From Dr. Paul Craig Roberts
The following is printed here with full credit given to Dr. Paul Craig Roberts who we have invited to appear on our show.
“The Assault On Gold — Paul Craig Roberts
For Americans, financial and economic Armageddon might be close at hand. The evidence for this conclusion is the concerted effort by the Federal Reserve and its dependent financial institutions to scare people away from gold and silver by driving down their prices.
When gold prices hit $1,917.50 an ounce on August 23, 2011, a gain of more than $500 an ounce in less than 8 months, capping a rise over a decade from $272 at the end of December 2000, the Federal Reserve panicked. With the US dollar losing value so rapidly compared to the world standard for money, the Federal Reserve’s policy of printing $1 trillion annually in order to support the impaired balance sheets of banks and to finance the federal deficit was placed in danger. Who could believe the dollar’s exchange rate in relation to other currencies when the dollar was collapsing in value in relation to gold and silver.
The Federal Reserve realized that its massive purchase of bonds in order to keep their
prices high (and thus interest rates low) was threatened by the dollar’s rapid loss of value in terms of gold and silver. The Federal Reserve was concerned that large holders of US dollars, such as the central banks of China and Japan and the OPEC sovereign investment funds, might join the flight of individual investors away from the US dollar, thus ending in the fall of the dollar’s foreign exchange value and thus decline in US bond and stock prices.
Intelligent people could see that the US government could not afford the long and numerous wars that the neoconservatives were engineering or the loss of tax base and consumer income from offshoring millions of US middle class jobs for the sake of executive bonuses and shareholder capital gains. They could see what was in the cards, and began exiting the dollar for gold and silver.
Central banks are slower to act. Saudi Arabia and the oil emirates are dependent on US protection and do not want to anger their protector. Japan is a puppet state that is careful in its relationship with its master. China wanted to hold on to the American consumer market for as long as that market existed. It was individuals who began the exit from the US dollar.
When gold topped $1,900, Washington put out the story that gold was a bubble. The presstitute media fell in line with Washington’s propaganda. “Gold looking a bit bubbly” declared CNN Money on August 23, 2011.
The Federal Reserve used its dependent “banks too big to fail” to short the precious metals markets. By selling naked shorts in the paper bullion market against the rising demand for physical possession, the Federal Reserve was able to drive the price of gold down to $1,750 and keep it more or less capped there until recently, when a concerted effort on April 2-3, 2013, drove gold down to $1,557 and silver, which had approached $50 per ounce in 2011, down to $27.
The Federal Reserve began its April Fool’s assault on gold by sending the word to brokerage houses, which quickly went out to clients, that hedge funds and other large investors were going to unload their gold positions and that clients should get out of the precious metal market prior to these sales. As this inside information was the government’s own strategy, individuals cannot be prosecuted for acting on it. By this operation, the Federal Reserve, a totally corrupt entity, was able to combine individual flight with institutional flight. Bullion prices took a big hit, and bullishness departed from the gold and silver markets. The flow of dollars into bullion, which threatened to become a torrent, was stopped.
For now it seems that the Fed has succeeded in creating wariness among Americans about the virtues of gold and silver, and thus the Federal Reserve has extended the time that it can print money to keep the house of cards standing. This time could be short or it could last a couple of years.
However, for the Russians and Chinese, whose central banks have more dollars than they any longer want, and for the 1.3 billion Indians in India, the low dollar price for gold that the Federal Reserve has engineered is an opportunity. They see the opportunity that the Federal Reserve has given them to purchase gold at $350-$400 an ounce less than two years ago as a gift.
The Federal Reserve’s attack on bullion is an act of desperation that, when widely recognized, will doom its policy.
As I have explained previously, the orchestrated move against gold and silver is to protect the exchange value of the US dollar. If bullion were not a threat, the government would not be attacking it.
The Federal Reserve is creating $1 trillion new dollars per year, but the world is moving away from the use of the dollar for international payments and, thus, as reserve currency. The result is an increase in supply and a decrease in demand. This means a falling exchange value of the dollar, domestic inflation from rising import prices, and a rising interest rate and collapsing bond, stock and real estate markets.
The Federal Reserve’s orchestration against bullion cannot ultimately succeed. It is designed to gain time for the Federal Reserve to be able to continue financing the federal budget deficit by printing money and also to keep interest rates low and debt prices high in order to support the banks’ balance sheets.
When the Federal Reserve can no longer print due to dollar decline which printing would make worse, US bank deposits and pensions could be grabbed in order to finance the federal budget deficit for couple of more years. Anything to stave off the final catastrophe.
