Sunday, January 12, 2014

The Case for Gold Has Never Been Stronger

Although 2013 marked a pause in the previous 12 year bull run of the price of gold, we believe that 2014 will reverse the losses and break new ground in dollar denominated pricing.
The economic situation of the United States is dire, but its vulnerability is compounded by the deplorable economic conditions abroad, especially in Europe.
None of the financial problems stemming from the engineered take down of Lehman Brothers has been solved, with the insolvency of the big US banks as acute as it was in 2008.
During the time since the onset of the Great Depression 2.0, Eastern powers have been sucking gold out of the West at a rate which hasn't been seen since the fall of Rome. The trade of industrial plant for cheaper prices has not been a good deal for Americans as they are no longer employed sufficiently to pay the cheap prices.

The latest government reports on the fastest growing job segments are all low pay hospitality and retail positions.
Barry Soetoro has produced the most profligate spending since Nero burned Rome. Not even a ship of drunken sailors could steal and spend money with so much abandon and criminality as the budgetless president.
David Stockman recently described the overvaluation of stocks due to accounting gimmicks which eliminate so-called non-recurring expenses from earnings reports and thus deflates P/E ratios, a quick test for evaluating the value of stocks. Rather than being 18 times earnings, the reality is that they are 23 times earnings, clearly in overbought territory. The key point is that these non-recurring charges are quite recurrent and will soon show up in stock prices.
Thus the stock market really has no place to go but down in 2014 since its values are artificially maintained by the criminal Federal Reserve Board and the President's Working Committee on Markets Stability. However, their abilities to manipulate markets is tapering as they lose control of the world's reserve currency, the price of oil, and the price of gold.
With total debt levels still at 330% of GDP, deficits soaring out of control, and the US having last year entered another dip in its ongoing depression since 2008, the economic prospects of the US will force settlement of past due accounts which have been kicked down the road for the past 5 years.
Germany requested a portion of its 3300 metric tons of gold last year, and so far has seen 37 tons delivered. The LBMA and COMEX have ceased or stalled delivery of gold. Andrew Maguire has reported that London gold vaults are empty due to a massive exit of gold East to make good on the sea of bad US debt held by the Chinese, and to help repatriate the gold it stole from China in exchange for granting the brutal regime Most Favored Nation status.
Taper Talk is a charade anyone can safely ignore - the Fed will not taper. Michael Pento told King World News today that the amount of debt on the Fed's balance sheet is closer to 10 trillion USD rather than the publicly reported 4 trillion. Thus not only does the Fed have no "tools" for fighting another recession - and it creates all recessions - but it is completely insolvent, a point we have made for several years.
With scarce gold and the Fed and US government on the verge of unleashing trillions more of debased currency into the teetering US economy, we are certain that gold's price will head distinctly higher.

Another factor contributing to the scarcity of gold, one which rarely gets any public play, is the multiple claims of ownership on each ounce of gold, currently running around 80 claims per ounce. This very fraudulent ownership chain on gold practically guarantees its higher price.
The trigger for the economic collapse will emanate somewhere near the vicinity of Deutsche Bank or JPMorgan Chase, whose London Whale Trade is still toxic as ever. It didn't sell Chase Center at bargain basement prices to the Chinese because it was feeling charitable.
Demographic and economic factors are working hard to destroy the US. The labor force participation rate is the lowest since 1978, unemployment is at all time highs even as the Bureau of Labor Statistics lies its back end off proclaiming otherwise. This means that tax revenue will not recover, making debt the only recourse for America's leaders to maintain the illusion of prosperity.
The Chinese have written down trillions of dollars of US debt - mostly treasuries, meaning that they will be out for blood over the coming years. This has given them the leverage to demand gold as settlement, with somewhere between 10-30,000 tons of gold having shipped East in the last 18-24 months. Bankster lives depended upon this settlement, some of whom will wind up in an oil drum next to Jimmy Hoffa.
With the collapse of the US Treasuries market and consequently higher interest rates, the plummeting price of stocks, and the vaporization of gold from the West, we are certain that gold prices will escape the manipulation of America's banksters to seek a price this year in the 2000s. But as a cautionary note, William Kaye, Vice Chairman of Pacific Alliance Group of Companies, warned Eric King of King World News of a drop in price to the 1050 - 1100 range before heading higher. While the price may continue to gyrate, we don't see the price going that low given the factors we have discussed. 

Copyright 2014 Tony Bonn. All rights reserved.

No comments: