GOLD INVESTMENT REPORT
PRECIOUS METAL & ENERGY
CURRENCIES & STOCK INDEXES

* USGovt Threat & USDollar Panic
* Intro Golden Nuggets
* China Flexes Muscles
* Gold Exodus & Arbitrage
* Gold Price Poised for Quantum Leap
* Strong Eastern Gold Demand
* Gold Supply Faces the Cliff
* Shale & Mining Retreat





HAT TRICK LETTER
Issue #115
Jim Willie CB, 
“the Golden Jackass”
20 October 2013

Editor Note: The Gold Report contains almost no charts. The entire analysis of the gold market and its powerful subterranean forces has shifted from a quantitative analysis toward a qualitative analysis. Imagine from a numerical study to a focus group study. The Price of Gold will therefore enjoy a resurrection from a quantum leap driven by global forces toward the return of the Gold Trade Standard.

"Nobody really understands gold prices and I do not pretend to really understand them either." ~ Benjamin Shalom Bernanke (moron liar head of the USFed, with rubbish Doctoral Economics degree on revisionist history of Great Depression, and blind eye on all gold suppression done by JPMorgan & Assoc, who will pass the Weimar keys to the next Bagholder)

"Normally, the dynamic runs something like this: leading economic measures deteriorate; the economy subsequently deteriorates; leading economic measures improve; and the economy subsequently improves. The result is a positive correlation between leading measures and subsequent activity. In contrast, the recent dynamic runs something like this: leading economic measures deteriorate; the Fed responds with some massive intervention that is unprecedented in scale; economic activity and leading measures temporarily improve; but since these improvements were entirely artificial, the improvement is quickly followed by fresh deterioration in both economic activity and leading measures. The result is an inverse correlation between leading measures and subsequent activity." ~ John Hussman (describes systemic failure)

"Forecasting is easy. It is the model that is the hard part." ~ Jim Rickards (rebuttal: Almost no model has any value anymore, since financial markets are all distorted, skewed, and controlled, which requires the analyst to use other logic, to stand on perches to view ongoing developments, and to rely upon other right spacial brained methods to detect paths and patterns, as well as deep inside sources to determine what the key projects underway will emerge. Rickards has no Eastern sources, and ignores most projects and pathways that emerge from the Eastern Hemisphere.)

"[Countries] want physical custody of gold. They are positioning for the day when there is a massive loss of confidence in paper money. You are seeing it with massive acquisitions of gold by Russia and China taking place through channels that bypass the London Bullion Market Assn. They are buying mines in Western Australia. They are having the ore refined right there in Australia at the Perth Mint, and then shipping the gold straight to Shanghai. They are completely bypassing the London market where they minimize their market impact, which is a smart move. That is what you would do if you were trying to buy gold and not run up the price. You would do everything in secret and that is what is going on. When the international monetary system collapses and it comes time to rewrite the rules of the game and create a new system, it is going to be all about how much gold you have." ~ Jim Rickards (still with excellent insights)

"The long-term solvency problems of the United States are going to trigger a massive decline in the dollar in the not too distant future. That in turn will give us the early stages of hyper-inflation in this next year. We are basically at a point where we cannot kick the can down the road. Going forward from here, you are going to generally see a weaker dollar, and it will get much weaker. You are going to have a dollar panic, but no exact timing on that." ~ John Williams (finally he veers from the incorrect notion that USFed monetary expansion will produce nasty price inflation, with recognition of the currency factor as dominant)

"Fathom the hypocrisy of a government that requires every citizen to prove they are insured, but not everyone must prove they are a citizen. Now for any of those who refuse, or are unable to prove they are citizens, will receive free insurance paid for by those who are forced to buy the insurance, because they are citizens." ~ Ben Stein (comedian who still maintains the clownish view that 911 attacks were perpetrated by young Arab boys)

"The Israeli-Saudi Axis will keep blossoming. Few in the Middle East know that an Israeli company, with experience in repressing Palestinians, is in charge of the security in Mecca. If they knew, with the House of Saud's hypocrisy once more revealed, the Arab street in many a latitude would riot en masse." ~ Pepe Escobar (reference to al-Majal G4S)


"You should see the physical movement of gold bullion bars that takes place off-market. We cannot secure enough cargo planes to move physical from the West to the East." ~ Colleague of The Voice

## USGOVT THREAT & USDOLLAR PANIC

◄$$$ THE USDOLLAR HAS TWO TYPES, PRE-2009 AND POST-QE, THE FORMER MORE VALUED AND QUARANTINED, THE LATTER DEBASED. A COMPLEX SEQUENCE HAS BEGUN TO EMERGE POTENTIALLY. THE USFED STANDS BY TO PRINT UNLIMITED MONEY. THE REPO MARKET IS SEIZING UP. THE USTREASURY BONDS ARE REGARDED SUDDENLY AS UNWORTHY COLLATERAL. PRESSURE COMES FOR A USDOLLAR SPLIT. CONSIDER A SCENARIO FOR A SEQUENCE MECHANISM IN END STAGE FOR USFED CONVERSION OF USTBILLS INTO CASH SO AS TO AVERT A USTBOND COLLAPSE, SINCE THE USGOVT DEFAULT (EVEN TEMPORARY) HAS ACTUAL CONSEQUENCES.

TRANSLATION: CHINA MIGHT BE FORCING A DEFAULT IN ORDER TO OBLIGATE THE USFED INTO CONVERSION TO CASH. THE USFED COULD CONVERT INTO A GIANT CONVERSION WINDOW FOR USTBILLS, GOING TO CASH USDOLLARS. CHINA IS CONTENT TO TAKE THE CASH, LOSE THE USGOV RISK, AND CONVERT TO GOLD. JUST AN END GAME THEORY DURING A TIME WHEN THE OUTLANDISH IS VERY CREDIBLE. $$$

Insider information has revealed that the USDollar has two types. A quarantine of sorts (called cordon sanitaire) was built around the internationally traded USDollar in 2008. It is widely held, like in Switzerland, London, Hong Kong, Singapore, and Panama. The motive was to protect vast USDollar holdings in cash accounts, even cash bundled stores in warehouses. The fundamental picture involves protection of honestly earned USDollar holdings, in the face of the bankruptcy of the US corporate government. The deep hint is for the groundwork being laid for the break of the USD into domestic and international currency. The legal aspects of the USD split are coming into view. Time is ripe for scenarios to be floated as potential, especially when parts of the plan might be in motion and visible. Explore the backdoor of a USTreasury Bond default, with revolving front door in Weimar USDollar expansion like a centrifuge. Something big is going on, an unprecedented trial run, and the news is reporting nothing but bare superficial meaningless information. In simple terms, the global USDollar will be a gold instrument. The domestic USDollar will be a fiat toilet paper variety founded in electronic bits, which suffers rounds of devaluation. The dust has risen, soon to settle.

China might be in the control room with the US-UK operators tied up in their chairs. The USGovt temporary default might have been intentional so as to trigger the USTB/USD conversion process legally. It could be part of a bigger and more complex procedure, linked to the Global Currency Reset amidst the confusion. Later would come the USDollar devaluation, after the main creditors including China have removed most of their risk. The important churn could be conducted through the USFed window, better described as the revolving door. It could be well planned and choreographed. The plan might be to carry out a functional default without the ugly publicity and dizzy fanfare, like with formal USGovt debt downgrades and all the investment fund fallout. The bank syndicate would also prefer to proceed without the Credit Default Swap payouts kicking in as nuisance, and the consequent deep shame, the utter ignominy. Clearly, the Big US Banks underwrote the CDSwaps.

Two types of USDollar are in circulation, with little comprehension. The USD in 2008 and previous years stand in contrast versus later printed USD currency. The USDollars held at the time of Quantitative Easing in 2009 and in following years are technically different, badly debased. Pre-2009 USD are subject to the cordon sanitaire, the official legal quarantine at work. The consequence is potentially vast. The USD currency issued and held before QE was instituted in 2009 will hold value as it has been quarantined. The USGovt creditors will not allow that USD to be diluted and wiped away. This USD must be legally redeemed either via trade (real goods & services) or via hard assets like land, buildings, energy deposits, or gold bullion, even port facilities. The newer USD currency issued as part of the official sequence of QE programs will be likely written down very significantly in value, during the devaluation. In a sense the asset price inflation since 2008 is a fiction in progress since based on an inflated currency. The rectification would come upon the USD devaluation of new QE money, the impaired monopoly money. On the international front, bank accounts held outside the United States would enjoy the same protection as pre-2009 USDollars. Domestic bank accounts would be treated without protection, as part of the newer tainted QE era. Think Old USD versus New USD, with the USFed's Quantitative Easing making the line of demarkation. The foreign USD must abide by some rules.

The settlement process, or better described as shock phase, could take two potential pathways. (1) The US Stock market collapses, USTBond yields rise, banks suffer failure, with no split or breakup between domestic USD and international USD. This option seems unlikely, since the alarms would ring, internal damage would be disorderly, and innocent people would be harmed indiscriminantly. Another option is more likely, which coincides with the Jackass forecast of a formal USD split. (2) The US Stock market holds its value, the USTBonds hold their value, but the USDollar is broken up into an international currency and a separate domestic currency. Almost immediately afterwards, the domestic USD will endure a series of devaluations. Expect a 25% to 30% devaluation in the first round, followed by another 25% to 30% devaluation only a few months later. Expect a new look to US currency in bill form for carrying in pockets and wallets.

Next, consider that the USTreasury Bond market and its various appendages will all be affected. The temporary USGovt debt default might have been a trial run from a legal and procedural standpoint. The REPO Market has started to seize up. It has been in trouble with unstable sessions. In the last two weeks, it experienced a different type of seizure, not from lack of liquidity but rather from defaulted securities. The USTreasury Bond is being rejected as collateral, as almost all financial institutions cannot hold and will not accept a defaulted security. Even though just a technical default, it does not matter. Formally and legally, it is called a Selective Default. The consequence is important and tips off what the final stage scenario might be. The USFed will be the only buyer in town, the only window where the tainted USTBonds and USTBills will be accepted, the bound toxic treatment plant. The USFed would take in defaulted USTreasurys of all maturities (mainly short-term liquid USTBills) and issue new USDollars. A tremendous humongous spike in the M1/M2 money supply rate would occur, as the USFed balance sheet will triple or quadruple within days or weeks. The Weimar Printing Press would shift into a very high gear. The USD devaluation would be an obvious step to take, fully justified before the world.

The Chinese behind the scenes might be forcing the entire issue of default in order to freeze up the REPO Market, to force the devaluations, and to ensure the USFed begins redemption of USTBills into USD cash. China wants the cash, and wants to begin the flood of inflation into the tangible USEconomy, for all to observe. The Chinese are angry, no longer the trade partners. They are adversaries. When the Wall Street banks reneged on return of Mao Era Gold from the lease contract in 1999 in exchange for Most Favored Nation trade status, the gloves came off, the fur has been flying, and the trade war has escalated. In the last two years, the Chinese have been joined by the White Dragons, a society of ancient wealthy Chinese families. They wish to change the world, to clean it up of human refuse of extreme type and environmental blemishes of extreme type. The end game is upon us, and China is pulling the levers. The USDollar devaluation and USTreasury Bond default will be very complicated, since so intertwined in machinery, so vast in global reach. The USGovt and USFed are equally vulnerable, no longer able to control the situation. They are in effect reacting to the situation, due to their own extreme insolvency. They are wrecked houses.

Down the road take an example like ABC Bank, which owns many $billion in USTBills it wishes to redeem. Its long-term USTBonds are different, held for bond yield in core accounts. The short-term bills do not pay anything appreciable in yield. They are the main REPO Market item exchanged. So ABC Bank puts $10 billion of USTBills at the USFed window, and takes out $10 billion of USD cash. Following the default events, even if selective default, the USGovt debt is given rating downgrades. The USTreasurys of all maturities start trading at a higher yield than at the point of default. Then comes the nasty real world twist. Recall the REPO Market has activity in both directions, pawned and redeemed. ABC Bank goes to the USFed and offers to buy back the same $10B in USTBills, but at 99 cents or 98 cents on the dollar. As a result, the USFed would refuse, since losses would be realized in large volume. The USFed insolvency would be made a public spectacle, while the central bank balance sheet would suffer massive lost value. They would not declare asset writedowns, since not a bank.

The USGovt debt default would move to a more widely observed default in full view. So the USDollar devaluation and the USTBond devaluation would be inextricably linked by means of the REPO Market. Some form of this dynamic will play out and have a massive impact on the USD, sufficient to force the first devaluation and later the second devaluation. The entire process could be the Global Currency Reset played out of the global reserve currency, the USDollar. Much might be forced upon the USGovt in recennt weeks and future weeks, since insolvent and in default. The mayhem would be played out on domestic USDollars and domestic US bank accounts. The extent to which foreign USD (post-QE) and foreign bank accounts are affected is unknown, but expect them to be protected by some type of quarantine.

The offices of the USDept Treasury, the USFed, and many Big US Banks would have Black Swans painted on their building facades and interior walls. This is the big reset. The purpose will be to redeem suspect USTBills into USDollar cash form via the USFed window. China will swap out from USTBills and into cash, property, hard asset caches (mines and deposits), and equities. If a big US Stock market decline occurs, China will be pleased. They would require a stock decline first, like 20 to 40% lower than current prices. They will surely engage in a stock pounce following a major pullback, as they did it in 2011, the event reported on Bloomberg. Seriously, the theory makes sense. Adaptations must be made for the deals cut to end the USGovt shutdown, if it was actually a political deal at all and not just a showcase. Behind the scenes, great stress is being seen. Already the February and March USTBills have started to show stress. Behind the scenes, the trigger might have been pulled though, to initialize a technically bound sequence, to give it a trial run. That is the Jackass belief.

The key is the REPO Market, the primary liquidity transfer engine, the transmission plant. The USTBill market might dictate the entire process with REPO and USFed churn. The REPO Market is the formal mechanism that manages swaps. Given the outsized rise in bond yields from May to September, the Jackass believes the Interest Rate Swap machinery has broken, if not totally, then critically so. The damage is not visible. It is conceivable that China is the main agent for pushing USTBond yields up this summer toward 3.0% on the TNX. The Chinese might have designed a controlled destruction of the Interest Rate Swap machinery via massive USTBond sales, which in effect forced the Big US Banks into unwinding their carry trade. The result might have been to force these loyal USFed accomplices into a straitjacket of deep insolvency plus illiquidity (aka bankruptcy). Once rendered immobile from profound new capital loss, the behemoth criminal banks would be more pliable to further Chinese directed plans to dismantle the Anglo financial machinery that plagues the world. The REPO Market will reflect the brokenness of the entire USTBond complex, including its highly leveraged IRSwap devices. The REPO Market is directly tied to such derivatives. The cash flows are exchanged in the REPO that come from a floating leg and a fixed leg of USTreasurys generally. It is the center of the USTBond market for liquidity purposes.

