Yesterday was the most I’ve ever written in a day – ten hours – but here we go again, a new slew of “horrible headlines” to confront and the criminally exploitative Greek “debt swap” bailout just hours away. With 60% PSI commitment, it appears a cinch to reach the 66% required to force the remainder to comply, but not necessarily the 75% needed to prevent it from being considered truly “voluntary.”
At 66% commitment, the Greek government can force the remainder’s hand via “Collective Action Clauses” – or CACs – which cannot possibly be considered by the ISDA to be “voluntary.” Moreover, even if 75% do commit, how can the ISDA state that the remaining 25% accepted the terms voluntarily?
These are all rhetorical questions, of course, as the ISDA is run by the same banks – JP Morgan, Goldman Sachs, Bank of America, Citigroup, and HSBC – that wrote 97% of the world’s $1 QUADRILLION worth of derivatives, so they will say “black is white” if need be, supported by an ever-expanding GLOBAL PPT that prints money at exponentially higher rates each week, soon to go hyperbolic. This is not speculation, as even their own charts depict this, and that’s just the money they ADMIT to printing.
Greece Readies Record Debt Swap With 60% Commitments
This is why my friend Paul Brodsky of QBAMCO values gold TODAY at more than $10,000/oz, utilizing the same calculations as Jim Sinclair, Mike Maloney, and myself. This is the identical money pricing mechanism utilized at Bretton Woods in 1944 – dividing the “monetary base” by central bank gold reserves – that came up with $35/oz back then. However, one can easily make the case for a $27,000/oz gold price in TODAY’s DOLLARS (i.e. no more MONEY PRINTING), as I will demonstrate shortly.
Brodsky – US Money Base Will Explode to $15 – $17 Trillion
QBAMCO is just using the OVERT (U.S. government published) monetary base of $2.7 trillion divided by the U.S.’s supposed 8,135 tonnes (261 million ounces) of gold reserves, to reach an initial target price of $10,300/ounce. However, he expects the monetary base to EXPLODE to $15.0-$17.0 trillion in the coming years, again assuming the U.S. hasn’t COVERTLY sold any of its gold reserves – LOL.
U.S. government officials have on numerous occasions ADMITTED to selling, leasing, and swapping gold, yet official gold holdings have barely budged in 30 years. Moreover, given how viciously active the Cartel has been in recent years – particularly on the multitude of occasions when gold lease rates went negative (i.e. paying parties to lease one’s gold) – there is not a doubt in my mind – or GATAs – that at least half, and likely more is gone forever.
This is why the U.S. Treasury has not allowed an audit of its gold reserves (held at Fort Knox, West Point, and the Denver Mint) in 60 years, and NEVER will despite Ron Paul’s best efforts. Not to mention, why Central Banks around the world – such as the German Bundesbank and Swiss National Bank, and likely the Dutch National Bank – are ordering audits of their gold held in New York.
Per the Chart below, I have created three separate gold price projections, based on QBAMCOs methodology, the same utilized at Bretton Woods, NH in 1944:
1. The first estimate – in black – represents QBAMCOs estimate based simply on the PUBLISHED monetary base and gold reserve figures – $10,325/oz.
2. The second estimate – in blue – represents MY ESTIMATE based on the PUBLISHED monetary base and MY ESTIMATED gold reserve figure – $27,000/oz.
3. The third estimates – in red – represent QBAMCOs projections of U.S. money supply growth, combined with PUBLISHED gold reserve figures – $57,361/oz. – $65,010/oz.
4. The fourth estimates – in green – represent QBAMCOs projections of U.S. money supply growth, combined with MY ESTIMATED gold reserve figures – $150,000/oz. – $170,000/oz.
Now do you see why I have devoted my career – and net worth – to PHYSICAL gold, and why I find it silly to take risks with mining stocks? Not to mention silver, where my price target continues to be based on a decline in the gold/silver ratio to between 5:1 and 15:1, suggesting a price target utilizing this methodology of $700/oz to $34,000/oz?
