GOLD INVESTMENT REPORT
PRECIOUS METAL & ENERGY
CURRENCIES & STOCK INDEXES

* Intro Gold Nuggets
* Failure, Fractures, Fraud & Froth
* Petro-Dollar Shifting Sands
* Gold Story Western Front
* Gold Story Eastern Shift
* Strong Demand & Acute Shortage
* Barrick Mess in Showcase






HAT TRICK LETTER
Issue #116
Jim Willie CB, 
“the Golden Jackass”
24 November 2013

QUOTES ON GOLD

"On November 22nd 1963, my uncle President John F Kennedy, went to Dallas intending to condemn as nonsense the right wing notion that peace is a sign of weakness. He meant to argue that the best way to demonstrate American strength was not by using destructive weapons and threats, but by being a nation that practices what it preaches about equal rights and social justice, striving toward peace instead of aggressive ambitions. Despite the Cold War rhetoric of his campaign, JFK's greatest ambition as president was to break the militaristic ideology that has dominated our country since World War II. Hugh Sidey, a journalist and friend, wrote that the governing aspect of JFK's leadership was a total revulsion of war." ~ Robert F Kennedy Jr

(the next 50 years have seen the Fascist Business Model has merged with the War Machine, the Wall Street fraud totaling in $trillions, the war costs in $trillions, the core industry largely vanished, the national bankruptcy almost complete, the federal deficits out of control, the debts covered by inflation, the leaders working their own agenda, the political dysfunction appalling, the financial corruption pervasive, the economy mired in an interminable recession, the people feeling betrayed losing hope, the homestead equity protection gone, as the path away from the Kennedy vision seems a path to US destruction)

"If you want to know when a society vanishes, watch money. Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of moral existence. Destroyers seize gold and leave to its owner a counterfeit pile of papers." ~ Ayn Rand

"History will overwhelmingly approve of Quantitative Easing." ~ Lawrence Summers (moron castoff from Harvard, who jumped off the building, and is now somewhere between the 10th and 15th floors)

"He that is good at making excuses is seldom good for anything else." ~ Benjamin Franklin (founding father US statesman)

"Ignorant citizens elect ignorant leaders. It is as simple as that." ~ George Carlin (comedian and current US philosopher)

"Ignorant, gullible, and poorly raised people select syndicate puppets as leaders with glee, but they compensate for their errors by repeating the process, sometimes using the other political party, which happens to be identical except for subtleties and formalities like preferring an elephant or a donkey as mascot, but still sleeping with bankers and acquiescing to war." ~ Jackass

"What the Federal Reserve is doing is utter insanity. The rest of the world is starting to lose faith in our financial system and the USDollar, and this is the most important consequence of QE money printing [for bond purchases]. The [foreigner economies] actually use more dollars outside the United States than [the domestic economy uses] inside the United States. The economic collapse is happening right now. It is a steady decline punctuated by moments of crisis like we saw back in 2008. [The next crisis] will be like 2008 on steroids. We are living in the greatest debt bubble in the history of the planet. Learn how to grow good food, get alternative sources of energy, and hold gold & silver for the long term." ~ Michael Snyder


"The COMEX currently has 223 tons of gold stored in its custodian's vaults. [Then] 203 tons of this gold is reported as Eligible, which means that it is owned by others who have warrants to claim it. The COMEX vaults are storing this gold which is Eligible to be reclassified as Registered gold in the event that the owner decides to sell it. The COMEX has 20 tons of gold to cover a potential demand of 572 tons in December alone. The situation seems extreme. But somehow, the COMEX has avoided a delivery default and cash settling future contracts in all previous months. December contracts are very popular. So a comparison to last year at this time is more instructive than comparisons to previous months of 2013. Going in to year end, the COMEX currently has proportionally fewer ounces to cover December contracts. All I want for Christmas is for just 10% of the December contract holders to stand for delivery and publicize when the COMEX forces them to settle for cash instead of bullion. This charade has gone on long enough!" ~ Jesse (of Cafe Americain)

"Inflation is not measurable. We can summarize our views on money with similar succinctness: it is poorly understood. As for the economy, we know only this: it is a complex system. From these observations can be derived a straightforward corollary on economic policy makers: trying to control a variable you cannot measure (inflation) with a tool you do not fully understand (money) in a complex system with hidden unobservable and non-linear interrelationships (the economy) is a guaranteed way to ensure that most things which happen, were not supposed to happen." ~ Dylan Grice

"The gold price will continue down until the COMEX is dead and shut down, with no gold held in inventory, facing multiple lawsuits for contract fraud. It is that simple, since the rest is noise and outward musings." ~ Jackass

"There is nothing the Fed can do to solve the depression or to change the structural problems in the US economy. I may be a critic and I may be able to point out why they are wrong, why their models are wrong and why this says NO GOOD EXIT, but they think they are right. They are gonna keep going and kind of drive the bus over the cliff. Now, at that point, when the crisis emerges, they may have to go to a Gold Standard. They do not want to, but they may have to, so as to restore confidence." ~ Jim Rickards (the crisis emerged five years ago, Big Jim, and the Eastern nations are already working on the Gold Trade Standard, which you never talk about because you have one foot in the Anglo banker camp, much like a mole)

"We should not even care about a financial metric like the Gold Forward Rate, when some connected insiders mention repeatedly that the Gold market is broken and gold is not available in size, except for the Eastern central banks and a few select geo-politically connected billionaires." ~ EuroRaj

## INTRO GOLD NUGGETS

◄$$$ LANGLEY LARRY ADDED TO THE GLOBAL YUAN PERSPECTIVE. $$$

The following is from a CIA source, straight from Langley, taken verbatim. "China released this afternoon an official statement that it will stop stockpiling USDollars. China will cease adding to its US debt to hold the total of USDollars at or below current levels. Most Chinese held US government debt is due within nine months at maturity. China is now in on the market moves that the US and UK have been making. China also issued rules allowing all futures on Chinese exchanges to be prced in Yuan/renmimbi. China also announced that multi-billion (in USDollar equivalent amounts) of Yuan contracts for oil & gas had been signed with Iran for the next five years. This is the first major contract with a duration but without a top amount signed in Yuan only. Iran is not allowed by the USGovt to use dollars. So Iran took Yuan from its main trading partner and ally. Other countries have made product exchange and barter contracts in their own currencies with China. But the contract with Iran is a straightforward futures contract with Iran in Yuan. China also announced that it has made but not yet officially started contracts between two other countries, where the contracts do not involve China using Yuan as the currency of exchange. The Yuan is now beginning to replace the USDollar as the global exchange currency and WashingtonDC will be screaming about this, demanding use of the USD to continue. Oil is already being sold against a basket of currencies rather than for dollars and the portion in USDollars falls on January 1, 2014."

◄$$$ THE CHINESE ARE GRABBING HARD ASSET SOURCES AND ENERGY OUTFITS. AFTER THE OGX GIANT, ANOTHER BRAZILIAN COMPANY HAS DEFAULTED, A NICKEL MINING COMPANY. WATCH CHINA GRAB IT QUICKLY. EXXON MOBIL WILL SELL ITS POWER STATION TO A CHINESE FIRM. GOLDMAN SACHS IS IN TALKS TO SELL ITS METALS WAREHOUSE BUSINESS, THE LIKELY BUYER TO BE A CHINESE FIRM. ONE BY ONE, BIG ESTABLISHMENT COMPANIES AND THEIR ASSETS ARE BEING TRANSFERRED TO CHINESE HANDS. EXPECT MORE USTBONDS USED AS CURRENCY IN THE LIQUIDATION BUYOUTS, THE INDIRECT EXCHANGE FLOW. $$$

Mirabela Nickel has become the first Australian company since April 2009 to default on a bond denominatd in USDollars. The miner failed to meet a semi-annual coupon payment on a US$395 million 2018 senior secured notes, due on October 15th. They bear 8.75% but defaulted. They missed a US$17.3 million payment, the grace period ending on November 14th, according to Standard & Poors. See the IFR Asia article (CLICK HERE). The last big Brazilian firm to go bust was under the OGX massive umbrella, owned by Eike Batista. Both firms are likely to be scooped up by the Chinese. Expect the investment to be covered in USTreasury Bond payments. The resource sector is littered with new acquisitions conducted by the Chinese. They are using their USTBonds held in reserve like supermarket cash on the metals counter and energy aisle. The currency will find its way in all types of cases back to the sender, the USGovt or London banks. It is part of the grand new trend, called Indirect Exchange, a manner of dumping the USTBonds.

Exxon Mobil has agreed to sell its majority stake in a Hong Kong utility and a power storage firm for a combined $3.4 billion. The energy giant has spent a cool $33 billion in the first nine months of 2013 on production and exploration projects. Under the deal, CLP Holdings will assume control of Castle Peak, one of Hong Kong's main electricity providers, lifting its stake to 70% in the process. They will buy half of Exxon's holding for HK$12 billion (=US$1.55 bn). The state-owned China Southern Grid will buy the other 30% held by Exxon. The terms of the deal have not yet been disclosed, but a source indicated a price tag also of HK$12 billion. CLP is backed by the wealthy Kadoorie family, committed to the electricity business in Hong Kong for over 100 years. See the Reuters article (CLICK HERE). More USTBonds in the channel to dump on the New York and London banks.

Goldman Sachs plans to resume continue negotiations to sell its metals warehousing business, given the tough new exchange rules in place. The potential buyers are largely firms based outside the United States. The item on the sale block is Metro Intl Trading Services, which stores aluminum and other metals for the London Metal Exchange warehouse system. It has been at the center of a controversy that focuses on GSax delay tactics to squeeze clients into paying higher fees. Wall Street ownership of physical commodity assets and warehouse management is ripe with corruption. Over a dozen parties have expressed an interest in buying the business, according to the Financial Times. They report potential buyers as Chinese insurer Ping An and China Minmetals. In addition, the Brazilian bank named Grupo BTG Pactual SA is also actively looking at warehouse assets. See the Reuters article (CLICK HERE). More USTBonds in the channel to dump on the New York and London banks.

China is maneuvering to secure tangible assets in exchange for USTreasurys. They pursue gold, commercial property, retail malls, companies with residential homes as assets, farmland, mines, energy deposits, and port facilities. They have gone shopping around the world, on every continent. It is redemption time. EuroRaj added a true interpretation, "The secret is out, how China is silently conducting a global audit by buying out long-term metal hedges and acquiring warehouses and vaults. Next come landlord inspections."

In a rhyming event, due to the US bank downgrades, Morgan Stanley has been forced to sell its commodities business unit to OAO Rosneft, the giant Russian energy firm (twice size of Exxon Mobil). Any sale would probably include TransMontaigne Inc., a Denver-based petroleum and chemical transportation company with storage facilities. Morgan Stanley's commodity business posted a return on equity under 5% in 2012, the lowest among its trading businesses. The firm cut 10% of its workforce in the division this year. It held talks in 2012 with Qatar's giant sovereign wealth fund about selling a stake in the business. The Wall Street banks are under financial pressures from insolvency, but also legal pressures for market interference and overreach. The world has stopped accepting USTreasurys as collateral, one of their problems. Worthless fake money does that. US banks are being forced to sell many marginal and sometimes valuable assets to stay alive in the fiat world. See the Bloomberg article (CLICK HERE).

◄$$$ THE CHINESE STRATEGY ON GOLD IS SIMPLE AND EFFECTIVE. $$$

The Chinese Govt is encouraging the people to buy gold for three reasons:

1)      Investment in gold inhibits a common path that would otherwise flow into bubble markets like real estate and equities. No energized gold trend is an asset bubble, but rather an enlarged safety valve with reservoir.

2)      Gold provides a strong base to protect the citizenry from price inflation or other economic chaos, including bank failures with associated account losses. The stability insurance can reduce the chances for civil unrest, if economic problems ensue.

3)      If the people ever wish to redeem their gold bars, the Peoples Bank of China is ready and willing to soak up supply. The central bank could easily increase its reserves by stealth.

◄$$$ THE FINAL PHASE OF THE MASSIVE CHINA & RUSSIA OIL DEAL IS COMING TO A SUCCESSFUL CONCLUSION. AN ERA OF DISTRUST AND UNEASY ALLIANCE WILL TRANSFORM INTO A GIGANTIC RESOURCE AND ENERGY SUPPLY RELATIONSHIP WITH TECHNOLOGY TRANSFER. REGARD THE NEW ENERGY PACT AS A KEY PLANK TO THE UPCOMING EURASIAN TRADE ZONE, WITH MOSCOW AND BEIJING SERVING AS ITS AXIS. $$$

The Russian leadership crew is crafty. They say what they mean, and mean what they say. Much thorough introspection and planning goes into their public statements, like in a chess game. So when Prime Minister Dmitry Medvedev recently made a formal statement that Russia has nothing to fear from China, it captured attention. The relationship has been tenuous but constructive in recent years, with caution but progress. Anxieties over the so-called Yellow Peril persist, extended from the centuries of Mongol Horde conflicts. The gnawing worries still center upon potential mass migration by the Chinese into the vast expanses of Siberia and the Russian Far East. A concern lingers that a stronger China may someday lead Russia to become a mere appendage to the Chinese economy by supplying it with raw materials, thriving on the income extending from the relationship. But such is the nature of alliance, mutualy benefit. The statement by Medvedev signals that if indeed there has been fear, it is no more so. The fact that he chose to make the statement from Chinese soil in an interview with the Russian state television is symbolic, a bridge made. Moreover, the words were spoken on the tail end of a productive visit to China, which the Xinhua news network had called a gathering of enormous significance to the further deepening of bilateral cooperation.

The highlight of the visit by Medvedev was the mega energy deal signed by the two countries. The significance is redoubled by the timing as coincidental with the visit by Prime Minister Manmohan Singh to China. The crux, Moscow and Beijing are coming to the final stretch in their protracted negotiations over a truly historic monstrously large and hugely significant energy deal. It will create a superpower alliance. It centers upon the $trillion contract to supply 38 billion cubic meters of Russia gas annually to China over a 25-year period or more. The final signature is within sight, so it is told. The deal will transform the Russian-Chinese strategic partnership of coordination and cooperation in the most profound manner. Some perceive the cooperation between the two superpowers as the post-modern Mutually Assured Destruction in reverse mode. The positive synergy is clear. The heavy Chinese dependence on Russian energy supplies and the prospects of growing investments in Russian supply chain out of Siberia for lumber, copper, water, crude oil, natural gas, even rare earth metals, makes Beijing a major stakeholder in the Russian partnership. The Kremlin requires the investment income and basic income stream for economic progress and capital development for national sustenance and economic vitality. Conversely, China is likely to grow dependent on the high technology from Russia such as nuclear technology, aviation, petro-chemicals, weapons, and more. It is widely known that China is way down in the supply chain evolution. The confirmation of a reform environment is to come at the Chinese Plenum conference. Truly, Russia is shedding its fear, as China is shedding its old ways.

Clearly, Moscow is preparing to shed its fear and is positioning itself to tap into the comprehensive and unprecedented reforms that the Chinese leadership is embarking on at next month's Plenum, as evident from the remarks by President Xi Jinping to foreign business executives last week and by ranking Politburo member Yu Zhengsheng in a speech over the weekend at a forum to promote relations with Taiwan. Read the Bloomberg analysis of what to expect at at the Chinese Plenum. See the Rediff Indian Punchline article (CLICK HERE).

