Yes, it is true: “Gold is dead.” (update)

On the price plunges in gold, silver. Yes, it is true: “Gold is dead.”

The U.S. Mint reports gold at Fort Knox has been entombed under “16,000 cubic feet of granite, 4,200 cubic yards of concrete, 750 tons of reinforcing steel, and 670 tons of structural steel” watched over by heavily armed guards, and army units totaling 30,000 soldiers, with associated tanks, armored personnel carriers, attack helicopters, and artillery. Gold rests in peace (somewhere), oblivious to the chart seizures around its death(s).

UPDATE on the ‘somewhere’. “More than $66 Billion in Gold Missing from Fort Knox.” Globe December 15, 1981. (Credited to SilverDoctors.com)

Gold rests in peace (somewhere) … During the 1970s period noted in the article, U.S. President Richard Nixon (1969 to 1974) closed the gold window in 1971; countries could no longer redeem U.S. dollars for gold. President Nixon appointed as U.S. Treasury Secretary John B. Connally, who accepted the position on the condition that “if I’m going to do that, I think you [Nixon] ought to find something for George Bush to do”(Barnes. (2006). Barn Burning, Barn Building, p.189). In 1971 U.S. Treasury Secretary Connally told a group of European finance ministers concerned about the export of dollar inflation that the U.S. dollar “is our currency, but your problem.” The previous posts indicate the direction of the problem has changed, as reflected in the severity of the past week’s orchestrated plunge in gold and silver. The 1981 Globe article raises questions about how much, if any, gold remains. Even before the 1970s, gold flowed out of Fort Knox.

In 1956, the Chicago Daily Tribune’s Washington bureau chief reported Fort Knox vaults $12.843 billion in gold, which at the standard 400 oz. bar and $35 per ounce at the time would be equivalent to 10,400 metric tons, or at the official price of $42.22, about 8,620 metric tons. Fort Knox held slightly over half of the $21.8 billion gold holdings in the United States, half of the gold foreign-owned.  In 1962  half a billion dollars of gold at Fort Knox was moved to an undisclosed location (“U.S. Taps Gold Supply Stored in Fort Knox.” Chicago Daily Tribune Aug 18, 1962). In July 1966 the Chicago Tribune’s chief again reported $11 billion in gold was withdrawn from Fort Knox, some of which could have been purchased by private hands – suppose at the official price of $42.22, that would be slightly under 7,400 metric tons; Switzerland alone took $1 billion (“U.S. Finances Gold Raids at Fort Knox.” July 22, 1966).

 About six months later the Chicago Tribune reported “amidst a cloud of security Fort Knox sent about $240 million worth of gold to Britain” (“Ship Gold Secretly to U.K. Bank.” Dec 1, 1967), and just three months after that, Continue reading

Run, Cyprus! Leave the Euro

How does the island of Cyprus in the Mediterranean Sea get vaulted into international headlines in the past few weeks of March 2013. Moody’s downgrade was in January 2013. In November 2012, Germany intelligence warned about KGB money in Cyprus banks. June 2012? Why now? Why Cyprus?

Insolvency? Not in the same league as the largest insolvent member banks of the Federal Reserve Bank and European Central Bank. Money laundering? A United Kingdom fund manager, William Browder of Hermitage Capital warned Germany (Reuters, Mar 27, 2013) of KGB money laundering in Cyprus banks. The extent of laundering is unknown, but for reference, London’s HSBC  – Europe’s largest bank – laundered $250 billion from 2001-2007 but is “sorry” for aiding drugs lords, rogue states and terrorists. Wells Fargo-Wachovia laundered $378.4 billion for cocaine drug lords from 2004-2007. Some others.

Cyprus resembles a trial run (attempted on lot of Russian money) of the new “bail in” bank bail-out scheme outlined in a joint paper by the FDIC and Bank of England in December 2012 titled, “Resolving Globally Active, Systemically Important, Financial Institutions”. Deposit insurance is becoming a thing of the past (FDIC insurer has been in a state of insufficient funds at least since 2010 with transfusions from the Federal Reserve printer), as bank depositors-savers are now considered unsecured creditors to banks. For instance, this means in the event of a bank failure, reported as of March 30, 2013 Bank of Cyprus big depositors (over 100,000 euros or US $130,000) could lose up to 60% of their money in an EU-IMF restructuring.

Cyprus. Greece. Italy. Spain. Portugal. Ireland,… RUN. Leave the euro. It is a trap.