These estimates are nothing new to me – as noted in my December 21st RANT, “SIMPLE MATH AND $100,000 GOLD” – and could go significantly higher if HYPERINFLATION cannot be averted. And you know my views on the likelihood of that occurring…
Estimate Source |
Monetary Base ($ trillions) |
U.S. gold reserves (ounces) |
Bretton Woods value of gold (per ounce) |
Published U.S. Gov’t Ests. |
2.7 |
261,500,000 |
$10,325 |
Published U.S. Gov’t MB, RANTING ANDY GOLD Est. |
2.7 |
100,000,000 |
$27,000 |
QBAMCO MB Est. (low end), Published U.S. Gov’t GOLD Ests. |
15.0 |
261,500,000 |
$57,361 |
QBAMCO MB Est. (high end), Published U.S. Gov’t GOLD Ests. |
17.0 |
261,500,000 |
$65,010 |
QBAMCO MB Est. (low end), RANTING ANDY GOLD Est. |
15.0 |
100,000,000 |
$150,000 |
QBAMCO MB Est. (high end), RANTING ANDY GOLD Est. |
17.0 |
100,000,000 |
$170,000 |
Now that I have you excited, I figured I’d add a post-mortem to the Toronto PDAC mining conference – the world’s largest by far – which thankfully I was able to skip for the first time in six years. Per the article below, another attendance record was set – more than 30,000, up from less than 5,000 ten years ago. Most are there with, or to see, mining companies, whose stocks continue to languish despite a sevenfold increase in gold and silver prices, the majority from junior miners whose stocks peaked five years ago.
I am encouraged by rising attention to the sector, as these people are watching PM prices and telling others, who may eventually buy gold and silver and tell others to do the same. However, when I see how DEAD junior mining stocks are, and how SHOCKING the contraction of large-cap multiples (on both earnings and reserves), it only heightens my belief that mining stocks are a siren luring investors to Scylla and Charybdis.
Mining stocks may or may not rise more than bullion in the future (excluding inevitable capital gains and dividend tax increases), with as much potential to BANKRUPT you as make you rich. As we approach the END GAME of the global monetary system, “getting rich” is the LAST thing you should be concerned about, the first being to PROTECT YOURSELF.
PDAC Convention Is to Toronto What Canadian Grand Prix Is to Montreal
Around the world, I see nothing but bad news, which MUST be separated from the relentless, expanding presence of PTB manipulation. Remember, equity volumes are at record lows for the HFT (high frequency trading) era, thus all I see in the financial markets are government PROPAGANDA games, utilizing the PPT, QE, ESF, and gold Cartel.
In Europe, even ECB governors are descrying the gargantuan, hyperbolic growth of the Central Bank’s balance sheet, chock full of worthless “collateral” for LTRO bailouts – er, loans – that will eventually be seen for what they are…
Ex-ECB’s Juergen Stark Says ECB’s Balance Sheet “Gigantic”, Collateral Quality “Shocking”
In China, the property/construction bubble is bursting before our eyes, guaranteeing more QE…
S&P: China developers getting closer to “downgrade thresholds”
…while in the U.S., even manipulated employment numbers are tepid, guaranteeing more QE…
Initial Claims Miss Expectations, Rise For Third Consecutive Week For First Time Since August 2010
…and even the supposedly strong BRIC nations are feeling the pinch of the GLOBAL economic collapse – such as Brazil, which surprisingly reduced interest rates today – adding additional GLOBAL QE from South America…
Brazil opts for deeper rate cut to stoke recovery
…and don’t forget the biggest threat of all, which would not only add more QE than the other issues COMBINED, but potentially yield tens of millions of deaths…WORLD WAR III.