◄$$$ THE USGOVT TEMPORARY SHUTDOWN REVEALED MUCH. THE TRIAL RUN REVEALED THE VULNERABLE PARTS, THE PORK-RIDDEN PARTS, THE EXEMPT PRIVILEGED PARTS, EVEN SOME VILE SCUM PARTS. THE FUTURE USGOVT DEFICITS WILL RISE WITHOUT BOUND FROM SOCIAL SECURITY AND OBAMACARE, AS WELL AS A GROSSLY BLOATED MILITARY. THE SOCIAL NET AND INTEREST EXPENSE WILL EQUAL THE ENTIRE TAX REVENUE INCOME SIDE. DEFICITS WILL SOAR. BUT THE USGOVT DEBT DEFAULT WILL OCCUR FIRST IN HIDDEN MANNER, THEN IN FULL VIEW. $$$

The USGovt shutdown did not achieve much of anything visibly. Nothing was accomplished in terms of legislative change. Federal workers received two weeks of paid vacation essentially. Many offices continued to operate, on emergency function. Some places like national parks and supervised areas were shut down, only to reveal citizen anger. Nothing visible was gained. The same drama will come up in January or February. Expect soon to hear about additional costs to shut down, then start up certain offices. The political alignment was revealed. In all, 87 establishment Republicans sided for the status quo. But 144 Tea Party republicans opposed the ongoing situation. That comprises one third of the USCongress, not a portion to ignore or to take lightly. The Republican Party has officially split in apparent lines. Obama is seen as a lame duck president, likely no measures to pass until the 2014 election. Beware a dysfunctional WashingtonDC in fully glory. To achieve a resolution ending the USGovt shutdown, a large supply of pork projects were twisted into the usual hands. A $3 billion Kentucky dam project was a beneficiary, among others to be revealed. See the Yahoo News article (CLICK HERE). On a more sinister footnote, in California no chemtrail spraying of toxic gases has been seen in three weeks. So the genocide projects were put on hold.

George from Chicago is a bright colleague on the burnt end of the MFGlobal criminal deed. He pitched in on budget deficit implications. He wrote, "In 3 to 5 years, the USGovt debt will go into hyper-drive, if not sooner. The main body of the Boomer generation will retire. They will not contribute into the tax revenue stream, while their payouts will begin to pay out [even to the Jackass]. Few of them have any retirement funds to speak of, victims of the tech telecom asset bubble. The costs from ObamaCare will wildly add to the deficit. Interest costs will be far higher, possibly even explode higher if bond yields rise. The interest payments will be heading towards a $trillion a year all by itself. To put that in perspective, social net costs and interest costs will represent 100% of current tax revenues. That translates to no money for military with defense contracts, no money for federal & military pensions, no money to run the government, no money to manage the borders and parks, and no money for pork." The Jackass fully expects the USGovt debt default to occur before the entire deficit goes out of control and truly skyrockets. Unchecked, the deficit could reach $2 trillion as the Boomers start collecting Social Security and make claims with Medicare, while the USEconomy goes deeper into recession.

◄$$$ JPMORGAN HAS IMPOSED CAPITAL CONTROLS, WITH LIMITS ON WITHDRAWALS, AND A BAN ON INTERNATIONL WIRE TRANSFERS. EXPECT MORE BANKS TO FOLLOW THEIR LEAD, BEGINNING WITH THE BIG MONEY CENTER BANKS. THE OUTWARD SIGNAL IS THAT THE BADLY INSOLVENT JPMORGUEN IS SUFFERING DEEP LIQUIDITY PROBLEMS. IT MEANS A BANK FAILURE COULD BE NEAR. THINK INTEREST RATE DERIVATIVE LOSSES. THE EXIT DOORS ARE SHUTTING VERY FAST TO MOVE MONEY IN SIZE GLOBALLY. CAPITAL CONTROLS ARE BEING INSTALLED ON A SCATTERED BASIS ACROSS THE WORLD. $$$

JPMorgan Chase has made the news with an ugly splash. The giant bank will limit cash withdrawals, prohibit all outgoing international bank wires, with more to come. Taking the USGovt debt cloud and official shutdown as smokescreen, even an apparent effort to front-run official government capital controls, JPMorguen has issued letters to all its business account holders notifying them as of November 17th, the bank will limit all cash transactions (including deposits, withdrawals, and ATM usage) to $50,000 per month. The official message was written by Donna Vieira, Vice President of Chase Business Banking. The note actually said, "These changes will help us more effectively manage the risks involved with these types of transactions." Perhaps the funds have been rehypothecated, or stolen, left only as electronic garbage bits. Strange times when JPM engages in the risk management of ATM withdrawals, the most bland part of any bank business. It aint bland if the funds are gone from insider grubby hands, tied to risky derivatives as their hidden collateral.

JPMorguen Chase will outright prohibit all outgoing international bank wires. The policy change is capital control, otherwise known as captured restricted money. The maneuver precedes Bail-in confiscations, possibly. The announcement has caused speculation that the bank is preparing for a looming financial crisis in the United States. The better interpretation is that JPMorguen is deader than dead, the recent runup in USTBond yields since May must have blown gigantic holes in their interest rate derivative book. Only one credible reason can justify such an extreme call such as capital control, the limit on funds movement. The big corrupt behemoth bank has been in INSOLVENCY to the extreme for five years. Actually this new signal is of ILLIQUIDITY, meaning they cannot afford to permit the movement of money, when the big bank is not able to offset the client movement. Conclude JPMorguen is approaching a failure and death event. One must wonder if the bank will act as supervisor of excess cash determined from monthly sweeps and dictate their investment in preferred stocks like their own bank stock. See the Zero Hedge article (CLICK HERE) and the InfoWars article (CLICK HERE).

Colleague Roger Weigand confirmed the validity of the JPMorguen note to its clients. He received the same note on restrictions. Simon Black (aka Sovereign Man) advised that as starting on October 20th, the premier clients at HSBC USA will have to wait a minimum of five days before transferring funds between their own international accounts. The doors are closing, the clamps tightening, the channels narrowing. With all the horrendous news about the gigantic banks, only the reckless and naive keep any money in bank accounts in them. Convenience is not a good reason.

A final note on JPMorguen that touches real lives. A Hat Trick Letter subscriber sent a note to inform about an unusual development in the Catskills region of New York state. The story changes from capital control to animal control. He is fond of the vacation retreat area. People in the resort region are real, the area beautiful, and winters enjoyable. He informed that a contractor friend worked to complete a Bunker (his words) for the ambitious Chief Information Officer of JPM, which is situated next to a 8000 sqft mansion he owns. The Bunker has two foot cement walls, all of which will be bermed over with dirt. When done, it will be difficult to even know it is there. The friend just earned $54,000 staining the exterior of the big house. The CIO lives in Princeton New Jersey. The workers joke that they will be able to get there long before the owner will.

◄$$$ CHINA'S LARGEST CONGLOMERATE HAS BOUGHT THE BUILDING HOUSING JPMORGAN'S GOLD VAULT. FOSUN INTERNATIONAL HAS PURCHASED THE JPMORGAN ICONIC FORMER HEADQUARTERS, WHICH INCLUDES THE WORLD'S LARGEST BULLION VAULT. CHINA HAS ALTERED ITS STRATEGY. IT IS ACQUIRING GOLD WAREHOUSES IN THE BANKING CAPITALS OF THE WORLD. REGARD THEM AS GOLDEN COLONIES AND ARSENALS. $$$

Fosun International, China's largest private owned conglomerate invests in commodities, properties, and pharmaceuticals, and is also known as Shanghai's Hutchison Whampoa. The huge corporation filed a quiet statement without fanfare with the Hong Kong stock exchange. David Rockefeller would roll over in his grave, except that he still breathes among the Satanic warm bodies, soon destined for the worms. His JPMorgan iconic former headquarters at One Chase Manhattan Plaza was sold for a measly $725 million. One must wonder if the sweet deal is in return for a truckload of toxic USTreasury Bonds in a package deal. The same JPM HQ location is the property complex that houses the their commercial gold vault. It is the largest in the world. One Chase Manhattan Plaza combines three main components: a 60-story tower, a 2.5 acre plaza, and a 6-story base, of which 5 floors are beneath grade (underground). Excavations, said to be the most extensive in New York City history, reached a depth of 90 feet. The construction is ornate and elaborate, featuring white Italian marble travertine, and fortified to withstand both a nuclear attack and a massive flood. The L-shaped plaza levels the sloping site and conceals six floors of operations, which includes an auditorium and the bank vault.

The news two months ago was that JPMorguen is exiting the physical commodities business, soon to be widely recognized as a crime scene perhaps crawling with police. The bigger news is that China just acquired the building that houses the world's largest gold vault. Contrast with the frenetic Chinese gold imports in the last several months from Hong Kong, totaling 2000 tons in the past two years. Conclude possibly that China has decided it will no longer settle for domestically held gold and is starting to expand its global vault facilities, kind of like golden colonies or outposts, better yet arsenals and armories. The acquisition is an important step in the Grand Paradigm Shift of power moving from West to East. See the Bloomberg article (CLICK HERE) and the Zero Hedge article (CLICK HERE).

◄$$$ A PARADIGM SHIFT IS IN PROGRESS OF MOMENTOUS NATURE. BIG CHANGES ARE COMING VERY SOON WITH A SWIFT HAND. GLOBALIZATION AND BANK PRACTICES ARE IN A STATE OF FLUX, WITH REFORM TO OCCUR QUICKLY. THE CHINESE ARE PREPARING TO WRITE OFF THEIR USTREASURY BONDS AS LOSS. INDIA IS FAST IMPLODING. THE WORLD IS UNDERGOING GREAT STRESSES AND CHANGES. $$$

The Voice shared some information gathered from high level meetings of various types of the last few weeks. Events are in motion, seemingly timed with both the USFed Taper QE Talk and the USGovt temporary shutdown. The events reinforce the notion of the USDollar devaluation and USTBond default are in progress as part of the greater Global Currency Reset. Expect the Global Economy to suffer a sharp pullback in demand and a brutal rollback of globalization. Many large multi-national corporations have made preparations, whose provisions will lead them to function more independently from the big Western banks (certain to endure failures). They have issued $billions in new bonds, and sit on mountains of cash. If several big banks go bust in the United States, London, and Western Europe, even Japan, these cash-filled corporations will survive easily. Furthermore, China has made provisions to write off $1 trillion in USTBonds. Their balance sheets might not be affected very much, especially if gold rises in value by a quantum leap. The accumulation of USTBonds was part of the plan to gain control and force the movement of gold. The USTBonds will be a casualty of war, a plowing under phenomenon of global soil, the weeds submerged. However, the real ugly event on the billboard is the coming implosion of India, a victim of the Grand Paradigm Shift. The cannot manage their imbalances, since inadequate reserves and no domestic gold mine production. Last week the largest real estate developer in Mumbai filed for bankruptcy. More important failures will come soon.

Interpretations as obituary can be made. It means a global economic recession or worse will hit hard in another important more powerful round. It means the stupid plan from 1990s onward where Emerging Market nations do the industrial work, while the Western nations sit back and fiddle with asset bubbles is over. The EM nations have wealth in store, and will start a non-USDollar alternative method for trade. The Western nations lost legitimate income, and are saddled with devastating debt with certain defaults to follow. It means the current broadbased USD banking system is dead. So banking and trade under the USD shadow are going away amidst deep global recession, as new financial mechanisms kick into gear. It means the Gold Standard will soon return, on the trade side. Its day is nigh.

## INTRO GOLDEN NUGGETS

◄$$$ GOLD BEFUDDLES BERNANKE AS CENTRAL BANK LOSSES AT $545 BILLION PILE UP. A PROPAGANDA UPDATE ITEM. GOLD IS NO LONGER NEEDED AS DISASTER INSURANCE, COUGH!! BIG BALANCE SHEET LOSSES POINT TO MISGUIDED INVESTMENT, COUGH!! GOLD IS NOT A CURRENCY, COUGH!! $$$

So USFed Chairman Bernanke claims not to comprehend Gold price mechanisms. What a crock! The august USFed owns some gold bullion. According to COMEX corrupted prices, since 2011 the hoard has lost $545 billion in value. Central banks own 18% percent of all the gold ever mined. They intend to add as much as 350 tons valued at about $15 billion this year, claims the World Gold Council. Rather than notice the gold market ambushes conducted by means of heavy naked futures contract shorting, sometimes equating to global annual mine supply in a single two hour segment, the quack economist Bernanke instead interprets the gold price decline this year to reduced need for disaster insurance. What a crock! While the USFed has expanded the money supply in utter desperation to meet the liquidity requirements of a grotesquely insolvent banking system and decrepit USTreasury Bond arena vacant of foreign bond bidders, the COMEX and its Wall Street & London criminal agents have been suppressing the Gold Price effectively. They do not wish for the USTBond to have a strong rival with a bull market banner. The price suppression efforts have continued during the USGovt budget dispute and office shutdowns.

Central banks in the Eastern Hemisphere are eager to grow their gold reserves, sensing a sovereign bond market breakdown and an insolvent banking system that defies solution, thus the Gold Standard return. As central banks were buying, investors were losing faith in the metal as a store of value. What a crock! The Hat Trick Letter has chronicled the broad deep and sturdy gold demand across the world, including the United States and Canada, where coin demand outpaced the two nations in mine output by 25 million ouces of silver. The investors are victims of a crime scene at the COMEX, whose accomplice is the Wall Street bank community, with the USFed the mafia don in charge, and the regulators at the CFTC paid to remain asleep on watch. The stories eagerly report heavy losses by John Paulson and George Soros (born Gyorgi Schwartz). The stories also eagerly report massive mining firm asset writedowns by an estimated $26 billion. The fool Bernanke, whose PhD in Economics should be stripped away, is on record as describing gold as a commodity asset rather than money, with an avuncular folksy moronic viewpoint that central banks own bullion as a long-term tradition. What a crock!

Gold is ballast to the banking and currency system, missing in action before and during the Global Financial Crisis that has seen no end in sight. Gentle Moron Ben is joined by system wag Nouriel Roubini who used to command an active brain stem, before he sold out. He properly warned of the mortgage bust, but sold his analysis to claim a recovery is upon us, helped along by wise policy. He actually said, "Bernanke was suggesting in his own way that too much importance is given to gold, as it is too hyped. Gold is not a currency." If it is not a currency, then they must explain why is it involved in the majority of FX currency swaps. See the propaganda rubbish piece for update from the enemy Nazi camp, replete with source of humor for its pathetic intellectual discourse. See the Bloomberg article (CLICK HERE).

◄$$$ PAUL KRUGMAN IS AN ECONOMIC MORON WITH A PAID FOR NOBEL PRIZE. HE BELIEVES THE GOLD STANDARD DOES NOT WORK. IN FACT THE GOLD STANDARD DOES NOT SUIT THE CRIMINAL SYNDICATE PURPOSE, NOR ACCOMMODATE THE UNITED STATES FOR ITS FREE RIDE, NOR SUIT THE SOCIALISTS, ESPECIALLY THE AGGRESIVE NATIONAL SOCIALISTS (NAZIS) WHOSE WAR INITIATIVES ARE A BUSINESS VENTURE. $$$

The Noble Prize winning economist Paul Krugman is an embarrassment to the profession, a mainstream apologist with very little wisdom or insight. He is critical of the Gold Standard, which he says does not work. Krugman is correct. The Gold Standard does not work for the banking syndicate, which wishes to print money for itself. Enforcement against counterfeit and bond fraud would come to a halt under such a standard. The Gold Standard does not work for the USEconomy, which lacks industry and imports too much with no discouragement to continue in that direction. The current imbalances are a direct result of no such standard in place. Krugman is a laughing stock, who will awaken when it is too late. The Gold Standard does not work for the socialist state, especially one with a strong aggression streak for military spending and foreign supply conquest. The irony for the USMilitary aggression is that it is paid for largely by the victims of the US aggression to destabilize nations, to seek supplies, and to obstruct deviations like trade systems outside the USDollar. See the YouTube video (CLICK HERE). What Obama is to the Peace Prize, Krugman is the Economics Prize, a total sham.

