Currency Balloons

Given the state of most media reporting, it’s sometimes tough to know whether to laugh or cry. Here’s a story from last week about a surge in gold bullion purchasing in Germany in August and September:

     German Bullion Dealers Report Major Increase in Sales

Christian Brenner, Chief Executive of Philoro Edelmetalle GmbH: “Already in August we noticed an increase on orders compared to the previous months, but September… September beats it all. From a German viewpoint it’s the strongest month of 2014.”. At their head office in Austria they also register an “overproportional high level” of revenue.

At the end of the article, there is a stumbling attempt to explain the recent surge with no mention of its real reason. Here’s a chart of the Euro showing it losing over 7% of its “value” in August and September, in the context of a 10% loss since May:
Euro2014107

It would seem clear that at least some people in Germany and Austria noticed that someone was letting the air out of their Euros and decided to convert to real money.

It was the same for the Japanese in August and September, but much worse overall since the Japanese government has been hellbent on devaluing the Yen for two years. Here’s a chart showing the loss in “value” of the yen of more than 31% in the last three years:

Yen20141007Since these losses in “value” are measured against the biggest balloon of them all, the US Dollar, this is the source of what you may have been hearing lately about the “strong Dollar”! In other words, the “strong Dollar” is simply the result of other major governments succeeding in intentionally letting air out of the balloons known as their currencies.

They are doing this in an attempt to create inflation! Unlike regular people, who like it when prices drop and they can get good deals, governments, being the largest debtors on the planet, want inflation so that their debts can be repaid in cheaper and cheaper currency as time passes. In case you haven’t noticed, that’s a form of grand theft: I’ll borrow money from you today, and pay it back with cheaper money later.

Well so what, you might say. If they are all doing that, what’s the big deal? Continue reading

A brief comment on the metals

This is strictly an opinion piece, I will not try to prove my case with links, charts, and so forth. An attempt to prove the case would be seriously lengthy, a project for which I don’t currently have the time and which I doubt most would want to read.

There is a very bright golden light on the horizon for precious metal prices, but that light is on the horizon (let’s say the first half of August), not right here. In other words, I think prices will drop first before they start rising in a serious way. I see four separate price, time, and trend patterns that include an expectation that price falls first before it takes off to the upside in a big way. And these patterns are supported by the seasonal pattern for gold which shows prices typically falling in the Summer and then turning up sometime in August.

So for anyone who has savings to deploy in the metals, the setup is ideal: you should get lower prices over the next couple of months for your buying, with an expectation that your buying will be followed by the start of a major price rally, that is, the prices available over the next several weeks should be quite a bargain.

For those of you who bought your metals years back–hopefully at prices that are still well below where they are now–and who have no additional buying power, you’ll need to be patient here, but as implied above, a price drop dead ahead will be an elegant completion of major recognizable patterns (based on four entirely different types of calculations) that have an exceedingly high probability of being the end of this general price downmove that started in late 2011. These patterns all clearly indicate that the bull market in metals that started early in this century still has many years to run, and that the best upward price movement is definitely still ahead of us.

Of course this could all be wrong if some huge war breaks out, in which case prices could go up and never look back. But if things are allowed to work out with “only” the normal amount of accelerating instability that is the most important trend of our time, then these reliable price, time, and trend patterns are likely to complete as outlined above. In any case, no matter what, prices should turn up for good later in the Summer.

This post is an attempt to keep emotions out of the precious metals picture so that as many of us as possible own some when we will all truly need them down the road. (I am serious about the word need; my repeated posting about gold and silver has nothing to do with an “investment scheme” to get rich quick or with having the “right asset class in your diversified portfolio,” I am talking about what people will soon need.) As their propaganda on this topic and their dirty tricks clearly show, the Powers That Were want you to get emotional and make the mistake of avoiding or selling physical metals so that they can accumulate more metals for themselves at low prices. I’m hoping that everyone who reads Thundering Heard is well prepared to fend off, or even capitalize on, their tricks.

