It’s that time of the morning again for the COMEX open waterfall smash of gold and silver, a daily occurrence in the now week-long post QE4 massive cartel intervention in the gold and silver markets. 
Gold has been smashed all the way back to Sinclair’s famous $1650, and silver has been smashed to a $29 handle.

*Update: 2nd wave of smash sends silver to $29.71, gold to $1641!

With the media fixated on the fiscal cliff, no one seems to be noticing the fact that the FDIC’s expanded 100% coverage for insured deposits ends January 1st, 2013.

Submitted by SD Contributor AGXIIK:

As of January 2013 the FDIC stops offering 100% coverage for all insured deposits.  That amounts to $1.6 trillion in deposits, 85-90% deposited with the TBTF mega banks.  Once the insurance ramps back to $250,000 the FDIC risk amelioration offered to large depositors will cause them to flee from the insecurity of the much reduced FDIC coverage.  This money will rotate immediately into short term Treasury securities.  The treasury, in order to handle this flood of money, will immediately offer negative interest rates.  This financing will resemble the .5% negative interest rate offered by the Swiss and Germans on the funds flooding to their banks from Spain, Greece and Italy.
This will be a bank run much larger than the Euro banks flight to safety
.

Silver will rise as much as 29% to $40.25/oz, from $31.10/oz today, in 2013. This is based on the median estimate of 49 analysts, traders and investors compiled by Bloomberg. Global investment through silver backed exchange traded products reached a record 18,854 metric tons in November, or more than nine months of mine output, data compiled by Bloomberg show. Holdings are now valued at about $19.2 billion. Bullion dealers all over the world report robust demand for silver and there has been a shift in many Asian and Middle Eastern markets from gold to silver – due to silver’s relative cheapness and undervaluation versus gold. According to Bloomberg, one of Singapore’s largest suppliers of coins and bars to retail investors, says sales tripled since October, part of a global surge in demand for silver that drove holdings to a record.

Submitted by Stewart Thomson:

The election of the new Prime Minister of Japan, Shinzo Abe, may be a “watershed” eventHis powerful commitment to unlimited quantitative easing could fundamentally jumpstart the next leg of the gold bull market.
Abe is committed to knocking down the value of his country’s fiat currency, the Yen.  His election probably ushers in an acceleration of the global fiat currency wars, and that’s more good news for gold investors.
Japan is the world’s largest creditor nation, and the 3rd largest economy.  If Abe is successful in forcing the Bank of Japan to embrace much more aggressive QE, it could spark what some major bank economists are already calling, “The Great Reflation”.

Martin Sibileau’s December letter is a MUST READ, and examines what causes hyperinflations, and why one has not occurred yet in the US.

What causes hyperinflations? The answer is: Quasi-fiscal deficits! Why have we not seen hyperinflation yet? Because we have not had quasi-fiscal deficits!

As anticipated in my previous letter, today I want to discuss the topic of high or hyperinflation: What triggers it? Is there a common feature in hyperinflations that would allow us to see one when it’s coming? If so, can we make an educated guess as to when to expect it? The analysis will be inductive (breaking with the Austrian method) and in the process, I will seek to help Peter Schiff find an easy answer to give the media whenever he’s questioned about hyperinflation. If my thesis is correct, three additional conclusions should hold: a) High inflation and high nominal interest rates are not incompatible but go together: There cannot be hyperinflation without high nominal interest rates, b) The folks at the Gold Anti-Trust Action Committee will eventually be out of a job, and c) Jim Rogers will have been proved wrong on his recommendation to buy farmland.
The manipulation will be so open that even the GATA will completely lose its raison d’être. It will be worthless to expose what will be public.

How do you say rehypothecation in Australian? 

After months of persistence, our friend Greg from AUSBullion has received written confirmation from the Reserve Bank of Australia that the bank holds all but 80 kg of Australia’s gold reserves at the Bank of England.  Out of 80 tons of physical gold, less than 0.1% is held in Australia!

The Central Bank defends London’s storage/rehypothecation of Aussie gold, stating: London is a major global gold trading market and the Bank of England provides a secure and cost-effective storage location for central banks and market participants. The Reserve Bank has processes in place to ensure that the gold reserves are maintained appropriately. It is not considered necessary from management, security or operational  perspectives to relocate the gold bars to a facility in Australia.

The Bank of Australia’s admission that nearly all of Australia’s gold reserves are on deposit at the BOE is below:

By SD Contributor Rob Kirby:

When sovereign gold is lent / leased – this is done through A BULLION BANK [like Goldman Sachs] whereby, physical bullion is sold into the market to raise cash balances which are then reinvested.

LTCM inadvertently collapsed when they took a highly leveraged position in sovereign Russian bonds and Russia defaulted.  If a public ‘work-out’ of LTCM would have ensued – the true state of sovereign Italian finances, as well as the criminal actions of Goldman ‘Hannibal Lecter’ Sachs would have been on public display for the whole world to see – and the Euro would very likely have been still-borne.

For his part in this CRIMINAL FIASCO – Super Mario Draghi was rewarded by being made Vice Chairman of Goldman Sachs International in 2002 and later, in 2011 was appointed president of the European Central Bank [ECB] which on December 13, 2012, was granted exclusive regulatory power over ALL EUROPEAN BANKS:

Our friend Sean of SGTReport.com has released an excellent interview with firearms industry expert and part-time police officer Mark S. Mann who lives in Connecticut, just miles from the massacre at Sandy Hook Elementary. He’s been following the story closely, talking to cops he knows in the area and he will be reporting for us as this story develops. Mark says there are just too many inconsistencies with the ‘official’ story and “Things don’t add up.” As we all now know, regardless of whether the mass murders of children and adults at Sandy Hook was a false flag operation, or the actions of a lone nut, the establishment intends to use this event to attack the Constitutional rights of law abiding Americans. They’re coming for the guns. And just like Stuart Rhodes of Oath Keepers, Mark says “We will not tolerate any abuses to our Second Amendment rights.”

Blythe and Jamie appear to be tying up loose ends, as JP Morgan has reportedly won regulatory approval for the US copper ETF, the JPM XF Physical Copper Trust.


JPMorgan Chase & Co. (JPM) won regulatory approval for the first U.S. exchange-traded fund backed by physical copper, which some industrial users said may disrupt the market.

In the midst of yesterday’s massive gold and silver raid, we remarked that it wouldn’t surprise us to see the cartel attempt to induce a second consecutive annual loss for silver, which would require approximately a $5 haircut from current levels, and a yearly close under $28.

While it still appears to be an outside chance that such a massive chart painting attempt would be successful, that doesn’t appear to have stopped them from trying, as gold and silver have just been treated to the now daily COMEX open waterfalls, with silver smashed to $31, and gold to $1663.