War

Despite a rare display of intelligence shown by a group of politicians, with the British parliament rejecting their Prime Minister’s call for war, at least for now; and despite serious questions raised by the likes of a former NPR reporter with years of on-the-ground experience in the Middle East who states that eyewitnesses say it is the Saudis who supplied the chemical weapons to the rebel forces; it seems almost certain that the US will be waging war in Syria, likely beginning with attacks launched from US naval vessels.

Most people might think this will be another “Libya” type of war with US techno-hardware pummeling the country for a couple of months and then it will be over. A bunch of political posing and sniping. Lots of discussion about whether annihilating people is legal! Little or no direct inconvenience to anyone in the US or Europe. And little consideration of the reality of those who will hold someone they love in their arms and experience the agony of seeing their beautiful friend demolished.

Why is this war less likely to be a brief campaign and more likely lead to World War 3?

1. There are 30,000 Russians living in Syria. If some of these people are killed, do you think Russia will just say, “Oh well. No problem.”

2. Russia is a long-time ally of Syria. They have a naval base there. They sell lots of arms to Syria. If Assad is toppled, Russia loses big strategically and economically: they wil likely lose their naval base; they lose a good arms customer; but most importantly, a new regime might be quite happy to allow the Qatari’s to build a natural gas pipeline across Syria to supply Europe with natural gas, breaking the Russian monopoly on the European natgas market.

3. Iran is an ally of Syria. Both countries are well aware that they are on the list of countries  whose governments the US planned to topple as early as 2001, as reported in this required-listening two minute video interview with General Wesley Clark:

So I came back to see him a few weeks later, and by that time we were bombing in Afghanistan. I said, “Are we still going to war with Iraq?” And he said, “Oh, it’s worse than that.” He reached over on his desk. He picked up a piece of paper. And he said, “I just got this down from upstairs” — meaning the Secretary of Defense’s office — “today.” And he said, “This is a memo that describes how we’re going to take out seven countries in five years, starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran.”

And Iran is an ally of China.

4. Cycles: Manfred Zimmel, whose excellent forecasting work we have discussed here and here, has for many years been predicting that the period from 2013 to 2018 will be “the War Years.”

5. Cycles: The uncanny Wheeler Cycle of War and Political Change, discussed here, arrives again at its most intense point for the risk of major war in 2014:

WheelerCycle

6. Cycles: Michael Mau’s books predicted world war for this period unless humanity can stand up to being manipulated into war yet again. Mau’s books contain detailed discussions regarding who manipulates politicians and populations into war. So this is a big test for humanity: do people want war or have they truly had enough of it?

7. Cycles: August 2013 was given here as a major potential economic turning point. Oftentimes, people and nations play their part when a big cycle is ready to turn.

8. The US badly needs a distraction from the revelations of illegal spying that arrive almost daily.

9. The US badly needs distraction from its financial failures and its upcoming battle over the debt ceiling. Even researchers from within the US Federal Reserve have admitted that the Fed’s money printing has had little positive effect, and they have announced that they would like to gradually stop printing so much. (Perhaps the White House will basically force them to keep printing to support a war?) And even that gold-bashing defender of the status quo, the Financial Times, began an article with this quote:

The world is doomed to an endless cycle of bubble, financial crisis and currency collapse.

And included this sentence in the same article:

A stable international financial system has eluded the world since the end of the gold standard.

(Side note: Numbers 8 and 9 are partial indications that things have not been going so well for the US lately. This too is a result of a specific cyclic influence, so if you are confident that a US war foray will be quick and successful, you might wish to contemplate what the news flow has looked like for the US for the last several months.)

10. There are always those powerful groups who stand to profit greatly, financially and politically, from war, as described so well by US Marine Corp hero General Smedley Butler in his booklet War Is A Racket.

So what’s it going to be, folks? Have we had enough of war? Or do too many still want war, or not care one way or the other? Whatever the numbers, it seems that humanity still does not understand that the advice “Do unto others as you would have them do unto you,” contains the idea that what you do to others you are doing to yourself. Humanity is one, though it appears that few are aware of their awareness that such is the case.

If you have chosen to have preparations in place for when it really hits the fan, and if you have not completed those plans, my suggestion would be that you wrap them up now. Not in a state of fear, not in a panic, but with definite persistence and logic. Perhaps the status quo in this world can hold on till 2014, or even 2015. But betting that way entails some serious risks. Besides, preparing for a life independent of the theftocracy–that is, working with gardens, greenhouses, plug-in vehicles, solar arrays, water wells, and so forth–is a lot of fun.

Waterfall of Emerging Truth

Really, what’s happening is, it’s a change in the rules of the game, which means that your cash is increasingly at risk of ending up in the government’s hands.
–Philippa Malmgren, former Special Assistant to the President of the United States for Economic Policy

So, acceleration of US government scandals, acceleration of truth emerging from the shadows into the mainstream, acceleration of clear signs of governments desperate to hold onto power. Wow, if you’ve been reading the news, you know that things are starting to move very quickly:

NSA collecting phone records of millions of Verizon customers daily

NSA PRISM program taps in to user data of Apple, Google and others

–The US has extensive offensive cyber warfare capabilities. According to a US intelligence source, “We hack everyone everywhere.”:

     Obama orders US to draw up overseas target list for cyber-attacks

–Youtube gets a video of a former Canadian Defense Minister saying that UFOs and extra-terrestrials are real, that some of them work in and with the US government, and that there is a worldwide cabal that runs the planet for their own purposes:

Who are these vested interests, and what are they up to? …I have broadened and deepened my definition to cabal, and the cabal comprises members of the Three Sisters—the CFR, Bilderbergers, and the Trilateral Commission—the international banking cartel, the oil cartel, members of various intelligence organizations, and select members of the military…who together have become a shadow government of not only the United States, but of much of the Western world. The aim of the game is a world government comprising members of the cabal who are elected by no one and accountable to no one. And according to Mr. Rockefeller, the plan is well advanced. Does this help you to understand why our civil rights are being taken away from us?

–And weather wildness continues to accelerate, Oklahoma seems to get more than its share:

The National Weather Service reported Tuesday that the killer tornado that struck near Oklahoma City last Friday was a ferocious EF5 twister, which had winds that neared 295 mph… The weather service also said the twister’s 2.6-mile width is the widest ever recorded. According to the National Severe Storm Laboratory, the tornado blew up from one mile to 2.6 miles wide in a 30-second span… There have only been eight F5/EF-5 tornadoes in Oklahoma since 1950, the Weather Underground reports, and two of them have hit in the past two weeks. The other hit Moore on May 20, killing 24 people.

We’ll have more comments on all of that government stuff soon, but today, as part of observing this waterfall of emerging truth, let’s review material from an interview with a true insider. As stated in the post Accelerating Truth, more insiders seem willing, finally, to speak publicly about what is going on.

The insider for this post is Philippa Malmgren. She has served in the White House as the liason between the White House and the Federal Reserve, as the person responsible for all financial market issues for the President, and perhaps most importantly for our discussion today, she was part of what is officially called the President’s Working Group on Financial Markets, but which is known on the Street as the Plunge Protection Team. The PPT was created in early 1988 in reaction to the stock market crash of 1987. This crew goes to work when markets aren’t doing what the White House wants them to be doing and they interfere in whatever way they deem necessary. While the details are not disclosed, these people are said to have access to a very large pile of cash to push markets where they want them to go.

Philippa gave an amazing interview this weekend to King World News.  Here are some quotes:

…the magnitude of the debt that is held by the United States, and indeed by all of the industrialized economies that have a debt problem, is so great it cannot be paid down. The human suffering involved would be so far beyond our capacity to withstand, so it has to be defaulted on.

