Jim says the crisis in Turkey is the critical first step towards the global reset where gold & silver will be revalued at much higher prices. Here’s more…
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Jim Willie CB, editor of the “HAT TRICK LETTER”
Use the above link to subscribe to the paid research reports, which include coverage of critically important factors at work during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. The historically unprecedented ongoing collapse has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.
A preface is required to explain that the US Federal Reserve is responsible for every grand financial crisis in the last 30 years, dating back to the Great Depression and its supposed spurious resolution to Black Monday of 1987. Little realized is that the ’87 crash was a direct result of the impact from outsourcing US industry, whose trend began in 1984 with Intel. The lost legitimate income had a grand effect on the inflows to the US Stock Market. Of course, the newly forming Reich Economic team preferred to describe it differently. The important outcome from the cleanup was the creation of multi-$trillion bank derivatives to serve as phony foundation for the entire Western banking system. Greenspan blessed it as good and firm, but now we know it was soft and weak. These derivatives are blowing up, which will require bailouts and a replacement in the Gold Standard. Instead, expect the derivatives to ramp up further with greater leverage up to the assured catastrophe. The fallout will be great.
Two critical factors have contributed to the ruin of the King Dollar realm, the global financial structure in place since 1974, but greatly altered since 2012. The first is the entire concept of outsourcing US industry. This is a tremendous textbook example of micro-economics making individual success stories with greater profitability, like to Intel Corp, which began the outsourcing trend. These realized lower costs. But the failure is at the macro-economic level, since the USEconomy lost a large chunk of its legitimate income. The Reich Economists (aka Keynesian mutants) promoted the entire movement, and steered the nation toward the clean society with financial engineering. Its results can be seen with financial crisis in sequence without end, at first with the subprime mortgage bond situation and later with USGovt debt dependent upon direct monetization. The entire US financial structure has become a computer machinery driven obscenity with pervasive derivative usage in hidden form. It is probably in the $trillions each month, ever since the vast Petro-Dollar derivatives began to be dismantled. Now the USEconomy is debt-ridden beyond simple patchwork solutions. which will require bank bailouts and a replacement in the Gold Standard. Instead, expect the households to see bail-ins in a grand betrayal and exercise of tyranny.
The critical second factor is the QE monetary policy. It is pure unsterilized hyper monetary inflation, the worst possible kind. The Reich Economists call it stimulus, when it is really just an asset inflation engine for the stock and bond markets. The result is what many analysts have begun to call the EVERYTHING BOND BUBBLE. All sovereign bonds, led by the USTBond and extending to the EuroBond, have become qualified as subprime bonds. They have very few buyers outside the central bank secretive trading desks. They have growing debt levels. The USGovt debt has a trajectory for over a $2 trillion deficit in this fiscal year. They deserve 8% to 10% yields, but the computer machinery keeps it under supposed control. A magnificent historical USTreasury Bond default via debt restructure is assured, unless President Trump can confiscate several $trillion lying around in elite criminal coffers, under threat of execution for mass murder, grand larceny, sex slavery, and treason. Now the USTBond is being discarded on a global scale like yesterday’s newspaper and dumped in Eastern large-scale projects, which will require bank bailouts and a replacement in the Gold Standard.
PREFACE ON REICH RECESSION
The consumer price inflation index is running at 10% annually. The fierce recession since 2006 never ended. The lie on GDP economic growth is between 4% and 7% every year. The stat rats in the USGovt busily suppress the CPI recorded officially by this amount, in the price inflation calculation. It is done so in a grotesque exaggeration in persistent fascist propaganda. This is the worst inflationary recession in the US history. It requires much more money creation to prevent a total collapse. The solution is astonishing hyper monetary inflation to wash away debt, or else grand systemic failure. The principal beneficiaries are Wall Street bankers and those wishing to finance the USGovt gargantuan debt.