◄$$$ AN ENERGY COUP IN A EUROPEAN GAS DEAL IS IN THE MAKING BETWEEN TURKEY AND UKRAINE, BUT WITH RISK FROM RUSSIAN RETALIATION. EUROPE REQUIRES MORE ENERGY SUPPLY FROM GAS, INCLUDING LNG. THEY MUST TREAT RUSSIA WITH RESPECT AND HONOR ITS CONCERNS OVER UKRAINE. TURKEY HAS THE POTENTIAL TO SERVE AS CRITICAL HUB FOR NEW MARGINAL EUROPEAN SUPPLY. THE PIECES OF THE EURASIAN TRADE ZONE ARE COMING TOGETHER. $$$

A little known fact, Norway in June overtook Russia in total exports of natural gas to Europe. The remaining balance of European gas supply from Russia comes through the vast network of Ukraine pipelines. Despite how Ukraine controls the transit of 90% of the gas that goes to the European market, Russia consistently uses its gas exports to Ukraine to gain greater control of the Ukraine transit system. Its pipeline network is deemed a strategic asset that the Kremlin lusts to control. The leverage owes to the Ukrainian dependence upon Russia for 60% of its current gas consumption. Many pieces are involved, much stress at work, many players making decisions.

Stress has come to the entire system, Europe versus Russia, with the stress point being Ukraine as relay station to Europe. The risk is retribution from a possible energy squeeze by Russia, which has a longstanding disagreement with Ukraine over gas. If Russian wishes are not honored, the Gazprom giant might make good on threats to raise the price Ukraine pays for natural gas. Some officials do not rule out a price hike for the European market as well, which obtains nearly 40% of its gas from Russia. Any new deal between a European player with Ukraine, even Turkey, should not be looked at as a business opportunity on isolated terms. Long-term view should be the priority, with respect shown to Russia. The King of NatGas is Russia, something never to be forgotten or overlooked. For its part, Ukraine has been making progress on shale and other unconventional methods, as part of the Black Sea Trust for Regional Cooperation (BST). However, shale is a temporary solution fraught with other risks like damage to ground water systems. In the graphic, notice huge supply from Russia as red arrows, the bottleneck of supply to Europe as blue arrows, and significant gas fields as yellow bars.

In the last five years, Europe's LNG import capacity has grown to reach a significant level. At the same time, higher Liquefied Natural Gas prices have been driven by strong Japanese demand. Furthermore, Asia offers a higher LNG price, due to contracts linked with crude oil supply. The result is diverted supply from the European market. An agreement between Ukraine and Turkey for the transit of LNG through the Bosporus Strait (gateway to Black Sea) would be a major lift for European energy supply security. It would put downward pressure on current LNG prices due to the high demand and premium paid in Asia, and would eventually provide Europe with cheap shale gas through a viable alternative marketplace. It is an idea developed by Robert Bensh, energy advisor to Ukrainian Vice Prime Minister Yuriy Boyko. He is managing director of Pelicourt Ltd and senior advisor for Cub Energy Inc, which operates in both Ukraine and Turkey.

The potential for LNG exports to Europe without a deal between Turkey and Ukraine for LNG supply through the Bosporus will fall flat. Without the deal, Russia will continue to provide at least 30% of Europe's natural gas through year 2023. Efforts call for Europe to tap the West Asian source. Some conflict is seen by European energy firms in the Mediterranean, busy with platforms. An urge is given to the European Union to use its bilateral relations with all parties, inclu ding Russia and Turkey, to contribute towards the emergence of a cooperative security environment in the Black Sea region. The challenge is difficult, the benefits great. But foremost, the Russian source must be respected and dealt with properly, since it is the King of NatGas. Integration of other African sources like from Nigeria might enter the EU equation. If core and marginal concerns can be met, a deal between Ukraine and Turkey would represent a political and economic coup of vast proportions, Bensh believes. For Ukraine, LNG is the key to energy independence. For Turkey, LNG is the key to becoming one of the most important energy hubs between the Middle East and Europe.

In combination with the Trans-Anatolian Pipeline (TANAP), controlling the LNG segment through the Black Sea would give Turkey broader leverage than any other player in Europe. The TANAP will bring Azerbaijani gas from Shah Deniz through Turkey toward European markets. For both Ukraine and Turkey, it would mean greater access to the economic benefits of the European Union, like income and technology transfer. It would mean control over Europe's LNG market and a level of political leverage over the continent for benefit. See the Testosterone Pit article (CLICK HERE). As the Eurasian Trade Zone comes together, the United States is not a player. It is stuck with the failed strategy of shale gas.

◄$$$ RUSSIA AND UKRAINE JUST SIGNED AN IMPORTANT TRADE PACT. KIEV LEADERS REJECTED A EUROPEAN UNION OFFER. THE TILT GOES EAST, AS THE EURASIAN TRADE ZONE COMES TOGETHER AND SOLIDIFIES. UKRAINE IS A KEY SWING NATION. THE NEXT KEY SWING NATION TO TILT EAST WILL BE TURKEY. $$$

Vladimir Putin of Russia and Viktor Yanukovich of Ukraine signed a deal, in a curious sequence of events that involved threats of retaliation but ended with smiles. The deal was hailed as a decision to define a civilization. Ukraine picked Russia over the West. On the table sat an Association Agreement and trade pact with the European Union, an open invitation to integration with the West. On the same table sat a Russian offer to join the Belarus-Kazakhstan-Russia customs union. Last month John Lloyd of Reuters wrote that if the Ukraine signed the EU pact, a major state will move into the West's sphere of influence. But it did not happen. Ukraine has chosen to decline the EU's offer after Russia imposed trade sanctions on the Ukraine and threatened other economic consequences if Kiev signed the deal. The Kremlin can sweeten the deal later. Most people do not realize the enormity of this decision, as even the story received almost no attention in the Western press. Momentum builds.

Ukraine was a prize asset for the United States to lassoo, a true thorn in Russia's side. With the economic issues that the EU and US face, yet another country is tilting East, while formation of a trade zone takes place slowly. The American Empire is gradually being lost in front of our eyes. As for the EuroZone, this is a grand vote of no confidence for the EUR as a currency experiment. Big moves lie ahead. Germany should soon realize the futility of staying in the EuroZone and subsidizing the Southern European nations, even the broken states of France and Belgium. Turkey will be the next one to tilt east explicitly. Within six months the right wing parties across Europe will grab a significant voice at the May 2014 EU elections. Just a matter of time. See the Business Insider article (CLICK HERE). The Eurasian Trade Zone is coming together, piece by piece, on several fronts.

◄$$$ THE BRICS NATIONS ARE ON THE MOVE. THE EASTERN HEMISPHERE IS MOBILIZING, WHILE THE WEST IS COLLAPSING AMIDST GIANT DEFICITS, BANK INSOLVENCY, AND BOND FRAUD. IMPORTANT PACTS ARE BEING FORGED AMONG RUSSIA, CHINA, AND INDIA. $$$

Chinese Premier Li Keqiang held talks with visiting Indian Prime Minister Manmohan Singh in late October, to mark the second time this year that the heads of government of the two countries have met. Premier Li visited India in May. The two sides signed nine agreements, including a crucial Border Defense Cooperation agreement, which promised no usage of military capability against the other side. Relations between China and India are important, since they contain the largest populations in the world, at 2.5 billion people combined. They are both rapidly growing economies, centers of capital expansion, and locations of gold accumulation. Agreements were made on trans-border rivers to provide for expanded cooperation, on roads & transport systems, and on power equipment. See the BRICS Post article (CLICK HERE). The United States will attack any nation that crosses its path or objectives.

The summit meeting between Russian president Vladimir Putin and Indian Prime Minister Manmohan Singh in late October took place at the crucial moment. The decision of the USGovt to allocate $1.6 billion in military assistance to Pakistan sent a very clear message to the Indian leaders. The Jackass view is that Pakistan stands between China and India, thus the US puppet buffer must be supported and built. The two BRICS partners of Russia and India reiterated their Special & Privileged Strategic Partnership (PPIO). India will continue to forge ties with Russia. The Eastern Alliance continues to form. The USGovt actions are causing a reaction of tighter bonds in the East, as US leaders have been moving into alliances with awkward partners, such as the Muslim Brotherhood, the Syrian jihadists, and the Pakistani secret services connected to the Taliban. At the summit in Moscow, Putin and Singh reiterated India's desire to be involved in preparations for the Geneva-2 conference on Syria. Russia reaffirmed its strong support for India's bid to become a permanent member of the United Nations Security Council, complete with veto power. The makeup of US, UK, China, and Russia always made sense, but not France.

The supply of Russian military weapons to India will continue, although with some bumps in the road like in the last ten months. Delivery should arrive before January on a large order of 235 additional Russian T-90 tanks, 67 Russian helicopters, and 6 MIG-29K fighters. In 2012, Russia's trade with India reached $11 billion, a level several times less than Russia's trade with China. The first nuclear reactor at the Kudankulam nuclear power plant, constructed in the southernmost tip of the Indian peninsula with the help of Russia, was due to start operations two weeks ago. The second reactor is supposed to go online for electricity production in early 2014. The construction of a natural gas pipeline from Russia to India is seen as thorny and complicated, with ecological challenges. It would pass through Central Asian states, including Afghanistan and Pakistan. See the BRICS Post aritcle (CLICK HERE). The Eurasian Trade Zone will feature Russian & Chinese arms deals, like powerful glue.

The BRICS Bank plans to reduce risks within the emerging market nations, with an aggressive agenda. China and India have agreed to increase cooperation among the five key nations so as to safeguard common interests. India Prime Minister Manmohan Singh cited the BRICS Development Bank and the $100 billion Contingency Reserve Arrangement as major efforts to support trade and investment, certain to reduce risks in emerging markets. Singh confirmed that India and China have a vital stake in preserving an open, integrated, and stable global trade regime. He stated, "We are in the midst of a significant and ongoing transformation where both political and economic power is being diffused. A multi-polar world is emerging but its contours are not yet clear. Protectionist sentiments in the West have increased and the global trading regime may become fragmented by regional arrangements among major countries." His comment is a big nugget. See the BRICS Post article (CLICK HERE).

◄$$$ THE STATE OF FLORIDA EXPORTS $8 BILLION PER YEAR IN GOLD, MOSTLY TO SWITZERLAND. THAT IS A LOT OF SCRAP MARKET SALES, PLUS HOME SALES IN REDEMPTION. $$$

According to the Florida Enterprise Report, gold rose from $50 million in 2010 to $7.0 billion in 2011, then to $8.0 billion in 2012, to become Florida's top export. The destination is most often to Switzerland, without doubt to be refined into 100-oz bars later shipped to China. The details of the official report document cite Gold (including Platinum Plated) unwrought, semi-manufactured as the line item. See the EFlorida article (CLICK HERE). Think recycled jewelry and cash raised to manage the wrecked economy, dragged down by housing. Without doubt, many living room private party sales are involved. The Voice offered a quick comment. He said, "Florida is the prime gold scrap market in North America. The scrap market is fed by the jewelry industry. The biggest market in the Middle East is Saudi Arabia. Their scrap is shipped to Dubai, as in tons per month."

◄$$$ THE MONETARY INFLATION SPIGOT APPEARS TO HAVE CAUSED AN IMPORTANT CHANNEL TO LEAK IN PRICE INFLATION. WITNESS THE FINE ART COLLECTIBLES, WHICH HAVE SEEN A 100% PRICE INCREASE IN UNDER A YEAR. THE INFLATION FIRES ARE BEING STOKED. WORD IS FILTERING DOWN THROUGH SOCIETY OF HYPER INFLATION WITHOUT END. $$$

Guests on the King World News have described price developments in the fine art collectible market. Asian fund manager Keith Barron discussed the technical hyper-inflation in the fine art market underway. Some fine art pieces have gained an astonishing 100% in just the last six to eight months. The rise is impressive for many items going out the door at auction houses. Regard the trend as in anticipation of a coming Great Inflation. Fund manager Michael Pento is in full agreement. He believes inflation created through a central bank tends to go to the top 1% in society. First, it goes to the major banks, and then it goes to the very wealthy. It serves as a precursor to what will occur for the overall inflation level of the USEconomy. Pento sees the pathways into assets like stocks, bonds, real estate, and art. Later it will go down to food and energy prices, which are creeping up. Apart from the art price as inflation hedge, Pento expects the QE to Infinity like the Jackass. He said, "This is a watershed moment in the Fed's history. I have been saying it for many, many months, if not years, that the Fed's QE program is without end. It is interminable. Now we have the Federal Reserve admitting that there is no limit, no dollar amount restriction, as to how high they will take the Fed's balance sheet." See the King World News interview (CLICK HERE) and the FoxNews article (CLICK HERE).

◄$$$ WARREN BUFFET HAS SECURED A HEFTY $3.7 BILLION ADDED STAKE IN EXXON. CONSIDER IT A BIG USDOLLAR HEDGE. $$$

Berkshire Hathaway disclosed on November 14th that it had made a signficant $3.45 billion stake in Exxon Mobil. The sizeable acquisition adds to its roughly $107 billion portfolio of stocks. Warren Buffett executed the decision. Exxon Mobil is the world's largest publicly traded energy company with a market capitalization of $407 billion. The Berkshire stake represents less than 1% of the 4.4 billion outstanding XOM shares. See the Wall Street Journal article (CLICK HERE). Whenever Buffet makes a large investment, the interpretation usually comes naturally. The move by the savvy iconic CEO hints of a weak USDollar, for which the oil firm serves as a currency hedge, even a proxy for gold. He is an ignoramus on technology and gold, but he knows the economic forces at work very well. Better described, he pretends to be ignorant of gold, in order to placate Wall Street.

## FAILURE, FRACTURES, FRAUD & FROTH

◄$$$ THE CABAL IS AN ORGANIZED SYNDICATE THAT HAS EXISTED FOR WELL OVER 150 YEARS, PROBABLY CENTURIES LONGER. THE PLAN HAS BEEN IN PLACE SINCE THE EARLY 1990 DECADE TO DESTROY THE UNITED STATES, SINCE IT IS THE CRADLE OF CAPITALISM AND THE BEACON OF FREEDOM. THE ELITE WHO WISH FOR A TOTALITARIAN STATE DO NOT TOLERATE THE MODEL THAT AMERICA HAS PRESENTED. IT IS BEING DESTROYED WITH MOTIVE, PLAN, COORDINATION, AND PURPOSE. $$$

Former USFed chairman Greenspan, President (Papa) Bush, President Clinton, Treasury Secretaries Rubin and Paulson, JPMorgan CEO Dimon, and Goldman Sachs CEO Blankfein are the chief visible agents for the US destruction, preparing the way for the global fascist state led by bankers. The hidden parts are the news networks, the large pharamaceutical firms, and USGovt security agencies, which in my view have bought into the Global Fascism plan with narcotics money. The entry fee paid by Langley must be in the $trillions. It is their grand coordinated plan, with Satanic roots. The antidote is Gold mixed with free markets and true representative governments, aided by free press sunlight. All these antidotes tend to be missing in egregious fashion. Therefore the destruction continues apace. Paul Yusem, the Gold & Silver Analyst, has outlined the formula for destruction of a nation. If to follow the prescription, their plan is on schedule. The cabal is trying to wreck the United States in order to install a global totalitarian government run by fear, control, intolerance, and violence. The orderly procedure has been methodical.

1)      Wipe out the middle class, starting with removal of home equity, which has served as their protection from inflation.

2)      Thin out the military brass at the highest levels, by dismissing any potential senior commanding officers who might organize a coup d'etat.

3)      Weaken the economy with extensive socialist programs that reward the idle and malingerers, and place a burden on the productive.

4)      Inflate the monetary system until capital is drained extensively, which will disable the job producing engines by forcibly removing the profit potential.

5)      Prevent escape routes for the vast majority of the population by crushing gold and silver, discouraging its ownership with propaganda on lack of value.