◄$$$ THE FAILURE OF THE AMERICAN PENSION SYSTEM IS GUARANTEED. BILL GROSS OF PIMCO HAS SERVED WARNING. BOND YIELDS ARE INADEQUATE TO SUPPLY THEIR INTEGRITY. PAYROLL CONTRIBUTIONS ARE INADEQUATE. FUND INVESTMENT RETURNS ARE DECLARED IN ABSURDLY HIGH TERMS. DECEPTION ABOUNDS. CALPERS IS WORTH WATCHING FOR ITS COURT CASE OVER THE RIVERSIDE BANKRUPTCY. $$$

Bill Gross of PIMCO has given warning. The national pension system is on course for failure. The Jackass has mentioned in several past reports that the ultra-low bond yields are insufficient to keep the insurance and pension systems going. The income is adequate to match the accident awards, the damaging acts of nature, the life payouts, and the ongoing pension payments. Gross has called to arms those in a battle, for survival of the fittest. See the Business Insider article (CLICK HERE) and the PIMCO research report (CLICK HERE). The warning by Gross was direct. He said, "The US (and global economy) may have to get used to financially repressive, and therefore low policy rates, for decades to come. The last time the US economy was this highly levered (early 1940s), it took over 25 years of 10-year Treasury rates averaging 3% less than nominal GDP to accomplish a beautiful deleveraging. That would place the 10-year Treasury at close to 1% and the policy rate at 25 basis points until sometime around 2035! Low yields can become high yields almost overnight. But they should stay abnormally low. A highly levered US and global economy cannot deleverage beautifully without repressive future policy rates." The tragic fact is that the USFed is stuck. They cannot increase rates towards the historical mean for decades.

The Boomer Generation as a group did not save like their parents. They squandered wealth, as they fell victim to the sponsored asset bubbles. Their home equity has also largely been depleted, not altogether vanished. As they approach retirement age, they will become totally dependent upon federal aid, or else be beneficiary to pensions. The two biggest state pension funds are CALPERS in California and the Texas State Teachers Union. They are both structurally unsound. CALPERS does not comprehend their plight, or public admit it. Their portfolio is half in US stocks, the rest divided among bonds, private equity, and property. Their public statement assumes a pension fund investment return to remain at 7.75% as far as the myopic can see. The are delusional clowns or deceptive liars. See the CALPERS press release from March 2011 (CLICK HERE).

Examine the internal dynamics. CALPERS bean counters have a vested interest to continue the fantasy on returns. They even run thousands of simulations to justify their assumptions. But beware of garbage in assumptions results in garbage out conclusions. The absurdly high built-in return rate keeps the California employees contributing to their fund. If the rate was made lower in reflection of reality, then CALPERS would be forced toward one of two controversial policy choices. First, they could require that members pay more from monthly paychecks going forward. Not a palatable request. Second, they would have to reduce benefits and stated projections for future pension payments. Not a savory message. Their officials would have feisty and contested meetings trying to justify their investment decisions. If CALPERS raised its contribution rate, the result would be to reduce the number of contributing workers. They would engage in revolt and backlash, the newer employees opting out into something different. Finally, the CALPERS plan is due to suffer from the legal front as the bankruptcy court ruling from the Riverside case might enforce a writedown in their assets. The trend could be followed with other cities that took strange loans from the pension giant fund.

Bill Gross has incentives but they are far more honorable and justified. He has no incentive to argue for fantasy rates of return. He wants the funds under his management to make money, to thrive, and to continue with integrity. He is motivated and angry, if truth be told. He was deceived by the Bernanke Fed in 2010. The Wall Street gangsters engineered a baseless rally in USTreasury Bonds without including Gross in the planned meetings. The device used was the Interest Rate Swap derivative tool. The PIMCO funds missed out on the artificially produced bond rally in 2011 and 2012. Gross is not prone to delusions. He does not believe for one instant that the USFed can raise rates. Jim Rickards is in this same school of thought. In order to delay the anticipated calamity, the USFed must keep rates very low for quite some time. As time passes, the investment assumptions of pension funds all across the United States will be called into question. The shrinking value of Social Security payouts will bring more attention to the grossly inadequate pension system. A risk is growing for its default, but assuredly a stealth default from price inflation and obscene loss of purchase power. See the TFMetals Report article (CLICK HERE). Thanks to the California Lawyer for his contributions.

◄$$$ THE GLD EXCHANGE TRADED FUND IS NOW A DEBENTURE, WHICH MEANS UNSECURED DEBT FUND. THE STATUS CHANGED IN CLANDESTINE MANNER, AS FEW NOTICED. INVESTORS ARE A CROSS BETWEEN DUPES AND MORONS, WITH SOME JUICE COMMON TO THEIR DIETARY NEEDS. $$$

The SPDR Gold Trust, also known as the GLD Exchange Traded Fund, has a new name. The trust formally changed its name as NewGold Debentures (GLD). The investors do not have claims anymore to gold bars. They are the object of constant mockery and criticism by the Jackass for over nine years. Perhaps the status change to debenture will awaken them to the con game afoot and their victim status. At least the executives from Wall Street and London have come out into the open. The GLD Fund is now officially a debt instrument no longer backed by gold bars. Check the definition of Debenture to see: "A type of debt instrument that is not secured by physical assets or collateral. Debentures are backed only by the general creditworthiness and reputation of the issuer." Financial firms, corporations, and even governments entities are known to issue this type of instrument (formally a bond) in order to secure capital. By nature, they are subject to loss, but legally.

The GLD Fund has morphed from an investment fund of gold bars to an slush fund set up for failure. The Wall Street and London bankers are in the process over the last few months to gut the fund of its hard asset contents. Its gold inventory has been the subject of frequent anomalies for inconsistent bar lists. It is almost surely Gold in Motion from mining firm shipments that never sits in vaults. Finally, the GLD Fund is apparently an unsecured shit-fund for the bagholder investors too stupid, too lazy, and too enamored of juice. Many investors have used the GLD Fund to have short-term exposure to the gold price. Maybe they still will. The officials behind GLD have completed the Bait & Switch on hapless clueless people who invested in it. All welcome the Gold Debenture, no longer a gold-backed ETFund. What a conjob done in the open, well done.

◄$$$ A SIZEABLE GOLD SHIPMENT DISAPPEARED FROM AN AIR FRANCE FLIGHT TO ZURICH. THE STORY IS ALMOST FUNNY. THE LONDON AND SWISS BANKERS ARE SO DESPERATE FOR GOLD THAT THEY MIGHT RESORT TO STEALING IT IN FLIGHT. OFTEN THE BANDIT THIEVES ARE IN CHARGE OF THE INVESTIGATION. $$$

Expect zero followup on the story of a gold heist at 30 thousand feet. The London bankers could easily hire MI6 to manage the thefts. London is short on gold, like from the German repatriation request that must be honored. The Swiss bankers could also hire a similar crew to manage the project. The Swiss are short on gold, like from stolen Allocated Gold Accounts that must be replaced. No investigation would occur, in the interest of national security, when perpetrated by the highest levels of government or their handlers. Actual gold production is messy and time consuming, compared to more efficient thefts in mid-air. The criminal deeds are occurring more often in broad daylight thefts. See the Russia Today news article (CLICK HERE). It is always good to remember the three groups immune from law enforcement, whose criminal cancer grows unchecked. They are the church, the big banks, and the government security agencies.

◄$$$ SOUTH KOREA AND MALAYSIA SIGNED US$4.7 BILLION CURRENCY SWAP DEAL. THE BILATERAL SWAP FACILITIES ARE WORKING TO FORM AN EFFECTIVE WORKAROUND TO USDOLLAR-BASED TRADE SETTLEMENT. THE WEANING PROCESS IS NEARLY COMPLETE. THE ASIAN REGION IS UNITED IN WORKAROUNDS AND COOPERATIVE SYSTEMS. THE USDOLLAR WILL ROT AND DIE FROM BEING IGNORED. $$$

South Korea and Malaysia signed a currency swap agreement worth $4.7 billion, according to the central bank in Seoul. The facility is designed to encourage bilateral trade and to curb currency swings. The pact allows the two Asian nations to purchase and repurchase each other's currency in amounts up to 5 trillion SKWon (=US$4.7 bn), equal to 15 billion Malay Ringgit. Not a small sum. The deal is valid for three years, renewable upon agreement. Greater flexibility for businesses will enable local currencies used for trades normally settled in US dollars. The Asian workarounds to USD-based trade are expanding. They form a lattice work of trade flows that bypass the US-UK control centers, cutting them off from hegemony abuse. The hidden message is Asian USDollar boycott. The latest agreement is the third currency swap deal South Korea has signed this month, all designed to guard against financial turmoil and encourage trade with other emerging markets. Asia's fourth largest economy forged currency swap deals in October worth $10 billion with Indonesia and worth $5.4 billion with the United Arab Emirates. Asia is very serious about moving away from the USDollar. Their next big decisions will center on diversification away from USTreasury Bonds that pollute their banking systems, the acid creating giant potential (imminent) holes in their reserves. See the Channel News Asia article (CLICK HERE).

◄$$$ THE SADDAM HUSSEIN FORTUNE OF 20 BILLION EUROS IS SUSPECTED TO BE IN A MOSCOW WAREHOUSE. IT HAS BEEN HANDLED AND DISPOSED OF, BUT SECRETLY. THE JACKASS GUESSES IT SATISFIED AN OLD IRAQI LOAN TO THE KREMLIN. $$$

A cargo of 20 billion Euros in cash (=US$26 bn) has sat unclaimed at a Moscow airport for six years collecting dust, possibly mold. Suspicions have circulated that it could be the secret fortune of Saddam Hussein. The stash has been kept under high security in a cargo depot, located on 200 wooden pallets each worth 100 million Euros. For the longest time, Russian customs has demanded the real owners of the booty present themselves to claim the fortune. Several bogus and half-baked attempts have been made to obtain it. However, no party has satisfied the authorities of being the rightful owner in claim. The Moskovsky Komsomolets newspaper raised the possibility that is was the private stash, money absonded by Saddam Hussein. The cash hoard is all in 100 Euro notes. The shipment was flown to Sheremetyevo Airport in Moscow from Frankfurt in August 2007, frozen at the site ever since unclaimed. Russian sources say the authorities have failed to untangle the identity of the hoard's ultimate owner, which strangely arrived at the airport without a specified recipient on the consignment. See the UK Daily Mail article (CLICK HERE). When asked, The Voice said the cash stockpile has been disposed of by Russian officials. But he would share details. It might have been used to settle some old Iraqi debts with the Kremlin related to numerous energy deals, perhaps by creation of a new long-term loan to perpetuity until the owner is definitively verified.

◄$$$ TEXAS DEFIANTLY DECLARED GOLD & SILVER AS MONEY IN A REVERSAL OF THE TAX ON COIN SALES. $$$

Texas has formally eliminated the sales tax on precious metals coins. The landmark legislation went into effect on October 1st in Texas. The measure completely eliminates all taxation of precious metals on the grounds that Gold & Silver are considered a currency. The state movements continue, not exactly gathering much momentum, but they will not go away. Gold & Silver are established as money in the Constitution. See the Money Web article (CLICK HERE).

## CHINESE FLEXES ITS MUSCLES

◄$$$ NOTE THE YAMASHITA STORY. KAREN HUDES CITED 170,000 TONS OF GOLD BULLION IN HAWAII. THIS STORY BEARS COMMENT. DEPLOYMENT OF GOLD CAN BE DONE FOR MANY PURPOSES, EVEN TO ALTER THE GEOPOLITICAL BALANCE OF POWER. HIGH VOLUME OF GOLD DOES NOT MEAN A LOWER FUTURE PRICE. THE WHITE DRAGON FAMILY GUTTED LONDON OF ITS GOLD IN A COMPLEX MANEUVER. THE GOLD COULD BE TAPPED TO FORM THE GOLD TRADE CENTRAL BANK CORE, AS THE BRICS NATIONS AND G-20 NATIONS FORM A NEW GLOBAL TRADE SETTLEMENT SYSTEM. $$$

Karen Hudes recently claimed that an abundance of gold exists. She claimed a bank in Hawaii has approximately 170,000 tons of gold bullion in storage, equal to nearly 68 years of world mine output. The hoard represents several centuries of ancient Chinese family wealth accumulation. See the YouTube vid eo (CLICK HERE). Many naive observers believe the abundance of ancient gold will keep the gold price suppressed. Not at all, since it depends entirely how it is used. Sure, if dumped on the market, but the usage to date has been the opposite. A tremendous hoard of gold exists, recently brought to bear on geopolitics in the last two years. The large gold volumes do NOT translate into a burden of heavy sales and fast falling price. The Jackass has three sources that confirm the White Dragons have $100 trillion in gold bars. They are an extension of a large group of ancient Chinese families. They have awakened, or else the great plan has turned a page that permits China to take its place in the next generation. Their gold hoard is enough to fill five football fields of pallettes at chest high. It is called the Yamashita Gold.

The White Dragon gold was stolen by Japan over many centuries from China in frequent raids, regional domination, even streaks of genocide. The gold hoard was hidden in the Philippines during World War II. A rough number on the volume for WD gold is 20 times Fort Knox. The 8500 tons once in Fort Knox Kentucky has been vacated, a euphemism for pilfered by the gang led by Clinton, Rubin, and Papa Bush.  The Voice tipped the Jackass off in late 2011 that a powerful Eastern Entity finally had at its disposal tremendous wealth, but offered few details. He said they took $50 billion on loan in cash against the gold to fund a major geopolitical project that would change the global power structure. They went hunting for gold in London. From March to July 2012, they drained 5000 tons of London gold. Further details were not directly told, but inferred conclusions were confirmed in brief but clear terms. The Voice hinted that my conjecture was correct, on how the London criminal banks had taken the Chinese WD gold and improperly put it to use as collateral on failed FX trades using leverage. They illegally rehypothecated ancient Chinese gold. In turn, the WD families demanded the return of their improperly used gold bars, since the margin calls were huge. The London bankers could not simply supply cash to meet the margin calls, since the margin was posted using Allocated Gold on Account that did not belong to them. London bankers were caught red-handed. The margin call required the London banks to relinquish gold in replenished form, causing a major drain. In four short months, London shed 60% of what Fort Knox once held.

Therefore, conclude the $50 billion in loans off gold collateral did not harm the gold price, but rather push the London bankers to the cliff's edge. Its deployment gutted London and weakened the US-UK Axis of Fascism. It started the process of gold heading East, which today continues as the Shanghai gold arbitrage. Reports indicate from Hudes that the White Dragon gold is being stored in Hawaii. My guess is Hawaii will not remain in the US union for many more years, nor will Alaska. As footnote, listen to the facts shared by Hudes, but give little weight to her assessment of a what constitutes a great investment. One is left to wonder if she works to keep her life free from attack by making silly conclusions like Gold is not good investment. As with Greenspan, listen to the topics and gather the information, but ignore the conclusions.

Some analysts have made the critical error of jumping to the conclusion that gold is at risk. In reality, the USDollar is at extreme risk from severe debasement via QE run by the USFed. A sudden overnight USDollar devaluation could result in an overnight 100% rise in the Price of Gold. The owners of the enormous gold hoard are making demands, like the New Global Lords. More likely, the emergence of the Gold Trade Standard will be created with several important devices and platforms. Imagine the Gold Trade Central Bank being set up using several thousand White Dragon tons of gold bullion. The WD officials might take USTBonds and force a debt default, then plow under the USGovt. The Jackass has a diametrically opposite viewpoint on the WD Gold. It will be used to kill the USDollar, to force a bust in the USTBond bubble, and to usher in the new age. They will ensure the new Price of Gold will be on the order of $7000 to $10,000 per ounce. It has already been decided upon, according to The Voice, who claims the entire multi-step project has made great progress and its completion is underway.