THEREFORE THE CENTRAL BANKS WITH THE GOVERNMENTS UNDER THEIR CONTROL WILL BE FORCED TO MONETIZE TRULY STAGGERING AMOUNTS OF DEBT IN ORDER TO PREVENT BOTH ECONOMIC DECLINE AND BANKING SYSTEM COLLAPSE. THEN COMES MONETIZING THE GIGANTIC SOVEREIGN DEBTS, WHERE THE OFFICIAL BONDS HAVE ALL BECOME SUBPRIME. GOLD WILL BENEFIT FROM THE OFFICIAL MONETIZATION PROCESS AND THE IMPLEMENTATION OF THE GOLD STANDARD, LED BY THE EAST.
The Shadow Govt Stats folks do excellent work. Theirs was confirmed by the Chapwood CPI calculations in recent years. Using pre-1990 methodology, the Consumer Price Index (CPI) is currently running at over 6% nowadays. However, using the same methodology employed prior to 1980, CPI is currently running at over 10% nowadays, shown in the graph below. The Clinton-Rubin gangsters conspired to falsify all economic statistics, with aggressive motive to cut Social Security payouts and federal cost of living raises. Even following the Lehman crisis event, the CPI remains over 5% in reality. The 10% PRICE INFLATION IS THE USECONOMY REALITY, woven into the entire system, a consequence of monetary inflation from QE and astounding USGovt deficits. Therefore the lie is at least 4% to 5% every year, every single year on economic growth declarations by the USGovt and their Wall Street managers. With official GDP growth stated at 2% or so, it means minus 5% recession due to the lie. They call inflation as growth. This is simple calculation to reveal the grand lie which persists every year. To be sure, price inflation, running at a six-year high, continues to eat away at any wage increases offered. The lie is shown in the red series, with claimed CPI at 2.5%, which is absurd and far less than reality.
There is no question. The true Consumer Price Inflation rate is above 6.5% to 7.0% when entering the world of reality. Even in the fugazzi financial world, the analysts are waking up to the disconnect between the suppressed USTreasury market bond yields and rising price inflation led by food and materials. They also are noticing the accelerating trend of USTBond dumping by foreign bond holders, in a grand USDollar rejection. Yet the bond yields do not budge. Hence the growing recognition of yield capping from the USFed QE program and also, significant yield capping by the USDept Treasury from their powerful Exchange Stabilization Fund. It is a multi-$trillion slush fund, which ironically was funded by the Saudis at its origin. The kingdom’s accounting shows several hundred $billion missing each decade from their FOREX reserves, made easy by a TIC Report with OPEC nations grouped together, until recent years. The solution will be a magnificent hyper-inflation sweeping action, or else grand systemic failure.
During the Quantitative Tightening, plans might come to install a new system with enormous USD devaluation, alongside other major currency devaluation, with respect to Gold & Silver. In other words, AU/AG will rise by an order of magnitude with respect to the USD. Think of it as tiny steps backwards, followed by two giant leaps forward in inflating debt away, with Gold the winner. The BIS and Western central bank franchises will assure the process, since their balance sheets are all wrecked. Their asset book will be lifted upward by Gold bullion ledger, done surreptitously. The USGovt and the USFed will be forced to provide more true stimulus to the Main Street businesses and households. So far the only recipient has been the bankers in profound banker welfare. The result will be good impetus for Gold & Silver in an unmistakable inflation event, which lifts consumer prices in a noticeable manner.
