International Forecaster Weekly

Gold Is A Good Bet When Sovereign Nations Are Imploding

Get physical gold, real shortages in physical metals affect market activities in strange and interesting ways, pressure on Goldman Sachs in time for the election, hand slaps for the destroyers of economies, paper interests are folly, metals due for a moon shot...

Bob Chapman | May 5, 2010

There are only two kinds of gold and silver to own.  Physical gold and silver that are located above the ground and that are also in your possession (which can be owned via coins, bullion, jewelry, etc.), and physical gold and silver that is located below the ground (which can be owned through producer shares which represent an ownership interest in the ore containing the raw and unprocessed metals).  That is because while owners of bogus paper interests in above-ground gold and silver such as ETF shares, COMEX and LBME contracts, mint certificates and OTC derivative contracts in gold and silver are subject to fraudulent claims of ownership, storage, possession, inventory levels, security issues, insurance issues and metal content, those who take physical possession of their above-ground gold and silver need only worry about security and insurance issues (easily resolved with a private safe/secret hiding place and a call to your insurance carrier) and the metal content of their physical gold and silver, which metal content is really only a concern for the larger bars of gold bullion which recent events reveal might be "tungsten-salted."  One further concern is honesty and fair dealing in making purchases outside of any exchange through dealers.  We can provide you with a list of dealers on request who will treat you fairly so you can buy your metals at a fair price in types and quantities that are right for your situation.  Liquidity of physical metals in your possession is not a problem, although it requires more effort to liquidate than doing transactions on an exchange accessible via your computer.  Don't get lazy - buy physical!

Like owners of paper interests in above-ground gold and silver, owners of shares in below-ground gold and silver have many issues that are of concern.  But the difference here is that the issues for below-ground paper interests can be weeded out through the due diligence of experienced analysts, whereas the issues for bogus, above-ground paper interests cannot be discovered by due diligence because these markets are engaged in ongoing fraud where there is intentional duplicity and a complete lack of transparency meant to deceive and to pilfer the general public, and all with the total complicity of our government and our regulators.

Some concerns with paper interests in below-ground gold and silver include fraudulent resource claims (a problem solved by becoming an IF subscriber where we weed out the bad from the good for you), along with "yellow fever" stock market hits and naked shorting, which can be overcome by going long, staying long and adding on dips.  (A "yellow fever" stock market hit is an Illuminist-orchestrated takedown of the general stock markets via our corrupt government's Plunge Protection Team, with a view to stalling a rally in precious metals markets by causing margin issues for traders in the hopes that this will force liquidations of metals positions and producer shares to cover the resulting margin calls).  Also, rising production costs, sovereign risks and credit crunches can be an issue, but once again we weed out the companies that are vulnerable to these issues for you.  Truly great companies are those lead by an outstanding management team that has, in a fiscally prudent manner, acquired interests in extensive, low-cost gold and silver resources that are located in friendly countries.  The prospects of such companies are so good that financing for any future operations is easy to find under almost any circumstances, whether through loans, or issues of new shares.

While physically-possessed above-ground gold and silver and their related producer shares in below-ground gold and silver are also subject to manipulation by Illuminist-run governments and financial institutions, the ability of the cartel to manipulate them by doing things like creating naked COMEX commodity contracts or placing naked shorts on PM (precious metals) shares, is really related to, and empowered by, the ability of the cartel to continue its perpetration of ongoing frauds in the bogus paper interests via above-ground gold and silver markets that have only a small percentage of the gold and silver that they claim to have.