* * *

Look, we are in a world where every major industrialized government doesn’t have the funds to deliver on the promises they’ve made to the public. So they are going to reach for the public’s cash in different ways…. Some of it is through higher taxes. Some of it is what I would call ‘expropriation,’ although taxation and even inflation are a version of that. But for example, Portugal, about a year ago, announced that they were nationalizing three of Portugal Telecom’s pension funds and placing the assets on the government’s balance sheet so that the government’s balance sheet would look better for the purposes of negotiating with the EU.

Now, were those pensioners expropriated? Yes. It made page 14 of the Wall Street Journal and the Financial Times, as if it was a non-event. But I think what we saw in Cyprus, a really overt expropriation, we are going to see that come in lots of different forms (going forward). Some of it will be obvious like Cyprus. Some of it will be subtle like Portugal, but what’s sure is that it’s happening.

So, yes, we have a really important political, philosophical battle now as states (and governments) try to find a way to take your cash in order to fund themselves, and not necessarily to the citizens best interest.

Really what’s happening is it’s a change in the rules of the game, which means that your cash is increasingly at risk of ending up in the government’s hands. So this is what we need to be alert to around the world.

* * *

You just have to whisper at it (the price of gold), and you can move it big time. Are governments good at that? Yes, they are good at that.

* * *

It is true that governments hate it when gold starts going through the roof, especially when they are in the midst of the largest devaluation, currency debasement strategy ever known…. We have never seen so many large industrialized economies all adopt this strategy simultaneously.

* * *

…this is one reason that many of the institutions that I’m advising are very wary about gold is because they do feel it’s subject to manipulation. That (as a result) the volatility is too heart-stopping to withstand.

And they are looking at other options. One option is definitely the world of diamonds. I see lots of private wealth moving in that direction. That’s one reason we see diamonds hitting absolutely record high prices. It’s because you can move an immense amount of value across a border with this thing in your pocket that a metal detector cannot find.

By the way, I was in charge of anti-money laundering policy for the U.S. government, so I’m not condoning this. I’m just saying it’s a fact. In a world where inflation pressures are definitely ripping through emerging markets, people want to move ‘value.’ And in a world where currencies are being debased, they want to hang on to value.

I’ve said a number of those things on this site, some in almost precisely the same words. The web sites listed on the Blogroll for this site published most of these things earlier than I did. These things are not complex. They are easy and clear. But I thought that perhaps these things would mean more to readers if they heard it from a true big-time insider. Let’s summarize:

1. Governments made lots of financial promises they cannot keep.

2. Governments have borrowed way more money than they can ever pay back.

3. They will try to disguise Points 1 and 2 by printing a lot of money because they see this as the most palatable way to default on their obligations, that is, they will pay their debts in money that is worth less and less and less…

4. Governments are going to do whatever they can to confiscate money from people to remain in power, in both subtle and overt ways.

5. Governments who are debasing their currency hate it when the gold price rises as a direct reflection of people trying to defend themselves from the money printing and the confiscations. So they will try to keep you in their confiscation system by scaring you away from gold. By having the price of gold and silver move wildly when priced in dollars, what governments are trying to do is to convince you that an unbacked currency that can be created digitally in infinite quantities is stable…and that gold and silver, honored as money for thousands of years, is not.

Philippa mentioned diamonds for wealth preservation and that has not been mentioned at all on Thundering Heard. The reasoning is threefold: I am not an expert on diamonds; I have heard of other non-experts who attempt to preserve wealth via diamonds and get fleeced by those who are experts; and the diamond market is a cartel run by DeBeers and the Russians where price is falsely supported by these suppliers withholding huge supplies of diamonds from the open market, so in my view, if their cartel ever gets broken, the price crash in diamonds will be epic.

However, Philippa is right: at least for now, for hiding portable wealth, diamonds are very tough to beat. And her clients are large institutions, sovereign wealth funds, etc. These people can afford to hire experts to make sure they don’t get fleeced when they buy diamonds. So if you have such expertise yourself, or access to it through friends, diamonds might be a very good way to go. But if you do not have access to such expertise, in my view, gold is far better because if you buy minted bullion coins from a reputable dealer, you don’t need to be an expert. Though I guess it is best to mention that the following quote was the advice for getting through the financial collapse from a book mentioned in What is the Transition? Conclusion, that is, the Sanctus Germanus Prophecies Volume 1, published in 2003:

Buy minted gold and silver coins, other precious metals or color gemstones. This is your 100 percent guarantee against the financial collapse. Store them in a safe place other than a bank, as bank failures will multiply. Few, if any, will survive. The US and other country currencies will collapse just as the Confederate currency did after the Civil War in the US.

The overall message here is: if you have savings in bank or brokerage accounts, governments are trying to figure out how to grab that money. They are making this very clear, as I will show shortly in separate posts on the threats to bank accounts and brokerage accounts that have recently been clearly announced by governments.

Accelerating Truth

Most people have been trained to internalize only those ideas that come from honchos, that is, political and religious big shots, “experts,” very rich people, celebrities, etc. The powermongers capitalize on this when faced with criticism of the system by often resorting to what the logicians call ad hominem attacks, that is, they deflect attention from the criticism by attacking the person delivering it, attempting to undermine that person’s credibility. They characterize the malcontents as crazy, unpatriotic, uninformed, uneducated, or as crackpots, charlatans, imbeciles, demons, and so forth, while never addressing the issue at hand.

So for a more general public understanding of the nature of our system, it helps when people considered to be honchos start publicly discussing what is in fact going on. Other honchos are less likely to try to pull the ad hominem attack on one of their own. In other words, truth about the nature of our system needs to emerge from the blogosphere and into the mainstream. This process is accelerating.

Below is a link to an amazing video showing Columbia Professor Jeffrey Sachs speaking to a conference organized by the US Federal Reserve:

     Columbia Economist Dr. Jeffrey Sachs speaks candidly on monetary reform

He begins by reporting that he was just at a meeting with foreign ambassadors at the UN who were asking:

“Why are we taking advice from the people who have managed the financial system so badly?”

He goes on to say that while people expect economists to talk about statistics and monetary issues, that the real problem with the system is as follows:

We have a mountain of criminal and fraudulent behavior…The amount of utter criminality and financial fraud is absolutely enormous…This is what’s called the American financial system at the moment.  It’s an unregulated essentially lawless environment…

This is a profound failure of government…

I regard the moral environment as pathological…

We have a corrupt politics to the core. Both parties are up to their necks in this. It really doesn’t have anything to do with right wing or left wing. The corruption, as far as I can see, is everywhere.

Sachs follows that by saying that he meets with the top Wall St CEOs on a regular basis and the common feature he observes is that these people believe they can do anything they want, legal or not, with impunity. And that given their takeover of the politicians and regulators, they are correct!

Now this isn’t coming from MIT’s Prof. Noam Chomsky–who, let’s face it, was decades ahead of all of us in pointing out the criminality of the corporate/political system–it’s coming from a highly respected Columbia professor.

For a few years now, the money printing central banks such as the US Federal Reserve (the central banks have directly printed at least $16 trillion and counting) have been told by bloggers that this money is not supporting jobs and the economy, but rather that it is going to the rich who are bidding for financial assets and causing bubbles in multiple asset markets including stocks, bonds, and real estate. People like Ben Bernanke, his henchman, and academic and Wall St economists have denied this.

But now we find out, from a Freedom of Information Request by Bloomberg and from a leaked Fed document, that the banking insiders who advise the Fed are finally saying the same thing that the continuously-discredited bloggers have been saying all along: that the money printing is creating bubbles in farmland prices and student loans, and:

There is also concern about “an unsustainable bubble in equity and fixed-income markets given current prices.

And for years, bloggers have said that the central banks cannot possibly stop printing more and more money or the whole edifice will crumble, another charge that is roundly derided. The Fed has claimed repeatedly that it has the tools to undo all the money printing so that it will never cause a problem. But now their own banker advisory panel says that if the Fed stops printing, it “may be painful for consumers and businesses…” and thatthe Fed may now be perceived as integral to the housing finance system.” In other words, if the Fed stops printing, the “housing finance system” will collapse. Which it would. In a heartbeat.

