Defaulting banks - where will it stop?

[Peter Lemkin]

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Paul Craig Roberts -- Fed:They Do Not Have Any More Gold

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By *Greg Hunter

Paul Craig Roberts
(image by Paul Craig Roberts)

Greg Hunter's USAWatchdog.com
Former Assistant Treasury Secretary Paul Craig Roberts is making some bold new claims about the Federal Reserve and its official government gold holdings. Dr. Roberts contends...

"They don't have any more gold. That's why they can only give Germany 5 tons of the 1,500 tons it's holding. In fact, when Germany asked for this delivery last year, the Fed said no. But it said we will give you back 300 tons . ... So, they said we will give you back 20% of what you trusted us to keep for you over the next seven years, but they are not even able to do that."

Dr. Roberts goes on to say...

"The stocks of gold at the Bank of England seem to be disappearing. The stocks of many of the gold trusts, such as GLD, are being looted ... all of this gold is disappearing into Asian markets. The entire West is being drained of gold."

According to Dr. Roberts, this is an inflection point for the gold market. Dr. Roberts says...

"The reason is: the ability to supply large amounts of gold to the bullion dealers to sell has diminished with the supply of gold and silver. What the Fed did was turn to massive 'naked shorts' of gold futures contracts. They don't have the real gold ... so they come in and dump contracts, say in a period of 6 minutes, that are three times the amount of gold COMEX has to make delivery. ... So, it drives down the price of gold. That's how they got the price down from $1,900 to $1,250."

Roberts contends that America's gold is "mainly gone." That's right, a former Assistant Treasury Secretary who is the father of Reaganomics, says, "They obviously don't have any because, if they did, they would have given Germany's gold back. If they had any, they would let people audit the vaults." Dr. Roberts warns...

"The point is the ability to continue selling these 'naked shorts' is now disappearing because there is no gold left to back them up. ... None of these EFT's has the gold to back the shares. The ability to continue looting them in order to make good on gold deliveries is running out. So, this will prevent the Fed from selling 'naked shorts' to protect the dollar from its policy of quantitative easing. That's what's it's all about. You can't print $1,000 billion new dollars every year without causing other holders of dollars to wonder about the value of the money and to seek a way of getting out of it. China has been doing that by going into gold."

On gold holdings, Dr. Roberts argues there are two big reasons why he says, "I don't think they have any." Roberts says,"There is no reason for partial delivery if you have the gold. There is no reason to sell all these naked shorts if you have the real gold you can dump on the market." Roberts predicts...

"If people in the West try to move from dollars into bullion and there's not any to speak of, then you would see a massive rise in the price. I think, this year, you are going to see a further downturn in the economy. The signs are not only that we do not have a recovery, but it's going to get worse. ... Christmas sales were very negative. There's no growth in people's income and no jobs. So, if the economy goes down further, what does that mean? It means the deficit widens. It means they have a greater debt ceiling lift. They have to have a bigger debt ceiling increase, and all of this will alarm the world. They'll say, good heavens, they already had a trillion dollar deficit. Now it's gone up, and the Fed can't stop the quantitative easing without the stock and bond market collapsing. The banks' solvency will become an issue. So, the world is watching a bigger deficit, more printing of money, and they are likely to start dumping dollars. When they do that, they'll say 'gold, I want gold.' There's not much supply to meet demand, and the price has to escalate. So, I wouldn't be surprised if that shows up this year."

Join Greg Hunter as he goes One-on-One with economist Dr. Paul Craig Roberts.

After the interview, Dr. Roberts said, "Here's another heads up." He told me he's going to post an article from an anonymous insider that will address the question of "estate recovery" contained in Obama Care. Dr. Roberts charges: "The Affordable Care Act is not affordable and doesn't provide care. It's a way to loot the poorest people and steal whatever assets they have."