These fraudulent paper interests in above-ground gold and silver could be easily eliminated by the hard money community if they really wanted to.  The Illuminati know this, and it is their greatest fear.  That is why they had both George Soros and John Paulson, who are undoubtedly wealthy Illuminist henchmen like Buffett and Gates, take huge positions in the GLD gold ETF sponsored by HSBC.  This bourse is in real trouble because they have leased out most of their gold and are running largely naked, one large investor redemption and liquidation away from a catastrophe.  Paulson and Soros were asked by the Illuminati to renew credibility in the GLD by taking large positions in this ETF, with its ongoing inventory fraud, and lack of a guarantee against non-conforming metal content (i.e. if we have tungsten-salted bars, that's just too bad for you, as we have no accountability).  They may also be backing up the GLD with their own private hoards of gold and cash, especially Soros.  This is their way of paying the Illuminati back for all the riches they've earned through insider trading tips provided by the Illuminati's various institutional operatives, chief of which is Goldman Sachs.  Their greatest fear is that investors will bail out of the GLD and expose the whole freaking fraud!!

Paulson is an Illuminist as you can obviously see from his conspiracy with the Vampire Squid to create super-toxic subprime derivatives to pawn off on suckers via bogus AAA ratings while he and Goldie shorted those same derivatives and just sat back and waited for the inevitable implosion and outlandish profits they could make on account of that implosion.  Obama wants to make it look like he sicked the SEC guard dog on Goldman Sachs and Paulson & Co. to gain brownie points for upcoming elections yes, but mostly to get people going wild about Wall Street fraud to keep up pressure for passage of the Dodd-sponsored financial reform package that will set the Fed up as the absolute Shogun over all things financial in the US and around the world which we have continually warned about since this recession, now a depression, got underway. Watch how quickly the investigation turns its focus off jail time for the chief perpetrators and onto bogus fines and hand-slaps, with perhaps a few underlings being sacrificed so the US Attorney's office can save face.  This is going to end up being nothing more than an investigative white-wash, just the same old, same old.  We can hear Rockefeller, Rothschild and the Queen Mum maniacally laughing their derrieres off as the Fed is set up as the New Vampire Squid On Steroids, bringing them that much closer to implementing their one-world Orwellian police state of feudality.

All the hard money community would have to do is cash in their chips, leave the casino and buy physical gold, silver and their related producer shares.  The henchmen responsible for carrying out the fraudulent and criminal manipulations perpetrated by the Illuminist cartel would be immediately stopped in their tracks if that happened, and the plans of the Illuminati for a corporatist fascist one world Orwellian police state would also be completely and utterly destroyed in the process.  Why waste your time voting for some miscreant Dumbo or Jackass who you can't stand anyway.  Vote with your gold and silver first, then destroy every incumbent miscreant who holds any public office at any level of government for the sole purpose of ridding ourselves of their ingrained corruption.  Get rid of fiat money first, then blow out all the incumbents!!!

We, the little guys, can do this, even without large institutional help.  Even a large number of small moves out of the casino by the smaller players could put the criminal enterprise of the cartel over the edge into total and complete destruction.  This would embolden and free up the large institutions to join the party.  And that is when the real fun will begin as we all become very wealthy.  Let the large non-Illuminist institutions become the big heroes in the end.  But right now we need some small heroes to get the party started.  We can win without investing another dime and without taking on any more risk by simply reallocating our capital away from the bogus paper gold and silver Ponzi schemes being perpetrated in rigged Illuminist casinos and into physical gold and silver which we have in our own possession or which we own through producer shares.

So how do you cash in your chips, leave the casino and eliminate the potential for PM related frauds?

Very simple.  STEP ONE:  Convert your COMEX and LBME contracts, your GLD and SLV ETF shares, your private mint certificates and your OTC PM derivative contracts into physical gold and silver if you can, and take physical possession of it.  If you can't get physical possession, then just cash out and take your cash to your nearest reputable gold and silver dealer.  When it comes to above-ground PM's, you take possession of your metals, period.  Do not trust anyone else with your gold and silver.  And if you store them in a bank safe deposit box, we're sorry, but we're going to have to hurt you for exhibiting such stupidity.  Also, in the case of large gold bars, you have them assayed and certified as genuine before paying for them and taking possession.  

