I have written previously that China is co-operating with the Federal Reserve, the US Treasury and the Bank of England to manipulate the price of gold and silver to keep them low to make their currencies look good. Jim Willie did not mention that co-operation but has said this manipulation will be ended soon by market forces. I agree with that. China and Russia have enough gold and sufficient trade surpluses and allies to replace the dollar as the world’s reserve currency as early as January to March of 2014. China is the world’s largest gold producer. China owns gold mines overseas. It only reports the gold it imports through Hong Kong so we do not really know how much gold they do have.
Remember Sun Tzu. He said, ‘when you are many pretend to be few’ and ‘when you are near pretend to be far.’ I would add that I believe China is also lying about their population. I think their total census would be much closer to 2 billion than it is to 1.3 or even 1.4 billion people.
Jim Willie has also told us that between 20,000 and 40,000 tons of allocated gold on deposit at bullion banks has been stolen. Bankers have the right to lease gold from Central banks and sell it as paper certificates to five different investors. Until recently they could just lease more gold from an idiot like Gordon Brown who sold Britain’s bullion at bargain basement prices to bail out the crooks at Deutsche bank. But China, India, the Gulf States and a few others have bought all the bullion. France had to invade Mali to steal African gold when Germany demanded the return of just part of their deposit at the Federal Reserve and at the Banks of England and France.
In his latest article Dr Jim Willie said that the dollar is set to collapse and that China is preparing a distributed system of clearing international trade based on one kilogram gold bars. One kilo = 35.274 ounces. At $7,000 an ounce that is $266.918. $7,000 is the price his sources told him would be the new price of gold. These kilo bars of gold would form the basis for letters of credit. Dr Willie also mentioned an associated price for silver at $250 an ounce. That would mean a gold to silver price ratio of 28 to 1. Currently, gold is more than 60 times the price of silver. Historically, the gold-silver price ratio has been 16 to 1, 12 to 1, 20 to 1 and points in between.
Lest you bullion investors suffer from excessive euphoria, I should remind you what Max Keiser said. ‘If gold ever went to $5,000 an ounce, I would go into hiding.’ Max lived in Paris and now lives in London. I would not want to live in either of those cities or in any American city when gold goes to that price. You are talking about a societal collapse.
Dr Willie has said that many foreigners do not really understand what is going on in America. I would add that most Americans do not understand what is happening either in their country or overseas. The U S government has 17 trillion dollars in debt it owes to bondholders. It also owes a few trillion dollars to Government Sponsored Enterprises (GSEs) like Fannie and Sallie Mae. They have 4 trillion dollars in state and local debt. And then there is the 222 trillion dollars it owes in unfunded liabilities. It grew 11 trillion dollars last year. This means that the total of unfunded liabilities is growing 915 billion dollars a month. That is substantially more than a billion dollars an hour.
Dr Willie never does tell us how easy it would be to solve our problems if we ever got rid of out current leadership. I will get to that point in a minute. But I would first like to discuss what he sees happening in our near future to take America down.
Dr Willie says we don’t have to talk of Black Swan events sneaking up on us and taking us by surprise. What surprise is it when Mark Carney, the former Goldman Sachs VP and current Governor of the Bank of England, says at the 125th anniversary of the Financial Times that it would be a good thing to grow UK bank assets from 2 trillion pounds to 9 trillion pounds. He also said London could be home to trillions of pounds in assets from the Shadow Banking system. Martin Wolf, the most widely read columnist at the Financial Times, agreed that Carney could take the UK right to where Iceland was in 2007. Only 1.4% of all bank loans in the UK go to manufacturing. Most loans are secured either by nothing, by fraud or by over valued real estate. Only in London can a swindler take out a billion dollar loan in New York, treat it as an asset for a billion dollar loan and then do that again and again. Carney wants to expand Britain’s role in financial fraud to make more jobs for the criminal elite.
