GOLD INVESTMENT REPORT
PRECIOUS METAL & ENERGY
CURRENCIES & STOCK INDEXES


* Intro Golden Nuggets
* Gold Standard on Agenda
* Crude Oil & Energy Chess Games
* Venezuela & Political Oil Blend
* Physical Gold Battleground
* Gold in Heated Geopolitics
* Pressure Builds on Gold Price
* USEconomy & Growth Lies


HAT TRICK LETTER
Issue #103
Jim Willie CB, 
“the Golden Jackass”
24 October 2012

"These [Federal Reserve QE] funds have not made it into the markets and the economy yet. But it is a mathematical certainty that once the dam breaks, and this money passes through the reserves and hits the markets, inflation will surge. Once you hit 10% inflation, 10-year Treasury bonds lose about half their value. And by 20%, any value is all but gone. Interest rates will increase dramatically at this point, and that will cause real estate values to collapse. The stock market will collapse as a consequence of these other problems. Companies will be spending more money on borrowing costs than business expansion costs. That means lower profit margins, lower dividends, and less hiring. Plus, more layoffs." ~ Robert Wiedemer (esteemed economist and author of best-selling book "Aftershock")

"Gold valuations are not as stretched as a naïve look at its nominal price might suggest. Central banks globally are seeking to depreciate their currencies in a beggar-thy-neighbor attempt to stimulate their domestic economies. The Swiss National Bank is a prime example. Therefore, we believe investors should consider owning gold, precious metals, and other assets that store value as long as central banks continue to print and maintain negative real interest rates." ~ PIMCO

"Instead of smoothing the way, our government continues to erect more barriers to growth through burdensome regulations that increase costs for small businesses and all Americans." ~ Dan Danner (president of National Federation of Independent Business)

"The United States is suffering from a potential fatal combination of gullibility, apathy, stupidity, class warfare, racial hatred, and endorsed aggression. The only result of substance from the endless Fed rescues, bailouts, and liquidity functions is to create an endless moral hazard, where every market and even the economy is almost totally dependent upon the Fed. The hazard is becoming universal. This is pure Weimar America." ~ the Jackass

"You cannot balance the budget in a busted economy." ~ Bill Clinton (who therefore does not accept the nonsensical claim of a slow recovery, or its preached mantra)

"The penalty that good men pay for not being involved in politics is that they will

  be ruled by evil men." ~ Socrates (apologies for inexact quote)

"The USTreasury market is dead, from no yield in return. I am not going to invest in the high yield bonds, which are really subprime without a good yield offered to compensate for the risk. I like emerging markets instead, with plenty of opportunities. Emerging markets have less debt. What a turn of events that is!" ~ Ira Harris

## INTRO GOLD NUGGETS

◄$$$ THS US-STATE DEPT IS BEGINNING A NEW PROGRAM THAT ESSENTIALLY MAKES IT IMPOSSIBLE TO OBTAIN NEW US-PASSPORTS OR THEIR RENEWALS. THE INQUIRY FORM IS ABSURD AND INTRUSIVE. THIS STORM WILL ERUPT AND EXPOSE THE FASCIST STATE. $$$

The US State Dept has begun to illegally and oppressively use new passport application forms that are impossible to complete to the satisfaction of officials. The new long form reads like a comedy or nightmare or both. The new long form DS-5513 includes a Biographical Questionnaire that requires answers to bizarre and intrusive personal trivia questions about everything from whether you were circumcised (with religious rituals), to the dates of all pre-natal and post-natal medical appointments for your mother, and your parental addresses one year before you were born. It requires a list of every address at which you have ever resided, and your lifetime employment, history including the names and phone numbers of each of your supervisors at every job held. The usage of the new Form DS-5513 would amount to de-facto denial of their application for a passport, since almost impossible to complete. The new form continues in scattered usage despite the challenges for its absurdity and obstacles imposed. That appears to be the obvious motive for the State Dept procedure. Witness nazi nation and the onset of closed borders.

Following a small firestorm of protest, the State Dept seeks approval for a revised Form DS-5513 as well as a new Form DS-5520, which contain many of the same questions. Off the board are details of circumcision, but still on are mother's medical appointments plus a complete list of hospital workers in the room to serve as witness to your birth. One might suspect the USGovt wants to screen out extra-terrestrials. The address section required in the revised form includes only to list addresses of residence until age 18 years. See the Economic Policy Journal article (CLICK HERE). The fascist state is tightening its grip. American have no idea of the Syndicate stranglehold in progress. Next on tap capital control of the human kind. Soon neither money nor people will be leaving in a slow inexorable process.

◄$$$ FACEBOOK EXPANSION PLANS DO NOT INCLUDE MUCH OF ANY EQUIPMENT PURCHASES OF AMERICAN-MADE PRODUCTS. JOBS WILL COME THOUGH. THE PAINFUL FACT OF USECONOMIC LIFE IS THAT VERY LITTLE MANUFACTURING CAPACITY REMAINS IN THE NATION, MOSTLY SERVICES AND THE MILITARY INDUSTRIAL COMPLEX. $$$

Facebook (symbol: FB) recently began construction of a 330,000 sqft complex in Prineville Oregon. Its advantage is small population, cheap power, and ample broadband access. FB will house thousands of servers in this space, a server farm. The typical Greater San Francisco location is becoming saturated and more costly. Instead of using air conditioning to control the heat, FB will use a series of fans, filters, and water, in air cleaning functions with adjusted humidity. Facebook engineers are currently conducting heat tolerance tests. Instead of buying the computers from Dell or Hewlett-Packard, Facebook has them specially manufactured by Asian suppliers. Facebook plans to build similar centers in North Carolina and Sweden. Then again, most Dells and HP computers are fabricated in Asia. The US industrial sector has been largely gutted over the last generation, a trend that started after the Vietnam War when the resulting price inflation priced US labor out of the market.

◄$$$ THE US-STOCK MARKET IS IN TROUBLE. THE LEADERS ARE BEING WOUNDED, TAKING DAMAGING HITS. THE TECH LEADERS WERE FOLLOWED BY RETAIL LEADERS INTO THE GUTTER. THE SYNDICATE HAS A PLAN IN REACTION, TO REDUCE THE REQUIRED MARGIN ON ALL THEY DEEM IMPORTANT IN A BLATANT TRANSPARENT EXERCISE. $$$

The CME lowered the E-Mini S&P500 futures contract margins requirement as the stock market began to falter badly. It was an incredibly bold, transparent, obvious ploy to support the stock market generally. The USEconomy is on an accelerating downward slide in the world of reality, which clashes from the press network story. The recent tech stock fiascos continue, from Apple (AAPL), IBM, Google (GOOG), Microsoft (MSFT), and Advanced Micro Devices (AMD), followed by Morgan Stanley (MS), Chipotle Mexican Grill (CMG), and Marvel Comics Technology (MRVL). Last Friday the US stock market took a major dump, with the Dow Jones Industrials down 205 points (-1.5%), the S&P500 down 24 points (-1.7%), and the Nasdaq Composite down 67 points (-2.2%).

The financial markets are slowly coming to grips with the powerful entrenched galloping recession in the USEconomy. The USFed and USDept Treasury are engaged in stock support programs, but they appear inadequate to shore up investor demand. The stock market has turned into a comic farce. Some High Frequency shoddy programs surely suffered some margin calls, and the computers responded by sell dumps. So the CME responded in kind, by reducing the margin requirements for the E-Mini S&P futures contract. Investors with love of juice were given an open road to leveraged stock positions. The move was done in plain view, as blatant market interference to support the favored large cap stocks. No financial market in the US is free of corrupt interventions and deep distortions, except perhaps cotton and scrap cardboard. See the Zero Hedge article (CLICK HERE) and the Gold Seek article by Rick Ackerman (CLICK HERE).

◄$$$ PRESIDENTIAL POLLS ARE A STUDY IN BIAS. THE SAMPLING DICTATES THAT BIAS. MOST POLLS ARE PAID FOR BY AN ENTITY, USUALLY WITH A MOTIVE. WATCH THIS ELECTION DEMONSTRATE A STRONG ECONOMIC EFFECT IN THE FINAL WEEK, BEYOND THE FINAL POLLS. THE VOTE RIGGING MIGHT NOT BE SUFFICIENT FOR THE PRESIDENT TO CARRY A SECOND TERM. WALL STREET BANKS HATE OBAMA. $$$

The Franklin Roosevelt victory over the expected Dewey winner (from polls) was the first major bias ever reported. The poll was of the Atlantic Monthly subscriber base, assumed naively to be a random sample representative of the population. It was not. They ended up sampling wealthy non-working housewives for the most part. The best estimates made nowadays attempt to address past errors and biases of major polls, based on results of previous elections in a form of recalibration of the machinery. They label the adjustment process as likely voters. An estimate based upon a set of polls can be useful in improving accuracy, but it should not be taken as an advanced method like a stratified random sample with assured gains in precision. The final element in jumping from a poll, however sophisticated representative and unbiased, between the final weeks before the election and the actual election day, in my opinion is the condition of the USEconomy. Scared and frustrated people will turn out to vote, usually against the incumbent. Even when polled just days before the election, a potential voter still stands on simulated ground. The final vote cast requires first that the person makes the effort to show up at the voting center, wait in line, and then evaluates both the economic situation and the intangibles from the clouds of crisis. Usually in the final minutes, the economic factor dominates with a splash of reality from knowing four more years ensue. Thus the shift from the final recorded polls.

History has shown that with a bad economic situation where jobs are insecure and businesses are on the defensive, people tend to vote an added 3% to 5% against the incumbent president with respect to the final poll percentage recorded. It is the economic factor. Apparently, Romney has gained a sudden hefty 8% lead in California, which some analysts attribute to the rotten economy and deteriorating conditions. Therefore, Obama must rely on vote rigging and outright vote fraud. The tradition in the United States for vote fraud was minor until the 1990 decade, with egregious isolated examples like the Chicago dead people voting for Kennedy in 1960 in droves. Dead people tipped that election. The Hat Trick Letter has pointed out the extreme anomalies in 2004 and 2008, the evidence being vast discrepancies and absent high correlations between the Exit Polls and the final precinct counts. The vote count could be more highly corrupted this election, since the Obama Manchurian candidate sprang directly from the Langley camp, a devoted tool of the security agencies, which controls the press networks and has authorized the rules for vote count. The vote analysis experts anticipate vote rigging in the swing states of Florida, Ohio, and Virginia. It might not be enough to keep Obama in office, given the strong economic headwinds. See the Before It's News article (CLICK HERE).

As footnote, some subscribers have wondered why Wall Street dislikes Obama. The answer was provided by John Mack, former Morgan Stanley CEO. He put it well in a Bloomberg interview. Because Obama betrayed Wall Street on numerous occasions. He worked closely with the Wall Street banks to lay out strategy on dealing with some tough thorny problems. Then Obama went out and trashed the same bankers to the US press, which appeared like obvious grandstanding and exploit of anti-bank popular sentiment. Mack concluded Obama is not working to solve any problems. They also do not like how the Obama Admin supports application of the Financial Regulation Bill that pressures the big banks to conform to tiered asset levels, lower leverage, and mark-to-mark on high risk derivatives. In short, Wall Street hates Obama. That is why they have collectively given five times as much campaign funds to Romney.

Watch for potential stock market scary dives, orchestrated by Wall Street, led by Goldman Sachs stratagems, which could serve as a major damper on the Obama campaign. In my view, this election is between the narcotic baron Nazis versus the bankster Nazis. My forecast is the Nazis will win and retain control of the USGovt, imposing their dictatorship that fractures the three chamber balance (executive, legislative, judicial) as foundation, and continues to undermine the designed checks & balances (see the executive order list). It does not matter whether the man in the White House wears red or blue skivvies along party lines. Much more could be said, but further commentary is beyond the scope of this newsletter. A dictatorship cometh with martial law and deep disorder. The USEconomy will be pocked by price inflation and supply shortage. That is why the Jackass left the US in January 2007, these conditions foreseen not completely, but in clear broad strokes.

◄$$$ THE USPOST OFFICE HAS SUFFERED A SECOND SUDDEN DEFAULT. THEY CANNOT HANDLE A USGOVT-MANDATED OBLIGATION TO PRE-FUND RETIREE HEALTH BENEFITS. THE WASHINGTON-DC CROWD MAKES RULES BUT DOES NOT PROVIDE FUNDING. WITNESS THIRD WORLD DEGRADATION. $$$

An update on the US Postal Service morass. The firm will default this week on a $5.6 billion congressionally mandated obligation to pre-fund retiree health benefits, marking the second time in two months the agency has undergone a default. The amount was due in September 2011 but was deferred by Congress until August 1st. That default was the first ever on a payment to the USDept Treasury. On October 1st, it defaulted a second time. Health care for current retirees is paid for from the Postal Service general operating budget, not to be affected by the default. Their inability to make payments will not affect mail delivery or employee pay, according to the USPS. See the National Journal article (CLICK HERE).

◄$$$ UNITED STATES VERBAL STANDARD SA.T. SCORES HIT A NEW LOW. THE NATION SUFFERS FROM CEREBRAL DECAY, AS THE DUMBIFICATION CONTINUES. PLENTY OF RECRUITMENT OPPORTUNITY FOR THE POSTAL SERVICE, IF THEY CAN ONLY SURVIVE THE ONGOING CRISIS. PLENTY OF RECRUITMENT OPPORTUNITY FOR THE USMILITARY, IF THEY CAN ONLY KEEP THE ENDLESS WARS GOING. VIDEO GAME EXPERTS MAKE FOR EXCELLENT MILITARY DRONE DEVICE CONTROLLERS. $$$

◄$$$ A CHINESE MEGA CITY IS ON THE VERGE OF BANKRUPTCY. THE CITY OF DONGGUAN IN THE PROVINCE OF GUANGDONG IS CONSIDERED THE BOOMTOWN OF PROGRESS AND DEVELOPMENT. THE CITY IS IN RAPID DECLINE AND NEARS BANKRUPTCY, NEAR THE HONG KONG BORDER. $$$

No silly, not Don Juan! The bustling cities of Hong Kong and Macau are well known worldwide. The many large Chinese cities beyond Beijing and Shanghai are not well known. The Chinese province of Guangdong is the biggest of all Chinese provinces with over 100 million people, boasts a GDP of nearly $1 trillion, perhaps the most important economic dynamo in the nation. The province lies on the South China Sea adjacent to Hong Kong. They jump over to HK for banking functions,dental work, and a glimpse of a modern functioning world. The key city in Guangdong is Dongguan, which has a population of nearly 10 million. It has long been considered the provincial boomtown and one of China's richest cities. One of its notable features is the New South China Mall, the world's largest. However, timed with the US housing bust, it has been mostly empty ever since it opened in 2005. Which perhaps is a good segue into this story. Traditionally the city of Dongguan has been a story of prosperity, until recently. According to the South China Morning Post, which cites researchers at Sun Yat-sen University, this city is now on the brink of bankruptcy. China is under pressure. The pressure has been on the Beijing leaders for the last two years, to use the vast $3 trillion in national savings. It has been somewhat committed domestically to regional bond backstopping. It has also been heavily used in securing commodity and energy supply on a global basis. National leaders will have to focus on their cities that are crumbling from over-expansion, without realizing that Western nations lost their industry and in the process lost their income. A vicious cycle has hit.

◄$$$ A REPORT ON THE GROUND FROM ARGENTINA, A NATION IN TURMOIL AGAIN. SOCIALISM IS THE WRECKING BALL FOR PAST SINS. $$$

Subscriber Juan in Argentina has provided a glimpse into the darkening hole that has become his once prosperous nation. He wrote, "There is a cold war everywhere. The Brazilian minister called it war when he saw QE3. People cannot buy dollars or gold legally in Argentina. They are totally trapped. They only can through black market and online purchases with a 15% tax credit added recently. It is disgusting. I hope something big and positive happens to the rest of 2012." He has previously offered data on the extremely rapid rise of price inflation, which destroys the purchase power of the Argentine Peso. The tragedy unfolds again in the southern nation. Few seem to comprehend that socialism applied over two generations practically wrecked the nation. The soccer football league in the nation still functions well. Go Lionel Messi, the pulga (flea).

◄$$$ HUGO SALINAS PRICE OFFERED REFLECTIONS ON THE EFFECTS OF WAR AS COMPARED TO THE EFFECTS OF FIAT MONEY. HIS DESCRIPTION IS OF A DEVASTATING EFFECT. IN MY VIEW, FIAT PAPER MONEY BASED UPON FAITH IS LIKE CONTAMINATED BLOOD IN THE BODY. IT DESTROYS EVERY ORGAN AND THE BODY ITSELF. $$$

Price is an expert on gold, an advocate for Mexican usage of Silver as currency, and a historian of high repute. He wrote to emphasize how tainted currency is more devastating to economies than war itself. The damage is much more subtle, but more complete. He focused on how the advent of globalization (rebirth of China) has acted to wreck many economies. He wrote, "World War II leveled some cities of Europe in the countries which were part of the Axis, and killed millions of soldiers and civilians. After the war, both the winners and the losers turned to rebuilding their countries. The devastated cities began to heal. New modern factories were built. People went back to doing what they had been doing before the war. By 1970, a traveler could hardly tell there had been such terrible destruction and loss of life just 25 years earlier. The de-industrialization of the West set in under globalization, which was constantly extolled as the new, modern, and progressive structure of the world's economy. Old industrial buildings were transformed into structures harboring cafes, restaurants, and art shops. The de-industrialization was masked with credit expansion facilitating consumption, not production, which was un-economic under the globalization scheme. Stagnant or falling wage earnings were supplemented with easy credit for the masses. This all happened because the money the world has been using since 1971 is fiat money, not real money. But still, at this date, you hear very few voices recognizing this fundamental fact.