Reliance on paper interests in above-ground PM's is pure folly, as PM's can be leased and then sold by people who do not own them, while the real owners still carry them as assets on their books.  This means that you have no idea who really owns any given cache of bullion.  Is it the party possessing it that owns it, or is it owned by some other party who perhaps leased it out to the party in possession but that still carries the PM's on its books as the original owner?  Or is it owned by yet a third party, that bought the PM's for value from the party that originally leased them from the original owner, and that is now allowing the party in possession that leased the PM's from the original owner to store the metals for them?  You also don't know if a party's claims to having your PM's in a storage facility are true.  If you can't visit the facility, and see your allocated bars or coins with proper identifying information on them, you can never know if they actually even exist.  Often, the money you send to people who you trust to use it to buy and store PM's for you do not buy physical PM's with your money.  Instead they buy paper interests in PM's, which are subject to the very same issues just mentioned previously where you have absolutely no idea who really owns the PM's that your paper interests supposedly entitle you to or if those PM's even exist.

And then of course, in the case of gold, even if you absolutely know who owns it, and it has your serial numbers on it, and you visit and actually see the so-called gold, it might turn out to be tungsten-salted gold, of which their might be thousands of tons floating around in vaults around the world, especially at Fort Knox and other Illuminist central banks.  We wonder how many bar owners are now suffering daily coronaries wondering whether their cache of gold is real or not, and if not, what will happen to their balance sheets as a result.  They are probably afraid to even have it assayed for fear of the damages that might result from a bad assay report.  Other institutions may have knowingly taken in tungsten-salted gold as part of the con-game they are playing with PM investors, with surreptitious promises given by our government or other Illuminist institutions to cover their fraudulent butts for any losses they might suffer as a result.  No wonder Rothschild got out of the gold market in 2004, and in that same year the Manhattan DA's investigation of Stuart Smith, Senior Vice President of Operations - NYMEX, who had control over NYMEX gold inventory records, got stifled.  No one knows what happened to Mr. Smith after he took an administrative leave of absence and the investigation by the DA's office was abruptly terminated.  We don't think that Rothschild was worried about getting burned by tungsten-salted gold.  His concern was that he wanted no part of the taint that would come from being involved in one of the biggest, most bungled, blatant and incriminating frauds that has ever been perpetrated in all of human history, a fraud which would obviously come out in full bloom in true SHTF fashion with the passage of time.  It was only a matter of when, not if.

Above-ground PM's have become the objects of a giant, ongoing shell game conducted by institutional con-artists called central banks, bullion banks, commodity exchanges, ETF's and private mints.  These con-artists wildly, speedily and deftly mix up the shells on the table, and you are supposed to guess under which shell the real PM's might be located.  GOOD LUCK, because the contents of the shell covering the real PM's are often quite deftly and surreptitiously removed from the table during the mixing up of the shells, meaning that it is impossible for you to win because all the shells on the table are empty.  In fact, the analysis of trading volume over the various markets in PM's, in particular the COMEX, LBME, GLD, SLV and OTC PM related derivatives market indicate that the PM trading volume exceeds the supposed physical inventories of PM's by approximately 100 to 1.  So basically, not only are the central banks floating their fiat currencies in a fractional reserve banking Ponzi scheme, they are doing precisely the same thing, aided by bullion banks, commodity exchanges, ETF's and private mints, with above-ground PM's as well.  Essentially, this bevy of con-artists are printing up paper out of thin air which purports to give you an interest in real above-ground PM's, but many of these paper interests are, in reality, completely and totally naked, or at the very least substantially naked.

And then these con-artists will play another game with the gold side of the PM's.  They will suddenly slow the shells down to make it easy for you to pick the winner.  Ah, but when you claim your prize and take it home and have it analyzed, you find that it was really salted with tungsten, and is not even worth the amount of money you put up to play the shell game.  YOU LOSE AGAIN!  It's heads I win, tails you lose.   We get the gold mine, you get the shaft.

