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Beware the yellow peril

By Owen Paine on Monday November 16, 2009 02:51 PM

Closing off the fast fiscal policy track to recovery, needless to say, is a key part of the whole yellow-flagging of the domestic American economy.

Enter Time Square merlin-without-portfolio Paul "nattering nabob" Krugman, mad as hell and not taking it any more -- errr -- without, ummm -- serious protest.

His contra blast comes in a blog post under quite a daring headline: "Stupidity Economy", where Paul announces sagely that "bad ideas are acting as serious constraints on policy."

Bad ideas, Paul? Come on. Cui bono, pal, cui bono? Where's our countryless cosmopolite corporate claw holders in all this? What if THEY want a yellow flag here -- not because they're "stupid", or condemned to operate under the laws of faux markets, or even because they're any more or less greedy than the rest of us. What if it's err -- umm -- prolly in their best long-run interests? What if they're kinda like our old slaveholding class? Maybe the good of the nation -- the progress of the nation -- right now is, well, not so good for them?

Now of course top liberal economist Krug knows perfectly well what ought to be done -- for the good of America's job-class majority, at any rate:

"[A] really big fiscal expansion, sufficient to mostly close the output gap. The economic case for doing that is really clear. But Washington is caught up in deficit phobia, and there doesn’t seem to be any chance of getting a big enough push."
So what is Krug's new policy peddle?

Well, since we can't increase total job hours without triggering an import surge, then we start job-time sharing, like the Euros do. Spread the misery and to try to squeeze from both sides. He throws in incentivizing bribes for the corporate hiring office, sorta like the new machine tax credit.

Savour that a while, fellow dismailians -- then let's move on to finger-pointing time: not exactly cui bono, more like cui scapegoat-o.

See its not the trans-nats Pauli boy accuses. He's decided to tag China with the blame for our stagtime horizons:

[T]he problem of international trade imbalances is about to get substantially worse. And there’s a potentially ugly confrontation looming unless China mends its ways.... Most of the world’s major currencies “float” against one another. That is, their relative values move up or down depending on market forces.... these days most nations try to keep the value of their currency in line with long-term economic fundamentals. China is the great exception. Despite huge trade surpluses and the desire of many investors to buy into this fast-growing economy — forces that should have strengthened the renminbi, China’s currency — Chinese authorities have kept that currency persistently weak. They’ve done this mainly by trading renminbi for dollars, which they have accumulated in vast quantities. And in recent months China has carried out what amounts to a beggar-thy-neighbor devaluation, keeping the yuan-dollar exchange rate fixed even as the dollar has fallen sharply against other major currencies. This has given Chinese exporters a growing competitive advantage over their rivals, especially producers in other developing countries. What makes China’s currency policy especially problematic is the depressed state of the world economy. Cheap money and fiscal stimulus seem to have averted a second Great Depression. But policy makers haven’t been able to generate enough spending, public or private, to make progress against mass unemployment. And China’s weak-currency policy exacerbates the problem, in effect siphoning much-needed demand away from the rest of the world into the pockets of artificially competitive Chinese exporters."
And he throws in a zinger on a zinger:
"[T]his problem is about to get much worse.... Looking forward, we can expect to see both China’s trade surplus and America’s trade deficit surge.... With the financial crisis abating... U.S. trade... showed a sharp increase in the trade deficit between August and September. And there will be many more reports along those lines....

So picture this: month after month of headlines juxtaposing soaring U.S. trade deficits and Chinese trade surpluses with the suffering of unemployed American workers. If I were the Chinese government, I’d be really worried about that prospect."

Where are the real beneficiaries of this filthy swindle of a profit pipeline? Where are the big trans-nat outfits, the arbitrage grifters who actually scoop up the gravy, and sensibly want to keep the gravy flow going? There are hundreds of millions of Han peasants yet to go here.

Maybe if we slow the pipe flow here a bit, by reducing effective demand for imports, the strong-boy dollar profit lifts can continue.