 

What’s up with the metals? Part 2

Someone asked me whether I “was still in favor of gold.” The answer is an unqualified Yes. One easy reason is that almost every country on the planet is trying to drive down the value of their paper currency. So if you live in the US, it looks like this, and this is based on the US Government’s statistics for price inflation and we all know that they have every reason to play games to make this number look a lot lower than it really is, so you can safely increase each of these number by 50%:

CPI_Since_2000

The first column, CPI, says plenty: That if you live in the US, since the year 2000, the purchasing power of your money, of your salary, has lost 39%. And this is during a period that they claim has had “low inflation”! And the US Federal Reserve is currently on record as saying they are trying to create more inflation. So when you own US Dollars, or items denominated in Dollars such as US stocks and bonds, or items in currencies pegged to the US Dollar, realize that this is only going to get worse. The same is true for the purchasing power of the other currencies.

* * *

The post What’s up with the metals? Part 1 showed that some notable gold bears had turned bullish and that unprecedented demand for physical gold continued. Despite the strong demand, gold then had the bargain price of $1,237 per ounce, having just bounced up from $1,181 on the last day of 2013. Price went to $1,355 Monday and has pulled back to $1,338 today.

The strong demand for physical bullion, coins, and jewelry, documented in Part 1, has continued. Despite record-breaking demand in 2013, Chinese demand year-to-date is 51% higher than demand to this point in 2013. Mints around the world are working overtime:

     U.K. Royal Mint Runs Out of Sovereign Gold Coins on Demand

The U.K.’s Royal Mint, which traces its history back more than 1,000 years, ran out of 2014 Sovereign gold coins as prices near a six-month low led to “exceptional demand.”

     Gold Mint Runs Overtime in Race to Meet World Coin Demand

Austria’s mint is running 24 hours a day as global mints from the U.S. to Australia report climbing demand for gold coins…

Austria’s Muenze Oesterreich AG mint hired extra employees and added a third eight-hour shift to the day in a bid to keep up with demand. Purchases of bullion coins at Australia’s Perth Mint rose 20 percent this year through Jan. 20 from a year earlier. Sales by the U.S. Mint are set for the best month since April, when the metal plunged into a bear market.

Global mints are manufacturing as fast as they can…“The market is very busy,” Lang said. “We can’t meet the demand, even if we work overtime.

So, if demand for physical gold is so strong, how could there possibly be such a price drop as happened in 2013?  The answer is simple really. They have created a paper gold market that is hundreds of times larger than the physical gold market. By larger I mean in terms of the dollar value of trading in these two markets. People trade paper that has more or less of a connection with gold (sometimes none at all), and it is in these large markets that the price of gold is set. Most of the participants in these paper gold markets believe that they could, if they wished, convert these pieces of paper into physical gold, that the pieces of paper are claims on real gold. But in reality, only a tiny fraction of them could succeed in converting their claims into real metal. There just isn’t enough metal to go around.

If you think I exaggerate, check this chart, which I’ll explain below. It describes the action at the COMEX, the primary gold price-setting exchange in the US:

COMEX_OwnersPerOz

The key phrase on the chart is “Owners Per Ounce,” which for the COMEX is now at 111 owners per ounce of gold in the vault! That is, for each ounce of gold in the COMEX vaults (the blue line in the upper section of the chart), 111 contracts exist that allow the owners of those contracts to demand delivery of that single ounce of gold. We all understand that banks operate with only a little cash on hand for all the deposits they’ve taken, called a fractional reserve system. The COMEX is the same, worse actually: percentagewise, they keep a lot less gold around than the banks keep cash on hand.