Jim Willie focused on the US Treasury bond interest rate and on the repo rate. Repo stands for Repurchase agreements. Banks with no liquidity and no assets depend on short term overnight loans using US and UK Treasury bonds and gilts as collateral. China could easily squeeze the dollar and the pound by refusing to accept Treasury bonds and gilts as collateral. China would more than make up for the loss in its bond holdings by quadrupling the price of gold. Of course they might massively dump their dollars just prior to refusing to accept US Treasury bonds as collateral.
China has severe problems not mentioned by Dr Willie. Their population is far greater than they admit. They lack natural resources like water and energy. Their people are choking on pollution. Their manufacturing is geared to the export market. And their leadership ranges from bad to incompetent. China is run by the spoiled sons and grandsons of the men who went with Chairman Mao on the Long March back in the 1930s. These men are running businesses which will one day need a trillion dollars in US Treasury bonds to bail them out of their bad debts. That is another possible exit strategy from US dollars.
Dr Willie also cited the rise in the interest rate on US Treasury Ten Year bonds from 1.5% to almost 3%. It is currently around 2.55%. Rising interest rates are not good in a banking system built on fraud. The Federal Reserve has increased its Monetary Base (balance sheet) from less than a trillion dollars to 4 trillion just to keep interest rates low and asset prices high. This Monetary Base is high powered money. If it were ever loaned out, it could double or even triple the money supply in the public’s hands (M2) very quickly.
If interest rates ever went above 3%, China and everyone else in the world would have to dump their dollars. Interest rates are like rent. If the rent you collect goes up, then the value of the property you own is going up. But think of the US and the UK with their low interest rates as being property owners who own apartment houses in towns with strict rent controls. The only solution would be to sell all of your rent controlled assets as quickly as possible and buy anything else. That is what will happen to US bonds and UK gilts. If interest rates go any higher, the dollar and the pound will crash. Wages in real after tax terms will be cut in half overnight and Nationwide Food Riots will erupt. When the price of gold goes past $5,000, you and a few hundred million other people will be looking for secure shelters.
Dr Willie also leaves out what I have said about Nikola Tesla and the price of gold and silver. I would and have urged people in the past to buy gold and silver and to buy storable food and water filters. Yes. And I even said I would issue my alert to buy silver on a credit card when I thought the time was right. We are not yet at the point where I would recommend buying bullion on a credit card.
But mark this point. Nikola Tesla is the sell signal.
Suppose the government collapsed tomorrow and a US general went on the air and said we are arresting the bankers responsible for this financial debacle and seizing their assets both in the US and abroad. We will be releasing Tesla technology and other scientific advances to rebuild the economy. If for some strange reason, America gets an honest government that does share its secret scientific knowledge, then I would immediately sell every precious metal at market prices.
Nikola Tesla invented alternating current and radio. He had more than 150 boxes and trunks full of lab notes and experiments when he died in 1943. The US Navy and the FBI seized all of his works and kept them secret for 70 years. I am not the only one who believes that the Secret Government has Tesla technology. They could replace nuclear, oil and coal fired energy any time they wanted to. Tesla energy would essentially be free. This cut in the cost of utility bills would lower production costs and raise living standards. But it would also cut gold and silver to less than $50 an ounce because they could be extracted from the sea. The bankers want you to go into debt to buy back at $7,000 an ounce the gold they stole from you.
Our problems are easily solved. There is no reason that we should allow the banks to create money as a loan at interest and have us pay them with our labor for what they created out of nothing. We also need to end fractional reserve banking. We need to end interest bearing currencies. And we need to seize the tens of trillions of dollars the banks stole from us. If we don’t, the bankers will have to release a few plagues to kill more than 6 billion people because they stole our pensions and our savings.
References: This first article explains one exit strategy from our problems.
How And Why An American Military Coup Could Save The World
This article explains how we are being abused by the aristocrats of Wall Street.
Catherine Austin Fitts On Genocide And The Looting Of America
The Jewish World Order 622 BC – 2013 AD
Was John Hagee Told By The Israelis When They Plan To Blow Up The World?
That article from Jim Willie is here:
The Game is Over. King Dollar is Dead! – Gold to $7,000 Silver to $250+!