◄$$$ CHINA IS EXPLOITING TO THE EXTREME THE GOLD CONDUIT FROM LONDON AND ZURICH AS THEY REALIZE A TREMENDOUS OUTFLOW OF GOLD. NON-STANDARD METHODS ARE BEING USED IN THE LOGISTICS. THE PARADIGM SHIFT ACCELERATES TOWARD CLIMAX. THE CHINESE OWN MUCH MORE GOLD THAN REPORTED. THE NEXT GLOBAL CHAPTER IS NEAR. THE WESTERN GOLD CENTERS ARE TO BE PHASED OUT. $$$

As reported last month, the gold exports from the UK to Switzerland jumped from 85% tons to 1016 tonnes in the first eight months of 2013. That is a 12-fold increase on an annual basis. Huge red flag!! Some bullion market watchers attribute the huge increase to withdrawals or sales from the many Exchange Traded Funds based in London, a veritable pillage and betrayal of their investors. The other half of the story is a massive flow to Switzerland. The intrepid Koos Jansen reports the export of nearly 500 tons of gold to Hong Kong through July 2013. In turn, Hong Kong has exported over 1200 tonnes of gold to the Chinese mainland over the same period. Gold is on the move, being mobilized in a huge way, as the geopolitical power center shifts. Switzerland and Hong Kong are serving as a conduit of Western gold en route to China, probably to fill Chinese central bank reserves. See the USA Gold article (CLICK HERE).

More to the story as it unfolds and develops, a reliable source has revealed. Details are sketchy but are coming together in knitted form. The volume of precious metal moving East is an order of magnitude greater than what is commonly known even to the gold community. The enormous drain of London gold from April to July 2012 has continued. The shipments are usually off the radar, not using the typical cargo aircraft, as in not Brinks. The destinations are both Hong Kong and Mainland China. The logistics team managing these lifts are professionals with long experience in such operations. They honor discretion and privacy. The Chinese are not liberal in their trust of the Caucasian people generally, even as hired agents. The shipping project is complex and filled with risk. Two conclusions can be arrived at with growing certainty. This inside word corresponds to reports that China has accumulated over 15,000 tons of gold in preparation for the next chapter beyond the King Dollar specter. It will feature Gold Trade Settlement and and new Eastern Gold Central Bank. Think $5000 gold price, then $7000, later higher. Secondly, the New York and London and Swiss gold centers of power are being phased out, their golden lifeblood drained. The next news in domino form could be a momentous reform in the COMEX for its gold contracts. The Cash & Carry feature could happen soon, with gold futures contracts no longer offered, as in the end to gold price discovery in New York and London.

◄$$$ AUSSIE TRADE DEALS WITH CHINA AND OTHER ASIAN GIANTS ARE BEING PURSUED. EFFORTS ARE BEING MADE ON A SERIES OF BILATERAL AGREEMENTS ON FREE TRADE. $$$

Australian Prime Minister Tony Abbott has set a working target of 12 months to sign free trade agreements with Australia's three biggest export markets. They are China, Japan, and South Korea. At the East Asia Summit in Brunei, subsequent to the APEC summit in Bali, Abbott admitted a meandering on progress since 2005 to make the trade deals final, without resolution yet. He is confident of mutually satisfactory completion, given the target goals. Abbott said, "All of our significant trading partners are very conscious of the benefits to both of us of freer trade. Everyone accepts that in the end, everyone is better off the freer trade can be. All of us would prefer a swift and satisfactory conclusion of the Doha round, but if you cannot get a multi-lateral agreement, better to get a pluri-lateral agreement. And if you cannot get a pluri-lateral agreement, better to have a series of bilateral agreements. It is better to take small steps in the right direction in the absence of large steps. My philosophy is that if you cannot get what you want today, take what you can get and go for the rest tomorrow. In the end, it all comes down to jobs: jobs for Australians. That is what these meetings are all about. If we have more trade, we have more jobs, and if we continue to have strategic stability in our region, we will have more trade."

Details on agenda were shared. The APEC summit in Bali had focused on trade, while the East Asia Summit in Brunei had focused on security. Abbott went on to add many comments about friendly relations with Japan and China. He mentioned a desire to develop better relations with India. He commented upon past wounds with Japan during the war, and conflicts over whale harvesting. Then he praised Japan for its political pluralism. See The Australian article (CLICK HERE).

◄$$$ NEW ZEALAND HAS OPENED THE DOOR TO CHINESE COLONIZATION. PROPERTY PRICES ARE IN FAST RISE, BUBBLE MODE. NO IMMIGRATION QUOTAS ARE IN EFFECT. HALF THE CAPITAL OF AUCKLAND IS POPULATED BY CHINESE. $$$

The Auckland population in New Zealand has 48% Chinese. They are buying up houses in Auckland at 30% above valuation at auctions. Word has it that most Chinese migrating to NZ and students who arrive to study at NZ universities are all beneficiaries of the Chinese Govt in some form indirectly. Contact AngieJ has a friend who used to attend auctions and bid on houses. But he does not waste his time anymore. The auction rooms are flooded with Chinese buyers, who over-bid. A story made the rounds how 32 houses were sold to one Chinese buyer, with just a phone call to a single agent. The Chinese Govt has many routes to deploy USDollars in the newfound Indirect Exchange. They purchase assets large and small with USTreasury Bonds, here as third party buyers in the property market in Auckland. The natives will gradually be pushed out to locations the Chinese find undesirable. Witness colonization of the NZ capital city.

Real estate agents are selling houses in droves. Even the less skilled and dumb ones, as AngieJ described. However, mortgage brokers are hurting, due to more strict lending criteria that require buyers to post 20% deposit in down payment. It could be that New Zealand has intentionally tightened its lending criteria in order to shut out its own citizens, while opening the side door to Chinese buyers loaded with cash. AngieJ mentioned that the big buzz for some years now was that the bank cartel planned to exploit New Zealand first as the official guinea pig for establishing Chinese colonies. Incredibly, the NZGovt has reassured the public that the rise of house prices has nothing to do with the Chinese. So their credibility is fast vanishing. The impact is nasty even to those natives who wish to exploit the higher prices. Her friend sold their house for NZ$1.5 million, and one month later was unable to buy back into the market on home loan qualification. The competing Chinese Kiwis have become dominant, shutting out the natives of their own housing market. Witness the inner dynamics of active colonization and displacement, meaning removal of the natives on a gradual basis. She surmised in conclusion that the NZ urban housing bubble would not go bust until the USTBond market collapses. The Chinese are buying up NZ capital homes at a terrifying speed before this happens.

It seems like the Chinese are colonizing NZ using USDollar reserves. The mismatch is that the USTBonds will be devalued later. But until then, they are pushing up the NZ housing market. A big gap down comes in a few years. The NZGovt must be encouraging the process, paid off in the backrooms. They are not imposing any immigration quotas. At least New Zealand is located close to New Guinea, for what that is worth, if they are guinea pigs. The land is rich and bountiful. The NZEconomy is a massive supplier of milk, wool, and lamb meat, with enormous supply of fresh water. The nation could supply ample fishing industry and a naval base to China in the long run. Always keep in mind that NZ is supplying a steady stream of passports to the same immigrant predators. Thanks to AngieJ for her contribution.

◄$$$ THE START OF CHINA'S GOLD MINER BUYING SPREE COULD BE NIGH. THE SPREAD TRADE TO GO LONG GOLD METAL BUT SHORT THE MINING STOCKS COULD BE CLOSE TO AN END. AT ROCK BOTTOM PRICES, THE MINING SHARES ARE APPARENTLY ON THE CHINESE RADAR. THEY BEGIN WITH A KNOCK AT THE IVANHOE DOOR. THE JACKASS BELIEVES THE MINING STOCKS WILL REMAIN DOWNTRODDEN, PICKED UP FOR PENNIES LATER. $$$

In October of 2012, Hugh Hendry of Eclectica Asset Mgmt proposed a very simple investment thesis: long gold metal, short gold mining equities. The GDX fund of scattered mining stocks is perfect, since Goldman Sachs has a habit of sitting on the fund for basic suppression functional delight. Hendry pointed out the risk of confiscation for mine properties, a longstanding Jackass concern. He chooses gold ETFunds, gold futures, or gold bullion.  His strategy has made a substantial double digit return even while the COMEX gold price was flat or falling. It is unpopular, since it rides the GSax downslope wave on a short gold surfboard. The time is coming to an end for the trade though, following a 50% mine sector selloff.

The gold miner stocks have become attractive to those with deep pockets filled with reserve fiat paper like China, anxious to rid themselves of the toxic USD scrilla. Last month, The largest Chinese gold company, China National Gold Group Corp, began talked with Ivanhoe Mines about buying a stake in the company, or one of their assets. See the Zero Hedge article (CLICK HERE) and Wall Street Journal article (CLICK HERE). The Hendry strategy is consistent with the aversion to mining stocks espoused by the Jackass since early 2008. Although China might pursue more mining firms in acquisition, my belief is the sector will remain suppressed, and bought up for pennies by either China or large global mining firms whose output is curtailed. It would not be a surprise if Barrick went wild with narco money in the acquisition trail.

◄$$$ AN AMBUSH TO OBSTRUCT A MINING FIRM ACQUISITION COULD HAVE TAKEN PLACE IN SINGAPORE. A HARDBALL TACTIC MIGHT HAVE BEEN USED TO TAKE DOWN THE SHARE VALUE IN ACQUIRING FIRMS LIKE LIONGOLD IN ORDER TO PREVENT THEM FROM TAKING OUT CHEAPER SOUTH AMERICAN ASSETS. THEY HAD PURSUED MINERA IN A TAKEOUT. JUST A THEORY. $$$

The Singapore Exchange suspended Blumont, LionGold, and Asiasons after their share prices plunged. The SGX is the largest SouthEast Asian bourse. The declines were impressive. Blumont fell 56%, LionGold fell 42%, and Asiansons fell 62%. Trading was halted for their shares, despite any formal circuit breakers being in place. The trio have been on an acquisition tear. Last month, Blumont agreed to invest A$116 million in Australia's Discovery Metals Ltd in a deal that could give it control of the copper producer. The Blumont shares had risen over 11-fold in the current 2013 calendar year, making their shares richly valued currency useful for buyouts. The SGX officials have been prompted to investigate the stock surge, which likely added to the decline. LionGold (symbol: LIGO) was in talks to buy as many as three gold mining assets. LionGold jumped 46% in August alone. They are the largest holding in junior index GDXJ at about 5% weight. This company has only been around for about a year and a half, already the largest holding in GDXJ in a suspicious phoenix rise. Last month Asiasons bought a stake in US-based oil & gas producer Black Elk Energy Offshore Operations LLC. Asiasons reached its highest ever closing price on October 1st. The three stocks might be Chinese fronts, and if so, a crafty maneuver.

The targets are many. Raw material producers and energy companies are the worst performing stocks on the MSCI Asia Pacific Index this year. Gold miner Newcrest Mining (NCM) tumbled 50% so far this year, the object of a big A$6 billion writedown on its assets in June. Whitehaven Coal Ltd dropped 46%, leading losses among energy producers. Next consider a motive and hidden hand. These three companies were prepared to acquire assets. Their shares plunged and were halted. Perhaps they were smashed in order to wipe out their capability to acquire assets. LionsGold was busy, ready to acquire Minera out of South America. It is pure speculation. It is possible the three companies were discovered as fronts for Chinese money. The Chinese might have been bidding up the penny stocks for acquisition purposes, leverage of a different sort. With an inflated stock they could use its shares to acquire cheap mining assets in a new sphere of influence, South America. The Andes form the longest mountain range in the world, incredibly rich in mineral resources. Perhaps the Western bank cartel got wind of the pattern and made some phone calls, then conducted some GSax styled naked shorting of their stocks. It is not conceivable that the Anglo Powerz would permit the Chinese to go on endless shopping sprees to buy cheap mining assets so close to home. See the Bloomberg article (CLICK HERE). As footnote, the speculative argument is not a Jackass idea, but the source cannot be tracked. Too much information directed to the valued INBOX.

◄$$$ SPROTT JOINED FORCES WITH LARGEST CHINESE MINING COMPANY IN $110 MILLION DEAL TO BEGIN AN INVESTMENT FUND. $$$

Sprott Asset Mgmt has announced a $110 million deal to launch a new offshore fund with Zijin Mining Group, the largest Chinese mining company. The deal calls for Sprott to assist Zijin with acquisitions of top metals mining companies. The targets are to be publically listed equity and debt instruments of gold, other precious metals and copper mining companies. The announcement has potential positive implications for junior and mid-cap mining shares, like to cushion their steady decline. More importantly, China is pursuing gold production capacity. China wants to own gold mine output in a strong steady stream. All relevant regulatory approvals have been received in Canada and the Peoples Republic of China. The Fund has been initially seeded with US$100 million from Zijin and US$10 million from Sprott. The conglomerate Zijin Mining Group Company Limited is the largest gold producer in China, and the second largest mined copper producer in China. It has listings on both the Hong Kong and Shanghai stock exchanges. The combination of Zijin technical strengths and Sprott investment expertise will prove to be formidable. The Fund will be co-managed by affiliates of Sprott and Zijin. See the Silver Doctors article (CLICK HERE).

Some oddball analysts have stated that Eric Sprott plans to suppress mining stocks in the strategic move, that he is selling out. Doubtful. The Zijin acquisitions will be for mining firms, probably at very cheap prices, while the nasty suppression is being done by hedge funds, guys like Hendry, Goldman Sachs, and the market. The small fry mining firms are in big trouble for numerous reasons, like running out of cash, confiscation by foreign governments, worker strikes, and more. It is unlikely that Zijin will bid up mining stocks. They will bottom feed instead.

◄$$$ THE SHANGHAI FREE TRADE ZONE IS LAUNCHED. THE SHANGHAI  ECONOMIC HUB IS THE WORLD'S SECOND BIGGEST ECONOMY. IT PREPARES TO TEST LONG AWAITED ECONOMIC REFORMS. NUMEROUS LURES COME WITH A FREE TRADE ZONE TO ENCOURAGE BUSINESS AND CAPITAL FORMATION. THINK CHECKMATE FOR THE ANGLOS, SINCE CORPORATE PRIVACY WILL BE HONORED IN STRICT TERMS. $$$

The Voice wrote an email message with a single word, 'Checkmate' on it. He reminds the key factors. Nobody can touch offshore operators in China. The officials in Beijing will not roll over to any foreign pressure to reveal identities of tax corporations. Investment will pour in over time. The entire region will be secure. Shanghai is expected to launch the mainland's first free trade zone (FTZ) soon, reinforcing its bid to become a global financial center. Plans within the free trade zone are to facilitate cross-border commodity and capital flows. In such a zone, goods can be imported, processed, and re-exported without the intervention of customs authorities, hence the encouragement to attract capital. A major item is to come. Beijing would allow full convertibility of the Yuan currency in the pending FTZ, a move to help Shanghai in fast track transformation. Economists believe a FTZ in Shanghai could firm the actual implementation of the Yuan's full convertibility. It is expected to help Shanghai to compete against Hong Kong as the established financial, trading, and shipping center in the region.

