The Doc sat down with Jim Willie for the 2nd part of an explosive interview this week discussing the likelihood of a coming bank failure contagion, and multiple signs of an impending implosion in the gold market.
Willie made the shocking claim that upwards of 60,000 tons of gold have been pilfered from ALLOCATED gold accounts by the bullion banks, & stated that the bars have been recast to remove the evidence, and are now physically held by Eastern parties such as William Kay’s hedge fund.
Willie stated that the allocated gold account theft scandal will break soon, and could be the largest bank scandal in history.
Willie discussed the current gold shortages amidst unprecedented global demand and stated that the COMEX & LBMA futures price for gold is becoming a farce as their is not enough physical gold to clear demand!
The Golden Jackass also discussed the likelihood that the next Western bank to fail will trigger a massive contagion throughout the Western banking system, potentially bringing even Goldman Sachs and JP Morgan to their knees!
Jim Willie’s full MUST LISTEN 2-part interview with The Doc is below:
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With COMEX gold inventories plummeting and the LBMA GOFO rate negative for nearly 20 days, The Doc began by asking Willie for his thoughts on what is currently going on in the gold market:
I just wrote an in-depth public article on the gold supply vs. demand. We’re not seeing the true price of gold reflected- there’s no equilibrium.
The most important point to start with regarding the gold market is that there’s no equilibrium regarding supply and demand. According to basic economics, what you should see is that demand clears supply and the supply satisfies the demand. We’re not seeing either! We’re seeing shortages and huge demand. Shortage in supply, and unspeakable demand across the whole world. We’re seeing pockets of shortages, pockets of different availability, different prices here and there, different premiums here and there- the whole market is disrupted!
We don’t have the true price of gold being reflected by the official COMEX gold price. The COMEX gold price is farce! The COMEX/ LBMA tag team are a joke, they’re a criminal enterprise! The dominant player in the COMEX gold inventory draw-downs you mentioned is JP Morgan. What’s even more telling of the criminality besides the empty vaults is the ravaging and the pillaging of the GLD holdings! They are going down massively with the plummeting JPM and COMEX inventories.
There is some arbitrage going on, and satisfaction of deliveries. The Shanghai Gold Exchange has a premium of $20-$4o higher than COMEX. There are rumors that the Wall St. banks are taking GLD inventory, and selling it in China! There is other evidence that the volume for gold deliveries at the COMEX are almost identical with the drawdown of the GLD inventories!
It’s so ugly that in the silver market, JPMorgan has not yet satisfied and delivered on the June silver futures contracts! It’s so ugly that using hidden entities that Andrew Maguire has detected in London, JPM is using hidden entities to hog 90% of the July silver deliveries! It appears that JPM doesn’t have the silver to meet June delivery, and is trying to replenish their own vaults by taking delivery in London, secretly, to replenish their inventory! Where are they getting it from? Maybe the SLV!
The JPM clients have removed between December and June- close to 40,000 kg of gold- thats 40 metric tons. While JPM’s house account has removed over 40 tons in the same period! What’s the lesson there? It appears JPM’s best friends and clients don’t trust them anymore!
My best source (originally a trader with Scotia Mocatta) tells me that the allocated gold account raids have resulted in 40-60,000 tons of gold! (The US likely doesn’t have any of its reported 8,500 tons left at all!). Rubin and Clinton might have made $2-$3 trillion leasing and selling the US gold. Someday the US may have to replenish its gold.
We’ve had other things like ABN Amro’s default, and another small Dutch bank just made the same statement that they’re not going to redeem on gold accounts. Morgan Stanley is stalling on every single metals transfer request. When it is finally transferred the serial numbers and weights are different than what was documented. Clearly the broker dealers are going into the market to find the gold, to find supply just in order to meet their daily requirements.
The Brinks’ accounts are going bare and are almost down to zero – these are all problems on the supply side!
As soon as the allocated accounts are raided, they send the bars to the refiners to get the bars recast so that the evidence is gone- as William Kay advised is happening in Hong Kong! If William Kay’s hedge fund now owns some German or Swiss guys’ gold, what is their recourse? They have none! They only have a paper claim against the bullion bank! They can’t go make a claim against the Hong Kong hedge fund manager who now actually owns their gold!
Allocated gold account holders don’t own gold. They THINK they own gold, but they own paper certificates!
When the next big Western bank fails, they won’t be able to play the kind of games that they have in the past, and its going to reflect on gold. Its going to be much more evident that there is no safe haven [in the banking system] – look, tomorrow we could have a bail-in with account confiscations!
We’ve also had MF Global since Lehman’s failure, which made it very clear that private brokerage accounts and futures contracts- they’re not safe either!
So where’s the safe haven? Everything points to gold!
The allocated gold account scandal is really brewing! Egon Von Greyerz of Matterhorn Asset Management talks frequently how the Swiss bullion banks are denying their clients’ requests to even LOOK at their gold, much less take it out! These bullion banks are going to be buyers! They have been buyers! You have these long delays on transfers like at Morgan Stanley for instance. Its because they don’t make the transfers right away because they don’t have it, they have to go out and find it!
When they go out and find it they push up the price with new demand!