[Peter Lemkin]

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How Economists, Policymakers [and banksters] Murdered Our Economy

By Paul Craig Roberts [/TD]
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Source: Paul Craig Roberts

(image by economic noise)

The economy has been debilitated by the offshoring of middle class jobs for the benefit of corporate profits and by the Federal Reserve's policy of Quantitative Easing in order to support a few oversized banks that the government protects from market discipline. Not only does QE distort bond and stock markets, it threatens the value of the dollar and has resulted in manipulation of the gold price. See here.

When US corporations send jobs offshore, the GDP, consumer income, tax base, and careers associated with the jobs go abroad with the jobs. Corporations gain the additional profits at large costs to the economy in terms of less employment, less economic growth, reduced state, local and federal tax revenues, wider deficits, and impairments of social services.
When policymakers permitted banks to become independent of market discipline, they made the banks an unresolved burden on the economy. Authorities have provided no honest report on the condition of the banks. It remains to be seen if the Federal Reserve can create enough money to monetize enough debt to rescue the banks without collapsing the US dollar. It would have been far cheaper to let the banks fail and be reorganized.
US policymakers and their echo chamber in the economics profession have let the country down badly. They claimed that there was a "New Economy" to take the place of the "old economy" jobs that were moved offshore. As I have pointed out for a decade, US jobs statistics show no sign of the promised "New Economy."
The same policymakers and economists who told us that "markets are self-regulating" and that the financial sector could safely be deregulated also confused jobs offshoring with free trade. Hyped "studies" were put together designed to prove that jobs offshoring was good for the US economy. It is difficult to fathom how such destructive errors could consistently be made by policymakers and economists for more than a decade. Were these mistakes or cover for a narrow and selfish agenda?
In June, 2009 happy talk appeared about "the recovery," now 4.5 years old. As John Williams (shadowstats.com) has made clear, "the recovery" is entirely the artifact of the understated measure of inflation used to deflate nominal GDP. By under-measuring inflation, the government can show low, but positive, rates of real GDP growth. No other indicator supports the claim of economic recovery.

John Williams writes that consumer inflation, if properly measured, is running around 9%, far above the 2% figure that is the Fed's target and more in line with what consumers are actually experiencing. We have just had a 6.5% annual increase in the cost of a postage stamp.
The Fed's target inflation rate is said to be low, but Simon Black points out that the result of a lifetime of 2% annual inflation is the loss of 75% of the purchasing power of the currency. He uses the cost of sending a postcard to illustrate the decline in the purchasing power of median household income today compared to 1951. That year it cost one cent to send a post card. As household income was $4,237, the household could send 423,700 postcards. Today the comparable income figure is $51,017. As it costs 34 cents to send one postcard, today's household can only afford to send 150,050 postcards. Nominal income rose 12 times, and the cost of sending a postcard rose 34 times.
Just as the American people know that there is more inflation than is reported, they know that there is no recovery. The Gallup Poll reported this month that only 28% of Americans are satisfied with the economy.
From hard experience, Americans have also caught on that "free trade agreements" are nothing but vehicles for moving their jobs abroad. The latest effort by the corporations to loot and defraud the public is known as the "Trans-Pacific Partnership." "Fast-tracking" the bill allowed the corporations to write the bill in secret without congressional input. Some research shows that 90% of Americans will suffer income losses under TPP, while wealth becomes even more concentrated at the top.
TPP affects every aspect of our lives -- from what we eat to the Internet to the environment. According to Kevin Zeese in Alternet, "the leak of the [TPP] Intellectual Property Chapter revealed that it created a path to patent everything imaginable, including plants and animals, to turn everything into a commodity for profit."
The secretly drafted TPP also creates authority for the executive branch to change existing US law to make the laws that were not passed in secret compatible with the secretly written trade bill. Buy American requirements and any attempt to curtail jobs offshoring would become illegal "restraints on trade."
If the House and Senate are willing to turn over their legislative function to the executive branch, they might as well abolish themselves.
The financial media has been helping the Federal Reserve and the banks to cover up festering problems with rosy hype, but realization that there are serious unresolved problems might be spreading. Last week interest rates on 30-day T-bills turned negative. That means people were paying more for a bond than it would return at maturity. Dave Kranzler sees this as a sign of rising uncertainty about banks. Reminiscent of the Cyprus banks' limits on withdrawals, last Friday (January 24) the BBC reported that the large UK bank HSBC is preventing customers from withdrawing cash from their accounts in excess of several thousand pounds.
If and when uncertainty spreads to the dollar, the real crisis will arrive, likely followed by high inflation, exchange controls, pension confiscations, and resurrected illegality of owning gold and silver. Capitalist greed aided and abetted by economists and policymakers will have destroyed America.