My god, I was watching commentary on the Presidential election campaign yesterday, showing Romney, Gingrich, and Santorum ALL provoking Iran with “we will attack” rhetoric, topped off by Obama’s press conference with Netanyahu, in which the two of them appeared to be competing for the title of most boorish, offensive comments.
Guest Post: War With Iran Is Coming
I mean, how is ANYONE listening to this madman Netanyahu, inflaming the doting AMERICAN crowd with the same PROPAGANDA utilized by the U.S. government…
http://www.youtube.com/watch?v=chnzvcsm-l0
…PROPAGANDA that only Ron Paul is not susceptible to…the one candidate against the madness of war. By the way, does ANYONE believe this psychopath Michelle Bachman could give a rat’s arse about “our ally Israel”…
http://www.youtube.com/watch?v=oqNy39cz-0U
…or that Rick Santorum can be VIOLENTLY against abortion but so VICIOUSLY in favor of annihilating Iran…
http://www.youtube.com/watch?v=Yi12aVa3psc&feature=related
…or that puppet Mitt Romney word’s weren’t written – VERMBATIM – by his “handlers,” i.e. Wall Street and the Military-Industrial Complex…
http://www.youtube.com/watch?v=VdFk8nLxQjc
…or that Newt Gingrich has a HUMAN soul…
Honestly, it brings me to tears listening to these pieces, making me feel so ALONE in my quest for truth. Thank god for this newsletter – and my “shadow world” – for giving me the strength to keep fighting.
http://www.youtube.com/watch?v=RPZ36Nb1j3Y
As for today’s markets, what more is there to say but capping at KEY ROUND NUMBERS and “Dow / Gold x 2 ALGORITHMS?”
At the COMEX open at EXACTLY 8:20 AM EST, gold breached the KEY ROUND NUMBER of $1,700 for minutes, before its first WATERFALL DECLINE OF THE DAY immediately thereafter with no other market budging…
Similarly, silver breached the Cartel’s ULTIMATE line in the sand at the KEY ROUND NUMBER of $34.00 for a total of one minute before it immediately WATEFALL DECLINED by $0.65/oz…
Mind you, Dow Futures were consistently +60 the entire morning, until the “Dow/ Gold x 2” algorithm was turned on at the NYSE open. As you can see above, at EXACTLY the 9:30 AM EST NYSE opening, gold plummeted $6.00/oz, or 0.3%, and silver $0.30/oz, or 0.9%, while the Dow fell a measly 20 points, or 0.1%. And don’t forget the miserable HUI, completing a terror-stricken PDAC conference with yet another opening plunge, this time of a whopping 1.2% in the opening 30 minutes of trading, as the Cartel fights with all its might to push it below 500. Ah, the relief of being out of mining stocks, which have experienced the exact same trading patterns for the past five years.
I am glad you are still fighting for all of us!! I definitely know how you feel as I feel rather alone without your daily rant and a few other resources. The rest of society is lost and we try to help them find truth. Someday we will find that tipping point and bring this world back to operating with common sense and reason, I sure hope we can. Keep it up Andy, we love you man. Next time you come to Golden you always have a friend at Colorado School of Mines you can visit. I will fight for my generation and this nation all that I can. I am one RP delegate in this state, that’s my start, we will take this (“election”) thing one way or another.
Ryan
Ryan,
Always good to know I have allies close to home!
Andy
Keep up the brilliant work Andrew!! You aren’t alone mate, great articles to pass on to friends and family. I’m hearing ya loud and clear in Ireland!!
Greg,
Ireland, very cool.
The internet is the greatest invention on Earth.
Andy
Great article…to bad gold is already out of my reach financally. Been concentrating on silver as its something i can still afford on my bidget. hopefully in the long run it still can keep me afloat when the market crashes And gold/silver go threw the roof!
Mike,
Gold, silver – it makes no difference. So long as you buy some you will be PROTECTED!