The Welfare State, funded with fiat money, has produced millions upon millions of humans who have grown accustomed to a good life based on credit and welfare. Fiat money has destroyed humanity's normal way of life, a way of life in which men and women could find their places and were thankful to have them. That old way of life is gone; the old attitudes toward life and work have been erased. This is destruction many times worse than the worst destruction of any war. That is where we are today. This is what fiat money has brought to the world. Fiat money is the child of the arrogance of human intellect, which has sought to invalidate the laws of human nature which have regarded the precious metals as money for thousands of years, and sought to substitute an intellectual construct for the real thing. Now we are going to pay for that arrogance. What now? Nobody knows. Unquestionably, we are headed straight into fearful problems never seen before. At least, owning physical gold and silver may be help some of us survive." See the Plata article (CLICK HERE). In Spanish, plata means silver.

Two points of disagreement. The first centers on the arrival of China. The great wage differential, and not so much the fiat paper factor, contributed to the harmful effects on Western economies. China attracted industry from a labor advantage. The vacuum in the West was felt with lost income, higher debt, and insolvent structures. A missing piece in the argument is that fiat currency standard led to the Globalization movement. It did so in that Western wage inflation occurred as a result of fiat monetary controls. However, the Jackass points to war costs and resulting inflation that led to seeking offshore solutions that avoided the higher Western wages. War led to Globalization much more than fiat money, although both had a big role. The second point not mentioned or developed is that fiat currency misallocates capital, permits financial fraud (like bond fraud and counterfeit), favors speculation over industry, leads to over-consumption, and undermines business capital from rising cost structures. In short, fiat currencies kill capitalism and invite socialism to preside over wrecked fields and charred economies after they enter powerful predictable decline. These are more important points than Globalization, which he has shown plenty of awareness of in his past work. Respect to Price, but fiat paper currency involves a cornucopeia of evils not addressed above even in passing. Fiat money undermines capital, to make the indictment simply in its most economic terms. Socialism is not a direct consequence of tainted paper monetary systems.

As footnote, the advance of the welfare state with its unearned benefits has little if anything to do with fiat money. Britain had socialism in the 1950s and 1960s, which cost the nation dearly. Thatcher reversed its trends. Argentina introduced socialism long before the Bretton Woods Gold Standard was violated in 1971. To be sure, fiat money permits more deficits, which are incurred by the welfare state expansion. These seems somewhat parallel notions and almost independent, but not quite.

◄$$$ FOREIGN INVESTORS SPENT $82.5 BILLIONS IN 2012, A NOTABLE 24% RISE OVER 2011 ON RESIDENTIAL PROPERTY IN THE UNITED STATES. THEY SEEK WARMER CLIMATE, DIRT CHEAP MICHIGAN PROPERTY, AND THE PERCEIVED DISCOUNT OF LOS ANGELES BUSINESS PROPERTY RELATIVE TO MANHATTAN. THE CHINESE ARE NOT ALONE IN THE BUYING SPREE. $$$

The data from the National Assn of Realtors showed foreign investors acquired $82.5 billion of the US residential market over the past twelve months. The tidy sum amounts to a 24% increase over the $66 billion spent the previous year. The market is truly vast and expansive, as the total consists of only about 9% of all the nation's residential real estate. Foreign investors view US real estate as a safe investment with almost guaranteed returns. They are in for an enormous nasty shock, as the police state expands and martial law is installed, with riots spreading across the land in response to frustration and shortages. The competition from the foreign buyers will not clash with average US homeowners or investors. Most foreigner buyers seek high end properties in major metropolitan areas. New York City, San Francisco, Miami, and Houston remain the places most desired and targeted on their acquisition spree, from an influx of foreign investment money. Canadians to the north make up about 25% of all foreign investors. They seek warmer climate, but have also targeted the damaged neighboring Michigan area due to cheap prices.

The next most active group is the Chinese, who make up about 11% of the total, an increase from the 9% last year. Investors from India, Mexico, and Britain each have about a 7% share. One recent shift in the buying pattern of foreigners has been from Manhattan (New York City) to Los Angeles. Real estate prices in Manhattan were barely affected by the recession, while prices in Los Angeles are perceived nowadays to contain a 60% to 70% relative discount compared to Manhattan. On the sidelines continue the American buyers, deeply affected by poor economic conditions and employment growth. See the Coaching by Peter Vekselman article (CLICK HERE) and his YouTube video (CLICK HERE).

## GOLD STANDARD ON AGENDA

◄$$$ THE LONG ACCEPTED INVERSE CORRELATION BETWEEN THE USDOLLAR INDEX AND THE GOLD PRICE IS FLAWED AND SHOULD BE ABANDONED IN ANALYTIC CIRCLES. IT FAILS TO EXPLAIN THE LAST SEVEN YEARS OF GOLD'S PERFORMANCE. THE LACK OF CONNECTION SHOWS HOW ATTENTION PAID TO THE USDOLLAR INDEX IS MISLEADING AND IRRELEVANT. $$$

Jonathan Kosares of USAGold focuses his attention in the argument against the correlation on the consumer purchase patterns and prices paid. Still housing costs dominate the household budgets, then transportation and food. The biggest escalation in price has been seen in gasoline (+100%), coffee (+87%), eggs (56%), meat (+40%), and electricity (+41%) since 2005. Although the USDollar has gained ground versus the embattled Euro currency, all major currencies have lost significant value versus the Gold price. Kosares concluded, "The net result is that the dollar index remains tightly bound in its range, as do all of the other currencies, yet all devalue against real goods and services. As currency wars ramp up, the nominal values applied to currencies in this model will become increasingly irrelevant and misleading. In fact, one could argue, given its decline across so many areas, that a collapse in the value of the dollar is already taking place, and it is being disguised, not displayed, by the dollar index." See the Gold Seek article (CLICK HERE).

◄$$$ JAPAN EXPERIMENTS WITH A BLATANT QUANTITATIVE EASING TO INFINITY, AS THE HALF LIFE OF THE SUCCESSIVE Q.E. QUACKERY SHORTENS IN TIME. THE BANK OF JAPAN IS A SERIAL MONETARY ADDICT. THE OBVIOUS NEED FOR A GOLD STANDARD IS GLARING, TO PREVENT SUCH CENTRAL BANK ABUSE. IT UNDERMINES WEALTH AND ECONOMIES. $$$

Almost all central bank bond monetization is celebrated by the idiot masses. They wish for higher asset prices while high cost of living is the quiet price paid. The Bank of Japan must be dragged on public stage for charges of horrendous monetary abuse. The BOJ has surprised even its supporters with an unexpected increase in its asset purchase agreement. Only one month after QE8 was launched, it failed. Its designers are demanding the launch of QE9 in an absurd circus show. They will buy JPY 10 trillion more bonds, bringing the total to JPY 80 trillion for the discredited central bank. The practical problem, if not utter embarrassment, is that the entire impact of the additional bond purchase fizzled in a mere nine hours. The colorful Art Cashin of UBS on the following day called it Japan's failed QE 8. The USFed QE programs are equally ineffective, but reinforced by secretive Interest Rate Swap abuse through derivative contract leverage.

One month later, nothing has changed in the global race to debasement (race to the basement). The fizzled half-life of the successive QE programs is diminishing, even as their effectiveness is diminishing, not that any QE is effective in accomplishing anything except adding liquidity to bond markets and raising price inflation on a broad basis. QE adds to wealth nowhere. Glaring is the failure of all QE done by Japan, the flawed policy response for over 30 years. The island powerhouse nation is stuck in monetary mud, the poster boy nation of ZIRP being the final 0% corner from which no escape exists. Japan is on a treadmill of QE to Infinity. The obvious need is glaring for a global Gold Standard, to prevent clownish desperate heretical central bankers from destroying money, wealth, and economies. See the Zero Hedge article (CLICK HERE).

◄$$$ STEVE FORBES CALLS FOR THE GOLD STANDARD. EVENTUALLY, THE SMARTEST OBSERVERS, CRITICS, AND CONTRIBUTORS WILL REALIZE THAT THE MANY PAPER SOLUTIONS TO THE TOXIC PAPER PROBLEMS DO NOT SOLVE ANYTHING. THEY MERELY BUY A LITTLE TIME, APPLY LAYERS OF PAPER MACHE OVER ROT, RAISE SOME HOPES, BUT ONLY SPIN GEARS. THE ON-STAGE PERFORMANCE BY THE ELITE BANKERS RESEMBLES FLAILING WHILE FAILING IN A CHEAP TRAGEDY. THE GOLD STANDARD WAS THE REMEDY MANY YEARS AGO. THE GOLD STANDARD WILL BE THE CORE OF THE NEXT NEW GLOBAL SYSTEM, MOST LIKELY INSTITUTED BY A NEW TRADE SETTLEMENT SYSTEM. $$$

The Gold Standard is no longer simply a solution, but more like a sickle or scythe to clear the American landscape after the fiat paper caused extensive weed growth in a cancer episode. Next comes scorched earth. Despite denials of widespread destruction to the nation from decades of fiat paper, Steve Forbes shows insight with bold statements that should disturb the elite power center. Forbes believes that Gold can save the United States from disaster. He does not comprehend the disaster already deeply suffered, much not reversible. My belief is that he might have been right in 1990 or 1995, but it is at least a decade too late to save the US from the disaster of fiat money, war impact, lost industry, dominant financial sector, widespread speculation, dependence upon asset bubbles for income, and central bank reckless policy. He sees the capital destruction factor, but not from a rising cost structure. He sees the USTBond rally as a false flight to safety, but not from Interest Rate Swap derivative abuse. He sees the insanity of tax hikes. Forbes calls a new Gold Standard crucial. He is correct. Even with only one eye open, his views are astute.

Forbes wrote, "The disasters that the Federal Reserve and other central banks are inflicting on us with their funny money policies are enormous and under-appreciated. An unstable dollar is wreaking havoc on our capital markets, depriving us of money for productive enterprises and future enterprises while subsidizing government debt on a scale never before seen in US history. The Zero Interest Rate Policy destroys capital by punishing savers and enabling the central bank to allocate where capital goes. By definition such central planning means subpar or negative returns. No one believes, given the finances of the US government, that a ten-year Treasury bond should yield only 1.8%. The promiscuous printing of money in the United States, Europe, and elsewhere is enabling governments to put off pro-growth structural reforms and giving them incentive to increase the burdens on the private sector. The poster child here, of course, is France, raising its maximum income tax rate to 75%. Not since the early 1930s have governments of major countries collectively acted so destructively. The only difference between then and today, and it is a gargantuan one, is that we have not destroyed the global trading and capital systems. But even they are facing increasing strains and will continue to do so unless policies are changed."

This claim of systemic ruin not yet marring the US structure is precisely where Steve Forbes is dead wrong. The global sovereign bond markets have been irreversibly destroyed, as bond yields rise without control in Europe, and bond yields decline in the US from derivative machinery. Central bank actions done in desperation will not halt the broken bond market pathogenesis, which he does not detect or does not admit. The global FOREX currency markets have been irreversibly destroyed, as they sit atop the wrecked bond platform of uncontrollably rising debt. The capital formation system has run aground, from the ZIRP policy that assures rising cost structure, shrinking profit margins, and shut down business segments, complete with lost worker income.

Forbes does not address broad national insolvency on a systemic level. He seems unwilling to give emphasis to the household sector badly harmed by insolvency, to the banking sector crippled by insolvency, and to the USGovt finances that are beset by chronic insolvency. He seems unaware that the US has woefully inadequate industry from which to derive legitimate income. These blind spots by Forbes are both astonishing and typical of the US elite. However, Forbes makes the full pitch for an indictment without realizing the full extent of the damage. He continues to assail the fiat system that has held the US hostage. He makes the case for the destruction, without recognizing the destruction well in progress. He curiously asks where the United States can move forward on a Gold Standard before a real catastrophe like the 1930s results. News to Steve Forbes. What has occurred in the United States is an order of magnitude more devastating than what happened in the Great Depression.

Forbes continued to write, "What the Fed is doing through its binge buying of bonds is enabling Washington to consume our national wealth. Instead of creating new wealth, we are beginning to destroy that which exists. No wonder tens of millions of people feel rightly that their real incomes are declining and their financial situations are coming under more pressure. In real terms the stock market is lower today than it was in the late 1990s, and even in absolute terms it still is not  where it was in 2007. A big part of the problem is that economics classes no longer teach the fundamental importance of stable money. The Gold Standard, if mentioned at all, is derisively dismissed as a relic, like the Egyptian pyramids or the Ford Model-T. Unless Mitt Romney educates himself quickly on the need for monetary reform (yes, he will win this election, despite all the claptrap to the contrary), we are going to have to seriously and deliberately begin the process of education and experimentation." This is very enlightened commentary. He understands the solution.

Forbes advocates the removal of anti-gold laws for commerce. We wants to see the removal of legal barriers to alternative, non-government currencies used within the United States. Commerce permits the usage of British Pounds, Japanese Yen, Euros, and any other currency to carry out a transaction. Yet it forbids the stable Gold & Silver, with a clear moronic bias that is self-serving to the fiat paper merchants and its legion of defenders. Forbes becomes a little lost in the room concerning taxes for gold coin purchases. He urges the new upcoming President Romney to work with the new Congress to pass a bill similar to that proposed by Ron Paul (the Free Competition in Currency Act) which would abolish all federal taxes on gold and silver bullion, as well as ban state and local taxes on them. It would explicitly allow gold-based monetary transactions and would remove the onerous reporting rules that now afflict gold and silver bullion buyers.

However, despite all the insight, Forbes seems oblivious to the concept of sound money serving as a stable monetary foundation, with its full impact of benefits, and its clearing of corrupt entrenched functions. Refer to where distortions in industrial output are addressed quickly, where nations are not permitted to consume beyond their income, where rogue nations like the United States cannot wage aggressive or adventurous war without payment of costs, where the dominant financial sector cannot conduct fraudulent bond operations free from prosecution, where the intelligence agencies cannot engage in counterfeit of the currency from stolen $100 plates, and the most basic, where capital formation can flourish from a proper price of money working against a proper cost of business. Regardless of Jackass criticism, my compliments to Steve Forbes for his insight, even though he goes only halfway across the street in his perceptions and impact. See the Forbes article (CLICK HERE).

◄$$$ DEUTSCHE BANK OFFICER SUGGESTS THE GOLD STANDARD. THE PRESERVATION OF WEALTH AND ASSETS IS A BASIC REQUIREMENT, BUT SO IS PROPER REWARD FOR CAPITALIST VENTURE. A CHANGE WOULD FORCE GOVERNMENTS TO GIVE UP MONEY SUPPLY CONTROLS. THE ARGUMENTS AGAINST THE GOLD STANDARD ARE EXTREMELY SHALLOW AND LACKING INSIGHT. THE PRACTICAL SIDE THAT FEW ANALYSTS MENTION IS FOR A GOLD COVER CLAUSE TO PERMIT FLEXIBILITY, WHICH WOULD LEAD TO VARYING EXCHANGE RATES FOR GIVEN CURRENCIES. THE ENTIRE CONCEPT OF A GOLD STANDARD MUST OVERCOME A WELFARE SOCIETY MENTALITY THAT HAS BECOME ROOTED IN THE WESTERN WORLD. $$$

A startling opinion was offered by Daniel Brebner from Deutsche Bank on the Gold Standard, its wisdom versus its practicality. The elusive solution from the central bank wrecking ball engineers over the course of the last four years has provided an open door to new solutions being discussed. Among the enlightened are those who promote the return of the Gold Standard. They do so at risk of ridicule and outright attack by the USGovt ministry thugs and intelligence agency goons. Great strain has come to exit the current quagmire wrapped in a nightmare. My description is of a global monetary war to defend and preserve the USDollar in its imperial throne that permits financial savagery and violent hegemony. Here are the major points made by Brebner, with a few final editorial Jackass comments to each point.

Analysts, investors, and think tank experts have turned desperate in search of a viable solution to the chronic powerful relentless financial crisis. A common emerging theme in discussing the gold market is the prospect for a new Gold Standard in the future. The practical motives are to preserve wealth, to protect assets, and to encourage effective capital ventures. Such newfound motive is a good thing, since wealth, assets, and capital are the chief victims of fiat money. Much like a blood system, the contamination destroys all the internal organs.

A return of gold in pre-eminence would force dramatic change in the manner that governments manage their economies. It would force plowing under of failed businesses (instead of propping them) and failed policies (instead of furthering them), neither in short supply. It would place limits on governments and bank centers of power to both add to the money supply and direct its flow (instead of amplifying them). The money supply would be the new power pursuit, from domestic gold holdings and gold production capacity. The latter might become state property.

Many economists shudder at the notion of a Gold Standard. The vast entrenched School of Keynes advocates flexible monetary policy as an important tool in optimizing an economy. Yet what has occurred is the saturation of debt, the proliferation of bond fraud, the move from utility to dominance in investment banking, even to indirect central economic planning and the devotion to war machinery. Few argue the need for flexibility during extreme economic imbalance, but the system has been transformed into one where extreme imbalance is an everyday condition.