[David Guyatt]

This was an interesting report and reminded me of something I was told about 15 years ago.

Namely, that a decision was made in the late 1980's / early 1990's to move everything "south", by which was meant the southern hemisphere. All the gold's gone there, and a great many of the jobs too, as the foregoing article makes plain.

And if this was an accurate and true assertion, then it stands to reason that the US and northern hemisphere would be thoroughly plundered before the move was finalized.

[Lauren Johnson]

What would it mean to move gold south? Why south? Who and/or what would receive it? I just don't get this at all.

[David Guyatt]

What would it mean to move gold south? Why south? Who and/or what would receive it? I just don't get this at all.

Sorry Lauren, I didn't make this clearer - it wasn't just gold but effectively shifting the US economy to the unregulated southern hemisphere (I suppose India, China etc). By that I mean jobs, wealth, wealth generation etc.

This was a conversation I had with Catherine Austin Fitts, who had been told this by Nick Brady --- "the decision's been made, Catherine" were his words, as I recall. She was arguing for domestic jobs.

It was a conversation that stuck in my mind because of the enormity of it at the time (late 1990's and the conversation she had with Brady was during her time in the 1st Bush Amin, so 1989-93).

Today, we can clearly see that the new powerhouses are southern hemisphere nations.

[Lauren Johnson]

What would it mean to move gold south? Why south? Who and/or what would receive it? I just don't get this at all.

Sorry Lauren, I didn't make this clearer - it wasn't just gold but effectively shifting the US economy to the unregulated southern hemisphere (I suppose India, China etc). By that I mean jobs, wealth, wealth generation etc.

This was a conversation I had with Catherine Austin Fitts, who had been told this by Nick Brady --- "the decision's been made, Catherine" were his words, as I recall. She was arguing for domestic jobs.

It was a conversation that stuck in my mind because of the enormity of it at the time (late 1990's and the conversation she had with Brady was during her time in the 1st Bush Amin, so 1989-93).

Today, we can clearly see that the new powerhouses are southern hemisphere nations.

Indeed, I did get the part about the jobs. But you said this:

All the gold's gone there, and a great many of the jobs too,

But I guess you did not refer at all to gold.

[David Guyatt]

What would it mean to move gold south? Why south? Who and/or what would receive it? I just don't get this at all.

Sorry Lauren, I didn't make this clearer - it wasn't just gold but effectively shifting the US economy to the unregulated southern hemisphere (I suppose India, China etc). By that I mean jobs, wealth, wealth generation etc.

This was a conversation I had with Catherine Austin Fitts, who had been told this by Nick Brady --- "the decision's been made, Catherine" were his words, as I recall. She was arguing for domestic jobs.

It was a conversation that stuck in my mind because of the enormity of it at the time (late 1990's and the conversation she had with Brady was during her time in the 1st Bush Amin, so 1989-93).

Today, we can clearly see that the new powerhouses are southern hemisphere nations.

Indeed, I did get the part about the jobs. But you said this:

All the gold's gone there, and a great many of the jobs too,

But I guess you did not refer at all to gold.

Agreed. I wasn't being very precise.

