December 9, 2013 By Joseph P. Farrell

Yesterday I shared the Zero Hedge discovery of an important document in the US State Department detailing a discussion between then Secretary of State Henry Kissinger and several advisors. You will recall that Secretary Kissinger was disturbed that Europe should be making moves to move to a unilateral gold standard, and therefore away from the US dollar as the reserve currency.  Now, within the wider context of the Vatican audit, I also predicted that there will be international calls for an audit of the US Federal Reserve, which, of course, will never be acceded to, but the calls, and the refusal, will be sufficient to drive confidence in the wobbly Anglo-American financial-ponzi system and its high speed trading-driven stack market casinos into further disarray. There is another component to retain in this context as you ponder the article below, and that is the recent Chinese announcement that they will no longer stockpile US dollars as a foreign currency reserve. This comes at a time of renewed Sino-Japanese tensions over the Senkaku islands, which I have suggested might be about more than nature resources, but rather, a convenient place for placing such high-speed trading systems. Whether that last scenario is true or not remains to be seen, but now there is this news:

China is fully aware of gold price suppression and planning to overthrow it

Now I want to draw your attention to a significant statement:

"Back in October gold researcher Koos Jansen and Jan Skoyles of The Real Asset Co. in London called attention to commentary by Zhang Jie, deputy editor of the Chinese publication Global Finance and a consultant to the China Gold Association, which cited the Federal Reserve's manipulation of the gold market to protect the U.S. dollar's standing as the world reserve currency.

"Jansen has obtained a much better English translation of this Chinese commentary, and it includes this observation about gold leasing by Western central banks: 'Through continuous gold leasing the gold in the market can be circulated and produce derivatives, creating more and more paper gold. This is very significant for the United States. Gold leasing is a major tool for the Federal Reserve and other central banks in the West to secretly control and regulate the gold market, creating gold credit derivatives and global credit conflict.'" (Emphasis added)

Now, please note what has happened: an "official" for a world power, and Asia's largest economy, has confirmed the model that I have been suggesting over and over: namely, that one component of maintaining US dollar hegemony and sustaining the voracious appetite for the military black budget and covert operations slush funds has been the re-hypothecation of gold over and over again.

For this reason, the Fed has, I suspect, been refusing to return major bullion reserve holdings of other nations. It can afford to return a few tons to small holders, but returning over three thousand tons of the stuff to Germany is out of the question. It most likely was sold off to suppress gold prices, or re-hypothecated so many times that to honor any pledge to return it would be to provoke a "run" on other countries' reserves, which cannot be allowed to happen, for the reserves are not there...

Which leaves only one thing backing the dollar: brute force. And let's face it folks, brute force isn't a very good way to back any currency, for if military fortunes are reversed, then one can only take the course of converting one's internationally worthless Reichsmarks into other more stable currencies or, bullion and other commodities...

See you on the flip side.