Moronic pronouncements in rebuttal of a Gold Standard by the elite economist hacks center on two points. They show their ignorance of all things financial. They claim: 1) an insufficient supply of gold exists to serve, and 2) there is insufficient supply growth to accommodate growing economies. Brebner argues that the first argument is spurious. The volume of gold is not important. Instead it is the value that is ascribed to this gold that is important. A zero can easily be added to a paper bill to change its value. Similarly, the value an ounce of gold can suddenly be given a 10-fold increase. The missing observation is that the money supply has grown by 3-fold in just a few years. Therefore a tripled gold price might make perfect sense. Brebner accuses the system wonks of a certain lack of humility on the second argument. In order to achieve reasonable price stability within a growing economy, money supply also needs to grow. The current managers of money growth have lost control, as it has shot up like an upward spiral while the economies are stagnant or in reverse. In normal fiat times like the 1990 decade or early 2000 decade, when the money supply grew too quickly, inflation resulted, but if too slowly, deflation was the consequence.

The Jackass view is that a key part of a Gold Standard is overlooked. Nations could continue to manage over attached but independent currency systems. They could use a gold cover clause to enable flexibility. The US could for example declare the USDollar to be backed by 5 cents in redeemable gold, a 5% cover clause. The Europeans could declare the Euro currency to operate under a 3% cover clause. The Japanese could declare a 10% cover clause, while the Chinese declare a 12% cover clause. The British and Swiss could avoid the entire responsible game, since they are too mired in lawsuits over stolen Allocated Gold accounts. Heck, the United States would not be immune to such lawsuits either. A varying gold cover clause would move currency exchange rates, in response to national priorities and directives, like in response to problems. If abuse comes on cover clause enforcement, then the nations would lose their gold and thus respond quickly. That is the check & balance. The central banks could resume their role in counting money, checking for counterfeit, and monitoring the banks for drug money laundering, none of which functions the central banks do anymore.

Brebner does not believe the collection of Western nations can successfully navigate into the Gold Standard clean waters, because of cultural deficiencies. He wrote, "While a Gold Standard could work, we remain skeptical that it will be considered (barring a serious financial crisis, perhaps associated with highly volatile inflation). In large part we blame the low probability on culture. The world economy has, over the past century, morphed into a highly integrated, government dominated system guided by conventional wisdom (group think). The self-reliant individualism of the free market has been left behind in favor of a New Age of coddled consumerism. Culturally this represents a very powerful force in our view, one which minimizes creative options and solutions to economic impasses. On this basis we are cautious of predicting such a radical solution to monetary imbalances."

The Jackass agrees with the cultural problems, but instead it is much worse. The bad economic education has prevailed for over 30 years. The public does not comprehend well the tenets of capitalism anymore, except in parts of Asia. With the poor comprehension of capitalism, comes the poor comprehension of money itself. Worse, and consistent with Brebner, large pockets of the Western world believes that the state owes them a living, from the welfare society group think. The public dole, whether for jobless insurance, food stamps, disability income, tax grants, or tax loopholes, too much of the population is not responsible actor. The Gold Standard is a massive staff, a scepter, to impose responsible behavior for finance and economics. Lastly, if not careful, the German bankers will be accused of terrorism, child pornography, human organ trafficking, and perhaps even money laundering, if they continue to espouse a Gold Standard to emerge from the mire of the current mess. They might even suffer strange violent firebomb attacks. See the Zero Hedge article (CLICK HERE).

◄$$$ ROBERT TRIFFIN CITES CONSEQUENCES OF HOLDING THE RESERVE CURRENCY WITH AN ABSENT GOLD STANDARD. THE PATH TO DESTRUCTION IS UNAVOIDABLE. A NATIONAL ADOPTION OF A FIAT PAPER CURRENCY AS THE GLOBAL RESERVE INVOLVES A NATURAL COURSE THAT RESULTS IN ITS OWN FAILURE. EXAMINE THE SCIENCE OF PAPER WITH INK, GIVEN IMPORTANCE IN RULING OVER LABOR AND VALUE. THE CURRENT SYSTEM IS DESTINED TO FAIL. IT URGENTLY REQUIRES A REPLACEMENT. $$$

Economist Robert Triffin wrote, "For a national currency to also be a reserve currency requires a country to experience a current account deficit, which over the long run undermines confidence in the currency. Ignoring the dilemma does not solve it." The clarity and simplicity of his statement should shoot through the reader like a bolt of electrical charge. The USEconomy has run a Current Account deficit for most of the past 20 years, accumulating an annual foreign debt of nearly $1 trillion. On its face, the condition is unsustainable. The United States depends heavily upon foreign capital. That source has largely dried up. In the vacuum, the USFed has entered with an overly active printing press. The Weimar USFed has stated clearly that it will purchase bonds in unlimited volume, keep the interest rate at 0% for an unlimited time, and continue the fiat paper chase. Anyone who believes the current path can be maintained is brain-dead. The fiat paper currencies and their bond foundation are both destined to fail. See the Bullion Intl article (CLICK HERE).

For additional references, consider an essay by Martin Hutchinson on a world without a reserve currency. The United States risks loss of the global reserve currency as the fiscal cliff is approached, and not dealt with. The nation has gone over the cliff in reality. Politics will surely prevail, and reckless avoidance of tough decisions will continue. The present situation seems mired, with all major currencies dominated by governments stuck in a quagmire, either financial or political or both. Multiple currencies without an anchor invite the quick valid criticism that none has value, or that value is difficult to determine. The author walks through history in an interesting discussion. See the Prudent Bear article (CLICK HERE). For another interesting perspective on why the mainstream media, Main Street, and financial institutions fail to see the benefits of gold, or refuse to acknowledge the value of gold, during the most awesome destructive chapter of financial history, see the Gold Silver Worlds article (CLICK HERE). It features an interview with Nick Barisheff, CEO of Bullion Management Group.

◄$$$ ALL FIAT CURRENCY ECONOMIES TURN INTO BANANA REPUBLICS. PAUL CRAIG ROBERTS WARNS OF AN ELITE GRAB AT MORTGAGES ACROSS THE UNITED STATES, PAID WITH PRINTED MONEY. HE IDENTIFIES A CIRCULAR SHELL GAME WITH THE USFED SUPPLYING FUNDS TO THE BIG US-BANKS, WHO IN TURN BUY USTBILLS. NOTHING IS SOLVED, AS FIAT ROT IS LACED WITHIN THE SYSTEM. $$$

Paul Craig Roberts provides a bold warning, given like a cold splash on water on the face. As preface, read this. "America, the next Banana Republic. America will become a great nation again when We The People grow a set [refer to testicalia] and admit that we have been duped, abused, and used like pawns on a chessboard. When liberals and conservatives alike finally admit that their guys are no different from the other on the real issues confronting our nation." These are dangerous challenging words permitted by the power center.

Roberts served in the Reagan Admin in the 1980 decade. He warns that the latest QE3 monetary policy elucidated by the USFed is dangerous. Roberts calls it QE Unlimited, directed at the purchase of mortgage backed securities. The USFed is gearing up the machinery to own your mortgage. They are a private firm. He accuses the news media of spinning the story so incorrectly, that nobody will understand what is happening until it is too late. We are talking about an elite class owning up to half of the US property titles. Roberts believes it is too late, as ruin and rot have settled in, with debt serfdom lying ahead. He identifies a vicious cycle of monetary corruption and subjugation. The USFed will purchase mortgages from the big US banks, using $45 billion in money simply printed. The banks will use the proceeds of mortgage sales to purchase USTreasury Bills, which enable the USGovt to pay the interest on the debt. However, big curves in the road lie ahead. The USFed has already put the mortgage bonds on the derivatives market with leverage deployed at a 9:1 ratio. Foreign investors might at times own your home mortgage, in a vast shell game. Roberts warns that hyper-inflation will break down the derivatives market, a bold forecast which has already begun. Check JPMorgan.  He advises to buy Gold & Silver! See the Before It's News article (CLICK HERE).

## CRUDE OIL & ENERGY CHESS GAMES

◄$$$ MEXICO PLANS TO SELL CRUDE OIL TO CHINA OUTSIDE THE USDOLLAR. THE PARADE CONTINUES TO ISOLATE THE PETRO-DOLLAR , AND TO UNDERMINE THE DEFACTO STANDARD BEFORE IT VANISHES IN THE NIGHT. THE DEFIANCE BY CHINA IS BOLD, THE MEXICAN DEAL DONE ON THE UNITED STATES BORDER. $$$

China has been in closed door negotiations to purchase Mexican crude oil without using the USDollar in payments as its trading currency. Sources inside the Mexican Govt are tight lipped, but sources report they have been in secret negotiations with China over possible crude oil sales to China outside the USDollar in settlement. The Chinese officials involved claim meetings held with the Mexican Govt and Petroleos Mexicanos (PEMEX) are focused only on investment and economic growth inside Mexico. Their chief negotiator was a former PEMEX executive, a heavyweight according to my source. His Chinese counter-party was the top guy from Sinopec. Sources inside Mexico have leaked that China has in fact brokered a secret major deal with PEMEX to purchase crude oil outside the global trade realm dominated by the US$ global reserve currency. The deal would break the convention.

The defiance grows, as China racks up nation after nation in swap agreements, essentially barter. The details of this agreement are still unknown, but China is expected to make a public announcement soon. Over the past ten years with new trade agreements, China has invested $billions inside Mexico. China has helped the Mexican Govt create jobs and has financially supported investments in the privatization of ports and infrastructure throughout Mexico. The troubled nation, beset by drug lord bands, continues to privatize large sectors of its economy. China stands in line to benefit from additional investments inside Mexico. See the Financial Times article (CLICK HERE).

◄$$$ THE PRICE RIGGING CONTROVERSY HAS REACHED THE CRUDE OIL MARKET. IT WILL EVENTUALLY REACH THE GOLD MARKET, THE USTBOND MARKET, AND OTHER MARKETS IN A DIVERSE SWEEP UNTIL THE CONSENSUS IS REACHED THAT ALL US$-DENOMINATED MARKETS ARE CORRUPTED IN PRICE. SUCH IS THE CONSEQUENCE OF A FIAT PAPER CURRENCY, ESPECIALLY WHEN RUN BY A CRIME SYNDICATE ON WALL STREETAND FASCIST REGIME INSIDE THE USGOVT. $$$

The LIBOR scandal has begun to extend into the crude oil market. So the entire interest rate based derivative market is and has been a giant scam. The commodity market had been spared of accusations and indictments for corrupt price rigging. Obviously it is corrupted, since the Wall Street henchmen have played with it like a cat does a ball of yarn. Recall the plunge in 2009 from the rarified air of $130 down to below $40 per barrel. Few called the market corrupt at the time. It was simply labeled an adjustment to the financial crisis sparked by the Lehman failure. Nonsense! The Wall Street agenda at the time was to inflict damage on Russia, to keep them from exerting a dominant maneuver during the Western throes of crisis. Their main revenue source was from crude oil. Deep damage was indeed done to Russia, with tremendous resentment and newfound motive to de-throne the USDollar.

In early October came a report from the Financial Times, that a Swiss trading office of Total Oil Trading had sent a response letter to IOSCO (the Intl Organization of Securities Commissions), alleging that the same kinds of market price fixing games have been taking place in the crude oil market over bottles of Bollinger. The price fixing corruption has been pervasive in the crude market as well. As footnote, the natural gas market is also deeply corrupted in price games by Wall Street. A few years ago, Amaranth was the object of a powerful price crush in the natgas market, perpetrated by JPMorgan (the usual suspect). JPM killed the firm in a powerful hidden assault. In the last two years, the price differential between North American natgas and European natgas is approximately 4-fold to 5-fold. In no way is the differential due to supply factors. It is from Wall Street corruption, again.

◄$$$ THE BRENT OIL PRICE RECENTLY PEAKED AT A 21.50 SPREAD OVER THE WEST TEXAS OIL PRICE. THE CURRENT SPREAD IS ABOUT 19.50 TO 20.00 AS OF TUESDAY. MUCH DEBATE EXISTS OVER THE SPREAD MEANING. $$$

Until 2008, the West Texas (American standard) crude oil price had always traded at a premium to Brent crude oil. The European standard Brent has a longstanding history of containing more impurities and sulfides, costly to remove. Something changed after the Lehman bank collapse, as a flip took place. For the last few years, the Brent crude is trading at a premium to WTexas. The premium flipped in reversal at roughly the same time that North American price of natural gas divorced itself from the price for the rest of the world. The American natgas contracts trade between 3.00 and 3.50 steadily in New York markets. However, the same natgas contracts are priced in the 10.0 to 11.0 range currently in Europe. Important energy product shortages are coming in full view, sure to cause social unrest. Again, blame goes to Wall Street.

Rob Kirby added his perspective on the big spreads in energy prices. He wrote, "America is built on cheap energy. They do not give a rat's arse who they must short-change to maintain their lifestyles. Canada, being America's largest energy supplier of crude and natgas, gets screwed by all of this to the point that our balance of trade, which had been positive for 50 years, went red back in 2008 when the prices of these two strategic goods de-coupled. That is what happens when you live next to fascist crooks who control financial markets,  permit bond fraud, and rig the gold market."

The Jackass viewpoint is similar. The USDollar is kept afloat in value, lifting it while intervening in the USTreasury Bond and Energy markets. Ever since 2004, when the Hat Trick Letter was launched, a regular point made has been that the USDollar valuation is maintained and managed by a triangle that involves the DX index, the USTBond, and the Oil price. It is the manifestation of the Petro-Dollar Standard. Since 2008, when the US financial system came under fire, when its insolvency required reaction, the extremes in market interference became regular fixtures. Evidence that the crude oil market was broken, insofar as the West Texas crude price is concerned, was crystal clear when in 2009 the price came down 75% from the $130 range to the $40 range in a matter of a few months. Few questioned the massive decline, which exposed its deep corruption and its required leverage devices to maintain the USDollar. That plunge went largely without criticism or recognition. The WTexas premium vanished as of that time frame. The Wall Street market maestro criminals use the US oil price to maintain the USDollar, and to prevent rising energy costs from rendering deeper harm to the USEconomy. The credit engine is broken.

◄$$$ CALIFORNIA GAS STATIONS SHUT DOWN DUE TO SUPPLY SHORTAGES. ELECTRICITY, PIPELINE, AND QUALITY ASSURANCE PROBLEMS HAVE CAUSED INTERRUPTIONS. THE WALL STREET CROOKS HAVE AN AGENDA TO KEEP THE ENERGY PRICES DOWN FOR THE BENEFIT OF THE USECONOMY. THE PRACTICE ASSURES SUPPLY IMPACT AND DELICATE BALANCE. LIKE NOW PERHAPS IN CALIFORNIA, WHERE NATIONAL TRENDS OFTEN CROP UP FIRST. $$$

Energy analyst Michael Krieger accuses the longstanding price fixing schemes by the central planners (and investment banker geniuses) of being responsible for gasoline supply shortages. Their games might be blowing up, or at least in the early stages of widespread breakdown. The state of California has its own unique fuel specifications that make it an isolated market. Watch for indications of shortage in other states. The outlet for Costco in Simi Valley, 40 miles northwest of Los Angeles, ran out of regular gasoline in early October. They responded by selling premium gasoline at the price of regular. The company has not been able to source enough unbranded summer grade gasoline to keep its stations in supply. Low-P, a gasoline station in Calabasas, in the hills northwest of the San Fernando Valley, stopped selling unleaded gasoline on October 2nd. Soon afterwards, they ran out of high octane and medium octane fuel. They posted signs and took down the price tags. The station's owner John Ravi said "I can get gas, but it is going to cost me $4.90 a gallon, and I cannot sell it here for $5. If you come here right now, I have got some diesel left. That is all. My market is open, but no gasoline." Sam Krikorian is owner of Quality Auto Repair in North Hollywood. He claims the business of selling gasoline is just not worth it. He said, "We are going to start shutting pumps Friday. Gasoline is costing me almost $4.75 a gallon with taxes. There is no sense in staying open. The profit margins are so low, it is not worth it."

The smaller businesses are losing money. The independent gas station owners are typically the first to run out of fuel and shut their pumps when spot prices surge, since they tend not to have long-term contracts to buy from fuel suppliers at set prices. The California Independent Oil Marketers Assn, a group that represents wholesale and retail fuel marketers, formally petitioned the state to expedite a waiver that would allow refiners to produce and sell winter-grade fuel. The official California summer blend fuel requirements remain in effect in Southern California until October 31st. The Reid Vapor Pressure (RVP) limits are lifted in other areas of the state as early as September 30th. The tighter regulations are a result of Los Angeles smog and activists statewide to preserve the incredible beauty of the state.

The market is having a conniption. The Los Angeles spot gasoline price for wholesale climbed 30 cents to $1.45 per gallon over gasoline futures traded on the New York Mercantile Exchange, in response to the field shortages. On an outright basis, the fuel jumped to $4.3396 per gallon at pumps (that had supply). For the last couple years, the Wall Street monkeys have been pushing down the price for American West Texas crude oil, in order to support the USEconomy. The US price is regarded by worldwide players as corrupted and held artificially low. The customers can benefit as long as they locate supply at the distorted price. When suppliers cannot earn an adequate profit, they go out of business. Such a capitalist notion is fast becoming foreign to the fascist clowns running the financial markets like a casino game under political directives. The evidence of accidents, electricity cutoffs, quality control checks, and natural events brings attention to the extreme vulnerability of the supply in balance.

