GOLD DEFAULT DEAD AHEAD: The COMEX and London Metal Exchange are living on borrowed time in their corrupt gold game. They sell paper gold, and precious little actual gold metal. See a refreshing straightforward interview aired on CNBC of all places. It is by Jurg Kiener, CEO of Swiss Asia Capital. He points out the dual market for gold, one paper and one metal. He expects soon the US ‘gambling price’ gold market in COMEX and LME to default. By that he means a return suddenly to physical price determination. He is quoted to say THE GOLD PRICE WOULD DOUBLE VERY QUICKLY, LIKE IN DAYS AFTER THE EXPECTED METAL DEFAULT. One should expect the interview to be lifted and removed from their website within days, after they realize the explosive nature of his words.

THE FAVORABLE DISCONNECT: In August, my analysis pointed out that a disconnect was necessary for the gold price to rise independently of the USDollar. Gold is no longer just an anti-US$ trade, but rather a trade on global monetary inflation. With today’s virtual global rate cut, one can herald the transition as complete. Notice how since mid-September, the gold price has risen with the USDollar DX index, shown in the big green ellipse. Liquidations and monetizations will go hand in hand, once properly understood. Gold has begun to respond to anticipated extreme new US$ money supply growth and supply needs.

USDOLLAR RALLY AS SIGNAL OF DEATH: Few seem to comprehend that the USDollar is rallying recently as a result of the imminent death of itself and the USTreasury Bond. A vast liquidation is underway of speculative trades, and of US bank assets. For years many analysts properly understood that the USEconomy is debt dependent. Now credit is drying up, and being denied even to good credit risk customers. The USEconomy is falling off the cliff, and evidence mounts. See car sales in September, down almost 30% by Toyota, down 34% by Ford. Layoffs by the tens of thousands are next, right down the vertically integrated car industry layers. As the USEconomy and US bank system continues in death spiral, the USDollar rallies, during unspeakable ruin to US fundamentals. Recall that the tide went out along the shores in Indonesia and Thailand right before the great tsunami hit almost three years ago. Ditto here! The banking crisis and extreme distress that remains stubbornly unfixable in the Untied States urgently motivates foreigners to quickly assemble, implement, and announce a replacement world currency basket. Watch for a euro currency split soon, where Nordic version will compete viciously against the dead USDollar.

HUGE RISK OF LOSING WORLD RESERVE CURRENCY: As preface, the world banking structure rests atop a world currency foundation denominated in USDollars, with USTreasury Bonds and USAgency Mortgage Bonds serving the primary role as financial instruments. These toxic building blocks are all really bad lego blocks. Foreigners must respond very soon, to replace the US$ as global reserve currency, or else risk a similar implosion to their banking systems. Many USAgency Bonds have been replaced by USTBonds, not much of an upgrade. If the USTreasurys soon suffer in the heart attack seizures underway, foreign economies will be at risk of serious deterioration. So foreigners are working toward a solution. One might be announced soon, with a new world reserve basket announced, based upon the Euro, Russian ruble, Japanese yen, and newly crowned Gulf dinar. The common theme is these are all currencies from nations boasting export surplus. They are taking action, but behind the scenes, like in Berlin. The consequence to the USEconomy is dire. The beleaguered nation would be forced to attract foreign capital, and bid up foreign currencies in order to purchase crude oil. The word inflation would soon be replaced in the press networks with the word “hyper-inflation” as the Untied States enters the Third World overnight. It seems that the vast majority will be caught blindsided.

THREATENED FRANCHISE OF CENTRAL BANKS: The other big powerful underlying failure in progress is of the central bank concept, and its many franchises. They essentially install central planning, Soviet Politburo style, complete with failure. The central bankers around the globe must be panicking over their common failure. They have one thing in common, overarching above trade surpluses or deficits. That common trait is they all manage debt from a fiat currency, and extend credit to inflate. They acted in coordinated style today for the first time in their history. Call it a panic! Central bankers are all scared witless.

THE BIG LIE ON THE WALL STREET BAILOUT: The historic $700 billion Congressional bailout bill had some key added provisions over the failed House bill. The new funds can buy back bonds owned by foreign investors, like those defrauded in Europe and Asia. The American public was told that the US banking system would have blockage unclogged. BS! It was a congame again, after foreign investors demanded restitution immediately, or else! The US banks will remain clogged. When almost nothing is fixed concerning US internal bank distrust due to toxin floating around, people will eventually realize the US public just paid for Wall Street fraud of foreign financial firms. It might be even worse. Foreign firms can possibly package any kind of rubbish, toxin, or acid into a bond for US swap. No end to the fraud. Oh, lest one forget, the $700 billion is only 15% to 20% of what might ultimately be needed. The overall tally will be much larger, for total bailouts, nationalizations, FDIC refills, tax stimulus, and ongoing programs to rework mortgages. The people have been ignored so far.

