What the Fed, U.S. Treasury, J.P. Morgan, and China might really be up to as well as what all of this means for the gold and silver markets. Recent news in the world of finance over the past two weeks has made it much clearer who the likely entities were, behind the scenes, committing what is most likely, the biggest financial crime in the history of humanity.
The U.S. and other Western countries are heading towards a terrifying collapse. Despite all of the mainstream media’s propaganda, the Fed and other Western central planners are now desperately trying to keep the current financial system from imploding.
Once the Fed loses control, there will be a run on the dollar and the whole system will collapse. So what the Fed is now doing is preventing a blowup, in the short-term by keeping bond rates from rising. However the long-term consequences of this will create a massive blowup, once the run on the dollar has begun.
All of this (turmoil) is really “part of a much larger move, towards a new financial system”.
Already several individuals, myself included, suspect that what’s now happening is a redistribution of the world’s gold supply, from the West to the East, to compensate Eastern nations for their dollar surpluses, which will not hold their value, as gold does.
It’s highly probable there has been a secret bargain made, mutually agreed upon (from Western nations and Eastern nations) where China and the other dollar-surplus countries would agree not to dump the dollar, US government bonds or Western debt (generally) so long as they can continue accumulating gold at discounted prices.
The main objective now for central banks in the West is to overwhelm & crush markets. This will create massive shortages in gold along with crazy misallocations of capital. I don’t know when it’s going to end or when the entire system will finally break down. The key question word here is, when?
About two weeks ago, news came out that the CTFC flat dropped its investigation into JPMorgan’s decades long, gold market manipulation allegations, along with recent evidence from two J.P. Morgan employees who blew the whistle. JP Morgan has repeatedly stated they have never engaged in manipulating the gold or silver markets, and said they were only doing transactions “ordered by their customers”. Because of a law enacted in the1930’s the perpetrators, the legal system and regulatory agencies, have declared, past and current manipulations inside the precious metal markets as completely legal. Case closed!
We now know that according to this 1930’s law (that’s still on the books) no criminal manipulations into the precious metal markets occurred. In-fact the price suppression that has been on-going was legal in every way. The breakout of this news of course is very disturbing to the better part of investors. Investors have been told that attempting to corner and manipulate markets would not be tolerated, and would also result in severe financial penalties as well as time behind bars. In fact, this is true for everyone, except the central banks.
As for J.P. Morgan in all this, they say they were only carrying out orders given to them by their “customers”, when accused of manipulating markets. Speculation is now pointing towards the U.S. Treasury & the Federal Reserve as the banks “customers”. Astonishingly, China has been named “through speculation” that they too, have been involved in rigging & manipulating prices in the gold and silver markets.
Is it plausible that the Chinese are also J.P. Morgan’s customers?
Let’s assume a theory based upon two of China’s objectives that we already know to be true. First, is their desire to acquire massive amounts of gold, to diversify outside the huge quantities of paper currencies they already own, particularly the dollar. The second being China’s desire to back the yuan with this gold, and have it replace the US. dollar as the world’s new reserve currency.
If one was to start lining up the dots, a plausible explanation might be created, based upon what’s already been witnessed in China. Let’s go one step further, let’s assume China actually is one of J.P. Morgan’s customers (in-which J.P. Morgan is referring). It’s possible America’s central bank and the US. Treasury made a deal with China allowing them to control gold and silver prices in-exchange for not dumping the huge quantity of US. Treasuries they own into the open market. In-fact it is actually very plausible that J.P. Morgan was telling the truth about making transactions for its “customers” and not engaging in any manipulations itself.
China’s also engaged in flooding the markets with huge amounts of paper gold and silver contracts, of which both J.P. Morgan and the COMEX will never question. With prices artificially low, China’s able to acquire gold stocks already held by the GLD and other gold repositories, while adding more tonnage, already acquired from their own domestic mining.
The sad truth here, this is a very risky game now in progress for America to enter into because it’s now, a house of cards, just short of toppling over. How is this going to end? China basically could just default on all of its outstanding paper contracts. The answer as to when they could do that is when there’s no significant tonnage left to be acquired. Its apparent now, were incredibly close to the moment where a huge reduction in supply of above ground gold stocks will occur, throughout central bank vaults in the West.
If a default sounds crazy, think back to August of 2009, where a decree by China’s Assets Supervision and Administration Commission was made. In this decree; any state-owned entities could walk away from derivatives where lack of disclosure and fraud are involved. Now because overwhelming evidence of rigging within the gold and silver markets has already occurred, it would be easy for the Chinese to say all these outstanding contracts are now null and void. You can also bet J.P. Morgan and any other entities that were involved in this, protected themselves already.
Why would this scenario even be conceivable?
Well, simply having the yuan as the world’s reserve currency gives China a gigantic advantage. If having to choose between either allowing China to accumulate 10,000 tons of gold, which could very well unseat the dollar in the longer-term, or dumping their hoard of Treasury Bonds now, which would unseat the dollar quickly, the Fed chooses, the path that leads to buying more time for itself. Which of course is allowing China to buy gold on the cheap, and keep accumulating it. By choosing this option, America avoids a total collapse of the dollar now, as well as retaining its world reserve currency status. And for China, it’s cheap gold, and a sure bet the yuan will rise to reserve currency status down the road.
As the financial smoke continues to disappear surrounding the impact of this 1930’s law, deeming the legality of all these manipulations, the above scenario is looking more and more a reality. Meanwhile diversifying into hard assets and out of paper currencies is surly the best strategy to take as the financial world starts falling down all around us. Insure you’re protected by holding physical gold and silver and storing it outside the world’s banking systems to insure zero counter-party risk.
Tom Genot –