6)      Sell off as much national gold reserves as possible in order to remove any potential recovery with sound money, disabling any economic recovery.

7)      Instill a culture of corruption, theft, and depravity at the top of the political and banking class, which is permitted to filter down into the society, thus encouraging the world to isolate the nation as a plague.

The cabal will continue to ply its central bank destruction. The appointment of Janet Yellen will assure a continuation in seamless monetary policy. The Jackass had at one time wondered if Yellen would submit well to cartoon mockery and related caricatures. Of course she will. Notice the new and improved broom and updated satchel of cash to dispense. Her QE volume will double during year 2014. The irony is thick, since she opposed many policies that resulted in systemic breakdown, and her recognized siren warnings were largely ignored.

◄$$$ THE KAHN IMF STORY REVISITED, AS IT IS VERY DANGEROUS TO CROSS THE ANGLO BANKER MASTERS. DOMINIQUE STRAUS-KAHN OPENLY DISCUSSED THE ABSENCE OF THE USGOVT GOLD RESERVES FROM HIS OFFICE. THEN SUDDENLY HE WAS IN THE NEWS ON SPURIOUS ALLEGATIONS, LOST HIS JOB, THE CHARGES LATER DROPPED. THE POST WAS FILLED WITH A BETTER TEAM PLAYER. $$$

Dominique Straus-Kahn began to express grave doubts whether the US Federal Reserve actually held the 8044 tons of gold claims as USGovt gold reserves. He brought unwanted attention to the US finance team controllers. The former Intl Monetary Fund director was on record to demand an independent audit of the USFed gold back in 1978. The incident related to the USGovt refusal to deliver 191 tons of gold agreed to the IMF under its Articles of Agreement. The project was signed by the Executive Board in April of that year, the US being the lead member. The purpose was to support Special Drawing Rights issuance, the cooky basket of major currencies used by the fund in its accounting and project dispensations. DSKahn repeated his demand for a US Gold audit in early 2011, at a critical time of ramped up hyper monetary inflation of the USDollar and dependence for USGovt debt finance. Suddenly, before he could find transportation on the return trip to Paris, he was hit by a bizarre hotel sex scandal during his stay in Manhattan, and abruptly forced to resign. The Russians had a role, which demonstrates the global game being played out. Straus-Kahn had been shown a secret Russian intelligence report prepared for President Vladimir Putin in which rogue CIA agents revealed that the US Federal Reserve had no gold reserves. The central bank holds paper certificates worth nothing, backed by nothing, their vaults filled with Rubin Thank You Notes (special IOU cards). The USFed engages in a constant stream of lies. See the Silver Doctors article (CLICK HERE).

Some find it ironic or coincidental the sequence of events. The May 2011 incident involving Kahn at a New York hotel included very strange display of evidence, but circumstances followed with a USGovt debt downgrade in August 2011. Perhaps the Standard & Poors analysts got wind of the absent gold with some reliable evidence provided privately. The entire sex case was hokey from the start. The Haitian woman was not considered credible, nor was the evidence convincing when the prosecution door was opened. The prosecutors filed a motion to drop all charges against Straus-Kahn after completing a lengthy professional investigation. The mission was accomplished since he was removed from his IMF post. He spoke no further about matters on gold reserves. The case was dropped, DSKahn cleared of all wrongdoing. His press conference in New York City was canceled abruptly when a freak earthquake hit the city. It would be difficult to write a more absurd Hollywood movie script. The script could have settled for child pornography on the DSK personal computer, a popular smear used by the FBI and Homeland Security thugs. The hotel rape with torn maid uniform was a bit more juicy and salacious. The bad man should keep his hands and other inflatable parts off the young woman. That the victim was a cokehead might not have had a bearing on the case, just speculation.

◄$$$ THE OBAMACARE WEBSITE CONTRACT WENT TO A COMPANY RUN BY A MICHELE OBAMA COLLEGE CLASSMATE. THE CONTRACT WAS WON UNDER THE NO-BID SWEET DEAL SCENARIO. JUST A COINCIDENCE THE RELATIONSHIP, AND JUST BAD LUCK THE BROKEN WEBSITE. $$$

First Lady Michelle Obama attended Princeton Univ. Her classmate was a top executive at the company that was given the contract to build the failed ObamaCare website. To say won the contract would be misleading. Toni Townes-Whitley (class '85) is senior vice president at CGI Federal, which earned the no-bid contract to build the $678 million ObamaCare enrollment on the Healthcare.gov website. CGI Federal is the US subsidary of a Canadian company, for a little added intrigue. Townes-Whitley and her Princeton classmate Michelle Obama are both members of the Assn of Black Princeton Alumni. Toni Townes is a one-time policy analyst with the General Accounting Office and previously served in the Peace Corps in Gabon, West Africa. Her decision to return to work after six years of raising children was applauded by a Princeton alumni publication in 1998. Too bad she is incompetent. George Schindler became an Obama 2012 campaign donor after his company gained the ObamaCare website contract. He is the president for the US & Canada regions for the Canadian-based CGI Group. The Jackass sure would like to glance over the college transcripts for Michele and Toni, to check their courses completed and grades.

Amidst all the technical snafus, incompetence of website design, another new curious problem has emerged. The website has a childlike architecture. It does not have the robust power to handle heavy traffic. It cannot properly merge the incompatible nature of diverse systems from the USGovt, which must merge for proper function. The designers did not adequately test the site before launch. In early active runs, countless disconnections and failed connections. Yet they launched the website anyway. Atop all these shortcomings, up to 20% of Americans will not be in a position to participate with the required Mickey Mouse system of national health care. Some will not be comfortable with online registration, distrustful of the faceless procedure, while others might not possess the internet basic ability to accomplish the task. However, the system must make at times a complicated decision. The tax situation for some citizens might be too complicated for the website to determine eligibility for subsidies. Many complaints address the insurance contract design by lawmakers, rather than the hack website designers. See the Huffington Post article (CLICK HERE).

Incredibly, President Obama has declared that 100 million Americans have successfully enrolled. He is disconnected from reality, and in need of special medical attention, perhaps psychiatric attention. The weary leader made his gaffe during the conference call hosted by Organizing For Action that permitted 200 thousand people to listen. So plenty of witnesses to a delusional White House occupant. See the UK Daily Mail article (CLICK HERE). A wise colleague once advised the Jackass in 1984 never to stand in the way of a man in the middle of self-destruction. The advice was heeded, and a horrendous manager at a previous large corporation (my employer) was a sunk wreck two years later. It is a long story.

Yet another scandal has emerged from the health care system nightmare on Elm Street. A cabinet member is being summoned to explain $2 billion in curious Coop loans related to the bizarre contraption called ObamaC are. Several leading members of Congress are requesting that Health & Human Services Secretary Kathleen Sebelius explain the $1.98 billion in taxpayer money loaned to various firms to kickstart the various health insurance Coops. The query will include questions whether the taxpayers will ever be repaid, or the grants to be grafted gifts. Under the dutiful but loyal watch of Sibelius, one fiasco has occurred after another. A formal letter by signed four ranking Senators and one Representative was delivered to the embattled HHS Secy. At issue is the slush fund conduit called Consumer Operated & Oriented Plans, which has been used to dispense massive sums with dubious results. An inspector general produced a report that found 11 of 16 Coops exhausted their funds in startup costs before any system was operational. They reek of fraud and phony costs. One of the Coop plans was denied a license by the state of Vermont to operate, but received funds. See the WND News article (CLICK HERE). A closer look will surely find many Obama supporters own such Coops, with little or no activity.

As footnote, the Jackass considers EmBalmaCare to be managed death and official obstruction of cancer treatment to elders, and of joint replacement to elders. Besides, joint replacement might be a luxury for a nation on the doorstep to the Third World that lacks any semblance of robust savings. The national program is designed to be a grand hospice and brick wall. Read the fine print on age limits. Too many reports circulate that implanted ID chips will be a forced requirement in the near future. It is doubtful that even RFID chips will wake up the American public, the worst informed and sleepiest of any modern industrial nation in world history. Another gem graphic art work by Pawel Kuczynski to depict the national monument symbol, the only visible part being Pinocchio's nose. It symbolizes the assembly of liars, not the phallic of the nation's forefather.

A bizarre detail is important. In addition to being replete consummate liars, the USCongress is incompetent in overseeing the bungling cronyism by the arrogant leader with the White House address. The Obama Admin Cabinet and senior assistants have the lowest percentage of business experience of any presidential administration in history, around five times less than the next lowest. Their percentage is around 5% with business experience, truly unimpressive for an administration seeking to produce jobs. The previous low for cabinets was around 25%. Ideology, not quality or integrity, is the calling card of this socialist failure gang. Expect further snafus, breakdowns, failures, and weird events later on with the Affordable Care Act with its poorly constructed, worse designed database system. Possibly foreigners will sign up from other countries, or hacking of information will occur, or falsified records will be easily inserted, and more, after their access is not blocked. A colossal mess cometh. My expectation is for fraud worse than Medicare fake billings to take place throughout the upcoming newly installed embryonic system.

◄$$$ FORBES MAGAZINE HAS CALLED FOR THE IMPEACHMENT OF PRESIDENT OBAMA FOR WANTON CONTEMPT FOR THE CONSTITUTION. ANY ACTION SHOULD INCLUDE THE WALL STREET BANKS AND DEFENSE CONTRACTORS. THE MARCH TO THE FASCIST STATE MUST BE INTERRUPTED, IF THE NATION IS TO AVOID THE THIRD WORLD. $$$

Forbes Magazine is not a two-bit slouch journal. It is highly respected. Neither is it a radical right wing rag, with no demonstrating partisan bias. The magazine has called for the impeachment of President Barack Obama for contempt of the US Constitution. The nearly five years of disregard and disrespect weighs heavily on the nation. The skein of deeper executive orders are a design for a fascist state, for a deeply abusive totalitarian state. Forbes claims his tyrannical disregard for the US Constitution has sent the nation to the brink of a Banana Republic. Forbes wrote, "The shocking fact is that our whole system of representative government depends on it being led by an individual who believes in it; who thinks it is valuable; who believes that a government dedicated to the protection of individual rights is a noble ideal. What if he does not?" They capture the essence. However, two important points must be made. First, the bankers should be included in the indictment, with criminal charges for multi-$trillion fraud and RICO racketeering. The big bank assets must be confiscated as criminal ill-gotten gains. They are running narco money laundering into every major bank, combined with diverse bond fraud and constant insider trading in the financial markets. The criminal charges must include some key defense weapons firms, who are complicit in narcotics trafficking in the private corporate jets, even fraudulent billing turned commonplace.

Second, the entire USCongress should be dissolved if it does not rescind the Patriot Act. The act served as a Gestapo Manifesto that eradicated rights and essentially tore the Constitution up into pieces. Bush II and Obama have systemically built the Fascist Nation as they dismantled the entire Bill of Rights. The United States has gone back 600 years to before the Magna Carta. If the President is to be accused for trampling on the Constitution, then the USCongress should be challenged for dismissing the same Constitution. See the Silver Doctors article (CLICK HERE).

Rumors are brisk and common about the South Carolina nuclear device gone missing, and possibly being detonated 500 miles off the coast. Perhaps the motive for firing several USMilitary Generals was motivated by their disobedience. The story told is that they refused to explode it in the South Carolina area, as part of a false flag event, to be followed by martial law. The United States is treading on very dangerous ground, if the story is even half true. Obviously, the entire publication is posturing, but it points to an important perceptual change for the US nation, with open challenge by internal institutions. A prominent contact replied, "Keep on dreaming. All this is verbal and mental masturbation and nothing else. Since when to the sheep run the Shepard's dogs? It the other wayaround." The schism within the United States and its highest levels is becoming very clear. Be clear that impeachment calls are mere rattling, but important rattling.

◄$$$ CORRUPTION HAS COME IN SWEET DEALS FOR USGOVT LEADERS IN THE DISPOSITION OF US-POSTAL SERVICE PROPERTY. FEINSTEIN AND HER HUSBAND ARE IN LINE FOR A $1 BILLION PERSONAL GAIN. THE BROKER PRIVILEGE CAME WITHOUT A BID PROCESS. $$$

The USCongress collusion is mindboggling. The USGovt has entered into a contract with a real estate firm to sell 56 buildings that currently house US Post Offices. The government has decided it no longer needs these buildings, most of which are located on excellent locations across the country. The sale of these properties will fetch about $19 billion. A regular real estate commission will be paid to the company that was given the exclusive listing for handling the sales, without a bidding process. The company is CRI, which belongs to a man named Richard Blum, the husband of Senator Dianne Feinstein. Most voters and many of the government people who approved the deal have not made the connection between the two persons, since different last names appear. Senator Feinstein and her husband stand to make a fortune from these transactions, estimated at between $950 million and $1.1 billion. CRI will be making a minimum of 3% and as much as 6% commission on each and every sale. The company will function as the sole broker on the sale, to keep America competitive and strong, surely to defend liberty (to steal) also. No mainstream media entity has mentioned the conflict of interest and obvious corruption on the sale of $billions worth of public assets. They were purchased with US taxpayers funds with very low debt. The net proceeds of the sales will go back to the USPS, an organization that has lost $117 billion in the past ten years. Thus the sale proceeds will keep the wildly unprofitable firm going a few more years. See the Truth or Fiction article (CLICK HERE) and the Snopes verification of the story (CLICK HERE).

◄$$$ THE BAKKEN OIL REGION IS IN SEVERE OUTPUT DECLINE, DESPITE A MASSIVE RISE IN WELL COUNT. THE BAKKEN DRILLING FRENZY GIVES THE ILLUSION OF SUSTAINABLE GROWTH. THE NET DECLINE RATE IS ACCELERATING, AND SO IS THE RISE IN NEW WELLS DRILLED. IT IS A PONZI SCHEME, THE DETAILS EASY TO SEE. THE MARGINAL WELLS ARE IN LINE NEXT TO ADD SUPPLY IN DIMINISHING VOLUME. MOTHER NATURE IS AN OPPONENT TO PONZIS. $$$

The EIA & US Energy Info Agency are providing some good information from which to make conclusions, regarding the US-based individual shale oil & gas ventures. The Bakken story has a dark side that disputes the big production salvation story. The daily decline rate in the Bakken region from their existing oil wells has reached a staggering 63,000 barrels per day. Every day the existing wells in the Bakken region pump oil, but the overall output is declining at 63,000 barrels per day (bpd). The decline rate started to accelerate downward after 2011, when the average daily decline was only 20,000 bpd. In less than 3 years, the decline has more than tripled. The regional project has finite lifespan remaining.

The Bakken drilling frenzy gives the illusion of growth, under the cloud of confusion from heavy activity. However it is neither stable nor sustainable. The typical American believes the propaganda put forth by the USGovt, that the nation has ample hidden oil & gas resources to be easily tapped. A flurry of activity is to be seen, for certain. The negative side screams of a temporary rush that will end very soon, with no national energy independence. The public is told about the huge increases in production. The oil production continues to increase in the Bakken region only as a result of the massive amount of new wells added during the frenzy. The chart below reveals the illusion of this sustainable growth. Soon the opportunity to expand the wells in production will halt, since the region is finite and limited. In a couple years, only the pathetic and hopeless wells will be drilled, with little promise of output.

