IT’S THE GOLD AGAIN FOLKS: PART FOUR: THE LONDON FIXDecember 11, 2013
If you've been following my blogs here the past few days, you'll have noticed the following:
- The Vatican is being audited (a first), by an accounting firm (Ernst and Young) which is also the auditor for the Bank of International Settlements, and for Lloyd's of London;
- The US Federal Reserve system has not been externally audited, and I have predicted there will be calls internationally for precisely such an audit, which will be (surprise surprise) refused;
- The suppression of the price of gold has been a constant of US foreign policy since at least 1974 (and probably before), and this has been accomplished by massive gold sales;
- These sales might have been accomplished by selling other countries' reserves held in the Fed;
- Gold bullion in central banks has been leased over and over in a vast rehypothecation scheme, and the ultimate benefactor of this vast amount of liquidity has been the US black budget;
- High speed trading increases liquidity exponentially (another benefit to the military industrial complex);
- The Chinese have stopped stockpiling US dollars in their foreign currency reserves;
- Japan and China are at cross purposes over some island rocks in the South China sea, ostensibly over the resources there, but in my opinion really because they would seem to be possibly perfectly positioned for high-speed relay stations requiring great security (and isolation on an island is wonderful security);
- The Chinese are perfectly aware that the Fed has deliberately suppressed gold prices to prop up the dollar, and they've about had it (can't blame them, really); and finally,
- The U.K.s Royal Mint is planning to issue physical bitcoins with a gold content of five hundred pounds sterling, adding a new twist to the gold-rehypothecation scheme. (Now, there's one thing I didn't mention yesterday about this particular point, and that is that there have been quiet rumors that a full-scale financial war is on between the UK and USA, or rather, between London and Wall Street, over just who is going to be the financial capital of the world. This could be taken as a signal of that conflict, for gold-coin-backed bitcoin -sans the reservations I expressed yesterday - would be a powerful temptation to people fed up with the financial and military shenanigans of the USA over the past decade.)
Bear these points, and particularly number 10, in mind as you read this:
Isn't that convenient? a nice thing to have laying on the table if one plans to issue gold backed bitcoins if one can manipulate the price of gold to make sure the value of the currency never falls below the prince of the gold content of the coin, sparking a "run" on the coins as people rush to redeem them. Why, with such a tool in hand, one could rehypothecate those coins at very high speeds and really manipulate things... and collect the fees for doing so. As I've observed elsewhere, the net effect of this computer-driven market has been to decouple price from value, creating a virtual market bearing no real connection to productive human value and reality, and such a situation is tailor-made, as the article above points out, to be gamed in any number of ways.
So it boils down, now, once again, to two important factors: (1) trust, and (2) force, and the BRICSA nations and the West are engaged in a race to establish both. The West is losing trust and it seems evidence that there's little that can be done, at least for the immediate future, to restore it. Notably, as the article points out, one important bank involved in the London fix is the HSBC Bank, the Hong-Kong and Shanghai Banking Corporation, a British Bank, but one with deep ties and roots in China... so, watch China's moves now, very carefully.
See you on the flip side...