This One Is Interesting – What do you think?

Big Al
September 8, 2014

Courtesy of Money Morning:

CIA Insider Leaks Evidence of China Gold “Smuggling”


A CIA insider has gone public with sensitive intelligence community evidence that reveals China’s military forces are helping to secretly smuggle gold into their central bank.

In an exclusive interview with Money Morning, Jim Rickards, the CIA’s Financial Threat and Asymmetric Warfare Advisor explained:

“[My source] brought gold into China at the head of an armored column of the People’s Liberation Army. I guarantee that [gold shipment] did not show up in the official Hong Kong import figure.”

Rickards declined to name his source, only admitting he was a high-level officer of a major private secure logistics firms.

Rickards contends that because of this suspicious activity, the Chinese government now owns 4x more gold than they admit.

“They lie about this,” he said.

“They officially say they have 1,054 tons; that’s what the official records show. But in reality they have more than 4,000 tons.”

This secret stockpile would amount to more than 10% of all government-owned gold in the world, all by itself.

Rickards’ claims mirror those being made by both Forbes and the Financial Times.

They have reported on a massive discrepancy in China’s official gold consumption data for 2013: a 500-ton “gap” between production/imports and demand. These publications pointed to this as evidence that the People’s Bank of China is buying gold secretly… and then lying about it.

Rickards explained the reason China has been going to such great lengths to conceal this operation.

“Gold is relatively cheap right now. China would like to keep it this way until they reach the finish line.”

“The minute they pull back the curtain, you are looking at gold shooting well past $2,000 an ounce. The ceiling could be astronomical. Of course this will rock the global stock markets and crush the U.S. dollar. So they have to time their moves just right.”

Rickards predicts China will wait until early 2015 to leak their true gold reserves. And when they do, it will likely be a surprise announcement. China has done this before, most recently in 2009, when the People’s Bank revealed overnight that its gold reserves had almost doubled. But few people are prepared for the impact of the next announcement.

During the interview Rickards revealed a series of charts known to the intelligence community.

The one below shows the future impact of China’s true gold position on the reserves of the world’s central banks.

Editor’s Note: Money Morning has released their exclusive interview with Jim Rickards to the public. And it’s a must-see for every American who is concerned about our country and their financial security. Click here to view it.


In addition to being the CIA’s Financial Threat and Asymmetric Warfare Advisor, Rickards helped lead a sensitive operation called Project Prophecy.

The mission was to use the financial markets to predict pending national security threats from terrorists, rival nations, and from internal weaknesses lurking inside our economy.

The system he built through Project Prophecy proved its accuracy on August 7, 2006, when it detected the warning signs of an impending terrorist attack.

Three days later, in London, a plot involving a cell of 24 Pakistani extremists was thwarted. Their targets were 10 U.S. passenger jets that were going to be blown up simultaneously using liquid explosives.

Over 2X More Dangerous
Than The Great Depression

Does this chart prove a 70% stock market crash is imminent? 
Click here to continue…

Rickards believes that China’s plot to smuggle gold is alarming, but it is just one of five dangerous “flashpoints” that could soon ignite a $100 trillion economic collapse.

He believes this outcome is unavoidable. And many of his colleagues agree.

A sensitive report has surfaced containing the consensus view of all 16 branches of the U.S. Intelligence Committee which suggests emergency preparations are already being put in play for this crisis.

These agencies, which include Rickards’ CIA, as well as the FBI, NSA, Army, and Navy, have already begun to jointly estimate the impact of, as the report stated, “The fall of the dollar as the global reserve currency.”

And our reign as the leading superpower being annihilated in a way “equivalent to the end of the British Empire in the post-World War II period.”

The nightmarish endgame scenario presented in this report involved “a worldwide economic breakdown and an extended period of global anarchy.”

“When one of these flashpoints strike, the first phase will appear as a nearly instantaneous 70% stock market crash. From the outside, nobody will see it coming,” Rickards explained.”

“Once it becomes clear that it’s not a flash crash – it’s a systemic meltdown in the economy itself, that’s when the gravity of the situation will sink in. And there will be no digging out from it.”

Rickards warned Americans to avoid rushing into what he referred to as “paper gold investments,” like the GLD ETF, in advance of this looming crisis.

He described it as an upside-down pyramid scheme.

“Imagine you have a pyramid, only it’s inverted,” Rickards explained.

“At the bottom you have this tiny block of physical gold and then on top of it you have these expanding layers of paper gold. Gold leasing, unallocated gold forwards, gold futures, gold options, and gold ETFs.”