The Bakken production data comes from the North Dakota wells at the heart of the large oil deposit. It is large, but not giant. The graph includes the Montana output also. Together they reveal the huge increase in oil wells required to grow production. The North Dakota story is most telling. In 2008, the Bakken in North Dakota (ND) only had 479 producing wells. Fast forward five year to see at last count in September, the Bakken had 6447 wells to pull the production. The total output is up to 867,123 barrels of oil per day. Therefore, the energy companies drilling and producing oil in the Bakken must keep increasing wells every single month in order to offset the huge 63,000 bpd decline. For example, consider the September ND data. An additional 135 new wells (ND) were in production mode in September versus August. The incremental addition to oil output was 20,589 bpd of production. New wells cannot halt the decline in aggregate output. If only 100 new wells were added that month, the production would have remained flat or possibly declined for September. The story in the press would have been altered on the down side. Lastly, the best and most productive wells are exploited in the initial rounds, leaving the marginal wells for later. So two factors will contribute to a sudden aggregate output decline, 1) exhausting areas for any new wells, 2) remaining wells are the least productive. In the next year or two, the peak will be reached, and the subsequent bust will finally arrive. All factors explain a Ponzi scheme. See the SRS Rocco article (CLICK HERE). Steve is a Hat Trick Letter subscriber and colleague.

◄$$$ FROTHY STOCK INFLOWS SIGNAL A TOP, AS NAIVE RETAIL INVESTORS BUY THE PHONY STOCK VALUATIONS. IT IS ALL DUE TO THE USFED EASY MONEY POLICY, NOT AN ECONOMIC RECOVERY. EVEN THE FINANCIAL PRESS ACKNOWLEDGES THE DEPENDENCE, THE USFED SPIGOT CITED OFTEN. THE MONEY INCOMING THAT ENTERS STOCK FUNDS ARE AT ALMOST 15:1 IN RATIO TO BOND FUNDS. $$$

The Bank of America analyst Michael Hartnett cited the frothy conditions of the US stock market. The equity fund inflows saw a third consecutive week of heavy volume, the week of November 13th at $12.4 billion. Stocks rule the waterlogged roost, the indirect beneficiary of the USFed easy money. Year to date for 2013, the stock funds have seen $231 billion of inflows, versus a mere trickle of $16 billion for bond funds. The public has distrust for the obviously supported bonds. They do not see the indirect stock support and froth. Other people giving stern warning about the stock bubble besides BOA are JPMorgan, Bill Gross of PIMCO, Larry Fink of Blackstone, and David Einhorn. One can be absolutely certain that the alert vigilant watchdog USFed will do absolutely nothing, except possibly talk about the recovery that does not exist. No recovery can happen while ZIRP enforces 0% and while QE permits hyper monetary inflation, the official USFed policy. Notice the opposite directions for stock inflows (up) versus bond inflows (down). See the Zero Hedge article (CLICK HERE). Once more the public buys the bubble with enthusiasm.

◄$$$ THE RUSSIAN PARLIAMENT IS WORKING TOWARD AN OFFICIAL BAN OF USDOLLAR BASED BANK ACCOUNTS. THE PHASEOUT CALLS FOR ONE YEAR. THE RATIONALE CITED IS UNCHECKED INFLATION BY THE UNITED STATES. THE BILL IS WORTH MONITORING, SINCE IT COULD BECOME A TREND IN FOREIGN LANDS. $$$

The story is of a preliminary law in the Russian Duma Parliament, a drafted piece of legislation in progress. The law proposed by Mikhail Degtyarev would prohibit movement of USDollars within Russia and their storage. The Russian citizens would be required within one year to close their existing USD accounts in Russian banks, to delete all the data records, and to convert accounts plus cash to Rubles. Provisions would exist to close all accounts automatically after one year. Cash found by the police, customs, tax authorities, border guards, or security agencies would be seized. Some reimbursement would be made on seized funds within 30 days, as in conversion to Rubles. Securing USDollars would become difficult to come by, with a requirement to prove need, such as for traveling abroad. Of the 50 most popular destinations for Russian citizens abroad, only 11 seem to need to hold USDollars when traveling.

The stated reason for the rule is actually that the free flow of Dollars in the United States prevents the Russian Ruble from becoming a full fledged global reserve currency. The practice by many Russians to keep their savings in USDollars is considered dangerous for the country. The bill's authors actually stated an expectation for the collapse of the USDollar system by year 2017, if the US national debt continues at its current pace. A restructuring of the debt would be expected to follow. Therefore, the affected countries need to rid themselves of USD dependence. The Parliament prefers to avoid having to bail out its citizens holding USDollars, a tremendous foreseen expense. Apologies for any minor error in detail, since the translation to English was very poor. See the Washington Times article (CLICK HERE) and the RBC article in Russian (CLICK HERE).

◄$$$ THE CHINESE CENTRAL BANK WILL NO LONGER INCREASE RESERVES BASED IN USDOLLAR DENOMINATED BONDS. IT IS DECLARED NOT IN CHINA'S INTEREST. THE TURNING POINT HAS COME. CHINA STRIVES TO PUSH THE YUAN AS GLOBAL RESERVE CURRENCY, STARTING WITH TRADE STANDARD PAYMENT MEDIUM. THE YUAN EXCHANGE RATE WILL RISE. $$$

The Peoples Bank of China will not increase its foreign currency holdings, a back door announcement that the Middle Kingdom will rein in USDollar purchases. Implicit is the permitted Chinese Yuan appreciation. Deputy governor Yi Gang of the central bank said, "It is no longer in China's favor to accumulate foreign exchange reserves." The rest of the statement pales by comparison. The monetary authority will end normal intervention in the FOREX currency market. Expect the Yuan daily trading range to grow wider, the official hinted. It is an off-hand way of saying the Yuan exchange rate will be permitted finally to rise. The Chinese Economy will benefit from cheaper imports. The Western Economies will see higher import prices. China's FOREX reserves surged $166 billion in the third quarter to reach a record $3.66 trillion, more than triple those of any other country. Incredibly, their reserves exceed the Gross Domestic Product of Germany, Europe's largest economy. Decreasing the influence and accumulation of the USDollar is a milestone toward China's 2015 goal to float its currency with full convertibility. See the Business Week article (CLICK HERE).

## PETRO-DOLLAR SHIFTING SANDS

◄$$$ GLOBAL TALKS ARE UNDERWAY FOR BOTH DEALING WITH IRAN WITHOUT SANCTIONS AND MOVEMENT TOWARD A CURRENCY RESET. THE SECOND ROUND OF SUMMIT TALKS HAVE MADE SOME IMPORTANT PROGRESS. WHEN IT ARRIVES, THE RESET WILL CENTER UPON GOLD. THE CHINESE WILL USE EXTRAORDINARY MEANS TO KEEP THE UNITED STATES PROPPED, SO THEY CAN REDEEM OVER $1 TRILLION IN USTREASURYS. IF THE USGOVT MUST BECOME A CHINESE PUPPET, THEN SO BE IT. THE HIDDEN HAND WILL BE DIFFICULT TO DISGUISE AND CONCEAL. THE SHIFTING SANDS INDICATE LESS AMERICAN POWER, INFLUENCE, AND PRESTIGE, AND MORE CHINESE POWER, INFLUENCE, AND OPPORTUNITY. $$$

Some firm impressions are made. Important meetings are in progress, but their purpose is broader than reported. The Iran Nuclear Talks are a proxy for financial accord to put down the USMilitary defense of the USDollar, since the Petro-Dollar has been declared dead behind closed doors. With the discarded USDollar relationship with Saudi crude oil, new rules are required, including the huge offsetting forces on pointed nuclear weapons. The Global Reset is the marquee name publicly for the Return of Gold Standard, but to be executed in trade settlement, not FOREX currencies. The US will deceive all the way to the Third World, unless it begins to cooperate in good faith. The signals will be very confusing. Expect some big Western banks to enter failure and go under, and some sovereign bonds also to enter default and go kaput. These two failure events are unavoidable upon reset, whether leading into it or following it. China will take extraordinary measures to keep the USS America (aka Titanic) afloat. They wish to drain it of assets, resources, and whatever else they can in order to enjoy much greater bond redemptions.

Wall Street has enjoyed a direct line for toxic bond redemption, but China does not. It makes no sense in letting the United States be destroyed when it can be propped, supported, and nourished a little, with the motive to facilitate blood drainage, much like a aged gladiator tied to a rack. Therefore the Chinese must make pacts with the castle dwellers who want the US to turn into a totalitarian state. It will be pushed in that direction under Chinese guidance and command. They have an urgent need to slowly unload recent USTBills and older legacy USTBonds from acquisitions. The WashingtonDC crowd dismisses bonds held from the 1930 decade, but Beijing emphatically does not. Since none of their significant USTreasurys position contains securities maturing over two years, they require at least two years of time. China has two choices, either write off all the USTBonds or keep the emaciated debilitated Uncle Sam propped to withdraw his capital. A source in Costa Rica with a strong reliable British secret service contact believes the Chinese will drain the US dry over several years, the hidden props to be magnificent, some already visible, since they do not want either to discard their US$-based reserves or to lose their US customer in trade export. The next increase in USFed bond purchases (QE to Infinity) will be quite interesting to watch, both from how sheep react, and how the mainstream press attempts to explain its necessity and wisdom. It will be predominantly for Chinese benefit.

Quick update. The Geneva talks went very well with some important agreements made concrete. It is too early to digest the information. However, The Voice has a contact whose colleague was present at the talks. The delegates from the United States and its small control room nation ally were both embarrassed and silenced. Guido Westerwelle was described as a very savvy man to achieve the accord, even though he represented a caretaker government in Berlin. It is reported that Kerry (US Secy State) tried to intimidate Westerwelle without success. The Jackass wonders how the nuclear deal might pave the way for a financial deal next very soon, as in the Global Currency Reset and greased path to a Gold Standard in some form.

◄$$$ CHINA FIRED A SHOT ACROSS THE PETRODOLLAR BOW. STRAIN HAS COME TO THE US-SAUDI RELATIONS. ATTEMPTS AT DETENTE WITH IRAN HAVE MADE MORE SOUR THE US-ARAB RELATIONS. THE SHANGHAI FUTURES EXCHANGE MAY PRICE CRUDE OIL FUTURES IN YUAN. THE PETRO-DOLLAR IS SUFFERING SEVERE CORROSION. IT WILL UNDERGO DEMISE. $$$

The US crude oil demand might be met by the shale revolution for a while, but the influence of Saudi oil is rapidly declining. The false sense of comfort might lead to a critical error in discarding the Petro-Dollar that centers upon Saudi oil sales in USDollar terms. The USGovt gave the cold shoulder to Saudi Arabia and Qatar over the Syrian debacle, then turned its back on the Saudi regime when making overtures to bring an end to icy relations with Iran, all done over the stern objections of Israel and the Saudi lobby. The shifting commodity winds and the political arguments conducted on the global stage have put stress on the USDollar's biggest pillar, upon which the currency's reserve status rests. Until recently, the Petro-Dollar has made the USD the only currency in which most nations have transacted toward energy purchase. The global banking reserves foundation system has rested on the USTreasury Bond pillars. Diversification will pick up great speed. The USFed will double and triple its QE volume to handle the USTBond dumping, as manifested in the great backfire from the Petro-Dollar demise. Expect change soon, as forecasted by the Jackass over a year ago.

The Shanghai Futures Exchange is considering a price mechanism in its crude oil futures contract in Yuan terms. The bourse is speeding up preparatory work to secure regulatory approvals. Regard such a maneuver as extremely important damage to undermine the Petro-Dollar foundation, and an open invitation to the Saudis to build bridges to China. The Saudis will turn their back in like manner to the United States, each step irreversible. See the Zero Hedge articl (CLICK HERE). Keep in mind a summary. The Saudis feel betrayed by the Americans, as the relationship has grown old and tired. The royals have come up against a firm Russian brick wall in a military confrontation over Syria, with feisty exchanges and intransigent Kremlin actions. Following betrayal and resistance, the Saudis will build new links and mechanisms to manage the transition. They will fall into the Chinese hands easily, in the midst of a power vacuum. Expect more Chinese Yuan to circulate inside Saudi Arabia, with giant projects and payments forced by Beijing for crude oil. The Chinese surpassed the United States recently in crude oil imports, and will dictate terms. On an increasing basis, Chinese warships are seen in the Persian Gulf area. They signal an end to the Petro-Dollar. The term Petro-Yuan has been spotted on editorial fields. The bigger unspoken challenge might be to maintain petroleum engineering with less Western expertise on the ground.

◄$$$ GEOPOLITICAL POWER GAMES HAVE MIXED WITH HIGH FINANCE AND MAJOR NATION CLASHES. EXPECT THE PETRO-DOLLAR TO FADE AWAY SLOWLY BUT WITH A POWERFUL GRADUAL EFFECT AND FAR REACHING IMPACT. THE US-SAUDI CRACKUP HAS REACHED A DRAMATIC TIPPING POINT. THE SAUDIS ARE TURNING AWAY FROM THE UNITED STATES AS PARTNER AND PROTECTOR. THE RIFT WITH SAUDI ARABIA IS GROWING. THE HOUSE OF SAUD IS ON THE VERGE OF PIVOTING TO CHINA, AFTER HITTING A RUSSIAN WALL. $$$

Since the cowering yet peaceful response by the USGovt on the Syrian battle front, the United States has seen a strange uneasy friction with its Saudi ally. The Saudis have severed diplomatic ties with the US. With the relations cut off, some negative momentum has begun to develop. It could go out of control. Any successful nuclear talks with Iran, wherein Tehran is granted the right for nuclear enrichment in pursuit of power generation, would certainly anger the Saudis further. Most critical implications pertain to the continued reliance upon the Petro-Dollar in the oil trade, and upon the USMilitary for security protection in the Persian Gulf. The pact has served the two nations well since 1974, called the Grand Oil Surplus Recycle and engineered by Henry Kissinger. The US benefited from the required sale of OPEC crude oil in US$ terms, which has the extremely important (not well understood) consequence of major nations of the world storing their reserves in USTreasury Bonds. The Saudis benefited from the protection, as the royals could continue to steal the national oil wealth and claim it as private royal property. The entire arrangement is under new tacit renegotiation at global tables with broad attendance, and curiously the US voice squelched. Watch for the emergence of the Petro-Yuan very soon, if not already. The term has been spotted in the financial press on a few occasions, with some surprise. Only internet journals state the extreme risk, tying factors together.

The financial press has caught wind of the enormity of the situation, but not much in the mainstream press where the Petro-Dollar is assumed part of the global landscape. The shock from its removal, elimination, and dismantlement will be enough to cause financial earthquakes and countless tremors. Keep in mind that in the current year, China surpassed the United States as the biggest oil importer. The Western press is replete with stories in coverage. See the UK Daily Mail article for the Saudi diplomatic riff (CLICK HERE). See the Economic Collapse article for the Petro-Dollar threat (CLICK HERE). See the Reuters article for the gradual inevitable shift away from the United States (CLICK HERE). See the Washington Post articles, one for the Saudi tipping point implications (CLICK HERE), the other with direct discussion of the tilt toward China (CLICK HERE). See the UK Telegraph article on the great Saudi gamble (CLICK HERE). See the Zero Hedge article on the risk to global USTreasury Bond reserves management (CLICK HERE). The internal problems that the Saudi Royals must manage, such as with political dissidents, reform advocates, critics of Islam, handling Shiites internally, backfire among neighboring nations, are very thorny and might be equally important in the fall of the House of Saud. They will not be commented upon, since the other prevalent factors are covered.