There is not much that is made visible, except for Cyprus’s proximity to Syria and Turkey where NATO and Russia have been stockpiling missiles. It is almost as if one were spectator to Zbigniew Brzezinski and company’s (Henry Kissinger, Rockefeller – the Chase part of JP Morgan Chase, Goldman Sachs, etc.) Grand Chessboard moves on the European continent, that incidentally, is a block of real estate adjoining Russia and China.

For a moment, let’s look at the plight of Hermitage Capital’s William Browder who warned Germany. Russia banned Browder from entering the country since 2005 (WSJ Mar 18, 2006), but he is on trial in absentia on tax evasion charges. On March 5, 2013 (Bloomberg), Russia opened a case against Hermitage Capital for illegally purchasing 131.6 million shares in Russia’s Gazprom for about 2.1 billion rubles ($70 million) at a time when foreign ownership of the world’s biggest natural-gas producer was prohibited; Browder said buying Gazprom shares through “derivative structures” was “perfectly legal”. Back in 2008, the WSJ reported Kameya, an investment vehicle on Cyprus linked to Hermitage, figured in a “gray scheme” that allowed foreign investors to get around the restrictions.

In 2009, Browder wrote a tribute “They Killed My Lawyer [Sergei Magnitsky died in a Moscow prison]” decrying Russia’s lack of rule of law, which was published in Foreign Policy (Dec. 22), whose CEO and chief editor David Rothkopf is former managing director of Kissinger Associates. In 2006, the Washington Post reported (July 13) three U.S. Senators (J.McCain, B.Frist, C.Schumer) wrote a letter to 43rd President G.W. Bush to take Browder’s – a British citizen with ties to the President and Prime Minister Tony Blair – case to Moscow as some U.S. investors had $1 billion in Hermitage, to set an example for rule of law. (Khodorkovsky’s similar plight on his purchase of Russia’s Yukos Oil and Bush (41st) is in the upcoming Part II ideological subversion of the United States.)

Browder and Edmond Safra founded Hermitage Capital Management in 1996 (WSJ Jul 13, 2006) and to 2005 was among the biggest foreign investors in Russia. Safra founded the Republic National Bank of New York (known as a gold bullion house, currency dealer) and Safra Republic Holdings of Luxembourg. Safra sold both to London’s HSBC for nearly $10 billion before his death on December 3, 1999. Safra’s murder from an arson in his Monaco house remains shrouded in mystery that extended to much of his bank dealings. Henry Kissinger’s comments upon Safra’s death (WSJ Dec. 6, 1999) are rather interesting given they were personal friends for 20 years. Denials of Safra’s Republic Bank alleged links to drug money laundering, the Iran-contra affair, CIA operations accompany suggestions Republic laundered Russian money.

On March 13, 2013, Russian journalists reported Safra was planning to give testimony to the FBI when Safra was killed. The bureau was investigating the fate of the stabilization credit that the IMF extended to Russia in 1998, which vanished from accounts at Safra’s bank at a time when Browder’s Hermitage Capital turned up significant sums of money to buy Gazprom shares. On March 26, 2013,  HSBC (Hermitage Capital’s trustee) shut down Hermitage Fund(link) as Browder is sued in London and Russian investigators threaten to seize documents from HSBC in Moscow.

[One of Republic’s largest customers was Martin Armstrong, accused of using his accounts, which represented 90% of Republic’s securities business, to defraud Japanese investors of $1 billion, described as Ponzi (USA Today Nov 21, 2001); HSBC settled. Questions remain about how much Republic knew. In a telemarketing scheme thousands of investors, many elderly, were persuaded into purchasing commodities (gold, platinum, etc.) with a 20% cash downpayment as SafraBank financed the remaining through a Texas subsidiary what came to be over 10,000 precious metals loans. Investors had no idea what they purchased in the 1980s was an OTC derivative and lost millions; in 1992, Republic settled some lawsuits.]

Leave the Euro

It is a trap. It is like telling people to go back inside a burning building. Cyprus. Greece. Spain. Italy. Portugal. Germany …and other nations in line to join the euro. Run. Walk away from it. Leave the euro with what is left of your nation’s wealth and sovereignty, if sovereignty is what you value. One can ponder the thought as a few months ago, the IMF sees the European banks face $4.5 trillion sell-off of assets (yours and the nation’s assets in exchange for printed money that was lent to you). In 2005 when the Dominican Republic suffered an economic collapse, the New York Observer (Dec 25, 2005) reported the IMF forced the country’s central bank to sell 2,000 acres of prime beachfront to a group of “20 American luminaries” – financiers, intellectuals – to “vacation, play golf and bask in the glow” of each other. The same has been done to the people in the United States. But consider a plan much bigger.

