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I wrote Mission “UN” Accomplished on Monday and talked about how Iraq has not been put to bed and in fact has become an even bigger problem than it has been.  Whether officially admitted or not, Iraq’s oil was the reason we were there in the first place.  It was viewed as a source that we could both control and profit from.  Unfortunately, this will most likely destabilize the entire region and create a brand new and much higher price range for oil.  This is happening at a very bad time both economically and financially.  The world’s economy is slowing demonstrably and the financial system is showing cracks, higher oil prices will only exacerbate the weaknesses.

The recent “find” in China that collateral either never was or has disappeared is now spreading to other ports and many more institutions.  Even if the economy was strong which it is not, the fact that collateral is gone or never was will be devastating to the financial sector both in China and with financial institutions far away.

The recent “collateral” problem will surely spread to other markets as well, not just base metals.  The one particular market where this is important is gold.  “We” have argued for years that it just wasn’t there, it couldn’t be.  “It couldn’t be” because more has been claimed than we knew existed.  This is also the case for silver.  Eric Sprott has argued that many “claimed” inventories cannot exist all at once as the total adds up to more than has been mined.  This is the root of it, let me explain.

The world has existed on the words “trust me.”  The world has followed what the U.S. ordered for many many years whether they liked it or not.  After 1971 we were able to turn the worlds’ eyes away from our gold reserves by creating the artificial demand of the petrodollar.  Now, oil is on the verge of trading and settling in many different currencies and the demand for dollars is about to dry up.  This situation alone has been reason for the U.S. to go to war or depose rulers in the past.  Now we have a situation where many nations all at once will shun the dollar, were Saudi Arabia to do this publicly I believe the dollar will drop 5-10% in purchasing power within a week’s time.  They are probably already accepting non dollars privately.

Now we have the recent revelation that “collateral” does not exist, the result is that everyone will be scrambling for verification of collateral.  This will be like a witch hunt and long standing agreements, friendships, cooperatives and even as big as treaties will be broken.  Then, we must of course add religion into the mix.

This is how I see it.  We are headed toward a global “shooting war.”  WWIII in my opinion had already started and has been waged through the financial, technological and political markets.  The financial markets have been held together by derivatives to show a placid picture; vanished collateral will upset the order further.

Because the “old world order” seems to be collapsing, a new world order will arise.  There is no telling how this may shake out and who the ultimate partnership may be.  We look now and see Russia and China partnering and isolating the U.S.  The question remains, who is going to stand with the U.S.?  Saudi Arabia and their oil?  Europe who needs and receives energy from Russia (which is in the process of not arriving)?  South American countries that have had the screws put to them by Wall St. for over 50 years?  African nations whom we have ignored (while China has courted them)?  I am not even sure that we could count Israel in our corner the way we have treated them over the last 5 years.  Who?  Who will stand with the U.S. while the new “teams” are being chosen?

I am truly fearful that lunatics who have been running the show finally realize that “the show is over.”  I am afraid that triggers will be pulled and used as “blame.”  Blame (cover) for an economy and financial system that is imploding behind the scenes.  I am afraid that the powers that be will try to “cover” the reality that the Ponzi scheme is ending and will point to war as the reason …it all went south.

Many wars in years gone by were initiated because of poor economies and used to boost growth.  The New York Times (shame on them) wrote this past weekend that the global economy is weak because there are not enough wars.  The problem is that in today’s world, man has the ability to destroy the playing table.  Paul Craig Roberts wrote 2 weeks ago that he believes the U.S. is planning a first strike and now believes that nuclear war can be won.  He believes that Russia and China know that this strategy is in the works and may be forced to preempt our first strike.  His thoughts may be found here.

Unfortunately, we have arrived at a point where the reality of bankruptcy is now about to be revealed by the lack of collateral.  We are about to find out how fraudulent the world is and has been for at least 10 (maybe 101 since 1913) years.  The danger is that those who committed the fraud decide to kick the table over in desperation.  As the saying goes, desperate people do desperate things; the problem now is that Russia and China know this.  I hope that Mr. Roberts is wrong but I am afraid that he is not.

All you need to do is look around for yourself.  No, the mainstream media will not tell you about it even if they do scratch the surface for appearances.  Iraq and the entire Middle East is a slow motion train wreck that is about to fast forward.  Russia has shut off gas supplies to the Ukraine and the Ukraine retaliates by preventing Russian gas through to Europe.  China hacks the U.S.; the U.S. hacks China and then puts Chinese officers on their most wanted list.  These are all “declarations of war,” what do you think will happen when someone finds out that their “collateral” (gold) is missing?