The transition will not be smooth. At stake is stability on the geopolitical front, but also continuity within the vast Saudi petro-chemical business that includes very sophisticated petroleum engineering. The American/British expertise, together with Western European expertise (like Norway), will be required. Without it, the Saudi oil output will enter decline. The Saudi financed shills speak openly about creating a new security arrangement for the Arab world, but it is a well understood joke and stream of empty words. The House of Saud is showing fear and insecurity, throwing fits, seen as crying in public to attract attention. They are the geopolitical babies who wish to continue the plunder of national wealth under the aegis of a protector. At risk is their energy industry. The Chinese do not possess expertise. They are just the biggest global oil importer. The Saudis lack PhDs, but have plenty of camels and arrogance, even Islamic priests. Watch the angst with the United States, combined with hitting a brick wall with Russia, result in the Saudis falling into the Chinese hands. Finally the hidden element of the USDollar support from oil sales will be more clearly revealed. For the last two decades, the primary backbone for the USDollar has not been economic or financial, but rather military. See another gem depiction by Pawel Kuczynski, whose art work speaks 1000 words. He omitted the field tanks, fighter jets, uranium artillery shells, and drones in the the USD blanket too, not just helmets and rifles. The cleaning has begun, the fallout to be revealed.

◄$$$ THE PETRO-DOLLAR IS IN THE PROCESS OF BEING PHASED OUT. THE EUROPEANS REALIZE IT. THE UNITED STATES DOES NOT. THE USFED ITSELF MIGHT BECOME AN ANACHRONISM RENDERED SUDDENLY IRRELEVANT IN A NEW PETRO-YUAN WORLD. THE WALL STREET PRINTING PRESS TO DOLE OUT WEALTH TO ITSELF MIGHT SUDDENLY BECOME JUNK METAL AS THE METTLE WILL RESIDE IN BEIJING. $$$

An unusual but realistic repercussion could come soon, where the Saudi Arabians find themselves on the wrong side of the fence. The Riyadh leaders might be setting themselves up for sanctions, slowly at first, in a spectacular sequence of events. Consider the Russian Valentin Katasonov, economist and the chairman of the SFSharapov Russian Economic Society. He wrote a significant essay about the new dynamics of Iran, Saudi Arabia, and the Centennial of the Federal Reserve. It would be ironic if the 100-year anniversary of the bank syndicate control center occurred with a flip, where detente was reached with Iran (ally and trade partner with the East) but where friction was triggered with Saudi Arabia (ally and Petro-Dollar liaison with the West).

Katasonov makes numerous excellent points. The active dialog between Tehran and Washington, brokered by Berlin, caused a sharp negative reaction from Riyadh. The Saudis were barely represented at all, indicative of how effectively they hide under the skirt of protectors. The possible consequences of this conflict are far reaching, and full of irony, as the Saudis could resort to the same methods of trade that Iran has used for two years. He wrote, "Saudi Arabia could very soon end up in the same situation as Iran was in the past: sanctions could be imposed against Riyadh. One can anticipate Riyadh's reaction in this case. It will try to avoid transactions in US dollars by switching to other currencies. It may also use such time tested instruments as gold and barter. The next move will be Washington's and it will be a forceful one. Washington will try to gain control over Riyadh by military means and force it to abide by the 40 year old agreement (conduct transactions exclusively in US dollars)."

Katasonov described the United States as becoming a hostage of its own involvement in Middle Eastern affairs. Iran is unlikely to use the USD in energy trade. Tehran is likely instead to continue with Chinese Yuan and Indian Rupee. The Saudis will be pushed to adopt a Petro-Yuan, the extreme damage hitting USTBonds. He described the formerly stable Middle Eastern foundation of the Petro-Dollar defacto standard as a quaking bog that features the USDollar in its death throes. He notes the events taking place on the eve of the 100th anniversary of the creation of the Federal Reserve System. He concluded, "If the dollar collapses, the Fed's printing press will become worthless junk. Nothing will be left of the Federal Reserve but a facade. It cannot be ruled out that the Fed will not survive long after its centennial, and it could be from the Middle East that its demise will come." The Jackass dislikes double negatives. He concludes the USFed might not survive the turning of the Petro-Dollar page to the next chapter that features the Petro-Yuan, the hand being Arab that turns the page.

Pepe Escobar is an excellent analyst with a keen sense of what is important, whose flair is appreciated. He notes the Saudis must conform to the new global players, Russia & China. The recent Beijing rumblings are a call to end the Petro-Dollar defacto standard, with its reign of terror. The giant Chinese petro-chemical plant by the Red Sea is of huge importance in leverage. See his recent essay on "Losing the Petro-Dollar Religion" in Asia Times (CLICK HERE). He wrote the following. "The House of Saud also knows very well it is the solid anchor that keeps OPEC tied to the petro-dollar system. Without Saudi Arabia the petro-dollar is history. That is arguably the number one scam in international relations. Virtually everyone and his neighbor needs US dollars which are mostly invested in US Treasury Bills and other securities, mostly used to buy US dollar-denominated commodities like oil. How sweet it is to be bought by you. Washington keeps running up untold trillions of US dollars in debt that everyone must buy. The House of Saud of course duly invests its cascades of US dollars in US debt. Now imagine the House of Saud deciding to ditch the petro-dollar. That would be Apocalypse Now for the US economy. Slowly but surely times are changing. Iran under those declaration of war style sanctions is pointing the way, selling energy in other currencies, accepting gold and even bartering. The House of Saud, by the way, is also terrified that with a US-Iran detente, there will be a lot more Iranian oil and gas on Western markets, thus diluting Saudi profits.

Russia is now the number one global oil exporter, and China is the number one global oil importer, importing more from Saudi Arabia than the United States. By 2020 China will be importing a whopping 9.2 million barrels of oil a day. So it obviously makes no sense for BRICS members Russia and China to keep using the petro-dollar. That is a crucial feature of Beijing's recent call to de-Americanize the world. And Riyadh knows it. The House of Saud also considers two other trends. It has been exporting most of its oil to Asia for years now, and China inevitably has become the top exporter of myriad manufactured products to Saudi Arabia, ahead of the US. Beijing once again is playing a discreet long game investing in Saudi infrastructure. Aware that Saudi Arabia cannot export more of its heavy high sulfur oil, because few customers can refine it, China is building a massive new refining and export complex. So long-term, what we have is essentially a US-China confrontation (with Russia and Iran also weighing in) over the petro-dollar. The House of Saud utmost priority, whatever happens, is self-perpetuation. Then to keeping earning loads of cash, petro-dollar or otherwise. And then to keep mortal enemy Iran, those 'Apostate Shiites' in check." In the next year watch for growth in the Chinese Yuan account.

## GOLD STORY WESTERN FRONT

◄$$$ ANDREW MAGUIRE CLAIMS THE LONDON-BASED LBMA GOLD MARKET IS IN GREAT DANGER, NEAR COLLAPSE. THE CHINESE TRADING STRATEGY HAS EFFECTIVELY BLOCKED THE FORWARD AGREEMENT METHODS USED BY THE LONDON BANKERS. A DEFAULT APPROACHES WHEREBY THEY CAN NO LONGER ACCESS PHYSICAL METAL WITH WHICH TO EXERT CONTROL OVER THE MARKET. THE LBMA GOLD MARKET COLLAPSE IS AT REAL RISK. IT LACKS METAL. IN A SENSE, REVERSE MARGIN CALLS ARE AT WORK TO KILL THE GOLD CARTEL. THEY CANNOT MEET THE CALLS WITH GOLD BARS. THE GAME IS NEARING A CONCLUSION. $$$

Andrew Maguire shared his perspective on the gold market, corrupt as it is. As preface he made clear that the synthetic COMEX supply is not gold at all, but rather phony supply in worthless gold certificates and ledger items. With ease, the big banks can overwhelm the underlying (true physical) demand with seemingly infinite paper gold. In just an hour or two in time, they can sell a full year of global gold mine output (or silver mine output) with no consequences legally. They are protected by the corrupt governments, which are in turn controlled by the bank cartel. The fake gold market will suffer a price decline. But the physical gold market is unleveraged and real, experiencing big shortages and supply line interruptions due to the corruption. Maguire pointed out that the USFed enjoys its position, with complete visibility into the trading book of the large and small speculators alike. They know exactly how much synthetic (futures based paper) gold to dump into the market at any time to overcome the bid stack. They can outweigh the buyers at any time. They can ignite the algorithm driven momentum to force selling with collusion by the big banks in New York and London. The USFed and Wall Street, with London collusion, are expert at the USFed game. They even enlist the support of the financial news networks to spin out absurd stories. Most of the public gobbles it up like idiots.

Maguire painted the picture with the crooked games and excessive leverage to defend the system. He gave a concrete example, and then described the leverage. He said, "It allows the two primary bullion bank operatives to front-run, using inside information, for their own book too. When a single entity instantly dumps, like after the FOMC Meeting, over 35 tons of synthetic gold into the market, it is giving the algorithm driven market the temporary ability to overwhelm any unleveraged physical demand. This is the last vestiges of the tail wagging the dog, although as each time they do this, the physical buyers take the spot price. They then step up into the London fix, demanding to convert these paper purchases into real bullion. Speaking of London, the physical market is where the rubber actually meets the road.

Converting so much paper gold into bullion is stressing out [the existing system with] between 90:1 and 100:1 leverage of available supplies. This was never, ever anticipated to happen [by the bullion banks or the Fed]. The bulk of all LBMA bank accounts are held in unallocated form. It is amazing how few institutions even realize this. That includes $billions of pension fund holdings. What amazes me is when speaking to these [pension fund] managers, they actually believe they have access to the physical gold, or that they can convert these holdings into allocated form on demand. That could not be further from the truth."

Maguire describes the mechanism that will destroy the LBMA/COMEX, the physical gold demand at the artificially low price. Tricks and deception are used by officialdom. When applying for an LBMA bullion account in London, any party (whether a wealthy investor or an institutional entity) is steered into the lower cost unallocated option with the lure of lower carrying costs. The Allocated Accounts cost more, and involve careful bookkeeping like with the serial numbers and recorded stamps. Closer paperwork inspection reveals quickly that unallocated accounts contain zero physical bars to support the bullion holdings. The depositor merely received a ledger receipt, just like a cash bank account. Therefore the depositor unwittingly becomes a creditor of the bullion bank, but worse, with zero visibility of the activity that moves around the bullion wealth. Maguire calls these accounts highly leveraged, rehypothecated structures that for decades have completely distorted true supply & demand fundamentals. Enter the present, where big events are happening.

Maguire describes great changes, as the new Chinese players have grown savvy. They are interrupting the financial paper games like tossing in large wooden shoes in the works (origin of the word sabotage from disruption to the Industrial Revolution that wiped out jobs). The rollover process has been altered, and the game is nearing an end, with a gold market default looming. The balance of physical and paper gold is being implicitly forced. The leverage anchor has been dismantled, and the leverage is working against the London bankers. They have lost control finally, creating an end game. The tables has turned on them. Huge additional physical gold demand can destroy their entire corrupted arena, here and now.

Maguire described the dynamics behind the eventual breakdown of the London Bullion Market Assn. The system lacks metal, like a car engine that lacks lubrication. The seizure is assured. He said, "China is now poaching, financing these forward agreements away from these traditional LBMA bullion banks, ruining their ability to roll forward many of these leveraged positions that have kept this Ponzi scheme at the LBMA going. People have to understand this is a game changer. It forces the bullion banks to pay the piper. The bullion banks have to mark longstanding, over-collateralized, rehypothecated gold and silver positions to market. This means buying physical to do so. This starts to bring supply & demand fundamentals to the forefront. These positions are put on, and over time they were rolled again and again and again, allowing them to be collateralized as we said, 100 times over. At that time the bullion banks had full control of the US and London markets. However, this unanticipated physical demand is removing this underlying physical gold out of their control. This is a big deal. The high leverage in the paper markets, based upon one ounce for every rehypothecated 100 ounces employed in the market, this anchor has now come loose. Unfortunately, for the bullion banks leverage works in two ways. What we are seeing now is the start of a forced unwind of these rehypothecated positions. There is simply not enough physical gold for them to cover their positions, and that is why we will see a default at the LBMA." The death of COMEX/LBMA is within view, but with no time deadlines, only obvious imminence. Hats off to the Chinese, but they have their own agenda. A massive short squeeze is in progress, and the victim is the gold cartel. The monster in the arena has turned against its masters, and only because they are running out of physical gold bars. See the King World News interviews (CLICK HERE and HERE).

◄$$$ GLD INVENTORY DATA SCREAMS OF BANKER PANIC. SOMETHING BIG IS GOING ON WITH GOLD DEMANDED BY A SECRET PARTY. AN IMPORTANT GOLD LEASE WITH A HIDDEN THIRD PARTY MIGHT HAVE TAKEN PLACE IN LATE 2008. THE WALL STREET BANKS SURVIVED A SCARE, BUT TODAY THEY MUST RETURN THE LEASED GOLD. THEY CANNOT AND ARE THEREFORE IN BIG TROUBLE. GIVEN THE JPMORGAN HQ PROPERTY SALE, SOME FINGERS POINT TO CHINA BEING THE HIDDEN PARTY. EURORAJ WAS PRIVY TO SOME HARDBALL ACTIONS DONE BY CHINA TO SWAP SENIOR BANK BONDS FOR GOLD IN YEAR 2011.

ON THE AMERICAN FRONT, THE TECHNICAL DEFAULT OF CHINESE-HELD USAGENCY MORTGAGE BONDS IN 2008 MIGHT HAVE RESULTED IN MORE DEMAND FOR GOLD BULLION IN RESOLUTION. THE PICTURE PAINTED APPEARS TO INDICATE CHINA IS CALLING IN OLD CHIPS, AND WILL WRECK THE ANGLO BANKERS. DATELINE 2014 FOR THE WRECK. $$$

EuroRaj has shared another featured dynamic behind the complex gold market. He hypothesizes that some truly enormous games were played in 2008 during the Lehman breakdown. The bust was much wider than just Lehman and Fannie Mae with an AIG chaser. Some big gold swaps were done five years ago, precisely when China was being a sonofabitch to New York and London with extreme pressure applied. Some analysts believe that Fannie Mae was adopted by the USGovt with nationalized status, because the Chinese were dumping USAgency Mortgage Bonds. They exercised vengeance after the US reneged on returning their leased Mao-era gold as part of the 1999 Most Favored Nation grant. Powerful vengeance indeed! Well, EuroRaj was in Wall Street leading to the 2008 grand breakdown, then jumped to London at a different bank in The City. He observed much and put the pieces together. Last month he shared his perspective on the hidden Goldman Sachs bailout via the AIG adoption and the TARP Fund that followed, even the extreme unseen vulnerability of GSax from not having an established mature commercial bank foundation.

EuroRaj follows the GLD inventory closely. A good litmus test for gold stress is offered behind the walls is the GLD Fund inventory of gold bars. At end year 2012 it was 1350.82 tons. The present count (or very recent) was 852.21 tons. It is losing approximately 50 tons per month. The SPDR Gold Trust (aka GLD Fund) will very likely be shut down at some point in 2014. Expect to touch the 800 ton level in late November or early December. The big effect will be what follows. The drop from 800 to 600 tons could be very sharp. He has postulated that the GLD is Gold in Motion, from the mining firm output to the Wall Street corrupted arena. Mine output is sharply down. Also, the GLD bars are being used to satisfy arbitrage demands from Shanghai, where the gold price is noticeably higher, at least high enough to make the arb trade profitable. The GLD depletion is the visible alarm, which should alert its sleepy dopey junkie investors to exit quickly. Any sudden departure en masse would exert additional extreme pressure on the gold cartel. Regard the GLD inventory as the last vault of gold to raid in the end game.