(Please skip this paragraph if you already understand what 111 owners per ounce means!) Let me explain: The COMEX is a futures trading exchange where people trade gold and other commodities. Futures exchanges were created to be a meeting place between producers of a commodity and its end users. In January of any year, for example, a producer of wheat can agree to sell wheat in the future, in September, at a specified price to a cereal company. Both the wheat farmer and the cereal company know that they can make a reasonable profit on their operations if the farmer supplies, and the cereal maker takes delivery of, wheat at the pre-arranged price when that wheat is ready in September, so they make the deal. That’s called a futures contract. It promises both delivery and payment in the future at set price, and that’s great. But the futures exchanges are now dominated by big money speculators who have no intention of producing or taking delivery of anything. The chart above reflects this reality. The COMEX vault is supposed to have gold to back up the gold trading that takes place on that exchange. As you can see in the upper panel of the chart, back in 2006 they had over 5 million ounces backing up the contracts. Now that amount has fallen by 93% to only 370,000 ounces as more people realize that they better stop trading paper and get their hands on the real stuff.  Currently, for all the futures contracts to buy and sell gold on the exchange, they only have 1 ounce for every 111 contracts in existence. These contracts are paper gold, a huge synthetic supply of fake gold.  If everyone decided to make their claim for real gold (similar to a run on bank), only 1 ounce would be available for every 111 claims. Such an attempt would drive the price of physical gold into the stratosphere. On a typical day last week, 55,000 of these paper contracts traded hands. That represents 5,500,000 ounces of paper gold traded each day just at the COMEX. That trading sets the price for gold in the US. But it’s possible that no one demanded delivery of gold from the COMEX on that same day. So the trading that sets the price is really for cash, not for gold. And this paper trading involves a lot of borrowing, that is, leverage.  One can easily prove this crazy situation by contacting a futures broker and creating an account with $8,000 in that account. One could then buy or sell (they call it selling short) a futures contract for 100 ounces of gold. At today’s price of $1,338 per ounce, 100 ounces of gold is worth $133,800. So as far as COMEX is concerned, you are using your $8,000 gambling stake to control $133,800 worth of gold. And this “gold” can be sold, driving down the price. Seems crazy, but it’s literally true.

So if you or I can control 100 ounces for $8,000, imagine what JP Morgan and Goldman Sachs can control with the many billions of printed money they receive from the Federal Reserve, printed money that has not been lent out to boost the economy but is being used as collateral for trading. They can push markets in whatever direction they want. The same is true for central banks, but on an even greater scale: They have no limit on the amount of cash they can print up, so they can overwhelm any market anytime they wish.

The COMEX sets the price in the US. In London, it’s the LBMA (London Bullion Market Association) which is more than 7 times larger than the COMEX in terms of the dollar value of daily paper gold trading. The LBMA admitted a couple of years ago that, like the COMEX today, their leverage ratio was over 100 to 1. And the gold market in Switzerland is just as large as the LBMA, but it is run privately by the Swiss banks, so they publish no statistics. All told there are 40 futures exchanges in the world for trading paper gold.

Another form of paper gold is certificates for gold accounts with banks. Several of these banks have been caught charging people fees for storing gold when they are actually storing nothing at all. The banks figured they could quickly meet any claims for the gold, but when the claims came in, it took them weeks to procure the gold in the open market.

And there are stocks that hold gold, options on both those stocks and on the futures described above, gold leases, and swaps contracts. The latter are private contracts and they may actually dwarf all of the rest of the paper gold claims in terms of their stated dollar value (their “notional value,” as it is called) because the central banks, like the US Federal Reserve and the Bank for International Settlements, often use swaps for their trading. What, central banks trading gold? In September, the French Central Bank admitted:

We are still active in the gold market for our own account…meaning that we are in the market nearly on a daily basis.

In that same paper, the Bank of France said they owned 2,500 tons of physical gold and that they had no plans to sell it. So what are they trading daily? Paper gold, for profit.

Sometimes people go way too far with these contracts. People thought that Bear Stearns went bankrupt in 2008 because of the mortgage market. But the astute article What Really Happened to Bear Stearns by Ted Butler explains that it was actually bad trading in gold and silver that took them down: they had massive bets that the prices of gold and silver would go down, but instead the prices shot up by a lot over a few months instead. 

BearStearnsGold

The chart above is the price of gold from 2004-2008. Notice how the price was moving up strongly prior to the collapse of Bear Stearns. Guess who picked up all of the assets and trading positions of Bear Stearns as it went bankrupt. Why our “good friends” at the company implicated in, and fined for, manipulating just about every market around since then: JP Morgan. They picked up Bear’s assets for about 6 cents on the dollar. Notice the smashdown of the gold price as soon as Morgan was in charge. The price smashdown was even worse in silver. Here’s the chart from 2004-2008 for silver:

BearStearnsSilver

It sure makes one wonder whether JP Morgan was involved in both moving the price up to bankrupt Bear Stearns, and then smashing it down once they had taken over Bear and inherited all those bets that the prices of gold and silver would drop.