The Shanghai free trade zone is large. It covers 29 sqkm (=11 sqmiles). Restrictions on foreign investment will be eased inside the area, and interest rates will be set by markets. The tightly controlled Yuan currency will be swapped freely for other currencies, according to China's State Council. In all, 18 sectors ranging from finance to shipping will have regulations loosened in the zone. Their aim is to spur trade by reducing costs via lower taxation, less bureaucracy, liberal labor laws, relaxed environmental laws, cheaper electricity, extensive research grants, no rental cost, and more. In effect, subsidies are realized along with pseudo current discount for the corporations. Every trick in the playbook is being done by China to increase competitiveness and to form a global financial center.

The giant city faces some competition from Qianhai, an experimental financial zone at Shenzhen within the Guangdong province. It serves as a testing ground for freer Yuan usage and capital account convertibility. The launch of a free trade zone in Shanghai is consistent with Beijing goals to make an operational plan for the full convertibility of the Yuan before the end of 2013. Next would be the liberalization of their Capital Account. See the BBC article (CLICK HERE) and the older South China Morning Post article (CLICK HERE).

◄$$$ VENEZUELA AND CHINA SIGNED MULTI-BILLION DOLLAR DEALS CENTERED ON ENERGY AND AGRICULTURE. RELATIONS ARE FIRMING. THUS THE MOTIVE FOR THE USGOVT TO BLOCK VENEZUELAN PRESIDENT ON AIR SPACE IN PETTY STYLE. $$$

Chinese President Xi Jinping and Venezuelan President Nicolas Maduro held talks at the Great Hall of the People in Beijing in late September. The nations strengthened their ties and forged new deals in continuation of the Chavez relations. The oil giant Petroleo de Venezuela (PDVSA) signed a $1.4 billion deal with China Petrochemical Corp to develop the Junin heavy oil bloc of heavy crude oil in Venezuela, which will produce 200,000 barrels per day. It is complex heavy crude. The China Devmt Bank announced a $5 billion loan for broad development in Venezuela. The line of credit will invest in private homes, agriculture, transportation, industry, roads, electricity, mining, health, science, and technology, according to Maduro. The repayments will come from oil revenue. The Export-Import Bank of China will lend Pequiven (Venezuela's state petrochemicals company) $390 million for the construction of a seaport. China will clearly continue to tap the nation's energy output for secure supply. Venezuela has also secured funding from Chinese banks for a mining survey around the country. Further cooperation will be given by China's CITIC Group to move forward with gold mining projects in the important Las Cristinas deposits in Venezuela. Maduro was involved in a diplomatic dispute with the USGovt when the Venezuelan president said his jet was banned from flying over Puerto Rico on his way to China. How petty! Rising above it, Maduro encouraged Chinese businesses to play a role in Venezuelan special economic zones. After the talks, Xi and Maduro witnessed the signing of 12 cooperation agreements on energy, education, agriculture, and construction. China slowly encircles the United States. See the BRICS Post article (CLICK HERE).

◄$$$ CHINA HAS SIGNED CONTRACTS TO LEASE FARMLAND IN UKRAINE. PAST FARMLAND COMMISSIONS HAVE BEEN SIGNED IN SOUTH AMERICA. THE EMERGING GIANT IS SECURING FOOD SUPPLIES. $$$

China will lease 3 million hectares (=7.4 million acres) of Ukrainian farmland for the next 50 years, as it strives to keep up with its rising food demand. The official Xinjiang Production & Construction Corp has signed an agreement with Ukrainian agricultural firm KSG Agro, which would see Ukraine provide 100,000 hectares to China. The land volume would eventually rise to 3 million hectares. The crops produced would be bound for two Chinese state owned grain conglomerates at preferred prices. China has a major struggle to feed its people. It accounts for 20% of the global population but controls only 9% of its land. Demand for food is rising as incomes have risen during the last decade. China must consistently seek new overseas agricultural partnerships to ensure its food supplies. Other areas across the globe have been commissioned for farmland. China has made substantial agricultural investments in South America. The Beidahuang Corp acquired 234,000 hectares to grow soya bean and corn in Argentina. Chongqing Grain paid US$375 million for soya bean plantations in Brazil and US$1.2 billion for land in Argentina to grow soya beans, corn, and cotton. See the Foreign Policy Forum article (CLICK HERE).

## GOLD EXODUS & ARBITRAGE

◄$$$ THE HIDDEN SECRETS OF MONEY REVEAL A PATH TO MARKEDLY HIGHER GOLD & SILVER PRICES. THE DOLLAR CRISIS OPENS A GRAND GOLDEN OPPORTUNITY. SOME KEY GLOBAL MOVEMENTS AWAY FROM THE USDOLLAR SYSTEM ASSURE THE RISE IN THE PRICE OF GOLD. AMAZINGLY TO THE UNSCHOOLED, OBVIOUS TO THE GOLD STUDENTS, MAJOR CURRENCIES LOST OVER 75% VALUE VERSUS GOLD SINCE YEAR 2000. $$$

Mike Maloney states his case for why the Gold & Silver prices are poised to rise dramatically. The greatly expanded money supply assures much higher precious metals prices in the next few years. The solution to the current ongoing persistent crisis is a return to the Gold Standard, along with a movement to re-establish free markets, free banks, free people, and sound money. Gold is a study of money supply and purchasing power, against a backdrop of currency debasement. Wealth is never lost or destroyed, merely transfered into other forms. However, capital can be destroyed and is being destroyed by the current USFed monetary policy. Maloney expects the world to have a new monetary system in this decade. Whether it is from nations repatriating their gold supplies, or creating bilateral trade agreements outside the USDollar sphere, these events are all deemed to be what he calls Golden Nails in the coffin of the USDollar system of trade and banking that is coming to an end. See the YouTube video (CLICK HERE).

The major currencies of the world have lost over 75% of their value versus Gold since year 2000, just since the turn of the new century. The race to debase is on, a global gathering storm. A big picture view of how Silver & Gold Bullion have performed versus 120 different fiat currencies in a little more than a decade is shown in a table for the referenced article. In the 21st Century, fiat currency has lost an average of 78.16% of its value to Silver. The distinction for which paper currency is the biggest loser to Silver thus far is the Congolese Franc. It has lost 99.89% of its value to the white precious monetary metal. The lost value is rather consistent. In the future years, the gains for Silver will outshine the gains in Gold. See the Gold Silver article (CLICK HERE). And Wall Street says Gold is a dead asset! It is store of wealth and valuable ballast in the liquidity seas.

◄$$$ CURRENCY WAR AND MASS EXODUS OF GOLD (FROM WEST SHIPPED TO EAST) COULD POINT TO A SUDDEN EXTREME REVALUATION OF GOLD MULTIPLES HIGHER, SILVER TOO. THE EMERGENCE OF THE BRICS NATIONS AS DOMINANT IN COMMERCE AND FINAL DEMAND WILL CHANGE THE GLOBAL EQUATION. REFLECTION IN ALTERED TRADE SETTLEMENT COMBINES WITH GERMAN REPATRIATION FALLOUT TO MAKE FOR A GRAND SHIFT IN GEOPOLITICAL BALANCES. THE BENEFICIARY WILL BE GOLD, WHOSE ROLE IN THE CYPRUS BAILOUT IS CURIOUSLY POSITIVE. THE BRICS NATIONS ARE PUSHING FOR ALTERNATIVES, PERHAPS A BROKERED DEAL IN PROGRESS. THE POSSIBILITY OF AN OVERNIGHT GOLD REVALUATION UPWARD IN QUANTUM JUMP IS RISING. $$$

Begin with some illustrative Cyprus bail-in math. In all, 10 tons of Cypriot gold were shipped to the overlords in return for $10 billion from European Stability Mechanism (ESM) and the IMF. The amount would suggest that physical gold collateral is worth $31,250 per oz in the current crisis. The market surely does not see such value in the corrupted COMEX & LBMA prices. A rebirth in the gold bullion bank management crisis occurred when the Bundesbank demanded the repatriation of German gold, obviously refused since it is gone. A deal was cut, a war in Mali was waged, and some cockeyed propaganda about a seven year deferral was announced on loudspeakers. Germany disrupted the world Gold market. Such are some of the Western marquee events. On the Eastern side, global physical trading patterns have reached critical tipping points. Emerging markets have arisen to form dominant players in final demand of some goods & services, as well as production, even oil demand.

The major agent of change, the big rub, is the lost interest by the East in maintaining the status quo. They do not wish to use the Western paper with its toxic bonds and Western banks with its harsh rules. As Jesse's Correspondent concluded, "They appear to be acutely aware of the fact that the Anglo-American exorbitant privilege has been funded directly by their [Eastern] sweat equity. Or to put it more bluntly, why would the BRICs want to settle their trades between themselves in dollars so that they can help to fund their own military encirclement that has consistently acted against their interests? The most likely scenario is that physical gold goes up to a really, really big number in some sort of global currency system reset, thereby completely collateralizing most of the sovereign debt out there." The only problem with that last thought is Western banks shed all their gold.

Think ultimate abuse of credit card to harness aggression toward the creditors themselves. Russia is suspected to be attempting a brokered deal toward a gradual currency compromise using their chairman role of the G-20 this year. The Anglo-Americans are resisting, but primarily for better terms of surrender in what the Jackass has called the Monetary War. The US Financial Army wishes for granted time to permit their Generals a safe retreat. They are bargaining for time to allow their favorite banks to square themselves in the face of the change, better described as a Paradigm Shift. During the climax phase, the Correspondent expects the gold mining stocks to rise significantly, but less than the Gold price. Governments will effectively seize them and turn them into public utilities, whose annual dividends will be set equal to a big percentage of current miner share prices. See the Cafe Americain article (CLICK HERE). Some students regard the Jesse Correspondent opinion to rhyme closely with the FOA/FOFOA theory, as in Friend of Another. The positive shock to Gold, in a possible overnight revaluation, is increasingly looking like to occur sooner rather than later.

◄$$$ A COMMENT ABOUT INDIA ON THE GROUND, WHICH IS PLANNING TO TAKES FIRST STEPS IN PRIVATE GOLD CONFISCATION. A VIOLENT REACTION WOULD COME. GOLD DEMAND WILL RESUME IN INDIA. $$$

Comments from EuroRaj, who has family in India and makes frequent trips to visit his mother and his wife's mother. They make long stays which enable close looks. He knows the Indian Economy very well, along with the Indian banking system and its financial structure, even its customs. He follows their gold market with a very close eye. He wrote, "If they try, the Indian people will tear their officials from limb to limb. They will threaten and bribe the temple guardians to authorize storage of their gold at the central bank for safety & security reasons while offering to pay interest. A hefty portion of the proceeds would be funneled into the guardians at Swiss bank accounts. They are capable of misdeeds like to stage a massive theft of the gold via underground tunnels, also with threats combined with big bribes for the guardians to look the other way. Indians are also very religious minded people and whether logical or not taking temple gold which belongs to the gods and giving it to a bank or government could be considered sacrilegious and could invite bad karma." The Indian people, unlike the Americans, are not passive and have no hesitation in attacking their leaders, even setting officials afire on a pyre or tossing them off palace balconies. An update on India. Gold demand in the fourth quarter is expected to increase by 15% to 300 tons, due to good agricultural season and a plethora of festival days. See the Reuters article (CLICK HERE).

◄$$$ INDIANS ARE ACTIVELY ARBITRAGING GOLD, JUST LIKE IN SHANGHAI. THE PHYSICAL DEMAND REMAINS STRONG, WHICH SUPPORTS THE ARBITRAGE. THE MUMBAI PREMIUM OVER THE NEW YORK GOLD PRICE HAS BEEN GROWING STEADILY, THUS CREATING THE OPPORTUNITY. A GREAT DRAIN IS IN PROGRESS, THE NEW YORK GOLD HEADS EAST TO INDIA. $$$

The global price structure in the Gold market has created a growing opportunity to exploit higher Indian gold prices. The arbitrage factor results in a Second Silk Road in gold, the Shanghai road with a pit stop in India. As background, since the Indian Rupee currency price is set by the FOREX for seeking equilibrium, it should not be a factor. The Indian Gold price is set by the global price, which should eliminate any disparity from the New York price. However, strong extreme factors are present, as in import duties and bank bans on gold product sales. The ongoing differential between Mumbai and New York on the Gold price opens up the possibility of arbitrage. Gold is purchased on the cheap in New York, in the heart of the corruption. Gold is delivered for sale at the premium value in Mumbai. Thus supply meets the great Indian demand, while the corrupt land in the United States loses its gold held in inventory. The chart shows higher Indian prices in USDollar terms, courtesy of the Indian Govt. For those with trading acumen and delivery logistics, with high security, these differences on a daily basis are arbitrage opportunities for tremendous profit. To the passive observer, it means the Gold price will continue to feel upward pressure while New York relinquishes its gold. In the process, New York will risk shutdown of the COMEX market itself, when gold inventory is critically low.


Timing notes. From January to June 2012, the European financial crisis was in full swing. During that time, the Indian central bank raised the duty on gold purchases from 2% to 4%. Between July 2012 and December of 2012, the Mumbai Gold premium ran between 3% and 5%. From January to June 2013, imports were squeezed hard. Duties on gold buys were hiked from 4% to 8%, while the Reserve Bank of India banned gold product sales through their banks. The price premium for Mumbai Gold was between 10% and 12% over the New York Gold price. In the last few months, the Mumbai gold premium has been steady at 13%. See the Economic Times of India article (CLICK HERE).

◄$$$ THE MOSCOW EXCHANGE PLANS TO INTRODUCE GOLD & SILVER TRADING SO AS TO BROADEN AVAILABILITY. THE PRECIOUS METALS WILL BE DONE ON A CASH BASIS, SETTLED THE NEXT DAY. IT WILL JOIN THE STOCK AND CURRENCY MARKETS FOR GOLD & SILVER LISTING AND TRADING HOURS, IN AN UNUSUAL ARRANGEMENT. THE POTENTIAL FOR ARBITRAGE IS OBVIOUS, JUST LIKE IN SHANGHAI. $$$

The Moscow Exchange will introduce trading of Gold & Silver as early as October. They wish to increase access and to reduce transaction costs. The exchange will make price quotes in Russian Rubles per gram, with minimum trades starting at 10 grams of Gold and 100 grams of Silver. Platinum and palladium contracts will start trading in the first half of 2014. Among emerging market nations, Russia is the second largest producer of gold after China. Russia has a different system. Most metals trading in the country takes place via the over-the-counter (OTC) market, dominated by their biggest banks like OAO Sberbank. The smaller players endure higher costs. Lenders like Absolut Bank ZAO in Moscow take on higher costs and risks because they turn to the market makers to close positions, a limitation. Ivan Fomenko is head of asset management at Absolut Bank, and offered an opinion on benefits. He said, "It [new system] is a cheaper way of tapping into Ruble denominated Gold. You will be able to buy, sell, swap easily. It is awesome." Operational costs will be lower, bringing in new players.

The Moscow Exchange is following the Shanghai Gold Exchange in listing precious metals to augment the OTC trading. The goal is to broaden the range of instruments available for hedging and liquidity purposes, and to open the door to more smaller investors and business types. The bourse will introduce swap agreements for the metals that are not available on the OTC market. It is an unusual move for the stock and currency exchange to list physical metals. Consider it a sign that first, Gold & Silver are currencies, and second, Moscow intends to challenge the New York & London criminal control centers. Banks can deposit or withdraw precious metals in the form of physical bullion bars, with delivery and collection to occur at a nominated Moscow vault, according to bourse officials. The contracts are also likely to appeal to brokers, producers, jewelers, and private investors in the long run. Here is the shot across the Anglo ship bow. Trading hours will run from 10am to 11:50pm Moscow time, with settlement taking place on the day after the trade. The closing time in Moscow translates to 3:50pm in New York City. Hence the Kremlin designed their market trading in Gold to coincide with Wall Street. If the Anglo Boyz play games, they have to deliver physical Gold bars the next day in Moscow. This is a big bold chess move by Putin. Trading will enforce settlement the day after trades are made, a radical challenge to the West. This is Cash & Carry which can potentially arbitrage and bleed the LBMA & COMEX in a painful manner, especially since Shanghai is making a very similar challenge on a larger platform.