Andy
Hi Andy,
You contradict the Cartel’s ability. You imply that the cartel may implode at any time and you also imply that the cartel’s goal is to allow both gold and silver to rise without ever going parabolic. That has to confuse your readers. Take caution that the cartel has extended its reighn effectively for over a decade already. In an election year especially, it would be foolish to believe that the cartel cannot extend their control longer.
You state that you are 100% invested in physical metal. I’ll guess that you store yours in either the U.S. or Canada. What changes do you see possible if the Euro implodes, the Dollar has a run, and financial chaos ensues world wide ? Most Americans have zero gold and silver. What if the U.S. banned precious metals from leaving the country ? What if the U.S. impossed a heafty tax on any metal liquidation ?
Best, Keith
Keith,
No offense, but there is NO WAY I have been “confusing” about anything.
The Cartel will inevitably collapse – just as the London Gold Pool in 1968 – and there is nothing I can do about predicting the actual date.
They have escalated their illegal tactics for a decade, but now we have a glboal economy on the brink of collapse. Do you really think “they” can keep things going simply because it is an election year?
I mean c’mon, if they could get what they want, THIS is not what they would have taken. They will ALWAYS attempt to keep things under control, whether it’s an election year or not. It’s not about Obama – and by the way, this is a GLOBAL situation – it’s about the glboal financial system. Do you really thing people in Asia or Greece could care less about an American election?
And I have been CRYSTAL CLEAR in my view that the Cartel’s goal has always been a controlled rise in gold and a controlled fall in the dollar. They CANNOT keep gold down, and they CANNOT keep the dollar up (at least against ITEMS of REAL VALUE), so the best they can do is attempt to keep these changes slow. As Sinclair said today, the U.S. “strong dollar policy” is simply to keep gold from soaring and the dollar from plummeting.
I am also a bit irritated with your other questions, as you seem to be inciting me. You know very well I’ve answered these questions 1,000 times in the 30+ hours/week I write, particularly about the dollar “having a run.”
What does that mean? Against the pitiful Euro, which it has traded in a tight range against for EIGHT YEARS? “The dollar” is a meaningless construct.
The U.S. government CAN and WILL do EVERYTHING they can to protect themeslves, and if they announce the draconian measures you note, it will mean PMs have soared and PAPER assets crashed.
Would you rather have PRICELESS gold or WORTHLESS dollars?
I’ll cross that bridge when I reach it.
Andy
Andy , You are not alone!!
Mike,
And neither are you, or any of us!
Andy
Hi Andy,
Been your avid follower since BabyBullTwits.
I am a civil Engineer by profession so the terms a bit hard to digest but truly enjoying your Rant.
You have been an inspirational to many.
Back here in Malaysia and i think for the rest of South East Asia most people go for physical only.
Cumulatively once of this days we will crush the manipulators for good.
Manja,
Thanks so much, and keep buying that PHYSICAL.
Agreed, the end is nigh for those trying to prevent DESTINY.
Andy
Andy,
Thank you for taking the time to help strengthen the hands of average people such as myself who have decided to leave fiat-based investments and to hold physical. You expose the folly of the ever-present temptation to cash in the ounces.
Jay,
You’re very welcome, and pretty soon most people will consider PMs MONEY, not INVESTMENTS, as you suggest.
Andy
Andy I live in Vancouver Canada, home of the last standing housing bubble, (I can’t say that too loud around here , I fear for my safety lol!). Anyways a bit off topic but what r ur thoughts on the Vancouver housing market ? Im fairly new reader to miles franklin, and i would very much like ur opinion cuz I agree with 99% of everything I’ve read on ur blog so far… 🙂 keep up the great work !
Howard,
That’s funny, as I was scared to wear the “Mr. Housing Bubble” shirt I got as a gift five years ago, as I knew everyone (with all their “equity” in real estate) would hate me.
I have no strong views on Vancouver’s housing, other than that it should be relatively well-supported by East Asians seeking REAL ITEMS OF VALUE with their depreciating currencies.
Andy