Kill 'em with 3000 cuts not 1000. Slow the depth of each cut, but keep the rate at one cut per month. 25 years of misery, not 9. At least for now, we can always speed up again.

The Han accession to the north currency club could be 2025, 2035, but prolly 2020 sounds best. Here's PK again:

"[T]he Chinese don’t seem to get it: rather than face up to the need to change their currency policy, they’ve [decided] to make our unemployment problem even worse."
Of course they get it, and of course they're relying on their Yank partners to govern the flow rate here -- slowing the flow by slowing the demand.

Hey, it's already happening. What's left to do in Beijing? Wall Street is taking the point position here. On that topic, note this laff riot of a line from Mr K:

"I’m not sure the Obama administration gets it, either."
Oh, Larry Summers "gets it" all right, Paul. He gets and gets it good, and he gets his orders good too. "Yellow flag time, brother pig" -- that's an actual intercept of an e-mail from a top player among our limited liability leverage artists and corsairs extraordinaire up there on Wall Street.

For those with a detail-oriented disposition, here's Krug's job "time share" plan and raison d'etre:

"Consider, for a moment, a tale of two countries. Both have suffered a severe recession and lost jobs as a result — but not on the same scale. In Country A, employment has fallen more than 5 percent, and the unemployment rate has more than doubled. In Country B, employment has fallen only half a percent, and unemployment is only slightly higher than it was before the crisis Don’t you think Country A might have something to learn from Country B?".

Comments (21)


Okay, looks like nihilism is "too pale a romantic" for you, but what would you have us quaff with this one?
On the only note I can contribute, the couple of the 2000 decade award goes to...
As described in Vanity Fair's recent hagio-up-close, Larry Summers divorced his wife and flung himself into the arms of, yes, you guessed it, one of Christopher Hitchens' favorites, our own Axis Sally, talk-show rabid rightess from Greenwich, CT, arch-Republican Laura Ingraham.
The affair, however, bit the dust, as Larry couldn't wear the Ronald Reagan mask on the Sabbath.

What?? Summers was having a bit of the old in-out-in-out with... Doctor Laura? I mean, yeah, she posed in Playboy and all, but, still... she's got to be one of the meanest-looking old broads I've ever seen, like Nancy Grace without the soul.

But, aaa-aanyway... even as much as we need people as smart as you, Owen, still... that's some pretty dense prose up there. I'm able to understand it OK, except it takes me so long to chew it all properly so I don't choke on it. I guess that's why, early in the decade, back in the antiglob days, we had guys like Rob Weissman and Rob Naiman working with the Mobilization For Global Justice, making all those complex issues understandable for all us foot soldiers out in the streets. I mean, seriously... you try coming up with a snappy chant about patent law; you try designing a kick-ass poster for a demonstration about Structural Adjustment Programs. Go on, try it. Hah, didn't think so. ...I sometimes think it wasn't the chilling of the political climate after 9/11 that wrecked the antiglob movement; it was all those densely-convoluted wonky-assed issues that made the Black Blocers' brains explode.


But, jeez; you guys sure love busting on Krugman, huh? I guess it's not like he doesn't deserve it a fair amount, but, still... I want to at least cut him a break for being a fellow cat lover. Paul Krugman loves cats; I love cats, therefore, I... oh, shit, I've scared Minnie out of the room.

Oh, and btw, how is it that cats always look twice as smart as their "owners"? I mean, my wife and I are both pretty damn' smart people, but every morning, when Minnie jumps into bed with us, she always has this look on her face like she just found out something important that we don't know yet -- kind of like Krugman's cat. Krugman's cat has this look like she's just sneaked a peek at his next column and already decided it's bullshit.

Good to see it's finger-pointing time at last, though. My middle finger's been needing a good workout.


how is it that cats always look twice as smart as their "owners"?
only a cat owner would need help answering that question flooggy

Mike Hunt:

But we got even.