The manipulation of the bullion market is illegal, but as government is doing it the law will not be enforced.
By its obvious and concerted attack on gold and silver, the US government could not give any clearer warning that trouble is approaching. The values of the dollar and of financial assets denominated in dollars are in doubt.
Those who believe in government and those who believe in deregulation will be proved equally wrong. The United States of America is past its zenith. As I predicted early in the 21st century, in 20 years the US will be a third world country. We are halfway there.”
Remember the words of John the Baptist, cfs!
Big Al
things = thing is
Big Al, I wish this box would be bigger.
Excerpt From Jim Sinclair http://www.jsmineset.com
You must, in my opinion, face whatever tax consequences there are and close your retirement programs. You are in clear and present danger of confiscation for questionable paper of whatever you hold in these type accounts. In a financial sense you are exactly what the ghettos in Germany and Poland were when they knew they should run but found any excuse possible not to do what was logically screaming at them to take action.
I am screaming at you from every pulpit I can find, with no personal benefit that you must take various actions and take them now. The fact the IMF, a major international body, had the audacity to demand that Cyprus nationalize all it pensioners and confiscate large percentages of the account values should be like a flashbulb going off in your eye to wake you from your sheeple slumber.
Bite the bullet.
Pay the tax.
Get your assets back.
Get out of the system.
Or, Bobby, do what you can to make the system better!
Big Al
I saw Sinclair’s piece. I understand the threat he is worried about. Not only is there a tax consequence, but also a penalty if you are not close to retirement. I would be more cautious and suggest taking some out this year, some out next year and then some in future years. Thus reducing the tax consequences and gambling that the currency collapse will take several years. I am guessing, and it is a guess, about 4 or 5 years. One can watch carefully and speed up or slow down the exit as circumstances warrant. My best guess is that the government will treat IRAs and 401Ks as they do social security. i.e. replace part or all by treasuries. I don’t believe the US will ever default, because they do have a printing press and will print as necessary. The problem arises when other countries refuse to accept US dollars in exchange for goods and services, and that is a long way off. First they will demand more and more dollars for a given good or service; they may never absolutely refuse the dollar.
cfs..i have to disagree , 4 to 5 years , i think it is more like 1 to 2 years..but just my opinion ..no i dont believe the US will default by choice , they will be forced to default when the rest of the world turn their backs on them , look what’s going on with the BRICS & other nations, they are fed up with been dictated to by the US….
The US = Rome #2…………………………
hello IRISH…..I agree with you……your view is from what is european and closer to the street ,,,so to speak…..Americans are asleep at the switch, and are about to witness the Roman empire experience first hand……The circus, is in full swing….the arenas are full, and their food is supplied by the caesars……(or govt.)….they have no insurance(gold)…. and are at the mercy of the fools in Washington DC…and the digital accounts will be transferred to the banksters……OOTB….
BTW…..CFS….love all your hard work and communications and updates….thanks…OOTB….
You’re welcome.
I read a lot and never cease to be amazed at the lack of information that reporters often have, and the spinning. For example about Cyprus, I think everyone has been sidetracked by the Russian link, dubious origins of the money that was in Cyprus banksI have been digging hard.
Fact: 9% of the total money in Cyprus banks was in accounts owned by Russians.
Most of that I would guess was legitimate. Can’t find out actual legitimacy. The press has really been fed a series of untruths to try and justify the savings grab.
It really bothers me that a grab like this can be done by those in power, just because they have the power. No law passed, no court decision. Just a grab with NO precedent. No power of redress. Nothing the person, who could have had his life ruined, can do legally. Unbelievable.
Listen to the Daily Editorial tomorrow, cfs, with Bob Moriarty.
Big Al
Jerry (OOTB), Irish:
Welcome back, Jerry. Yes, I agree. Things are moving much faster now. I am thinking 2+, 3 years. But, we know where it is going and it boggles my mind that people dont get it. The US is financially (trading, etc) very vulnerable to the emerging powers and we fiddle while this thing comes UNDONE. And, I AM NOT referring to the song by THE GUESS WHO :).(She’s come undone0 circa 1969.
Jerry,
A BIG DITTO on that!
If you believe The US is a basket case just come north to Canada, we haven’t experienced the property crash yet and they think all is rosey because the government has been giving them those IQ lowering pills for free and telling them in the morning they will be much happier and it’s working. DT
Sure looks that way, Mr. Irish!
Big Al
Gents, I was thinking 4-5 years but after reading Jim’s article and Dr Roberts above, I see the light, Jim said: ACT NOW, to me that means NOW.