“The amount of physical gold stays the same, but the pyramid keeps getting larger. However, China is actually taking this physical gold off the market and putting it in their safes where it won’t see the light of day for hundreds of years. All that means is the pyramid is eventually going to collapse.”

Rickards is making his message loud and clear. Americans need to take action now to prepare for that unfortunate day.

Because time is running out.

To help them, during the interview he provided a specific set of investment recommendations to target immediately.

Editor’s Note: For a limited time, you can view Rickards’ interview and claim a free copy of his 2014 New York Times bestselling book, The Death of MoneyClick here to continue


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    Sep 08, 2014 08:01 PM

    Sensationalist, conspiracist and been hearing this for years. Ain’t gonna happen. Did you ever read the story about Chicken Little? The Boy Who Cried Wolf? If even a hint of this were true and China we even hinting internally that this was even a possibility, gold would be multiples higher than it is today.

    Sep 08, 2014 08:47 PM

    For those who travel a lot, you’ve probably seen notices in airports indicating you have to declare if you have more than $10,000 in money/instruments when crossing a US border.
    Or 10,000 euros crossing a european border or 10,000 crossing UK border.

    I am informed by Knowledgeable people that rules have changed for exporting gold or silver out of the US.

    Legally one is now required to file SED form 7525-V when moving $2,500 of gold or silver out of the U.S.
    If caught at border with more than $2,500 in gold or silver, the instructions from on high are now confiscate.
    Isn’t liberty great?
    What you don’t know, can hurt.

      Sep 08, 2014 08:52 PM

      Is that only for gold bullion and coins ?
      Surely jewellery would be exempt from this declaration?

        Sep 08, 2014 08:04 PM

        Don’t be so sure, Skeeta. If you are not wearing it then it comes to their attention as suspicious. I had just such a problem a couple years back. In London of all places where the customs agents held me up because of a small satchel of gold and silver jewelry intended for my wife. Since I was heading for Africa they demanded to know its purpose. Jesus, I said….it is for the wedding (mine). I really felt they were planning to confiscate it but on what grounds who really knows. Lets just say I won’t make that mistake again unless I also take full documentation of origin, purchase and purpose etcetera.

          Sep 08, 2014 08:41 PM

          Bird, I was thinking more about jewellery your actually wearing,
          Being proficient at the Lost Wax casting technique (and possessing all the necessary equipment) I was thinking along the lines of if it was every necessary then I could melt down ounces and recast as wearable jewellery…cufflinks, religious pendants (large Cross etc) as well as belt buckle, rings, bangles etc.
          Then hopefully they’d just think I like my Bling ! ;)….errr…..unless they mistook me for a pimp !

        Sep 08, 2014 08:29 PM

        Land of the Free.

        It USED to be.
        Long gone.
        If it moves license it, if it stays put tax it.

          Sep 08, 2014 08:03 PM


        Sep 08, 2014 08:34 PM

        Sounds about right Al. That was helpful and it is worth knowing. In fact my own problem arose in a transit country and not in the departure or arrival nation. It was England where I experienced the hassles and got all the strange questions. It was not expected so I was a little put off and surprised. I imagine they deal with some pretty bad guys day in and day out though so it probably just goes with the territory.

    Sep 08, 2014 08:20 PM

    I believe jewellery is exempt, but am not absolutely positive.
    I know unmounted precious stones are not taxable on entry in the US, but jewelry not bought in the US over your import limit is now taxable. (I’m guessing the annual limit on all goods is an exemption of $1,000.)
    However, I’ve been moving stuff out, not in; before I become legally non-resident in the US.
    I’m down from 5 houses to 3 in the U.S. and by the end of this month it will be just two. It has taken almost two years, so far to un-americanize!

    Sep 08, 2014 08:27 PM

    The dollar has just closed above the 600 week ema for the first time in almost 12 years.$USD&p=W&yr=3&mn=3&dy=0&id=p14271820360

        Sep 08, 2014 08:39 PM

        Even I am amazed it hit 84.50 so fast and I was predicting it.

          Sep 08, 2014 08:41 PM

          So much for all the people who kept saying the long side of the dollar was too crowded and the short side of the Euro was not a good place to be. They are all wrong. You must use your own judgement at all times and never be persuaded by the doubters when you know you have a solid case.

            Sep 09, 2014 09:58 AM

            V.good point BM. I find that in many other spheres of life too.

