TFMR Podcast #44 - Jackass on the Barbie


For a holiday treat, Jim Willie stops by for an informative and enlightening podcast.

Jim and I cover three main topics today:

  1. The recent takedown in gold and silver and the incredible physical demand which followed.
  2. News and behind-the-scenes events related to the recent G20 meeting in Turkey.
  3. The Fed's ongoing ZIRP and QE∞ and their total inability to exit the treasury market. Ever.

So there you have it. Nearly 45 minutes of uninterrupted Jackassian wisdom. Enjoy.

Have a great weekend!



May 26, 2013 - 8:07pm

@ Utilitarian

Ferdinand Lips is a giant. Everyone should read him.

Great point on the shipping lanes. This might be a good book to take out of the library

The lamestream media wants to talk about Brittney or whoever the celeb de jour is and not SCO and energy security.

Anytime you get something on this please post, I think it is very relevant to honest money and TEOTKE


May 26, 2013 - 8:33pm

We've moved on from the Iraq war but Iraqis don't have that choi

Iraq's ministry of social affairs estimates 4.5 million children have lost one or both parents. This means 14% of the population are orphans. Photograph: Reuters

The dust in Iraq rolls down the long roads that are the desert's fingers. It gets in your eyes and nose and throat; it swirls in markets and school playgrounds, consuming children kicking a ball; and it carries, according to Dr Jawad Al-Ali, "the seeds of our death". An internationally respected cancer specialist at the Sadr teaching hospital in Basra, Dr Ali told me that in 1999, and today his warning is irrefutable. "Before the Gulf war," he said, "we had two or three cancer patients a month. Now we have 30 to 35 dying every month. Our studies indicate that 40 to 48% of the population in this area will get cancer: in five years' time to begin with, then long after. That's almost half the population. Most of my own family have it, and we have no history of the disease. It is like Chernobyl here; the genetic effects are new to us; the mushrooms grow huge; even the grapes in my garden have mutated and can't be eaten."

Along the corridor, Dr Ginan Ghalib Hassen, a paediatrician, kept a photo album of the children she was trying to save. Many had neuroblastoma. "Before the war, we saw only one case of this unusual tumour in two years," she said. "Now we have many cases, mostly with no family history. I have studied what happened in Hiroshima. The sudden increase of such congenital malformations is the same."

Among the doctors I interviewed, there was little doubt that depleted uranium shells used by the Americans and British in the Gulf war were the cause. A US military physicist assigned to clean up the Gulf war battlefield across the border in Kuwait said, "Each round fired by an A-10 Warhog attack aircraft carried over 4,500 grams of solid uranium. Well over 300 tons of DU was used. It was a form of nuclear warfare."

Although the link with cancer is always difficult to prove absolutely, the Iraqi doctors argue that "the epidemic speaks for itself". The British oncologist Karol Sikora, chief of the World Health Organisation's cancer programme in the 1990s, wrote in the British Medical Journal: "Requested radiotherapy equipment, chemotherapy drugs and analgesics are consistently blocked by United States and British advisers [to the Iraq sanctions committee]." He told me, "We were specifically told [by the WHO] not to talk about the whole Iraq business. The WHO is not an organisation that likes to get involved in politics."

Recently, Hans von Sponeck, former assistant secretary general of the United Nations and senior UN humanitarian official in Iraq, wrote to me: "The US government sought to prevent WHO from surveying areas in southern Iraq where depleted uranium had been used and caused serious health and environmental dangers." A WHO report, the result of a landmark study conducted with the Iraqi ministry of health, has been "delayed". Covering 10,800 households, it contains "damning evidence", says a ministry official and, according to one of its researchers, remains "top secret". The report says birth defects have risen to a "crisis" right across Iraqi society where depleted uranium and other toxic heavy metals were used by the US and Britain. Fourteen years after he sounded the alarm, Dr Jawad Al-Ali reports "phenomenal" multiple cancers in entire families.

Iraq is no longer news. Last week, the killing of 57 Iraqis in one day was a non-event compared with the murder of a British soldier in London. Yet the two atrocities are connected. Their emblem might be a lavish new movie of F Scott Fitzgerald's The Great Gatsby. Two of the main characters, as Fitzgerald wrote, "smashed up things and creatures and retreated back into their money or their vast carelessness … and let other people clean up the mess".