Consider that what was put forth to the people – the euro – as an integration of the European economy is subverted to control over the European Continue reading

Part I: Ideological Subversion, Psychological War on the United States

 “This [U.S. Constitution] is likely to be well administered for a course of years and can only end in Despotism… when the people shall become so corrupted as to need despotic government, being incapable of any other.”      

 – Benjamin Franklin, Founding Father (81 years of age), Speech at the Signing of the Constitution of the United States on September 17, 1787.

I have not written about “fiscal cliff” or debt ceiling issues. The data is simple: there is no feasible economic growth to solve these problems and more so, tied to over $1,000 trillion in OTC notional derivatives (imaginary money) embedded in the quasi-private Federal Reserve Bank’s largest member banks and financial institutions that have been suspended from the black hole since 2008. The Federal Reserve Bank’s printed $20 trillion+ over that period (The Federal Reserve Bank’s Love Affair in QE 0-1-2-3∞, The Federal Reserve Bank is Naked, Beyond QE) is not enough for its member banks as the authorities are looking to help “manage” (protect) Americans from their $19 trillion in retirement savings accounts. It seems an ideal environment. Before a few fall off their chairs, it can be useful to look beyond chart movements as the truth leaks out from time to time for some time.

First, I would like to share a monetary experience not found in Ph.D. economics. After the communist North Viet Nam took over the more free and prosperous South in 1975, the communist government “State” confiscated all the guns (and priests). After an interlude, the State introduced without warning a new currency that took immediate effect. Gold disappeared. People were allowed to exchange a certain amount of old currency for the new currency to “equalize” everyone – control an unstated purpose and the State wanted to know who had what. What people could not exchange became worthless paper. There was panic, pandemonium as people furiously spent the old currency on food and goods, pushing up prices; our produce could not keep up with demand. Those with cash below the exchange limit took the old currency, but that did not solve the problem of inflation and another currency revaluation. People with gold (few put anything in banks) were insulated from these changes and preserved some independence from the State. Sociologist Vu Duc Vuong explained the Vietnamese’s centuries-old attachment to gold, “Empires may fall, currencies may change… gold will always survive.”

Indoctrination was constant. To protect the population, the communists shot people who fled the country to prove the dangers of having a gun. The State had a “see something, say something” program where their informers reported back suspicious activity in the neighborhood. Poor Mom was reported to the State when she sold our pool table because the cash could be used to fund terrorism against the State, such as to feed the family. The State was also concerned about our diet and dropped by to see what we were eating in case the food differed from what the collective ate. To protect us from leaving the communist paradise, the State visited to ensure we were safe. As a shared sacrifice, the State asked to borrow our home permanently, never mind that we lived there. They took it over when we disappeared.

The village elders have a saying that is translated as: “Hide the hand that throws the stone.” It may be that it is a hand that plays all sides, loyal to no nation or peoples.

I.  Ideological Subversion, Psychological Warfare: (Back) Into the Lion’s Den

Ideological subversion or psychological warfare is a “process which is legitimate, overt… to change the perception of reality of every American to such an extent that despite the abundance of information no one is able to come to sensible conclusions in the interest of defending themselves, their families…their country… [E]xposure to true information does not matter anymore. A person who is demoralized is unable to assess true information. The facts tell nothing to him.”

“[P]romise people all kind of goodies and “paradise of earth”, to destabilize your economy, to eliminate the principal of free-market competition and to put a “Big Brother” government… In other words, Marxism-Leninism ideology is being pumped into the soft heads of at least three generations of American students without being challenged or counterbalanced by the basic values of Americanism, American patriotism…”

“[I]ndividuals who were instrumental in creating public opinion: publishers, editors, journalists, actors, educationalists, professors .. business circles… would be promoted to positions of power through media and public opinion manipulation… large circulation, established, conservative media…filthy rich movie makers, intellectuals, so-called academic circles. Cynical, ego-centric people…are the most recruitable people, people who lack moral principals, who are either too greedy or suffer from self-importance…”

“The result? The result you can see. Most of the people who graduated in the ‘60s, drop outs or half-baked intellectuals are now occupying the positions of power in the governments, civil service, business, mass media, educational system… They are contaminated.”

