bazookaMario Draghi finally let loose this morning with everything left in his monetary “bazooka” and has gone as far as the Bundesbank will let him.
We now have a situation where central banks have lost their credibility.  This will lead to a loss of confidence in all things paper. Either the central banks revalue their balance sheets with a wildly high gold price or the markets will do this for them by voting with their feet so to speak.
We are on the cusp of absolutely wild market gyrations and obscene price levels for gold.
Do I know what the level needs to be for gold to perform its function as central bank reserve?
No, the number could be $25,000, $50,000 or $5 million or more…


Silverbug Island 2nd Release
The Kraken

Submitted by Bill Holter, JSMineset:


First it was the Fed, then it was the Bank of Japan, now the ECB (and maybe even China).  Mario Draghi finally let loose this morning with everything left in his monetary “bazooka” and has gone as far as the Bundesbank will let him. He also has to face the BIS restrictions in the next three weeks which are far from certain to be in favor of his actions. 
Looking backward first, the Fed unsettled markets in mid December with a rate hike.  Japan lit gold’s fuse in January with the announcement of negative interest rates.  Today, Mario Draghi spent and fired his last shot, it will be seen as a blank.  Now we will get to see what sort of reaction is received from the markets.  Initially the markets went in the “favored” directions, that only lasted for about an hour.  The Euro is again strengthening, gold going higher and stock markets have turned negative as if asking “now what?  Do you have anything else”?
Before going further I want to break down what they are trying to do into its most basic form.  Systemically (including Europe) the world ran into “debt saturation” back in 2007.  The plan was to cure too much debt with …more and more debt.  The “experiment” has not worked and will not work …and Mario Draghi just ran into a wall where this is it, he has no more room to “experiment”.  No doubt this is being done now to try to support the Italian (Spanish and others) debt that has gone bad. 
There is another little problem that few are talking about, the BIS.  The Bank for International Settlements has warned Mr. Draghi not to go to this wall of negative interest rates and further outright monetization.  The BIS has the ability to force Draghi to not only stop the madness but also reverse it.  So not only are the markets asking “what’s next?”, it is also wondering whether or not the BIS will step in.
We also have another piece to add to this puzzle, China.  They just announced they will begin to take equity stakes for non performing loans via the banking system.  “Nationalization” no matter what they call it.  It had been speculated China would have to devalue the yuan in an effort to make their massive corporate debt payable and industry more competitive.  I would suggest this is simply wiping out current debt in an effort to make room available to create more debt and to reflate.  We will see how this works out but I do not believe this is any more credible than any of the other “serial reflators”.
Many times it is said “OK, so you see the problem but what’s the answer”?  The answer is obvious and we will get to it after looking at the true problem.  The world hit debt saturation in 2007, sovereign treasuries and central banks stepped in and sacrificed (destroyed) their own balance sheets in an effort to reflate.  We know it has not worked and the global economy (pie) is no longer growing.  The ONLY way for a country or region to “grow” is by taking an inordinate size of the pie and the only way to do this is by devaluing currency faster than your competitors.
The problem today is ALL currencies are competing against each other in debasing (devaluing).  If you devalue too slowly you lose.  If you devalue but not enough, again you lose.  This is the problem with and misunderstanding of the USDX index, the currencies are all valued against each other and NONE OF THEM ARE REAL!  The “answer” as it was back in 2008 is still the same, rather than race “against” each other THEY ALL need to collectively devalue!  The only way to do this is to collectively devalue against “something” …and that something is what it always has been, GOLD!
A collective devaluation will do several things.  First, it will create “inflation” and thus make the existing debt payable if the devaluation is deep enough.  Business will get “reflated” and main street will actually participate in the better business conditions.  Most importantly, for those nations who actually do hold gold, their balance sheet holes will be filled up and patched.  Sovereign treasuries with gold will suddenly see their coffers filled.  There is of course the problem of nations who either do not hold gold or have lied and no longer hold what they said they did.  In this case, these nations become the world’s new “cheap labor” and begin to dig their way out via industrial/commercial production.  This is a very long and hard process which also involves a huge drop in the standard of living.
Do I know what the level needs to be for gold to perform its function as central bank reserve?  No, the number could be $25,000, $50,000 or $5 million or more, I do not have the answer.  The biggest holder(s) of gold on the planet could simply “mandate” a price or do it via the physical markets over a reasonable period of time …but they will do this as it is the only viable solution.
We now have a situation where central banks have lost their credibility.  This will lead to a loss of confidence in all things paper.  Either the central banks revalue their balance sheets with a wildly high gold price or the markets will do this for them by voting with their feet so to speak.  We are on the cusp of absolutely wild market gyrations and obscene price levels for gold.  So obscene you will either be in or you will be out forever.  Do not try to time anything, these last bazookas fired with blanks will be seen as a very large starting gun!
Standing watch,
Bill Holter
Holter-Sinclair collaboration

Kraken SDBullion

  1. “Do I know what the level needs to be for gold to perform its function as central bank reserve?  No, the number could be $25,000, $50,000 or $5 million or more, I do not have the answer.”

    I do not have the answer.”  That’s better Bill, you have a lot more credibility than a lot of article writers here, so don’t lose it making unrealistic predictions.

    Thanks for giving us what information you can and we can make our own decisions.

    All the best & please keep “Standing watch” _JOHNLGALT

    • It is very difficult to know what the price of gold will be in the future because we do not know the data upon which such a calc would be made.  The simplest calc would likely try to figure out how much fiat exists, how much gold exists, and then dividing the dollars by the ounces to get the new price of gold.  Some hold-back in ounces would be needed so that the country was not immediately tapped out on its gold.  They have to have some in reserve that is not encumbered in any way.

