Two Things On My Mind

246
Tue, Jul 24, 2012 - 9:33pm

Earlier today, I spent about an hour visiting with Jim Willie. As usual, the conversation was enlightening and thought-provoking. Along those lines, two items have been stuck in my head all day. I thought I'd get them stuck in your head, too.

First, someone asked me in the previous thread if I had asked Jim lately about his statement that gold would soon fall 20% before rising several fold. In all honesty, I never thought to ask him. We generally discuss "big picture" things when we talk so short-term prices fluctuations don't usually come up.

OK, so here are the two things that are on my mind. First (and I mentioned this in the previous thread and in detail at TTM), is this idea of a U.S. treasury market "Black Hole". You may recall that Jim started using this metaphor back in early June. For a refresher, you should read this https://news.goldseek.com/GoldenJackass/1339012800.php and maybe listen to this https://www.tfmetalsreport.com/podcast/3910/tfmr-podcast-23-jim-willie-t....

The idea behind the "black hole" is that its gravity is so strong that it sucks in everything around it. Back in early June, the 10-year note was yielding about 1.70%. Today it fell through 1.40%. As money flows toward the "safety" of treasuries, it flows out of other assets like corporate bonds, stocks, municipal bonds, sovereign bonds, high yield funds and on and on. Treasuries increase in price (yield drops) while the selling of every other asset causes their prices to fall. This, in turn, feeds into the crisis atmosphere, causing more selling of everything in order to purchase more treasuries. This makes treasury rates sink even further. This accentuates the crisis atmosphere and causes even more "flight to safety" until the "treasury black hole" has sucked in almost everything. It's a very interesting concept and we may be seeing it play out in real time. Ponder, please, the consequences of all this and what the world may look like with a 10-year below 1% and a 30-year near 2%.

The other thing we discussed was the LIEbor scandal and Barclays. Jim will be releasing a new, public newsletter with this as subject matter in a few days. Until then, here's the perspective he offered me.

LIEbor is a huge, major scandal. New details are emerging every day and the size and scope of the manipulation is growing. It is now a simple matter of time before the lawsuits begin....and that's very important. In the discovery phase of these lawsuits, layers of Banking Cartel schematic will be laid bare. Not only will lawyers and investigators find damning, new information on LIEbor, it is inevitable that they will also unearth information regarding the decades of fraudulent and deceptive bullion banking activities. It is when this happens that the proverbial excrement will begin to hit the rotating blades.

What is the difference between allocated and unallocated gold? How many times over have bullion banks leveraged and "rehypothecated" unallocated gold? How many claims are there in the world to the same gold bar? How many folks/institutions/funds/central banks/countries think they own physical gold but, in fact, only own paper certificates? How much gold is really in GLD or the plethora of other U.S. or European ETFs? This is where it could get really interesting. As these investigations dig deeper and as new details come to light, how might price react? If it is finally revealed that non-existent physical metal has been methodically and fraudulently "sold" to the world for years, will this ultimately lead to the collapse of the entire Western World banking system? Can you see why I've been thinking about this all day???

While I was on vacation, the LIEbor scandal grew and morphed into the significant scandal that it has become. The idea that it could ultimately lead to far greater consequences than simple fines and embarrassment is something we all need to immediately consider.

TF

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  246 Comments

treefrog
Jul 24, 2012 - 9:35pm

furst?

second!

QE to infinity
Jul 24, 2012 - 9:43pm

1st?

1st!

I read Jim Willie's article about the Treasury black hole and it does look like it is happening in real time. But what happens when the yield reaches 0%? Will the stupid "flight to safety" continue into negative nominal yields?

Roark
Jul 24, 2012 - 9:47pm

Rehypotheticated as thurd :)

Its a liebor of luv

Pax Argentum
Jul 24, 2012 - 9:50pm

..."the LIEbor scandal grew

..."the LIEbor scandal grew and morphed into the significant scandal that it has become. The idea that it could ultimately lead to far greater consequences than simple fines and embarrassment is something we all need to immediately consider."

As much as I'd love to see it, it won't lead to any significant consequences for the bad guys. At the same or greater speed that the lies are uncovered, there are alibis, waivers, escape clauses and fall guys being set up in London, New York and Hong Kong.

Dream big and hold physical....but don't hold your breath for justice, in this world anyway.

Pax

Feed the Turd.

TransmissionRebuilder
Jul 24, 2012 - 9:50pm

Kinda makes you

want to go get some more physical doesn't it?

Oh and first top ten for me

Transmission Rebuilder

kingboo
Jul 24, 2012 - 9:53pm

top 10.....

not even on the podium.....shit!

recaptureamerica
Jul 24, 2012 - 9:53pm

Smithfield Turns to Brazil

Smithfield Turns to Brazil for Corn https://online.wsj.com/article/SB100008723963904440252045775469408866697... You know this isnt good, drought speajung, when the worlds largest porker is buying corn from othrr countries to keep costs down and stay in biz.

NW VIEW
Jul 24, 2012 - 9:53pm

Mr. T.F.

The markets of the entire world are filled with fat fingers. It seems impossible to invest these days in stocks, bonds or miners. The employees of brokerage houses will need to collect unemployment benefits as the black hole appears. jmo

Fired
Jul 24, 2012 - 9:55pm

Excuse me but...

I think gold has broken out in the hourly $ chart and now in the Euro as well. Can someone confirm?

BTW, accuweather is calling for less than 1/2 inch rain in KC for the next 2 weeks at least.

recaptureamerica
Jul 24, 2012 - 9:56pm

From 7-22

Explosion Rocks S. Arabia's Intelligence Headquarters TEHRAN (FNA)- Reports from Saudi Arabia said an explosion rocked the Arab country's intelligence headquarters and killed the Saudi deputy intelligence chief. https://english.farsnews.com/newstext.php?nn=9104250954

Key Economic Events Week of 11/11

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Key Economic Events Week of 11/11

11/12 Three Fed Goon speeches
11/13 8:30 ET CPI
11/13 11:00 ET CGP on Capitol Hill
11/14 8:30 ET PPI
11/14 Four Fed Goon speeches
11/14 10:00 ET CGP on Capitol Hill
11/15 8:30 ET Retail Sales
11/15 8:30 ET Empire State Manu Index
11/15 9:15 ET Cap Ute and Ind Prod
11/15 10:00 ET Business Inventories

Key Economic Events Week of 11/4

11/4 10:00 ET Factory Orders
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11/6 Speeches by Goons Williams, Harker and Evans
11/8 10:00 ET Consumer Sentiment
11/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 10/28

10/30 8:30 ET Q3 GDP first guess
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10/30 2:30 ET CGP presser
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10/31 9:45 ET Chicago PMI
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Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
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Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
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10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
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10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

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10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
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Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
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Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
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9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

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