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4/23/13, "Aftershocks," Zero Hedge, Authored by James Howard Kunstler, via The Burning Platform blog,
"If the FBI can track down two homicidal Chechen nobodies inside of
forty-eight hours from their Boston bombing caper, you kind of wonder how
come the Bureau can’t detect the odor of racketeering, insider trading,
and wire fraud in this month’s orchestrated smackdown of the gold
futures markets,
including the parts played by the Federal
reserve, one or more too-big-to-fail banks,
self-interested big money
players such as George Soros, slumbering regulators at the
Commodities
Futures Trading Commission,
and tractable editors at The Wall Street
Journal and The New York Times.
Of course, US Attorney General
Eric Holder, who oversees the FBI, has done a fair imitation of a
Brookes Brothers store window mannequin for four years, but surely
somewhere in the trackless labyrinth of American law enforcement there
exists some dogged rogue investigator with a filament of nagging
curiosity who might piece together the clunky train of events that may
amount to the financial crime of the century. For instance, it
can’t be so difficult to determine who was behind the several hundred
ton mass dump of paper gold contracts a week or so ago. There must be a
pretty simple record of the transaction, retrievable with a warrant or a
subpoena. Whatever entity did it — still ostensibly unknown —
knowingly generated losses in the neighborhood of a billion dollars for
itself. Was this just the cost of doing business? Or a favor owed, say,
from a bank to its godfathers at the Fed, carried out to make the dollar
look relatively a lot less unsound than it really is? Or a ruse to
allow the custodians of bullion in US depositories re-acquire at bargain
prices gold that has been stealthily hypothicated into oblivion? Or
just to divert attention from their inability to make good on contracted
deliveries of actual physical gold.
No official has yet answered why the Federal Reserve Bank of New
York told the German government a couple of months ago that it would
take seven years to return that country’s gold held in safekeeping
(across the ocean from the Russians) since the Cold War. The NY Fed
must have a vessel under contract that makes the proverbial slow boat to
China look like an ICBM.
Doesn’t anybody want some answers to these questions,
including how come the two aforementioned major newspapers published
front-page stories calculated to justify, if not provoke, the most
extreme negative sentiment in the precious metals markets, seemingly
coordinated with Goldman Sachs advisories to short those markets? And
what about a glance at the trading records to see who executed massive
naked shorts? Wouldn’t it be interesting if they were the same parties
as the dumpers? And why? - other than a strenuous intervention in the
markets to make those markets look unreliable? Does anyone even
remember that the purpose of financial exchanges is to verify and
authenticate the clearing of trades to provide confidence that markets
are honest so that real business can be conducted?
What the interveners have accomplished is only to prove that the gold and silver derivatives markets are unreliable. They
may have smashed the trade in that kind of paper, but only achieved a
firmer divergence between the derivatives markets and the bullion
markets where, for example, the premiums on delivery of silver ounces
makes the price exactly equal to the pre-smackdown price. Anyway, nobody believes that the London Bullion Market Association (LBMA) or that the New York Commodity Exchange (COMEX) can deliver.
Meanwhile, runs on bullion contracts were starting to uncover a
contagion of swindling in precious metals obligations that pervaded the
western banking system. It was not a coincidence that the smackdown happened three weeks after the Dutch bank
ABN Amro notified clients that it would only satisfy demands for
redemptions of gold held in its custody with equivalent cash payments. “No
gold for you today!” A fair inference based on subsequent events would
be that all the custodians of physical gold bullion have misreported
their holdings. And now that actions by the European Union and
its agents have ventured into the dangerous territory of plain
confiscation, there is not a whole lot of faith throughout the western
world by people who are paying attention that an account of any kind in
any financial institution is safe. There is good reason to fear runs on
everything.
Because the smackdown organizers pulled off
their operation in a panic, they probably ignored the potential further
negative consequences of their stratagem, namely a worsening
loss of confidence in banks generally and in the trade of abstract
financial instruments in particular, including currencies. Nervous
public officials may be brooding on imminent “bail-ins” and currency
controls, but the public may be ready to bail out of the prevailing
banking model into things that have been considered more money than
“money” for a few thousand years, namely real gold and silver. The basic fact remains: there isn’t enough to go around."
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