International Forecaster Weekly

Expect The Recession To Increase In Severity

The dichotomy between paper and metals, US owes 3 trillion to foreigners, the wiemarization is coming, more banks go belly-up, gold manipulation poses problems for economic stability, consider the recent rallies to be as good as it will get

Bob Chapman | November 8, 2008

      We have reported extensively on the dichotomy between the physical and paper markets in precious metals. The pricing between these two types of markets is now completely out of sync, with the casinos, which some dare to call commodity markets, utilizing bogus manipulated prices based on paper sales of precious metals in volumes that do not physically exist, while the physical markets have become a de facto black market where the true value of gold and silver is recognized based on market fundamentals.  This market split has resulted from an intentional bottleneck created by preventing wholesale gold and silver from being converted into retail gold and silver.  This has been accomplished by withholding wholesale gold and silver in COMEX inventories under thinly veiled threats against anyone attempting to take physical delivery, while channeling existing wholesale supplies at the smelter and dealership levels to the large bullion banks that are using these wholesale supplies to suppress precious metal prices and to bolster their short positions.  

Further, new production from Illuminist producers like Barrick is also being channeled to the bullion banks, while the cartel has simultaneously ordered the shutdown of mint production in Illuminist-controlled countries around the world, including the US, Mexico, South Africa and Canada, thus reducing the drain on wholesale gold and silver for use in producing coinage.  In addition, supplies of wholesale gold and silver held by ETF's are being leased out for suppressive purposes against the very people who supposedly own it, namely the ETF shareholders, while their ETF shares are naked-shorted to produce imaginary sales of metals that do not even exist.

    This whole suppressive process is not only despicable, it is blatantly and patently criminal, and violates nearly every conceivable market regulatory law you could name, which laws were passed to prevent these very things from happening.      Instead, these laws are either ignored, or are twisted and perverted to produce outcomes, which are the antithesis of what legislators intended when these laws were passed.  Needless to say, the so-called regulators are owned by the cartel Illuminists via bribe or compromise, and like little cartel monkeys, they play the see no evil, hear no evil, speak no evil game.

    The reasons for the market dichotomy and the wholesale/retail bottleneck should be obvious.  They want the large commercial casino players to have enough gold and silver to back their suppressive manipulations, and they also want to make the acquisition of gold and silver by the public to be as difficult and as expensive as possible by creating supply shortages and large premiums over spot at the retail level. The suppression in the paper markets is to throw the public off the trail of destruction which the Illuminati have reeked against our economy to bring us to our knees so we will accept an Orwellian, feudal, corporatist, fascist police state and world government.     They have the canary in the coalmine on artificial life support as they cut off power to the ringers on the gold and silver alarm bells.

    The retail premiums and shortages are a de facto gold confiscation, since few in America, Canada or Europe own physical gold and silver anymore, and are thus defenseless against the coming hyperinflation. The Illuminati want the public to remain defenseless, and making the retail purchase of gold and silver as onerous as possible is intended to accomplish just that.  They do not want the public to be prepared for the hyper-stagflation which is on its way as the soon-to-be-many-trillions in bailout money hits the dollar supply depot via monetization of treasuries and as commercial banks attempt to re-inflate our financial markets by starting to lend again, mainly to Illuminist insiders, in their effort to complete the last stage of the Big Sting Two.  The commercial banks can now lend to one another risk free because the FDIC is now guaranteeing all interbank loans, with any losses to be borne by the sheople taxpayers.  

    They have already pounded commodities into the ground.  Now all they need to do is to orchestrate one or two huge bear market rallies so they can bail out through their dark pools of liquidity, and use their sales proceeds to buy commodities and other real, tangible assets at suppressed, bargain-basement prices, or at bankruptcy liquidation prices as non-Illuminist companies are allowed to go under because bailout money is intentionally withheld from them by Vizier Paulson, or by the person who will be his successor, to whom Congress has given god-like powers with bogus oversight by Buck-Busting Ben.  Obama will look like a hero when the bear market rallies occurs, and the fane-stream media shills will proclaim his genius.  That will last for six to twelve months until we are Weimarized as everyone bolts for the exits in anticipation of the dollar destruction to come via hyperinflation caused by the huge increase in the circulation of money that will occur as greed and speculation get one last hurrah in the general stock markets.