BROKEN DEBT ENGINE
Debt is at tragic levels of broken efficiency in its production of economic activity. It takes over $5 to produce the supposed new $1 in economic activity. The normal levels had been $1.50 in debt to produce $1 in economic activity in the 1990 and early 2000 decade. The only problem is that in reality it is producing a recession of lesser magnitude. The debt engine is totally broken. It does not work. The debt saturation levels have been reached. The growth is a grand lie, the grandest lie of the Reich Economists. The Ponzi Scheme is the entire USEconomy. This is very difficult to grasp and harder to accept. The entire system is running on debt fumes, but in a horrible contraction. Nothing has been fixed since 2008. All systems have been fed more and more debt, using free money. The valid true solution involves both business creation and sound money. The US-UK fascist tagteam have no interest in either, only in self-enrichment and more power with war as a constant defensive tactic. The game is over, with only the denoument to be played out. Unlike the usual past crises, this crisis has a debt saturation factor which is utterly astounding. Therefore the efforts to come on stimulating the USEconomy will in all likelihood result in a national crisis which the Jackass has been calling the Systemic Lehman Event. All official sovereign bonds are subprime. The key economic zones are moribund. The financial markets are rigged. The derivative machinery is on full tilt, with great hidden strain. The United States leadership crew will next be working to install the Gold Standard, in order to coincide with the Eastern superpower efforts in the same direction. To be left behind means a certain Third World entry for the United States.
THE GLOBAL FINANCIAL RESET HAS BEGUN
Let it be known that the resolution of the financial crisis in Turkey can be regarded as the first critical step in the Global Financial RESET, which has already begun. This is according to consensus among the Jackass colleagues. The introduction to critical steps has been the ongoing Deutsche Bank rescue and Italian banking system life suport, in the West. The introduction to critical steps has been the creation of the Gold-Oil-Yuan futures contracts in the East. THE GLOBAL RESET BEGAN A FEW MONTHS AGO, WITH NO MARQUEE SIGNS, NO FLASHING LIGHTS, NO BANDS, NO HOOPLA. The banker cabal prefers that the public is ill-prepared, since the elites among them are busily preparing their positions for tremendous profits in the $trillions, equal to the losses expected by the clueless public.
RISKS, DANGERS, HOT SPOTS & PRESSURE ZONES
They are just too numerous to identify completely in a short list. The entire global financial system is in ruins, with tremendous distortions, massive misallocations of capital, grand abominations in rigged financial markets, victim zones from the weakest foreign regions, ugly fascist pressures from the US & UK, sanctions left & right toward friend & foe, war to obstruct the defiance away from the USDollar trade realm, and narcotics bribery to remain loyal to the toxic tainted King Dollar. Consider the following long list of extreme risks. Each risk contributes to the entire gold equation as being the central element of a bonafide solution.
All the following crises and initiatives are working to remove the USDollar as global currency reserve. Ten years ago, the crisis zone was primarily inside the United States, with the mortgage bond subprime crisis breaking out. Little known for that crisis was the fuse lit by China in 2005, when they began selling $billions in Fannie Mae Bonds. They were angry, very angry, at the USGovt for reneging on a gold lease of large scale which was part of the Hong Kong Resolution in 1999. History is so poorly written in the West. To mention the Chinese dumping of Fannie Mae bonds, they would have to mention the reneged gold lease. So neither is cited in the financial press rags, which serve best to line bird cages. Notice the numerous sites around the world, unlike in 2007 leading to the Lehman failure (kill).
- Currency Crisis has slammed Turkey, along with Iran, Argentina, and Venezuela. The USGovt and Wall Street bankers believe they are inflicting pain on the wayward nations who refuse the Washington lead, but they are assuring an Eastern rebellion against the USDollar. They will align with the Eurasian Trade Zone, and move toward Gold gradually.
- Emerging Market debt collapse has crippled numerous nations. Their total USD-based debt is between $9 and $15 trillion. The lure of low interest rates since 2009 resulted in disaster for nations which did not factor in the effect of currency decline in their home countries. A wrecking zone resulted. The victims will be the Western banks who on the hook. These Emerging Market nations will seek help from the East, where the Gold Standard is emerging.
- Belt & Road Initiative projects are a non-USDollar engine. They are directing numerous nations into $6 trillion of new massive projects. Watch China offer up a vault full of USTreasury Bonds in indirect exchange for funding purposes on many projects. They will gain strategic positions in every case.