People like Matt Taibbi of Rolling Stone have been stalwart in documenting the ongoing manipulations in the interest rate, municipal bond, derivatives, and oil markets. And others have offered very strong evidence of manipulation of the stock market and precious metals markets. Taibbi recently wrote that “everything is rigged.” The US Bond market, the largest in the world, is certainly rigged: the Federal Reserve itself buys 75% of the bonds issued by the US Treasury. And the Fed announces, at the start of each month, which days it will be buying bonds through the Wall St firms in the coming month. The stock market always rises on those days. Always. Why? Because the Wall St firms take that money, leverage it up by further borrowing, and buy stocks. The Fed wants exactly that: they believe that a rising stock market makes people feel a “wealth effect” and therefore they will go out and spend more money in the real economy.
So finally, along comes one the largest banks in the world, Deutsche Bank, saying:

We would stress that we fully understand why the authorities wouldn’t want free markets to operate today as the risk of a huge global default and unemployment cycle would still be very high.

And a recent member of the Federal Reserve Board, Kevin Warsh, said that their money printing is not working and they are losing credibility:

…over the last several years, [the Fed] has over-promised and under-delivered, and the bank’s most important asset – credibility – is under attack.

One would think that, if their strategy isn’t working, that they have other tools they can bring to bear. That’s what they tell us. But Warsh says, “There is no Plan B.”

Bloggers have been warning that European banks are insolvent and getting worse all the time. Now the European Central Bank itself admits that the “euro zone’s slumping economy and a surge in problem loans were raising the risk of a renewed banking crisis.”

Here is an interview with the President of the Chicago Mercantile Exchange, that place where they trade paper and electronic instruments that have an increasingly tenuous connection with physical things like gold, silver, copper, oil, etc. From the interview:

What’s interesting about gold, when we had that big break two weeks ago we saw all the gold stocks trade down significantly, we saw all the gold products (ed: futures) trade down significantly, but one thing that did not trade down, was gold coins, tangible real gold.  That’s going to show you, people don’t want certificates, they don’t want anything else.  They want the real product.

Then there is the supposed eternal juggernaut of the Chinese economy that will keep all the other floundering countries afloat. Much of that juggernaut has been propelled by debts taken on by local governments to promote the economy in their areas. But now the Financial Times reports this:

A senior Chinese auditor has warned that local government debt is “out of control” and could spark a bigger financial crisis than the US housing market crash.

Zhang Ke said his accounting firm, ShineWing, had all but stopped signing off on bond sales by local governments as a result of his concerns.

Last but not least, an insider is finally speaking up about nuclear power plants in the NY Times:

All 104 nuclear power reactors now in operation in the United States have a safety problem that cannot be fixed and they should be replaced with newer technology, the former chairman of the Nuclear Regulatory Commission said on Monday…

The position of the former chairman, Gregory B. Jaczko, is not unusual in that various anti-nuclear groups take the same stance. But it is highly unusual for a former head of the nuclear commission to so bluntly criticize an industry whose safety he was previously in charge of ensuring.

This system is coming apart at the seams. Insiders and whistlebowers are finally describing the details. The US Government realizes this and is desperately trying to keep whistleblowers from telling the truth by filing charges against them and trying to ruin their lives. Ultimately, it won’t work. I just hope that everyone reading here takes those actions they need to take. By the time the collapse is on the television Nightly News and Page 1 of the newspapers, with the system honchos all claiming “No one could have seen this coming,” it will be too late.

Update on Metals, Deposit Confiscation, and Capital Controls

…one goal is to get to the point where all market participants understand with certainty that if a large SIFI (systemically important financial institution) were to fail, the losses would fall on its shareholders and creditors
–Governor Jeremy C. Stein, US Federal Reserve Board, Regulating Large Financial Institutions, speech at a conference sponsored by the International Monetary Fund, April 17, 2013

* * *

“Bank creditors,” as it happens, is a class of people that includes bank depositors. Everything about the rhetoric of banking is designed to obscure this. You deposit money in your bank account…But what you’ve really done is loaned the money to the bank…
Slate.com

A big price drop in the precious metals. So let’s see, on Thursday, April 11:

     CEOs of biggest U.S. banks to meet with Obama on Thursday

and the big selling in metals took place on Friday, April 12 and Monday, April 15.  No chance of any causation in that correlation. Nah. Move along. As Leslie Nielsen said, “Nothing to see here.

Anyway, with all that selling, there must be lots of inventory of coins around. That’s what they teach in Econ 101, right? That if a price is plunging, it’s because people are dumping large quantities of that item onto the market.

But there isn’t lots of inventory. Inventory is very tight, sold out in many cases. Delivery lead times are out to five or six weeks, and that’s if you can even place an order for what you want.  Big-volume dealers like Tulving.com are entirely out of one-ounce silver coins minted by any country, and they have been since April 15. You can scroll down this page at their web site to see how many items they normally sell are currently sold out.

And these people make a living buying and selling lots of coins. They really want to do a lot of business. And they are happy to buy right now, but they can’t sell lots of items because there aren’t any available.

This scramble to buy physical bullion coins is going on worldwide.

In Australia:

     Golden times for Perth Mint

The volume of business that we’re putting through is way in excess of double what we did last week,” Treasurer Nigel Moffatt said, without giving precise figures. “There’s been people running through the gate.”

In Japan:

     As global price slumps, “Abenomics” risks drive Japan gold bugs

But on Tuesday, buyers outnumbered sellers by a wide margin. At Ginza Tanaka, the headquarters shop of Tanaka Holdings, gold buyers waited for as long as three hours for a chance to complete a transaction.

In India:

     India’s Response To The Gold Sell Off: A Massive Buying Frenzy

In China:

     Chinese Gold & Silver Exchange Society Runs Out of Gold…Importing from Switzerland and London

Now we discover that the Chinese Gold & Silver Exchange Society has essentially sold out of gold bullion, and must wait until Wednesday for shipments to arrive from Switzerland and London.

     Gold Buying Frenzy Continues: China, Japan, And Australia Scramble For Physical

In the US:

     US Mint Sells Record 63,500 Ounces Of Gold In One Day

According to today’s data from the US Mint, a record 63,500 ounces, or a whopping 2 tons, of gold were reported sold on April 17th alone, bringing the total sales for the month to a whopping 147,000 ounces or more than the previous two months combined with just half of the month gone.

     Bullion Shortages Develop As Retail Demand Skyrockets

…on Monday there was such chaos in the markets that some of the larger wholesale dealers had to shut down at various times because of the massive demand on the buy side… Gold and silver buyers are still outpacing sellers by a stunning 50 to 1.  There were premium increases on everything bullion related.  The wholesalers are now telling us four to six weeks on silver maple leafs, and wholesalers quit taking orders on one ounce silver rounds.

In Canada and Europe:

     Massive Run On Physical Gold & Silver At UBS & Scotiabank

At the Bank of Nova Scotia in Toronto the gold window has been absolutely swamped. I have confirmed there were people lined up in droves recently for multiple-hours at a time to buy gold and silver bars and coins….

“I then confirmed with UBS today in Zurich, Switzerland, that they are experiencing exactly the same thing. They told me people are waiting in long lines for bullion related bars and coins. The physical market is incredibly tight…

In Switzerland:

     Refiners Can’t Keep Up With Massive Global Gold Demand

If you look at our company, as just one example, we did not have one single seller in the last few weeks.

So during this takedown in gold and silver there wasn’t one single seller, only buyers….

If we turn to the Swiss refiners, Eric, the premium over spot for physical gold is rocketing. Swiss refiners are unable to keep up with the demand for immediate delivery. They are working flat out, including the weekend, and still can’t keep up.