Getting back to our discussion. All of these contracts taken together are called derivatives because they derive their value from the underlying value of gold. Guess who owns most of them now:

     Market Cornered: JPMorgan Owns Over 60% Notional Of All Gold Derivatives

What? Isn’t it illegal to corner a market? Don’t the regulators come down hard on anyone trying to corner a market? Yes, but as long as it isn’t gold or silver. JP Morgan is allowed to corner gold and silver because it serves the interests of those who still want the US Dollar to dominate the world so that the US can continue to exercise its “exorbitant privilege” of printing paper to trade for the real goods of other countries. So if someone like Morgan and the central banks weren’t suppressing the prices of gold and silver, it would make the Dollar and the other paper currencies look bad, and those in charge won’t allow that.

To show you how off base these government people and economists are, when Nixon took the world off of what remained of the gold standard in 1971, his chief economist was the “great” Milton Friedman. Friedman told Nixon and others that gold was deriving its value from the US Dollar, not the other way around, and that as soon as Nixon severed the link between gold and the Dollar, that the price of gold would actually fall quite a lot. He was entirely wrong, as government economists so often are, as gold never looked back again at its then-current price of $35 per ounce.

These government types have always hated gold for one reason: it inhibits their ability to wage war. We’ve covered it before: governments started going off the very-successful gold and silver standards in order to fight World War 1. That war would have been over in a few months, but that wasn’t good enough for the warmongers, they had to kill off millions of people over four years to serve their greed.

We’ll talk more about governments and gold later, including their failed attempts to suppress gold in the past, in Part 3. But you know that comment above about the gold price going into the stratosphere when people with all these paper contracts rush to convert them to physical gold? That will happen. It’s inevitable, as more and more people lose confidence in governments, banks, and the blizzard of paper claims they have created. That COMEX chart above–where it shows that the physical gold backing up the paper trading is down by 93%–says that the process is already well underway. Best to get your gold and silver before all those folks with the paper contracts try to get some because, at that point, it will be tough to find real gold at any price.

What’s up with the metals? Part 1

First, a digression right off the bat: let me say that I hope everyone who is interested in the precious metals is doing their own research on this topic so that they can make truly informed decisions, especially since I am not a registered financial advisor of any type, these are just my views of the world. One of the best ways I know to become informed on the metals is to get the free e-mails issued by GATA, the Gold AntiTrust Action Committee. You can sign up for their e-mails here. They send out links daily pointing to the best articles about gold and related topics from across the web. OK, end of digression.

*  *  *

Since I was wrong last Spring about when gold would make its next move up, let’s look at the views of three very capable market commentators who were correctly bearish on the gold price during 2013, that is, they thought that the price would drop. They were right, and perhaps their analytical work will continue being right. So let’s look at what they are saying now, and throw in the opinion of the head of the largest gold refinery in Switzerland as well.

Tom DeMark

The first analyst is Tom DeMark. Tom has been a trading advisor to the big institutions for decades. It’s rare for him to give his advice in advance to us commoners, though in his defense, he has published many of his techniques for those who wish to spend the time to learn them.

What DeMark said on December 16, 2013 about the metals is in the last minute of the short interview at this link. He said:

We’re looking for a huge move in gold next year, beginning next year. We think the bottom will occur with the tax loss selling this year.

So what he is saying is that, as soon as those who want to take trading losses on their gold positions for tax purposes (to balance off other gains they had) finish that activity, then price will begin that “huge move” up that his firm is expecting. His price projection, for a long time, for the downside in the gold price had been $1180. In the interview, he said they had revised that to somewhere between $1155 and $1180. The price went down to $1181.40 on the last day of 2013, the last possible day for tax loss selling for the 2013 tax year. That’s probably plenty good for meeting his price target, but we’d have to be institutional clients of DeMark to know whether he now thinks price might still move down to $1155. In any case, by DeMark’s famous work, the price low is already behind us or will be here very soon. There will be evidence below that JP Morgan may have been following DeMark’s advice precisely.