- Germany & Russia are working constructively together, using German brands and newly created subsidiaries to produce and to sell inside Russia. None of this trade will be in the USD form for payment. The ultimate irony might be that their bilateral trade might soon be done in new Nordic Euro terms (gold-backed). The Jackass expects Frankfurt to become a big RMB trading hub, which will serve the Eurasian Trade Zone.
- The Deutsche Bank and Italian banking system disaster continues to fester. If truth be told, DBank is a Bush narco money laundering bank, and the site of hidden Saudi gold. It also operates as the biggest European bank derivative location, those $trillions in slush funds which support the various broken entities. When Italy goes bust, the principal victim will be the French banks, which own four times as much Italian debt as the German banks. Turkey and Italy will bring the financial system to its knees.
- The European Commision has turned rebellious to both Washington and the USDollar. Just a few months ago, the EU Court declared that Nord Stream II companies were justified in continuing their energy pipeline project. It was like an absolution from USGovt sanctions. Then following a true disaster in the G-7 Meeting, a few key nations lined up several large trade deals with Russia, in full defiance of Washington. Then most recently, EU President Juncker complained that all the trade payment for European commerce made no sense to be so tilted toward USD settlement.
- The entire broken shale oil & gas sector is on the verge of collapse. This saga is given reprieve only by the USFed-Wall Street collusion to lift the crude oil price via open market contract support. The crude oil price will work its level toward the equilibrium prescribed by Supply & Demand. The bank sector wish to avoid a $2 to $3 trillion disaster in the energy fields, where the guaranteed failure of their shale strategy is assured. Theirs is a wrecked Ponzi Scheme with rising oil rigs required, but with contaminated ground water systems.
- The Gold Trade Note and Petro-Yuan will kill the King Dollar. The introduction of the Gold Trade Note is the dagger in the heart of the Petro-Dollar defacto standard. The Petro-Yuan futures contract in Shanghai is the death warrant for the same Petro-Dollar. Already the Saudis are accepting RMB as oil payment by China.
- Food prices and consumer prices across the entire table are rising in the USEconomy. Most popular uprisings throughout history occur after the food prices rise beyond the reach of many lower tier households. Gasoline prices might offer a small oasis of relief, but with a ravaged bank sector from the damage. The public has noticed the price increases. Meanwhile, soybeans rot in US-based silos, since no buyers amidst trade war.
- Miserable USEconomy in reality is the harsh bite. The housing market is ready to enter a new decline, as the subprime factor has become entrenched all over again. The car & small truck market is already in a collapse mode. The public is fooled by the high stock market indexes, which seems to produce a mesmerizing effect.
As the Western central banks continue to tighten on monetary policy, whether with higher interest rates or reduced credit flow, the result will be a suicidal sequence. The marginal nations will fail, but leave the Western banks with defaulted debt. They will turn East and seek entry into the Eurasian Trade Zone, which is expanding with the promise of economic growth and revived vitality. Meanwhile, all elements of the US-China trade war show the United States as the loser. The Chinese have found other sellers to their country, while the US has lost buyers. The rotting soybean story in the US farmlands is horrendous. At the same time, tariff costs are passed down to the US households and businesses. The Trump Admin has achieved a lift in domestic prices along with a strong downshift in US trade. The description of bumbling seems apt. Then again, all USGovt foreign policy initiatives since 9/11 have been dismal failures, without a single exception.
FINAL REMARK ON CLEVER CHINESE TACTICS
China is evolving in its clever usage of funds, in a multitude of ways. They are ingenious in their methods and astute in acquiring solicited counsel. The Chinese have lent money to Angola for managing their government debt in Africa. The source of funds has been USTreasurys held in reserves in Beijing. The key twist is that Angola repays the Chinese after selling crude oil on the open market, but now in RMB terms. They no longer sell oil in USD terms. OPEC has become a defunct entity. As a result, China is weaning the entire African oil producers off the USDollar, using their debt vulnerability. Watch Nigeria follow suit, as they are a broken corrupt pathetic locale.