The Swiss refiners are seeing global demand coming in from everywhere, especially from the Middle-East and the Far-East. So, again, this proves that the artificial manipulation of paper gold has nothing to do with the physical market.
–Egon von Greyerz, Matterhorn Asset Management

So, with all that buying interest in real physical gold and silver, why has the price been falling? Because the two largest trading venues on the planet for metals, the LBMA (London Bullion Market Assoc.) and the COMEX in the US, are the places where the price of gold is currently set. And 99% or more of the trades there that are said to be related to gold are not for the physical metal, they are futures contracts that are traded for cash, not physical gold. In other words, these are very large trading casinos. But like the banks, they are fractional reserve systems. In other words, if everyone who had a futures contract for gold actually wanted physical gold for their contract, there would not be anywhere near enough gold to go around. Even supporters of the LBMA admit there is maybe 1% physical gold backing all these contracts. So that’s even more leverage than is used at most banks. A lot more.

Monday, April 15 was a good example. Andrew Maguire–an LBMA trader and whistleblower who the Powers That Be ran down, but did not kill, with a car in 2011 right after Andrew gave testimony on silver price manipulation to the authorities—reported that on Monday, there was a period during which 155 tons of gold was sold on the LBMA in one hour. I can tell you for sure that no one who owned or was the custodian for 155 tons of physical gold would sell it in a panic into a falling market. This was selling of futures contracts that will be settled in cash. They have little or nothing to do with physical gold. People in charge of 155 tons of real gold do not sell in a panic. If they wanted to sell—and such a thing would be quite unusual these days when even central banks are net buyers of physical gold—they would do so carefully, trying to get the best price. They would sell on days when the price was rising, not falling. This is the way anyone with a strong profit motive sells, they hire good traders to sell over time when they can get the best price. They do not panic dump their holdings regardless of price.

In fact, Maguire reports that central banks picked up 55 tons of physical gold during that one hour period when 155 tons worth of paper gold contracts were sold.

Here are Maguire’s comments about Monday, April 15.

At some point, this charade will fall apart. The price of physical gold will separate from the price quoted in these paper instruments. This is already visible when one needs to buy coins at a premium above the spot price of the metal. During these smashdown selloffs (we’ve seen these before in 2006 and 2008), the premium above the quoted spot price for physical gold and silver rises, sometimes to as much as 50% above the spot price if you want prompt delivery. During those periods, the price for physical coins is not the quoted spot price, it is the spot price plus the premium, and that price can be substantially higher. These are the indications of the separation of the paper and physical gold and silver prices to come.

The press duly reported nearly the same quote from representatives of all of the banks. Yes, reps from those same banks that met with Obama on April 11. “Gold has lost its safe haven status. “ “Gold is no safe haven.” And on and on. They should have dressed them up in silly costumes and they could have danced and sang together, at least that would have been entertaining.

So why do they want to scare you out of, or away from, gold and silver? Two main reasons:

First, so that you cough up your goods so they can buy them on the cheap.

Second, when they go to “Cyprus” your accounts, that is, when they want to confiscate some of your money, they want it easily available with a few keystrokes. Confiscating gold and silver coins would be inconvenient at best, dangerous at worst.

Do you think “they’ll never do that here”? Here is the overall order of events in Cyprus:

1. On Feb 10, the Financial Times published the plan for the confiscation of depositor money in Cyprus called Radical rescue proposed for Cyprus.

2. On Feb 11, the Central Bank of Cyprus posted a letter shown at this link saying that the Financial Times article was incorrect, that confiscating depositor money was against the constitution, etc.

3. In mid-March, the confiscation of depositor money was announced.

4. The Cyprus parliament voted against it.

5. The central bank of the EU overruled the Parliament of Cyprus and went ahead with the confiscation. So democracy and the constitution were thrown out the window along with the promises.

On the day after the confiscation, the new head of the EU finance ministers, Jeroen Dijsellbloem, gave not one, but two interviews in the mainstream press in which he said the Cyprus bank resolution was a new template for such actions. From Reuters:

A rescue programme agreed for Cyprus on Monday represents a new template for resolving euro zone banking problems and other countries may have to restructure their banking sectors, the head of the region’s finance ministers said.

The rest of the EU and IMF politicians nearly had a baby on the public stage. For the next three weeks, all they would say was that Cyprus was not a template. We should have put them in a chorus line too. Even Dijsellbloem tweeted that he didn’t say what he said.

But then a member of the US Federal Reserve Board, Governor Jeremy C. Stein, said that if a Too Big to Fail bank failed, that private investors and creditors would have to bear the losses. His speech was on April 17, well after the Cyprus event wherein depositors were ruled as “creditors” of the bank. These people choose their words carefully. I hope everyone out there listens to them carefully.

And it’s worth remembering this: In the US, for example, the bank insurance fund held by the FDIC has $25 billion. That’s the amount insuring $9 trillion worth of deposits.  So that’s 370 times more deposits than the amount in the insurance fund. And the insured banks have an additional $297 trillion in exposure to derivatives. So that’s almost 12,000 times more than the amount in the insurance fund. Very safe and sound, eh? Now you know why the authorities have just hinted that banks won’t be simply bailed out anymore; people’s deposits will be bailed in. Just remember, they’ve put you on notice now that you need to determine whether or not your bank is safe. People who spend their whole lives trying to do that can’t figure out which banks are truly safe anymore, but so what, you are now supposed to be able to do that. You can see a chart of the FDIC situation here. And you can find out a little about the safety of any US bank at the Safe and Sound section here. I am not aware of what is available publicly available for bank analysis in other countries.

Also part of the Cyprus event were strong restrictions on how much money a person could take out of Cyprus, the dreaded capital controls. This is also part of the template. When that happens, people are stuck in their own currency even if it tumbles mercilessly in value. When people tried to switch their money into the electronic currency Bitcoins because it recognizes no borders, it doubled the price of Bitcoins in a few weeks. TPTB then smashed down the price of Bitcoins as well, to show people that there is “no safe haven.”

Throughout history, currency devaluations, capital controls, and asset confiscations are denied until after they have happened. Governments typically say, “Sorry, we didn’t want to do that, but we had no choice.” You need to either anticipate them or be a connected government crony. Here’s a chart of monthly deposits into and withdrawals from the Cypriot banking system. The large withdrawals in January and February show the strong likelihood that some people were given advance notice:

CyprusOutflows

Most people were not given advance notice; if the time comes, you and I will be in that group.

Lots of people are showing that they understand. As the stories above show, people were waiting in line for metals at these prices across the globe. We have seen this play before. Sometimes the elites smash down the prices of metals. Did I see it coming? Nope. Can they do it again? Yep. But as the rising price of gold over the last 12 years proves, they can’t push it down too far. If they do, the Asians and regular people will end up owning all of the gold. And the banksters won’t like that at all since they know the financial (per)version of the golden rule: he who has the gold makes the rules.

Lots of regular people on the planet take these price smashes as a gift. I think these people are smart.

Here is Jim Sinclair’s latest comment on the topic: The US Will Be Cyprused & We Will See $50,000 Gold.

And the recently-released video The Secret World of Gold, while not perfect, has Andrew Maguire briefly explaining how gold and silver prices are manipulated, and brings up the interesting question of whether there is any real gold (and not just gold-plated tungsten bars) at the US gold depository at Ft Knox. Channeled information agrees that Ft Knox is empty of real gold.  It will be a very interesting day when the world finds out about that.

CashGrab1

What is the Transition? Conclusion

Now you can’t say that no one ever told you.
–David Daniels

In Part 7, I promised predictions for this installment. And there will be predictions. The important question is: predictions based on what? The web and the media present piles of predictions, most of which turn out to be wrong.

So based on what? Evidence; and a model of how things work. Most predictions go awry because they aren’t based on either. Or if they are said to be based on models, the models are flawed.