The "mess" left by George Bush and Tony Blair in Iraq is a sectarian war, the bombs of 7/7 and now a man waving a bloody meat cleaver in Woolwich. Bush has retreated back into his Mickey Mouse "presidential library and museum" and Tony Blair into his jackdaw travels and his money.

Their "mess" is a crime of epic proportions, wrote Von Sponeck, referring to the Iraqi ministry of social affairs' estimate of 4.5 million children who have lost one or both parents. "This means a horrific 14% of Iraq's population are orphans," he wrote. "An estimated one million families are headed by women, most of them widows". Domestic violence and child abuse are rightly urgent issues in Britain; in Iraq the catastrophe ignited by Britain has brought violence and abuse into millions of homes.

In her book Dispatches from the Dark Side, Gareth Peirce, Britain's greatest human rights lawyer, applies the rule of law to Blair, his propagandist Alastair Campbell and his colluding cabinet. For Blair, she wrote, "human beings presumed to hold [Islamist] views, were to be disabled by any means possible, and permanently … in Blair's language a 'virus' to be 'eliminated' and requiring 'a myriad of interventions [sic] deep into the affairs of other nations.' The very concept of war was mutated to 'our values versus theirs'." And yet, says Peirce, "the threads of emails, internal government communiques, reveal no dissent". For foreign secretary Jack Straw, sending innocent British citizens to Guantánamo was "the best way to meet our counter-terrorism objective".

These crimes, their iniquity on a par with Woolwich, await prosecution. But who will demand it? In the kabuki theatre of Westminster politics, the faraway violence of "our values" is of no interest. Do the rest of us also turn our backs?

Lamenting Laverne
May 26, 2013 - 8:43pm

@ Redwood - Munknee

"Conclusion: If gold drops (according to above article) as an averaging trend line against US debt, we will see other currencies kept low and the US dollar remains supreme, maintains world reserve status and secondarily global financial stability is maintained. Isn't this what this is all about in the end?" I have just had the chance to look at the article now. I would agree that the answer to your question is yes, but I have a few comments to put a big question mark next to the conclusion from the article: 1) The "startling" correlation between US-government debt and the price of Gold, is not very surprising to me. Since the entire monetary system is based on debt, and Gold is the primary hedge against fiat currency dilution, it seems only natural to find this relationship. New monetary supply in the global reserve currency is initiated by US Government debt and then levered up in the banking system. (What does that R2=0.7413 mean? And the Y=other numbers mean)? 2) The Gold Bull was put back to sleep in 1980, when Volker hiked interest rates to the moon. Gold is not a broadly attractive asset, as long as bond are repayable regarding both interest and principal. In a healthy market the rates must cover real inflation plus a premium for deferred gratification and there must be confidence that the principal can be returned under these conditions. If these requirements are not met - Gold will say so, if traded freely. What the chart below tells me, is that Gold is not free. The debt is sloping upwards all the time, and Gold is falling from 1980 to 2001. Note that Gold tried to start a catch up in mid 1993, but was bended off and pushed downwards some more - hereby widening the gap between the debt and the price of Gold. As far as I know, this coincides approx. with the time, when credit derivatives and interest derivatives began hitting the market. It makes sense, if that took out a bit of the hedging pressure. The mid 1997 to late 2000 pressure was reduced because the debt fell a bit. I am sure that the beginning of the rise in 2002, was because Greenspan lowered the interest rates instead of tightening, so Gold got the wind in the sails needed to catch up, despite control mechanisms in place. 3) This is the bad one ;-) I don't like that he is using a linear representation of historic debt to make a conclusion that insinuates that it will be linear in the future. He states specifically that he assumes that the debt will keep going up, so how can he build a conclusion on debt continuing to go up with that representation in the chart, when we know that the debt - by its very nature of compounding interest - will develop in an exponential fashion and not linear. Maybe the timeframe is too small to see the exponential curve bend? But he also speculates IF the trend reverts to the trend line in 5 years in 2017 at a debt of 17T, then Gold prices should return back down to 52. But he does not state his assumptions. In my book, his conclusion assumes that we do not have a situation of debt saturation today. It assumes that we will have no out of control deflation with bank failures and debt restructures. It assumes that investors will be happy with near zero interest rates far below real inflation for another 5 years. His conclusion would be more likely, if interest rates were allowed to rise to make bond more genuinely attractive - but I would argue (cannot prove) that a significant rise in bond yields now at these overall debt levels, very well could produce the exponential bend in the hockey stick, and the debt would skyrocket over the next five years, and I doubt that Gold would ignore that - as already shown in previous chart. Come to think of it - he is probably already showing the bend in the hockey stick in the previous chart, starting in 2008. So my conclusion is, that he is making a hypothetical play-around with numbers, without stating his premise for "all-else-equal-to-1980" sufficiently, and ignoring the fact that 2013 is NOT 1980, when you compare the overall size of the debt to economy production capacity and ability to not only service interest, but actually repay and reduce principal, which is the requirement for bond market continuation over the long run. So in short, I don't believe his conclusion to be correct. Charts are reproduced from here:
May 26, 2013 - 9:12pm