The bullion banks who have improperly leased, sold, and rehypothecated allocated gold accounts– they’re replacing their sold & missing bars so that the account holders don’t file lawsuits and criminal prosecution charges. So there’s alot of demand that is behind the scenes, and it’s just like a crime scene, but the governments are doing their best to cover everything up, they’re not enforcing law. There is no rule of law in the West anymore. Instead we have the Fascist business model, merger of state and corporations and complete license for criminality & fraud by the banks.
When asked by The Doc to clarify his recent claims that Deutsche Bank may be near collapse, Willie responded:
My best German source informs me that 3 major banks are in trouble, and these 3 banks are fighting every single night to fight off insolvency and failure. He says CitiGroup in New York, Barclays in London, and Deutsche Bank in Germany- every single night are in trouble.
The important thing to keep in mind about Deutsche Bank is that it won’t go down alone if it goes down at all. If it fails, it will take along with it 3,4,5,6 or 10, or 15 other banks! It will be 1 or 2 quickly, then a 3rd and 4th a few weeks later, another, then before you know it, all of Italy and their major banks would be kaput.
My belief is that Deutsche Bank and its constant overnight risk of failure is somewhat tied to derivatives related to LIBOR, and also a risk related to their FOREX derivatives. In other words, derivatives that the banks use to balance off the currencies.
Believe it or not, in the derivatives world, gold is treated like a currency. Isn’t that ironic?
The FOREX derivatives that the banks are involved in are very much tied to gold.
The big immediate threat for Deutsche Bank though has to do with their problems in hiding debt for the Sovereign nations applying for the Eurozone. For example, Greece and Italy couldn’t have their debt ratios over certain levels, so what Deutsche Bank did was they turned nice big chunks of Sovereign debt into currency swaps.
For an example of how this works: Suppose you have a $250,000 bad business loan that is stinking up your credit report. So you call up your favorite Deutsche banker (or Goldman or Morgan- pick your criminal enterprise that is your personal favorite) and you tell him, look I have a $250,000 debt here and I want to make it go away. They say OK, we can do something clever here. We can pay off your debt so your credit report looks good, and we can establish this $250,000 Euro swap, and we’ll keep it off the books!
So you have this $250,000 bad loan stinking up your books, it goes away, and is replaced by something hidden- a euro currency swap! That’s precisely what was done on a larger macro scale by Greece and Italy- and Deutsche Bank is involved with several of these, and the total that is becoming disclosed is $400 Billion. Apply your typical ratios and you can conclude that they are $10, $15, $20 billion short for capital requirements!
The big banks are so criminal that they have converted fraud and criminal activity into a small cost of doing business!
When asked to clarify his statement that a failure of Deutsche Bank would likely result in a contagion of bank failures Jim Willie responded:
Deutsche Bank is in a slightly different situation than Barclays, even though Barclays just announced a 12.8 billion capital shortfall Tuesday. The former Deutsche Bank CEO Ackermann was forced out last year.
Interpol came into Ackermann’s office and conducted a financial document raid. There’s a new sheriff in town. Sources indicate that big, powerful Eastern interests hired Interpol to clean things up.
We had events in April, May, and June in which 5,000 metric tons of gold were lifted out of London. Eastern entities were angry as hell that their gold had been leased and rehypothecated. The London banks used the Easterners’ gold as equity for futures contracts that went bad- like in Spanish, Greek, and Italian debt.
Deutsche Bank’s CEO could not withstand an assault on their office to retrieve data, even though he appealed to several high level politicians.
Fast forward to July 2013, and now we are seeing several Deutsche Bank Vice Presidents being indicted under various fraud charges, and they are almost all cooperating with Interpol! They’ve flipped to cooperate with the serious fraud division of Interpol.
London and New York remain fortresses (for the cartel banksters), but Frankfurt might be in the process of being penetrated.
Getting back to your question as to why a Deutsche Bank failure would be different than Lehman Brothers, it’s because they are involved with all the different Sovereign bonds! Spain, France, Italy, Greece, they’re involved with all of them and their balance sheet qualifications for the European Union!
Deutsche Bank is involved very closely with all of the Eurozone currencies and bonds, and they have massive swaps interwoven with all the major Western banks.
I have a client informing me that Deutsche Bank has a bunch of swaps that they wrote against Detroit muni bonds! Deutsche Bank has their fingers in alot of different pies! Lehman Brothers was involved in numerous mortgage instruments.
Dont bet your money that Deutsche Bank will go down, but if it does, the next day its going to be Citi, Barclays, HSBC, Morgan Stanley, Soc Gen, and big threats to JP Morgan and Goldman Sachs!
In conclusion, Deutsche Bank owns $25 trillion in OTC swaps with the Central banks and other major banks, so expect a daisy chain of derivative failures for the $1.6 quadrillion derivative market if it were to fail!
Deutsche Bank cannot break down by itself. It would result in the complete breakdown of the European Monetary Union!
In today’s world when a big bank dies, they merge them with another big bank. Another European bank, potentially Barclays. I think we are going to see massive amounts of money flooding into gold!
A bank failure contagion, that’s whats going to push gold way over $2,000/oz again.
Silver is going to be moving over $100 and gold is going over $5,000, I’m as certain of it as I am that the sun will rise in the east in the morning come January.