But in my defence I was loosely using Paul Craig Roberts "loose" quote: "all of this gold is disappearing into Asian markets. The entire West is being drained of gold.""

[Lauren Johnson]

This was a conversation I had with Catherine Austin Fitts, who had been told this by Nick Brady --- "the decision's been made, Catherine" were his words, as I recall. She was arguing for domestic jobs.

I had a discussion with a friend about globalization. He claims globalization is a natural process of capitalism. I was saying that it was engineered but could not back it up, and quoting CAF would not but much more than hearsay evidence.

David and anyone, has the process of how this decisions was made and implemented been documented here or anywhere? Do the free-trade agreements sum it up? Is there more to it like messing with the tax codes or other things I can't imagine?

[David Guyatt]

This was a conversation I had with Catherine Austin Fitts, who had been told this by Nick Brady --- "the decision's been made, Catherine" were his words, as I recall. She was arguing for domestic jobs.

I had a discussion with a friend about globalization. He claims globalization is a natural process of capitalism. I was saying that it was engineered but could not back it up, and quoting CAF would not but much more than hearsay evidence.

David and anyone, has the process of how this decisions was made and implemented been documented here or anywhere? Do the free-trade agreements sum it up? Is there more to it like messing with the tax codes or other things I can't imagine?

A natural process of capitalism? Well, I suppose that inasmuch as capitalism being allowed to be wholly unregulated then the world being made into one exploitable, subservient market that is the desired outcome.

But let's look at reality here. As Tennyson said, nature is red in tooth and claw.

A "natural" process (outcome) of unregulated capitalism is organized crime: the global drugs traffic, sex trafficking, gun running, murdering competitors, the slave trade, selling fake medicines at inflated prices that don't actually work, selling diseased meat as food etc etc., and, of course, taking over the banking system to launder illegal proceeds and, ultimately, taking control of governments to make what is illegal legal.

These are the shadow traits. Natural, but wholly chaotic, destructive and de-civilizing.

On implementation, I vaguely remember that Chomsky discussed this in one of his books. As I recall, the setting was pre WWII (could even be WWI?) and the idea was to shift industry eastwards and use all the very cheap labour there ( an early version of moving "south"). This could've been Chomsky's What Uncle Sam Always Wanted and or World Orders Old & New.

[Lauren Johnson]

This was a conversation I had with Catherine Austin Fitts, who had been told this by Nick Brady --- "the decision's been made, Catherine" were his words, as I recall. She was arguing for domestic jobs.

I had a discussion with a friend about globalization. He claims globalization is a natural process of capitalism. I was saying that it was engineered but could not back it up, and quoting CAF would not but much more than hearsay evidence.

David and anyone, has the process of how this decisions was made and implemented been documented here or anywhere? Do the free-trade agreements sum it up? Is there more to it like messing with the tax codes or other things I can't imagine?

A natural process of capitalism? Well, I suppose that inasmuch as capitalism being allowed to be wholly unregulated then the world being made into one exploitable, subservient market that is the desired outcome.

But let's look at reality here. As Tennyson said, nature is red in tooth and claw.

A "natural" process (outcome) of unregulated capitalism is organized crime: the global drugs traffic, sex trafficking, gun running, murdering competitors, the slave trade, selling fake medicines at inflated prices that don't actually work, selling diseased meat as food etc etc., and, of course, taking over the banking system to launder illegal proceeds and, ultimately, taking control of governments to make what is illegal legal.

These are the shadow traits. Natural, but wholly chaotic, destructive and de-civilizing.

On implementation, I vaguely remember that Chomsky discussed this in one of his books. As I recall, the setting was pre WWII (could even be WWI?) and the idea was to shift industry eastwards and use all the very cheap labour there ( an early version of moving "south"). This could've been Chomsky's What Uncle Sam Always Wanted and or World Orders Old & New.

Thanks, David. As always, illuminating.