Very few analysts realize what will happen to the United States when the US TREASURY BUBBLE BURSTS.  We are now seeing plenty of coverage and news releases on LIBOR manipulation, PFG bankruptcy, Gold Manipulation… and etc.   The world is really starting to realize just how bad the situation has become.  All that is left is for the large DEAD STINKING CARCASS OF THE WESTERN BANKING SYSTEM to fall off the cliff.

When the world realizes that the ALLOCATED GOLD is not there, and in its place is nicely printed gold certificates… WE WILL ENTER INTO A NEW WORLD.
This will be great for a fraction of the public, but hell for the rest.  This is also true for countries who produce GOLD & SILVER.

PFG’s owner and CEO Russell Wasendorf has just been arrested in Iowa.   As Wasendorf was last reported to still be in a coma, he might not currently regret his only mistake of failing to match Jon Corzine’s campaign contributions to Barrack Obama.

As Wasendorf’s alleged 20 year theft may have put SD friend JB Slear’s Fort Wealth permanently out of business, here’s wishing Wasendorf a speedy recovery so he can fully enjoy maximum security penitentiary.

Eric Sprott is sticking to his guns with his gold prediction for $2,000 before the end of 2012.
Sprott, who told SD listeners in June he expected silver and gold to both make new all-time (nominal) highs, potentially by the end of 2012, told Bloomberg this week he still expects to see a new gold record in 2012.
Sprott stated that the ‘debt crisis should be incredible for gold‘, and believes the world will likely return to a gold standard when the fiat debt collapse is complete.

Submitted by JB Slear:

JB Slear updates SD readers on MFG 2.0 (PFG).  Fort Wealth IB’s accounts remain frozen, and all of their positions were liquidated by force at the authorization of Jefferies at massive discounts and losses.  Not only were they liquidated by force, but positions were liquidated at 33% below the settling price given for contracts!
Slear states that the $200 million segregated client theft by PFG will result in every single trader being left out of the precious metals market.

The NY Fed has just released its response to it’s connections to the rapidly widening LIBOR manipulation scandal.

Among the information gathered through markets monitoring in the fall of 2007 and early 2008, were indications of problems with the accuracy of LIBOR reporting. LIBOR is a benchmark interest rate set in London by the British Bankers Association (“BBA”) under the broad jurisdiction of the UK authorities, based on submissions by a panel of mostly non-US banks. The LIBOR panel banks self-report the rate at which they would be able to borrow funds in the interbank money market for various periods of time. As the interbank lending markets dried up these estimates became increasingly hypothetical.

Suggestions that some banks could be underreporting their LIBOR in order to avoid appearing weak were present in anecdotal reports and mass-distribution emails, including from Barclays, as well as in a December 2007 phone call with Barclays noting that reported “Libors” appeared unrealistically low.

‘Indications that banks were manipulating LIBOR were present in 2008.’  Ya think?
Geithner held LIBOR FIXING MEETINGS at the NY Fed in 2008!!!

Full Fed BS response below:

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LIEBORGATE just escalated to CDSgate as JPM’s Form 8-k released this morning openly admitted that traders at the firm’s CIO office intentionally mi-smarked (manipulated) $ hundreds of billions in CDS contracts!!
JP Morgan reported that due to the mis-marking, it will restate it’s previously-filed financial statements for Q1 2012!!

JPM also reported the CIO derivatives loss has grown to $4.4 billion, and Q2total  theft (profit) was $3.1 billion.

South Africa’s gold output continues to collapse and fell a further 2.9% in May, according to data from Statistics South Africa released yesterday. The decline in gold production comes despite a 0.8% rise in total mining output in the same month (see below).

Gold is being supported by euro zone currency and contagion risk and inflation hedging diversification.

Merrill Lynch predicted gold would reach $2,000/oz yesterday due to more astute investors fearing inflation due to ultra loose monetary policies. Francisco Blanch, Head of Global Commodity & Multi-Asset Strategy Research Merrill Lynch, said in a CNBC interview that Merrill believe “that $2,000 an ounce is sort of the right number. We believe that ultimately the Fed will be forced to do quantitative easing.”

“If it happens in September, as our economists expect, we will get a rally sooner in gold,” Blanch added. ”If it happens after the election (in November), we will get the rally a little bit later; probably we will touch $2000 an ounce sometime next year.”

Demand and supply factors remain in gold’s favor.

Jim Grant has given another memorable interview to CNBC tonight, discussing the banks’ manipulation of LIBOR, and stating that outrage at the banks for manipulating interest rates should be redirected at central banks, who manipulate everything on a massive scale routinely for a living!

Regarding The Fed’s options going forward Grant stated:
The Fed is not out of bullets, the trouble is it’s gun shoots backwards!
These massive interventions in the markets distort the prices we call interest rates. There’s this great scandal with LIBOR- ‘the banks fixed the rates’.  The Fed fixes everything!  The banks do it opportunistically, The Fed does it for a living, it does it on principle!

Full MUST WATCH interview below:

For the 3rd consecutive day (following the 1 million ounce withdrawal Monday and 651k ounce withdrawal Tuesday) we have a massive silver withdrawal to report from Scotia’s vault Wednesday.

SD reader Saddle has noted that the previous 2 silver withdrawals almost exactly equal a coinciding massive new silver deposit just reported into the SLV fund.

As Harvey Organ has long alleged, it would not surprise us if the cartel is currently scrambling to move around what little PHYSICAL silver they have left to meet delivery requests at the SLV.

The Telegraph’s Thomas Pascoe, who recently revealed that Britain’s gold was dumped on the market by Gordon Brown in order to rescue Goldman Sachs from a 2 tonne gold short position gone bad, follows Ned Naylor-Leyland’s comments on CNBC this week that gold is manipulated along with LIBOR, stating that gold manipulation may well be the next big scandal to break.

Pascoe rightly asserts that manipulation of gold is a bigger scandal than the manipulation of LIBOR, and states (as we first suggested) that the LIBOR scandal will result in MSM attention of precious metals manipulation for the first time.

In the aftermath of the Libor scandal, the Bank of England complained that it had received no forewarning from the marketplace.
Gold price manipulation may well be the next big scandal to break – if it does, this time nobody can say that they were not warned.

Wondering why silver suddenly just popped $1.00?
Sprott Asset Management has just announced a $200-$230 million follow-on offering for the PSLV.
As Sprott will once again be draining all available physical supply from the market to complete the placement, it is safe to say we have likely seen a bottom in silver.

Our friend Sean of SGTreport has released an excellent interview with BullionBullsCanada’s Jeff Nielson.
Nielson is obviously bullish on gold and silver, and states that before the bull run is over, ‘we will see the price of silver with a zero behind it‘.

In the 2nd half of the interview, Nielson covers the mystery of the Treasuries market… there are NO actual buyers, just the FED’s primary dealers doing the bidding for their master.

Live 24 hours silver chart [ Kitco Inc. ]Eric Sprott informed SD readers in early June that the silver cartel’s MO had changedfrom raiding precious metals upon the monthly release of the jobs report to raiding them whenever Bernanke speaks or the Fed makes a release.

This pattern played out to a T with the release of the June FOMC statement, with both gold and silver undergoing waterfall declines just as the report was released, and the selling intensified over the next 24 hours.

Today is simply the latest example, as both metals are down hard this morning after yesterday’s release of the Fed minutes from that same FOMC meeting.