    The banks are now even complaining about the impact that the Treasury's possible purchase of toxic waste assets might have on their balance sheets, since they would prefer to use the money to acquire the smaller fry and shore up their financial statements, and that is how the bailout money will be used, as was planned by the Illuminati all along.  The purchase of toxic waste by the Treasury was a red herring to get Congress to pass the Paulson Ponzi Plunder Plan, the ulterior motive being to save the big Illuminist players so they can scarf up the small fry, thus creating a handful of too-big-to-fail financial institutions which will be bailed over and over again with an endless supply of new bailout money and which will eventually be merged with the broke Fed to form one nationalized super-entity that will rule our financial markets with an iron fist.

    The commercial banks, which every Illuminist business is now becoming so they can tap into the plunder extorted fromtaxpayers via the Paulson Ponzi Plunder Plan, are continuing to stuff nuts of taxpayer largesse into their baggy little cheeks so they can buy out the smaller fry and endure a harsh financial winter.

    In addition to the artificially created bottleneck in precious metals, we now have an artificially created bottleneck in treasury bonds, with huge, unprecedented failures to deliver occurring almost non-stop, and this despite the fact that there are new treasuries being created like hot-cakes to fund the Paulson Ponzi Plunder Plan and other government bailouts, to the tune of trillions of dollars.  What is probably happening here is that the creation of bonds is being delayed, or their recordation is being delayed, in order to produce an artificially high price for bonds which should be flooding the market, but which are coming in by trickles instead even as proceeds from de-leveraging seek the perceived safety of treasury bonds and can't find enough of them to satisfy their needs for a safe-haven.  The Illuminati are getting the best of both worlds.  They are getting dollar support and a high demand for treasuries from the de-leveraging of foreign assets, while simultaneously creating higher prices on treasury bonds than should be possible under the current circumstances by creating an artificial market shortage in treasuries which should, by rights, be flooding the markets via the primary dealers.  These market distortions, in the long run, are untenable, and eventually the dam will break, the dollar will go into the tank, and gold and silver will fly.

    We now have a new dollar anti-gravity machine.  You may recall that much of the AIG and Lehman CDS fallout is in the private, opaque, unregulated OTC market. This fallout is in the magnitude of hundreds of billions of dollars, which losses must be settled in dollars.  Yet we hear that there was no problem, and that the derivative masters must have known their stuff and done their homework all along.  This is, of course, an impossible result.  The losses don't just disappear.  What may have happened here is that, because these instruments are private contracts that are not publicly traded, the parties are free to alter the terms of these contracts by mutual agreement.  With some strong-arming by Vizier Paulson, they may have deferred settlement of these derivatives in stages, or on demand.  Thus, whenever the dollar needs a boost, Vizier Paulson makes a phone call and more derivatives get settled - in dollars of course.  The foreign banks who are counterparties must use their domestic currencies to buy dollars to settle their liability under the CDS contracts, and this could help to explain the dollar spikes we see continually whenever the dollar starts to falter. This may be how they are now pumping the dollar up despite the fact that oil has been beaten down and the euro effect has fallen off.

    The non-Illuminist hedgies who were long precious metals are now being systematically destroyed.  Fifty percent of all hedgies will no longer be with us in two to three years, during which time they will either be bankrupted or redeemed into oblivion. Non-Illuminist hedgies will not get any bailout money, loans or insider trading tips as leveraged precious metal plays and OTC derivative losses hunt them down like dogs.  

    Illuminist hedgies being preserved by obtaining profits from insider trading via the new formula for profitability as follows:  Profitability (Meaning Insider Trading Profits) = Low Volume + Volatility + Dark Pools of Liquidity + PPT.

    Thus, we are now on our own, and will continue to be on our own unless and until an untoward event occurs, the sovereign wealth funds or the Illuminists go long gold and silver, or the gold and silver community wake up and empty out the COMEX gold and silver cupboards.  A few billion could have bought out the entire supply of COMEX silver, yet we seem to have no patriotic hedgies or wealthy individuals who are willing to clean it out.  Major players in the gold and silver communitiy should all be ashamed of themselves for allowing this to happen, and endangering the viability of our producers, thus placing future supplies of precious metals at risk of falling into the hands of Illuminist control.