The refinery business has had some disruptions. A Chevron oil pipeline shut down in September. A electrical power failure occurred on October 1st at a Torrance refinery owned by Exxon Mobil. Units shut down at other plants have cut supplies in the market. The Torrance refinery produces 150,000 barrels per day. The plant is due to flare gases for a week as it restores production after the power failure. The Chevron interruption inv olved the Kettleman-Los Medanos pipeline, which carries crude from Kern County to Northern California refineries operated by Royal Dutch Shell, Tesoro, and Valero Energy. The pipeline remained shut after elevated levels of organic chloride were detected in the oil. Phillips66 is scheduled to perform maintenance on process units at its Rodeo and Los Angeles refineries in October. A different Chevron refinery problem befell their Richmond plant that produces 240,000 barrels per day. It is the largest refinery in Northern California. It has been running at reduced capacity since a fire that occurred on August 6th. The delicate balance is being disrupted by constant Wall Street games. Suppliers are discouraged to produce, while they suffer from natural and technical obstacles. See the Bloomberg article (CLICK HERE). Nationwide trends often begin in California. The gasoline supply shortage effect must be watched with other states, especially the ones that dictate special blends by season.

## VENEZUELA & POLITICAL OIL BLEND

◄$$$ THE CHAVEZ RE-ELECTION IS TIED TO CHINESE LOANS WITH VENEZUELAN OIL REVENUE HELD AS COLLATERAL. THE ABUSE IS BY CHAVEZ, NOT SO MUCH CHINA. THE STRONGARM AUTOCRAT PAYASO MORTGAGED THE COUNTRY'S FUTURE FOR HIS PERSONAL GAIN, AND FOR HIS CAMP. THE CHINESE MIGHT SEE AN ADVANTAGE IN CONTINUED CHAVEZ RULE, BUT THEY ARE TYPICALLY INTERESTED MORE IN TRADE THAN POLITICS, EVEN IF UGLY POLITICS. NUMEROUS CHINESE COMPANIES STAND TO GAIN ACCESS TO BIG CONTRACTS WITHIN THE LOCAL ECONOMY, FIRST IN LINE FROM THE DEALS. $$$

Since 2007, the China Development Bank has lent Venezuela $42.5 billion with collateral provided by revenue as collateral from the bountiful oil reserves within the nation. Numerous deals have been forged by the Chavez regime. Put the figure into perspective. The amount is 23% of all overseas loans by the Chinese state-run bank and much more than the $29 billion the USGovt spent on rebuilding the Iraqi infrastructure between 2003 and 2006. At least $12 billion was pledged in the last 15 months, during which oil production was stagnant and borrowing costs were high. The loans fueled a surge in spending from the Chavez henchmen, as they donated homes to the poor, supplied the socialist supermarkets with appliances, and built a cross-country railroad. The motive in part is clearly to win votes by coddling the public with showers of gifts. In the process, future oil output is committed to China.

Chavez won the tainted election again, as he gained 54% of the vote. My Latino sources indicate two big vote factors were at play. He blocked ex-patriots from entering the country from the Colombia border on voting day. They are overwhelming anti-Chavez. He shut down the two Venezuelan Embassy facilities inside the United States on voting day. The nationals living in the US are also overwhelming anti-Chavez. Long lines had formed in each location to cast absentee ballot votes. They were practically eliminated, with zero votes cast. The other ordinary method popular in Latin America is to block voter registration in neighborhoods and towns that oppose the strongarm leader.

The loans give the Chinese Govt influence over Chavez. Ironically, he routinely harangues about recovering Venezuelan sovereignty after decades of subjugation to the US empire. The nation will next contend with taking a second seat to the Chinese, following orders. In addition to securing large deliveries of oil, conditions imposed upon Venezuela include lucrative contracts to Chinese state-run companies whose global expansion is also being financed by the same Chinese Development Bank (CDB). Among the beneficiaries are China Petrochemical (Sinopec) and China National Petroleum, their biggest oil and gas producer. Both energy giants gained stakes in the Venezuelan oil industry after Exxon Mobil and ConocoPhillips abandoned the country under the threat of nationalization and appropriation of property. Chavez in the past has openly admitted that Venezuela's oil is at the service of China. However, some friction and tension has arisen between Chinese managers and site foreman pitted against local workers over safety conditions and long work hours. The ultimate irony might come in the future with China appropriating Venezuela, after mismanagement of the national oil enterprise.

The Bank for Social & Economic Devmt in Venezuela is an important fund to finance infrastructure projects set up in 2007 with funding aid by the Chinese CDB. To date, China has contributed $16 billion, while Venezuela has committed $8 billion. Separately Chavez also secured a $20 billion loan from CDB in 2010, half of which is payable in USDollars and half in Yuan currency. Chavez recently stated an intention to seek a third credit line. Venezuela pays off the loans with oil, while the current benefits curry favor with the population. The oil payments depend upon the price of crude in fluctuation. Currently debt servicing consumes about 200,000 barrels of the 640,000 daily output that Venezuela sends China, according to Oil Minister Rafael Ramirez.

The Venezuelan economy relies on crude oil sales for 95% of its exports and half of public spending. As a result of the nationalization drive by Chavez, coupled with native price inflation, the country's borrowing costs have soared to the highest among major emerging markets. Their price inflation has remained above 18% annually since 2007. The extra bond yield demanded by investors to own Venezuelan US$-based debt rather than USTreasurys is 976 basis points (almost +10%), according to the EMBI Global index run by JPMorgan Chase. Savings from the Chinese financial arrangements are significant, cheap credit indeed with strings attached. Venezuela pays up to 6% interest on its loans from China compared to 12% from the capital market bonds. The nation has thus avoided the costly route of tapping capital markets. Against a backdrop of the state oil company Petroleos de Venezuela SA having sold a record $17.5 billion of US$-denominated debt in 2011, so far this year PDVSA has issued only $3 billion in such debt. The Chinese credit line is brisk.

The attachment for China is key. The Chinese company CITIC is building more than 33,000 homes across the country. It is in talks with PDVSA to acquire a stake in the Petropiar oil venture in the heavy crude Orinoco belt. It is also a minority partner in Las Cristinas, a mine containing the largest gold deposits. Another subsidiary, CITIC Securities, the largest Chinese brokerage by market value, is advising on ways to conduct financial operations for Venezuela through the Hong Kong stock exchange. Chinese companies like Qingdao Haier are in line to fill pent-up demand for a raft of consumer items, from cars to televisions to air conditioners and other appliances, in response to currency and import restrictions that have led to supply shortages. The appliance maker was an acquisition from Germany a few years ago. The loans are also being used to import cars made by Wuhu-based Chery Automobile Co.

Many sales are derived from a popular program called "My Well-Equipped House" that is backed by credit from state banks at a subsidized interest rate below inflation. According to a September 2010 resolution cited in the Official Gazette, Venezuela must spend at least 75% of the $20 billion it received in 2010 from China on cooperation projects between the two countries. Kevin Gallagher is an economist at Boston University and author of about Chinese-Latin American industrialization. He said, "The Chinese have done their homework. The Venezuelan economy can tank, but part of the loans are linked to commodities that are not going to disappear anytime soon." The Chinese Govt has similar but smaller programs with Ecuador, Ghana, and Russia.

The USGovt has some concerns, but they are fading. The US purchases 9.7% of its oil from Venezuela. It has remained largely silent about Chinese outreach in Latin America, a silence in my view short-sighted and dim-witted. China is surrounding the United States in its own hemisphere, including deals with Mexico. Rising production levels in countries such as Brazil and Canada are expected to make up for any potential shortfall. Furthermore, much of the oil acquired by China is re-sold inside Venezuela. The big risk for Venezuela lies more with the Chinese contract terms than disturbing the wounded US giant. If crude oil prices tumble, and the cost of servicing the loans jumps, the construction boom may come to an end in Venezuela. So would the socialist handout programs. Morgan Stanley said in a report this month that Venezuela could default on its debt as early as the second half of 2013 unless Chavez takes action to shore up the nation's increasingly fragile finances, in their words. The standard criticism against the Chavez regime related to the national oil industry is ongoing maintenance and investment. On a regular basis, decisions are made by PDVSA to put off investments in its facilities in order to favor the funding of social programs. If and when problems reach a critical level, the revival of oil output will not be easy. Production is down 22% in volume from peak years over a decade ago, like when Chavez took power in 1999, according to annual statistics published by British Petroleum.

◄$$$ CHINA HAS CLAIMS TO THE VENEZUELAN DEPOSIT AT THE LAS CRISTINAS GOLD MINE. THE WINNER IS CITIC, AND THE LOSER IS CRYSTALLEX OF CANADA. $$$

Chinese and Venezuelan officials signed an agreement in late September to jointly develop one of the world's largest gold mines. The agreement to develop the Las Cristinas gold mine was signed by officials of the Venezuelan Govt and the Chinese company China International Trust and Investment Corp (CITIC). The Las Cristinas mine in the southern Bolivar province is estimated to contain 17 million ounces of gold. The agreement will develop both gold and copper deposits at the mine. It specifies engineering, construction, and processing of the gold and copper. Involved will be generation of a map of mineral deposits in the South American country. The deal goes hand in hand with the major ongoing oil deals with China. The aggrieved party is Crystallex International Corp, a company based in Toronto. It is pursuing international arbitration after Venezuela rescinded its contract to develop Las Cristinas mine. The mining firm has registered an appeal to a World Bank arbitration body, claiming it was due $3.8 billion in compensation. Although a clear contract breach by a dictator, little should be expected by any rational person in the way of claims and restitution. Fascism tramples laws at the highest levels, seen amply in the United States. See the Washington Post article (CLICK HERE).

◄$$$ VENEZUELA CUT AN OIL DEAL WITH RELIANCE INDUSTRIES OF INDIA FOR A HEAVY OIL PROJECT. THE DEAL EXTENDS TO ENGINEERING ON SEVERAL OTHER PROJECTS, WHICH IS IN SHORTAGE IN VENEZUELA. THE INDIAN CONSORTIUM PLAYS A KEY ROLE IN THE ORINOCO OIL REGION. $$$

In early October, Reliance Industries (RIL) announced an agreement with Venezuela for a project to produce heavy oil in the South American OPEC nation. The deal was cut with the Venezuelan state oil monopoly Petroleos de Venezuela (PDVSA) to develop a project in the Orinoco extra heavy crude belt. RIL signed a separate agreement to buy more Venezuelan oil for its twin refineries at Jamnagar in Gujarat. PDVSA will supply between 300,000 and 400,000 barrels per day of Venezuelan heavy crude oil to two RIL refineries in Jamnagar under a 15-year crude oil supply contract beginning in 2013, according to terms. RIL operates twin refineries at Jamnagar with a total refining capacity of 1.24 million barrels per day, half of which will be heavy crude type. RIL had in 2008 signed an agreement with Venezuela to buy 150,000 bpd of oil, which was gradually raised to 270,000 bpd. PDVSA said earlier this month that it plans to raise overall shipments to India to 518,000 barrels per day by 2018.

The Indian deal with Reliance extends to engineering. Chavez has spent far too much on social and donor programs, and very little on engineering schools. RIL and PDVSA expect to work together on studies to update and improve the Venezuelan refinery network, as well as the offshore natural gas project, including the chronically delayed Mariscal Sucre project. It has suffered from mismanagement, engineering shortage, and lack of funding. In 2009, RIL was in line to bid with the Indian consortium of ONGC Videsh Ltd, Indian Oil Corp, and Oil India Ltd for one of the three giant oil blocks Venezuela was offering in auction. However, it abandoned the consortium possibly because of delays in bidding. After the Reliance exit, the OVL-IOC-OIL consortium teamed up with Repsol YPF of Spain and Petronas of Malaysia to make a successful bid for the massive Carabobo-1 project in the famous Orinoco heavy oil belt. The field, which possesses an estimated 50 billion barrels of proven oil reserves, is expected to produce a minimum of 400,000 bpd of oil. See the Economic Times / Indian Times article (CLICK HERE).

## PHYSICAL GOLD BATTLEGROUND

◄$$$ THE UNITED STATES HAS SUFFERED A HUGE GOLD DEFICIT AS RECORD AMOUNTS HAVE BEEN EXPORTED TO SWITZERLAND, LONDON, AND HONG KONG. THE THREE COUNTRIES ACCOUNTED FOR 70% OF ALL US-BASED GOLD EXPORTS. THE AMERICAN SOURCES ARE BACKSTOPPING ENORMOUS EASTERN PURCHASES TO PREVENT DEFAULT. THE STORY CONFIRMS THE DRAIN OF GOLD IN LONDON BANKS. WITNESS A CONTINUING TRANSFER OF WEALTH FROM WEST TO EAST, MAKING HISTORY. $$$

Over the first seven months of the year, the United States has run up a huge gold deficit, after exports of a record 424 metric tons of gold. The ramp-up is significant, since the US exported a total of 488 metric tons for the entire year in 2011. According to the US Geological Survey, their July Gold Mineral Industry Survey states the US only imported 188 metric tons of gold between January and July, but exported 424 metric tons. The resulting deficit amounts to 102 metric tons. One would think the big shortfall would make the financial news. Some of this deficit was compensated by the domestic US gold mine supply. Factor in the domestic gold mine supply plus the gold imports in the first seven months of 2012, to find the United States ran a large 102 metric ton gold account deficit. The United States is exporting record volumes of gold. The majority of it is being sent to Switzerland, London, and Hong Kong. Without a doubt, these large gold exports from the land that constantly denigrates gold are intended to fill the insatiable demand for physical gold by the Eastern buyers. The US is helping to backstop the European big bullion banks that are under siege from demand by China and the Dragon Family. This data confirms, or at least provides some corroborating evidence, that the London banks are being drained of gold.

The United States produced 134 metric tons of gold between January and July of 2012. Shown in a table from the linked article, with source again the US Geological Survey, of the total 134 metric tons of gold produced in the country, Nevada supplied 102 metric tons or 76% of the overall amount. Alaska produced 11% of the US production. The three nations of Switzerland, London, and Hong Kong are major bank centers. Clearly, Hong Kong is taking delivery of massive orders on behalf of their many diverse Asian clients. They surely have lost patience with the banker fraud, monetary excesses from QE initiatives, and the debasement of their outsized reserves in possession. The arrivals to the Swiss and London locations are to backstop the enormous deliveries to Eastern clients. Switzerland received the largest share of the gold, importing 137.3 metric tons of gold from the US, while the United Kingdom came in second at 84.3 mt, followed by Hong Kong at 74.5 mt. These three countries alone imported 70% of all the entire 424 mt gold exported from the United States during this time. Other nations involved in the exports were Australia, Canada, India, and Thailand. See the Silver Doctors article (CLICK HERE).

◄$$$ THE UNITED STATES IS SHIPPING LARGE AMOUNTS OF SILVER TO LONDON EVERY MONTH. CLEARLY THE L.B.M.A. IS TRYING TO AVERT A DEFAULT FROM DELIVERY ORDERS. THEY ARE DESPERATE TO KEEP SILVER BARS IN INVENTORY. $$$

The latest USGS monthly Silver Commodity Update provided a smoking gun of information, not of crime or fraud, but of desperation. A casual observer can conclude the London gold market is in great danger of running out of silver to meet silver delivery demands. Many analysts regard the June versus July reports as an absolute shocker. It is indeed! Consider the difference in silver exports from June to July to see that a staggering 169 metric tons of silver was sent to the United Kingdom from the United States in July alone. Translate it to mean it constituted a 5.4 million ounce transfer of silver to London in a single month. The normal amount of silver moved per month to several different countries is in the 30,000 kg range, defined as 30 metric tons. The UK was in the normal range until July. However, in July the United States exported 169,000 kg (169 metric tons) which is almost a five-fold increase. The LBMA in London must be in deep trouble, for them to have transferred such huge volume. Seen another way, of the total 587 metric tons of silver bullion exported between January and July of 2012, a whopping 29% of the total silver exports took place in one month, and to one country, the United Kingdom. That would seem newsworthy to the carnival flops on the financial news networks, whose advertising revenue is predominantly Wall Street and major investment funds. They reported nothing, only the Silver price declines, which were and have been largely due to naked shorting, another story they do not tell.

◄$$$ SOMETHING BIG IS HAPPENING WITH SILVER, SEEN IN SHIFTS IN ACCOUNTING, AND SHIPMENTS. A BIG WITHDRAWAL OF FIVE MILLION OUNCES IN REGISTERED SILVER HAD BEEN LOGGED FROM BRINK'S SUDDENLY. A MASSIVE SILVER WITHDRAWAL ON OCTOBER 12TH COULD MEAN SOME DESPERATE MEASURES UNDERWAY. LOOK FOR A SIGNIFICANT SWAP TO TAKE PLACE. NOT ONLY IS DEMAND BEING MET IN THE FACE OF SUPPLY SHORTAGE, BUT SOME VAULT CAGE GAMES COULD BE IN PROGRESS TO COVER ABUSES OF ALLOCATED ACCOUNTS. $$$

Last Friday the Silver Doctor reported an astonishing 3.6 million ounce withdrawal of registered silver from the Brinks COMEX vaults. The physical silver drain continued Tuesday, with another large 1.2 million additional registered ounces withdrawn, again from Brinks. The New York and London bullion bankers are in battle mode with full metal jackets. This brings the total to nearly 5 million ounces of registered silver withdrawn from a single COMEX depository in the span of three days. Put the volume in perspective. It amounts to 25% of the entire Brinks registered inventory, and 12% of the entire COMEX registered silver inventory!! The removals bring the total COMEX registered silver inventory down to 36.8 million ounces. Too much attention is paid to the slide in the corrupted paper Silver price, dominated by naked shorting and outright illegal market activity such as but not limited to MFG account thefts. Not enough attention is paid to the evacuation of Silver inventory to satisfy the massive demand for physical silver. The banker cartel has been busy hammering down the paper price since the QE3 details were announced in the continued accelerated Weimar-style debasement of currency. As they push down the Silve r price by fraudulent methods, never reported by the press, they offer the buyers a severe discount that has furthered a powerful drain in supply. Artificially low price drains supply, simply stated. The cartel sees the $35/oz price level as critical to defend. See the Silver Doctors article (CLICK HERE and HERE).