China has financed projects, like in Sri Lanka. One stands out as a model. The deal involves development of a giant port facility, which will give access to China for the entire Indian Ocean region. Consider it a key element in the maritime pathways for the Eurasian Trade Zone. In a sense China is outmaneuvering the US-UK maritime monopoly which has endured for over 200 years. The souce of funds again was USTreasury Bonds held by Beijing. In this case, the Sri Lanka Govt is caught in a position where they are unable to repay the debt. Therefore, China changed the terms of the entire deal to make it a 99-year lease with full control. They created a Hong Kong on the Indian Ocean. Some financial analysts are calling this tactic used by China to be Debt-Trap Diplomacy. It is made possible by the need for economic development in the targeted country, and the available funds in the form of USTreasurys. This is but one example in an upcoming $1 trillion worth of Belt & Road projects to be launched by China, in 68 countries. The US-UK dynamic dead duo are stuck with debt and war, while the Chinese are engaged in investment and expansion.
China is doing basic commercial colonization in several key African locations scattered across a dozen sites within the dark continent. They have built a worthy seaport facility in Djibouti, opposite Yemen. The ugly war has found a key protective site on the African side with Djibouti. In the last month, the Houthis of Yemen commandeered a Saudi oil tanker bound for the Suez Canal. The Saudis might be compelled to delay or suspend oil tanker shipments to Europe through the Suez Canal. The threat would not be possible without the Chinese presence in Djibouti. It is highly strategic. The United States is in the midst of losing the Gulf Region to Iran and China. At the same time, the Saudi Kingdom is crippled by the lower oil price, by high costs of the filthy Yemen War, and by wasted wealth. The Saudis are also facing much lower oil deposits held in reserve, near total depletion, a grand lie and very ugly secret. They will be urged to turn toward development of their truly considerable (if not magnificent) mineral reserves.
China and Russia began this concept of grandiose effective economic development with the Holy Grail energy pipeline deal in 2014. The financing has come largely from USTreasurys, and the crude oil payments for the Russian production has been in Chinese RMB currency terms. It has been a direct assault on the Petro-Dollar defacto standard. The biggest oil producer in Russia, and the bigger oil consumer in China do not use the USDollar in their oil trade. The US cannot sanction both superpowers, since that would be both stupid and futile. Ooops! They did, a clear sign of fascist aggression and megalomania gone amok. The first section of the larger plan of Holy Grail pipelines has been completed in record time. The Russians are using the RMB oil payments to convert to gold bullion, done in Shanghai. The days of the King Dollar in dominance are gone. The Chinese RMB will take all secondary stages, leaving the USDollar with the abandoned central stage. In the process, the RMB will continue to make significant strides in trade payment volume. Later the RMB will make parallel gains in bank reserves allocation for numerous foreign nations.
THE GREAT THREAT
China has no intentions to continue with the USDollar as global reserve currency. They plan to use the RMB in a caretaker role, first to supplant the dominant USD in global trade. Then the natural follow-on effect will be to supplant the USTreasurys in banking reserves. The ultimate plan and goal is to re-establish the Gold Standard in global financial structures. They wish to restore the equitable system, the sound system, the balanced system. The USDollar realm and rule has failed, made abundantly clear in 2007 and 2008 with the onset of the global financial crisis. Not a single problem from that crisis has not been fixed in any remote sense. All the harmful destructive measures used for creating the 2008 crisis have been used on a global scale in the last decade. It has been spread to the entire bond world. The standard USTreasury has become a subprime bond. Entire bonds will be forced into debt restructure after default. It will surely occur in hidden form. Entire banking systems will be forced into debt restructure after failure. It will surely occur in full view. The Chinese will take the lead in implementing the Gold Standard. The gold price will naturally rise an order of magnitude. Silver will also rise, but with other factors pushing it to much higher levels, like next generation energy systems.
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Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a PhD in Statistics. His career has stretched over 25 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors at www.GoldenJackass.com. For personal questions about subscriptions, contact him at [email protected]