◄$$$ THE DUTCH HIGH COURT RULED IN FAVOR OF A PENSION FUNDS AND THEIR INVESTMENT IN GOLD. SUPERVISION BY THE CENTRAL BANK BUT NOT FULL CONTROL IS THE RULING. $$$

The Dutch Central Bank (DNB) took a Dutch pension fund to court and lost in a high profile case. They objected when the fund invested 13% of its assets in gold. The central bank formally stated, "Gold is not to be regarded as a liquid asset, but on the other hand gold is a risky investment. The price of gold, according to DNB, is mainly determined by the demand for gold for use in jewelry and the confidence that investors have in gold. So the value sentiment driven and not driven by economic activities. Gold has no intrinsic value, is hardly industrial application, and does not produce cash flows. The value of gold is, therefore, dependent only on the demand for gold. Only as long as more and more parties invest in gold, the value of gold [should rise]. This can quickly lead to bubble formation, argues DNB." What a load of trucked in manure! Such deep stupidity laced with dense propaganda is their statement, which should lead to great shame. The Court on September 10th overturned earlier rulings that had led to the pension fund liquidating the majority of its gold position. The pension fund plans to sue for damages, such as court costs, legal fees, and possibly lost opportunity. See the translated article on the official ruling (CLICK HERE) and the limited Dutch news coverage article (CLICK HERE). Strike a blow against the central banks in Western Europe.

◄$$$ A NEW COLOMBIAN ATM MACHINE DISPENSES BULLION AND GOLD COINS. THE KIOSK DEVICES WILL SPREAD ACROSS COLOMBIA, FROM THEIR ORIGINAL MEDELLIN LOCATION. $$$

The Banoro Value Store in late September launched the first ATM in Latin America that dispenses Gold & Silver bars and coins. The company claims to be the first store of its kind to safely and securely buy and sell gold. At the ATM machines, a reverse process takes place, as people can withdraw gold or silver items using either a credit card or cash. They can acquire between 0.5 to 250 grams of pure metal units. The machines are located in Medellin, as part of the 9th International Mining Fair. The irony is thick, since Medellin is the home of the feared drug cartel (also legions of gorgeous women). The Banoro Value Store ensures that all metals withdrawn from the ATM are internationally certified. The ATM can be operated in five different languages, provides product information about the desired precious metal, and reports the updated international price of gold every 60 seconds. The ground breaking device is located in the Banoro Value Store in downtown Medellin, soon to be in shopping centers around the city. See the Colombia Reports article (CLICK HERE).

## GOLD PRICE POISED FOR QUANTUM LEAP

◄$$$ RICKARDS EXPECT GOLD TO SURPASS $5000 PER OUNCE IN PRICE. HE REGARDS QUANTITATIVE EASING TO BE A DISASTROUS  POLICY, FAR AFIELD FROM WHAT SHOULD BE THE CENTRAL BANK ROLE. ITS ACTION GOES AGAINST WHAT IT SHOULD FOCUS ON, NAMELY PRICE STABILITY. $$$

James Rickards of Tangent Capital Partners is making bold statements. He spoke to Hard Assets Investor in an interview. He urges a prudent path where the USFed ends QE and its monetized bond purchases. In the ensuing many months, the Gold price would reach $5000 to $7000 per ounce in his estimation. Rickards believes the USFed should drop its Quantitative Easing (QE) and just focus on controlling inflation, since QE will go down as one of the greatest economic blunders in history. He appears to be breaking ranks from the establishment, and making distance from the mainstream apologists. He said, "My own view, which has no chance of happening, is that they should stop asset purchases completely and start to sell assets and raise interest rates. [They should say:] We do not do stimulus. We are a central bank. Our job is to maintain price stability. We are not in the business of boosting the economy or propping up the stock market or propping up the housing market. [The Fed's rationale] has gone way outside the mandate. QE will go down as one of the greatest economic blunders in history. Over three or four years, we are looking at a much more serious risk of financial panic and collapse, with a rise in gold to significantly higher levels."

Rickards has turned idealist, hardly a pragmatist. The practical objective is to avert the collapse by continuing the extreme sequence of QE whisky and a ZIRP chaser. He warns that the Gold price could slip in the nasty unusual fallout from the USFed blunders, but its ascendance is assured. Rickards predicted the precious metal could reach $5000 to $7000 an ounce. He expects no monumental change in the USFed data in the next couple of weeks. It sounds like he has a large personal gold position (haha). See the Money News article (CLICK HERE).

◄$$$ CHINA SOON MIGHT REPORT ANOTHER 5000 TONS OF GOLD IN THEIR OFFICIAL RESERVES DECLARATION, ACCORDING TO JIM RICKARDS. SUCH NEWS WOULD BE INCREDIBLE AND CAUSE GLOBAL SHOCK WAVES IN THE FINANCIAL SECTOR. HE BASED THE FACTOID ON HIS SOURCES DEEP INSIDE THE PHYSICAL GOLD MARKET. HE FORECASTS A $13,000 GOLD PRICE. $$$

Rickards anticipates China will report gold reserves of 5000 tonnes next year, in a sort of synch with The Voice. Actually, my main source informs that China actually has already at least 15,000 tons in a fast growing reserves mountain. So they might admit to having one third of that higher real amount. Jim Rickards expects China will shock the world with a formal statement on their official gold reserves next April, with data to show 5000 tons of gold. He told the Agora Financial Investment Symposium, "I have spoken to a number of people who are very close to the physical market. I have done my own investigations. Every time I have an estimate and try to verify it, what I get back is that I am wrong on the low side [with the 5000 tons figure]." If the disclosure comes, it will cause a tremendous stir with terrific global shocks.

Imagine Russia making a similar disclosure at the same time. The rumors would be reeling with reports of imminent gold backed Yuan and Ruble competing with the Wester fiat toilet paper currencies. The Price of Gold would be forced higher, perhaps much higher, maybe double the current rigged price. Big Western Banks would either die suddenly (without gold in portfolio) or come to live suddenly (with gold in reserves). Questions would arise as to why the Chinese have done this secretly, and whether in collusion with the bullion banks. The answer is obvious. They wish to exploit the lower price. They wish to use the USTBonds, UKGilts, EuroBonds and leverage to secure more gold bullion. They are still buyers, and wish for the cheap price to continue. They have 100 times the patience of the American and British and European investors.

Rickards continued, "That should be an earthquake. Because even the gold deniers, the gold doubters, are going to have to sit up and take notice. Either the Chinese are dopes, which they are not, or people will start to get gold, which I think they will. The world of $4000 gold is the world of $400 oil, $100 silver, higher prices for copper, corn, wheat and everything else. In other words, it is a world of very high inflation in which the value of your retirement funds and your annuities have been wiped out." Notice the end comment about severe damage to the pensions generally, implying either severe debasement or even confiscation. He concluded that China will then command a seat on the top table of the central banks when it comes to laying out a future strategy that includes a gold-backed currency. But suddenly, Rickards goes off course and enters the Land of the Mainstream Landmines & Morons by suggestion of an IMF super currency, even a gold-backed super currency. The reality is that the IMF has entered the outhouse, not the corner office. The are the ignored office, the band of harlots fully exposed.

In fairness to Rickards, he has in the recent past made his position more clear than on this subject. He regards the IMF devices of Special Drawing Rights, even if reinforced, to be more of the same inflation paper flow with no real solution. If the IMF offers a gold-backed SDR basket of currencies, it would quickly kill its designers and participants. The pursuit of gold bullion to back the USDollar, the British Pound, the Euro, and the JapYen would kill all four nations in rapid style, from their sovereign bonds to their banks, a death blow. Not gonna happen!! See the Arabian Money article (CLICK HERE).

Elsewhere, Rickards is quoted to have said, "In the short-term, if investors want to buy a precious metal, I would buy silver because silver has more upside. We are seeing increased demand for solar, massive money printing, and this means huge upside for Silver. But for patient investors, they should know that in the future instead of Gold trading in the $1315 area, Gold will be trading at $13,150 [per oz]. There is going to be a spectacular rise in gold. We are getting closer to that big move as the Chinese begin to accumulate another 5000 tons of gold." The Chinese disclosure could turn out to be the key news item The Voice referred to in a private message last month, with no followup details. The Jackass gut believes he is instead referring to something much bigger, like a pathway from Chinese Yuan full convertibility, to a fully developed Capital Account, and a future indication finally of a gold-backed Yuan with a gigantic reserve hoard in gold bullion. Then later the kill shot will be cooperation with a Gold Trade Center Bank managed by the BRICS, enabling full blown Gold Trade Settlement with gold bank intermediaries. It is very doubtful that Rickards and The Voice are reading off the same page, but the paths detected might be parallel.

◄$$$ WILLIAM KAYE ATTESTS TO STRONG ASIAN GOLD DEMAND. HE POINTS THE FINGER OF A VERY LARGE SOVEREIGN GOLD BID BEING CHINA, WHICH STRUGGLES TO MEET HUGE DIVERSE NATIONWIDE DEMAND. KAYE BELIEVES A GOLD PRICE WITHOUT INTERFERENCE APPROACHES $3000 PER OZ. $$$

William Kaye is a Hong Kong based hedge fund manager with 25 years experience at Goldman Sachs in mergers & acquisitions. He follows the gold market from Asia with a keen perspective. Kaye concludes there is a massive sovereign bid in the Gold market at this price level. It is from China to meet an insatiable demand that is broadbased and deep. He began with comments on the characteristics shown that defy any bear market description. Without market interference, he estimates the equilibrium Gold price to be close to $3000 per ounce. What follows are his thoughts.

The orchestrated Gold market interference against gold is not over. Kaye calls the futures contract device on price discovery to be the dog wagging the tail of the real gold market, whose physical market side is still incredibly robust. He attests to very strong demand from China, India, and elsewhere in Asia, where nations have lost trust in the US financial systems. He warned, "Your listeners (and readers) need to be clear that we have none of the characteristics of a bear market in Gold. Gold is still very much in a bull market, but that is physical gold. The claims on paper gold exceed physical gold by roughly 93 to 1. Those are not my numbers; those are the Reserve Bank of India's calculations, and they are the ultimate insider." He emphasized how the buyers at central banks in China, India, and Russia find these prices favorable, as does his own hedge fund in Hong Kong. He described a strong buyer around the $1300/oz price, with a sovereign identity. He suspects it is China, which he believes is running out of gold to satisfy the huge nationwide dem and.

Kaye pointed out other significant factors which confirm strong physical demand to distort the Gold market, and the end game being near the finish line since the manipulators are exhausted. He identified the key unmistakable signals. "This [demand] is clear from the continued backwardation of gold, and the continued negative GOFO rates, which is basically the same thing. It is very obvious to me that the parties which are orchestrating this manipulation are running out of physical metal necessary to orchestrate the manipulation." He made some conclusions on the equilibrium price of Gold. The adjustment in price following the manipulation will be something to behold. It might not be far off in time. He concluded, "If we can just get it [this downside move] over with in the next couple of weeks, that would be fantastic. Then gold would migrate much higher and we would seek the equilibrium price for gold, which in my opinion is well above $2000 an ounce, absent manipulation, and possibly $3000 an ounce. It is going to be very good times for people who were able to endure the pain." He does not factor in the Allocated Gold Account scandal, with requisite replenishment of tens of thousands of gold tons, nor the Gold Trade Standard installment. Hence the move toward $5000 and $7000 per ounce, and beyond. See the King World News interview (CLICK HERE).

◄$$$ JOHN ING CONNECTS A FAILED USGOVT BUDGET RESOLUTION TO A PANIC SPARKED INTO GOLD. THE SAFE HAVEN TO ESCAPE THE THREAT OF A USGOVT DEBT DEFAULT IS GOLD, AND ALWAYS HAS BEEN GOLD. FAITH IN THE USDOLLAR IS BEING DEEPLY DAMAGED, WHICH MIGHT HAVE BEEN BY DESIGN. $$$

The USGovt shutdown has caused the USDollar to weaken even further. During the time leading to and including the shutdown, a 17-day period saw the US DX index decline by 2.3%, and has now broken the critical psychological level of 80. Convenient for the banker cabal, the Chinese were briefly on holiday during this timeframe. It left the door open for more serious manipulation in the gold market. This interference came amidst discussion of USGovt default potential, and conflicts over raising the debt ceiling. In the past, when the ceiling has been raised, Gold has enjoyed a runup in price. Ing commented on coordinated selling and intervention, wondering if the cabal would ever run out of bullets. He marveled at their resourcefulness and keen ability to exploit the quiet trading periods.

Ing said, "Both sides are digging in their heels. I am afraid that this game of chicken is going to have more dramatic implications for the US dollar, which in my opinion is still headed down. In fact, the US dollar can go significantly lower from here. I would not be surprised to the US Dollar Index quickly hit the next level of support at 76. Of course, that would have a positive effect on gold. You will see a scramble for gold in that environment. That is going to be a catalyst for gold ultimately reaching new highs. My expectation is that given foreign offshore money holds something like half of the US debt, as that money seeks a safe haven, the default currency has been and will continue to be gold. This will have a powerful effect on the price of Gold in terms of moving it higher, particularly since this move will be reinforced by the massive physical buying." Ing makes a great point, as he cautions that the bank cabal will find it increasingly difficult to manipulate the Gold Price lower, against the backdrop of the historic events that are currently unfolding and in rapid fire. See the King World News interview (CLICK HERE).

The Ing observation points out the many different doorways that could blow open and cause a rush of people, money, and wind. The Ing concept of USGovt debt finance crisis is one of a great many possible open doors to blow the Gold Price skyward. Many are the questions that are posed to the Jackass in client messages, often inquiring what will finally serve as impetus to drive the Gold Price much higher. My response is usually Gold Trade Settlement and conversion by the BRICS Bank of USTBonds into Gold, initiated by Western bank collapse and sovereign bond panic. My responses list the other potential forces, like the following, with a dream at end.

  • a broad Western bank system failure (recapitalize with gold)
  • a broad sovereign bond breakdown (seek gold-backed currencies)
  • severe impact on Gold & Silver mine output from lower official prices (decline to last years after going over the production cliff)
  • details on the Allocated Gold Account thefts (over 20,000 tons to replace)
  • admission of Chinese & Russian Govts owning 30,000 tons gold in reserves (imminent gold-backed currencies)
  • the Saudis announcing the end of Petro-Dollar (accepted non-USD oil payments)
  • diversification of bank-held FOREX reserves into Gold (fix insolvency)
  • an archipelago of de-centralized gold currency retail systems arise (like BitCoin)
  • a global resolution declaring the USDollar to be a narcotics backed currency
  • a UN resolution to ban the USDollar (funds USMilitary and CIA aggression).

