"There is no possible reason why the U.S. would not let the Germans see their gold. It’s not ‘a security issue.’ Its Germany’s gold. The whole thing is preposterous. However, it is a security issue if the vault is empty or damn near empty. Then you can’t let the Germans in because it really is a security issue. So when a country is backed into a corner the way the U.S. was with regards to the German gold, well, desperate times call for desperate measures.” -- Grant Williams, 8/19 in a Kingworld News interview Dear All, Let's begin with this... Continue reading

Dear All, This bit of news via Reuters overnight, which the mainstream press will surely downplay if even disseminate at all, could not be more significant to the future of the dollar, the gold price and future U.S. living standards. The final straw in a pile of hubris, mismanagement and abuse that is knocking the dollar from the international reserve currency pedestal may well be the ill-considered U.S. led economic sanctions of Russia. President Obama, a former schoolteacher with a faculty lounge mentality understands none of this. Vladimir Putin by contrast is a hardened KGB operative with highly developed street... Continue reading

Dear All, One of my challenges is not making the blog depressing. What is occurring in our political and financial world is dark stuff, both now massive and growing kleptocracies. What our government has evolved in to is really not surprising; it is the nature of government to steal form its people, the only variable is degree.* When government is small there is less to steal, engendering less corruption and a higher quality of "public servant." It was never a possibility that U.S. federal expenditures could reach $3.8 trillion without corrupting the political system to its core. Then there is... Continue reading

Dear All, The modern economist -- a used-car salesman's dream...He never looks under the hood, doesn't ask questions and accepts what he's told. Friday's report of 288,000 non-farm jobs created was heralded as evidence the economy is recovering. The headlines however are one-dimensional apple-to-orange quantitative comparisons. Here's what was under the hood: Full-time jobs declined by 523,000 while part-time jobs increased 840,000 -- a multi-decade record for a monthly part-time employment increase. If that sounds to you like something other than a recovering economy you'ld make a lousy economist. The headlines don't tell the story of the deteriorating quality of... Continue reading

"I have maintained for quite a few years that when we reach the peak in this gold cycle, the SGE [Shanghai Gold Exchange]will resemble a casino. The Chinese have a huge propensity for gambling, and this is what will likely propel the gold price to levels that we probably can’t even imagine." -- Franco-Nevada Chairman Pierre Lassonde, 5/21/14 Dear All, President Obama's release of five prisoners from Guantanamo Detention Center -- a government torture facility for predominantly innocent men -- raised eyebrows not so much for his continued failure to close the facility altogether, but for the American soldier for... Continue reading

"Political power corrupts the morals and the judgment. Bet on it." -- Richard Maybury, Early Warning Report, May 2014 Dear All, It would be unrealistic to expect the financial press or for that matter, any mainstream economist to actually rock the boat and examine the Federal Reserve's claim that it has been reducing or "tapering" its monthly bond purchases. Accepting the Fed at its word is far easier than questioning the monetary gods. Doing so might jeopardize one's job security, whether at a news outlet, bank or academic institution. So it falls upon those less invested in the perpetuation of... Continue reading

Dear All, Bordering on the juvenile, the self-defeating U.S. sanctions targeting Russian individuals (which as Zerohedge has speculated may ultimately include the freezing of their Netflix accounts) typifies the unproductive and clumsy manner in which the Obama administration has navigated the crisis of its own making in Ukraine. As was made clear last week Washington has no intention of curbing its aggression and insane foreign meddling; The Washington Post reported that the U.S. secretly attempted to create a social media site in Cuba to stir unrest. U.S. prestige and influence is now so diminished that its strategic leverage has been... Continue reading

Dear All, A number of comments have come in regarding the Democracy Now interview of Professor Stephen Cohen contained in Friday's post. The interview apparently struck a nerve. I'm passing on another piece in which Cohen expands on the misplaced and counter-productive antagonism toward Vladimir Putin that is pervading Washington and the media: Newsweek: The American Who Dared Make Putin's Case "I began warning everyone in 1990, in the 90s when Clinton began to move NATO towards Russia, that this was going to lead to exactly what it’s led to...that if we keep this up, we’re like a Western Pac-man... Continue reading