Fake 400 troy oz Gold bars found...from central bank transfer to Hong Kong.
There are now reports of fake 400 oz gold bars in Oct. of this year. The report from Hong Kong said that the bars were gutted and had tungsten inside instead. The finger was first pointed at the Chinese for making the fake bars. The Chinese have pointed the finger at the Clinton Administration for the problem. Saying that they gold plated tungsten blanks and sold them on the open market. Many of these fake bars might possible be in the GLD ETF holdings! Nice way to hide them!!

Is the Dollar "Good as Tungsten"?
n his article, Rob Kirby says:

And here’s what the Chinese allegedly uncovered:

Roughly 15 years ago – during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] – between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day.

I can't find a previous post claiming that Gold paint was listed as a physical sale/transfer of gold to another nation.
Interesting eh.

Wow... tungsten, huh?

Well, I guess it's not a total loss, then. I mean, 16k tonnes...it sounds like they could make a lot of light bulbs with that.

It's the Kiss Of Death --
-- from Mister...

...oh, never mind.

Mike Hunt:

Luckily we managed to gain this


Unemployment in the USA, even when calculated in the deceptive and distorted way we have now become so fully accustomed to that we hardly raise our voices anymore, is much higher today than it was a year ago. The official U6 number is at 17.5%, unofficial data indicate more than 1 in 5 Americans are effectively un- or underemployed. A few million more homes were foreclosed on in 2009. The number of hours worked is lower. Pay per hour is stagnant at best. $1.5 trillion in consumer credit card space was pulled. States are reeling and panicking over double digit budget shortfalls. Tax revenues are plummeting. Federal debt has risen by a factor higher than seen since WWII, if not even more. Add your own favorite stats and color the pictures.

Still, before any of these developments had even started, back in 2008 49.1 million US citizens had trouble finding enough food to eat. That probably means 15-20 million children. And don't forget that if they could have fed themselves, much of the food would have been of an inferior quality, since in most poor areas of the country, there's a hell of a lot more cheap burgers available than vegetables. Perhaps luckily for them, they couldn't even afford no high-fructosed whoppers.

But that was last year. In 2009, how many more hungry children did we add to the tally? Whatever their number, Obama and his administration chose and choose to ignore them. For Washington, saving Wall Street institutions is much more important. First you save the banks, and if there's anything left afterwards, you may -or may not, depending on what the polls say- look at the 30-some million unemployed and the 20-odd million undernourished children.

The money used to prop up the banks has led to the illusionary notion of actual profits being made. Which in turn is all the excuse that's needed to pay out bonuses, which in 2009 are set to reach new record levels. 20 million hungry children could be greatly helped with $1000 a year each for food. That would cost $20 billion, and still leave more than enough to pay some kind of bonuses. Or even better, dare we say it, pay back the government loans.

Where I come from, the description of a nation that leaves its children behind in hunger while showering its upper classes with lavish amounts of more luxury than they know what to do with evokes pictures of present-day Somalia or latter-day Rome and the let-them-eat-cake France of Marie Antoinette. Not of a socially and politically highly developed society of the 21st century.

Whew thank god we dodged the bankster fail bullet.

Mike Hunt:

Oopsie forgot somethin
Makes one wonder which "Yellow Peril" we should fear.
Barrick is Bush familia connected.


South African gold on final deathwatch as top grade scientist finds residual gold is more than 90% less than claimed

Research shows that production rates should fall permanently below 100 tonnes a year within the coming decade
Author: Barry Sergeant
Posted: Monday , 16 Nov 2009


The apparent bottom line in a paper published in the South African Journal of Science is that South Africa's gold industry is on final deathwatch, despite claims of massive existing below-ground reserves. Chris Hartnady, research and technical director of Cape Town earth sciences consultancy Umvoto Africa, has found that South Africa's Witwatersrand goldfields are around 95% exhausted, and anticipates that production rates should fall permanently below 100 tonnes a year within the coming decade.