William Kaye

The second fellow who was right about the gold price dropping in 2013 is veteran money manager and former Goldman Sachs employee, William Kaye. Kaye repeatedly gave interviews in 2013 on King World News where he would point out movements of physical gold in the markets that indicated the next phase of price manipulation down by the Fed and the big banks would happen promptly. And it would unfold as he predicted. In this December 31, 2013 interview, Kaye said he thought the gold price could be manipulated down one more time in January, followed by a large, fast move up for the gold price to somewhere between $2,000 and $2,500 in 2014:

My guess is we are now looking at mid-to-late January of 2014 as a probable and absolute bottom, after which it is going to be difficult for sidelined investors to gain a position because gold and silver will then move very, very quickly in the other direction.  That is why most people are going to miss this move…

While all of the Western media is filled with anti-gold stories, China continues to buy virtually all of the available physical gold at these levels, and will continue to do so on any further price declines.  Also, the flow of gold into India has continued because of increased smuggling.  But none of the smuggled gold is being reported in the official import numbers.

One of the primary reasons this gold flowing into India is not being reported is because the politicians themselves control the smuggling rings.  The reason India has such a large current account deficit and a loss of confidence in the Indian currency is because of the bad government policies.  The people of India see this and so they seek refuge, as they always have throughout history, in gold…

As you know, Eric, I have extremely good sources and contacts in India because we’ve done business there for years. If our sources are correct, this year the gold imports into India are very close to 1,200 tons, which is a staggering figure.

On top of that, we have the Chinese importing a mind-boggling 2,200 tons of gold for 2013. That figure actually totals the entire global mine supply for all of 2013 outside of China…

You also have to remember that we have enormous demand from other countries around the world such as Russia, Brazil, just to name two…

Regardless, 2014 is going to be an extremely good year for the precious metals.  I believe we could easily see new highs in nominal terms in both gold and silver.  We may see $2,000 to $2,500 in gold, and $50 to $60 in silver, maybe even higher.  The bottom line is that 2014 will be the year that the cartel gets broken.

Martin Armstrong

Our third commentator is Martin Armstrong. The guy has done some of the best financial cycles work in modern history. As examples, due to his real estate cycle work for the US, he was telling clients–in the 1990’s to give them ample time to act–to be out of all US real estate investments by February, 2007; that real estate prices would then fall from 2007 into 2012, then rise into 2015 in a snapback rally that would sucker a lot of people back into real estate, and then fall again through 2033. (Yes, real estate folks, you read that right, a 26 year bear market in real estate that started in 2007.) A summary of that work published in 2009 is here, and a look at the chart from the first page tells the story very well:

ArmstrongRealEstate

To say that this was good advice, at least so far, would be quite an understatement. Also in the 1990’s, he told his clients that interest rates/mortgage rates would fall till January 2013 and then start an inexorable rise for many years to come. He was only off by six months, interest rates went to their lowest level in mid-2012 and have been generally rising since.

So the guy is very smart. But I don’t have a link to his site on the Thundering Heard home page because it is nearly unbearable to read him daily. Anyone else’s views on anything, he calls those opinions, and pelts them with ridicule and insults if they disagree with his own opinions, which he claims are not opinions, but actual facts.  His cycles work is fabulous, his knowledge of history is formidable, but when he strays from those, as he often does, you have to put your boots on and wade through it. That’s a worthwhile exercise, but you have been warned.

Anyway, Armstrong is our third analyst who was bearish on gold all year, to the point where he called anyone advising buying gold during 2013 to be a fool, criminal, and worse. But all year, he has expected a Directional Change (his capitalization) for gold in this month of January, 2014.

So with DeMark, Kaye, and Armstrong, you have three very capable analysts who think this price downmove is over, or will be in over in this month of January. If I were a person with savings denominated in fiat currency, I would be jumping all over this opportunity. But of course, people need to make their own decisions. As mentioned above, getting the free e-mails from GATA is a great place to start. And no, they don’t sell your e-mail address to others.

