. The PBGC reported last week a fiscal year ending with an outsized $34 billion deficit. That represents a 31% increase from the $26 billion deficit reported for the previous year. Witness one more contradiction to the politician claims of a USEconomic recovery. It is instead deteriorating at an increasing rate. The list of broken parts to the USS American ship of state adrift in federal toxic waters is staggering. Add the PBGC to Social Security, Medicare, Medicaid, the Postal Service, Food Stamps, and the FDIC. To say innumerable federal spending programs are all bankrupt is a gross understatement that might overlook several more. These programs must cease with a default, or else have their debts monetized by the central bank, with USGovt approval. The USGovt deficit is not coming down. The Pension Benefit Guaranty Corp is officially the guarantor for bankruptcy cases. If a company goes bust, the workers do not lose their entire pension. Around 35% of the original pension promise is honored, paid by the PBGC. Conclude easily that hundreds or thousands of companies are going bust, during a supposed recovery. Only a moron would believe the recovery story, a qualification for public office. See the Silver Doctors article (CLICK HERE).

◄$$$ EUROPE HAS BEGUN TO UNDERGO A MINOR PANIC ABOUT ITS HIGHER ENERGY COSTS AND HARMFUL CONSEQUENCES. CRUDE OIL IS 25% HIGHER IN PRICE, AND NATURAL GAS 300% (FOUR TIMES) HIGHER IN PRICE THAN IN NORTH AMERICA. REGARDLESS OF REASON, THE EFFECT IS FELT ON THE ECONOMIC PROSPECTS DUE TO COST STRUCTURES. $$$

Germany's industry lobby group the BDI has warned that the nation will lose a competitive edge against rivals in the United States because of the much higher energy costs in Europe versus North America. The discrepancy is expected to continue widening in the future. While US costs are actually easing, European costs are still rising due in part to the German Govt decision to exit nuclear power. It said the US shale boom could lead to a revival of the US, and warned that the higher prices in Europe could result in a de-industrialization effect. It said that a pan-European energy market could bring prices down, but the European Commission is not expected to meet its 2014 deadline for a single energy market. Asia, and particularly Japan, are also extremely concerned about the industrial impact from rising energy prices. Consultancy Macquarie wrote, "Japanese policy makers are increasingly worried about the falling competitiveness of local industry due to an over-reliance on Asian LNG supplies with non-flexible, higher pricing slopes." The LNG pertains to Liquified Natural Gas. The Hat Trick Letter has commented periodically on the $20 differential between the West Texas and Brent crude oil price. The effect, whatever the cause of the differential, is gradually being felt in the cost structures. The potential for relative US growth is a potential benefit from this position, if it can avoid financial collapse and martial law.

A big part of WTexas vs Brent price spread has been the continued trend in the North Sea toward lower oil production. The drilling has been troublesome in the biggest source of Brent supply. Much European demand draws from the Brent price, but also from a much higher natural gas price. The North American oil price benefits from the abundance of oil deposits, and low gasoline demand trends due to the rough economic recession. The margin looks promising with new ramps in production in places like the Dakota Bakken. Do not expect the WTexas vs Brent oil price spread to close much, perhaps from the current $22 spread to the mid-teens. As of Wednesday, WTexas crude was at $87.4 versus Brent at $110.9, still a roughly $22 spread. Thanks to The Shamrock out of the New York options trading area for the story.

◄$$$ GERMAN EXPORTS HAVE DECLINED BY 2.3%, AS EUROZONE DEMAND SHRIVELS. EVEN THE MIGHTY GERMAN ECONOMY FACES TROUBLE, AS THE NOOSE TIGHTENS FROM THE BROAD DAMAGE TO THE CONTINENT. EXPORTS TO CHINA CAN NO LONGER OFFSET THE DAMAGE TO ITS EUROPE-BASED CUSTOMERS. THE BELLWETHER NATION IS HURTING. $$$

The German export trade is in trouble. Exports declined in September at the fastest pace since late last year, harmed by lower demand among its EuroZone trading partners locked in crisis. Imports also fell, clear indication that the German Economy has been afflicted. The trade figures come atop a string of disappointing data for the continent's economic powerhouse. Business sentiment has worsened; the private sector has contracted; joblessness has risen; and industrial orders have fallen at their sharpest rate in a year. The debt crisis has slammed Germany finally in the core business sectors. A breakdown of the German trade data on an unadjusted basis showed exports to the EuroZone fell hard by 9.1% on the year, even as exports to countries outside Europe rose 1.8%. Imports fell 1.6% and exports declined 2.5%, worse than consensus forecasts. The seasonally adjusted trade surplus narrowed to EUR 17.0 billion from EUR 18.1 billion in August.

For a long time the Germany Economy seemed impervious to the EuroZone troubles. That it is submitting to pressures means two things. The neighbors in Europe have big unresolved problems as they submerge inexorably. But secondly, the Chinese customer have fewer orders from the German innovative industries. The China slowdown has hit Germany, a huge source of machinery along with Japan. Look for negative growth in Q4. A reflection is seen in France. Although their trade deficit narrowed in September, it was aided by lower energy imports and a lift in Airbus sales. The former indicates recession, the latter a temporary factor. See the Reuters article (CLICK HERE). The damage is widespread in Germany. See a Reuters article (CLICK HERE) on Commerzbank cutting jobs. See a Testosterone Pit article (CLICK HERE) on the gathering pressures hitting the Germany Economy. Thanks to RobH in Washington state for aid on several stories, including this one. Much appreciated.

## 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.