Gold production from the Witwatersrand, the biggest known gold field in the world, peaked at around 1,000 tonnes in 1970 and has declined ever since. Hartnady says that while initially (1970-1975) the decline was "quite precipitous", it has been interrupted by only short periods of slight trend reversal (1982-1984 and 1992-1993).

Leon Esterhuizen, a London-based specialist analyst at RBC Capital Markets, has reacted to the research by saying that "South African gold is dying -- this is not new news", but adds "that it may be dying faster than we currently believe is novel". On the levels of reserves, Hartnady finds that the South African "residual gold reserve" after production through 2007 is only 2 948 tonnes, a little less than three times the 1970 production figure, and much less than 10% of the officially cited reserve.

The country's gold reserves are less than half of the current United States Geological Survey (USGS) estimate of 6 000 tonnes, and the country is not first, but fourth in world rankings, after Australia (5,000 tonnes), Peru (3,500 tonnes) and Russia (3,000 tonnes), Hartnady's research shows. The USGS currently cites South Africa's gold reserves at around 6,000 tonnes, while SA claims a 36,000 tonnes reserve base figure (or about 40% of the global total). Hartnady's findings are based on Chamber of Mines figures and mathematical modeling pioneered by the distinguished American geologist M. King Hubbert.


Barrick shuts hedge book as world gold supply runs out
Global gold production is in terminal decline despite record prices and Herculean efforts by mining companies to discover fresh sources of ore in remote spots, according to the world's top producer Barrick Gold.

Aaron Regent, president of the Canadian gold giant, said that global output has been falling by roughly 1m ounces a year since the start of the decade. Total mine supply has dropped by 10pc as ore quality erodes, implying that the roaring bull market of the last eight years may have further to run.

"There is a strong case to be made that we are already at 'peak gold'," he told The Daily Telegraph at the RBC's annual gold conference in London.

"Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore," he said.

Ore grades have fallen from around 12 grams per tonne in 1950 to nearer 3 grams in the US, Canada, and Australia. South Africa's output has halved since peaking in 1970.

The supply crunch has helped push gold to an all-time high, reaching $1,118 an ounce at one stage yesterday. The key driver over recent days has been the move by India's central bank to soak up half of the gold being sold by the International Monetary Fund. It is the latest sign that the rising powers of Asia and the commodity bloc are growing wary of Western paper money and debt.

China has quietly doubled holdings to 1,054 tonnes and is thought to be adding gradually on price dips, creating a market floor. Gold remains a tiny fraction of its $2.3 trillion in foreign reserves.

Gold exchange-traded funds (ETFs) – dubbed the "People's Central Bank" – have accumulated 1,778 tonnes, making them the fifth biggest holder after the US, Germany, France, and Italy.

Ross Norman, director of theBullionDesk.com, said exploration budgets had tripled since the start of the decade with stubbornly disappointing results so far.

Output fell a further 14pc in South Africa last year as companies were forced to dig ever deeper - at greater cost - to replace depleted reserves, not helped by "social uplift" rules and power cuts. Harmony Gold said yesterday that it may close two more mines over coming months due to poor ore grades.

Mr Norman said the "false mine of central banks" had been the only new source of gold supply this decade as they auction off reserves, but they are switching sides to become net buyers.

Al Gore's Crowded Bed:
Bush, Barrick Gold, and General Pinochet

by Cynthia R. Rush

The fact that Barrick Gold was one of the principal sponsors of Al Gore's upcoming appearance in Santiago, Chile, as the keynote speaker at the May 11 conference, "Global Warming and Climate Change: The Time To Act Is Now," ignited a public outcry from several Chilean environmentalist groups which, along with an international spotlight placed on the case by the LaRouche Political Action Committee's website (www.larouchepac.com), has forced Barrick to withdraw its sponsorship from the event. Gore, for his part, is trying unconvincingly to distance himself from Barrick.