So what does the head of the largest Swiss gold refinery have to say about all this?

     Alex Stanczyk: Physical Supply Never Been Tighter

I’ll let the article speak for itself:

Refineries in Switzerland are still working 24 hours a day to cast bars for China, sometimes having difficulties sourcing the gold…

We met with the managing director of the largest refinery in Switzerland and spend about two hours talking to him…Now, this gentleman we were talking to probably has a better idea of physical gold flow than anybody else globally. He sees what is coming from the mines, he sees what is coming from the UK, and all over the world, as well as where its going. He indicated the price didn’t make sense because he has got so much fabrication demand. They put on three shifts, they’re working 24 hours a day, and originally he thought that would wind down at some point. Well, they’ve been doing it all year. Every time he thinks its going to slow down, he gets more orders, more orders, more orders. They have expanded the plant to where it almost doubles their capacity. 70% of their kilobar fabrication is going to China, at apace of 10 tons a week. That’s from one refinery, now remember there are 4 of these big ones [refineries] in Switzerland.

…At this Swiss refinery there have been several times this year on which they were unable to source gold, this shocked me. They’re bringing in good delivery bars, scrap and dore from the mines, basically all they can get their hands on. This gentleman has been in the business for 37 years, he was there during the last bull market in the late seventies. I asked him when was the last time this has happened, that he was unable to source gold, he said never. And I clarified it, I asked: let me make sure if I understand what you’re saying to me, in the last 37 years you’ve worked in the gold industry this has never happened? He said: this has never happened.

When do think the price is going to rise?

“I’m not comfortable to put a time on this. What I do know is that we are on the threshold of a situation that has never occurred before. A squeeze is imminent, it could take 3 months or 6 months, but all I know is that it’s coming, and I know that with 100% certainty.”

What Stanczyk is talking about is shown on the next chart, which has only been updated through the end of October. Hong Kong has imported more gold from Switzerland in 2013 than in all prior years combined!

HK-Swiss-gold-trade-10-2013

(Chart source: China Mainland Gold Import Accelerating )

Here’s a way to look at the overall Chinese gold imports from Hong Kong:

Gold_HK_to_China_2011_2012_2013

(Chart source: China Imports More Gold Via HK In 2013 Than 2011 & 2012 Combined)

And here is a chart of total Chinese imports from Hong Kong by month since Autumn 2011. And this chart doesn’t show imports from other sources or China’s own mine production, which is now the largest of all countries and which is keeping six large refineries busy in China. There have been reports (blatant lies is what they are) in the Western media that Chinese gold imports have been falling. Does this look like falling to you? Each of those numbers are tons.

China Gold Imports to October 2013 Gross

(Chart source: China October Gold Imports Surge To Second Highest Ever)

Despite strong government disincentives to buying gold in India, as we heard from Kaye above, the flow of gold can’t be stopped. Here’s a typical story:

     Smugglers smile as NRI carriers bring gold into country legally

It was evident last week when almost every passenger on a flight from Dubai to Calicut was found carrying 1kg (2.2 pounds) of gold…

This strong buying is a worldwide story:

     Scarcity of Gold in Mexico

Including Canada, Australia, and the US, as reported here by the Wall Street Journal:

Sales of gold coins are booming even as the metal’s price is falling…at mints and coin shops around the world, gold continued flying off the shelves…

Sales of Gold Maple Leaf coins by the Royal Canadian Mint surged 82.5% to 876,000 ounces in the first three quarters of 2013 from the same period of 2012. The Perth Mint, Australia’s national coin and bar producer, saw sales rise 41% to 754,635 ounces last year, while the U.S. Mint sold 14% more American Eagle gold coins than it did in 2012, along with a record amount of silver coin.

Even JP Morgan, big sellers of their own horde of physical gold earlier, which helped to drive prices lower, has been rebuilding their cache, perhaps guided by Tom DeMark’s work, or perhaps to simply be the manipulating elephant that they have been caught being in so many other markets:

     JPM’s Quiet Scramble To Refill Its Gold Vault

JPM Eligible

In Part 2, we’ll talk about how it is possible to have extraordinary worldwide demand for physical gold and still have a falling price.