Evidence is what Part 1 through Part 7 were all about. And all of us, consciously or not, operate from models of what the world is like. If we walk into a dark room and flip a light switch, we are operating from a model of the world where electricity is flowing into a building with wires connected to lights controlled by switches, and flicking a switch–that often sits precisely where we expect it to be even if we’ve never entered that room–lights one or more light bulbs. We have all sorts of such models in our heads having to do with gravity, internal combustion engines, computers, shoelaces, banks, the properties of water, etc. When correct, these models have predictive abilities that make our interactions with the world relatively easy and efficient compared to operating without such models.

So these models lead to predictions about the future, and when correct, they yield excellent results. When we turn the key in a vehicle ignition, we expect the engine to start, and typically we aren’t disappointed. Thus we made a prediction about the future, one that has generally turned out to be true. Perhaps not every time. Once in awhile, the car might not start. But the results are good enough, the model reliable enough, that we rarely “give it a second thought.”

In my view, this scales up to the major aspects of our lives. Though it does seem that, the larger the scale, the greater the disagreements people have on the topic. Yet I contend that getting large-scale models right is important and possible. When we get the large scale models wrong, life can be unnecessarily confusing and difficult; when we get them right, the results can be profound.

Bias, the bringer of difficulty

We all like to think we aren’t biased, but on this planet at this time, that is a rare achievement. It runs deeper than we like to admit. Were that not true, the mystics would not have to advise us to pierce the veil. Without bias, we would likely see that there is no veil.

Let’s look at a good example of why people have a tough time getting large scale models right. This is one where, were it a multiple-choice question on a standardized test, most highschoolers would get it right. But on this one, the “masters of Wall St” got it wrong. Big time.

Several decades ago, one researcher pointed out that the economy of the USA operates on a roughly 25 year recession/depression cycle, that is, roughly every 25 years, there is either a recession or depression. Yes, there could be recessions at other times, but you could rely on the idea that one would happen roughly every 25 years.  This cycle has been active since early in the 1800s and predicted that there would be a recession or depression starting ideally in December, 2007. I told a number of people about this ahead of time, and few thought the idea had merit despite the historical track record, part of which looked like this at the time:

9/1857: very serious recession 6/1857-12/1858 (18 months contraction)
2/1882: depression 3/1882-5/1885 (38 months contraction)
7/1906: serious recession 5/1907-6/1908 (13 months contraction)
10/1932: serious depression 8/1929-3/1933 (43 months contraction)
7/1958: recession 8/1957-4/1958 (8 months contraction)
12/1981: very serious recession 7/1981-11/1982 (16 months contraction)
12/2007:

Every August, George Soros has a meeting at his Long Island estate for the biggest movers and shakers on Wall St. By August 2007, the sub-prime mortgage market was already falling to pieces. Soros asked his 21 guests, people who have the money to buy the purportedly best research on the planet, whether the current situation would lead to a recession in the US. Twenty of twenty-one said no recession. But right on schedule for the 25 year cycle, a recession started in December 2007. Some say we are still in the depression that started then, and there is good evidence for that.

So how come people would ignore such a prescient cycle with a long and excellent track record? First, because while most people are well aware of being surrounded by cycles such as heartbeats, breathing, night and day, moon phases, ocean tides, the seasons, years, birth and death, to name just a few cycles to which we are subject, they believe that such cycles couldn’t possibly apply to an economy, that such thinking is equivalent to voodoo. Second, the researcher who was the first to publish about this cycle was Edgar Cayce, and to most hard-nosed Wall St people who think they are operating by logic and science, how could Edgar Cayce possibly be right about anything.  What they think of as hard-nosed is actually thick-skulled because Cayce was right about plenty of things. But he doesn’t fit their constrained view of “logic and science,” so out goes Cayce and anyone like him. While it would be fun to say “too bad for them,” when their firms failed in 2008, it was the rest of us who got stuck with the bill for bailing them out so they could keep their bonuses, stock options, and corporate jets.

So as we all know, in 2008 we got a humdinger (serious academic term) of a recession despite the bad models being used by the Wall St mavens and people like Fed Chairman Ben Bernanke that said we would not get a recession. So why did the masters of Wall St and most others dismiss such information? Probably because, if they heard the source of the prediction, most would discount something from Edgar Cayce because it was information channeled from the other side. And “everyone knows” that stuff is only for new age goofballs. So the real answer is: bias. People would rather hang onto their bias than admit that correct information is useful if they despise the source.

Oddly, another researcher, Manfred Zimmel of www.amanita.at, later figured out the basis for Cayce’s information. OK, check your biases. For some of you, this is about to get worse. Here’s that same recession/depression series from above exactly as I first saw it, presented by Manfred, in 2006:

Ø conjunction 9/1857: very serious recession 6/1857-12/1858 (18 months contraction)
Ø conjunction 2/1882: depression 3/1882-5/1885 (38 months contraction)
Ø conjunction 7/1906: serious recession 5/1907-6/1908 (13 months contraction)
Ø conjunction 10/1932: serious depression 8/1929-3/1933 (43 months contraction)
Ø conjunction 7/1958: recession 8/1957-4/1958 (8 months contraction)
Ø conjunction 12/1981: very serious recession 7/1981-11/1982 (16 months contraction) – last deep recession
Ø conjunction 12/2007:

Yep, you guessed it (heh), the cycle is actually the Jupiter-Pluto conjunction cycle. So an astrological model has reared it head! Yikes, so if the Wall Streeters had heeded either the channeled or the astrological model for this cycle, they could have saved their firms tens of billions in losses and turned 2008 into a year of tens of billions in profits by aligning their trading with the idea that a recession was very likely. This is not a stretch since there were hedge funds that did make billions from the financial collapse in 2008.

If a model is clearly working in significant ways, it is useful to ask whether allegiance to one’s biases is more important than being on the right side of major trends on this planet. One of the worst things a person can do in this rapidly-evolving environment is get in front of a major negative trend and stay put thinking that trend is not important. Millions have gone bankrupt in recent years doing just that. In the markets, they call it picking up pennies in front of a bulldozer. Sometimes having a good or bad model is a matter of life or death, for example, a bad model about the nature of the Nazi party brought horrific suffering and the deaths of many millions. (Side note: Thundering-Heard.com exists because I think understanding and heeding good models versus bad ones could very well be a matter of life or death over the next few years, or perhaps even months.)

Handling predictions

One more brief topic, and then on to predictions about the Transition: What is a person supposed to do when they hear a prediction about the world? Assuming that they want to do anything at all, here is an approach from some people whose livelihood depends on their expert handling of predictions. When you hear a prediction:

1. Put aside the natural human propensity for wanting to know immediately whether the prediction is correct. This is emotion coming to the fore. All of the remaining steps are about eliminating emotion from this process so that rationality, research, and observation can take their rightful place.

2. Consider the prediction a script about how the future will unfold.

3. After giving it some thought, assign a rating, say from 1 to 100, on whether you think the predicted event can possibly emerge from current conditions. If it has any chance of emerging, write down the script and place it in your script pile wherein scripts about the future are sorted by your numeric ranking. If there is no chance that the event can arise from current conditions, then throw it out.

4. If the outcome of a script would be important to you, do research on the topic and, if it is appropriate based on your research, adjust your numeric ranking for the prediction in the future script pile. If there is a way to investigate the track record of the person making the prediction, and on the internet there often is, this can help a lot in rating a prediction. People with a bad track record are typically operating from a narrow or faulty model and usually continue doing so. Few people, especially people who have achieved some fame using one model, will admit their errors and find a better model.

5. Watch as evidence about all of your scripts unfolds and adjust your script pile accordingly, tossing out scripts where emerging events show a script to be faulty, and upwardly adjusting the numeric rankings of those scripts where the evidence is pointing to the idea that they might be right.

Through this process, predictions that are false are discarded and those that are true rise to the top of the pile. Emotions are kept at bay, biases fall as evidence accumulates, observation and logic guide the process. And you learn a lot about how the world works.

The Evidence

So what have we observed?