      Next would be the question of whether or not the US really has a gold reserve.  We might and then again we might not.  Gold, in this case, is the equivalent of the “pea” used in the old shell game.  Is it there under one of the 3 shells or has it been palmed already?  Like most others here, I favor the idea that it’s already been palmed… as in sold.  The banksters refer to this as “leased” for some oddball reason.  It’s not because in a lease agreement, it is certain that the person who owns that which is being leased gets the item returned at the end of the lease.  Maybe that is to make it look like a temporary loss rather than a permanent one?  As far as I can tell, there is NO leasing of gold.  It is simply sold to various buyers, aaannnddddddd… it’s GONE!  Maybe the banksters believe that they can buy it back later and all their financial shenanigans will be kept from public view.  But, what happens when the physical gold supply gets tight and they are unable to buy it back?  No doubt that the price of the gold that is available for sale will go very high very fast.  As with many other “problems” in finance, the right price will solve it.

      The glacial speed of the US Gov / Fed at returning the gold that they have held over the past 100 or so years for other governments deemed to have been in less secure situations than the USA is illustrative.  Supposedly, this included a little over 1500 tons of German gold, most of which likely came to the US after WW-II to protect it from the Russians.  When the return of a small part of this was requested, the NY Fed was unable to come up with it.  They would not even let the German banking delegation SEE their own property.  IMO, this is strong evidence that they were not allowed to see it because it was not there to be seen!  So, they hammered out an agreement to repatriate this gold over a couple of decades.  Well, guess what?  The US is behind schedule on the agreement.  When they should have returned 150 tons, all they could manage to scrape up was a pathetic 5 tons.  What was that?  Floor and corner sweepings?  Who knows?  What we do know is that this is a pathetic excuse for a secure storage system if it could be looted so easily and the looting then covered up so completely.  And these are the same people who now want US citizens to loan them money via buying their junk-quality UST paper.   I would not give these thieves control of my pocket change, let alone anything of real value.


  2. Super Mario Bazooka Palooka, more like wet fart in tidy whiteys.  ECB QE will STB.  The action in the markets, triple digit swings.  Action the PM space.  Major price swings from low to high.  The daily chart of gold and silver prices makes me think there is hope in the world for the much abused stackeratti class

  3. Why wait for the END? Front run your neighbor now! Shamless gold oz’s for only 1 Million $/oz!

    You heard it right, lock in your 4+ million in profits today, because you wont get your hands on any later!

    Pick up your phone! Operators are standing by! ????

    • @Shamus001


      Speaking of phones and operators standing by, lol… my son and I were watching a movie on TV a few years ago when on comes an ad for a “psychic hot-line”.  They gave their spiel and then flashed their 900 number on the screen.  My son looks over at me and says, “Dad, if a psychic has info for me, they’ll call ME“.  😉


  4. So I got in my White car, with the “Prviliged” decal firmly affixed to windshield so everyone knows I am coming, and drove down to Draghi the Italian Chosenite’s bank to get me one of them there “negative interest rate” mortgage and auto loans. Looking good: now I will just stay home and let them pay me for living here…are there any negative loans for gas to fill up my new pink Caddy? Put it on my stack of food stamps, willya? Look at yourself closely America…you and the world have a parasitic disease needing remediation. The cure? No dual citizens allowed in government. Ever. Period. Imagine the ridicule if one of these Chosenites peddling “White Privilege” attempted that in China against it’s citizens? Or in Russia. They did the same tactics to ancient Greeks: they were labeled and ridiculed as “Boethos”…Bozos. Look closely at Jezz Bezos. Cass Sunstein. Albert the plagerizer Einstein…Bozos. It is no “coincidence.” They are Clueless in running government: all they know is looting through Media and political manipulation funded by control of OUR printing press. Now we have the story in MSM of the new program Joe “I’m a Zionist too(l)” Biden pushed through for AMERICANS to pay HOLOCAUST reparations to Jewish fakers pretending they survived WORK CAMPS. Gee…I wonder why those “evil Germans” confiscated all the ill-gotten riches their Chosenites accumulated through financial fraud and owning the printing press in Germany? Shame on those Germans: the Chosenites stole it…”fair and square” by occupying government and then legalizing their criminal behaviour. The first step is accepting reality: the International Red Cross records PROVE the a total of less than 250,000 Jews died in those camps, mostly from conditions resulting in Allied bombing of supply trains. Over 40 million died that weren’t Chosenites. Or you can cling to your Chosenite programming and label truth a lie. A choice only you can make.

  5. Great article, and thanks for not giving us the $5000 gold by end of year prediction!!  With that said I do truly believe the only way government can get a control on debt is by inflation.  This is what the Fed has been trying to do with their 2% goal.  Yet with oil falling, commodities falling, and unemployement remaining low it is getting hard to reach that.   I did read an article where 6% raise in inflation over 6 years would reduce the debt by 50% alone.  I think that is where we are headed and the only way to lock in is with gold and silver.  Kudos DOC good info here!  I would love to see $10,000 gold and $500 silver let alone 50k 😉


    But banks please work harder at supressing gold and silver a little more,  anothe year or two.  I’m still accumulating 😉

  6. The fix is in. The shtf is coming, best be prepaired.

    Who in there right mind would except negative interest on there deposits?

    I think the people need to start making citizen arrests of the money changers.

    There are purposely trying to destroy the current monetary system!

    What is the financial gain of this policy?

    So, the  $64,000 dollar question who is behind this?

    Keep stacking till it hurts and then stack some more.

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