The demoralization process in the United States is basically completed already for the last 25 years. Actually, it’s over fulfilled…  United States is in a state of war. Undeclared total war against the basic principals and foundations of this system. And the initiator of this war is not comrade Andropov [Head KGB].”   Yuri Bezmenov, KGB Subversion Expert, Soviet Defector excerpts from 1984 Interview.Transcript further below. (1 Hour Interview Full Version)

Yuri Bezmenov was perhaps aware more than most that a few notable Wall Street banks and their founding of their quasi-private Federal Reserve Bank, and U.S. industrialists-corporations (Ford, GE, Rockefeller’s Standard Oil…) financed among others, communists of the Bolshevik Revolution later renamed Communist Party of the Soviet Union in 1952, building up the Soviet Union whose weaponry was later used against U.S. soldiers and the Vietnamese in the South during the Viet Nam war. These financiers backed both Franklin Delano Roosevelt and Hitler’s Nazi rise into the profits of World War II that gave birth to a set of twins, the New Deal and the New Order. The financiers, FDR, Hitler and Mussolini shared mutual admiration for State control and low regard for free markets.

By the 1930s

In an interview with the New York Times on June 4, 1933  Premier Mussolini praised, “President Roosevelt’s new plan for coordination of industry follows precisely the lines of Fascist cooperationContinue reading

In Between the Lines: U.S. Marine to U.S. Senator: “I am not your peasant”

Courage and honor, and IQ do not often occupy the same space.

Louis Michael Seidman, a professor of constitutional law at Georgetown University, “Let’s Give Up on the Constitution(by way of jsmineset.com):

“Our sometimes flagrant disregard of the Constitution has not produced chaos or totalitarianism; on the contrary, it has helped us to grow and prosper.” — New York Times, Dec. 30, 2012.

When courage, honor and IQ do occupy the same space, it is something to behold. U.S. Marine Joshua Boston’s letter to U.S. Senator:

Senator Dianne Feinstein,

I will not register my weapons should this bill be passed, as I do not believe it is the government’s right to know what I own. Nor do I think it prudent to tell you what I own so that it may be taken from me by a group of people who enjoy armed protection yet decry me having the same a crime.

You ma’am have overstepped a line that is not your domain. I am a Marine Corps Veteran of 8 years, and I will not have some woman who proclaims the evil of an inanimate object, yet carries one, tell me I may not have one.

I am not your subject. I am the man who keeps you free. I am not your servant. Continue reading

The Federal Reserve Bank is Naked: QE 10T Dollar ‘Loans’ Swaps and Naked Mortgage Bonds of Quantitative Easing 1

More broadly there seems to be a confluence of events as the American public and its treasury are being plundered in parallel to once-sovereign countries of the Eurozone, bound together by debt and much of the over $1,000 trillion in derivatives (money that does not exist). All based on a quasi-private Federal Reserve monetary system that prints dollars (or euros) from nothing in exchange for savings earned and countries as collateral for the privilege of its debt. Smoke plumes rise in the Middle East. From my first post, Welcome to EconomicsVoodoo.com! (October 17, 2012)

The banking and financial crisis emerging in September 2008 is often called a global financial crisis, but to be more precise the data point to a crisis of the Western central banks. I referenced euros previously, so this is the euros companion to Quantitative Easing 0-1-2-3∞ & The Federal Reserve’s Love Affair with its Banks and Mortgage Bonds: Levitating The Black Hole. QE 0-1-2-3 is incomplete as concurrently the Federal Reserve Bank also entered into $10.06 Trillion in dollar ‘loans’ liquidity swaps with foreign central banks that we examine in Section I. Why QE $10T as we look at a few of Europe’s largest banks in Section II, which leads us to the $1.25 Trillion naked reasons behind the Federal Reserve Bank’s Quantitative Easing I purchase of phantom agency mortgage bonds  that we revisit more closely in Section III.

What the Federal Reserve Bank and its largest member banks, some European banks did with the $1.25 trillion Federal Reserve MBS purchase program in 2009 “QE 1” may leave some in disbelief. Consider an example from this MBS purchase program, the Federal Reserve gave a handful of banks $57.7 billion for a $600 million mortgage bond issued in 1980s . For a moment, recall that quantitative easing or ‘QE’ is the printing of dollars (or euros) in digital or paper form beyond the capacity to earn them through the production of goods and services. The banking and financial crisis in 2008 is often attributed to subprime mortgages, but it is not the mortgage loans per se, but the opaque $7 trillion or so mortgage derivative bonds (presumably containing mortgage loans) and $62 trillion in credit default swaps (CDS) ‘insurance’ derivatives built into the bonds and their insurers that make losses exponential.

