18 October 2009
Jim Willie CB,  “the Golden Jackass”

* CIA Documents Exposed
* Exchanges with Former Bankers
* Gold & Upcoming 50% US$ Devaluation


Special Report #2
Issue #67

OPEN EVIDENCE OF USGOVT GOLD SUPPRESSION

$$$ USFED HAS HIDDEN GOLD SWAP AGREEMENTS. SUPER SLEUTH G.A.T.A. HAS OBTAINED PROOF OF USGOVT GOLD CONTRACTS USED TO SUPPRESS THE GOLD PRICE. THIS IS A SMOKING GUN OF HIGH ORDER! $$$ What an incredible preface for the special report! The US Federal Reserve admits to hiding its Gold Swap Accords, according to the GATA committee headed by Chris Powell and Bill Murphy. GATA has gone global with the story. They wrote, "The Federal Reserve System has disclosed to the Gold Anti-Trust Action Committee that it has Gold Swap arrangements with foreign banks that it does not want the public to know about. The disclosure, GATA says, contradicts denials provided by the Fed to GATA in 2001, and suggests that the Fed is indeed very much involved in the surreptitious international central bank manipulation of the gold price particularly and the currency markets generally." See the Business Wire article (CLICK HERE).

CIA DOCUMENTS EXPOSED

$$$ A RELEASED C.I.A. DOCUMENT CONFIRMS GOLD SUPPRESSION STRATEGY. $$$ The intrepid Zero Hedge has posted another USGovt document from 1968 that details the official desperation in actions taken to suppress the gold price. The documents referred to rigging the international currency markets in favor of the USDollar. This document is a declassified memorandum from the files of the Central Intelligence Agency. USGovt interest in supporting the USDollar by supressing the gold market has never ceased in recent decades. The Zero Hedge posting about the CIA memo is headlined "The CIA Chimes In On Gold Control" which is well worth a view (CLICK HERE). Previous posted articles revealed how critical it has been for the USGovt to remain in full control of gold, as seen in other declassified documents by the US State Dept. The CIA presents comparable important high-level deliberations related to gold by the previous administrations. The evidence is not so much smoking guns as it is putting gold on the radar of strategic importance, to demonstrate official awareness. The documents outlined key strategic points, as follows.

The United States loses influence in world affairs whenever:

  • The dollar is weak in exchange markets

  • There is a major outflow of gold; and/or

  • We are obliged to pressure countries into holding dollars or giving us payments assistance.

The US position can also be improved by action on the international monetary system to:

  • Decrease vulnerability to confidence crises

  • Increase world monetary reserves (liquidity); and

  • Improve tools for adjusting payments surpluses and deficits.

With $33 billion of foreign dollar holdings ($16 billion in official hands) and only $10.7 billion of gold in the US reserve, the risk is clear. To contain these pressures our strategy is:

  • To isolate official from private gold markets by obtaining a pledge from central banks that they will neither buy nor sell gold except to each other;

  • To bring South Africa to sell its current production of gold in the private market, and thus keep the private price down.

EXCHANGES WITH FORMER BANKERS

$$$ ZERO HEDGE IS DOING TREMENDOUS YEOMAN INVESTIGATIVE REPORTING THAT BORDERS ON HISTORICAL SIGNIFICANT. THEY PROVIDE DETAILS ON THE USFED EXCHANGES BETWEEN CARETAKER PRESIDENT FORD DURING THE TIMES AFTER THE USGOVT BROKE THE GOLD STANDARD. HISTORY WILL TELL MORE CHAPTERS TO THE STORY IN FUTURE YEARS, NONE COMPLIMENTARY. $$$

Harken back to the event back when the United States betrayed the world, delivering the many nations USTreasury Bond paper instead of gold, in exchange for finished products and raw materials, in order to satisfy current account deficits (trade gaps). The story is surely replete with shock, scrambling behind the scenes, and financial fortification in defense. They openly discussed the impact of monetary growth and the resulting challenge of locating and pricing additional huge gold reserves. Their work exposes early hostility between the USFed and a much more independent USDept Treasury, like before Wall Street infliltrated and subverted the ministry in 1992 by Robert Rubin of Goldman Sachs. The USFed had an objective to bring the Treasury under control, through insult, recommendations, influence, and intimidation. The memos reveal how the United States orchestrated global dominance that turned into privileged hegemony, full of resentment and abuse of power. Private syndicate creation was the privileged grand fruit. The following historical passage was released. The players created a system designed to grant the United States a privileged position. It was a prescription for global financial dominance and control, carefully crafted.