I always sit up and listen when John Pilger has something to say

Thanks for posting that DeaconBenjamin.

He's one of the few who still have a voice and the UK MSM can't conveniently ignore - it would be a major red flag if they did - John having been a BBC war correspondent in the 70's, 80's and I think the early 90's - before his reports started to become extensively edited, which he then exposed after becoming an independent journalist and film-maker after he left the BBC.

John Pilger has dedicated his life to exposing the truth of the war-machine. He was there and saw it happen first-hand.

He is one of the few great reporters that still have a bit of a voice. Everyone else has been pretty-much silenced now.

May 26, 2013 - 9:13pm

Classic Understatement

I'm not liking at all what's been going on in the Japanese markets this past week. I kept mentioning that I think bad things will happen once the JPY hit 100 and I think we're starting to see the fallout

I've been talking about Japan since Nov/Dec. and watching how this had evolved. The 3rd largest economy going through spasms will seriously cramp everyone else if they go into a convulsion. I get the sense the patient is very ill.

I think we're witnessing what happens when the numbers start to get too large and unmanageable and the confidence that it was the right thing to do is being second guessed.

If they change course, lose control or say the wrong thing it'll get ugly very quickly.....and spread.

Video unavailable
May 26, 2013 - 9:45pm
May 26, 2013 - 9:51pm
Southern Cross
May 26, 2013 - 10:13pm
Southern Cross
May 26, 2013 - 10:15pm

Fat Finger.

Fat Finger.

Nick Elway Bollocks
May 26, 2013 - 10:32pm

Grant Williams uses bad math

Mandelbrot and Taleb do their best to show the silliness of using standard distribution to describe the variability of financial instruments.

The standard distribution leads to wonderful things like variance and predictions like once in a gazillion years.

A glimpse into what might be proper math might start with a look at heavy-tailed or fat-tailed distributions. Unfortunately the math is difficult.

There seems to be some curiosity about gold above ground.

There's a compilation in the Gold-Above-Ground forum:

Lamenting Laverne
May 26, 2013 - 10:32pm

@ 10th Amendment - Good question

You post was very good and thought provoking. You ask "What's wrong with it?" In my stomach I know it is dead wrong, but you are challenging to the process of explaining why. That is a very good thing. So here is my go at it:

1) I don't think that there is a risk of hyperinflation, because of the base money expansion by itself. You say that total Credit Market Debt has been flat since 2009. I assume that this means both government and private US debt. This indicate that there is no deleveraging going on, but rather a reshuffle from the private market debt to the public market debt. As I understand it though, it is still very much debt.

Also, I don't think that hyperinflation in the USD is possibly upon us because of QE2Infinity alone. I think of it may have been a drop, that made the cup overflow, but doubt that actually. The damage was done in 1971. Instead I think that it is proof that the withdrawal from the USD as reserve currency is in progress, and QE2Infinity is trying to pick up the slack to postpone the bond market crash. The hyperinflation risk comes from the loss of utility of the USD, when the reserve status is gone, and the dollars come home. That happens when USD is no longer required for buying Oil, and the reason that would happen is because of decades of printing, not just the recent QEX.

2) I agree that money just sitting in excess reserves in the FED from expansion of the base money / government debt float will technically repair the holes created elsewhere, but how is that deleveraging of the overall system?

It may improve a ratio of total credit market debt to base money debt, but if the absolute numbers are multiples higher, then at some point, when that money leaves the Fed, it will become reflected in the finite world of real stuff. Right now it is trickling out through interest payments to the banks, repairing their solidity I presume, since overall debt is not expanding as you state. If the amount trickling out is no greater than the private debt destruction, then I would expect no price inflation from that. (A lot more is coming out though - through public subsidies/stimulus, the stock market levitation etc.)

