'Game Over! Dollar Dead! Gold $7000' part 3 [Patrick Willis © Jim Willie]
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The REPO Market forces it. The Chinese might be orchestrating it, pulling levers, ordering actions, making phone calls, throwing their weight around. Their greater plan could be to cause the USGovt debt default and to force a regime change. Better described, they wish for a dismantle of the current form of the USGovt and its mis-Representative bodies. My best source has informed me that the Chinese Govt has already put in place a plan to write down $1 trillion in USGovt debt securities. Big changes are coming. The REPO Market might serve as the trigger device. The Chinese will then force a double in the Gold Price, which would bring them $1 trillion in like-sized profit. Think Reset. Their gold hoard is an order of magnitude greater than reported officially.
A few months ago, a strange story hit the press on JPMorguen taking steps to exit from the commodities business. It was given minor weight. Back in May 2012, the venerable broken JPMorguen CIO control room revealed astounding derivative losses. Obviously they lied on the details, and deflected the blame. It was not from FOREX trades linked to Southern European sovereign bonds, which all improved over the previous three months (by the way). The outsized losses, probably ten times larger than admitted, were linked to the fast rise in the 10-year USTreasurys. The interest rate derivatives were in the process of breaking down badly. The London Whale loss was the signal. The mainstream press enjoys distorting the news, but the Jackass prefers to report it and to interpret it.
The Saga of the JPM Funeral is ongoing and unstoppable. The casket is prepared. The old man is dead on the floor. The quick move from 1.65% on the TNX in May to 2.95% in September was sufficient to wreck the entire Interest Rate Swap derivative structure, kit & kaboodle. No minced words here, IRSwap structure dead and destroyed, barely limping along. The added piece of evidence to support the claim was the September event whereby the USFed led a round robin of flash trading to overbid the USTBond with the collusion of Wall Street banks. They might not have been eager to comply, but they were forced to do so. If the Interest Rate Swap machinery still functioned, there would have been no need to resort to such obvious tactics in the open, in full view. The IRSwap machinery that serves as the flying buttress to the USTreasury Bond Tower of Babel is broken. Big movements up or down in the TNX, the 10-year bond yield, are capable of wrecking the delicate extremely high leveraged derivative apparatus. It is managed by the Exchange Stabilization Fund under the USDept Treasury aegis, with JPMorguen CIO operational management. The exacerbation has come from the Big US Banks reversing their bond carry trade, which has badly depleted their capital. The capital is urgently needed to defend the USTreasury Bond Tower, and to supply the Interest Rate Swap derivative machinery. The capital is gone. They lack liquidity and are insolvent. Death awaits.
The final evidence of a wrecked House of Morguen is the massive property sale for a meager $725 million. David Rockefeller would roll over in his grave, except that he still breathes among the Satanic warm bodies, soon destined for the worms and nether world. His JPMorguen iconic former headquarters at One Chase Manhattan Plaza was sold for a measly $725 million, which deserves repeating. The tower itself is worth twice that figure, in a healthy market that fetches true value. One must wonder if the sweet deal is in return for a truckload of toxic USTreasury Bonds wrapped in a package deal. The same JPM HQ location is the property complex that houses their commercial gold vault. It is the largest vault in the world. One Chase Manhattan Plaza combines three main components: a 60-story tower, a 2.5 acre plaza, and a 6-story base, of which five floors are beneath grade (underground). Excavations, said to be the most extensive in New York City history, reached a depth of 90 feet during its construction long ago. The construction is ornate and elaborate, featuring white Italian marble travertine, and fortified to withstand both a nuclear attack and a massive flood. The L-shaped plaza levels the sloping site and conceals six floors of operations, which includes an auditorium and the bank vault. The motives for sale to a Chinese property conglomerate remain shrouded in mystery.