We will now outline the tragedy that we believe will soon befall the hard money community with respect to above-ground gold and silver if they do not immediately leave Sodom and Gomorrah and extract themselves from the paper PM frauds.  We believe that these frauds are in the process of being exposed publicly and that soon large and small investors alike are going to start taking action to protect their interests no matter how much the cartel thumps its fists and threatens them.  The sovereign debt debacles throughout the world will show the weakness of fiat money and accelerate the accumulation of physical PMs.  The price of gold and silver will eventually go on a moon-shot.  The hard money community will rejoice as they watch the value of their investments skyrocket, or so they will think.  But then, when the music stops and it comes time to settle their paper contracts and collect their profits, allegations will start to publicly explode that the king has no clothes, and that the exchanges and large commercial traders that dealt in their paper PM certificates, contracts and derivatives were running naked.  And then, the unthinkable will happen, and the thrill of victory will be replaced by the agony of defeat!

That's right.  The exchanges and the big commercials will go under, but not to worry, because they have been backed by their sponsoring governments all along and will get a stealth bailout from the Fed and other central banks in cooperation with their Illuminist-run governments, and from the Dodd bailout package for Illuminist banks that the Dumbos and Jackasses call financial reform.  No one will go to jail, as usual, while the SEC gloms their share of the booty in the form of bogus fines assessed against the criminals.  You, dear friend, will get nothing but a nice business meeting in settlement of your paper PM contracts as you take that long, slow walk to the nearest federal building for a visit with your local bankruptcy trustee, your life's savings having been completely wiped out.

Instead of rejoicing at the meteoric rise of gold and silver, we believe that those in the hard money community who do not forthwith leave the Illuminist casinos of Sodom and Gomorrah will shed enough tears to create a second Niagara Falls.  And remember, it is the Illuminists themselves that own thousands of tons of gold bullion and oodles of silver bullion which they have surreptitiously bought or stolen from their governments, financial institutions and their bogus, pass-through jewelry companies at bargain prices over many decades, and for some, many centuries.  They will be the ones who are celebrating, laughing their large megalomaniacal butts off -- NOT YOU!  Rockefeller, Rothschild, the Queen Mum and the White and Black Popes will be popping the champagne corks for sure!!!  They and their Illuminist compatriots own about a third of all the above-ground gold in the entire world, and one heck of a large portion of the below-ground gold and silver in the world as well.

Oh, and incidentally, that Illuminist belowground portion will increase dramatically as the producers languish due to your boneheaded allocation of capital into the Sodom and Gomorrah casinos instead of the producer shares.  The producer shares will be naked shorted into oblivion due to a lack of volume (that means your lack of participation for those who need it spelled out for them), and that means heavy dilution for producer shares due to criminally suppressed share prices, which will in turn drive the shares down further, which shares the Illuminati will be scarfing up for pennies on the dollar in takeover after hostile takeover by pirates and brigands like Barrick's board of directors.  They plan on having quite a party, unless you get your head out of the sand and start allocating your assets properly.  Even a small move into the producer shares could ignite one of the greatest short-covering rallies of all time as they unwind the criminal positions you have made possible by improperly allocating your capital.  Why buy palladium and platinum?  Those metals will get hammered when the economy goes down, and you don't know when that will occur.  That is what all these new ETF's are all about.  They want you to buy anything but physical gold and silver and their related shares, period.  It is just totally transparent, yet everyone seems to miss it.  They know physical gold and silver and their related shares are your only salvation, and they are doing everything they can to direct your attention away from it.  They want all the profits for themselves, and they have created a "wall of worry" to impede you so that as they bail out of their dollar-denominated assets, they will be able to swoop in and buy all the assets you are avoiding at bargain basement prices.  Once again, they plan to get the gold mine, and to give you the shaft.  Are ye daft, man?