"Human beings have a universal right to determine their own future." -- President Obama condemning 'The Affordable Care Act' Russia's actions in the Ukraine, 3/4/14 Dear All, With feigned indignation over Vladimir Putin's role in Ukraine, Barack Obama and John Kerry are engaged in an utterly reckless provocation of Russia following an attempted U.S. coup gone awry (In the leaked recording of the telephone conversation between State Dept. official Victoria Nuland and U.S. ambassador to Ukraine, Geoffrey Pyatt, the two are heard plotting the staffing of a new government). The U.S. is no more committed to Jeffersonian democracy abroad (or... Continue reading

Dear All, Amazing is it not, how quickly gold can be transported when there is a will (and the gold)? The Fed advised Germany that it will take eight years to comply with its request to return a portion of its sovereign gold ostensibly being held in custody at the New York Fed vault. Even so, the Fed is significantly behind schedule, having returned only 5 tons in the past year. If the following report is accurate, 33 tons of Ukraine's gold were airlifted out of Kiev airport early last week. The question of where the bullion is headed is... Continue reading

Dear All, The propaganda is flying at breakneck pace with the vast majority of it emanating from the U.S. and its lapdog media. If you caught any of Vladimir Putin's news conference yesterday, your impressions of him are likely rather different than the image being cultivated in the west. He is hardly a madman. Putin is ruthless and disingenuous, but no more so than his American counterpart and the political animal kingdom generally. I urge you to read former U.S. Treasury Undersecretary Paul Craig Roberts' superb synopsis of what has transpired. It is radically different than the narrative put forth... Continue reading

“Now that I am out of government, I can tell you what I really believe ... Central banks are now so heavily influencing asset prices that investors are unable to ascertain market value" -- Kevin Warsh, former board Governor, U.S. Federal Reserve Dear All, Gold and silver are on the march and as has occurred so often in the past when they have arisen from hibernation, the financial press has taken little notice. In fact the early years (2001-2003) of the secular precious metals bull market were largely stealth, with Wall Street begrudgingly acknowledging the performance only when the returns... Continue reading

"[T]he Fed) is no longer a central bank...the notion that there is a capital market that is pricing things is absurd. These manipulations are pricing them. How does this differ from central planning? How is this free-market capitalism? I don’t see this (the difference) at all. And people aren’t really getting upset about it.” -- Former Undersecretary of the U.S. Treasury, Paul Craig Roberts, 12/21/13 Dear All, Let's get right to gold... Bloomberg: Germany's top Regulator says Precious Metals Rigging worse than Libor Reuters: Deutsche Bank withdraws from gold and silver benchmark fixing Perhaps the Germans are expressing frustration over... Continue reading

"Did I hear that properly? Obama doesn't like how the US Constitution works, because it's getting in his way?...As a Senator in 2005, President Obama opposed changing the filibuster rule. WH says GOP use of filibuster as a tactic is worse now...The US Senate was designed precisely to be a brake on transient majorities. Delay isn't an abuse of its function; it *is* its function" -- British journalist and MEP Daniel Hannan in a series of Twitter posts following the elimination of the Senate's filibuster rule. Dear All, No news here: NYPost -- Warning: Jobless rate may be rigged "In... Continue reading

There is so much duplicity, dirty-dealing and bad-faith in these deals that nothing should be taken at face value. Everyone's hands are dirty and always behind these pacts are three constants: 1) They are driven by cash 2) The U.S. taxpayers bear the entire financial burden. 3) The cash recipient bears no risk under the agreement. You will recall the succession of U.S./ North Korean arrangements between 1994 and 2005, in which in return for agreeing to pretend to have ceased its nuclear program, N. Korea received $billions in free hard currency. Over those years the U.S. would dutifully accuse... Continue reading

“We really can't forecast all that well. We pretend that we can but we can't." - Alan Greenspan, to Jon Stewart in an interview on The Daily Show. Dear All, Taper talk and the labor force...Its been nearly six months since Ben Bernanke kicked off the Fed's propaganda campaign that the central bank would imminently scale back its monthly bond buying, while last Friday the Labor Department offered up the latest chapter of its employment fairy tale. According to the BLS 932,000 people were dropped from the labor farce, er...force in October bringing the total to a record 91.5 million... Continue reading

“I don’t think the Fed is going to taper its bond buying. I believe they are going to double it.” - Jim Willey Dear All, Regular readers know that a consistent theme of this blog has been that the Federal Reserve is functionally trapped and cannot let up on stimulus ('Cornered' 'Contrived Exits'). Essentially admitting as much in its most recent post-FOMC announcement (although talking heads insisted on alternative interpretations so as to keep the Fed-watching industry healthy) the central bank failed to announce a widely expected reduction or "taper" of its bond purchases. The unbridled pretense with which Fed... Continue reading