    We have cried out for two years that you must rule the physical markets before you can enter the casino, but few listened.  Ironically, it was the little retail buyers who turned out to be our true patriots, and many of them, especially the newer gold supporters, have, by and large been damaged, or have even been cleaned out, especially in resource stocks, because the larger players faltered and did not follow through.  This is simply inexcusable.  The larger players must demand physical delivery NOW on the COMEX, as we have importuned you to do vociferously for over a year, or let the cartel continue to clean the little guy's clock, and your clocks, until such time as gold and silver become unstoppable forces, which will eventually occur. The sooner the public is brought in, the better.  If you wait for the gold and silver markets to become unstoppable, the public will be caught by surprise and will not have a sufficient amount of time to protect themselves.  We ask do you want to have this on your conscience?  It is now time for bold, fearless action.

        More banks go belly-up - - Regulators close down Franklin Bank, a Houston bank with $5.1 billion in assets, and Security Pacific Bank of California, with assets of $561 million.

The end of the year rally in the stock market is over. This is as good as it gets. The steam will slowly go out of prices and early in the new year we’ll test 7,268 on the Dow.

December should prove to be an interesting month; the December contract on gold and silver close. The gap between the futures prices and the real cash market should close. If enough players take delivery in these metals there is the possibility that Comex will have to borrow gold and silver to meet demand or perhaps even default. No matter it is going to get more and more difficult for the “Working Group on Financial Markets” to further carry on their manipulations. The key is the commercials who want delivery. In gold, open interest has fallen from 500,000 to nearly 300,000 over the past several months. Speculators do not like to be told that they are non-economic customers and cannot demand delivery. What has been going on, on Crimex is criminal – all under the direction of our Treasury Department.

The recession we have enmeshed in for 21 months is now beginning to visually increase in severity. This recession will make all other recessions since the 1930s look like child’s play. The elitists wanted to take down the world economic and financial system and they’ll get what they wished for.

Wall Streets fairy tale rally ended Tuesday, November 4th, nobody with foresight believes our recession will be mild. They believe it will be severe. The public knows as well that they’ve been taken to the cleaners on the Wall Street-banker bailout legislation.

The October challenger job cuts rose 19% month-on-month to 112,884 near a 5-year high. The big cuts were in financials and autos.

The coming depression is going to be terrible. The US owes foreigners over $3 trillion, has over $10 trillion in short-term debt and over $100 trillion in long-term debt. We need $3 billion a day from foreigners just to stay afloat. We cannot compete with foreign countries without re-erecting trade barriers on goods and services. Our educational system has not trained younger Americans and half of them cannot compete. It sure doesn’t look good.

One of our short recommendations, D. R. Horton says it will lose $900 million in the 4th quarter.

Another short recommendation IBM is $34 billion in debt. This is money it lent to its clients to help them buy its products. We anticipated that clients would have a tough time riding out a recession/depression, hence the short. IBM has for some time operated in this manner, and now they find some clients cannot pay and that leads to charge offs against earnings and that puts pressure on the stock.

Arrogant to the end, IBM just borrowed money again to buy back its own shares and now that the market has collapsed the shares are lower and IBM has to repay the loans in a far more difficult business environment. Management says they are comfortable with their debt strategy. Passengers on the Titanic were comfortable as well before they hit the iceberg.

We talk about gold and silver being the only financial salvation of our age. It is and will continue to be because America and most of the countries are broke and there is no way they can recover. They are buried in debt and will try desperately to bail themselves out via inflation, which they know will not work. Eventually the bottom will fall out and they know it. That is why they have to have another war, a major one. They desperately need another distraction. That creates the opportunity for profit, people control, a draft, population destruction, avoidance of revolution and the repudiation of debt due to this terrible war that, of course, our enemies started. This allows as well for a further grab for power - the Nazification of our country. This will be accompanied by massive inflation, which as they say in the controlled media, that it’s already baked into the cake. Those in dollar denominated debt particularly in treasury and Agency debt will get clobbered. A triple AAA rating, which in this coming year will be lowered, is a trap for investors. Soon real interest rates will rise and that means lower bond prices. Growth will not be maintained and depression will eventually consume the world economy.