See the important Zero Hedge article (CLICK HERE).

"On 3 June 1975, Fed Chairman Arthur Burns sent a 'Memorandum For The President' to Gerald Ford, which among others CC:ed was Secretary of State Henry Kissinger and future Fed Chairman Alan Greenspan, discussing gold, and specifically its fair value, a topic whose prominence, despite former president Nixon's actions, had only managed to grow in the four short years since the abandonment of the gold standard in 1971. In a nutshell the entire Burns argument revolves around the equivalency of gold and money, and furthermore points out that if the Fed does not control this core relationship, it would 'easily frustrate our efforts to control world liquidity' but also 'dangerously prejudge the shape of the future monetary system.' Furthermore, the memo goes on to highlight the extensive level of gold price manipulation by central banks even after the gold standard has been formally abolished. The problem with accounting for gold at fair market value: the risk of massive liquidity creation, which in those long gone days of 1975 'could result in the addition of up to $150 billion to the nominal value of countries reserves.' One only wonders what would happen today if gold was allowed to attain its fair price status. And the threat, according to Burns: 'liquidity creation of such extraordinary magnitude would seriously endanger, perhaps even frustrate, our efforts and those of other prudent nations to get inflation under reasonable control.' Aside from the gratuitous observation that even 34 years ago it was painfully obvious how 'massive' liquidity could and would result in runaway inflation and the Fed actually cared about this potential danger, what highlights the hypocrisy of the Fed is that when it comes to drowning the world in excess pieces of paper, only the United States should have the right to do so."

"So to all conspiracy theorists claiming that gold is being manipulated on a daily basis by the Federal Reserve: when it occurs over and over, and is so well documented, it is no longer a theory, it is merely sad. And the fact that the US government goes to great lengths to hide the illicit dealings of the Federal Reserve, which through its monetary tentacles, has prima facie control over not just US policy but also over sovereign governments, is an unprecedented failure in the checks & balances system that the Founding Fathers had planned when they created the United States of America. Yet saddest is that the United States no longer pursues strategic goals that are in the best interest of the majority of its citizens, but merely manipulates other, less powerful nations into a servile existence that only provides gain to a very limited subset of the American financial oligarchy. It is time for the Fed's unprecedented control over affairs, both global and domestic, to end."

GOLD & UPCOMING 50% US$ DEVALUATION

$$$ GOLD VERSUS CENTRAL BANKS IS THE REVEALED WARFARE. AN ASTUTE ANALYST EXPLAINS THE NEXT USFED STRATEGY, IMPOSSIBLE TO IMPLEMENT. THEY MUST PUSH THE USDOLLAR DOWN, BUT MAINTAIN A STABLE GOLD PRICE. GOOD LUCK! $$$

CNBC hosted an interview that reveals how when investors own gold, they are fighting every central bank. My addition is: every central bank in the West, plus Japan. In late September, CNBC broadcasted a remarkable 6-minute interview with Jim Rickards, a financial strategic analyst from the Virginia-based consulting firm Omnis. His work deserves more attention, a top level analyst. Here is his profile bio background (CLICK HERE). Rickards was asked to analyze an essay published the Wall Street Journal by USFed Governor Kevin Warsh. This is the same USFed governor who this October acknowledged to GATA that the USFed has been concealing records of its Gold Swap arrangements with foreign banks. The essay entitled "The Fed's Job is Only Half Done" (CLICK HERE) revealed an outline of plans, goals, and major challenges. This is extremely high level strategic thinking. The CNBC interview is brief but very powerful. Rickards speaks fast and not very clearly, but reverse the ticker and replay portions if you wish (CLICK HERE).