Some of the Chilean groups have limited themselves to denouncing Barrick's environmental crimes—polluting the air with toxins and destroying Chile's glaciers—and ask how the great champion of global warming could possibly associate with a monster such as Barrick. A distraught Sen. Alejandro Navarro, Socialist Party head of the Senate Environmental Committee, reported April 7 that he was writing a letter to Gore to warn him of what "his visit's ties to Barrick Gold have provoked, so he can evaluate the impact this will have on his speech." In a statement issued on her website, Fabiola Marín Salgado of the Vida Autónoma organization, stated the same day that "every environmentalist in Chile would like to warn him that his image as an environmentalist will be ruined if he attends events sponsored by Barrick Gold." Gore's association with Barrick shows "callousness," she said.

A handful of groupings has gone further and posted exposés published by EIR in the late 1990s on Barrick's role in African genocide, and its links to the covert intelligence apparatus run by former President George H.W. Bush and other characters and institutions whose allegiance is to the Anglo-Dutch financial oligarchy.

But everyone is missing the fundamental point that the blimpish Gore's association with Barrick Gold isn't a fluke. He shares the company's outlook of racism and genocide, and has the exact same financial and political backers. These include the Bush family—you ask, but aren't they Republicans?—and major figures in the global Anglo-Dutch financial oligarchy and raw materials cartels. George H.W. Bush sits on Barrick's International Advisory Board, along with former Canadian Prime Minister Brian Mulroney. Barrick Chairman Peter Munk a protégé of the British royal family, is a member of the environmentalist millionaires' grouping known as the "1001 Club," along with genocidalist Maurice Strong.

Ok, Larouche is questionable but money does travel in the same tight circles.

And finally


Bush’s Barrick Corps drops bombshell
From Gold Anti-Trust Action Committee (GATA), Tuesday 10 June 2003, 1:19a ET

(one more piece of evidence. It can hardly be denied any more that the dollar exchange rate control mechanism, the magic invoked behind the scenes when the US talks up the dollar, has been the suppression of the price of gold by essentially short-selling massive quantities of central bank gold. The world economy is in deep doodoo)

Dear Friend of GATA and Gold:

Barrick Gold has confessed that it and its bullion banker, JP Morgan Chase & Co., are the direct agents of the central banks in the international control of the gold price.

Barrick’s confession was filed in U.S. District Court in New Orleans as part of a legal maneuver to gain dismissal of the federal anti-trust lawsuit brought against it and Morgan Chase by Blanchard & Co., the New Orleans-based coin and bullion dealer. Barrick moved to dismiss the Blanchard lawsuit on the grounds that the suit had failed to include as defendants some "indispensable parties" whose vital interests are at stake, the central banks; that the central banks, having what is called sovereign immunity against suit, simply could not be included in the suit; and that the suit therefore had to be dismissed.

Mike Hunt:

Final gold post.


Tiny Mauritius Tells US To Shove Its Dollar, Buys 2 Metric Tons Of Gold From IMF At $1,115 An Ounce

The latest development in the gold bubble saga, and one which will likely cause the precious metal's price to spike even higher, comes from the tiny island of Mauritius which according to Dow Jones has purchased 2 metric tons of Gold from the IMF for $71.7 million. The price works out to approximately $1,115 per ounce. More as we get it. (and yes, this is a picture of Mauritius not some CNBC anchor hangout).

Some more from Dow Jones:

The International Monetary Fund announced Monday it has sold two tons of gold to the central bank of the Indian Ocean island of Mauritius for nearly $72 million.

The sale came as gold prices surged Monday to an all-time high of $1,136.72 per ounce.

The sale to Mauritius "was conducted on the basis of market prices prevailing on November 11, 2009 with proceeds equivalent to U.S. 71.7 million dollars," the IMF said in a statement.

It was the second such sale by the fund since September, when its executive board authorized the sale of 403.3 tons of gold from its holdings to bolster its finances amid the global economic crisis.

On Nov. 2 it sold 200 tons of gold to the central bank of India for $6.7 billion.

The IMF said it would sell gold directly to central banks and other official holders for an initial period before selling the remaining amount on the open markets "in a phased manner over time."

