Gold Breakout: Three Major Factors…” The perfect financial storm will be at least three times worse than the 2008 financial crisis”

Monday, February 25, 2019
By Paul Martin

By: Jim Willie CB,
Monday, 25 February 2019

The Gold suppression game appears finally to be coming to an end. A Perfect Storm is hitting the Gold market, with an internal factor (QE), an external factor (SGE), and a systemic factor (Basel). These factors can be identified, each very powerful, each with a very new recent twist to alter the landscape. All three forces are positive in releasing Gold from the corrupt clutches of the Anglo-American banker organization. They have been willing to destroy the global financial structure and many national economies, in order not just to maintain the political power, but also to continue the privilege of granting themselves $trillion free loans. The owners of the US Federal Reserve, Euro Central Bank, and Bank of England have granted themselves free money in gifted pilferage for a full century. As the saying goes, a nation needs a central bank like an oyster needs a piano. In the last ten years since the Lehman Brothers failure, all systems have undergone the same reckless treatment that the mortgage bonds endured. They saw corrupted underwriting, corrupted title database, and corrupted demand functions.


The perfect storm in the Boston area involves three storm masses hitting the New England coast at the same time from different angles. One of the most beautiful sights in my 20 years in Boston was seeing a Nor’Easter slamming the coast with white snow laced with blue algae, visible in the sunlight angles. The perfect financial storm will be at least three times worse than the 2008 financial crisis that engulfed the subprime bond market. This time, the entire global bond market has been wrecked. The USTreasury Bond market has almost no legitimate buyers, has suffered massive dumpings in abandonment, and depends upon banker derivatives to fabricate phony demand. The corporate bond market is turning gradually into a BBB junk bond yard, after years of abused bond issuance devoted to share buybacks and executive options. The malinvestment has been astonishing and universal. The Emerging Market bonds have been kept afloat by Western banks, as they lent money to service the badly impaired debt. It can actually be stated with accuracy that the entire global bond market is subprime, led by the USTBonds.

Harken back to 2012, when the Swiss decided to install the 120 Euro-Swiss Franc peg. The publicly stated monetary policy was cover for a grand Gold price scheme which involved the USDollar, the Euro, and the Swiss Franc currency. It was very successful in bringing down the Gold price from its $1900 high, with full Euro Central Bank collusion, joined by massive USDollar Swaps. Together with the Quantitative Easing (QE) monetary policy from the US Federal Reserve, the Gold price has been stuck in a rangebound interval. However, an impasse has been reached, and the roadblock is being cleared.

In the last ten years, absolutely nothing has been fixed, no remedy even attempted, while all the errors, crimes, and reckless monetary policy that created the Lehman fiasco with the Global Financial Crisis, have been repeated on a global scale.

The Emerging Market debt is ready to explode. The Petro-Dollar has been largely dismantled, no evidence better than the crude oil price which cannot find its way above the $60 to $65 mark. Therefore, Wall Street energy portfolios, stuck with shale sector debt, are also set to explode. The corporate bond market is set to turn into junk, with GE, General Motors, and Deutsche Bank leading the parade of perhaps $1 trillion in corp debt into junk territory in the next year. But the grandest of the big stories is that the USTreasury Bond has become the global subprime bond.

Three factors will work to force the Gold price much higher, as a new chapter is unfolding. The factors are internal with QE, external with the SGE in Shanghai, and systemic with the BIS in Basel. One must always recall that the Gold price for almost a century had followed the money supply in a tight correlation. For the last ten years, the USD-based money supply has almost tripled. The process created a coiled spring. The Gold price is due to triple, making up for lost time. It just needs some internal, external, and systemic pushes.

The stage is set for another heavy big important Quantitative Easing (QE) initiative. The official monetary tightening has been a disaster. Next comes a reversal of policy, and resumption of extreme easing with heavy volume bond purchases. Maybe this time, it will include all types of bonds, from sovereign to bank bonds to general corporates to mortgages, even to energy sector bonds. A new wave of securitized bonds could occur, to facilitate monetization of debt, enabling the central banks to purchase them efficiently. Witness the dawn of the everything bond bubble yielding to the everything bond QE purchase program to save the Western financial system. It has been called the QE FOREVER bond initiative, which might be called upon to monetize the entire Western banking system. To be sure, the Gold price will respond with upward jettison to the conclusion of the full ruination of money. They masters must prevent a full banking system collapse.

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