EuroRaj discusses the big 2008 events in the gold backrooms. The gold market has some tabs coming due, old bills that involve Wall Street, the Chinese, and the Saudis. They must be resolved, in no way endless like Barrick Evergreen gold contracts. Bills are due here and now. The fallout victim could be the Petro-Dollar, due to Arab anger and a sense of betrayal by WashingtonDC. Harken back a few years when the crash occurred. Some large party deposited almost 200 tons back in 2H2008 right in the middle of the banking crisis. They might have been compelled, due to contractual obligations. The event was very strange, but went largely unnoticed. Imagine a significant deposit of gold bullion going to the very banks believed to be dead, as the Lehman failure was set to occur. It reeks of extreme coercion and pressure, or else a giant favor granted. It could have been China, or Japan, or Saudi Arabia, maybe even the Vatican.

The motive contains the intrigue. Clearly, with some thought, the transaction took place because someone bigger than the banks (with clout) refused to accept USTreasurys as collateral and demanded Gold bullion instead. They had their fill of debt securities. The banks appealed to an ally, a partner within the grand system, borrowed gold from them, and gave it to the counter-party who demanded the gold. The Wall Street banks survived for a few years on the back of the lease, but time is perhaps up. The five-year lease could have expired, and the banks might be foraging for that 200 tons to return that gold. The Venezuelan 15 tons is a piece, but not even 10% of what is required to keep the peace. Expect some consequences, like vengeance, the result to be visible in some form. To be sure, lies will be told, but given the extreme nature of the complex deal, we as observers might be able to infer who the hidden critical gold counter-party was after all. Theirs will be the loudest voice, or the most disruptive hand.

EuroRaj personally was close enough to the heat of the bond and gold market, that he tosses out names, just for example sake. They might be the actual parties, unsure. Suppose China refused to accept USTreasurys from JPMorgan & Goldman Sachs as collateral in 2008. The result would be that JPM/GS went to a friend (like Saudis or London or Japan) and leased the Gold from them, handing it over to China during the urgency of the post-Lehman weeks late in 2008. Essentially China might have declared "We keep the Gold, you keep the USTreasurys." However, time marches on and the GS/JPM Titans would have to return Gold to their ally who came to their aid in a time of need. Next comes the Big Oops. The Wall Street Duo cannot easily force them, or convince them, to accept another five-year lease when GS/JPM cannot be trusted. The recent spate of stories and prosecution cases, even lawsuits, indicates clearly that the duo cannot be trusted to return the gold. Connect the other events, the dots as the alert curious analysts prefer to say. The Chinese property conglomerate that last month acquired the JPMorgan HQ & Gold Vault could very likely be linked to the big 2008 gold lease in some shape or form. In the aftermath, China is taking physical control of the gold, leaving the other desperate parties high and dry. JPM/GS can no longer shift gold in its vault to satisfy two sets of owners. They are caught in a bind. The outcome sounds and smells like re-hypothecation gone up against a brick immovable wall. The ultimate problem is lack of physical gold, a common stated issue. The above is a credible hypothesis of events extended from the 2008 crisis, which is not over. It might be reaching a climax.

The dynamics of gold shortage might be entering the final equation. Be sure to know that our bond analyst with connections to India, Turkey, Iran, and London has a very good working nose. He has shared his hunch, and says humbly nothing scientific to back it up. But it makes sense. He has been close to the fire, noting the Chinese attitude and occasional hostility in market behavior. He shared another story filled with intrigue. In the middle of 2011 when the EuroZone crisis was in full bloom, Greece then Spain and Italy were erupting on sovereign bond breakdown. EuroRaj saw from the London offices an Asian entity dumping senior bank bonds, which the banks were forced to buy back at gun point, under intense pressure. He mentioned being in the middle of the conflict with a few fellow traders. At the same time, the Gold price was moving up quickly. His conclusion was that the Chinese were executing a clever Gold swap using their senior bank bonds as currency. It was extreme, fast, effective. Later that year in December, Draghi launched the LTRO super senior bond scam, which reduced the liquidity pressure on the European banks, who happened to be stuck with their own bonds shoved down their throats. They had to take what China sold off, playing hardball tactics. The biggest takers of the senior bonds were Spanish and Italian banks. Both nations are a wreck.

When bouncing the theory, we weighed another factor. The Jackass brought up a key element that had to be integrated into the complex equation. The only hard part to absorb is the 2008 trouble with collateral. However, that is exactly when China is reported to have delivered with force their Fannie Mae Mortgage Bonds back to the USGovt for redemption. In response, the USGovt nationalized Fannie Mae. The move served two purposes, since Fannie Mae and the entire GSE complex of mortgage bonds was an enormous center of criminality, bond fraud, rampant collateral falsifications, counterfeiting, even presidential thefts (see Clinton & Papa Bush theft of $1.6 trillion combined, fully documented by silenced auditors). The European banks might have been pressured on senior bank bonds, but the Wall Street banks were pressured on USAgency Mortgage Bonds. Thus the nationalization and easier redemption in the shadows of the USDept Treasury.

Much more fallout occurred from the entire Lehman event, as he has inferred, with a second side being mortgage bonds. The Chinese might have cut a deal, to accept the required Gold that Wall Street was desperate to supply them, but in return for other agreed upon provisions. The Chinese might have been  promised the JPMorgan HQ complex in commercial property, plus the gold vault. The Chinese might have also been given permission as right of first refusal to purchase high profile commercial property in the United States. They are gobbling up New York City property, Los Angeles property, and San Francisco property. They are also establishing isolated factory colonies like in Idaho. The big hints are the pittance price paid for the One Chase Plaza (JPM HQ) for a mere US$725 million. The property is worth twice that figure. The deal reeks of handing over collateral, rather credible as proof. EuroRaj believes the technical defaults on the Fannie & Freddy bonds might have enabled China to call the terms of the resolution. They might have demanded Gold bullion in return, five years later (as in now). He concluded China might have decided to conduct a trial run for defaulted bonds, to be exercised in 2013/2014. The Taper Talk and USGovt shutdown might have been that trial run exercise. The Jackass belief is that JPM lost its collateral on a default, possibly related to Interest Rate Swaps where the Chinese stepped in gradually to take the counter-party positions over the last few years. The Chinese might be competing with the elite Exchange Stabilization Fund in taking counter-party positions in globally important trades.

◄$$$ THE VANISHING OF CANADIAN OFFICIAL GOLD RESERVES HAS A HISTORICAL PATH THAT INVOLVES MULRONEY AND BARRICK THE MINING FIRM. THE COLLUSION APPEARS TO BE VERY SCUMMY AND SORDID, IN A GREAT BETRAYAL OF THE NATION AND PEOPLE OF CANADA. $$$

This story was written back in November of 2002, after nearly two years of research. Intrepid analyst and editor Ed Steer (with affiliation to GATA) conducted research on how almost the entire Canadian Govt reserves were sold from under the noses of the Canadian people. The great majority of 660 tons quickly vanished. The intriguing part of this story is that Brian Mulroney was the Prime Minister of Canada when most of the national gold reserves were sold. Mulroney was invited to join the Barrick Gold's executive board shortly after he resigned as Prime Minister in 1993. The collusion seems egregiously obvious. He served as the chairman of Barrick's other board, called the International Advisory Board, which functioned like a global committee with security agencies and the CIA with Papa Bush onboard, as well as Wall Street and London liaisons. No other gold company had a second board of higher more secret level of representatives. For more on this Board and who is on it, check out the bottom of page 117 in Barrick's 2003 Annual report. It is rather impressive, if not frightening, sure to produce a mild chill.

The connection between Mulroney, the Bank of Canada, and the US bankers is all too coincidental and cozy. The key element is the CIA, which in my opinion is complicit in the theft of Fort Knox gold and the elimination of President Kennedy. The story takes some unusual turns, when Barrick entered into so-called Evergreen gold contracts with the COMEX. They were part of massive special gold sales, with no legal requirement ever to deliver the gold bars, thus the name. Many Canadian friends and colleagues try to convince the Jackass that their nation does not play the same games as the Wall Street crooked clan of bankers. But as far as dumping the entire gold reserves, engaging in bank derivatives, permitting naked shorting of gold mining stocks, and going the asset bubble route, the similarities between Canada and the United States overwhelm the differences on the financial front. The biggest differences are found in the Westen provinces, where Chinese influence is starkly in evidence and some real capitalism is practiced. See the Financial Sense article by Ed Steer from 2004 (CLICK HERE). Ed mentions that some a few changes in hyperlinks are made since some have become inactive.

◄$$$ FINANCIALLY STRAINED VENEZUELA REPORTEDLY CUT A DEAL WITH GOLDMAN SACHS TO MORTGAGE ITS REMAINING NATIONAL GOLD RESERVES HELD IN LONDON. THE NATION IS STRAPPED FOR CASH, AS IT UNDERGOES THE DIFFICULT ADJUSTMENT TO CONDITIONS FOLLOWING THE EXIT OF CHAVEZ. $$$

As preface, note that Standard & Poors downgraded the Venezuelan Govt credit ratings to its lowest in eight years in June. One reason cited for the downgrade was the gold price, which weakened their ability to pay on debt. They really need a printing press like the USGovt, which never worries about paying back debt. The Venezuela newspaper El Nacional reported last week that their Central Bank and Goldman Sachs are ready to sign an agreement to swap gold reserves, the arrangement running from October 2013 until October 2020. The negotiated amount is equivalent to 1.45 million ounces of gold, valued at around US$1.8 billion. The gold is to be deposited at the Bank of England, with the funds transferred directly to Goldman Sachs once delivery times are stipulated. Goldman Sachs will then pay USDollars for the gold. An adjustment of 10% will be made to the asset value as a hedge, for bulk guarantees. That comes to $180 million in hedges put on, with lucrative fees to the GSax mafia. The annual interest rate will be 8%, determined by the BBA LIBOR rate.

Economist Jose Guerra told El Nacional that the contract is designed to provide liquidity to the Central Bank of Venezuela. They face a cash liquidity shortage, a condition since 2004. Current cash levels are only $1.2 billion, used to fund imports. Any dispute involving the transaction and its implementation will be resolved in English courts, which sounds cozy and one-sided. The nation of Venezuela is in a dire situation, made more obvious and urgent since the mysterious death of Hugo Chavez. Their central bank reserves have been falling fast this year. Stress has been acute since the S&P debt downgrade, coupled with a nearly 75% currency devaluation in the last year plus. Some irony exists, much like the backlash experienced by individuals who pay off a lump sum on credit cards, only to find their credit rating lowered. It seems that past events with more transparency worked against the nation's credit rating.

In September 2011, Chavez announced the country's gold mining sector would be nationalized. He also brought back home to Caracas significant tonnage in international gold bullion reserves held in foreign banks, the majority from London. At the time, Moodys stated "The Chavez decision to repatriate the gold reserves is a potential credit negative to the extent that it makes the handling of Venezuela's reserve cushion all the less transparent." The Latin American average of gold reserves held abroad was 8% at the time. By January 2012, Chavez had brought 160 tonnes of gold bars back to Venezuela, leaving 15 tonnes of gold reserves in foreign banks. This gold is to be mortgaged to raise cash, and conversely to supply the bank cartel with plenty of gold with which to honor contracts or to suppress its price. See the MineWeb article (CLICK HERE) and the original El Nacional article in Spanish (CLICK HERE).

Chavez would roll over in his grave to see his successor play ball with GSax and the bank cartel. However, much painful adjustment has come in the last 18 months after removal of his strict rules that held back markets. It should be clearly stated that Chavez wrecked his nation, wrecked the national oil company, and fleeced its wealth not for the benefit of his people, but rather for his countless rogue friends. He filled the PDVSA national oil company with his hack friends with little or no engineering experience, and largely gutted the company. Under his watch, PDVSA has seen a horrendous decline in output. His legacy is of cronyism, corruption, and rape of the nation under the guise of popular socialism. He is despised by hundreds of thousands of nationals who departed the country with their money, including my friend CarlosS, who lives in New York City. In summer 2006, the Jackass treated him to a lunch in order to pick his brain on Chavez matters. We still keep in touch. He was my bank branch manager in Pennsylvania. He actually joined JPMorgan in London for a year of misery, after which he complained of horrible treatment.

◄$$$ THE SWEDISH CENTRAL BANK HAS DISCLOSED THE LOCATION OF ITS TONNAGE OF GOLD RESERVES. ALMOST HALF ARE HELD IN LONDON. NOBODY REQUESTED THE INFORMATION. THE UNUSUAL DISCLOSURE MIGHT INDICATE AN UNEASY LIAISON WITH LONDON AND A POSSIBLE FUTURE DEMAND FOR REPATRIATION. $$$

The Swedish Riksbanken, their central bank, decided to be more transparent and make an unscheduled disclosure. They provided details where they store their 125.7 tons of gold. The information has long been kept a secret, never communicated publicly. Half of their gold reserves are located at the Bank of England. Some perplexed reaction has come, nobody able to explain why the data has come out now. No official parties or popular movements within Sweden had requested data on its location. Apparently once per year, statements are provided. Assurance has been given that they will start to inspect physically their inventory, implying distrust. Seems like distrust of London has finally arrived. Perhaps very soon news will come of an official request to repatriate those 61.4 metric tons of gold bars back to Stockholm. See the original DI article in Swedish (CLICK HERE). It would be interesting if Denmark made the same repatriation demand as Sweden simultaneously.

## GOLD STORY EASTERN SHIFT

◄$$$ MORE PHYSICAL GOLD IS BEING DELIVERED TO CHINA THAN MINED GLOBALLY. THE TWO ROUTES ARE THROUGH THE SHANGHAI GOLD EXCHANGE AND THROUGH THE HONG KONG WINDOW. THE SHANGHAI GOLD EXCHANGE IS MAKING A GIGANTIC IMPACT, THE NEW ELEMENT IN THE EQUATION.  $$$

The recorded demand for gold from China's private sector has escalated to the point where their demand currently accounts for significantly more than the rest of the world's mine production. The Shanghai Gold Exchange is the primary window for physical delivery, while Hong Kong acts as a separate parallel hub. In the first eight months of year 2013, together they have delivered 1730 tonnes into private hands, annualized to be 2600 tonnes. The world mining output is an estimated 2260 tonnes of gold, excluding China. The gold supply deficit for Southeast Asia and India will continue to put great strain on the gold price. Actually, the paper corrupted COMEX price does not have much strain at all, since it bears a disconnected link to the tangible bullion world. The strain is on the physical market, which approaches breakdown. China has become the undisputed destination for physical gold. The trend from the last two or three years shows no signs of slowing down. See the Sprott Group article (CLICK HERE).

The Shanghai Gold Exchange, founded in 2002, has quickly grown to become the largest spot gold exchange in the world. The SGE is to facilitate gold ownership, while the Shanghai Futures Exchange (SHFE) is a means for China to influence the international gold price. The SHFE works in terms of warrants, tied to gold as good delivery bars in kilogram format. So far in 2013, from January to September, the exchange has delivered 2.25 times more gold than it had in the same nine months in 2012. The Chinese Govt does not require investors who conduct physical delivery of SHFE gold contracts to pay value added tax (VAT). See the UK Real Asset article (CLICK HERE).