However, since it is not a closed system, we are seeing inflation. Why? Since 2009 at least some of the money has hit commodities, including oil, that is trading on a higher level than before the crisis in 2008. That is why we have inflation in the things we need, and hence keep demand up for - aka good investments - and we have debt destruction / deflation / less discretionary spending in the rest.

Since agricultural production (and I guess oil production) is much less labor intensive than 50 years ago, sustained demand in this sector, does not produce a lot of new jobs. (Demand is not higher in the West, since we can only eat so much and heat the house once) And the sectors suffering from reduced private spending and deferred stuff replacement - trinket producers and hairdressers - are laying people off or reducing hours. That means lower tax revenues.

So now we have a FED, that is buying debt, because no-one else wants it, that has been newly issued on top of old debt owed by the same Treasury, that has just seen its tax revenue go down the tubes, so its repayment ability is called into question, while whatever hot money that might trickle out from the banks or the less yielding part of the stock market or the low yielding now less repayment safe bond market is bound to hit the "must-have" commodities - repeating the cost push dynamic all over again eating discretionary pocket money, leading to layoffs, leading to less taxes etc etc.

I don't think they can pull that off without anything breaking until 2025.

How did I do? Did that answer your question?

Will check back tomorrow. It is time for bed. Good Night Y'all.

Sheetrocker DeaconBenjamin
May 26, 2013 - 10:33pm


In addition to the many-fold increases in cancers and birth defects among Iraqi's, our own troops were exposed to DU, chemical, and biological agents during the two wars there. This is also being covered up, and they get little or no help.

It seems like no one cares, except those afflicted and their families. I really don't have the words to express the hatred I feel for our political and military puppet leaders every time they tell us what a wonderful job we've done in Iraq.

If I remember correctly, DU has a half-life of 4.5 billion years. I can't think of a better way to make the people of Iraq hate us until the end of time.

For those interested in this, with time to watch, I think this is a very good video on the subject.

Video unavailable
May 26, 2013 - 10:51pm

Lamenting Laver

1. The bend in that graph insinuates an exponential curve. btw most growth curves in biology and that includes financial markets are logarithmic, but you need the time element to see it as you say. (one of the first things you learn in calculus :).

2. Yes, you make arguments that are difficult to contest, but the idea of raising interest rates is very viable as a means of controlling inflation.

3. Ultimately I see gold price as the fulcrum upon which the West is battling the East (including BRIC). The West desires a lower gold price to maintain the USD as reserve currency, the East want the reverse (after they have accumulated gold at these low rates) so as to introduce a new reserve currency, even it is a decade away.

4. I very much like your idea of fluctuating gold prices as a way to reboot the global currency system to achieve similar currency:gold ratios.

5. Let's us know when you have your new forum for this interesting topic.

6. To answer your questions: R2 is a regression analysis. Essentially given a set of data points, linear regression gives a formula for the line most closely matching those points.

Y = ax +b is an algebraic function that gives you the slope of that graph and the point of intersection of that line on the vertical (y) axis.

Mr. Fix
May 26, 2013 - 11:44pm

Some thoughts on Jim Willie's analysis:

I'm finally back in my lounge chair, after a week away from my computer, and have had a little bit of time to catch up on the news, and just finally digest Jim Willie's podcast.

Very much of it I agree with, but with one overriding exception, and it has to do with the "desperation" of the bankers.

His contention that they are manipulating the markets out of desperation, and that they have gotten into their particular predicament out of idiocy, just doesn't sit right with me.

As always, it has been my contention that if the bankers were idiots, sooner or later they would figure out what they were doing wrong, and stop doubling down on dumb, and work towards fixing the economic system.

It is my contention that they have painted themselves into a corner intentionally, with the outcome fully comprehended when they decided to simply print money with abandon, and keep interest rates near zero.

When you put the bankers in the context with the actions of our governments, it becomes apparent that it is a well orchestrated plan to collapse the system.

After all, we tend to refer to them as the Evil Empire, not the idiot brigade.

I believe it paints a somewhat clearer picture of what is going on around us once you ascribe pure malevolence as their motivation, as opposed to ignorance or stupidity.