A week ago we were practically speechless when we showed that the Treasury had redeemed nearly $494 billion in Bills in April. A truly stunning number and an indication of just how much cash the Treasury needs to have access to to keep rolling its ridiculously short average maturity debt load. Today we stand even more speechless: according to today's DTS, the Treasury has now redeemed $596 billion in Bills in Aprils: an all time world record, even when accounting for the Fed's steroid abuse period of SFP 1 (we are currently in the second iteration). Add $47 billion in Notes and there are almost $650 billion in redemptions. This number is simply ridiculous. Forget the interest expense: this ever increasing roll is the number one danger to the US and world economy. Should the Treasury be unable to keep issuing shorter and shorter dated debt (and it already is skirting away from even the belly of the curve), it is for all intents and purposes game over.

State deficits continue to climb. NY State next year will have a $15 billion deficit versus $9 billion this year. California is offside $20 billion and Pennsylvania, Illinois, Texas and New Jersey have similar problems.

The supposed republican, Lindsey Graham, Senator from South Carolina, has abandoned supporting climate change with the Democrats. The excuse is the administration’s pursuit of illegal alien amnesty, and its refusal to lock down the border. In addition the Senator has been asked publicly to come out of the closet, regarding his supposed homosexuality, which certainly won’t help his reelection chances. Graham has been well paid off and is compromised due to his lifestyle. He works closely with the Illuminists and is a sop for the bankers.

If the Greek public refuses the rescue package crafted for them, they’ll then exit the euro zone, default on debt and go back to the drachma. Even if accepted issue the EU now prepared to bail out the other insolvent PIIGS? The dream of using the euro as a structure for a world currency is in jeopardy.

On Tuesday the market fell 225 Dow points due to a falling euro and the belief that the deal negotiated for Greece is unrealistic. The euro will not survive. The rumor in Europe is that Germany may secede from the euro zone. That will finalize the euro once and for all if it becomes reality. If the people in Greece refuse the deal offered, will the military take over? They ran things just 36 years ago. If any of this happens the rest of the PIIGS will collapse, as well, and probably the entire world financial system.

JPMorgan Chase & Co., the second- biggest U.S. bank by assets, has a larger exposure than any of its peers to Portugal, Italy, Ireland, Greece and Spain, according to Wells Fargo & Co.

JPMorgan’s exposure to the five so-called PIIGS countries is $36.3 billion, equating to 28 percent of the firm’s Tier-1 capital, a measure of financial strength, Wells Fargo analysts including Matthew Burnell wrote today. Morgan Stanley holds $32.4 billion of debt in the region, which equates to 69 percent of its Tier 1 capital, Burnell wrote.

“Regulatory data suggests JPMorgan’s exposure is largest in aggregate, but Morgan Stanley held the largest aggregate exposure to the PIIGS relative to Tier 1 capital,” the analysts wrote. Overall U.S. bank “exposure to Greece is lower than exposure to Ireland, Italy and Spain.”

Bonds and stocks plunged across Europe in the past week on concern the Greek debt crisis is spreading across the euro area. Standard & Poor’s this week cut Greece, Portugal and Spain’s credit ratings as concern the nations may fail to meet their debt commitments increased.

U.S. banks held a total of $236.8 billion of exposure to the five nations, including $18.1 billion to Greece, Wells Fargo said. European banks have claims totaling $193.1 billion on Greece, according to the Bank for International Settlements, with another $832.2 billion of claims on Spain.

U.S. regulators seized three of Puerto Rico’s largest banks on Friday and sold their deposits to other banks, consolidating the struggling area’s financial sector.

I don’t believe in coincidence. So one has to ask beyond the fact that these banks were under supervision already, why now? Why the day after the vote? This administration begs the question and to basically almost obliterate the DIF fund on one island when there are plenty of targets in AZ, CA, NV, GA and oh yes, FL begs the question: Why now?