A reliable gold trader source pitched in with a comment. He said, "The volumes involved equate to 155.6 metric tons, or 31 cargo lifts. It is substantial but not earth moving. It would be interesting to know if it was actually withdrawn from Brinks altogether, or just shifted into someone else's name and vaulted cage. I only could identify 45 metric tones that had been moved out in shipments." Some quick observations. One must wonder why Silver is being exported out of US to the UK. Surely, massive demand out of LBMA. Possibly the US is swapping Silver for Gold. Possibly the US is swapping Silver for crude oil. Either way, this is bullish for the Silver price. More importantly, we could be seeing evidence of Unallocated bullion bars being converted to Allocated bars and then moving out of LBMA storage to private (non-bank) storage. The crooked banksters might be covering their tracks to avoid criminal prosecution and public lawsuits in the future.

◄$$$ THE STATE OIL FUND IN AZERBAIJAN PURCHASED 10.9 TONS OF GOLD IN THE FIRST NINE MONTHS OF 2012. THE MANY SMALLER NATIONS ARE AWAKENING TO THE NEED TO BUILD GOLD RESERVES, AND TO SHUN THE USTBOND SAVINGS DEVICE. IT IS TOXIC. GOLD IS THE STABLE FOUNDATION FOR THE FUTURE. $$$

Azerbaijan produces oil. Their State Oil Fund, known as SOFAZ, started investing in gold in 1Q2012. It has purchased 10.9 tons of the bullion as of October 1st. The value of assets in the fund grew 11.4% since the start of the year through the first nine months to $33.2 billion. The SOFAZ Fund contained 815.7 million Turkish Lira and $201.3 million Australian. The fund was established in 1999 to manage the Caspian Sea nation's state income from oil and natural gas sales. My excellent gold trader source offered some details. The Azeri state fund is buying gold from Turkish refineries. The gold originated from an Iranian re-refinery project of older bars. Although not told specifically, one can infer that Iran is recasting the gold it receives from India and other sources in the crude oil trade. They wish to protect their downstream clients by recasting with new serial numbers. So Indian oil sales might result in Azeri gold bars in purchase, by way of Iran recasting efforts. The Gold Wars are full of intrigue.

◄$$$ SAMSUNG HAS ENTERED A DEAL FOR GOLD, A GROUND BREAKING EVENT. THE MINING INDUSTRY HAS BEGUN TO SEE AN INFLUX OF CAPITAL FROM OUTSIDE ITS WALLS. THE TECHNOLOGY INDUSTRY REQUIRES GOLD AND EVEN MORE SILVER. THEY MUST SEE PRECIOUS METALS AS BOTH UNDER-VALUED AND UNDER THREAT OF SUPPLY INTERRUPTIONS. $$$

Cluff Gold is listed on the TSX exchange in Canada and the Alternative Investment Market (AIM) in London. Cluff owns West African deposits. It recently changed its name to Amara Mining. The Cluff Amara gold mining concern recently signed a Memorandum of Understanding with Samsung. The huge South Korean industrial conglomerate will be offering substantial funding to the mining firm to the tune of a $20 million, in an unhedged loan facility. Eric Sprott has been advocating such relationships months ago. The deal breaks new ground, wherein an industrial company has shown interest in a mining company, with a goal to ensure reliable continued supply of precious metals over the longer term. Capital from outside the mining industry is starting to become available. The industrial sector must see the billboard signs for both monetary distress and threats for interrupted supply. The industrial sector might also be awakening to the extreme distortions manifested in under-value of the Gold & Silver price. Mining firms are typically viewed as risky borrowers by banks. The banks are broken credit engines, thus creating significant potential problems for the future supply of silver by the mining firms. Many credit lines have been cut by the banks. Watch next for other industrial corporations to announce a similar joint ventures with the silver miners. The big banks are at the same time heavily short silver contracts, pointing out how they are shooting themselves in the face (not the foot). This Samsung deal is a warning given to the big corrupt banks that Asian industrial interests will replace credit cutoffs. See the Kitco article (CLICK HERE). The relationship between artificially low price and supply shortage is basic in economics, but beyond the scope of hack US economists.

◄$$$ THE M.C.X EXCHANGE IN INDIA IS SET TO LAUNCH A SILVER CONTRACT. ITS FEATURE IS DELIVERY FOR 1-KG BARS. EXPECT THE ALREADY TIGHT SILVER MARKET TO BECOME STRESSED. THE SYNDICATE WILL NEED TO NAKED SHORT MUCH MORE VOLUME. THE RESULT COULD BE GREATER STRESS AND BIGGER SHORTAGES. $$$

India could hold a key to a game changer, much like the Chinese with a new metals exchange. The Multi Commodity Exchange (MCX) in India announced in early October the launch of two new silver contracts. The contract facilitates the purchase of deliverable 1-kg silver bars. The Indian traders will no longer be compelled to deal with the Western futures exchanges. Delivery in the West is seen to be fraught with problems, including theft of private accounts seeking delivery. See MFGlobal. The potential is acute for an aggravated effect on the extremely tight physical silver market, where supply has been in deficit for several years. The extreme shenanigans done by the bank cartel to ship metal around, thus avoiding default, has become commonplace. The Indian market in a position to begin setting the price for physical silver, first in Asia, and then rapidly throughout the rest of the world. The threat is palpable for the New York and London criminal bank organizations to be overthrown in the paper futures markets, as their corrupt mart fades into irrelevance. Most honest brokers want to take their trader business to more open and honest markets. They are ruined during client thefts. Corruption is not good for business, except for the thief, but it usually does not result in repeat business for the thief. A robber cannot profit from entering an empty home.

The leading commodity exchange in India is the Multi Commodity Exchange. They are set to launch two innovative contracts including Silver 1000. Their official statement read, "Silver 1000 is a first of its kind innovative deliverable 1-kg silver contract with New Delhi as the base delivery center. With New Delhi being one of the largest consumers of silver in India, this contract will cater to the needs of small jewelers and retail investors, who wish to take physical delivery of 1-kg silver bar in demat or physical form." See the Silver Doctor article (CLICK HERE).

A well informed source, the London Siren, pitched in with a folksy but useful insight on the story. He wrote, "Silver was money until Independence in 1947. The British enforced paper money on the government afterwards. Thus even an illiterate Indian farmer knows never to trust paper money atop the banking system, and less so a politician. The daily usage of Silver & Gold in times of need due to its availability in jewelry stores in every small town ensures precious metals, will remain a store of value. I can guarantee there are more people in India who own gold than have a mobile phone or bank account. Every villager would have a good sense of what 1-gm of Gold & Silver is equivalent to in terms of wheat, rice, oil, which are the basic necessities. The fiat currency is simply a means of exchange and nothing more and certainly not a store of value. Nobody ever sleeps with money under the mattress in India. One would probably get a back ache with the fiat inflation that has occurred over the last few decades. If the Chinese also launch a gold 1-kg contract, it is lights out for the COMEX. I believe this will happen, maybe after US election when the new leaders in China take office in November." The timetable of the final gold crush of the USDollar by China is not known.

◄$$$ GERMANY HAS DEMANDED FULL VERIFICATION OF THEIR GOLD. THE GERMAN COURT OF AUDITORS IS REQUIRING A FULL AUDIT OF GOLD RESERVES HELD IN FOREIGN ACCOUNTS. THE OBJECT NATIONS UNDER SCRUTINY ARE ENGLAND, UNITED STATES, AND FRANCE. THE DISTRUST GROWS. THE BANK CARTEL MUST BE SWEATING PROFUSELY. THE ODD FACT MIGHT BE THAT GERMANY HAS THE THIRD LARGEST GOLD HOLDINGS IN RESERVES IN THE WORLD, BEHIND CHINA AND RUSSIA. THE UNITED STATES IS PROBABLY NOT IN THE TOP TWENTY. $$$

The German court of auditors (Bundesrechnungshof) wants a full audit of sovereign gold holdings. They have demanded that the Bundesbank undertake an audit of its gold reserves. Regard the step as an Audit the Fed similar maneuver, founded in deep distrust. The court wants to ensure that the nearly 3400 tons of gold in fact is in existence. They formally stated that stocks have never been checked for authenticity and weight, only given written assurance of their existence by foreign custodians. The custodians are no longer trusted. As a result of significant trade over decades, the Bundesbank gold is stored in three vaults around the world: the Bank of England, the Bank of France, and the US Federal Reserve. The majority is held in New York. The court formally has formally brought into question the practice of relying upon a written confirmation from the foreign central banks as custodians. The decision means physical verification is required as account holders. The report acknowledges that inspections might be logistically complicated, but the official demand stresses that the necessity cannot be discharged. In recent months, German officials paying visits to the New York Fed were turned away when seeking a glimpse inspection of their gold on account. The full audit demand appears to be the official response to the New York shun, delivered in a New York month (not minute). Within the story, the Bundesbank has begun the process of shipping 50 tons per year from the USFed back to Germany for the next three years.

The German Govt might actually possess the largest hoard of gold bullion in the world. While the official rankings include the USA at #1 with 8133 tons, only a moron with disconnected cerebral cortex wearing red white & blue boxer shorts believes such data. The US gold was vacated from its reserves vault in the 1990 decade under the watch of the Clinton-Rubin crime ring. In #2 position is Germany with 3396 tons, some of which with high likelihood has been leased by the Americans and British without authorization. In #3 position is the Intl Monetary Fund with supposedly 2814 tons, whose tally is pure fiction. The IMF does not hold gold, but rather gold pledges from member nations, resulting in a double accounting of official gold reserves. In #4 position is Italy, whose gold if not already leased will be ransacked under the corrupt eye of Mario Monti. In #4 position is France with 2435 tons, much of which is also leased by their proximal criminal allies. In #5 position is China with a reported 1054 tons. My gold source tells that the Chinese have official gold in reserves at least five times that amount, and maybe ten times. He also informs that Russia has far more gold than the paltry sum reported officially, with vast tunnels and caverns filled with legacy gold. They might actually be #1 or #2. So China and Russia are probably #1 and #2, with Germany #3 in the world of reality. See the Zero Hedge article (CLICK HERE). A long list of very minor nations have more gold than the United States, the next entry in the Third World.

A German banker with good connections replied to the ZH story as it broke out. He said, "The Bundesbank has been instructed to have Germany's 3396 metric tons of Gold authenticated, verified, and properly inventory audited. New York, London, Paris, and the German vaults are to be audited and the metal to be authenticated as being genuine. Expect some bankers will be sweating blood and shitting bricks now. Let's see what comes from this. Let the heads roll." A savvy subscriber made a great point. Rather than request for all their gold to be returned from the NYFed, the Bundesbank plans to repatriate penny packets of 50 tons per year as he called it. They realize that larger requests might cause a default, in particular if they seek 100%, as Chavez did for the Venezuelan Govt gold account. Another motive for storing German gold overseas has been an artifact of the Cold War, to protect in case of a Soviet invasion. The debate inside Germany has caused some inevitable conspiracy theories to surface, questioning the gold account's very existence, but several German politicians have also voiced concern. Apparently too many stories have hit the scene on US and London banker corruption.

The plot thickens. Several passages of the auditor report were blackened out in the copy shared with lawmakers, citing Bundesbank concerns that they could compromise secrets involving the central banks storing the gold. Plenty of ugly dirty secrets to hide indeed. The report said that the German gold account held in London has fallen below 500 tons, due to recent sales and repatriations. Almost half of the German gold account is held in New York. If even one third still exists in metal form not converted to paper certificates, the Jackass will eat any presented dirty German boxer shorts, provided the owner did not eat a pile of bratwurst. See the Yahoo Finance article (CLICK HERE).

◄$$$ ERRATA ON JEWELRY VOLUME. $$$

Thanks to GuntherH in Germany for the correction to the September report. My jewelry demand data was an order of magnitude off. In a story within the report, my words were "Furthermore, the annual global demand is 84.3 tons for jewelry, while technology uses 33.0 tons, according to the World Gold Council at end 2011." Apparently, the source of my data was way off, and my diligence was lacking. The Trustable Gold source cites the worldwide 2011 jewelry demand to be 1960 tons with technology and industrial usage at 460 tons. See the Trustable Gold article (CLICK HERE).

## GOLD IN HEATED GEOPOLITICS

◄$$$ CONSIDER A LONG WINDING ROAD OF GOLD HISTORY, AMERICAN AND JAPANESE THEFTS. TREMENDOUS AMOUNTS OF GOLD BULLION MUST BE ACCOUNTED FOR, INTEGRATED WITHIN THE SYSTEM, WITH FULL IMPACT ON THE GEOPOLITICAL POWER STRUCTURE YET TO OCCUR. EVENTS ARE UNFOLDING RAPIDLY. THE USGOVT FINANCIAL CORRUPTION IS THE DEEPEST AND MOST MAGNIFICENT STORY OF CRIME IN WORLD HISTORY. $$$

A contact with extremely deep information sources on gold history shared an anthology of USGovt gold market corruption. It reads like a crime syndicate historical account. It is presented not in any great sequential order. Begin with a preliminary background on some 2004 research about Canada's gold management. It is a brilliant account put into the political perspective that covered the personalities at the helm during those days. See the Financial Sense article by Ed Steer of GATA and the Casey Group (CLICK HERE). Many analysts dismiss the Leo Wanta inheritance and corrupt suppression by the Bank of England and USDept Treasury, but it might have much validity. The Anglo bankers, with Hank Paulson in a lead post, have worked to keep the fund on the sidelines in order to steal its large interest income. The Wanta project ties into many covert actions taken by the USGovt. See the Rense article (CLICK HERE) and the Beyond Weird article (CLICK HERE). For completeness with respect to the Wanta funds, include the Foster murder. Vincent Foster was killed at the White House by the Clinton & Rubin gang. In that sequence, Foster had returned from Switzerland where, on Clinton orders, he had tried to steal $250 million of the Wanta funds. He found himself entangled in a presidential succession. He suddenly knew too much and was iced, after some personal objections.

The last year has given the world an opportunity to bring light to an important missing components, like the gold that the USGovt stole from the Chinese and Japanese during and after WWII. Numerous classified files about a Japanese-German agreement discuss strategy on how best to secure the enormous Gold bullion hoard pilfered from China over centuries. Vast quantities were moved and have only begun to resurface to this day. There is plenty of Gold still stashed away in Asian countries where the Japanese used to rule with an iron fist. These sites have never been disclosed to the Americans and others. The Yamashita Gold located in the Philippines has begun to be uncovered and counted, reportedly as big as a football field, neck high in gold bars. See the historical account of Yamashita's gold on Wikipedia (CLICK HERE).

However, the Americans have stolen incredible quantities of the Gold in Asia. Cite the Hammer Project, which is described in a very detailed account. See the Deep Black Lies article (CLICK HERE). The Bush Family has a big hand in most large scale criminal activity involving the USGovt in the last generation, from the Kennedy assassination (Papa Bush in charge of Secret Service), to the Air America securing of the Cambodian Triangle narcotics (major motive in Vietnam War), to the pilferage of Fort Knox gold supply (distribution routes through Panama, same as the narcotics), to the global call to gather gold in false USDollar Gold Standard in late 1990 decade (CIA project with supply diverted), to the 911 attacks to bring the Fascists to power (aka Nazis), to the launch of the Iraqi War (stolen gold from Iraqi central bank), to the launch of the Afghan War (construction of vertically integrated heroin global monopoly worth over $800 billion per year). See the Peoples Voice article (CLICK HERE). Even the Saudi Royal Family plays a key role, since they must keep elevated the crude oil platform that enables the Petro-Dollar to stand firm. See the Google video (CLICK HERE). These many corrupt projects and events interconnect like dovetails and provide important impact on the unfolding events we are right in the middle of. As footnote, bear in mind that one third of all US Intelligence agency narcotics profits go to the Bush Family as tithe. They are $trillionaires not listed on the Forbes magazine.