I am not discounting the possibility that the psychopaths in charge of our system have not “figured it all out”,

and many aspects of what's going on, may not be well thought out.

That being said, I still think that their underlying plan is to steal the worlds populations savings, and plunder the planet's resources, for their own personal gain, and power.

Much of what I have witnessed as a blatant “ misallocation of resources” is just a part of the plan to collapse the system, and although theft, fraud, and blatant market manipulation in itself are crimes, they are only symptoms of the over all plan.

As a society, we are well past the point of no return, and a tyrannical “New World order” is still on the agenda.

It is impossible to predict with any accuracy how this is all going to play out, but it has become apparent that worldwide poverty, and mass starvation are part of their plan.

I would even go so far as to predict that they will divert the public's attention with catastrophic natural phenomenons, which I believe they can now create at will,

and even world wars will be created as part of this plan.

I think the bank runs that we are currently experiencing, (people demanding their physical gold back),

is a predictable outcome from the shenanigans of banker bailouts, and account seizures.

This is why I still see no bottom in sight for the paper futures markets,

gold and silver will soon be unobtainable at any price in the near future.

Jim Willie's prediction of an economic collapse over the next couple of years is one other point that does not quite feel right to me.

Not only do I think it will be somewhat sooner, but I also think it will be a overnight phenomenon,

and it will arise with a minimum of advance warning.

Surviving it will be a much higher priority than profiting from it.

Just make sure you know how to feed yourself, and defend yourself, for a substantial amount of time.

After the smoke clears,

gold and silver will be returned to their intrinsic value,

and it will be many times what is ascribed to it today.

Keep stacking friends,

the opportunity to do so is quickly being closed down.

Lamenting Laverne
May 27, 2013 - 12:35am

@ Redwood - Regr..A..Ehh?

I have to admit that read was a great LOL in the best meaning of the word. I am hopeless ;-)

Calculus - is that the same as arithmetic? In 2009, I think, I saw the video with that Professor Albert, who explains the exponential function. I think Silver66 posted a link again only yesterday. That was a great video. You would have to be a leatherboot or a plastic bucket or something not to understand, what he was talking about. Fantastic teacher.

So when you say Regression analysis, do you mean having an existing data set of different data points, and then using those points to extrapolate the same characteristics of that data set into the next timeframe, for which you do not have any recorded data? Creating a line based on existing dots, that you then continue into the future with the same angle/slope?

And the Y formula algebra thingy - does that mean, that you go so many paces out (on the x axis) and then so many paces up to find the dot or fraction of the line/slope that can be measured on the Y axis?

If correct - then you are a damn good teacher too ;-D

May 27, 2013 - 1:02am

Karen Hudes on Coast to Coast

I'm listening to this broadcast as I type. About two weeks ago, I posted my negative take on an earlier podcast of hers. This one so far only reinforces my earlier impression.

She is an apologist for The World Bank. Says it just has a few bad apples who need straightened out. Continually refers to 'the rule of law.' Tells us not to worry, she is going to fix everything.

To me she is almost laughable. I have heard nothing I didn't know years ago. There is corruption, our government is rotten, we are in a currency war, elections are fixed, and the media is controlled. Where's the revelation?

I'm just a dumbass construction worker, so someone please correct me if I'm wrong. Here's my understanding of The World Bank and IMF.

These organizations were designed to strip the nations of their wealth. They keep undeveloped countries in perpetual debt and steal their natural resources. Developed nations, such as the US, also get clipped, as they have to backstop these bad loans, often helping with financing through various mechanisms. The wealth ends up in the hands of the bankers and multinational corporations.

Simplified, I know, but that's basically my interpretation. I didn't have to go to Yale and work 20 years at The World Bank to know the whole system is corrupt.

Also, thinking that we can fix this corrupt system by working within it, is ridiculous, IMO.

Maybe I'm overly cynical, but I see this woman as either hopelessly naive, or some kind of a controlled distraction.

May 27, 2013 - 3:52am

(No subject)

Not just about miners. Worth a watch imho.

