Climacterics Coming – Prepare!
Friday, 16 August 2013
“The whole concept of creating money without toil or risk is an integral province of the Federal Reserve. I believe that one way or another, the Federal Reserve and all it stands for will be eliminated. The process by which this will occur worries me. I believe it will take a huge disruption of our current economic system in order to eliminate the Federal Reserve and its immoral process of money being created out of a computer and thin air.
“The process of creating money from “nothing” makes a mockery of real work of all kinds. Thus, by inference, I am calling the Federal Reserve an evil institution. The more so, since it denigrates gold, which is, and has always been, true wealth, wrung out of the earth through man’s sweat and toil and risk.”
Richard Russell, dowtheoryletters.com, 8/9/2013
But The Era of The Fed’s Creating Money from “Nothing” is soon coming to an end. That is because it has in the 100 years of its existence created so much Fiat Money that the Purchasing Power of the $US has been diminished by over 95% (See Deepcaster’s Free Report).
Thus, even if QE were stopped today, the Central Banks’ QE already in the System will ensure that The Major Climacterics which we have been forecasting will come to pass.
For one, we are on the Threshold of Price Hyperinflation already (with Real U.S. CPI, e.g., at 9.62% [See Note 1] contrary to Bogus Official Figures).
It is thus understandable that the private for-profit Fed and other Major Central Banks are, and have been for years, engaged in a campaign to discourage the use and holding of Real Money, Gold and Silver, by repeatedly suppressing their paper prices.
Gold and Silver are the Miners’ Canaries, as it were, signaling increasing Inflation. And a flight to Gold and Silver would increasingly devalue the Bankers’ Paper Fiat Currencies and Paper Treasury Securities.
But worldwide demand for Physical is rising, as reflected in increasing premiums for physical. This, of course, puts upward pressure on the Paper Spot and futures prices as reflected recently in the GOFO rate.
“What is unclear, is why GOFO rates continue to be negative (and are getting more negative). As we laid out over a month ago, it may be one of many things:
- An ETF-induced repricing of paper and physical gold
- Ongoing deliverable concerns and/or shortages involving one (JPM) or more Comex gold members.
- Liquidations in the paper gold market
- A shortage of physical gold for a non-bullion bank market participant
- A major fund unwinding a futures pair trade involving at least one gold leasing leg
- An ongoing bullion bank failure with or without an associated allocated gold bank “run”
- All of the above
“One thing we do know that has changed since then, is that JPM’s gold bullion holdings have slid to fresh record lows and JPM has been forced to scramble to procure gold from both HSBC and Scotia. Is there anything else going on behind the scenes? Absolutely (coughbundesbankcough), alas as usually happens in cases like this, we will learn the whole story after the fact. That’s ok: we have lots of popcorn, and unlike those who rely on the JPM vault for storage purposes, our physical holdings are always at arms length.”
“Gold Collateral Situation: ‘It’s Very Complicated’”
‘Tyler Durden,’ zerohedge.com, 8/9/2013