◄$$$ SPROTT COMMENTS ON GOLD AND CENTRAL BANK HISTORY. THE CENTRAL BANKS AND OFFICIAL BANK DEVICES CLAIM TO POSSESS A HUGE STOCKPILE OF GOLD, WHICH IS SURELY A GRAND RUSE LACKING ANY SEMBLANCE OF ACCOUNTABILITY. SINCE 2009, NON-WESTERN CENTRAL BANKS HAVE BEEN BUILDING GOLD IN RESERVES, LIKELY IN RESPONSE TO THE WESTERN INSOLVENCY. ENORMOUS INCREASES ARE SEEN IN DEMAND FOR GOLD IN THE LAST 12 YEARS. THE ACCOUNTING IS FUDGED BY MEANS OF NET PRIVATE INVESTMENT GIMMICKS. GOLD BUYING IS A HEDGE AGAINST THE RECKLESS CENTRAL BANK ACTIONS TO DEBASE THE MAJOR CURRENCIES. WESTERN CENTRAL BANKS ARE THE LIKELY SOURCE OF THE SUPPLY TO FILL THE DEMAND GAP. THEIR RESERVES ARE NEGLIGIBLE, DOWN TO THE BOTTOM OF THE VAULT. THE ANNOUNCED UNLIMITED BOND MONETIZATION PROGRAM (QE3) CANNOT BE BALANCED AGAINST UNLIMITED GOLD IN CENTRAL BANKS. IT AINT THERE. $$$

Eric Sprott of Sprott Asset Mgmt is a wise man with extensive experience, a seasoned solider in the Gold Wars. Attempts to paraphrase and summarize fall short. Let him tell the story without abridged edits. He is wiser than the Jackass. Permit some injected comments [xxx] by the Jackass. "Collectively, the governments and central banks of the United States, United Kingdom, Japan, Switzerland, EuroZone, and the International Monetary Fund (IMF) are believed to hold an impressive 23,349 tons of gold in their respective reserves, representing more than $1.3 trillion at today's gold price. Beyond the suggested tonnage, however, very little is actually known about the gold that makes up this massive stockpile. Western central banks disclose next to nothing about where it is stored, in what form, or how much of the Gold reserves are utilized for other purposes. [It is gone, as part of leveraged schemes wrapped in the gold lease made free at near 0% by Rubin.] We are assured that it is all there, of course, but little effort has ever been made by the central banks to provide any details beyond the arbitrary references in their various financial reserve reports. [All efforts to produce audits have failed, since it has been stolen and pilfered.]

As the Gold bull market developed throughout the 2000's, central banks did not become net buyers of physical gold until 2009, which coincided with gold's final breakout above US$1000 per ounce. [The West sold what the East bought.] The entirety of this buying was performed by central banks in the non-Western world, however, by countries like Russia, Turkey, Kazakhstan, Ukraine, and the Philippines. They have continued buying gold ever since. According to Thomson Reuters GFMS, a precious metals research agency, non-Western central banks purchased 457 tons of gold in 2011, and are expected to purchase another 493 tons of gold this year as they expand their reserves. Our estimates suggest they will likely purchase even more than that. [Their purchases are motivated by perceptions of Western bond fraud and currency debasement, led by hyper monetary inflation perpetrated by the US, European, and British central banks.]

The mere combination of only five separate sources (central banks, US & Canadian mints, cumulative Exchange Traded Funds, base Chinese retail, Indian consumption) of demand results in a 2268 ton net change in physical demand for gold over the past twelve years. This means that there is roughly 2268 tons of new annual demand today that did not exist 12 years ago. According to the CPM Group, one of the main purveyors of gold statistics, the total annual gold supply is estimated to be roughly 3700 tons of gold in 2012. Of that, the World Gold Council estimates that only 2687 tons are expected to come from actual mine production, while the rest is attributed to recycled scrap gold, mainly from old jewelry. The reporting agencies have a tendency to insist that total physical demand perfectly matches physical supply every year, and use the Net Private Investment as a plug to shore up the difference between the demand they attribute to industry, jewelry, and official transactions by central banks versus their annual supply estimate which is relatively verifiable. Their Net Private Investment figures are implied, however, and do not measure the actual investment demand purchases that take place every year. [The NPI is the giant fudge factor, a fiction to cook the books.] If more accurate data was ever incorporated into their market summary for demand, it would reveal a huge discrepancy, with the demand side vastly exceeding their estimation of annual supply.

In fact, we know it would exceed supply, based purely on China's Hong Kong gold imports, which are now up to 458 tons year-to-date as of July, representing a 367% increase over its purchases during the same period last year. If the imports continue at their current rate, China will reach 785 tons of gold imports by year-end. That is 785 tons in a market that is only expected to produce roughly 2700 tons of mine supply. That is just one buyer.

Who are the sellers delivering the gold to match the enormous increase in physical demand? What entities are releasing physical gold onto the market without reporting it? Where is all the gold coming from? There is only one possible candidate: the Western central banks. It may very well be that a large portion of physical gold currently flowing to new buyers is actually coming from the Western central banks themselves. They are the only holders of physical gold who are capable of supplying gold in a quantity and manner that cannot be readily tracked. [Look to the Bank of England and the Bank For Intl Settlements in Switzerland, which together are attempting to prevent gold market defaults on delivery. They wish to avoid the massive publicity, by provided the ultimate gold backstop. Their gold supply drain is justice rendered.] They are also the very entities whose actions have driven investors back into gold in the first place. Gold is, after all, a hedge against their collective irresponsibility. They have showcased their capacity in that regard quite enthusiastically over the past decade, especially since 2008. If the Western central banks are indeed leasing out their physical reserves, they would not actually have to disclose the specific amounts of gold that leave their respective vaults.

It would not lend much credence to central bank credibility if they admitted they were leasing their Gold reserves to bullion bank intermediaries who were then turning around and selling their gold to China, for example. [The reality is worse, as private Allocated Gold accounts have been borrowed, leased, pilfered. They are the object of widespread margin calls, requiring urgent central bank backstops.] But the numbers strongly suggest that is exactly what has happened. The central bank gold is likely gone, and the bullion banks that sold it have no realistic chance of getting it back. Our analysis of the physical gold market shows that central banks have most likely been a massive unreported supplier of physical gold, and strongly implies that their Gold reserves are negligible today.

We also realize that some readers may scoff at any analysis of the Gold market that hints at conspiracy. We are not talking about conspiracy here, however. We are talking about stupidity. [Disagree strongly, since conspiracy, fraud, theft, and stupidity in bad judgment through desperation in the final fiat currency chapter being played out. Many central banks are well aware of the criminal activity behind gold in several arenas. Sprott prefers not to address conspiracy, since not his theme.] After all, Western central banks are probably under the impression that the gold they have swapped and/or lent out is still legally theirs, which technically it may be. But if what we are proposing turns out to be true, and those reserves are not physically theirs, not physically in their possession, then all bets are off regarding the future of our monetary system. As a general rule of common sense, when central banks embark on an unlimited Quantitative Easing program targeted at the employment rate (see QE3), one had better make sure to have something in the vault as backup in case the unlimited part actually ends up really meaning unlimited. [They do not.]" See the Sprott Global essay (CLICK HERE).

◄$$$ THE GOLD PRICE RISES OVER TIME SINCE THE ELITE EXECUTIVES (INCLUDING WALL STREET AND LONDON BANKERS) HOLD PRIVATE ACCOUNTS WITH SIGNIFICANT GOLD POSITIONS. THEY HAVE WRECKED THE BANKS WHICH ARE SUPPORTED BY THE GOVERNMENTS, LIKE BANKER WELFARE AND LIFE SUPPORT OF ZOMBIES. THE GOLD PRICE WILL RISE WITHOUT RESTRAINT ACCORDING TO THE GLOBAL PLAN. THEIR PLAN MIGHT GO TOTALLY OUT OF CONTROL IF THE ALLOCATED GOLD ACCOUNTS BECOME A MAJOR SCANDAL. $$$

The Wall Street executives want to keep the upward price trajectory in a stable situation that permits an optimal amount of gold to be accumulated in their private accounts. Gut the publicly owned companies, while accumulating in their private accounts. Gold is a central core to the Elite plan, in the replacement of the broken fiat paper system based upon the USDollar. The big risk is exposure of pilfered Allocated Gold accounts by the Syndicate. The scandal can cause the Gold price to rise five-fold over a few year period. The publicly owned and trade companies are being trashed, using big shorting programs subjected to heavy leverage. These Wall Street firms will be systematically gutted, rescued by public funds (USGovt, taxpayer), then dissolved. In the meantime the Wall Street executives continue to accumulate Gold in their private accounts, while they make statements denigrating gold on a regular basis. Their words are truly tiresome. A primary investment vehicle for the elite is the Carlyle Group, which started to trade stock a couple years ago. That was the debutante party for the elite, an FU to your face. By the way, war is used to accumulate, see Libya. That has been a standard Nazi feature for decades. Time to wake up!!

◄$$$ MEXICO IS MAKING PREPARATIONS, ALTHOUGH IN SKETCHY MANNER, FOR A POST-USDOLLAR WORLD. THEIR TIES TO CHINA ARE GROWING IN BOTH CRUDE OIL DEALS AND CENTRAL BANK GOLD SUPPLY. MEXICO WILL BE INTERESTING TO OBSERVE, AN AMERICAN NEIGHBOR HEDGING ITS BETS AGAINST THE COLLAPSING USDOLLAR. $$$

Since 2009, at the arrival of the global economic crisis, the Mexican central bank has been quietly purchasing large quantities of Gold bullion. The same central bank bought another 100 tons of gold very recently. Last May, their central bank ramped up official gold holdings once more. A sizeable portion of this purchased gold has come from Chinese suppliers in a growing new partnership. The Mexicans continue to accumulate every month. It would appear that China is attempted to wean Mexico off the US$ standard in the oil world and banking sector. Without any US guidance, only from China, it appears that Mexico is preparing for a post-Dollar world. A reversal might occur, with the US falling into the Third World, while Mexico could elevate itself with oil deals to China and adoption of more gold from which to find ballast during the monetary storm. Mexico will be interesting to watch, not a First World industrialized nation, but not a backward outpost either. Mexico is making some preparations, although sketchy and preliminary, that indicate strategic moves by their government and central bank to serve as protective measures to shield Mexico from what it sees as the imminent and unavoidable devaluation of the USDollar.

Note that Mexico is one of the largest exporters of crude oil to the USA, a neighbor nation. The risk is acute for managing a troubled USDollar in the process of rejection. In layman terms regard the movement as the collapse of the US Dollar. Many key global players in the West are very concerned about trading crude oil in other currencies other than the USDollar. They correctly foresee a movement that rapidly destabilizes the USDollar. But they must make plans, since it is a sinking vessel, even if a grand vessel. The Eastern global players are constructing the alternative to the US$-based trade. They are far ahead of the West in planning. While the East plans and develops, the West doubles down, risks more, watches and worries justifiably. But a double threat of double facades lurks.

A double threat comes in the front door. With the continued and uncontrollable escalating US debt, with the continued and uncontrollable USFed abuse in monetary expansion, the world is taking defensive measures against the heighted risk. They might perceive a narco war on a credit card as the final straw to force reaction. Then secondly, the world must contend with a double risk within their native lands. Their economies must halt the price inflation, especially in food, energy, and materials, that is a direct consequence of the QE bond monetization abuse. They must also protect their hard earned reserves (national savings accounts) from grand debasement and lost purchase power in a horrific swindle. Double US threat, double damage threat. As the collective hive of nations take defensive measures, and alter their reserves policy, they inscribe a mosaic which went more complete will say on the global stage: USDOLLAR REJECTED.

The Jackass point has been made for over three years, that the nations that prepare for a post-US$ world will survive the nasty ongoing storm. The nations that bond with the US, British, and EU will go down the paper drain with a total toxic infusion. The world is fast losing confidence in both the USDollar as an instrument and the USFed as an engineer for solutions. The nation of Mexico will be interesting to observe, full of intrigue, with a critical element in the background in narcotics trafficking and money laundering. Mexico is hedging its bets with more solid ties to China. Even the heretical Chairman Bernanke admitted, "I do not think our tools are strong enough to offset the effects of a major fiscal shock. So we would have to think about what to do in that contingency." See the Indy Media article (CLICK HERE).

◄$$$ MEXICO BENT ITS KNEE IN FULL GENUFLECTION TO THE BRITISH BANK EMPIRE. IN DOING SO, IT SHOWED A WEAKENED SPINE. THE LONDON BANKERS DO NOT HAVE THE MEXICAN GOLD, ALL LEASED. THE LONDON BANKSTERS ENGAGE IN A VAST SPRAWLING PAPER SHELL GAME ON GOLD, SELLING IT MANY TIMES OVER, NEVER TO RETURN IT TO THE OWNERS. $$$

Some data on Mexican state gold account comes. At the Bank of England 94.23% is stored in London, then 4.82% is stored in Mexico, and 1.0% is stored in the NYFed. The Mexican Govt showed a limp wrist and little spine when in their latest communique, they stated no current interest in transporting the bars. They stated, "The Bank of England is one of the world's most important custodians of gold, for which reason maintaining our gold position with this institution minimizes the costs of storage and transfer of gold." Perhaps subject to interpretation is the limits of decision making when it comes to high finance and bank crimes. Perhaps the British promised to redeem the Mexican gold on account over time, provided a public lie was told on trust toward the London bankers. Mexico might be bound by the empire to its north and its allies on holding its metals with the cartel. It also means that the Mexican people are being bent over by its government, to kowtow the globalists party line. In other words, London and New York remain the core and Mexico is the periphery, taking orders, with bent knee in regular genuflections. See the Silver Vigilante (CLICK HERE). The thought of Mexican demands for its gold to break the London bank cartel is unimaginable and part of a fairy tale. Power rules. Besides, if not obedient, Mexico City could be the site of some nasty terrorist incidents. That is how the U S/UK play this game.

◄$$$ A US-JUDGE DISMISSED THE C.F.T.C. POSITION LIMIT RULE. THE SYNDICATE IS GIVEN FREE REIN TO CONDUCT NAKED SHORTING. THOSE WHO EXPECTED JUSTICE TO PREVAIL ARE SO NAIVE. NOT THE JACKASS. BUSINESS AS USUAL IN THE CORRUPT FINANCIAL ROOMS CONTINUES, FULLY PERMITTED. THEY ARE DEFENDING OUR FADING FREEDOM AND THEIR RIGHT TO STEAL. $$$

A federal judge gave Wall Street yet another victory, endorsing their widespread fraud. Their big crooked commodity traders were defended. The tough new CFTC regulations were put aside. No crackdown came against speculation in energy, grain, and metal markets, as the Jackass expected. To think otherwise is indescribably naive in my view. Judge Robert Wilkins of the US District Court for the District of Columbia threw out the new position limits rule put forth by US Commodity Futures Trading Commission. My firm belief is that Gensler at the CFTC made a bland gesture to look good, to save face, and to maintain a semblance of integrity. The regulation will be sent back to the agency for further consideration. In the process, the CFTC is made to look like the valiant soldier, defender of investors, blocked by the legal process and wheels of justice. Wilkins ruled that the CFTC was required to prove position limits in commodity markets are necessary to diminish or prevent excessive speculation. He discarded the notion that the 2010 Dodd-Frank financial regulations constitute a mandate to set position limits. Victory for the Syndicate, what a surprise! See the Reuters article (CLICK HERE) and the excellent 5-minute video on CFTC corruption by Brother John (CLICK HERE).

Rob Kirby has an opinion in line with the Jackass. He wrote, "Like I said earlier. Not a chance in hell that position limits will ever be enforced in a meaningful way on those who abuse the system. Anyone who really believes that Bart Chilton rides a white horse is either delusional or dreaming in technicolor." The Jackass contention all along is that anyone who believes the CFTC would eventually do the right thing, defend the integrity of financial markets, and impose restrictions on the big banks overlooks all the events over several years, relies on hope and not logic, and suffers from a break from reality.

## PRESSURE BUILDS ON GOLD PRICE

◄$$$ EVALUATE CENTRAL BANK INFLATION VERSUS GOLD SUPPLY GROWTH, WHICH IS AN EVEN COMPARISON. THE PAPER CURRENCY SUPPLY HAS GROWN 20X, 30X, 40X MORE QUICKLY THAN THE GLOBAL GOLD SUPPLY. THE GOLD PRICE WILL THEREFORE REACH THE $3000 PRICE LEVEL AND CONTINUE UPWARD. IT AWAITS THE FULL BLOWN CRISIS HITTING A CLIMAX, WITH NIL TRUST IN PAPER ASSETS OR MONEY. THE DISTRUST IS PUSHED BY BROKEN SOVEREIGN BONDS, THE AAA-SECURITIES. $$$

A Gold Standard and anything closely related, such as a hard asset backing (even a basket of commodities) or cover clause (partial gold/silver backing), strikes fear in the hearts of the existing money kings in castles where money is ruled and government leaders are given orders. Their floors are caving in. They specialize in creating money from nothing in electronic units, and lavishing massive streams of the created money into their own private channels. The $23 trillion in 2009 and 2010 was ample evidence, as seen in the USFed audits. The money kings within the cartel bulwark have deep disdain for constraints, such as those required in sound money backed by gold or other hard assets. Grant Williams of Vulpes Investment Mgmt revealed the expansion of the world's monetary bases contrasted against with the expansion in the world's gold supply over a comparable period. The paper money supply has grown two orders of magnitude greater than the global gold supply. Upward price pressure is constant and relentless.