An Important Whistleblower Event in the Metals

The news came out Friday at 2:00pm (circled on the chart below) that two JP Morgan employees have submitted to the government strong documentary evidence about how JP Morgan illegally manipulates prices in the precious metals markets:

     Morgan Whistleblowers Confess Bank Manipulates Gold & Silver

As you can see on this chart of Friday’s price action in gold from Kitco.com, those few traders who remained at their posts late Friday afternoon thought this was a big deal, and they ran the price of gold up $20 in the final three hours of trading:

Gold Friday13thedThey are right. This is a big deal. Why?

1. The last time compelling evidence of JP Morgan’s price suppression of the metals emerged into public view was March, 2010 when London trader Andrew Maguire told everyone that he had submitted hard evidence to the government about such manipulation, including sitting with them and showing them in real time just when and how the manipulation is carried out:

It was no coincidence gold didn’t look back from that day and it moved up over $800, from under $1,100, to (over) $1,900.  And silver moved up (an astonishing) $33, from under $17, to almost $50 in the same (time) period.

Someone tried to run Maguire down with a car two days later; he was hit by that car, but survived.

2. Many people have supplied evidence of manipulation of the metals to the US government agency that is supposed to take action about such crimes, the CTFC (Commodity Futures Trading Commission), but none, at least not that I know of, were employees of JP Morgan with direct inside information.

3. The CFTC has stonewalled the evidence received to date by staging an investigation of these allegations. The problem is, it’s been in progress for almost five years now. They haven’t taken a single action from this “investigation.” And why should they? Anyone known by Wall St to support such an action would be prevented from entering the “revolving door” and getting a cushy and highly-paid job at one of the Wall St firms as soon as their CFTC gig is over. And it is more than highly likely that the government itself is in collusion regarding the suppression of metals prices, so how can a lesser known agency point out that the US Treasury and Federal Reserve are involved in the scheme. But what was revealed Friday was that the CFTC received the data from the Morgan employees more than a year ago, in June 2012, and still they have taken no action. This will substantially increase pressure on the agency to take at least some sort of public action.

4. Allegations of price suppression in the metals markets have long been greeted as conspiracy theory by the mainstream despite the fact that government participants from the infamous Gold Pool of the 1960s admitted that they manipulated the gold price on a regular basis, though as with almost all government people, they only admitted to this after retirement or posthumously.  But with so many conspiracy theories recently being shown as conspiracy fact, and with JP Morgan getting caught in multiple illegal actions over the last few years, it is now getting tougher for anyone to claim that Morgan is not acting illegally in any market in which they participate.

The “paper gold” market (futures, options, ETFs, etc.) has been used for years to manipulate prices in the physical gold market, so much so that increasing demand for physical gold is often met by a falling paper gold price, turning all economic theory of supply and demand upside down.

The Powers That Be of the USA will do whatever they can to maintain what is rightly called the “exorbitant privilege” of having the US Dollar as the world reserve currency, which enables the US to print money to purchase real goods from the rest of the world. Part of their strategy has been to suppress the price of the precious metals to mask the deteriorating value of the Dollar. Another aspect is to keep the price of the metals very volatile to scare people out of the metals; they want to make the metals look unstable and the Dollar look comparatively stable.

Last year, the State of South Carolina considered adding gold as an investment to the state’s coffers and rejected the idea because their research showed that the precious metals are a manipulated market so they could not trust the metals as an investment. The state treasurer told the legislature this:

“Similar to other commodities, the value of gold and silver is determined by supply and demand, as well as speculation. The Federal Reserve, London Bullion Market Association, JP Morgan Chase, and HSBC Holdings have practiced fractional-reserve banking and engaged in naked short selling causing artificial price suppression.

So this testimony from JP Morgan employees is a major step toward gold and silver trading freely without government interference. No matter how old you are, gold has traded freely during your current lifetime for at most a few months at a time on a couple of rare occasions. If you hang in here for awhile longer, you will see it trade freely. And its price will be, to quote a great friend, magnificent.

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.