1. Acceleration, evident in a wide variety of ways, including:

2. Weather extremes and wildness, including floods, windstorms, typhoons/hurricanes, tornadoes, heat waves, droughts, superstorms, etc. The insurance industry reports a greater than tripling of “loss-related weather events” since 1980. (Part 1)

3. Earthquakes of magnitude 6.0 or greater up more than 50% since 1990. (Part 1)

4. Tsunamis up fivefold in this century versus the last. (Part 1)

5. Volcanic eruptions clearly on the rise. (Part 1)

6. Magnetic poles on an accelerating shift accompanied by hemispheric temperature changes . (Part 2)

7. Sea level rise. (Part 3)

8. Species extinction rising exponentially along with rising human population. (Part 3)

9. Sinkholes increasing rapidly enough to go from obscurity to the mainstream media. (Part 4)

10. Asteroid encounters appear to be on the rise. (Part 4)

11. Nuclear plants compromised by the increasing earth and weather changes causing problems for people. (Part 4)

12. People’s perception of time as speeding up. (Part 5)

13. An exponential rise in the price/performance of technology. (Part 5)

14. Exponential growth in money, debt, and unemployment. (Part 5)

15. Exponential growth in the amassing of physical gold by those, such as China and the oil sheikdoms, who supply real goods for all this printed money. (Part 5)

16. Relentless growth in the prices of real goods such as food and fossil fuels in response to the massive influx of printed money.

17. Despite an exponential increase in money printing, borrowing, and spending by governments to simulate economies, these same economies remain moribund and these tactics clearly show diminishing returns. (Part 5)

18. The “age of truth” brings increasing revelations of lies and truth. (Part 6)

And with people, acceleration is bringing increases in (Part 7):

19. Communication/connectedness.

20. Inner work.

21. Insistence on knowledge over belief.

22. Group consciousness.

23. A changing attitude toward the physical sciences.

And increasing exploration of (Part 7):

24. Healing methods.

25. The energetic nature of everything.

26. That energy is different at different locations on the planet.

27. The multi-plane nature of life.

28. Interaction with nature intelligences.

29. People changing from “what can I get” to “what can I do to help.”

And accelerating (Part 7):

30. General insanity.

31. Use of legal and illegal drugs and of alcohol to cope with acceleration.

Predictions

OK, so where will this lead us? Does anyone have a model that accounts for accelerating change in most if not all aspects of life on this planet? A model which we might then be able to look to for guidance about the future, from which we could actually expect some reliability?

Surprisingly, yes.  In early 2007, I was fortunate enough to run into such a model described in a book published in 2003. It went into my script pile at the time. Given that the book had been published four years earlier, I was able to evaluate whether a portion of its predictions were coming true or not, and they definitely were. I was already convinced prior to reading the book that we were likely to experience an all-out collapse of the financial system within 5 to 7 years. The book entirely agreed with that perspective, but it took things way beyond the financial world and covered the topic of the Transition from historical, geologic, meteorological, political, educational, occult, and cosmological perspectives, to name a few.  And this wasn’t a book of vague wishy-washy predictions that could be interpreted several ways. It was exceedingly specific. Here is what it said—and this was in 2003, before the explosive growth of sub-prime mortgages being sold to anyone who could fog a mirror, with those mortgages being packaged up and sold to institutions across the world as blue-ribbon, good-as-gold, AAA-rated securities—about the real estate bubble. And this was when almost all people considered real estate a perfect investment, something whose price could never go down, something that was definitely not a bubble at all:

Many who pulled their money out of the stock market…rushed to invest these funds in real estate, but again this mad rush created yet another bubble of inflated real estate. Finance companies, mortgage brokers, and banks readily accorded mortgage loans to these buyers. Once they obtained the signature of the borrower on the loans papers, they sold the mortgages to non-bank secondary mortgage companies. In order to purchase these mortgages, these secondary mortgage companies borrowed money by issuing bonds and derivatives on these bonds.

In essence, though this convoluted maze of borrowing, these non-bank financial institutions…own indirectly most properties purchased with a mortgage…

As the world economy deflates, more and more people will lose their jobs, they will default on their house mortgage payments, and be thrown out into the streets. The sinister secondary mortgage companies will take possession of the property.

When mortgage defaults reach a critical mass, the secondary mortgage companies will collapse leaving a wasteland of properties. This will spell the end of the financial grip the Dark Forces hold on the world, and the towers of finance they have spent centuries to build will fall one by one like dominoes.

So what we have here is an exceedingly accurate description of the work-in-progress that is the real estate bubble and its associated derivatives taking down the financial system. Lots of “dominoes” have already fallen. In 2007, Wall St had five big investment banks. The sub-prime mortgage collapse took three of them to insolvency—Merrill Lynch, Bear Stearns, and Lehman Bros—which were either broken up or absorbed into other companies, and it would have taken down the last two, Goldman Sachs and JP Morgan, but the government temporarily stabilized them by saying the they were now backed by FDIC deposit insurance even though they had never before paid a penny into the FDIC insurance program. In fact, they had shunned the FDIC program because they wanted less regulation.

As tracked by the Mortgage Lender Implod-o-Meter, 388 US and 13 non-US mortgage lenders have gone belly up so far. This includes giants such as “secondary mortgage companies” Fannie Mae and Freddie Mac and lenders such Countrywide, Washington Mutual, and Wachovia Mortgage. (The full list is here.) And now with sinister companies like Blackrock rushing in to buy foreclosed houses, the game is not completely over, but it won’t be long before the dominoes have all fallen.

Anyway, back to this book I’ve been speaking of. Of the 31 trends identified above, this book covered 26 of them, and for all I know, I may have forgotten references to the other five.

The book is The Sanctus Germanus Prophecies, Volume 1 by Michael Mau. It was followed by Volume 2 in 2006, and Volume 3 in 2009. The books can be purchased here or here.

There are a lot of books out there these days that are really highly-padded versions of what  could be a five or ten page article.  Mau’s books are not in that category, as demonstrated by the quote above, that is, the real estate crisis was discussed in detail on one page and that was it, the author moved on to other topics.  So an attempt to summarize the vast array of information in these books will do them serious injustice, but I will make the attempt anyway as a conclusion to this series of posts. The best advice, of course, is to read the books:

We are living in a period of transition during which much that impedes humanity’s evolution—warmongering, the manipulation/exploitation for power and profit of the many by a very few, the intentional distraction of people from their higher self, and so forth–will be cleared away. Energetic acceleration and earth changes will assure that this clearing/cleansing process takes place. The transition is a normal period of relative rest in the vast multi-billion year evolutionary cycle of our solar system called the manvantara in which people evolve through hundreds and even thousands of incarnations. Many people, called lightbearers in these books, incarnated now with the intention of helping people through this turbulent process and preserving, through the period of the transition, that which is conducive to people’s true evolution. The overall goal of the transition is to place humanity in a new golden age in which people can pursue soul liberation with excellent support and without interference. Getting to that golden age requires the dissolution of those organizations that serve the interests of those who seek to control everyone else for their own power and for material acquisition far beyond what any person would need during a lifetime. Since these organizations are not going quietly, we are dealing with increasing turbulence during which all people will have to decide where they stand with respect to war and the array of slaveries that permeate civilization. The degree of turbulence that can be expected is strongly related to whether or not people wake up and stand on the side of freedom and conscious evolution.

Volume 2 lists twelve regions on the planet that are called spiritual regions, higher elevation areas away from the coasts that, while not immune to the earth changes, are relatively safe with respect them, and which are conducive to lightbearers retrieving those abilities they cultivated in prior incarnations.