            Sep 09, 2014 09:47 AM

            Always someone trying to throw you off your game. Often enough they have no skin in it either. They just think they know better. This is one of the reasons I hate listening to anyone blither on about the imbalances in trading positions or commitment of Traders Reports because most of them make a hash of it and just put doubt in your mind.

    Sep 08, 2014 08:18 PM

    For those depressed by gold today:


      Sep 08, 2014 08:07 PM

      Who is depressed! I was ecstatic (because I was bang on the money baby!).

      Sep 09, 2014 09:01 AM

      Swimming in a sea of propaganda….your views BM ref CFS’ post?

        Sep 09, 2014 09:05 AM

        Just seen your posts below…James’ JR is a fraud and book promoter, Bird’s pumper buffoons. Come in CFS!!?

          Sep 09, 2014 09:49 AM

          Jim Rickards is brilliant. It just bugs me he went in with that particular gloom group selling subscriptions. It is like endorsing flying saucers and space aliens. Anything to make a buck on the gullible.

            Sep 09, 2014 09:07 AM

            Don’t do this again Bird. At least for a while I thought you were ouf your mind. It is damaging to your credibility. Sorry to say that. At least I take you seriously.

            Sep 10, 2014 10:16 AM

            Don’t do what?

        Sep 09, 2014 09:50 AM

        No idea. I don’t open links as a rule. Nobodies links. So I only responded to his words.

    Sep 08, 2014 08:05 PM

    JR is a fake and a fraud. He is nothing but a book peddler.

      Sep 08, 2014 08:33 PM

      This is quite serious accusation. He is well recognized both in main stream and alternative investment communities. He also has a credential which is quite impressive. You’d better have some real proofs. With Al here, you cannot say something like this irresponsibly. You are either right or wrong. I am not his follower but I have respect to his opinion.

      Sep 08, 2014 08:00 PM

      I kind of feel the same, James. He has joined the ranks of Jim Sinclair with this outlandish tale of intrigue and gone from being interesting and some what respected on money matter to becoming one of the pumper-buffoons.

      Anyway, why are we reading advertising clips? Has it really gotten that dull in the gold world, Cory?

        Sep 08, 2014 08:08 PM

        I too hope Cory or Al let us know whether Rickards is real or not

          Sep 08, 2014 08:13 PM

          Oh he is real. A smart guy too. I just hate that he has sold out and gone down the road of fear mongering and hype where gold is concerned. Such a mistake to get into the hack advertising angle because it ruins his credibility.

            Sep 09, 2014 09:19 AM

            OK, this is what you mean. If he is sold out, he should sell himself to the powers or the money such as FED, Wall Street or US government. There no one the other side to sell to? Maybe conscience I guess. With his wealth, I don’t think the money of the book makes any difference. I feel he is sincerely worried about the future of America. The first time I listened to him was on CNBC prior to financial crisis. He had same message with what he is saying now except I can feel more urgency with gold going much higher than ~$900 at the time. I remember I was surprised that main stream financial media has someone with clear thinking. Compared to Ron Paul, PC Roberts, David Stockman, he is quite mild. I guess he does not want to break ties with the elites yet.

            Sep 09, 2014 09:23 AM

            Looking from the outside of US, I feel US is on its way to the fate of any great empire. Human can slow it down but cannot cure it. Since I don’t have patriotism to US, I can see more clearly. A lot of problems are unprecedented in human history.

    Sep 08, 2014 08:06 PM

    GH ditto

    Sep 09, 2014 09:06 AM

    If you mean Greg Hunter James then I’m in part agreement.

      Sep 09, 2014 09:51 AM

      Still smarting eh!

    Sep 09, 2014 09:10 AM

    Oh I know it’s KW Nuts James…..

    Sep 09, 2014 09:42 AM

    Quote for the day (for the dollar doubters).

    “The US dollar will remain the world’s dominant reserve currency for a very long time, mainly because it is the only currency that exhibits anywhere near the needed level of credibility, mobility, and low transactional costs and, what is more, for all the huffing and puffing about “exorbitant privilege” no other country is willing to pay the considerable cost of allowing its currency to be accumulated by foreign central banks whenever these countries experience weak domestic demand”.

    Michael Pettis
    Professor of Finance – Beijing University
    September 2014

    Sep 09, 2014 09:01 AM

    The price of meat has really shot up the past year over here where I live. European, Chinese and Middle Eastern buyers have come shopping to East Africa and the meats in demand which were bargain priced until not so long ago have rapidly escalated in price as supply is pulled off the market and sellers give a preference for the foreign held abattoirs who have deeper pockets.