EFFECT OF ABSENT SHORT-TERM CREDIT: Few seem yet to comprehend the depth of the risk to the USEconomy if short-term credit continues its vanishing act. Most realize when the US banks are insolvent and lend less, the USEconomy is assured a recession. They do not comprehend that when short-term credit is denied, the USEconomy disintegrates. Imagine a man whose bones are turned into mush, trying to walk. That is the economy with insolvent banks. The man becomes a body without a heart and blood circulation when short-term credit is absent. The commercial side requires it for supply of food, gasoline, housewares, hardware, building materials, and more. Imagine riots for toilet paper, let alone gasoline and food! The financial side requires it for supply of ATM cash, credit card usage, and even payroll income. A heart attack is not a proper analogy. More like a science fiction movie where the victim is vaporized, or is burned suddenly into a heap of plasma.

FUTILITY OF SOLUTIONS: Few pundits, analysts, Wall Street observers, and banking officials seem to comprehend that solutions are almost all flawed. Where is the motive to generate jobs for legitimate income, like infrastructure development or reversal of Asian job exodus??? Where is the connection between Asian investment since 2001, job creation there, and a delayed reaction of the complete destruction of US banks and more? Are they all stupid? Maybe not, but surely compromised, indoctrinated, and committed to a system whose foundation is built on shifting sands. Call it a corporate executive sellout of America. The solutions fail because they are all debt based, like with new USTreasury Bonds to finance bailouts, like with USTBonds in swaps to banks for cratered mortgage bonds, like with USTBonds to finance household stimulus packages, and with monetization to print money to finance whatever the idiots leave on the table on USTBond sales. The problems from debt collapse due to debt-related ills inside banks cannot be solved by more debt instruments, plain and simple. The solutions must, if they are legitimate, involve new income sources, like manufacturing returned to the US soil, like a national grand initiative for infrastructure betterment, like better agriculture management of ethanol solutions, like broader export successfully landing abroad from US firms. The dumbstruck fools running US bank policy are forced to resort to their own failed toolbag. How effective will lower interest rate be, if only another attraction to a debt device? Not much! And the failure to revive and resuscitate will shock the system very soon.

HEART ATTACK SYMPTOMS & CAUSES: To be sure, the LIBOR rates are not responding to supposed solutions, the TED (Treasury EuroDollar) spread remains wide, and the short-term USTreasury Bill yield hovers near zero. These are the symptoms of heart attack. Behind the bank lending constrictions, clogs, and refusals is lost faith, lost trust in borrowers, lost credible value in borrower collateral. The day will come soon when banks will be paid a yield to hold money outside the system, as in financial firms and corporate entities will actually pay the biggest banks and the USFed itself to hold money. See negative yield, which occurred for a brief spell in Japan a few years ago. The ultimate cause of the heart attack symptoms is the split in usury cost, never discussed. The root cause is that JPMorgan continues to push the cost of money down, using its strongarm futures contract devices, complete with more than a small amount of counterfeit additives bought in dark basement chambers. Such a low rate results in revolt among bankers, who refuse to lend at such an absurd rate in today’s risky environment. So the LIBOR spread widens, even the overnight rate.

The picture Jimmy W prints ain't pretty and seemingly gets worse with every passing week, but hang in there, because, as he so eloquently outlines, Gold will soon be "Emperor" with its trailing equities the only bright light in a sea of failed financial gimmickery such nas that currently playing out on the Comex and London Metal exchanges!

"Sleight of hand" is wearing thin!

Reality is beginning to "kick" in! (As was evidenced by this week-end's secret meeting held behind closed doors under tha auspicies of the perps whose "policies" engendered this global subversion of credibility and confidence, the G7!)

Credit, the grease in a debt driven sociey, is melting quicker than the Polar Icecap, the consequences of which are unthinkable.

The "medicine," to treat this ever worsening malady, newly printed paper, while it might improve the "symptoms" for a day or two, may well require ever increasing "doses" eventually leading to the demise (death) of the "patient" sending those left behind into a unabashed wailing state of remorse, initially due to the loss of the "patient" but continued (the wailing that is) because of the abrupt loss of our expected lifestyle fueled by ever spiralling debt! (SUV's, ATV's, ATM's, Ninja's and all the useless trappings (new homes seeming never under 3,000 sq ft, based on the "philosophy" that in an ever rising real-estate market "bigger is better!" ) this debt driven "society" has come to demand! How many ATV's can you ride at one time? Just lamenting on a neighbour who has about 6, all brand spanking new!)

Enough venting, but, IMHO, without a gold laden portfolio, that "wailing of remorse" will be heard for a long time to come!

The "wake" initiated by the precipitous drop in SAN SP will soon (within the next 2 to 5 years) morph into a "wild" celebration drowning out the remorseful wailing of those believing in the lies of the state rather than the "truth" of gold!

RUF