Here are some highlights from the timetable at the back of Volume 2:

2005-2012:

  • Severe worldwide economic and financial crisis
  • World economy hits bottom and stays there, all conventional efforts to revive it fail
  • Water-related catastrophes: tsunamis, hurricanes, rise in sea level, floods of lowlands and coastal areas
  • Spiritual Regions on higher ground begin to develop: initial preparations

2013-2020:

  • Water-related catastrophes multiply making more and more low-lying areas uninhabitable
  • Massive population displacements to higher ground
  • Spiritual Regions take hold as lightbearers find their way there
  • Period of Reconstruction: Transitional societies begin to consolidate in the Spiritual Regions

2021-2080

  • Indications of major continental shifts, rifts, and movements begin to perturb the earth’s surface

There is a lot more to these books that what I’ve summarized here. They place the Transition in a perspective that ranges from the innermost to the cosmic. They say that, far from being over, that we are early in many of the accelerating trends identified above. These books have risen to the top of my “script pile.” They have become a stable platform from which to view the changes and turbulence in the world, and have given me confidence that life on this planet can and will be changed, and vastly for the better, and that this goal is way beyond worth working for. These days, when I hear a prediction–and I do seek out a lot of them–if it clearly conflicts with the information in these books, I relegate it to the category of “very unlikely,” and that repeatedly works very well.

One of the main reasons that so many predictions go awry is because they are drawn from experience of a small slice of life. We hear predictions all the time about finance, politics, weather, health, the use of energy, the environment, social trends, and now even meteors and comets. I contend that so many of those predictions go awry because they work from a narrow band and fail to take into account the larger context. Most would relate to maybe one or a few of the 31 trends identified above. Mau’s books place almost all of these individual trends in the context of a much larger one.

And seeing all of these trends in their larger context is precisely what we need right now as change permeates, well, just about everything! A narrowly focused model has no chance of accounting for across-the-board acceleration in, for example, finance, earth changes, mass shootings, and the emergence of truth.

So what’s a person to do about all this?

It is truly up to each person.

What would I do? I will provide a detailed post about that soon where I will contend that a wait-and-see attitude about these changes is no longer appropriate. Life is, as usual, being very kind by giving us a preview of exactly how this will all unfold by not bringing change all at once, but by ramping up all of these trends. But it’s up to us to read the signs and take action.

In the mean time, if you haven’t done so already, you may want to do your own research on these topics. If you come to some understandings, an action plan may naturally emerge from what you learn.

One piece of advice I would give is to never underestimate the power of an accelerating trend. As trends become obviously exponential, they can be quite breathtaking in their speed, power, and scope. As a friend from Cyprus told me: “On Friday night, when we went to sleep, everything was normal. On Saturday, we were told that the banks were closed and that we would have very restricted access to our bank accounts and that we might lose a lot of our the money.” When things change these days, they can change radically and quickly.

There are suggestions for dealing with the collapse of the financial system in the post What then can we do?.

And I leave you with outstanding comments on this topic from Gandhi: View the Forces of Nature bringing Earth Changes as Opportunity to Change the World.

Thanks very much for reading this long series and this long post.

We interrupt this program…

For two items:

1. The Cyprus Bailout
2. Gold: Last Chance

That title phrase was used when normal television programming was to be interrupted for a special news announcement. And this post is an interruption of sorts—of the What is the Transition series—though actually it is a continuation of a general theme here: Lots of the events that we are all seeing—from earth and weather changes to financial events to the fact that more and more people are taking up meditation by the day—are hints, clues, indicators of things to come. They are not isolated one-off events. They are part of a trend, signs to be read and understood to see what’s coming next. Life has been very kind, bringing things on in evolutionary fashion for anyone who wishes to heed the signs. But things are ramping up. This strongly favors action over a wait-and-see attitude. This first story is a perfect example:

1. The Cyprus Bailout

Europe Does It Again: Cyprus Depositor Haircut “Bailout” Turns Into Saver “Panic”, Frozen Assets, Bank Runs, Broken ATMs

The fifth European national bailout pertains to Cyprus, where receipt of the bailout money is contingent on the confiscation of money directly from people’s bank accounts. The government will take 6.75% of the deposits of anyone with under 100,000 Euros. And they will take 9.9% of anything over 100,000 Euros.

The people will not send in this money, it will be taken directly from their accounts on Tuesday if the Cypriot legislature approves the bailout plan.

Funds to pay the levy were frozen in accounts immediately, ECB Executive Board Member Joerg Asmussen said. The levy will be assessed before Cypriot banks reopen on March 19 after a March 18 national holiday. Sarris said electronic transfers will also be limited until then.

When bankers and politicians want someone’s money…

If a word to the wise is sufficient, one can only hope that more will gain wisdom from this event.  One German newspaper is already suggesting today that a 15% “wealth tax” be levied in Italy to help with its debt problem.

2. Gold: Last Chance

Jim Sinclair (there is always a link to his web site JSMineSet.com on the Thundering-Heard BlogRoll) held lots of gold in the precious metals bull market of the 1980’s, riding the price from $40 to $850 per ounce. He sold his holdings on the very day of the top price in 1980 and thus entered the ranks of investment legends.

In 2003, he started a web site and went public with the prediction, which he reiterated many times in the years that followed, that gold would rise from its 2003 price in the mid-$300’s to $1,620 per ounce by January 2011. He was roundly derided for both the predicted rise of the price and for the precision of the predicted timeframe. It turned out he was off by 8 months: gold’s price did not rise to $1,620 until August of 2011, not January.

The gold price in dollars has been in a sideways correction since late 2011. Recently, Jim has been pounding the table that the current sideways movement in the gold price will be complete before the end of this month, March 2013, and begin its next phase of upward price movement to $3,500 per ounce and beyond. When Jim makes predictions about gold, it pays to listen.

If anyone has been hesitant about buying gold because of claims by those who have been wrong all along about gold that the gold bull market was over, that the “gold bubble” has popped, let’s just look at a few charts, first of gold, and then of charts where bubbles did pop. I think you’ll be able to clearly see that the people claiming a “bubble pop” for gold don’t know the first thing about how to read charts, meaning that they know very little indeed about financial markets. Here’s the longer term chart of gold, from the year 2000 through now:

GoldSince2000 Notice that sideways price drift at the top right of the chart? Chart readers call this a “correction in an ongoing bull market.” It’s a bull market taking a breather before powering higher.

Now, want to see what the chart of a real popped bubble looks like? Here’s a chart of the Nasdaq stock index from Stockcharts.com. This index represented the internet and tech stocks during that time when we were told that there was a new paradigm, that everyone remotely connected with technology was going to be rich rich rich because they had started a web site to sell, well, whatever, it didn’t matter at the time:

Nasd_Bubble

Notice the parabolic upmove as price increased 15-fold in less than 10 years and then: SPLAT! A high-speed drop of 78% in just over two years. Thirteen years and trillions of printed dollars later, the Nasdaq is still 36% below that all-time high price.

Here’s the chart of crude oil from 2003 to 2009 with price rising to $140 per barrel and then crashing back to $32 per barrel in less than a year:

CrudeCrash

Note in both of those cases, no sideways price movement for months and months, as is seen on the gold chart, just a sharp fast very-nasty price crash.

I think Jim Sinclair is correct. I published back in June 2012 (What then can we do?) that people might want to complete their conversion from paper/electronic currency into gold by August 2012. That was a good idea. But cycles research at the time showed that it was possible that we would get one more price downmove, into March of 2013 at the latest, so I did not label that Summer 2012 opportunity as the “last chance” to get gold at a decent price. Now price has come down again into that same area where it was during the Summer of 2012. This time I think that “last chance” phrase is appropriate. Jim Sinclair says, and I agree, that after this month, you won’t ever be able to buy gold anywhere near $1,600 per ounce again.

What is the Transition? Part 5

ACCELERATION

People’s Perception of Time

Everyone whom I have asked, including young people, feels like time is speeding up, like the day, the week, the year starts, and “before you know it,”, it’s gone. People feel like they have little time to carry out their plans. I would guess that this not universal, but perhaps it is.