Dear CIGAs,
You must now act to exit the system
This was also clear “You ignore me at your own severe personal risk.”
Irish:
I heard recently, from a chap from Holland, that the EU was really a vehicle to fight evil, and that we, in the Western world, are being fed a pack of lies about it’s evil. Have you heard anything similar to this? I don’t believe all that I see and read coming out of the “Presstitutes and Banksters”, and given all that has and is going on, I don’t see his point…..Can you help?
Historically, with two world wars having originated in Europe, the concept that coutries that freely trade and have minimal borders are less likely to go to war. That is clearly good. However, combining together so many different peoples with different languages, different histories, customs and work ethics, is more difficult than the original planners of the union had projected. Ultimately the harder working northern nations would have to permanently subsidize the the less hard-working ones or the system would be bound to break up. Gradually the Eurocrats realized the problem and tried to ameliorate this problem by trying to enforce bureaucratic changes. They tried to introduce total freedom of movement and the right to live and work in any of the EU countries, the concept being that if enough people moved differences would be less noticeable, but the idea never fully worked and built up resentment in those countries with high welfare benefits suddenly finding themselves having to pay considerably more than planned. This was especially true for the UK that saw a massive influx of EU immigrants, even though it was not a signatory to the Shengen agreement. Another bureaucratic measure to homogenize the disparate work ethic was to minimize the working week. Again, an action disliked in the harder-working group of nations, but rigorously enforced by the bureaucracy. This reaction was not universal, but many people realized that if you force a decrease in working hours you force a decrease in living standards. Have you ever been on a long distance bus delayed by traffic, only a half hour from your destination, only to have the bus pull over to the side of the road and announce to the passengers: “Sorry, folks, but I’ve run out of working hours, I’m going to have to call in for a replacement driver.” You then wait an hour or so until a car pulls up the the driver swaps with his replacement! Happens every day in England.
Sorry Kevin, I went off on a tangent, but the point I was trying to make is that the bureaucracy of the EU is so cumbersome anf rigorously enforced it is an evil, that has turned many European Union supporters and many more hitherto ambivalent, into anti-EU people. Almost everybody sees the benefits of free trade, and the fringe countries have had immense improvements to their infrastructure paid for by the richer economies of the EU, but the harder-working group of countries are seeing their standards of living depressed in the current economic turn-down and are now saying enough is enough, no more subsidies.
P.S. It is now estimated that about 90% of the laws now enanacted in the British Parliament now originate from Brussels and the bureaucratic decisions over which individual countries have little control. This builds a lot of resentment from the general public, and if a rederendum were ever held about staying in or leaving the EU, back in the 1970s it would have been 50-50, but now polls have shown it would be 2-1 in favour of leaving. The French seem to like bureaucracy; the Germans accept it; but the British, for the most part, seem to see it as something to attack; always have.
From the Pilgrim Fathers, seeking religious freedom, to the American founding fathers fighting for freedom from monarchical rule and taxation.
Roth rules England.
Americans deny they are owned by Roth.
The key point to understand about the Brussels “bureaucracy,” it is not an annex of a legitimate, democratically elected government. There is no European People. If the Dutch chap did not understand this in Bosnia, doesn’t understand it now, he might not understand it before the Brussels regime collapses.
Kevin….I was going to reply , but cfs beat me to it , i totally agree with every thing he wrote…Brussels is just the front man & mouth piece for the real shadow group who want TOTAL CONTROL…….& IF THAT’S NOT EVIL THEN I DON’T KNOW WHAT IS.
I can only speak for the people of the UK & Ireland when i say they are fed up to the back teeth with Brussels telling them what they can & can not do. & i expect that apply s to the rest of Europe. I hope what cfs wrote & the little i added , answers your question.
Short term gold:
I seem to be seeing more calls for $1400. than $1600. Only time will tell.
I’m sorry to say that is wishful thinking by Mr. French. The headline may be an opinion, but it is probably not supported by the facts. Yes, housing prices have recovered thanks to ZIRP, however, over 80% of properties in mortgage default have not reached the market. The reasons are several-fold: Obstacles have been placed in way of forclosure by government and by sloppy original paperwork. Many Banks would be forced into bankruptcy if they had to mark to market their defaulted mortgages. There are many regions of the country where defaulters have been allowed to continue living in houses wih mortgage defaults for two or three years rent-free. The low-hanging-fruit has not yet come on the market. When, or even whether it will, is a different question.
I have been following P.C.R. writing for awhile, I believe at one time he had the power to call the head of the cia into his office and get answers. Pretty powerful guy at that time. He has an informed way of lookin at things.