The Washington-based IMF, which currently holds just over 3,000 tons of gold, is the third-largest official holder of the precious metal after the U.S. and Germany

Hmmm, makes one wonder how many Tungsten bars slipped in this lot.

Nancy Grace has a soul? Since when?



that auto earth site doesn't live up to it's very enticing name

the writing tends toward
long earnest unidirectional wind blows
with moments of gray flatulence

the grasp of analytic categories
strikes me on a quick look
to be at times poor
and at other times proto-cultish

i'll read more there
the fast closing paine mind remains open

but at first blush
strikes me as the product
of very little beyond
boho time on a few pair of hands
vicarious misery in it's uber-soul

reading it is like watching the drip drip drip of an out of service sewer pipe
it's like a free colostomy bag
for poor folks
to desposit their excess
wage/job/credit grief


fetched up a specimen for us :

auto earth's master S :

"Unions are unlikely to agree to cuts of the magnitude that would be required for businesses, municipalities and public services to remain viable. Their members have fixed costs which prevent them from working for less than a certain amount, but that amount will almost certainly be more than employers are in a position to pay. This means war in the labour markets. "

i'm hip pour it on brother
"My guess is that employers, particularly in public services such as education, will decide to break the unions, even at the cost of, for instance, an entire school year. I can imagine them firing all their teachers, or other public service workers, and inviting them to reapply for their old jobs at half the pay and no benefits. "

pov here seems a tad pwoggy-wog eh ?
her i expected talk of a hundred homestead
and i get the tableau of the shuttered school house door ...


more ...and it's analysis

"This is the kind of action that can easily lead to a general strike, where other unions come out in support of the particular workers under threat. The potential for extreme disruption is very high."

the red in my soul ripples with anticipation

"This is yet another reason to have ready cash, stored supplies, and the essentials of your own existence under your own control to as great an extent as you can manage"

what a small holder's prat fall:

the apex of the syndicalist class struggle drama
seen as hurricane katrina
marching down main street
in 100 thousand pairs of overalls


my favorit line:

"And don't forget that if they could have fed themselves, much of the food would have been of an inferior quality, since in most poor areas of the country, there's a hell of a lot more cheap burgers available than vegetables. "

now ain't that spit out
with an auntie-ish swagger... eh ??

thanx mr hunt
you made my morning coffee brake a delight

Phillip Allen:

@ Mr. Hunt:

"[...] Not of a socially and politically highly developed society of the 21st century."

From here in northwestern Connecticut I can say definitively that I do not live in a socially and politically highly developed society. You were being ironic/sarcastic, right? Or are you lucky enough to not live in the USA?

Mike Hunt:

My large post on Gold seems to be missing.It adds more links and information.
All in all something strange has been happening with Gold.

I found this.


US Exported 5000 Metric Tonnes Of "Gold Compounds" Over Last Two Years

I took special note of how 2,920 metric tonnes of “Gold Compounds” had been exported from the U.S. in 2008. This number seemed BIGGER than BIG – because the U.S is only alleged to have stockpiles of sovereign gold of 8,100 metric tonnes while annual U.S. mine production of gold is roughly 228 metric tonnes. This figure of 2,920 metric tonnes is equal to 36 % of all alleged sovereign U.S. gold stocks or more than 14 times annual U.S. gold mine production. So, I was left wondering, “just what is/are ‘gold compounds’?

I contacted the USGS and queried a qualified individual [who had working knowledge of this data stream] about the definition of “Gold Compounds”. I was told that, according to the U.S. Census Bureau – who supplies not only the definition but the actual reported numbers, gold compounds were typified by industrial type products containing low percentages/amounts of actual gold content – like gold paint.

