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I plan to report more about the New Orleans investment conference and in particular what Alan Greenspan had to say later in the week.  Today I want to speak about several pieces of news from late last week which I believe were important.  Though these are seemingly not “connected,” I believe there is a very strong connection for most of it but to this point only behind the scenes.

First, Russia reported the import of 1.2 million ounces of gold last month.  This is a big jump from what they had been previously importing.  Earlier in the year if I recall they were running some 300,000 ounces per month and they have now begun to increase this rate.  Why is this significant you ask?  Because Russia has been under U.S. sanctions for the last 3+ months.  If the sanctions were truly biting and crippling Russia, they would not have the financial ability to import any gold at all, much less increase the amount dramatically.  Maybe the Chinese are lending them a hand or Russia is acting as a proxy for Chinese buying?  I have no idea but Russia increasing their imports of gold certainly was not what Washington envisioned as a result of sanctions I am sure.  As a side note, we also got the weekly gold import numbers out of Shanghai.  Another 50+ tons after 68 tons the week before, how much longer can China buy nearly ALL global production?  The answer of course is until the Western vaults are empty.

Speaking of “empty vaults,” JP Morgan reported 321,500 ounces of eligible gold withdrawn from their vault last Thursday.  This is interesting because it is now the 3rd time in the last two months JPM has had this exact 10 ton withdrawal.  We do know that this is “kilo” gold and not “ounce” gold because of the reporting.  Were it N.Y. or London style bars we would see a report of “._ _ _” because the 100 ounce and 400 ounce bars are never exact round number weights, they are “point, something something something.”  In just the last 2 months, JP Morgan has seen over 75% of their eligible gold withdrawn and now stands under 500,000 ounces.  Because the East buys and trades in kilos rather than ounces, this may be an Eastern withdrawal or is actually being shipped East, no way to tell.

Getting back to Russia, Mr. Putin has finally spoken out in aggressive fashion.  Late last week he made several statements including, “There is risk of major conflict, the U.S. dollar is losing trust as a reserve currency and the U.S. cannot humiliate its partners forever.”  Why has he chosen “now” to become boisterous?  There can be several reasons individually but most probably all have come together at one time.  First, surely none of what he said would be done without the knowledge and approval of China.  Secondly, he has just finished many rounds of talks with Middle East nations where I am sure trade, finance, energy and “protection” were all discussed.  You can also add to this, November 1st is now only a week away and with it comes the calendar beginning of cold weather.  Russian gas supply to Europe is a trump card that no amount of “dollars” can beat, not even if you burn them all for warmth.  You see, Mr. Putin has the ability right here and now to blackmail much of Europe into fracturing away from the U.S.

Did he speak during his talks to Arab oil producers regarding “his markets” and his expectations that the Arabs not fill any void he creates?  Probably, I certainly would.  Please keep in mind that Russia has been militarily “probing” NATO everywhere on the planet.  They in my opinion are testing our response times and also showing us they are no longer a broken state.  Russia also last week sent military equipment and personnel to the hotly disputed Arctic Circle.  Does he plan to plant a Russian flag and thumb his nose at the U.S., Canada, Norway and Sweden?  Again, probably.

As to the Mr. Putin’s “timing,” it is not just the cold weather coming.  It just so happens the U.S. Fed is now about done with the current round of QE.  Our markets are beginning to convulse and the calls for renewed QE can be heard even from within the Fed itself.  This, at the same time Europe reported a banking stress test with 25 failures and 100’s of billion euros in new capital needed.  Please remember, Mr. Putin is a brilliant guy and can do logic as well or better than anyone.  He sees the West’s economies and financial systems weakening and knows the Achilles Heel to the system is physical gold.  While we have tried to isolate Russia, they have firmed up allegiances with China, the rest of the BRICS and now even Middle East oil producers.

NONE of what Mr. Putin says or does is by mistake or coincidence, everything is planned and done so well ahead of time.  Do you really believe earlier in the year he would have pushed Russia’s position when it would be stronger in 6 months’ time?  Russia now has more alliances, trade deals signed, gold and Chinese backing than ever before, …while the West has accumulated more debt, printed more currency, cut military numbers and EXPORTED gold not to mention “weakened relationships” internally.  This is not rocket science, the West has been declining for years and is now 6 months weaker while Russia/China et al are rising and are 6 months stronger and wealthier …

The fact that ‘the Bear’ is now growling publicly should not be overlooked as Mr. Putin would not do so, so loudly unless he was already in position.