I feel its bankers that are in control, the view I respect the most thats differant from mine is P.C.R. the military industrial complex being in control.
I look forward to hearing him here.
Jim Willie:
Gazprom’s main offices were in Cyprus.
Russia used Cyprus banks for all their European energy transactions-energy deals that excluded the US.
China and Russia’s gas and oil deals are being done with govt treasury bonds that excluded the US.
Yuan swap agreement will morph into a gold backed currency settlement vehicle.US excluded – toast.
Germany will join the Russia/China/Asia axis-meaning Europe abandons US in favour of the strong.
Eurasian and BRIIC’s have developed and implemented a US bond exit strategy with gold trade settlement.
BRIIC development fund backed by gold and is a vehicle to send US treasuries back to the US
They have ALREADY AGREED upon a $7,000 .00 gold price as the base of exchange.
Checkmate.
Matt……As you stated , that is what i believe , as i have stated on this blog more than once…I cant really see a different outcome…..Time will tell.
Hiya Green Girl, I think it comes down to being kind to yourself whhteer you’re kicking your goals or not. Know that all those small daily goals are how you treat yourself and your body with respect. And then, when things fall apart (as they do), be kind to yourself and accept that yes, you’ve strayed a little, but now it’s time to get back on track. It’s easy to fall into the trap of thinking hideous things about yourself: lazy, stupid, hopeless. You wouldn’t say these things to a friend, so don’t say them to yourself. Maybe there are people out there who plod along on a smooth trajectory, reaching one goal after another like they’re playing nintendo. But for most of us, success comes in bursts or waves and that’s ok.
That’s an apt answer to an inrntestieg question
Gazprom may have offices in Cyprus, but for the record their main offices are:
125 A, Profsoyuznaya Street, Moscow, RUS, 117647
Telephone: +7 4957773152
Gazprom Bank has had a presence in Cyprus for three years.
GPB Financial Services Limited – Official Website
GPB Financial Services Limited is located in Limassol, Cyprus and wholly owned subsidiary of Gazprombank (OJSC). The company was registered in the Republic of Cyprus on February 24, 2009, registration number HE246301.
On January 27, 2010, the company received its license number 113/10 from The Cyprus Securities and Exchange Commission (CySEC), which has permitted the company to provide the following investment services from within the Republic of Cyprus:
Reception and Transmission of orders related to one or more financial instruments
Order execution on behalf of clients
Dealing on own account
Underwriting financial instruments and/or placing financial instruments on a firm commitment basis
Placing of financial instruments on a non-firm commitment basis.
I could find no independent confirmation of Dr. Willie’s statement about the gold price agreement.
Jim Willie who holds a PhD in statistics, says, “There are staggering bullish market indications for gold. The primary cylinder is negative real interest rates for the past 10 years.” Dr. Willie says other bullish factors include “phony accounting at insolvent global banks” being propped up by massive money printing. Dr. Willie contends, “In January alone, the European banks were the beneficiaries of $1.2 trillion from dollar swap facilities as directed by the U.S. Fed. That’s what’s keeping these bonds floating and the banks alive. They’re zombies.” Dr. Willie says, “Europe is on the verge of collapse.” When it does, Dr. Willie says a new “Gold Trade Finance System” is already in place to take over for the dollar. Dr. Willie’s sources say, “The trade finance system has already agreed on a gold price of $7,000 to $8,000. Silver would be $150 to $200 per ounce.” Join Greg Hunter as he goes One-on-One with Dr. Jim Willie from GoldenJackass.com.
http://www.youtube.com/watch?feature=player_embedded&v=RhyfwjdYqzo
Ireland may still have problems:
Full Jim Willie interview here,CFS:
http://www.tfmetalsreport.com/podcast/4611/tfmr-podcast-43-jim-willie-returns
Thanks, I’m listening to it now.
excellent, interview. He has been talking about this for quite some time now, guess things are moving along.
I hope only limited amounts of the TBills come to Canada,forlone hope probly.
I wonder how much of our trading accounts will be taken.
I hope the story of the emp on the warship is true, that would eliminate some killing.
But overall, I think it will be a healthy thing for the world, hard on the americans of course.
The message is the same one thats been repeated many times here, PMs and get away from the banking system best you can.
I have listened to several interviews with Dr. Willie.
I have observed four factual mistakes, in 2 + hours of listening.
While he is clearly for the most part well-informed, he has a tendency when he does not know something for sure to guess or exaggerate.
My 2 cents opinion!
WE all make mistakes from time to time, but one should, when guessing or not absolutely sure, try to indicate so, not bluster through.
More sellers than buyers. End of story.