The objective to the central bankers who have destroyed the financial structures and economies is next to inflate away the $35 trillion in debt overhanging the system. Up to year 2009, it was $21 billion. The debt is crushing and impossible to repay. Notice the tiny growth in the gold supply. Compare its 8% supply growth versus the 223% USDollar supply growth, the 362% British Pound supply growth, and 146% Euro supply growth. The Japanese have the worst reputation for abuse, but the United Kingdom has clearly the worst recent record. The banksters are desperate to keep the Gold price down, using corrupt naked shorting as their main tool. This grand difference displays why the Gold price will pursue the $3000 mark, then the $5000 mark, all in time. Gold will rise in price strongly, assured since its supply will not rise much. It is constrained, unlike the paper currencies. See the Zero Hedge article (CLICK HERE).

◄$$$ BOTH THE GOLD AND SILVER PRICE MUST FIND SUPPORT AFTER BEING HIT BY NAKED SHORT ASSAULTS, AGAIN. THE CENTRAL BANKERS ARE ON THE EXTREME DEFENSIVE, AFTER MAKING PERMANENT AND UNLIMITED THE BOND MONETIZATION THAT IS QE3. THINK SURRENDER AND WHITE FLAGS. HYPER MONETARY INFLATION HAS BEEN DECLARED A PERMANENT FIXTURE, THE WORST DISASTER IN MODERN HISTORY. THE RUIN OF MONEY MEANS GOLD SKYROCKETS. THEY WOULD BECOME SOLVENT QUICKLY IF NARCOTICS WERE A TIER-1 ASSET. $$$

◄$$$ SILVER WILL MAKE EVEN GREATER GAINS, SINCE THE SCRAMBLE IS ON FOR OBTAINING SILVER SUPPLY, WITH OVERNIGHT MOVEMENT FRANTIC. TOO MUCH IS MADE OF THE OPEN INTEREST ARGUMENTS. NAKED SHORTING KNOWS FEW BOUNDS IN A CORRUPT FINANCIAL LEADERSHIP CLASS OPERATING THE HELM OF THE FASCIST BUSINESS TOWERS. $$$

◄$$$ SILVER DEFENSE AT 36 APPEARS AS DESPERATE AS IT IS CORRUPTED. THE 36 LEVEL REPRESENTS AN IMPORTANT LINE IN THE SAND. NO LIMITS ARE PLACED ON NAKED SHORTING, AN AMERICAN SYNDICATE PASTIME BLESSED AS LEGAL, OR PERMITTED WITHIN THE FASCIST STATE. A HUGE AMOUNT OF PAPER SILVER WAS DUMPED TO DEFEND THE IMPORTANT 36 LEVEL, FORCING A CORRECTION. IN ALL, TWO YEARS OF US-BASED SILVER MINE OUTPUT DUMPED IN A MERE 15 MINUTES. REGULATORS WERE NOWHERE TO BE SEEN, PROBABLY CHEERING FROM THEIR WINDOWS. THE SILVER PRICE MUST FIND SUPPORT AFTER TECHNICAL DAMAGE INDUCED BY CORRUPT MEANS, AGAIN. $$$

More disappointment has come to the Silver market investors. Their hope of a breakout has been blocked by corruption in the US elite sector of finance. Blessings by the courts and collusion by the CFTC enable the lid to temporary be kept on the $36 price level. The cartel urgently requires the Silver price to remain below 36, or else huge losses will befall them from scattered spread trades, leveraged trades, and exotic trades tied to currencies and bonds. The derivative mesh platform is at risk. The defense is designed to hold their paper fortress together. Above 36, and the silvery winds blow their fortress apart in a nasty storm. The date was September 21st, when the cartel dumped two years of US-based silver output on the market in only 15 minutes, during the 10 o'clock hour. The crime scene was New York City, the usual site. The cartel was desperate to keep silver below 36, and they succeeded. The Silver Doc wrote on that day, "After silver exploded through $35 on this today's COMEX open, we wrote this morning that should silver hold $35 through today's weekly close, the metal would quickly run to $37.00 to $37.50 early next week as a massive short squeeze developed. The cartel understood the predicament they were in, and responded with a massive paper dump on the market to stuff price back below $35. Between 10:35 and 10:50am EST, an astonishing 62.5 million ounces of paper silver were indiscriminately dumped on the market to induce the sell-off, equal to nearly twice US annual silver production of 36 million ounces!!" Such details are never given on the financial press networks. It was not from investors losing faith in precious metals, assured by central bank solutions.

The current price has a 31 handle, so success to the evil camp for now. Corrupt contract methods are their tools. Technical damage was done when the price went below the 32.50 level, where the 50-day moving average is located. The induced cycle down must find support. The Wynter Benton guys got their necks slammed in the door, and their hands nailed to the table. They had boasted that in the middle of October, they would make their presence known with a silver price runup. They did, but they proved only their weakness. They are no match for the corrupt syndicate which plays by different rules, all illegal. See the Silver Doctors article (CLICK HERE). The world is watching. The LIBOR scandal will eventually extend to price rigging in the Gold & Silver market. It is not clear what the trigger will be, or what institution and entity will hold the crowbar.

◄$$$ THE SILVER WHEATON C.E.O. EXPECTS THE SILVER PRICE TO RISE DRAMATICALLY IN THE NEXT YEAR, LIKE 40%. THAT MIGHT SEEM LIKE A BIG MOVE, BUT IT IS ONLY A MOVE TO THE $50 LEVEL. THIS PEAK WAS SEEN IN APRIL 2011. $$$

Randy Smallwood is the CEO of Silver Wheaton. He gave an interview in early October to CNBC with a studded panel. He expects the Silver price to spike by 40% in the next year. While such a nice gain would reach the spring 2011 peak, an important point must be made. The Wynter Benton folks have revealed that colossus JPMorgan is in danger of extreme uncontrollable losses in its silver position if the Silver price stays over the $36 level for 60 days. That event is coming. There is money to be made investing in silver. The Silver Wheaton (symbol: SLW) business model is not discussed enough. They latch onto industrial metal mining projects, like for lead, zinc, and tin, even copper. The silver is byproduct in the production process, usually much lower in volume than the base metal output. Silver Wheaton steps in and secures long-term contracts for silver byproduct during the life of the mine project, at attractive discounts. The mining firm wins a steady stream of cash flow to manage costs. SLW wins a cheap source of steady supply to build inventory and to sell for profit. It has the advantages of a royalty company without much of the risks. After a few years, the SLW cost on new silver into inventory is at times shocking low, like 30% or 50% or 70% below market price. They have multiple supply channels from multiple projects and associated long-term contracts. See the CNBC video (CLICK HERE), if you can stomach the panel from the hive.

◄$$$ SINCLAIR MAKES AN INTERESTING REMARK ON THE PRECIOUS METAL SHORT POSITIONS. HE BELIEVES THE CARTEL HAS MANY SPREAD TRADES AT WORK, GOING LONG ABOVE THE GOLD PRICE AND SHORT AT THE GOLD PRICE. THE STRATEGY IS USED TO CONTROL THE GOLD PRICE, KEEPING IT IN TIGHT RANGE. SINCLAIR EXPECTS WHEN THE PLAYERS SENSE THE GOLD PRICE IS RIPE FOR A BREAKOUT, THEY WILL COVER THE SHORT AND LET THE LONG SIDE RIDE UP UP UP. $$$

The central bank hyper monetary inflation, broken sovereign bonds, repair of broken banking system, reaction to harsh economic recession, endless economic stimulus, and more will provide the conditions Jim Sinclair describes to force a change in the gold market. It is being managed, but it might someday soon be permitted to run under the right favorable conditions. The debasement of money is a process not half completed, a long way to go. The QE to Infinity is only recently being fully contemplated and admitted. The bond monetization is permanent and unlimited, much as the Jackass forecasted a year ago and 18 months ago when the QE train began to crush wealth and value. It is being managed by spread trades. The recent drop after teasing the $1800 level was a result of dropping the upper end of the spread on the trades. Sinclair concluded in this way after close examination of the longs and shorts in the last month. He estimates that 75% of what look like naked shorts are not really. In an in-depth explanation, he concluded that the majority of what appears to be short positions is in fact a massive hedge spread which has been systematically used to manage the ascent of gold up from $250 and the US DX index down from 125 down to the current 75-80 range over the past 10 years.

While not an expert in this casino trade, the Jackass believes it is called a Strangle, designed to restrict movement. Sinclair expects that when the bullion banks sense that Gold is ready to explode upwards in price in the next powerful uplegs of the resumed bull market, the traders (market managers) will flip their spread hedge and convert to naked long. In doing so, they stand to reap the largest gains of anyone in the precious metals sector. They act as the gatekeeper. The Gold price could be propelled in this manner past the $2000 mark, past $3000, even much higher. See the Silver Doctors article (CLICK HERE) for the actual Sinclair essay in detail.

◄$$$ SOUTH AFRICA HAS ENTERED INTO A NATIONWIDE STRIKE. ANGLO AMERICAN PLATINUM LET GO 12 THOUSAND MINE WORKERS. THE FALLOUT COULD SOON AFFECT FORWARD GOLD SALES AND IN TURN THE BANKER SHORTING SCHEMES. WATCH FOR GEOPOLITICAL WRANGLING AFTER A MINING FIRM GOES BUST, AS THE CHINESE AND RUSSIANS STEP IN WITH TWO FISTFULS OF CASH. MOMENTUM IS GATHERING ON THE DOWNWARD SLOPE. IN THE FUTURE, MUCH LESS GOLD OUTPUT SHOULD BE EXPECTED, AND FUNDING THE SOUTH AFRICAN DEBT WILL BE DIFFICULT. $$$

Africa's biggest economy is suffering from the viral outbreak of labor strikes. spreading from the mines into the public sector. Since August, close to 100,000 workers have joined strikes and protests, halting work. The majority (75,000) come from the prominent mining industry. The impact is broad and deep, all negative. The undercurrent is a slower economy, less government revenue, bigger deficits, resulting in spending cuts that enrage their public. Attempts to cut the deficit will result in bigger deficits as a result of disruptions and violence. The people have seen higher cost of living imposed on them, and are openly frustrated. SA Finance Minister Pravin Gordhan has promised to reduce the deficit from the 4.6% of GDP forecast for this financial year. He had better prepare for a notable decline in GDP with bigger deficits.

The South African Municipal Workers Union (SAMWU) claims 190,000 members. Their almost daily calls for strikes will continue. The main transport union SATAWU has been gearing up with joined strikes aimed at railways and ports. The strikes began in the platinum industry and have spread. XStrata is the latest victim, with workers at its Eland platinum mine walking out. Anglo American Platinum and AngloGold Ashanti have been affected with strikes, along with lesser known Kumba Iron Ore. Look for the strikes to hit the entire mining sector within the important producing nation. Doubts have come on President Jacob Zuma's leadership that have tarnished South Africa's reputation among foreign investors. The fundamental outlook on the SA Rand currency is poor and worsening. Moodys cut the South African Govt Bond rating last month. See the Yahoo News article (CLICK HERE). For more grisly details on the violence see the Washington Post article (CLICK HERE).

Interpretations are many and all harmful. First the obvious. The gold supply will be reduced by a major national producing nation with a long history. That history has been slammed by a socialist marxist door by the grandest stupidity and mismanagement. The Gold price will enjoy more lift from the obstructed supply. On the flip side, the mining stock sector will suffer from lost trust, lost income, lost output, more strife. Embattled governments might see the striking workers, point to exploited national wealth, and accelerate the confiscations, to produce nationalized mine properties for exclusive domestic wealth generation. The Jackass has disliked openly the gold mining sector since early 2008, with good reason, and with verified confirmation on a correct call. The immediate consequence will be a falling Rand exchange rate and rising SA Govt Bond yields, as international investors hold back, wait, and watch in horror and disgust. What gold output comes, expected to be less this year and next year, will come the rising tide of costs. The mining profits will shrink, forcing more business reaction and more frustration among workers. It is a downward nasty vicious cycle.

The London Siren has offered some consequences of a financial type. He expects that the affected South African mining companies, in particular the large firms, will stop hedging production. They will sell long-term futures contracts much less, since unsure of their future output. The reduction will work to deprive the big Western banks of buying long term futures, thus interrupting their front-end shorting schemes. The banks will lose the hefty spread trades that they play and exploit so easily. The effect flies in the face of the Sinclair hypothesis, since the tendency will be to reduce the long trade at higher strike price. Furthermore, if a miner goes bankrupt, the liquidation process might turn into a messy geopolitical wrangle. The big banks serving as creditors might attempt to gather the failed firm and put the pieces back together. However, the potential buyers to gobble up the failed firm might be Chinese or Russian or Indian entities. The USGovt might step in to interrupt the process after the first liquidation buyout by an Eastern buyer. Eventually, the US and UK will realize that gold mining firms mean monetary power, banking strength, and economic recovery potential. They might realize that absent gold mining supply, the Third World awaits. That is my forecast, as the US is locked out.

◄$$$ CHINA HAS SEEN A MASSIVE INCREASE IN SILVER PANDA DEMAND & MINTAGE. IT IS QUICKLY BECOMING A WORLDWIDE TOP TIER COIN. SOON IT WILL CHALLENGE THE AMERICAN SILVER EAGLE IN PRESTIGE AND POPULARITY. SUPPLY IS TIGHT IN US-COIN SHOPS. THE SILVER DEMAND ADDS PRESSURE ON THE CORRUPT SHORT GAMES BY WALL STREET IN THEIR DEFENSE OF THE PAPER USDOLLAR. PAPER LOSES TO METAL. $$$

In less than two years, the Chinese Mint has increased the production of its 1-oz Chinese Silver Panda almost 13-fold. The output has gone from 600,000 per year to 8 million coins in 2012 so far, this year almost concluded. Although a raging success in its first couple year since launch, the Chinese strive to make the coin a global standard. Building upon this success, and the massive increase in just two short years, expect the Chinese Silver Panda to challenge the American Silver Eagle. The main reason the mintage of these coins was increased so much starting last year is the sudden legality in 2011. Chinese citizens are finally permitted to own silver coins. Experts in the coin industry forecast the 2013 mintage for the Chinese Silver Panda might be as much as 10 million coins. To make their Silver Panda as popular as the American Silver Eagle, production would have to reach over 40 million eventually. The Chinese Population is over four times that of the United States. Silver has always been popular in China, for over two centuries, used in many regions as currency. Once silver catches on again in China to match the popularity of gold, demand for the 1-oz silver coin could reach an easy 75 to 100 million in a single year by 2015 or 2016.

The coin is not jumping the ocean. On the US side of the Pacific Ocean, locating the new Silver Pandas is difficult. Supplies are tight. Coin dealers like Jim Orcholski who runs J&T Coins LLC was only able to secure one third of the quantity he requested. His distributor was unable to say when more coins might be available. See the Silver Doctors article (CLICK HERE). The Jackass position is that Silver in the hands of public serves three big purposes. 1) When the Yuan currency becomes backed by hard assets, it will have millions of tiny pillars in society already in place. 2) Legitimate form of savings for households is provided, besting the mattress and government debt securities. 3) Silver demand applies fierce pressure on the USDollar to bring out its de-throne. Add another factor, 4) some prestige is afforded, since only respected nations have popular global coins.

◄$$$ CHINA IS COUNTERFEITING PERTH GOLD BARS. BUYER BEWARE. THE FAKE BAR MOVEMENT IS GAINING MOMENTUM, PRECISELY COINCIDING WITH THE CENTRAL BANK ACCELERATION IN BOND MONETIZATION. MANY MORE GOLD BARS LACED WITH TUNGSTEN WERE FOUND IN MANHATTAN. THE DISCOVERIES ARE WORKING TO UNDERCUT THE PERCEPTION OF LEGITIMACY IN THE GOLD BAR MARKET. SOME FINGERS ARE POINTED AT THE US-INTELLIGENCE AGENCY FOR THE FAKE DISTRIBUTION. $$$

At least 300 fake Perth Mint gold bars were discovered in Australia, as a big Chinese gold forgery factory was uncovered. The fake bars in Manhattan New York has a corresponding flip side. A Chinese firm is openly promoting the sale and production of tungsten filled gold bars and coins. Credit goes to an Australian Seven News investigation which discovered the batch of fake Perth Mint gold bars and identified the Chinese gold forgery factory. Investigators were able to purchase 300 Chinese sourced 1-oz gold bars for a total cost of $300. When the investigators melted down the bars, every shiny bar was seen to contain the same gold content as Fort Knox, nothing zero nada. See the AU Yahoo News (CLICK HERE). An intrepid observer would note the coincidence of ramped-up QE bond monetization to wreck the global monetary system, the announcement of its permanence and unlimited scope, and the advent of fake gold bar discoveries. To be sure, some conmen are exploiting the strong gold bar demand in swindles. However, the Jackass never believes multi-$billion accidents. Suspicion points to participation by the US Intelligence agency for production and distribution of fakes. Of course, it would be to keep America strong and to defend liberty.

Just days after the initial discovery of a single fake 10-oz gold bar (filled with tungsten) in Manhattan's jewelry district, the NYPost reported that as had been expected, at least ten more fake 10-ounce gold bars laced with cheap tungsten were discovered. The sanctity of the gold inventory on 47th Street just off Fifth Avenue has been polluted, the Midtown Diamond District in Manhattan. Suspicion will reek havoc and halt gold bar sales in the near future. The 10-oz gold bars are highly popular with pedestrian investors. As times passes, the extent of damage will be better known, as the volume of fake bars sold is assessed. The news reporting is understandably sketchy, offering few details. The bar stamps and markings are flawless. The counterfeit poisons confidence and can quickly kill a shop's business, in addition to the realized loss of being a swindle victim. As Tyler Durden points out, the pesky Russians are often easy to blame. Bear in mind that only the USGovt defenders of the toxic USDollar stand to benefit. The finger of suspicion is at the USGovt agents who stole Fort Knox. They would enjoy seeing the gold fever suffer a serious dampening in demand for fear of huge losses in fake gold bar purchases. See the Zero Hedge article (CLICK HERE).