Over 700 junior miners have less than $200K in the kitty: John Kaiser
May 27, 2013 - 4:16am

This one is good

This one is good

We haven't hit bottom yet: investor Rick Rule on the turmoil hitting the resource markets
May 27, 2013 - 6:13am

Bron grills the Jackass

To finish some classic Jim Willie delusions: I can guarantee you in the next several months, or a year or more, there will be NO COMEX GOLD PRICE. ... It’s all coming to a climax where gold is going to be central with a gold-trade central bank and gold priced at $7,000 per ounce. What is encouraging is the comments to the article, with many less than impressed, so maybe people are tiring of the same old script which never seems to come true. This comment to the article sums it up: This is classic Jim Willie gibberish. He is saying he “guarantees” there will be no COMEX gold price in the next few months, or maybe a few years. Basically, he has no clue. But hey, it sounds SO GOOD to hear if you are long the metals. Please. This kind of vague, unsubstantiated opinion, offered as a guarantee, well it really is wordless no isn’t it?

May 27, 2013 - 8:53am

Give 'em the Jack Ass in May .... then go away ?

We're on to you, Turd .... oh, and dazzle ém with a little Riff Raffle .... oh, yeah ! We want moar fresh meat .... to eat ! Moanedas 1929 Comedy Jihad Hoarder Aid World Tour

May 27, 2013 - 8:56am

Once again looks like "let's

Once again looks like "let's get those metals up on the long w/e". I'll be expecting a smash down over night. Hopefully I'll be wrong.

May 27, 2013 - 9:03am

Lamenting Laver

Yeah you're almost there. You got the Y thing and half of the regression thing too. Good for you. Regression analysis certainly gives an extrapolation, but mostly what is does is condense the data around a mean, so you don't have as much scatter. Squaring the data or the "root of "gives you than condensation. You're much smarter than you think.

Don't get tied in knots about those seemingly impressive equations. They are not complicated if you think of each character in an equation like a letter in a word, and the word like an item in a sentence. Once you understand the symbolic equivalent you learn to read the "word" and then the "sentence".

One more thing about the equation: y=ax + b

y = degree of slope + where it crosses the y axis

a =how much the slope of x will be

b = where the slope will intersect the y axis (not necessarily at 0 where x and y meet).

So you got a, just add b.

10th Amendment Powers
May 27, 2013 - 9:11am

@ Lamenting Laverne

Lamenting, thank you kindly for engaging the question. I know many here really respect your thoughts. To be honest, I don't have complete confidence in my own ability to answer, "What's wrong with it?"

I think the largest component has to be the international dynamic. What will China do? What will Russia do? What will Germany do? I can't see them all just standing around for the next 15 years letting Bernanke desecrate their assets. Another component might be the threat of civil unrest. As you mentioned there will be moments of downward spirals and the ability of TPTB to prevent a collapse in that scenario does not seem certain. Another component is the transition period at the end. Not sure I can wrap my brain around all of it but I agree with you it just seems wrong in the gut. But I have no doubt in my mind Bernanke wants to accomplish what I describe, he just cannot say it in so clear mathematical terms, lest the market catch on.

Let me quickly address one of your questions: Yes I was referring to both private and public debt (U.S.). And while I agree there has not been much deleveraging since 2009 in nominal terms, I believe if you look up the numbers you will see total debt falling slowly in real terms, due to "inflation" as Keynesians define it. (savers are paying the bill...)

My own investing (wealth preserving) decision-making-tree for the next 15 years is formulated around probabilities of 1/3 chance of dollar currency crisis, 1/3 chance of deflation/depression, and 1/3 chance of sort of a slow-and-steady-but-painful-monetary-landing-and-deleveraging described by my previous post. I simply don't know how to handicap these possibilities.

Since the last scenario of those 3 might be different from what is often discussed here, I wanted to share some of my thoughts as to why I think its still 1/3 probability, and I why I cannot rule it out yet. And I certainly look forward to hearing more critique of this! (Thank you Lamenting!)

1 - Manipulation never has to end, and there will always be big players trying to manipulate. Just because banksters are "legally" stealing real wealth today doesn't mean they won't be in the same position to keep stealing tomorrow.

2 - While many here talk about a global rush from the dollar, isn't most international debt in the world payable in U.S. dollar terms, at rather high real interest rates? Won't that debt keep international demand for U.S. dollars quite high?

3 - If you were the decision-making-unit (DMU) of the Federal Reserve (again, this is not Bernanke) would you really want to throw away your power to control money with a dollar-collapse scenario? And if you were this DMU, and you had access to other levers of power and control around the world that many here might think you have, would you not be willing to use those levers internationally to maintain that power?