I. Federal Reserve Bank & European Central Bank’s $8.01 Trillion Dollar-Euro Swaps

At the height of the crisis in the United States, the Federal Reserve Bank extended $8 trillion of the $10 trillion in dollar liquidity swaps to the European Central Bank through the Federal Reserve Bank’s creation of the Central Bank Liquidity Swap Lines [Data] as shown in the Voodoo Swaps Chart 1 below; swap agreements were with 14 foreign central banks. These dollar liquidity swaps in essence were loans, though not technically called loans, but merely a swap or an exchange of currencies between two central banks, neither central bank having $8.01 trillion U.S. dollars and about €6 trillion equivalent to do so.

In doing so, each central bank essentially helped the other to print dollars and euros. Another nearly $1 trillion in dollar swaps was with the Bank of England, equivalent to nearly half of the United Kingdom’s GDP.  The Federal Reserve printed dollars equivalent to 70% of U.S. GDP in 2008.

Banking & Financial Crisis 2008: Federal Reserve $8 trillion in dollar "loan" swaps with the European Central Bank

Voodoo Dollar-Euro Swaps Chart 1. Federal Reserve $8 Trillion in Dollar Liquidity “Loans” Swaps with the European Central Bank

TECHNICALLY, the Federal Reserve and the ECB did not swap $8.01 trillion dollars for euros at one time, as it would look somewhat problematic for the Federal Reserve Bank monetary system and the ECB because these trillions in dollars and euros do not exist. Continue reading

Understanding The Truman Show

The Truman Show goes on, as local gas pump prices have reportedly jumped more than 10%  since last evening, after unlimited quantities of dollars had been secured for the levitation of the largest member banks of the Federal Reserve System, and more generally, the entire system.

Quantitative Easing 0-1-2-3∞ & The Federal Reserve’s Love Affair with its Banks and Mortgage Bonds: Levitating The Black Hole and Beyond will test its limits against time (t) such as reported last month, Germany is scrambling to count its gold bars being held at the Federal Reserve Bank of New York-London corridor. But perhaps Germany had reportedly already quietly withdrawn two-thirds of it home in 2001 after the creation of the euro (the Federal Reserve has been printing euros for its member banks through currency swaps). Hong Kong removed its gold from London in 2009 and Venezuela in 2012, which underscores confidence in a system that relies on QE (faith-based accounting & printing money) since the banking and financial system crisis-collapse in 2008 and more broadly, sustained shifts away from the U.S. dollar observed in currency holdings over time.

Carl Bernstein, one of the two journalists who broke the Nixon-Watergate scandal, wrote an interesting 25,000-word cover story published in Rolling Stone magazine on October 20, 1977, entitled, “The CIA and The Media.”

The article was published in 1977, so we can be 99% certain (+/- 100% margin of error) that such practices have been sharply curtailed. We will soon look at the $1,000 trillion in derivatives, but in the meantime, a few interesting snippets from Bernstein on the free press, journalism:

In many instances, CIA documents show, journalists were engaged to perform tasks for the CIA with the consent of the managements of America’s leading news organizations. The history of the CIA’s involvement with the American press continues to be shrouded by an official policy of obfuscation and deception for the following principal reasons:

 ■ The use of journalists has been among the most productive means of intelligence gathering employed by the CIA. Although the Agency has cut back sharply on the use of reporters since 1973 primarily as a result of pressure from the media), some journalist operatives are still posted abroad.

 ■ Further investigation into the matter, CIA officials say, would inevitably reveal a series of embarrassing relationships in the 1950s and 1960s with some of the most powerful organizations and individuals in American journalism.

 …Other organizations which cooperated with the CIA include the American Broadcasting Company [ABC], the National Broadcasting Company [NBC], the Associated Press[AP], United Press International [UPI], Reuters, Hearst Newspapers, Scripps Howard, Newsweek magazine, the Mutual Broadcasting System, the Miami Herald and the old Saturday Evening Post and New York Herald-Tribune.

 By far the most valuable of these associations, according to CIA officials, have been with the New York Times, CBS and Time Inc. The CIA’s use of the American news media has been much more extensive than Agency officials have acknowledged publicly or in closed sessions with members of Congress. Continue reading