Chris Powell described the CNBC interview with Jim Rickards, and its implications. Powell wrote, "Rickards construed Warsh's essay to mean that the Fed will be seeking to regulate the gold price closely even as the Fed needs to devalue the dollar by about half over the next 14 years to restore solvency to the United States. The purpose of the Fed, Rickards remarked, is to inflate the dollar to prop up the banks. Claims that the Fed's purpose is to achieve 'price stability' are manifestly nonsense. Central bankers, he added, now plan to turn the International Monetary Fund's Special Drawing Rights into the new world reserve currency replacing the dollar, a new round of money printing to create some stability in the world financial system during the dollar's steady but gradual and controlled devaluation. Rickards said he expects gold to go to $2000 but added, 'When you own gold you are fighting every central bank in the world.' Of course you have been hearing such things from GATA for some time."

◄$$$ STRATEGIC PLANS WILL BE TREACHEROUS TO CARRY OUT. A DIFFICULT BALANCING ACT COMES TO PREVENT A GOLD EXPLOSION IN PRICE WHILE THE USDOLLAR IS STEERED DOWN LOWER. $$$

What follows is an editorialized account of what Rickards stated in interview. My interpretations run parallel to Powell and GATA. The USFed watches capital utilization and the jobless rate in order to decide on its Exit Strategy, which means to hike interest rates again and drain liquidity from the financial system. They face an impossible task. But Rickards believes the USFed watches asset prices, meaning gold, more than the major stock indexes. The USFed wishes to pre-empt and interrupt the USDollar collapse. Rickards believes a $1500 gold price would signify a collapsing USDollar. He believes the USFed should have hiked rates at least six months ago, but doing so was not politically feasible. It is still not. Rickards believes that if gold reaches $1500 to $2000, the USFed will be compelled to hike rates by 50 to 75 basis points immediately. The USFed wants a 50% devaluation in the US$, but must attempt to manage the decline gradually. The US$ might collapse rapidly anyway, if it sees in advance the plan for such a devaluation. The gold price could rise sharply if it suspects the US$ is rapidly dying.

Rickards dismisses the legitimacy of the US Federal Reserve maintaining price stability. He argues for a 50% US$ devaluation. The USDollar must be inflated because the ruined debt securities greatly eclipse available money to pay for it. Worse, the USGovt has contingent liabilities of running into the tens of trillion$. He said, "What [the USFed does] is inflate the dollar to prop up the banks. There is no feasible combination of growth and taxes that can fund that liability." He concludes that the USGovt could fund about half the total liabilities in the next 14 years, translated into a devaluation of the US$ by half over that stretch of time.

The mission of the USFed, owned by a consortium of banks, is to ensure that the big banks are repaid for failed assets in a general sense. Public knowledge of the unstated bank welfare mission should outrage the public. Their objective can only be accomplished if they inflate the money supply enough to cover losses and the missing interest. A severe dilution of the USDollar valuation does the job, but that imposes a stealth tax on the citizenry. The money supply continues to suffer from aggregate growth from more loans made. The banking system is and always has been a pyramid scheme during the fiat times, without gold basis. It can be kept going only by continually creating more debt. See the Huffington Post article (CLICK HERE).

The G-20 Meeting in Pittsburgh annointed the Intl Monetary Fund as the newest central bank. It manages a balance sheet, issues debt, and collects revenue. It even holds gold pledges. A handoff is in progress, to displace the US$, and to permit the IMF Special Drawing Right basket of currencies usage in the global economy, to fuel the flow of money and credit. Only after the SDR basket handoff can the US$ be properly devalued, but that presents a new dilemma to handle the US security implications from an implosion of the US financial ship of state and its economy. The USFed must interrupt the unstable decline in the USDollar. Even with other central banks working in coordinated fashion, the financial markets are more powerful and win eventually. Gold fights all the central banks because it limits their ability to print money. THIS IS HISTORY IN THE MAKING, AS THE UNITED STATES RISKS A TOPPLE INTO THE THIRD WORLD.