4 - Debt is money. As long as total credit market debt is not rising, "high price increases" are not likely no matter how much "base" money is printed. The DMU can simply increase reserve ratio requirements... And we become a less levered world.

5 - Certainly China is a huge source of demand for precious metals - the primary competitor to the U.S. dollar. But, what if China is an economic bubble about to burst?

6 - QE at its current rate can go on a long time. Maybe another decade or two. Bernanke will try to condition the markets to expect it. My own hunch as to a tactic that might be used to accomplish this: equity margin calls and a stock market crash sometime in the next few months/quarters without any change in QE policy. Zerohedge notes that equity margin is back to historic highs. (We've seen the margin game before.)

I'm not sure what to expect in price action in gold/silver if that last scenario plays out. If they take a hit, I think you're looking at a generational bottom never to be seen again.

We live in interesting times...

May 27, 2013 - 9:29am

Gold Slut and for everyone else

Fwiw...I just went to ZH and looked at the comments after that "Math" thread.

I see someone else has the exact same name I use here and is commenting possibly negative about this site.

I'm stating here.....that I am NOT registered at ZH nor do I post anywhere else under my DPH moniker....period.

I did post a couple times at Screwtape (regretfully and foolishly) about a year ago and that's it.

They say impersonation and gossip is the highest form of flattery. I could do without it but then's a free world and funny/weird stuff happens online.

I saw some Xty barbs over there, some SpeakEasy comments and some revisionist and mildly bitter grapes. Oh well.

Idle minds in crappy PM markets bring out the best (sarc) in folks.


And some people probably laughed when I said my computer was targeted with a massive virus hack.

Weird stuff happens online....period.

May 27, 2013 - 10:23am

Daily Bell interviews Ranting Andy . . .

The Daily Bell discounts Andy's premise that the dollar-based system is near collapse, though they allow that some people have that belief, and so may want to act accordingly.

tmosley Excalibur
May 27, 2013 - 10:26am

@Excalibur Lots of things Jim


Lots of things Jim Willie says sound crazy, but he hit it out of the park on the subject of King Abdullah's death. He was what, 3 weeks or a month ahead of the curve there?

Also, his claim about the end of the COMEX mirrors the thesis I have been harping for YEARS. And yes, it is looking more and more like it will come to pass. Don't fall victim to normalcy bias.

ancientmoney Lamenting Laverne
May 27, 2013 - 10:43am

@Lamenting . . . re hyperinflation . . .

Last night you responded to 1oth Amend. by saying, in part:

"Also, I don't think that hyperinflation in the USD is possibly upon us because of QE2Infinity alone. I think of it may have been a drop, that made the cup overflow, but doubt that actually. The damage was done in 1971. Instead I think that it is proof that the withdrawal from the USD as reserve currency is in progress, and QE2Infinity is trying to pick up the slack to postpone the bond market crash. The hyperinflation risk comes from the loss of utility of the USD, when the reserve status is gone, and the dollars come home. That happens when USD is no longer required for buying Oil, and the reason that would happen is because of decades of printing, not just the recent QEX."


I agree with your assessments, especially the line I bolded.

Many people think hyperinflation is simply inflation on steroids. It isn't. Hyperinflation is when the collective no longer accepts the currency of the realm.

There is plenty of of dollars already baked into the cake for hyperinflation to occur. All China needs to do to cause it, for example, would be to begin selling US-T-bonds for whatever it could get for them.

Or, for SA or other oil producers to demand gold or grain or other tangibles in exchange for the oil.

So far, the big exporters of the world have decided to continue to trust the dollar, primarily because they are better off to do so.

There will come a point however, when some important country panics, and decides they want out while their dollars still have tradeable value. He who panics first panics best.

I think this truism explains why so much gold has been allowed to go from west to east. Why else would China agree to hold useless T-bonds?

Once the gold has been redistributed according to how the central banks intend to run things on a new gold-backed platform of some sort, we will see the end of COMEX trading and gold/silver will no longer be seen as commodities.

The main question I have is how they will introduce the new system. Will they create a distraction/chaos, and let the people suffer for awhile til they beg for a solution? Or, will they simply close down the banks for several days, have closed-door meetings, and emerge in a week or so with the new plan?

May 27, 2013 - 10:47am

James Turk interview USA Watchdog - nothing new.