◄$$$ CHINESE GOLD RESERVES AN ORDER OF MAGNITUDE HIGHER THAN OFFICIALLY REPORTED. WORD FINALLY COMES OUT THAT RESERVES ARE VASTLY UNDER-STATED. CHINA HAS OPENLY CHALLENGED THE USGOVT LEADERSHIP, IN ALL LIKELIHOOD BECAUSE THEY HAVE FINALLY ACCUMULATED A GIGANTIC VALID CORE OF GOLD RESERVES. TIME HAS RUN OUT. THE CHINESE ARE OPENLY CALLING OUT THE AMERICANS FOR RECKLESS ACTIONS AT THE GLOBAL HELM THAT PUT THE REST OF THE WORLD AT GREAT RISK AND CONSIDERABLE AGONY. $$$

As uneasy global concerns continue that the US Federal Reserve will maintain the pace of unprecedented monetary stimulus and currency debasement, the voice of the Chinese Govt (Xinhua) has lashed out at the USGovt in clear terms with extreme criticism never before heard in a steady stream diatribe. Comments from state backed Xinhua have called for a de-Americanized world, complete with a proposal to consider a new international reserve currency to replace the King Dollar. The official Xinhua News Agency accused the USGovt directly of creating the appalling fiscal, monetary, and political situation as it stands today. The timing is important, since the WashingtonDC leadership cast of incompetent corrupted clowns struggles to reach agreements on debt ceiling, refuses to make sharp spending cuts, and is stuck with destructive monetary policy. The criticism was as lengthy as it was detailed, in an extreme break from a genteel past. The global monetary war has escalated!!

The criticism deserves ample detail. Key among its proposals is the creation of a new international reserve currency to replace the present reliance on the USDollar as reserve currency. They accuse the USGovt of bumbling and profligacy which afflicts the world. Xinhau referred to the 2008 Wall Street bust, describing the world as still crawling its way out of an economic disaster, thanks to the voracious Wall Street elites, in their words. They cited USTreasury Bond investors as having their FOREX assets put in jeopardy, still at risk from further debt downgrades. It called the international community highly agonized over the financial situation. Back in March 2009, as governor of the Peoples Bank of China, Zhou Xiaochuan called for the creation of a new reserve currency. Now the same call carries more weight, after more utter failure is obvious and evident in the USGovt and Wall Street leadership. Zhou Xiaochuan is still the Chinese central bank governor. The goal is to "create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run." He indirectly describes GOLD. The criticism went on to make conclusions about the United Nations and its role.

The smart money, including the Chinese people and the Peoples Bank of China, is motivated to take defensive positions against currency debasement and to continue the accumulation of physical gold for the long term. The dumb money continues not to understand the ramifications of USDollar currency debasement and the De-Americanizing world. It continues to see gold as a trade or a mere speculation rather than for the essential safe haven asset haven toward which it has always served. Gold might be heading for the first annual decline since 2000, from its corrupted official COMEX/LBMA price. However, the artificially lower price has given China wide berth to accumulate Gold bullion very rapidly. They have greeted the official gold price drop this year with pure lust, continuing to purchase record amounts of gold. They know the price drop has created a gift for physical buyers globally. The massive migration of Gold wealth continues to go from West to East, along with the newfound power. See the Zero Hedge article (CLICK HERE). For a detailed review of mining data and gold reserves data, and much more, see the Silver Doctors article (CLICK HERE).

◄$$$ THE CHALLENGE TO KING DOLLAR IS REAL. THE THREAT OF LARGE SCALE DIVESTITURE AND DIVERSIFICATION IS COMING, AND IT IS NEAR. A BATTLE FOR CURRENCY DOMINATION HAS BEGUN, THE PITCHED BATTLE IN ITS FINAL STAGES. THE GLOBAL CURRENCY RESET IS ALL ABOUT GOLD, THE RETURN TO THE GOLD STANDARD. HOWEVER, PRIVATE SOURCES INDICATE THE TRUE LEVEL OF CHINESE GOLD HELD IN RESERVE IS AT LEAST 10,000 TONS AND PROBABLY CLOSER TO 15,000 TONS. THE EARLY INDICATIONS ARE CLEAR FOR A DE-THRONE OF KING DOLLAR, AND A RENEWED GOLD STANDARD, FROM THE TRADE WORLD ARENA, NOT THE BANKING REALM. $$$

The notion of the USDollar losing its status as the world's reserve currency appears to be more realistic today. The concept is gaining credence. A deeper look into China's gold holdings has garnered much attention lately, including by the Jackass. Its last reported gold holdings in April 2009 were 1054 metric tons. Even then it was a lie, a low figure as lie. After inclusion of net imports from Hong Kong and domestic output, the figure is closer to 5086 metric tons. If jewelry, industrial, and other categories are netted out, and only implied bar demand to central bank holdings is added, the figure is likely closer to 2710 metric tons. The nations that possess real gold in physical form will benefit from the relentless move in progress away from the USDollar as the world's reserve currency. Some form of a gold-backed currency emerges. However, the movement toward Paradigm Shift will come via trade settlement, not from currency reform. Private peer to peer payments will dominate, not bank transfers. The golden bullet could be the wholesale devestiture of USTreasury Bonds. If diversification away from the USTBonds occurs more broadly, the movement could cause an avalanche with significant global momentum.

Clearly, any USTBond sales would go into a critical mass of Gold bullion purchases. In the wake of the financial tectonic shift, the USDollar might paradoxically not reduce in value relative to other floating fiat currencies so much. Some analysts call the mass USTBond sales the Nuclear Option. They overlook how the Dollar Swap Facility could be deployed with urgency, so that newly created USDollars in the $trillions could be used to prop up the Euro, British Pound, Swiss Franc, Japanese Yen, Canadian Dollar, and other currencies. An unexpected early skirmish could be seen. The Bank Cartel vengeance could be to preserve the major currencies, and to wreck every single emerging market currency except the Chinese Yuan. Wrecking the Russian Ruble, Indian Rupee, Brazilian Real, and South African Rand would be easy. The defense would urgently demand the BRICS nations to execute a counter-strike by lashing these emerging market currencies together to the newly Gold-backed Chinese Yuan. Then the Eastern currencies would compete as a group centered upon Yuan, against the Western currencies as a group centered still upon the USDollar. It would be a titanic struggle of toxic paper versus Gold. The yellow metal would win easily. The threat of lower USDollar versus all commodities and higher USTBond yields should frighten the Western leaders.

The Jackass has repeated the point many times. The Chinese Govt is accumulating Gold bullion in tremendous staggering huge volume. It is like a war setting within the Monetary War for control of the financial structures, complete with airlifts under the radar to move Gold bullion. The Voice has assured that the Chinese have multiples more gold in reserves than the official data. It is not in their interest to reveal the factual data. The airlifts from London and Switzerland are weekly, in high gold volume. He estimates the Chinese Govt gold reserves are closer to 15,000 tons on the best calculation. He should know, since he is one of their brokers. As footnote, The Voice cites the Kremlin as housing at least 15,000 tons and perhaps 20,000 tons of gold as part of the Russian Govt gold reserves. China & Russia are ready to challenge the United States and Great Britain, armed with a massive gold arsenal.

◄$$$ THE GRAVITY OF THE SITUATION IS PERCEIVED BY SEVERAL OTHER ANALYSTS AND FUND MANAGERS. STEPHEN LEEB CALLS IT THE DAWN OF A TERRIFYING NEW FINANCIAL AND MONETARY WORLD ORDER. LEEB SEES THE CHINESE ACCUMULATING GOLD RAPIDLY, WITH AN OBVIOUS OPEN DOOR FOR CHEAP PRICE DONE INTENTIONALLY (SECRET PACT). THEY ARE PREPARING TO DISPLACE THE KING DOLLAR. THE CHINESE WILL REVALUE GOLD WHEN READY, TO AT LEAST $10,000 PER OUNCE IN PRICE. $$$

Leeb predicts the emergence of global alliances that will come together in order to reshape the financial structures. They will be centered on G-20 nations led by the BRICS. He goes on to describe nazi-like propaganda and directed lies in order to keep the gold price down, restrained, at bay. The USFed has repeated its threat of tapering the bond purchases, but they have lost credibility. He believes China has gathered much more gold in reserves than is made public, the full extent not known. The Beijing leaders see the USDollar as a lousy currency, in his words. They could not conceivably be comfortable when the USGovt threatens shutdowns, with implicit defaults. He assumes they not wish to lose on their FOREX reserves in the event of a default. But The Voice claims the Chinese have already made preparations to write off $1 trillion in USTBonds. Leeb reminds that the USFed is buying over $1 trillion USTBonds per year in the monetization program. They are still monetizing the debt, which is both unsustainable, and something a Third World nation does. It is obvious that the USDollar is losing its supremacy and prestige. Various countries no longer want to trade in doll ars.

The major countries will follow the Chinese and turn to gold. The Chinese Govt is accumulating gold at an all-time record pace, he acknowledges. Leeb goes on to suspect openly that the West is in some kind of agreement with China to sell them cheap gold, the price kept low by force to enable their accumulation. There is no other way to explain the price action, he perceives. The Jackass believes China has forced a pact, whereby the Gold price is kept low, and in return they delay their final USTBond dumping in the hundreds of $billions per month. Leeb concludes, "Regardless, all this type of manipulation and dishoarding of gold from the West to the East does is hasten the day in which China, Russia, and Germany are going to introduce another reserve currency to the world. And the Yuan is going to have a prominent role there. This is why the Chinese are buying up all of the available gold for sale in the world. They are literally in a race to accumulate gold. You can see it in the data. Yet the Western based Ponzi scheme paper markets in gold take the price lower. There is something strange going on here, but I can promise you it is unsustainable. The Chinese will revalue gold when they are ready, and that day is coming. Then it will be goodbye Dollar and hello Gold. I am not talking about a run to the old highs. I am talking about Gold many thousands of dollars higher than current levels, and quite possibly over $10,000 an ounce. There is just no way around this outcome. Until that day comes, the West will desperately cling to Fed propaganda and paper gold price suppression until it blows up in their faces." See the King World News interview (CLICK HERE and HERE). Leeb comprehends that China, Russia, and Germany will form the core from the Eastern Alliance.

◄$$$ DUBAI TRADE IN GOLD IS RISING EXPONENTIALLY, DESPITE THE MINOR RESTRICTIONS. ONE QUARTER OF GLOBAL GOLD TRADE PASSES THROUGH DUBAI, AND ONE QUARTER OF DUBAI GOLD PASSES TOWARD INDIA. DUBAI WILL LIST A NEW SMALL GOLD CONTRACT ON THE SPOT MARKET. CASH & CARRY WILL COME TO THE MAJOR PERSIAN GULF NEXUS. $$$

Dubai has been a gold trading center in the Middle East for decades. Its size has grown exponentially in recent years. A shift has come from the older Souk markets to the Dubai Gold & Commodities Exchange (DGCX). The exchange is planning to launch a spot gold contract next year, the first of its kind in the Middle East. The goal is to move the emirate from a regional to a more international gold trading center. Amazingly, about 25% of all the physical gold traded around the world passes through Dubai, the commercial hub of the United Arab Emirates. The DGCX strives to expand its trade, which has grown from $6 billion in 2003 to $70 billion last year, according to data from the Dubai Multi Commodities Centre. The trend is gold volume shifting from West to East, from London, New York, and Zurich to Dubai, Shanghai, Hong Kong, and Singapore. The Dubai emirate has adopted the title City of Gold.

Dubai is well-situated between producers in Africa and consumers in Europe and Asia.  Around a quarter of the gold that passed through Dubai in 2012 made its way to India, which in 2012 accounted for nearly a fifth of global physical demand, according to the World Gold Council. The DGCX currently serves as a gold futures trading platform, but it requires spot contracts to complement the robust physical market. They seek to complement the gold market in the region itself and also the global market, making it easier to trade gold. Note in the graphic, a breakdown is not available for 2012 yet. The size of the spot gold contract will probably be 1 kilogram (32 ounces). It will be cash & carry with size in kilograms, not the LBMA ounces. Big changes are coming, the hint being the kilogram designation that China, India, and all Asia prefer. See the Bloomberg article (CLICK HERE).

◄$$$ INDIAN GOLD IMPORTS SLIDE, BUT EXPORTS JUMP. INDIA MULLS OVER EASING GOLD IMPORT RESTRICTIONS. A VERY LOW GOLD IMPORT TOTAL OF 500 TONS IS LIKELY FOR THE FULL FISCAL YEAR. THE 80-20% RULE FOR DOMESTIC REDIRECTION TOWARD EXPORT WILL BE RELAXED. $$$

Bragging rights for India are soon to go away. The grand subcontinent is fast slipping away from its position as the world's #1 consumer of gold. A senior official of the Metals & Minerals Trading Corp (MMTC) has noted that due to Indian Govt restrictions, gold imports are likely to decline by 41% to 500 tons this financial year. MMTC is the largest bullion player in India. Around 400 tons were imported in the first six months of this fiscal year, with no more than another 100 tons expected to be imported by the end of the financial year. The Diwali season and the Christmas season will see muted responses. Both August and September saw very low imports. High gold imports, which totaled $53.8 billion in the last fiscal year, have contributed to India's high current account deficit of $88.2 billion in 2012-13. See the MineWeb article (CLICK HERE).

Reduced demand for gold, lower demand for imports generally, a tempered demand for crude oil, and an improvement in exports have brought satisfaction to the Indian Govt officials. Despite the boost in October gold imports, traders are expecting a reversal of curbs related to gold imports. An official of the All India Bullion & Jewellers Assn said, "All the signs appear to be looking good. The inward shipment of the precious metal has been severely compressed in the current fiscal. FOREX reserves are rising. The announcement to ease some of the restrictive norms should be out soon." The next step is expected for the Indian Govt and the Reserve Bank of India to ease the very unpopular 80:20 rule with regard to gold imports. The rule requires importers of the commodity to supply at least 20% of their imports to exporters. On July 22nd, the RBI issued a rule that one fifth of all gold purchases by importers must to be exclusively made available to exporters in their commercial trade. It had further directed that only 80% of the gold imported could be used for domestic purposes, exclusively by entities in the jewelry business, bullion dealers, and banks. The Indian Finance Minister Chidambaram expressed glee at lower gold imports. Even though imports rose to 23.5 tons in October from 11.164 tons in September, the increase is not troublesome in his view. He indicated the official position is compatible with gold imports at about 20 tons per month. This is clearly political spin, since the pushback on the official policy has caused a firestorm of protest. Lower gold imports help to reduce the nation's high current account deficit. See the MineWeb article (CLICK HERE).

◄$$$ INDIA'S DEPARTMENT OF POSTS PLANS TO FLOAT GOLD COIN TENDER, WHILE OTHERS CRY FOUL. THE RIGHT HAND OF INDIA OPPOSES THE LEFT HAND, INDICATIVE OF INTERNAL CONFLICT ON GOLD POLICY. GOLD COIN SALES WILL POSSIBLY BE CONDUCTED AT 1000 OF THEIR POST OFFICES. $$$

A battle appears to be brewing between the Indian Govt and the Dept of Posts, which has floated a tender for gold coin sales through some 1000 post offices. The sales would be done on commission, the contract valid for two years, the items not marked for import. In the past, the postal department would sell coins imported from Valcambi Switzerland. The Indian Govt restricts gold demand, by contrast. The battle to relieve the high Current Account Deficit continues among policy makers, which has harmed the Rupee currency exchange rate. The common man has carried the burden with high inflation and rising fuel prices. Amidst restricted business, both public sector units and private banks in some cases are still openly selling gold coins across the counter in defiance. However, the major jewelers, banks, and other financial institutions, who were earlier aggressively promoting coins and medallions, have quickly halted sales of the low margin product.

The Federation also asked its members to stop sales of coins and bars to retail customers. Retailers have shunned gold coins also. Tanishq stopped the sale of gold coins since August. Coins used to account for 10% of national gold sales over the past few years at the store's many retail outlets. Banks are also part of the pressure to cut back. The Indian Overseas Bank commented that the bank had been selling more than 1000 kilograms of gold coins every year, yet the total quantity sold this year was around 580 kgm. No coins had been sold for over five months at the bank. Similarly, Federal Bank's gold coin sale has been cut in half this financial year, from 609 kilogram in FY13 to 300 kgm in FY14 so far. See the MineWeb article (CLICK HERE).