I then reasoned with the USGS person, if such were the case, why would U.S. exports have increased in 2008 to nearly 3,000 metric tonnes [when the Global Economy was slowing and the U.S. Dollar was strong] from 2007, when U.S. exports totaled approximately 2,000 metric tonnes [when the U.S. Dollar was weaker and the Global Economy was booming]? I noted that this was counter-intuitive and made no fundamental economic sense:

Mike Hunt:

Phillip Allen

I'm not certain where the authors at Automatic Earth reside.

I would suggest anyone with questions about TAE positions brows through the articles under

TAE Primers, Must Reads & More

Here is a guide to the primers


As I understand it they expect an economic collapse that will have deep and significant social ripples.



Some of what they say is echoed in other be prepared posts.

They main point nearly economic blogs make is the numbers don't lie, only TPTB do.
And those numbers are very bad.



this gold slouthing needs a post up why not
draft one up and send it to mjs

btw i wish more of you did that
guest posts would i'm sure come as a relief to our
much burdened many tasked
upper west side hercules


speaking of the margins of civilization
mr allen

try hingham ma

for a welsh spirit trapped in the body
of a jew

its quite the life of quiet torment

Mike Hunt:

The problem is I don't know what to make of it.

The Tungsten blanks were done during Clintons time based on an earlier plan. Assuming they were created to bolster our claims to x amount of gold then some accidentally slipped into the market. Or some of those blanks were shared with the Brits who returned the Chinese gold recently and unknowingly returned some blanks.

The paint again is a claim which looks to bolster US reserves.
Places like Maurtius buying gold means they are hedging against the dollar.

Both South Africa and Barrick worried about Peak Gold at the same time, a time of great demand is interesting and possibly the trigger for some of these events.

But let's say that ALL the paper Gold can't be covered by real Gold. And in times of economic crisis people want physical Gold. But there isn't enough physical Gold to go around.
So misleading claims and actions happen.
But what happens when the peons start demanding their Physical Gold?
What happens if the government starts seizing Gold as they did during the Depression.
Better yet, would the Government seize Gold to protect the fact they don't possess enough physical Gold. Would they then issue paper Gold to replace the physical gold with empty promises.
They dodge a bullet but anger a lot of people.
Meanwhile other nations start backing their currency with physical Gold. Naturally IF checking that gold they discover some blanks slipped out. Remember most Gold transactions are only shuffled around at a central location. That is why the Chinese caught the blanks because they built a new vault to hold physical Gold.
To go even further one of the 911 rumors had the Gold storage vaults found empty. More rumors stated that trucks shipped out the Gold before the towers fell or were falling.

As I said something strange is happening with Gold but I have no idea what.

Mike Hunt:

Barrick Gold, a Bush involved operation, not Obama.


"there isn't enough physical Gold to go around"

sure there is at the "correct" price
peak gold is a very poor analogy to peak oil

why in hell are you
"into this"
beyond just plain old kicks
and possibly
" epater the larry and bob show "

Mike Hunt:

I'm following the money. Dollar falling, Gold rising. Everybody demanding their Physical Gold. IMF selling Gold.

What if it is just another Ponzi Scheme? A grand Ponzi scheme run by certain insiders, The Us/The Brits/The Fed/.
Best part is if the present combination of events had not happened none of this would have come to light.

This may explain everything.

Read the rest of the story. It all seems to tie into everything I posted.


The gold market is an accident waiting to happen

Basically, the gold market operates on a fractional reserve basis. On average there are several claims of ownership on each gold bar conforming to London Good Delivery (LGD) standard on the "pool" of gold which acts as liquidity for the massive OTC gold trade based in London.

Similarly, there are several claims of ownership on the gold bars in Comex wherehouses. If a sufficient number of market participants become concerned about this (which is happening) and there is a stampede to take delivery of physical bullion, the entire gold market will come crashing down, taking most of the global financial system with it.

Market failure isn't a risk, it is a certainty. The unregulated gold market is an accident waiting to happen.


"Market failure isn't a risk, it is a certainty. The unregulated gold market is an accident waiting to happen. "
oh if it were but true

unfortunately the gold market is way too small at one k a troy ounce to bring the buggar down

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