Just listened to today’s interview and basically nothing new was discussed. If you would like to hear Turk’s admission of giving today’s price only a 10% chance and confirmation of just stack then listen.

DrkPurpleHaze, sorry to hear about somebody on ZH has high jacked your name and is trashing this site. I have not seen the regular trolls and wonder if one of them has hurt/angry feeling. Your amazing avatar could be in Seattle’s Hendrix museum.

Silver66 thanks for the suggested reading and I noticed Freidman has a new book out. This one instead of 100years is the next decade and called The Next Decade: Empire and Republic in a Changing World.

Mr.Fix enjoyed your recap and agree 100% with the economic collapse happening as an “overnight phenomenon”. The one thing that bothers me is the assumption the Elites are one voice and a double down will happen. I see them much like the Bilderberg mainstays. Sometimes individuals must loose gracefully to the consensus and that way they continue getting filthy rich and only temporarily relinquish their power and or authority over one part of the game. Yes, your assumption of double down being the outcome looks to be on the agenda and we need to prepare for it. Although, I feel these guys always have more than one option on the table. Battles are sometimes lost so the war can be won.

May 27, 2013 - 10:52am


Thanks TM. I really like listening to JW and his colorful language and most of what he says rings true (though perhaps his passion leads him to making predictions with timing which is risky/foolish). I believe he admits he is a poor trader, as timing is not his strength.

I posted the above primarily as Bron often appears here and I thought his comment would be on interest.

May 27, 2013 - 11:10am

Golden Lilly: Parts 1 & 2

After World War II stories emerged of vast amounts of gold bullion looted by the Japanese, and buried somewhere beneath the Philippine hills. Part one of Golden Lily: A Secret History reveals the remarkable story of how that treasure came to be there; what happened when US Intelligence found it, and why mentioning the words 'Golden Lily' can be a dangerous business even today. Includes a rare interview with Peggy Seagrave, co-author, 'Gold Warriors: America's Secret Recovery of Yamashita's Gold'.

Golden Lily: A Secret History part one
Golden Lily: A Secret History part two


The Secret WWII Gold Hoard That Changed the World

By John Tiffany

During World War II, Japan conquered a large swath of the globe, including most of the Pacific islands and all of eastern Asia. Emperor Hirohito, portrayed as an innocent “marine biologist,” in reality directed the looting of the national treasures found throughout this large chunk of the world. These include the wealth of Britain, Netherlands and France, which had moved their gold to Asia “for safety’s sake,” and the national treasures of 13 Asian nations invaded by Japan.

Why they call it Yamashita’s gold is anyone’s guess. In reality, it was the treasure of Hirohito. Yamashita merely worked for Hirohito.

The royal family was put in charge of supervising the whole process, and as much booty as possible was taken to Japan. Many treasure ships were scuttled in Tokyo Bay, with an eye to salvaging the loot when the war was over.

Some of the treasure was first taken to the Philippines. But the Americans began sinking Japanese ships left and right, so the emperor and his family decided to hide much of the treasure in caves in the Philippines, expecting and hoping that the islands would remain in Japanese hands at the end of the war and the loot could then be recovered.

The routine was to select a good cave, fill it with treasure, and then blowup the entrance to the cave, with the workers sealed inside where they would soon die.

After the war, many secret deals were made by the U.S. government to let Japanese war criminals, especially the top criminal, the emperor, and the royal family, off the hook. In exchange, much of the stolen gold, silver, gems, antiquities etc was secretly taken by U.S. government insiders, particularly the OSS/CIA and various generals in themilitary. This is where the secret agency got its first big financing—under the table of course. This secret dealing was itself one of the greatest crimes of the 20th century.

Noted historians and respected investigative journalists Sterling and Peggy Seagrave, in their book Gold Warriors: America’s Secret Recovery of Yamashita’s Gold, documented the multibillion dollar World War II loot, valued at perhaps over 120 billion 1945 dollars.

In December 1937 Japan declared war on China and surrounded the capital city, which at that time was Nanking. Prince Chichibu, younger brother of Hirohito, had been chosen to direct the ultra secret treasure-looting team. This team was given a code name of “the Golden Lily” after a poem the emperor had written, and 6,600 tons of gold were recovered from Nanking alone, plus silver and precious stones. That was just the beginning of the emperor’s loot-the-world operation......(cont.)



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