◄$$$ STEPHEN LEEB FORECASTS A SUPER-SURGE FOR SILVER PAST THE $100 LEVEL, DUE TO THE FINANCIAL SECTOR IMPLOSION. BUT THE MAINSTREAM NEWS WILL STRESS ITS PHOTO-VOLTAIC USAGE. THE CHINESE ARE PURSUING GIGANTIC GOLD SUPPLY FOR RESERVES IN PREPARATION FOR THE USGOVT DEBT EVENTS AND THE ENTIRE FINANCIAL COLLAPSE SCENARIO. LEEB CITED THE 5000 TONS OF CHINESE GOLD ACCUMULATION, A SECOND SOURCE CONFIRMATION. THE UNITED STATES IS PLAGUED BY POOR LEADERSHIP AND BAD POLICY IN THE BEIJING VIEW, THE GOLD RESERVES TO BE DEFENSIVE. $$$

Stephen Leeb is a very bright fellow (founder of Leeb Capital Mgmt) with excellent vision shown over 20 years. He specializes in mega-trend stories. The following are his thoughts. The USGovt is under watch for their incompetence, as they dance at the edge of the precipice. Amidst the mayhem, Gold cannot find a strong bid. The Jackass believes because debt default would collapse structures, pulling all assets down. India has reduced its bid volume, strong-armed by government rules. The Chinese continue to buy with incredible aggression. China just imported a staggering 131 tons of gold through Hong Kong, but they obtain gold from other routes. Leeb's sources tell of the Chinese in progress to accumulate another 5000 tons of gold. The story is a second source confirmation of Rickards. It is highly doubtful the two men travel in the same circles. With urgency, China strives to gather as much gold as they can as fast as they can. The Chinese plan for the USGovt debt default, if not this time than a later time. They keep focus on the Gold Price for the next five years. My gut tells me the Chinese are forcing the debt default in a complex sequence.

China has really accelerated their need to acquire gold, but also their willingness to let gold prices soften. Loeb suspects the Chinese are involved with some paper selling with futures contracts, just to weaken the market a little bit. To be sure, the Chinese want gold, as fast and as much as they can possibly acquire. But they require large quantities of gold, in defensive posture for the trouble they observe in the United States. They clearly see the situation in the US as unsustainable. Everything from the energy policy, to ObamaCare, to outsourced industries, to endless supply wars, the United States does not have its act together. The Chinese have awakened to the urgency to accelerate their schedule in terms of accumulating large amounts of gold. Front and center right now, the Chinese want gold as a high priority, but they are not going to offer publicity to their goal. They will exploit any price weakness in the gold market for very large quantity purchases at highly discounted prices. This may frustrate long-term holders of Gold, but they must be patient while this plays out for many more months or even a few years. Sadly, natural buyers like John Paulson are out of the market, having already acquired their positions. These buyers are on the defensive, not willing to step in to support the price.

Leeb spoke of his expected price movements. The Gold price will rise, perhaps in spite of the China factor paradoxically. Global demand is rabid. He said,"But every single dollar lower in the price of Gold from here will be dwarfed when the price turns around and heads to the upside. It would not surprise me at all to see gold trading ten times higher than current levels years from now [as in $13,000 per oz]. So this is just noise we are seeing right now in the gold market. These are moves that are manipulated, and they are just positioning in gold. In the end there will be a dramatic reversal. With all of that being said, I do not expect gold to go much lower from here. Gold could test the lows, but we are talking about roughly 5% at the most. That is a very small number in the big scheme of things. Against that, we are talking about gold heading possibly ten times higher from current levels. So the risk/reward ratio has not changed at all in gold. In fact, it is dramatically positive and if anything, it is getting more positive." Notice the Leeb price target for Gold near $13,000 is in line also with Rickards. They speak in the same terms.

Leeb concluded that the mainstream press will emphasize the demand for photovoltaics, which is expanding enormously right now. They will choose not to give further emphasis to the deep trouble the financial structures are intractibly bound in with solution short of a Gold Standard return. He said, "Demand for Silver in this [solar] sector has nowhere to go except higher. This is going to drive the price of Silver over $100. I expect Silver to be stronger than Gold over the next year or two because of this explosive situation. It would not surprise me at all to see the price of Silver hit $110 in the next 24 months. The price of Silver is going to super-surge. But the mainstream media will be saying it is because of massive demand for photovoltaics. They will not be admitting that it is also because the financial system is going to hell." See the King World News interview (CLICK HERE).

## STRONG EASTERN GOLD DEMAND

◄$$$ CHINA'S GOLD IMPORTS FROM HONG KONG REMAINED ABOVE 100 TONS IN AUGUST (TYPICALLY A SLOW MONTH). HONG KONG GOLD IMPORTS SURGED TO THE HIGHEST EVER ON RECORD, MORE THAN THE MONTHLY GLOBAL GOLD MINING OUTPUT. CHINA'S UNSTOPPABLE GOLD IMPORTS CONTINUE VIRTUALLY UNCHECKED IN EXPONENTIAL GROWTH. THEY ARE PREPARING FOR SOMETHING BIG IN A SYSTEMIC SHIFT, FULLY SUPPORTED BY THEIR POPULATION. $$$

The slow August month was recorded, as China's net gold purchases from Hong Kong registered at 110.5 tons. They maintain fierce demand, each month above 100 tons for four consecutive months. Strong demand persisted for jewelry and bars in the nation posing as the world's second biggest bullion consumer. The July figure was 116.385 tons. All data came from the Hong Kong Census & Statistics Dept. The net gold imports to China from Hong Kong have totalled a whopping 744.818 tons for the first eight months of the year. The purchases from India stand at almost 600 tons, as of August. Any concern of a slowdown in China is without basis, since the August month is typically slow. The nation remains on track to comfortably surpass 1000 tons of known net gold imports for the year. Extrapolating the current pace over the full year would give a total import figure of 1084.5 tonnes via Hong Kong alone. Expect a higher amount, since the pace is accelerating. The full year would be more than the officially stated lowball figure admitted by the Peoples Bank of China. A curious data point comes with the dramatic surge in imports and re-exports to mainland China, where almost 300 tons were imported. The amount exceeds the entire global production of gold from mining for the month of August. Impressive for a quiet month, as the exponential rate is crystal clear. See the Reuters article (CLICK HERE) and the Arabian Money article (CLICK HERE).

◄$$$ SPROTT BELIEVES INDIA WILL DOMINATE THE SILVER MARKET IN 2013. THE NATION IS ON PACE TO CAPTURE 25% OF THE GLOBAL ANNUAL SILVER MINE OUTPUT THIS YEAR. A SHARP REACTION TO HARSH RULES ON GOLD PURCHASES HAS FORCED INDIANS TO JUMP THE TRACK TO SILVER. $$$

The fundamentals are changing, but they all favor silver. It will soon be reflected in the price. The most recent import data from the Indian Govt confirms that Indians are importing significant quantities of silver. Nikos Kavalis from Metals Focus Ltd shows that India imported US$1.78 billion worth of silver during Q2, a massive 311% increase over the same period last year. The volume equates to 3015 tons of silver in the first half of 2013, putting Indians on course to import on the order of 6030 tons of silver this year. If this trend continues through the rest of 2013, the highest silver imports in the past five years would be witnessed. An update. Koos Jansen of the Netherlands reported the Indian Silver imports on a year-to-date basis through July to be 3942 tons. Compared to last year on the first seven months, the growth is 138% compared to 2012. They imported 797 tons of Silver for the July month, a 14% rise sequentially from June and a 103% rise from a year ago in July 2012. Clearly the big surge was in the first quarter. See the Koos Jansen article (CLICK HERE).

The Indian import data indicates the arrival of silver bullion from all corners of the world to satisfy demand, the most notable sources being the United Kingdom, Switzerland, and China. Many countries are making their first silver shipments to India this year. The Indians have become an enormous new buyer of silver, partly in response to the stricter rules against Gold purchases. Take a look at global data. According to the Silver Institute, the world produced 24,478 tons of silver in 2012, meaning the Indians are currently on track to import 25% of the world's mined silver supply. The number could increase, given the forecasts for monsoon season. See the Sprott Group research essay (CLICK HERE). Also, see the Russia Today news article (CLICK HERE) on Indian gold smuggling in update. Nothing can stop demand, the old fashioned arbitrage method.

◄$$$ US-BASED GOLD COINS DEMAND IS DOWN 81% IN SEPTEMBER, THE LOWEST MONTHLY TALLY IN SIX YEARS. USMINT SILVER SALES REMAIN VERY ROBUST IN CONTRAST, DESPITE SOME SILVER BLANK SUPPLY SHORTAGE. $$$

The Syrian conflict motivated the bank syndicate to suppress the Gold price with even more gusto. The threat of USGovt shutdown motivated the cabal to suppress the Gold price further. The US gold coin sales fell markedly in September after several months of strong demand to exploit the bargain price. The September sales data was 81% below the same month in 2012. Total sales of American Eagle gold bullion coins on the month by investors were 13,000 ounces versus 68,500 in September 2012. The monthly average has been nearly 90,000 ounces for the first eight months of this year. The August figure was 11,500 ounces in August, very tame and the lowest for the month in six years. The highly seasonal demand is often weakest in the summer months before the extreme rise in the autumn months leading to Christmas. Americans buy jewelry for the holidays, while jewelers in India buy ahead of the Hindu festival of Diwali, a major gold buying event.

Silver was a different story. Sales of the American Eagle Silver bullion coins totaled 3.013 million ounces, only 7% below the 3.255 million ounces recorded in September 2012. A shortage problem has inhibited even greater sales, which require a deeper interpretation of sales data. The USMint has been limiting some silver coin sales since January, due to a lack of coin blanks used to strike the coins. See the Mine Web article (CLICK HERE).

◄$$$ ERIC SPROTT COMMENTED ON GOLD, WITH SHORTAGE AND RISING DEMAND, BUT WITH FALLING PRICE. THE NEW ENTRY IS CHINA, TO TAKE 25% OF GLOBAL MINE OUTPUT. THIS IS A DEEPLY CORRUPT MARKET COMPLETELY OUT OF BALANCE AND IN DEFIANCE OF PRICE MECHANISMS. $$$

Eric Sprott calls a spade a spade. He points attention at a deeply corrupted market where the fundamentals of Supply & Demand are short circuited by interventions in the most obvious manner, done in full view. He wrote, "Well it is really interesting. In fact it is funny you should start with 2011, because the most meaningful thing that is happened since 2011 (based on the statistics that come out of Hong Kong and those are the only ones we have), is that the exports of gold from Hong Kong into China have risen from under 100 tons a year in 2011 to 1200 tons a year in 2013, as we speak right now. That means that the Chinese are consuming an extra 1000 tons of gold. As you are aware, the gold market is a 4000 ton market. So we have a participant who stepped in to buy 25% of the gold market and the price of gold has gone down. I would challenge anyone to look at any other commodity where somebody bought 25% of it, whether its oil, or wheat, or corn, or any substance, where they would have expected that the price went down. It begs the question, I have written on this at least three occasions. The Western central banks have been supplying less gold because the supply of gold has not gone up. In fact, it was down last year. I am sure it will be down this year. I am sure it will be down next year. So how can we have these new entrants coming into the market and buying that much gold, and the price goes down?" Easy, explained by the most extraordinary and profound criminal applications to a market, fully sponsored and supported by the USGovt, the UKGovt, the USFed, the Bank of England, and the Euro Central Bank, with regulators paid to look the other way. Worse, the Exchange Traded Funds have been raped and pillaged for their supply, the GLD Fund even renamed a debenture. As footnote, the annual global output of gold is about 2750 tons, not 4000 tons.

◄$$$ THAILAND IS IMPORTING ON THE ORDER OF $40 BILLION IN GOLD PER YEAR. ONE IMPORTANT THAI GOLD BUYER HAS DOUBLED IMPORTS. THE CONSUMERS ARE LEGION IN THE NATION, BUYING GOLD IN SAVINGS. $$$

YLG Bullion Intl isThailand's biggest domestic gold importer. It expects to double purchases this year after the suppressed prices triggered a surge in demand for the investment metal. The company plans to import as much as 200 metric tons in 2013, up from 92 tons last year, according to CEO Pawan Nawawattanasub, a veteran in the gold and jewelry business for two decades. The company's shipments for January through June rose to 112 tons, accounting for 60% of the country's total. A ton is valued at $42.6 million. Demand in Thailand rose 58% in the second quarter to 26.6 tons, compared to a year earlier. The nation was the third largest Asian gold consumer, behind India and China in 2012, ranked seventh globally. The CEO cited individual investors as comprising half of gold purchases. She said, "There has been a complete change of customer profile. Huge volumes from retail investors are helping to offset a retreat from big investors." YLG Bullion sales rose to 836 billion Thai Baht (=US $26.6 bn) last year, from 2.6 billion Baht in 2004, a meteroic impressive leap from its first full year of operations. The family has other business interest in a brokerage firm. See the Bloomberg article (CLICK HERE).

◄$$$ MALAYSIA IS OFFERING ITS FIRST GOLD FUTURES CONTRACT IN OCTOBER. NO DELIVERY TO BE ALLOWED ON THE CONTRACT YET, WHICH WILL BE SETTLED IN CASH AND BENCHMARKED AGAINST THE LONDON FIX. IT IS A START. ITS SMALL SIZE WILL ENABLE THE SMALL INVESTORS TO PARTICIPATE. EVEN THE LESSER ASIAN PLAYERS ARE FORTIFYING THEIR DEFENSES AGAINST THE COLLAPSE OF THE USDOLLAR. $$$

Malaysia's first gold futures contract is planned to start trading on October 7th. The head of Bursa Malaysia Derivatives Bhd announced the launch. The small contract size at 100 grams will bear a low attractive price for small investors and merchants wishing to hedge. Bullion for delivery up to one year will be settled in cash and benchmarked against the London fixing. Although no delivery is yet planned, the contract is a start. Soon gold on delivery might be offered. The size accommodated the retail customers, while largest customers can simply use multiple contracts for their purposes. CEO Chong Kim Seng said, "The issues that are facing the United States, the government shutdown and the tapering policy, have an impact on the US dollar and interest rates. So it is important that people consider gold as part of their portfolio." See the Bloomberg article (CLICK HERE).

## GOLD SUPPLY FACES THE CLIFF

◄$$$ A LOOMING GOLD & SILVER PRODUCTION CLIFF HAS BEGUN TO ACCELERATE IN ITS PERILOUS ENCOUNTER. A MINING OUTPUT DECLINE IS EXPECTED TO HIT IN 2014. THE GOLD PRICE IS A MAJOR ISSUE. BUT ALSO A DECLINE IN DISCOVERY RATE AND REMOTE LOGISTICS HAVE PRESENTED ADDED PROBLEMS. THE LOWER PRECIOUS METALS PRICES ARE HAVING A PROFOUND IMPACT ACROSS THE INDUSTRY IN A RIPPLE EFFECT. $$$

In their outstanding analysis, National Bank Financial suggests a mining industry Production Cliff Profile was looming, but now is accelerating in approach. The term is used by NBF mining analysts for company profiles that are set to suffer a significant contraction in output. The mining firms do not have rapid enough new discoveries, and cannot develop the typically remote sites quickly either. Their report stated, "We generally reserve the term for senior producers since this condition applies to most of them, as it is a symptom of a landscape where geology presents natural barriers to reserve replacement. A declining discovery rate for very large deposits (>5 million oz) together with increasingly difficult development logistics, where companies explore further afield, present nearly insurmountable challenges to simply replace reserves let alone grow production. In some cases, significant revisions to 2014 mine plans as companies revisit cut-off grade strategies to navigate the current low gold price environment. As was the case in 2Q2013, the rate and magnitude of decline in gold prices was such that most producers could not respond quick enough. Certainly there is some scope for minor modification, but big changes are probably not on the cards until 2014 when new plans are being rolled out. [Positioning for the 3Q] ought to consider what is coming down the pike for 2014. NBF predicts that the Production Cliff is likely to hit in 2015. However, internal decisions that are a consequence to lower price could result in an acceleration of the decline thesis starting in 2014, well before the previously forecasted market drop-off in year 2017."