## USECONOMY & GROWTH LIES

◄$$$ THE OFFICIAL SEPTEMBER JOBS REPORT STINKS OF ROTTEN FISH. FORTUNATELY, HALF THE PUBLIC AUDIENCE DETECTS THE STENCH. $$$

The other half of the public audience is beyond hope, clueless, with dull bulbs in the cranial cavity, with brain stems disconnected, never to perceive reality. Disputing doctored corrupted monthly Non-Farm Payroll reports loaded with deceptions and gimmicks has been a tiresome task for the Hat Trick Letter. Done each month, it seems. They are easily disputed and discredited. Doing so reveals the weak condition of the USEconomy. We are told of a 114 thousand increase in jobs for September, but the entire data picture is highly suspicious for the curious minds. We are told of an 86k upward revision in previous months, doubtful. The reported jobless rate fell to 7.8%, taken on its face as good news. Except that hundreds of thousands of workers fall off the wagon and no longer qualify for jobless insurance. They are not usually counted as out of work. Those in part-time jobs, even the low paying temporary posts, are considered employed. The more realistic U6 jobless rate is at 14.7% from the USGovt stat rats. More integrity and reliability is obtained by the Shadow Govt Statistics jobless figure at 22.8%, which uses the exact same methods as before the Clinton Admin when the distortions became policy. The US jobless rate is just as bad as in Spain. The signal of a wrecked US landscape is the 0% rate, whereas in Spain it is the high bond yield. Otherwise, almost no differences in wreckage.

Here is the kicker. A sanity check is the usual Jackass procedure, to check on the official fudge factor known as the Birth-Death Model. The official Non-Farm Payroll report included a lift of 574k jobs from their handy dandy Birth-Death Model, which has no basis in reality. The same bogus model added 370k in August. By some curious bad luck, maybe a rogue trader's fault, the bogus model knocked off 1.204 million jobs in July. Perhaps the knock-down was intentional, done in the distracted summer month, used as a setup for the predictable autumn lift to help the president. The BDModel was originally designed to account for the difficult to monitor sector of small business, whose offices and stores and yards spring up and die quickly with dynamism. They actually expect us to believe that small business is hustling and bustling, enough to cause a powerful boost to employment. Not here, not me. My parents did not raise a fool. My professors did not train a fool.

John Williams also smells rotten fish in the September jobs report. He runs the Shadow Statistics report, a great compendium of monthly essays and graphs, with solid analysis. It has been a Jackass research tool for years. His expertise is manipulation and distortions in USGovt statistics, uncovering fallacious adjustments. He refutes and corrects the faulty official economic reports, offering valid defensible rebuttals. He summarized the recent dispute over the supposed promising September jobs report. He said, "The August-to-September change in the headline unemployment rate almost certainly was not a 0.3% decline. The Bureau of Labor Statistics (BLS) knows the reported change in unemployment was wrong, other than by extreme coincidence, and it knows what consistent reporting actually showed. Only politics prevents the BLS from releasing the correct number, whether the unemployment rate actually declined, held even, or rose as predicted by consensus forecasters. The lack of transparency here in the data preparation allows for direct political manipulation." The device is absent data to justify the official final figures, and guesses not cited as such. It is not a smoking gun, but rather extensive smoke.

Brother John found much to be very fishy in the September BLS unemployment rate. See the Brother John article where he explained his train of thought (CLICK HERE). Independent analyst Mike Rivero believes the Obama lieutenants cooked the unemployment numbers. See the Before It's News article (CLICK HERE). The September Non-Farm Payroll report is a stinking lie with blatant political motive. The USEconomy is sinking.

◄$$$ THE PRESTIGIOUS CONFERENCE BOARD REPORT ON THE LABOR MARKET CONTRADICTS THE USGOVT JOBS REPORT IN NO SUBTLE TERMS. THE TREND IS TOWARD A DEEPER RECESSION, TELL THE INDICATORS. $$$

The Conference Board is the most prestigious economic group in the United States. The National Bureau of Economic Research is a rubber stamp agency that has never forecasted a recession, only confirmed them in the past with heavy denial of reality and heavy reliance upon absurd hedonic adjustments. The Bureau of Economic Analysis is a data collection agency with heavy bias laced throughout, a pack of gophers. The Conference Board reported a weakening labor market, in direct contradiction to the politicized doctored Non-Farm Payroll report. They reported a decline in employment trends for the third time in four months. For September its reliable employment trends index fell 0.34% to 107.86 from a revised 108.23 in August. Downward revisions are always a sign of engrained weakness. However, the latest index is up 5.4% from a year ago. They expect the lackluster labor market to remain soft through the first half of 2013.

In September, five of the eight components within the employment trends index deteriorated. These indicators include the ratio of involuntary part-time to total part-time workers, and the share of firms with job openings deemed hard to fill. The Conference Board index is an aggregate of eight labor market indicators, including jobless claims, job openings data, and industrial production. It strives to improve the forecast process by filtering out the noise and volatility of monthly labor-market indicators and showing underlying trends more clearly. It does so by not gathering data solely from workers and layering on dubious adjustments afterwards. It measures the entire labor picture in a more adept manner. The September Non-Farm Payroll report is a stinking lie with blatant political motive. The USEconomy is sinking.

◄$$$ THE OFFICIAL USGOVT LABOR AND TAX COLLECTION DATA CONTRADICTS THE USGOVT JOBS REPORT IN PLAIN MANNER. SUCH DATA IS DIFFICULT TO FUDGE, AND THEREFORE HARDLY EVER REPORTED. $$$

Bill King hails from the King Report, not to be confused with the King World News. One of my favorite economic data series is payroll tax receipts, since they are mandatory, highly indicative of the USEconomy, and impossible to fudge. Best to look at them in nominal terms, with no adjustments. King looked at payroll tax receipts for September and compared them to August. If the economy generated jobs as claimed in the September Non-Farm Payroll report, the USTreasury would have collected more payroll tax receipts. Very simple logic. The payroll tax receipts for September declined by $2.2 billion versus the previous month. And following summer vacation, September is usually an upbeat month even during a flat economy. King also looked at year-to-date FICA withholdings (Social Security tax). The FICA withholdings through the end of August 2012 are $7.2 billion lower than for the same period in 2011.

Lastly, King focused attention on my favorite fudge factor, the Birth-Death Model. For the September Non-Farm report, the USGovt final figure includes the addition of 546,000 new jobs from the formation of new businesses. These are derived from the small local businesses. To verify the addition, examine the self-employment taxes that arrive in the Self-Employment Contributions and Federal Disability Tax Acts. Nothing positive there either, as the self-employment tax contributions year to date are lower in 2012 than for 2011. Really excellent summary analysis on all angles by Bill King. See the USTreasury data website (CLICK HERE). The September Non-Farm Payroll report is a stinking lie with blatant political motive. The USEconomy is sinking.

Consider FedEx the courier service, a reliable indicator of the overall USEconomy. If all is well, and recovery is occurring, then it should be moving along with even waters and good tidings. Not so. FedEx has been hurt by the persistent slowdown. FedEx has announced it will embark on a major cost cutting initiative in the face of tougher business conditions. The shipping giant plans to reduce its worker count by a voluntary buyout program detailed in August. It plans to retire older aircraft. The goal is reduce costs by $1.7 billion. The initiative is not symptomatic of a USEconomy in anything remotely described as recovery or slow growth. The larger rival United Parcel Service lowered its forecast for all of 2012 and said its Q3 earnings will fall below last year. UPS stated openly that many customers are fearful of worsening business conditions in the second half of the year. See the Huffington Post article (CLICK HERE).

◄$$$ THE NATL FEDERATION OF INDEPENDENT BUSINESSES ALSO CONTRADICTS THE USGOVT JOBS REPORT FOR SEPTEMBER. THE CLIMATE AMONG SMALL BUSINESSES IS NOT IMPROVING. THEIR VARIOUS INDEXES PAINT A PICTURE UNFAVORABLE, WHICH REFUTES THE BIRTH-DEATH MODEL DIRECTLY FOR JOB CREATION. OPTIMISM IS DOWN, HIRING IS DOWN, AND EARNINGS ARE DOWN. $$$

Small business owner confidence was little changed in September, but owners expect business conditions will improve in early 2013, according to a survey by the NFIB. The Natl Federation of Independent Business does good work in monitoring the pulse of the sector. Their small business optimism index fell 0.1 point to 92.8 in September. The index has averaged 93.1 so far in 2012, regarded as a weak reading. For the fourth consecutive month, slightly more businesses cut jobs during the past three months than the share of firms that reported adding them. The reported net change in employment per firm fell to -0.23, the lowest reading in two years. The business earnings trend index improved by 1 point, but at -27% remained very weak. The negative reading reflects a squeeze put upon small businesses between rising costs (wages, materials, shipping) but little pricing power. The net percentage of owners raising final prices fell 3 points to 6% last month.

The NFIB said many business decisions seem to be on hold until the election is over. The report concluded, "Owners are in maintenance mode, spending only where necessary and not hiring, expanding, or ordering more inventories until the future becomes more certain." The jobs expectations index dropped 6 points to 4%, the weakest reading since June. However, the future economic outlook improved to the highest reading since February 2011. The Admin positions and policies actually freeze small businesses, not invigorate them. The multitude of small business utterly dreads the prospect of ObamaCare, regarding it as a plague. The September Non-Farm Payroll report is a stinking lie with blatant political motive. The USEconomy is sinking.

◄$$$ THE CHICAGO P.M.I. SHOWED A DECLINE FOR THE FIRST TIME IN YEARS. NO RECOVERY HERE. THE SIGNAL IS NOT GOOD FOR THE NATIONAL ECONOMY. $$$

The Institute of Supply Management (ISM) provides a diffusion index of business conditions in the Greater Chicago area. In my view, as Chicago goes, so goes the national economy. It is big, broad, diverse, and representative. The trend is down, with the ISM moving from 53.7 in July to 53.0 in August to 49.7 in September on a clear slide. It would lend credence to the claim that a retail sales lift in August and September were mostly from higher prices. Some shrewd colleagues offer conjecture that the retail rise is from a spurt in refinance activity on home mortgages, aided and abetted by Fannie Mae with a risky return to subprime lending. Since the ISM is a composite diffusion index, it accounts for both manufacturing and non-manufacturing firms. As always, readings above 50 percent indicate an expanding business sector. The September Non-Farm Payroll report is a stinking lie with blatant political motive. The USEconomy is sinking.

◄$$$ A CONVENIENT FICTION WAS TOLD. THE CAPEX ROSE BY 1.1% IN AUGUST, AS THE FICTIONAL BUSINESS INVESTMENT SPRANG TO LIFE. SEEMS INCONSISTENT WITH THE DROOPY G.D.P. ANNOUNCED AT A DOWNWARD REVISED 1.3% GROWTH. $$$

The contradictions in the doctored rosy forecasts and economic data reports read like a children's crossword puzzle with the words not properly aligned. The financial community is told that orders for non-defense capital equipment excluding aircraft, also known as business investment (CAPEX), rose 1.1% in August after declines of 5.2% in July and 2.7% in June. The USDept Commerce is responsible for the data massage, doctoring, and deceptions. The CAPEX series for capital expenditures had been running a string of negative months. It is not consistent with other data series. Hence this August positive appears to be an anomaly in statistical parlance, namely a bogey. It is worse than an outlier. It has the earmarks of a compensation for an extra lousy July. Down over 5% in a single month is abnormally bad.

The anomaly and cross-eyed glance goes further. We are told that durable goods orders dropped 1.6% in August. They are intended for usage beyond three years. But the CAPEX rose. So the military spending and aircraft orders must have fallen off sharply. But the defense contractors have said nothing to that dreadful effect. In fairness, Boeing might be in trouble. Total bookings plunged 13% , the most since January 2009, paced by a decline in demand for civilian aircraft. The CAPEX for August is a rebound off a lousy July, possibly a planned pre-election soft lob of deception easily dismissed as insignificant. Use retail and the overall economy to form a triangular verification device. The back to school season was a little worse than horrendous. My serious doubts linger for a pickup in equipment orders at businesses. Bear in mind the USEconomy had a downshift in the official GDP reported for 2Q2012. The estimate was for 1.3% growth, down from a 1.7% in their heavily altered adjusted adulterated statistical process. Hence the momentum is turning down. The CAPEX is a white lie, an exaggeration to be recognized in a few months when the GDP turns close to negative (after the obvious fictional lifts). The September Non-Farm Payroll report is a stinking lie with blatant political motive. The USEconomy is sinking.

◄$$$ THE US-PUBLIC TENDS TO AGREE WITH JACK WELCH THAT THE USGOVT COOKED THE JOBS DATA. IT MEANS HALF ARE ENLIGHTENED, AND HALF ARE LOST WITHIN THE CONSTANT BLATHER OF PROPAGANDA. WELCH IS A BRAVE MAN, WHO LIKE MANY AGED BRILLIANT PEOPLE, IS NOT AFRAID OF THE SYNDICATE CRIMINALS. $$$

MarketWatch readers narrowly agree with Jack Welch on a poll. They are close to evenly split over former GE boss Jack Welch concerning his continued questioning of unemployment data released earlier this month. Based on the responses to an informal poll posted on The Tell webblog conducted a week ago, the public shares suspicion and doubt. Some 50% of those responding chose "I AGREE WITH NEUTRON JACK, THE DATA STILL LOOKS FUDGED TO ME," while 48% chose the response "JACK IS A CRANKY MOON BAT, THE NUMBERS ARE THE NUMBERS." The Jackass belief is that half the nation can be classified somewhere between moron and fool. See the MarketWatch article (CLICK HERE). The September Non-Farm Payroll report is a stinking lie with blatant political motive. The USEconomy is sinking. Feel free to send Jack Welch this chapter to the Gold & Currency Report. He has my permission to quote the above work that supports his accusation.

◄$$$ NOTE A TRUE STORY FROM A LATHAM FORD DEALERSHIP IN NEW YORK. SOCIAL SECURITY DISABILITY IS A VAST CON GAME THAT EXEMPLIFIES WHAT IS WRONG WITH THE NATION. THE SOCIALIST NETWORK DOES NOT ENCOURAGE WORK AND ENTERPRISE, BUT RATHER PARASITES AND HANDOUTS. $$$

One of the salesmen at Latham Ford had a woman in his office recently who wished to lease a brand new Ford Focus. As her credit application was being reviewed, he noticed she was on Social Security Disability. He commented that she did not look disabled and unable to work. She said "Well I am really not. I could work if I wanted to, but I make more now then I did when I was working and got hurt." She suffered a non-disabling injury and has fully recovered. She said the USGovt sends her $1500 per month in a single check. She receives $700 per month on an EBTcard (food stamps), plus $800 per month for rent. Amazingly, she also receives 250 minutes free on her phone. The total comes to about $3500 per month in disability benefits. When she was working, she used to take home about $330 per week. Do the math and then ask yourself why should she bother to go back to work. If you multiply this case by millions of people on federal disability, you begin to realize the scope of the problem. Once the socialists have 51% of the population attached with the same so-called benefit scenario, we are finished as a nation. Lenin was right about the people managing the national finances, leading to ruin. We are real close, with 14.0 million people on Supplemental Security Income (CLICK HERE). Socialism does not work. Its members stand with hand extended, not working.

◄$$$ THE INTL MONETARY FUND BRAIN TRUST SLASHED ECONOMIC GROWTH FORECASTS. THEY EMBRACE THE MISGUIDED BELIEF THAT THE MAJOR ECONOMIES CAN ONLY BEGIN RECOVERY IF INVESTORS LEAD THE WAY. THEY REMAIN FIRMLY COMMITTED TO THE FINANCIAL SECTOR AS THE LEAD DOG IN THE GLOBAL SLED. IT IS FLOUNDERING. $$$

The Jackass prefers not to dignify the IMF forecasts on the global economy with much of any respect. Their forecast will be overly optimistic, like most from their corrupted ilk. They will congratulate themselves when their distorted final figures come out later and the calls are verified as correct. Let it be known that the IMF forecasts outright recession in the United Kingdom and the European Union, but slow growth in the United States. They are way late in recognizing the UK and EU recessions, which are raging in decline. The UK property bust sent their economy into a tailspin that has yet to stabilize. The EU sovereign bond bust sent their economy into an uglier tailspin that might not stabilize until a new valid currency replaces the tainted Euro, subjected to Draghi messianic holy water, otherwise known as liquidity. The USEconomy has been mired in a recession since 2009. Its GDP is between minus 3% and minus 5% in decline. The IMF and most prestigious analytic houses are obliged by law to forecast slow growth at the worst for the United States. What a travesty.

The IMF concluded that unless the US and EU address their financial crisis, woe to the global economy. Brilliant work, NOT. The main message is they admit to a recession, which requires them to take a big gulp, and eat a large helping of humble pie. They therefore admit failure by their masters busy at work in central banks. See the Yahoo Finance article (CLICK HERE). These IMF staffers would hardly be qualified as garbage collection workers. They certainly would not qualify to join the analysis groups at any previous job in my career.

## 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.