## STRONG DEMAND & ACUTE SHORTAGE

◄$$$ ASIAN CENTRAL BANKERS MADE A SHOCKING ADMISSION ABOUT THE WEST. THEY OPENLY ADMIT THE WEST LACKS THE GOLD TO ADEQUATELY SUPPORT THE FRACTIONAL GOLD BANKING SYSTEM. CHINA COULD BLOW UP THE GOLD MARKET OR USTREASURY BOND MARKET ANYTIME THEY WISH. AT SOME POINT IN TIME, THE GOLD WILL RUN OUT WITHIN THE CORRUPTED MARKET. NO GOLD PRICE WILL BE OFFERED. THEN THE GOLD PRICE WILL BE SUDDENLY RESET MUCH HIGHER. $$$

Chris Powell is the top notch news journalist turned head of the Gold Anti-Trust Action committee, often called GATA. He recently made detailed presentations to two Asian central banks. In return, they spoke openly with him. One central banker offered some important information on a volunteer basis. The Asian banker admitted that most central bankers are aware of the fractional reserve nature of the Western gold banking system, and its high vulnerability. They know full well that gold bullion does not back all of the claims floating around the world financial system as paper certificates, specifically in the West. Be sure to know that central bankers never make such admissions. This is a shocker actually. So conclude the Eastern central bankers are breaking ranks from the West.

Powell said, "Eastern central bankers are doing a very delicate dance, as China tries to hedge its disproportionate US dollar foreign exchange reserves with gold and other hard assets, without exploding both markets (gold and the dollar). Nothing major happens in the gold market from day to day without China's consent. China could blow up the gold market any time it wanted. It could also blow up the US dollar market, the US interest rate market, and bond markets any time it wanted."

Powell went on to describe a severe upcoming disruption. He expects the the official gold price to go dark (none offered from suspension), with no viable gold market in function. He concluded, "I suspect that either that will happen, and the gold that is available will run out, or more likely the central banks will see what is coming and arrange an international currency revaluation. At that point there will be chaos in the gold and currency markets, but in the end this will mean substantially higher gold after the official reset of the international gold price." See the King World News interview (CLICKC HERE). Many stories indicate a major reset imminent, the global pressure building.

◄$$$ GOLD POURS INTO CHINA TO MEET RECORD DEMAND, SOME BYPASSING HONG KONG. CHINA WILL EASILY OVERTAKE INDIA AS THE #1 CONSUMER IN THE WORLD. THE SOURCE TO MEET MUCH CHINESE DEMAND COMES FROM SWITZERLAND, OFTEN CONVERTED FROM ETFUND GOLD RECAST INTO KILOBARS. $$$

China will surpass India this year as the world's top gold consumer. The data can be confusing, due to the Hong Kong window. China has imported nearly 20% more bullion than data indicates from its traditional conduit in Hong Kong. Other routes are used. Gold shipped from Hong Kong to the mainland nearly tripled to 855 tons in the year through September. More direct shipments have arrived, with a surge in China's gold purchases, the total measured at least 133 tons. Data is from Global Trade Information Services (GTIS). The internal shipments could be even higher since central bank purchases are not include. Cameron Alexander, manager of Asian precious metals demand with metals consultancy GFMS, echos the message. He believes the Hong Kong data is partial and incomplete, given rising direct flows to the mainland. The estimate of 133 tonnes is based on data from the top 20 gold exporters in the world that publicly disclose such information. It must understate the total since Britain and Switzerland do not provide complete details. The source of much direct China shipments has been these two important sites. The 133 tonnes does not include gold bought by the Peoples Bank of China. Industry watchers estimate Chinese reserves might be declared in the range from 4000 to 5000 tons by next year.

After a surge seen in demand for gold (jewelry, bars, coins), the World Gold Council forecasts Chinese gold purchases will top 1000 tonnes in full year 2013. The volume is well ahead of India where government restrictions are in place. At the same time, redemptions from gold backed exchange traded funds (ETFs) have risen sharply as the price of bullion has fallen, 650 tons from the top eight funds so far this year. Much of the fund exits have headed to China from Europe. The fraud in the ETFund management on unauthorized raids is another matter entirely. Refiners say they have been converting 400-ounce bars typically bought by ETFs into 1-kg bars to be shipped to China, popular as jewelry input and investment kilobars. The great recast trend continues apace, hiding the identity of the often improperly secured gold bars. Scott Morrison of gold refiner Metalor confirmed the trend by "We see huge flows of gold in and out of Switzerland, an inflow of large bars, which we convert to smaller bars. From April to August, we saw very large volumes from all our refineries headed to Asia." He added that the bulk of the refiner's output in Hong Kong went to China. Bernhard Schnellmann of the major refiner Argor-Heraeus in Switzerland, claimed that of the converting ETF bars, about 70% of their kilobar production was being shipped to China. In years back, the amount was zero. He called China the new kid on the block, already a very big kid. See the Reuters article (CLICK HERE).

◄$$$ CHINA HAS TAKEN CONTROL OF THE PHYSICAL GOLD MARKET. WHEN ITS INFLOW EXCEEDS GLOBAL MINE OUTPUT, THE RIGGED GAME AT THE COMEX WILL BE OVER. THE INFLOWS ARE ALREADY ON PACE TO EXCEED GLOBAL OUTPUT. THE PRESSURE TO BREAK THE COMEX/LBMA STRANGEHOLD HAS BEGUN, ALREADY WELL ALONG. $$$

◄$$$ TURKEY GOLD DEMAND HAS SPIKED TO AN 8-YEAR HIGH. THE FACTORS AT WORK ARE A PRICE DECLINE, AND INCREASED ROLE AS IRAN INTERMEDIARY. $$$

As gold prices have fallen, Turkey has vastly ramped up its purchases, whether for private hands or central bank holdings, even settled trade with its neighbor. Turkey's gold imports have doubled this year, on pace to reach the highest level since 2005. The swing state nation imported 251.4 metric tons of gold since January, the biggest tonnage increase since at least 1995. The demand for year 2013 is almost 60% higher than 2012. On the global billboard, Turkey was the fourth largest buyer of gold last year, after India, China, and the United States. See the Zero Hedge article (CLICK HERE). Although the data supports the claim that Turkey is on the rise with gold accumulation, the real unstated story is Iran. The Turkish intermediaries work diligently to supply Iran in net trade settlement. The data in the chart owes to the Iran factor, the Turks serving as key facilitators. The workarounds on sanctions are vigorous and effective. Damage is done from sanctions, but facilitated trade continues.

From his native corner of the world, EuroRaj added "The Turkish financial system is in a mess. Their banks are at the mercy of Qatar, which owns their short-term debt. There is no conceivable way Turkey has the export capability or the USD/EUR reserves to be buying this amount of Gold." Hence conclude that the Turkish window is being funded by the Persian Gulf, probably Iran with perhaps a Qatari hand. The vast Iranian energy sales are the driving force behind this gold flow.

◄$$$ A SILVER SHORTAGE HAS GONE GLOBAL, AS EVIDENCE POINTS TO A MASSIVE CHINESE ORDER CAUSING A SILVER SHORTAGE IN EUROPE. UNUSUALLY LONG DELAYS HAVE TURNED ROUTINE AMONG SWISS REFINERS. THE SHORTAGE HAS EXTENDED TO SCRAP SILVER AND OLD FRENCH COINS. $$$

Something big is brewing in Europe over silver, as a shortage has cropped up suddenly. The finger is pointed at China as culprit. Cyrille Jubert is author of "Silver Throughout History" and has shared the story. Great stress has hit the silver market. A contact of his from one of the largest European precious metals brokers reported their inability to find any silver. All the refiners they contacted could not take their orders, offering a suggestion to call next month. Never has such an event occurred in the past. In late October, an attempt was made to source one ton of silver (32,000 oz) from the three main Swiss refiners. Two of them refused to take the order entirely, and the third refiner stated delivery would take two weeks. The refiners claimed they had been very busy during the last month trying to fulfill an enormous Chinese order. They refused to divulge how enormous this demand was due to professional secrecy, but it seemed to me it was a sovereign (government) order. As India increased its 2012 silver imports by 4000 tons this year, the silver market has gone tight. The Chinese demand saturates the capacity of refiners. Conclude CHINDIA is putting enormous stress on the silver market. Maybe the market stress would not be present if the silver price were properly raised to $50 or $60 per ounce. The real market is a bitch!

Earlier in the year, in particular July and August, the Swiss refiners could not refine silver ore. Due to a string of huge gold orders, they were forced to focus all their capacity on meeting the orders. This explains the actual European silver shortage. A Swiss friend of Jubert's, whose company specializes in silver scrap, mentioned that the Swiss refiners were very busy refining silver ore arriving from the mines. They have recently been quoting between five and six weeks to refine silver scrap, twice the usual time. In addition, all the old French silver coins seem to have vanished. His contacts who used to trade 500 kgm per day in such special coins between 2007 and 2011, reported that in spring months of 2012, not a single month was this volume traded. For the past six months, the coins dealers have had no vintage French silver coins to sell, even the black market completely dry. See the Silver Doctors article (CLICK HERE).

## BARRICK MESS IN SHOWCASE

◄$$$ THE EMBATTLED BARRICK GOLD IS IN A DEATH SPIRAL. THE PASCUA LAMA PROJECT IS SUSPENDED. THE PAST HEDGEBOOK WITH HUGE HOLES CONTINUES LIKE A CANCER TO EAT ITS BALANCE SHEET, NEVER GOING AWAY. THE TOXIC BARRICK STOCK IS TO BE DILUTED, AND A BIG SHARE SALE FAILED WITH A 5% DISCOUNT. THE CHAIRMAN MONK WILL FINALLY RETIRE. EVEN MULRONEY WILL EXIT. $$$

It is difficult to conceive of a story more ugly dire and rancid. Amidst local pressure, legal dispute, and other challenges like challenges to mining rights, the huge Pascua Lama project has been suspended. The $10 billion project failure has been a major black hole with ball & chain combined. The project located on the Chile-Argentina border has been frequently cited in the Hat Trick Letter over the past several months with updates. It will be suspended finally, a sink of costs. Investors should never forget the two secondary stock issuances to cover its hedgebook of past ruinous forward gold contract sales. Neither was properly used after the funds were raised, which could be fraud, but not in this world with fine print and tiny font. The hedge book remains in effect, never covered. See the Financial Post article (CLICK HERE).

In an attempt to capitalize its loss, Barrick Gold Corp announced a move to raise more than US$3 billion in a discounted share sale, after the disclosed suspension of work at the Pascua Lama (PL) mine location. The company had been relying upon the giant project for a large share of future gold production. Originally Barrick had said it expected Pascua Lama to contribute in annual production 800,000 ounces of gold in 2003. It has been plagued by political opposition, permit issues, labor unrest, cost overruns, and a sharp drop in bullion prices. Back in July 2012, the company revealed higher PL costs, like 50% to 60% greater than estimated much earlier. The new price tag was expected to be between $7.5 billion and $8.0 billion, the full review hardly complete. Back in November 2012, the company pushed back the PL production date to the second half of 2014 from its previous target of mid-2014, and increased the total cost estimate to possibly $8.5 billion. They cited construction delays and higher labor and project management costs.

By April 2013, the company honored a court ordered halt to construction at PL in response to indigenous community claims. The project was allegedly destroying nearby Andes glaciers and harming the regional water supply. By May 2013, the Chilean Govt ordered Barrick to halt PL construction, slapping a $16 million fine on the company for serious environmental violations. By July 2013, a Chilean court suspended the PL construction until Barrick could build an adequate infrastructure to prevent water pollution, and ordered a review of the contract permit. By October 2013, analysts and shareholders expected Barrick to raise the cost estimate for the Pascua Lama project, now a recognized black hole with ball & chain, possibly to between $9 billion or $10 billion. Barrick announced it will halt development indefinitely. See the Reuters article (CLICK HERE).

◄$$$ THE BARRICK STOCK DECLINE IS A CLASSIC BROAD FAILURE. $$$

The bought deal was the third largest in Canadian history, according to Financial Post data. It was priced during the late October offering at US$18.35 per share, which included a 5.4% discount to the Barrick closing price at the time. The issuance was led by RBC Capital Markets, Barclays, and GMP Securities. There is significant dilution with the market capitalization around $19.4 billion. After the failed secondary issuance, the stock share price again fell hard. Currently ABX last traded at $16.38 per share. A very serious, very ugly, and very public collapse is in progress, a classic waterfall decline. The 20-week moving average appears to be guiding the stock lower. It will retest the impulse lows near the 14 level. Notice the volume rose with the downward moves, a horrible sign, usually regarded as a negative signal for retest of the lows. Worse, the cyclicals are dire. The MACD (moving average convergence divergence) indicates the worst has yet to come, as the next turndown could gain more momentum. Also, the slow stochastix indicates nowhere near has bottom been found with an oversold condition. Past low oversold levels seen in the first half of 2013 have not been reached.

◄$$$ BARRICK CEO MONK TO RETIRE FOLLOWING A LOUSY STOCK OFFERING THAT WOULD HAVE CAPITALIZED THEIR PASCUA LAMA PROJECT DISASTER IN SOUTH AMERICA. THE PATHOGENESIS WILL NOT BE TOWARD DEATH, BUT RATHER RESURRECTION WITH NARCO MONEY. THE GOLD CARTEL CANNOT AFFORD A FAILURE AND POST MORTEM ANALYSIS. EXPECT A SPATE OF ACQUISITIONS WITH MYSTERIOUS SECRETIVE FUNDS. THE TARGET WILL BE A MULTITUDE OF BEATEN DOWN MINING FIRMS. $$$

Barrick Chairman Peter Munk will be a victim of the Barrick Gold wide array of woes. He will retire following the disastrous new share issuance faltered. The Pascua Lama project losses will not be capitalized. The official word is a 'Tepid Response' to the company's US$3 billion share sale, which went undersubscribed. Bankers working on the deal admitted that there were orders for only 75% of the deal. They could not find enough idiots, morons, fools, and dupes to buy the stock. The underwriters had to do serious clean-up, which ate into their earned fees. The fees were set to amount to $90 million, certainly after the mining dust settles to be a loss.

Some investors had indicated they wanted more clarity on the board revamp before agreeing to buy any stock. A warning was given on a shakeup for its board. A source indicated that a succession plan would be announced soon for both Munk and another long-term board member, former prime minister Brian Mulroney. The political figure's presence on the board should be taken as a crystal clear hint how the Canadian Govt gold vanished into the gold market in its price suppression. Canada is an accomplice to Wall Street. The company might talk of recovering the Pascua Lama costs, and of reform with cost cutting, but this mining firm for now is dead kaput. Look for a strange sequence of events to unfold.

In no way can Wall Street afford to see the Barrick tool fail. A failure would involve an army of accountants and attorneys poring over corruption in the contract filing cabinets. A failure would reveal sordid details of the gold market price suppression and culpability of both the USGovt and Canadian Govt. They do not even want publicity of the Barrick Evergreen contracts, used to keep the gold price down, but never to be paid back on the gold collateral. The Jackass feeling for a few years has been that the large firms like Barrick will be beneficiaries of narcotics money from the USGovt security agencies. Such is the back end of their disgusting government and bank sector relationships. Expect no information whatsoever on mysterious secretive investors who stepped forward, only glee for their arrival. The objective will be to replenish their balance sheets, to restore their profitability, to resume healthy production, to take advantage of the attractive low gold price, all after a new acquisition program is put into gear. They will target hundreds of small and medium mining firms whose market valuations are down low, in the dumps, selling for pennies. See the Globe & Mail article (CLICK HERE).

## THANKS

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