Technology

And everyone, or certainly close to it, is aware of Moore’s Law, that the number of transistors that can fit on a chip doubles every two years. And Intel’s David House added that processor performance would double every 18 months. This acceleration in performance, and the fact that the price for that performance has steadily dropped, has changed the world in magnificent ways that have been difficult to envision at any point in time. People like Ray Kurzweil are famous for utilizing this increasing performance and for having made some prescient estimates of the impact of this exponential increase in price/performance, though some of his predictions have been wide of the mark, and it seems his general view that processors will outdistance human intelligence is destined to fail as well since a pathway to program a machine to have a higher self, intuition, noble emotions, will, self-awareness, and a sense of humor seems unavailable, to put it mildly.

Exponential, parabolic trends

As we did with the weather and Earth changes, let’s look at some data.

Money

It took the USA until 1990, that is, over 200 years, to create the first trillion US dollars.  The rate of money growth had increased so much by 2007 that it took less than a year to create each additional trillion.  Now, it’s seemingly all in day’s (OK, maybe a month’s) work. Here’s a chart of the money supply in the US and China combined:

USChinaMoneySupply

Yep, between the US and China, that’s $25 trillion floating around.

Another way to look at things is this: From 1971 to 2007, the world economy grew fourfold. Over the same period, the amount of money floating around increased forty-fold. And central banks were just leaving the proverbial starting gate in 2007; the continuing financial crisis had just begun, and the response was, and continues to be: Print Money!

And don’t think the Europeans want the euro to be left out of this print-a-thon:

ECB_BS

And the Japanese just joined the US and the Eurozone saying they would print “whatever it takes” to get their economy humming again.

And the Swiss!?!? The most pronounced money printing line on this chart (in light blue) represents Switzerland, purported to be so conservative about money. Ah, the good old days! No longer. For the size of their economy, they are the current money-printing front-runner by a wide margin:

CentralBankBalanceSheets

Et tu, Canada? (from zerohedge.com)

CanadaPrinting

And this has little to do with political parties, as shown on this chart of federal government debt in the US:

USDebt_DemsRepubs

though I would ask that you note the super-acceleration of this trend that started in the year 2000.

And in today’s world, the Chinese are the ones doing the heavy lifting in terms of manufacturing, so they are collecting a lot of this printed paper money, in other words, the West prints paper, sends it to China, and gets real goods in return. But the Chinese aren’t stupid, they are well aware of how much more of this paper is being created. So what’s their solution? To get real:

ChineseGoldAccum

The Chinese mine more gold than any other country now—none of which leaves the country–and they import even more physical gold from other countries. Insiders at the London Bullion Market Association, the leading venue in the world for trading physical gold, say that the Chinese are vacuuming out the London gold warehouses. And the Chinese are scouring the planet to buy mines, wells, and so forth, especially in Africa

But really, one would think that, with all this money floating around—there must be at least 200 times the money around now versus 1971–everyone must be rich! But we know that’s hardly the case. Sure, there are other parabolic charts, like the one for corporate profits:

CorporateAfterTaxProfits

The corporations seem to be doing quite well. And US banks had profits of $35 billion in the fourth quarter of 2012 alone. (Yes, the same banks that needed those big bailouts. As a group, they had a total of four quarters where they weren’t profitable. It’s been business as usual ever since. And they are hard at work telling legislators, as they bribe them, that any new regulations will seriously hurt their business.)

But other parabolic charts tell a different story. Here’s one for youth unemployment in the Eurozone (from zerohedge.com):


GreekYouthUnemployment

Yes, that’s over 60% youth unemployment in Greece, with Spain right behind.

And gasoline prices are “doing great”—for the oil companies, that is. Here’s the price chart for the US, with gas up 243% since 1998:

GasPrices

That chart is only through 2011, but since US gas prices just registered their highest ever price for a February here in 2013, this trend does not seem to be in jeopardy.

And the Food Price Index of the UN Food and Agriculture Organization is up 132% since the year 2000, with the all-important cereals/grains index up 190%. This is putting an extreme and accelerating squeeze on the budgets of the poor around the world.

This article contains the chart below showing that in 2005, it cost the US government one penny to mint a penny and one nickel to mint a nickel. Now, after all that money printing, it costs twice as much:

PennyAndNickel

resulting in a loss of $436 million for the Government of the US (GUS) to mint pennies and nickels since 2006.

So it seems clear that the accelerating money printing is accelerating the cost of real things that people need: gasoline, food, the metals that go into manufactured products, and so forth.

Here’s the accelerating cost of Social Security in the US:

SSA_TotalCost

Well, we saw the accelerating youth unemployment in the Eurozone above. And the EU just announced that its overall unemployment rate is 12%. And, as this chart shows, there hasn’t been any growth in the EU economy since late 2011 (chart source):

EU_GDP

In the US, GUS says the economy hit stall speed (0% “growth”) in the Fourth Quarter 2012. Here is a chart that shows that, of the 41 largest national economies in the world, only 18% of them expanded in the Fourth Quarter of 2012:

OECD_Expanders

Astute chart readers will notice that such a reading corresponds with the worst recessions (1973-74, 1981-82, and 2008-2009) of the last 50 years, so now you know why the central banks have started printing even more money–yes, accelerating!

How is it going for jobs in the US? As this chart shows,  the US is still 3 million jobs short of where things were in 2008:

JobsUS

Even worse, as the next chart shows, the large increase in the number of people working part-time means that a lot of the apparent job gains shown on the previous chart are part-time rather than full-time jobs:

PartTimeUS

If you think it’s only uneducated people who are suffering from all this, check this:

     Number Of PhD Recipients Using Food Stamps Surged During Recession

The number of PhD recipients on food stamps and other forms of welfare more than tripled between 2007 and 2010 to 33,655, according to an Urban Institute analysis cited by the Chronicle of Higher Education. The number of master’s degree holders on food stamps and other forms of welfare nearly tripled during that same time period to 293,029, according to the same analysis.

These job difficulties are reflected in household income in the US. The following chart shows two problems. While the red line shows income growth since 2000, it is still lower than it was at the start of the financial collapse in 2007. And the blue line shows household income adjusted for inflation. When GUS-calculated inflation is taken into account, income for the average household is 8% lower than it was 13 years ago:

RealIncome

Here is a chart of US household net worth (annotated by Of Two Minds) compared to all of the debt that has been created, showing that all of that debt is not making people richer:

NetWorthbyDebt

All of these economic charts were compiled by governments who, as we’ll show in a future post on the acceleration in lying, have a strong vested interest (it’s literally and even proudly called MOPE by academics—Management of Perception Economics) in making things look better than they are. In that light, I ask that you consider the following two charts compiled by a private bunch of computer geek types at a place called Consumer Metrics Institute. They thought, in this time of highly-networked business, that it was silly to have to wait until governments spent months collecting data before telling us what happened some months back, that the data could be collected and reported in near-real-time. If you wish, you can find out what they do at their FAQ.

But what they essentially do is track, in real time, discretionary purchases for things like automobiles, housing, vacations, durable household goods and investments.

These two charts show the trend in these purchases where a value of 100 would equal the same level of purchasing as was taking place in 2005. The first chart is the last 60 days:

CMIRecent

And the second chart is of the last three years:

CMILong

So, both charts show their index hovering around 85 or lower, which means that this large portion of the US consumer economy is 15% smaller than it was in 2005! Perhaps that aligns better with the income and net worth charts shown above rather than the rosy “we’re in a wonderful economic recovery” MOPE spewed by minions of The Powers That Be.

So what it looks like is that all that money printing is making a select few richer and, by driving up the prices of real goods, squeezing regular people—whose income is falling and who spend a far greater percent of their income on real goods. And the Western central banks say it isn’t their fault that people are rioting in countries where people’s costs for food have gone from 40% to 80% of their income. Nope, they aren’t driving prices up at all with their money printing, it’s those “evil speculators.” Well, perhaps it is evil speculators, but they are aided and abetted by a vast surplus of gambling chips supplied by the central banks.

There’s more to come. Stay tuned for Part 6.