    That is to say, until recently, meat was priced well below global costs as most is range fed by herders and nomads and very little was exported so costs were tailored more to local income levels. Virtually all of it would qualify as organic too as Western practices of medicating animals, using hormones and industrial chemicals or grazing on feed lots is not widespread here. In most rural areas it is still unheard of to treat plants, land and animals.

    The land itself is for the most part pristine compared to countries where industrial chemical agricultural methods are heavily used. Fertilizers, pesticides and herbicides are still a relatively new innovation here and few family farmers on modest plots can afford them even if they wanted the materials.

    So anyway…demand for meat has rocketed ahead. It has become quite a good trade in a short period of time as high quality meats are bought for a fraction of developed country costs. They are then inspected, butchered, cut, packed and frozen and shipped out. Skins are a byproduct but can also yield high returns as the textile and leather industry here has rapidly been expanding.

    The combination of ultra low cost labour for meat processing, low cost of live animals and absence of hormones and chemicals in the meat itself have been drivers for a rapid expansion in the business. But the downside is meat has now been priced above typical incomes that simply cannot compete with the buying power of both West and East.

    In short, due to meat shortages in the developed nations and growing demands in China for protein, the price of beef, sheep and goat has been rising to meet global pricing. And that has come as a big shock to people who live on dollar a day incomes and can no longer afford traditional seasonal foods.

    In less than twelve months alone the price of good quality beef cuts has risen from around 3.00 per pound to a new level of 4.00 which is a tremendous jump if one is on a small income.

    I know that will still sound pretty cheap to most readers but what I am referring to here is actually a trend in progress where African countries export their protein to earn much sought after dollars and in the process the base commodity rises to Western price levels bit by bit.

    We will see how it plays out over time. For now the price trend is sharply up as protein moves in growing volumes from Africa to the wealthier nations. I would not call this a food fight though. If you asked the man on the street here about why food is sharply up they really have no idea whatsoever.

    Sep 09, 2014 09:19 AM

    OK Matthew…this one is for you. Gold, silver and crude all look like a buy in my books beginning today. Since you mentioned I only call the down days…. Maybe I will break the mold here or something for a change.

      Sep 09, 2014 09:21 AM

      The inverse is equity markets look to be a sell…but is it the start of a correction?

        Sep 09, 2014 09:20 AM

        I’ve had a sell on SPY for days on the 60 min chart and a sell on the daily chart is imminent. Is THIS the start of a noteworthy correction? I don’t know, but I do think a protracted one will start soon from a big picture perspective.

          Sep 09, 2014 09:53 AM

          It does look tempting. I won’t call it though. I have had no luck in that department except for the recent brief correction. But it was nowhere near as deep as I felt it might go. Thanks for the chart. It was helpful.

            Sep 09, 2014 09:03 AM

            JNK is on a daily and weekly chart sell and I am short. This one is due for a meaningful decline.

            Sep 09, 2014 09:15 AM

            Good call.

            Sep 09, 2014 09:42 AM

            Fwiw, Bird, I think the new Sprott/Zack’s ETF SGDM is going to be a real winner. If high risk, low liquidity juniors just don’t cut it for you, but you still want a shot at substantially more upside than gold will deliver, it’s worthy of consideration in my honest opinion. Even though I am very partial to the juniors, i have been buying some myself, including today.

            Sep 09, 2014 09:56 AM

            Oh, that really is brand spanking new. OK thanks, had not seen it before. I will put it on my list. The lineup is a lot of the popular names so not sure how it will perform plus or minus but worth watching no doubt and a good addition to the index choices.

            Who knows Matthew…maybe gold will yet surprise me and take off with the mining sector. I still harbour some deep reservations but am keeping an open mind.

            Sep 09, 2014 09:31 AM

            I just bought more a minute ago at $22.04 and it’s already .04 cheaper, but that’s ok, it is a bargain. It’s trading at a discount to net asset value (NAV) and is quite oversold.
            I like its composition and position weighting.

            Sep 09, 2014 09:13 PM

            I may just pay closer attention and defer to what you are doing on the plus side since you are stronger there than I am and better tuned in to what is happening. As I said yesterday, short gold has been good to me and long has been good to you. We both do well no doubt. It is everyone in between that is getting the snot kicked out of them.

    Sep 09, 2014 09:30 AM

    GSV is on a fresh daily chart buy. Relative to its peers, I believe GSV is low risk. It has high institutional and insider ownership and great projects in mining-friendly Nevada.
    I own it.