Dear All, While GATA is blackballed from appearing on CNBC in the U.S., CNBC Europe's Bernie Lo has always been accommodative and willing to present GATA's evidence of gold price manipulation. In an interview this morning with GATA's Sec/Treasure Chris Powell, Lo went so far as to state that Chris was "preaching to the choir." There is also the disturbing matter of a U.S. CNBC interview with Salon's Alex Pareene on the criminal enterprise that is JPMorgan Chase. The interview is stunning for Maria Bartiromo's sweeping defense of the company's crimes since it "continues to churn out tens of billions... Continue reading

Dear All, Britain's Daily Telegraph is reporting today that a study by the highly respected defense consultancy, IHS Jane's found that nearly half of the U.S. armed rebel fighters in Syria are jihadists or hardline Islamists. In contrast with U.S. administration claims that extremists represent an insignificant faction of the rebels, the Jane's study found that only 30% of the fighters are moderates. Further, having appropriately backed off from its most recent potential military fiasco the U.S. has managed to dissapoint and alienate even the Jihadists du jour it has embraced and armed in Syria. These are the same terrorists,... Continue reading

"Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one." -- Charles Mackay, 'Extraordinary Popular Delusions and the Madness of Crowds,' 1841" Dear All, As the country is absorbed this week in remembrance of the events and victims of 9/11, apparently no one gives a damn that the Obama administration is providing weapons to al Qaeda -- Osama Bin Laden's disciples -- the very terrorist organization that perpetrated that event. Boobus americanus has wholly swallowed the media drivel that Washington... Continue reading

Dear All, It appears the Bush/Obama administration's next military fiasco may be in Syria, as the President is claiming that Syria's government has used chemical weapons in its battle to retain power, an allegation that has been no less credibly asserted about the U.S. financed Al-Queda controlled rebel/terrorists, Al-Nusra Front. . In truth the U.S. government could not care less what Mr. Assad does to his own people and you can be sure there would be no moral platitudes emanating from the White House if the region's main export product was cotton or sugar. . So what would be a... Continue reading

"Politics are usually the executive expression of human immaturity" - Vera Brittain, Rebel Passion Dear All, The largest banks have in excess of a quadrillion dollars in OTC derivatives on their books, the major component of which is interest rate swaps. Significantly higher interest rates would light a match to the swap chain, taking down not only the banks but the western financial system with it. Keep that in mind when you hear the prattle about tapering or exiting QE. The Fed is trapped into its zero interest-rate policy and monetization of Treasury and toxic mortgage paper. Sure, it may... Continue reading

"Critical scrutiny has been considered "unpatriotic" since 9/11." - Janine Gibson, Editor-in-chief of the U.K. Guardian' on the U.S. press' lack of journalistic vigilance Dear All, Several things stood out from Federal Reserve Chairman Bernanke's question and answer exchanges following last week's prepared testimony for the House Financial Services Committee. The first was his comment, barely reported by the financial press, on the status of the alleged economic recovery: "If we were to tighten policy, the economy would tank." Such frankness from the head of a central bank, let alone a U.S. Fed chairman is so unusual that coupled with... Continue reading

Dear All, Since this blog's first post in 2009 I have been banging the table that the Fed is trapped into continuing its liquidity orgy until its members pass the baton to the next set of lucky governors, who will then scratch their heads and conclude that they too are mere bench warmers. In this December post, 'Contrived Exits' I emphasized in that in spite of its market moving rhetoric "[t]he essential truth about the Fed's exit strategy is that there isn't one." Yesterday Federal Reserve Chairman Bernanke as much as admitted to being cornered by a financial system that... Continue reading

"I felt that as an American citizen, as a responsible citizen, I could no longer cooperate in concealing this information from the American public. I did this clearly at my own jeopardy and I am prepared to answer to all the consequences of this decision" -- Daniel Ellsberg, 6/28/71, upon surrendering to the U.S. Attorney's Office and admitting to providing the 'Pentagon Papers' to the press. Dear All, Friday's jobs report contained the requisite "better than consensus" headline number (195,000 net jobs created in June) and as usual it is only the cover that matters. The book tells a very... Continue reading