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I was going to write a comical piece about Mr. Magoo (Alan Greenspan) because he was on both CNBC and Bloomberg yesterday but other more important news regarding Saudi Arabia has come forward.  Before getting to that, I will poke a little fun at our speckled past maestro who never saw a bubble he didn’t like.  Actually according to his testimony to Congress he never ever saw a bubble until after the fact because as he says, “No one can recognize a bubble until after it bursts”… to which I say a giant HOGWASH!  There were many who saw his internet bubble, his real estate bubble and ultimately his dollar based debt bubble before they all burst.  The prudent got out of the way while the adventurous made billions of dollars on the collapses.

He says he will not “apologize because I’m not omniscient, I’m just a man.”  In reality Alan Greenspan is an outright sellout.  He was a disciple of Ayn Rand in the 1960’s and wrote a piece in 1966 regarding gold and its permanent monetary properties.  He knew then, he knew while Chairman of the Federal Reserve and he still knows…gold is money, everything else is credit.  Even though he refuses to apologize, I will say it for him…he IS “sorry.”  If history gets written correctly he deserves a very large portion of the blame for where we are and where it is that we are ultimately going.

Before I get to the Saudi news, JP Morgan is on a roll.  If you recall, I wrote earlier this week regarding their “exact” 6 ton and 3 ton deposits to their eligible (customer) holdings.  They had another 32,150.000 ounce (1 ton exactly) deposit yesterday.  If you understand that a “.000” deposit or withdrawal statistically can only happen once in 1,000 times then here is a little math for you so you’ll understand what “extraordinary times” we are living in.  Assuming (for ease of math) a 250 “workday year” then a deposit weighing exactly .000 should happen only once every 4 years.  A second “.000” deposit would then statically happen only once in every 4,000 years and yesterday’s deposit would bring the probability of a third consecutive “.000” deposit out to once in every 40,000 years!  As I said, “extraordinary!!!”

Saudi Arabia has now cut diplomatic ties with the U.S .  This is said to have happened because of our “handling” of the Syria and Iran situation a few weeks back (we did not attack them and thus start WW III).  Rather than address the obvious dangers such as crude oil imports being curtailed or cut, Saudi Arabia is moving closer to China and the U.S. is losing a key foothold in the Middle East, I will take another angle.  If you remember the movie “Rollover,” the worry back then was that the Saudi’s would sell their Treasuries and run our banks.  This started to happen back in 2008 (but not because of Saudi Arabia) when money funds saw $550 billion withdrawn in less than a day but was averted when “everything everywhere” was guaranteed by the Treasury.

So here we are today and Saudi Arabia has cut off diplomatic ties with us.  Everyone is worried that the Chinese will sell their “dollars,” I have another scenario for you.  I wrote nearly 2 years ago that some ridiculously small number like $5 billion could blow up the world by attacking the silver market.  Buy the physical, buy options, buy futures and then ask for DELIVERY…the silver market would be laid bare for all to see with astronomical pricing and none available for purchase.  Yes you can argue this and say that $5 billion is not enough.  OK, so let’s say $10 billion or even $20 billion, this is still absolute chump change to the Chinese (or in this case the Saudis).  If you move over to the gold market, maybe a figure like $100 billion would be necessary to collapse the paper markets.  $100 billion is still loose change in the financial world’s front pocket; this amount ($85 billion that we know of) is pumped into the system every month to keep the monster breathing.

Do you see what I am getting at here?  We have apparently ticked off the Chinese, the Saudis, and the Russians and not to mention the Germans, Brazilians and even the British.  Whether it be spying or moving around the world like a bull(y) in a china shop and breaking every (rule) thing in the place…we are not viewed fondly anymore and have used up all of the goodwill we ever created over 200+ years.  We have done this exactly at the same time that we are more vulnerable to our enemies (financially) than ever before in history.  If China wanted to “de Americanize” the world or the Saudis wanted to “Rollover” the financial system…they could do it very easily and accomplish their goal literally overnight.  Say that this thought process is alarmist if you will, all I am saying is that the “mechanics” now exist and are obvious to see at the same time we have given the world motive to use these “mechanics.”

No matter what anyone says, we would be completely helpless with an attack on the dollar, treasury market and precious metals all at the same time.  You will not be able to sidestep this debacle and Prechter, Edelson and Gartman et al will all be cursed for their crystal balls going dark.  Were a scenario like this to occur, even if you could get your coin dealer to answer the phone, take an order and even arrange payment and promise delivery…your “just in time” metal will not be coming because without even firing a single shot our nation could be shut down financially with an amount of money that for all intents and purposes is less than meaningless.

Addendum:  My math was wrong, 3 deposits of “.000” in a row can only happen once every 4 million years, not 40,000 years!  You get my point; it “cannot” happen in any real world scenario.