China just acquired the building that houses the world’s largest gold vault. Contrast with the frenetic Chinese gold imports in the last several months from Hong Kong, totaling 2000 metric tons in the past two years. Conclude possibly that China has decided it will no longer settle for domestically held gold and has begun to expand its global vault facilities, kind of like golden colonies or outposts, better yet arsenals and armories. The acquisition is an important step in the Grand Paradigm Shift of power moving from West to East. To put it in military terms, the Chinese just established a beach head in South Manhattan. It is more than a beach head. They took control of the USFed Operational HQ. Game over!! The USFed just surrendered!! The last people to know will be Americans. Word will filter through Wall Street. Watch the Wall Street investment banks soon announce the news of Chinese Govt debt being sold on US soil, just like in London. The whores of Manhattan can pivot and salute the Eastern master. The Chinese have captured the flag, by acquiring under duress the trophy tower. May John Pierpoint Morgan roll over in his two-timing grave also, an efficient agent for the Bank of England in the recapture of the US Colony a century ago.
Ever since the late 2008 events of financial firm collapse, the Big Banks lashed themselves together. Not just the New York banks, but the London banks and even the Western European banks like big German, Dutch, and French banks. If any one big Western bank fails, they will all suffer a failure event. There is security in numbers, which lashing does accomplish. The term comes from old ships at sea, which prevented sailors from being thrust overboard during stormy seas. They would tie themselves together with other sailors around the waist, then tie the ropes to the ship masts. In today’s financial stormy seas, the big banks are being rocked by insolvency, and rocked by impaired sovereign bonds, and rocked by interest rate derivative losses, and rocked by reversed carry trade losses, and rocked by legal challenges with court settlements, and rocked by departure of wise client funds, and rocked by damaged prestige. Their insolvency owes to profound losses in their portfolios of bonds and loans. Their illiquidity owes to sudden massive derivative losses. They are also being forced to comply with harsh Basel III Rules on maintaining sufficient capital. Again, insolvency plus illiquidity equals bankruptcy and failure. Finally the Big US Banks are insolvent and suddenly illiquid. Thus the JPMorguen prize property sale, to raise cash, and to wipe away bad paper.
The Big US Banks have begun to announce capital controls. It started with JPMorguen on client accounts, limiting their withdrawals and limiting wire transfer activity. The practice has recently spread to other big banks, following in the JPM lead. Shadow banking has come to the fore to show its ugly head. Clearly, such a capital control policy would not be necessary if the big banks had sufficient capital and sufficient liquidity. They have neither.
All the signals point to the same conclusion. The system is breaking down. The towers are falling. The paper mache structures have withered. The derivative machinery has been jammed. The confidence in the paper based system has vaporized. Nobody can foretell when the new system will arrive, but its description can be offered in rough terms. It will be from a Global Currency Reset, with a vast redemption of USTreasurys, a lost USDollar global currency reserve, and discredited sovereign bond backbone for all major currencies. It will feature a Gold Trade Standard, with trade settled on a net basis with gold bullion, supported by gold intermediary bankers. It will rely upon Gold Trade Notes that serve as Letters of Credit. It will see a massive Gold Trade Central Bank, whose embryonic form is noted in the BRICS Bank. Expect the bank to function as a processing plant at a later date, to convert USTBonds into Gold bullion. The same bank will process UKGilts, EuroBonds, and JapGovtBonds into Gold Bullion. The de-centralized system will be trade based, not bank based. Trade rules will dictate banking rules, to displace the Anglo banker hegemony. The New York and London offices, even the Swiss offices, will attempt to continue their sabotage. But they can only win delays. See the tactics exerted upon the G-20 Meetings. The BRICS initiatives and formal progress are led by Russia & China. They cannot be stopped, mainly because they attempt survival by establishing the next chapter’s architecture.
The Grand Paradigm Shift is in progress. My sources indicate that the 5000 metric tons of Gold bullion moved from London to points East between April and July 2012. The flow eastward never stopped. The pace has continued. The Gold bullion continues to be shipped in enormous staggering volume. The Gold Community has only a rudimentary comprehension of what is happening in the clandestine shipment of gold. The pillars of the community seem either unaware or unwilling to report anything but the supersized Chinese purchases through the Hong Kong window, the Indian demand, and the Turkish demand. My belief is they lack insider contacts on the phenomenon movement of gold by the White Dragon Family and their Triad escorts. The agreements have already been made on the new Gold Trade Settlement system with its newly imposed Gold Trade Standard. They have agreed on a $7000/oz gold price, with a similarly exalted silver price of at least $250/oz. Decisions have been made final. The implementation is slow but steady. The game is over. The King Dollar is dead. All that remains is the funeral, the war in its wake, and the retaliation from the Satanic fortress and its legion of diabolical subjects.