Tough decisions must be made. More impairment charges will come, from properties suddenly no longer profitable. More reserves will be written down. Mining firms must respond quickly to a quantum drop in Gold & Silver prices, a warning the Jackass gave three or four months ago, in a exchange with SRS Rocco. He expected a slow reaction, which would be damaging. We agreed. The NBF research indicated mine output in 3Q2013 will be unimpressive, while cash balances are being further depleted. Both lower metal prices and stricter cut-off grades have made an impact on decisions. Recent quarters are reporting sequential declines in Gold prices, below the free cash flow threshold for many producers. NBF acknowledged that firms are not responding quickly enough. They have longer time horizons for planning purposes. Hence expect more reserve writedowns, more budget cuts, and more production declines as companies target higher grades to drive margin expansion and conserve cash. New high capital intensive project have been delayed, shelved. Quality dictates (higher grade, easier access) over quantity, thus lower output will be seen with a keen eye on profitability. Mining firms will focus on cutting overhead costs, like administrative that include closing down some regional offices.

A quick survey. Kinross Gold is far along with its cost cutting initiatives. The firm has delivered four consecutive quarters of strong operating results. Franco-Nevada remains one of a few mining companies where the cash balance is expected to grow. The structural issues plaguing the gold sector will be a strategic advantage for Franco, since it is locking in more deals at attractive metrics. At Agnico Eagle, the prospect of a declining cash balance, with further expanding credit lines, might not be received well at quarterly earnings times. See the Mine Web article (CLICK HERE).

◄$$$ THE RUSSIAN NATIONAL GOLD OUTPUT ROSE SHARPLY by 12.2% IN THE JANUARY TO JULY TIMEFRAME, AIDED BY SCRAP OUTPUT. RUSSIA'S GOLD INDUSTRY IS HIGHLY FRACTURED (DE-CENTRALIZED), WITH OVER 600 COMPANIES WORKING IN THE SECTOR. $$$

Gold output across the entire Mother Russia advanced sharply by 12.2% on annual basis to 122.041 metric tons in the first seven months of this year. The Union of Russian Gold Producers gave the breakdown for the January to July period. The country's gold mine production rose by 8.9% on annual basis, to reach 102.435 tons, while its scrap gold output rose by 87% to reach 7.9 tons. The rest was from miscellaneous sources. Three mining companies were dispatched to foreign countries, producing 2.516 tons of gold. They were Highland Gold Mining with Novoshirokinskoye Mine in the Trans-Baikal region, and the two companies Polymetal-Albazin Mine in the Khabarovsk Territory, and May in Chukotka.

Gold Miners Union reiterated its forecast for gold output in 2013 at 208 tons, while the total of production extraction including secondary sources will increase to 234 tons. Mother Russia produced 225.846 tons of gold last year, up 6.8% over year 2011. The current growth is expected to come from increased underground gold mining, due to mines commissioned in 2011 and 2012 reaching capacity production levels, and new mines being commissioned this year. Russia's gold production has increased by 38% since the collapse of the Soviet Union in 1991. The development of large gold projects held by the leaders such as Kinross Gold and Polyus Gold are projected to be the main marginal contributor to the increase in Russia's gold production. Polyus increased output last year by 12% to 1.68 million ounces, while Polymetal output jumped 33% to 589,000 ounces. Russia is considered to be the single largest unexplored gold region in the world, with large deposits only recently being discovered. It possesses massive land expanse that covers eleven time zones. The United States and Canada have three and four timezones respectively. See the Scrap Register article (CLICK HERE).

◄$$$ INDIA'S GOLD REFINERIES ARE HUTTING BULK OPERATIONS. SUPPLY THROUGH RECYCLING OF USED GOLD DECLINED TO AROUND 10 TONS IN THE SECOND QUARTER OF THE CURRENT CALENDAR YEAR, LESS THAN HALF THE USUAL VOLUME. SUPPLIES ARE EXTREMELY TIGHT. THE GOLD SUPPLY CHAIN STRAIN IS EVERYWHERE. $$$

According to the domestic trade group Assn of Gold Refineries & Mint, the gold refineries of India are operating at only 25% of installed capacity. They suffer from acute shortage of used jewelry, partly due to zero imported gold in the last two months. As a result of the stagnant Gold price, required scrap sales have declined dramatically. The weak domestic demand was met only through existing inventory and recycled gold. The result is a grand threat posed in the last few weeks to the national array of refineries. The facilities must shift to processing of dorey bars, the cast bar at 90% purity from the first stage of gold purification. The Indian Govt curiously liberalized dorey bar import early this year, recently seen as the more economical source of supply. The system is a mess, since refineries have unusual challenges to accept dorey bars, due to procedural hurdles. Separate licenses are required from the directorate general of foreign trade. Refineries will by force make the shift. Supply through recycling of used gold declined to around 10 tons in 2Q2013. In the third quarter, supply through used gold is expected to decline further, making for less availability of scrap for recycling.

A nasty sequence is at work. Government strictures have curbed pure gold import. Import duty has been hiked to 10%, with 20% of imported volume to be channeled to the jewelry industry. The public believes the gold supply will remain under pressure, the therefore hold back from disposing of older jewelry items, resulting in reduced supply of used gold. The Indians are recently trading items in upgrade on a more frequent basis, especially for hallmark types. They are requesting polish and refurbishing more lately. The trend is expected to continue into the fourth quarter. The distress has spread to the scrap supply channel. Overall consumer sentiment is weak in the jewellery markets. The refineries are in a major bind to engage in profitable business. "Gold refineries are on the verge of closure due to non-availability of used jewelry. Melting of jewellery scrap to convert into 24-carat gold has, therefore, become a loss making process. Operational capacity has declined to an alarmingly low level," said Harmesh Arora, managing director of NIBR Bullion. See the Business Standard of India article (CLICK HERE).

◄$$$ JEWELRY TELEVISION APPEARS TO BE RUNNING OUT OF STOCK IN ITS PRODUCT LINES. THE US-BASED STATION IS RESORTING TO SELLING BRONZE IMITATIONS (COSTUME JEWELRY). THE SIGNAL IS CLEAR, BIG SHORTAGE. $$$

In the United States, a company called JTV (Jewelry Television) operates. They have been on the air for years and sell tens of $millions annually in jewelry and gemstones, with several regions in presence. They hit an abrupt wall. In the last year they have started in earnest to promote sterling silver, sometimes with gold plating. A sinister ploy is their practice recently. They are inducing, not exactly tricking, customers into buying bronze jewelry. It is better described as high quality costume jewelry for kids. Other alternatives are so much better, even copper pennies. The point is JTV is one of the largest retailers in the United States, no longer with adequate gold supply. Thanks to a HTLetter subscriber for the story.

◄$$$ COMEX GOLD INVENTORIES PLUNGED IN LATE SEPTEMBER TO A NEW LOW WITH MASSIVE WITHDRAWALS. THE IMPACT WAS TO THREATEN A TOTAL DRAIN ON THE MAJOR BULLION BANKS. $$$

COMEX had enjoyed a respite in late summer, but no more. Their Gold inventories suffered a huge withdrawal from an HSBC withdrawal, which took the total warehouse stocks to a new low not seen since 2006. A sizeable hit of 173,358 oz gold was withdrawn from the HSBC Eligible category took place a couple weeks ago. The single withdrawal was so massive that it would have totally wiped out Brinks, HSBC, Scotia Mocatta, and most of JPMorguen Registered inventories. See the Max Keiser article (CLICK HERE).

## SHALE & MINING RETREAT

◄$$$ THE GREAT SHALE EXTRAVAGANZA CONTINUES TO BE SCALED DOWN AND PHASED OUT, REVEALED AS A PONZI SHAM. SHELL OIL WILL ABANDON ITS COLORADO SHALE PROJECT. THEY ARE NOT ALONE. DESPITE CONSISTENTLY HIGH OIL PRICES, SHALE DOES NOT PAN OUT. THE GEOLOGY IS TOO DIFFICULT AND THE PROCESSES ARE TOO ENERGY INTENSIVE. $$$

Royal Dutch Shell has decided to abandon its 800 billion barrel resource of shale-based oil in Colorado after 31 years of experimentation. Shell stated a desire to shift resources toward profitable opportunities. The experts estimate the EROI of oil shale at best is 2:1 ratio, according to Cleveland Cutler. Shell claimed the Energy Return on Investment ratio of around 3 to 1 at one time. While the ratio seems good, consider that the global economy is currently running on crude which at a ratio around 20 to 1. Such is the sham of the shale story, six to seven times less efficient than conventional oil projects, but with Obama Admin cheerleading. Shell is not the only one to withdraw. Another international major, Chevron dropped their oil shale project last year. Slowly, the USGovt-led hype of the trillions of barrels of supposed US oil resources may indeed by losing some its muster. It is a grand deception and lie. Furthermore, the big oil firms are gradually exiting the shale projects by slowly and silently selling assets, guaranteeing no quick return on projects. Deep pockets, sophisticated technology, and high oil prices cannot seem to unlock the billion barrels of recoverable resources. The potential prize is huge, but the costs are too high. Consider advocate Porter Stansberry another backer of a losing horse.

The Denver Post revealed the hitch as obstacle to be the requirement of a dedicated power plant to enable full scale production. Rock structures must be heated to release the waxy hydrocarbons embedded in them. In this pilot project, the subterranean rock was heated for three years before liquids were captured and brought to the surface for further processing. In addition, the need for large volumes of water are required, this in near desert conditions. Water is needed to cool power plants associated with oil shale extraction and for processing the extracted liquids. The decade of drought in the region exacerbated the problem. A technical lesson. Oil shale is a promotional term. Oil shale is neither shale, nor does it contain oil. It is better characterized as organic marlstone. It contains kerogen, a waxy complex hydrocarbon that must be extensively processed to convert it into a synthetic form of crude oil. Oil shale is often confused with oil taken from deep shale formations such as the Bakken in North Dakota. The oil is more correctly called Tight Oil.

The Shale story is a big disappointment. Consider its history relative to the oil price. Proponents of oil shale claimed in 1981 that it would be economical to process if oil were to reach $38 per barrel and remained there. Their threshold economical price kept escalating along with the price of oil all the way up to $80, claimed a 2008 study by the US Bureau of Land Mgmt. Today, the current Brent Crude world benchmark hovers over $100 dollars. The average daily price for the past three years has been fixed above $100. Despite the consistently high oil prices, Shell is abandoning oil shale development along with Chevron. The Shale Sham Story will be more clearly exposed by end 2013 and early 2014. The Obama Admin will backtrack or look like idiots. See the Oil Price article (CLICK HERE).

◄$$$ CHESAPEAKE WILL CUT A HUGE SLICE OF WORKERS. THE PHONY UNITED STATES SHALE STORY IS COMING UNDONE. THEY ARE THE LARGEST SHALE PROJECT DEVELOPER. THE SHALE SHAM IS A VICTIM BOTH OF THE ENGINEERING COSTS DRIVEN BY DIFFICULT GEOLOGY AND LOW NATGAS PRICES. $$$

A shakeup comes to Chesapeake Energy Corp. Under a new CEO Doug Lawler (formerly of Anadarko) the company has cut its entire natural gas vehicle team, with more layoffs likely soon. The firm has pushed for wider usage of natural gas vehicles. The dismissal of its entire 7-member team signals change in focus for the natural gas giant. The team worked to convert much of the Chesapeake commercial fleet of trucks to run on natural gas. Lawler has ordered a comprehensive review of all areas by November 1st. The emphasis will be on return of investment. Former CEO Aubrey McClendon, who co-founded the company, had made a big commitment to asset acquisition binge. The company snagged US shale basin properties. The strategy backfired when the outsized debt amassed ran into headwinds for debt service when the natgas price decline struck in 2008. The large collection of assets in the portfolio could not be profitably developed. Conclude the the largest shale gas company is preparing to retrench in the Shale region, precisely when the national consensus regards shale energy as something of a savior for the USEconomy. See the Oil Price article (CLICK HERE).

Consider the entire movement, pushed by the hapless showmen at the USGovt, to be a grand national misstep. It will almost be funny to observe the Shale Story dismantled. The hype provided by the clown in the White House promoted it as an important pillar, when it is simply the latest link in a long chain of USGovt travesties. The Team Obama is as left-footed as Bush was simple-minded. The US leadership crew is losing credibility at every turn, from the promoted housing bubble to the TARP Fund to the USFed sanctioned hyper inflation to the USG budget impasse to the USMilitary wars for supply to false accusations of Iran nuclear programs to Libyan gold theft to obstructed Iran-Pakistan pipeline to Egypt puppet overthrown to Syrian chemical false flag call toward war.

Credit to Steve StAngelo (aka SRS Rocco) who nailed it a while ago with his detailed analysis of the shortcomings of shale projects. Yet another major milestone that foretells when the crisis hits, the United States will be forced to increase oil imports, not the other way round as touted by the consistently misdirected myopic propaganda pumped out by Wall Street. Keystone will be forced upon the US for its survival. The Voice put an emphatic exclamation point, saying "The US house of lies, deceit, fraud, and Hollywood orchestrated scheiss is sinking deeper and deeper into its own pit." The errors are as serious as the criminal activity. The predatory activity is both in the economy and the war fronts. The common theme is sacked capital and criminal drain.

◄$$$ THE JUNIOR MINING FIRM CASH CRISIS MOUNTS. NO QUICK TURNAROUND IS SEEN. THE SECTOR IS BEING TRANSFORMED INTO MINIATURE ZOMBIES. THEY ARE DYING. $$$

The Junior mining firm cash crisis grows worse by the month. No quick turnaround is seen for the firms as a near majority of Venture listed firms suffer from cash stores under $200 thousand. The key sector for exploration in a dominant nation like Canada cannot be sustained with so little cash. The number of exploration equities trading between C$0.005 to C$0.01 pile up, as in between half a penny and one penny. The do not even qualify to be called Penny Stocks. They are a cross between carrion and zombies. Kaiser Research has recent data on average junior working capital. Back in November 2012, the number of juniors with less than C$200,000 in cash stores was 632 out of around 1800 firms. In June 2013 the number grew to 751. At the turn of October, it grew to 816, about half the equities measured. This is not a sector downturn, but rather a famine. The August run was more like a fleeting drizzle, the waters shallow, sapped in just weeks. See the MineWeb article (CLICK HERE).

◄$$$ MEXICO PLANS TO IMPOSE A 7% TO 8% MINING TAX, LIKELY TO SMOTHER INVESTMENT. THE TELLTALE SIGNS POINT TO A SHIFT TO CHINESE INVESTORS OVER NORTH AMERICAN. $$$

Until the summer months, Mexico was one of the rare countries left in the world that chose not to impose taxes on mining production or profits. That has changed. A proposed 7.5% tax on Mexican resource companies, and as much as 8% for gold, silver, and platinum miners, is driving off investors and discouraging participants. Mexico has long had a 35% corporate tax that is enforced quite rigorously. Just when the fears of drug cartel dominance and government disintegration seeped into the investor psyche regarding Mexico, a surtax is coming to smother investment. The surreptitious plan is coming into view. Mexico could be facilitating equity ownership for Chinese investors at the expense of US investors, the former in upper level deals, the latter in discouraged equity ownership. Those who control the physical stock of gold control the price. Refer to the ore bodies below ground, and the equity shares above ground. The exit doors for the cabal are collapsing. See the Mining article (CLICK HERE).

## THANKS

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