I think you meant to say, more naked sellers than buyers. I can’t begin to count the times I watched them hit bullion futures on my inter-day chart. Sometimes in 5-10 minutes they do nearly an average day’s volume. That tanks the price and trips investor stops, then they ride along added naked shorts to maintain the downward momentum into strong support. Problem is: there are position limits for longs and no position limits for shorts–specifically naked shorts.
Jim Sinclair and Jim Willie combined provide exceptional world,political economics.
I am not worried about a few mistakes because events are always in motion and his sources may be correct before they are reported elsewhere.
As a practising goldbug since 2001, I am getting a bit fed up with the conspiracy theorists frankly. They are not delivering results and as gold moves down they just get louder and louder. I think they might be talking their book, desperately. I don’t see miuch merit in this Paul Craig Roberts piece. It sounds like whingeing and sour grapes to me.
As for Jim Willie, he is always a great listen and very entertaining. I think he is usually onto something with his analysis and always adds a twist. Sometimes I take it with a pinch of salt; other times he is probably spot on. He does make blanket statements sometimes and is as outspoken as he feels like at the time without restraint. He does come out with some really wild stuff though sometimes.
I think the take on the current gold situation is: Fractured Euro = stronger dollar. Hyperinflating Yen = stronger dollar. Pound being trashed = stronger dollar. Inflation everywhere else = stronger dollar. US stock market bubble = stronger dollar. Continuing US Treasury bond bubble = stronger dollar. …
Stronger dollar = weaker gold and silver.
At the moment, I would guess all the hot money is going intot the US dollar and $ denominated instruments. It could last a while because some of these other crises are not going away anytime soon. How can the Eurozone depression end until some countries quit the Euro? Never, perhaps? As disaster hits these other countries and with gold underperforming, huge amounts of money are flowing into the US bubbles in bonds, stocks and maybe the USD itself and it’s become a momentum trade.
We have a cyclical bear market in gold within I would guess is a Super Major Bull Market, as Jim Dines would put it. We are going to have to sit it out or quit it and stop complaining – and wait for things to unravel in the USA.
Dave,
Spot on with stronger dollar=weaker gold and silver.
Kyle Bass on Japan:
http://www.youtube.com/watch?feature=player_embedded&v=LDs_vnyzmWU
I lost 100 grand in silver equities in the last six months.
I think the whining should start right now.
I am sure everybody else is in the same boat that invest in metals equities.
I see zero whining compared to the carnage.
Ditto, Matt, we’re in the same boat in the same water. It’s aqmazing how docile people are even when they lose half of their net worth in a year or two. What can we do other than wear our lifebelts – physical gold and silver – until things turn around?
I believe both Jim Willie and Jim Sinclair are pretty close to the action and it sure sounds like they have good connections. I read KingWorldNews every day, too. Best of luck to all.
we are all down big time, but i am prepared for $20.00 silver, Hope not, but prepared. We have not yes seen the true puke point of capitulation.
The usual Sunday night gold sell off. So was Fridays big up day just another bounce followed by another sell off or was this the finally the real deal. To be down $5 already isn’t good. Lets face it we are running out of time and price. We need some momentum here. Was Friday irrational exuberance? Hope not…
My first adventure into PM equities was via mutual funds; as I recall there were only 3 or 4 available in Canada. One of them was managed by John Embry, then with RBC.
Compared to those days, there’s still a lot of interest in the sector. Besides seeing 2/3 of the Venture Exch delisted, also 2/3 of PM related blogs & websites may have to bite the dust.
Only a handful of true Kooks will be in this when it ends; they won’t be hated so much as pitied.
For some reason this comes to mind: “Let the Dead Bury Their Own Dead”.
http://www.cgg.org/index.cfm/fuseaction/Library.sr/CT/BQA/k/164/Why-Did-Jesus-Say-Let-Dead-Bury-Their-Own-Dead-Matthew-822.htm
The nice hings that the available gold is limited in supply, even if it increases due to mining activity. As third world nations become more wealthy and can afford to buy even a ring or any gold band for the finger wrist or neck, the available supply dwindles and eventually there will be a failure to deliver. We come close every now and again and see quick efforts to ensure no failure, as in this past week. The danger now appears to have receded now for the shorts, but every time it gets more hectic and sometime soon there will be a default. Once that happens the physical price will dominate.
Of course, by then, it will be difficult to actually buy physical.
In terms of third-world countries, we are, indeed, achieving that goal fast. No longer in the top ten countries in per capita income, in education, or even satisfaction with life or well-being, and from the best healthcare in the world, how long will it take to destroy that?