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[bob3]

Chapman: Gold, Silver, Economy & More
by Bob Chapman
The International Forecaster
Sunday, 6 January 2008

http://news.goldseek.com/InternationalForecaster/1199655419.php

US MARKETS

We have now reached the point where gold has exploded past its all-time high of 850, having gone as high as 869.10 already in thin trading before the large specs swing fully back into action. Technically speaking, there are no longer any upper limits. Gold is now in virgin territory with fundamentals so good that if you had asked us to come up with a more bullish scenario for gold only a year ago we could not have come up with a more bullish situation than we now have. The cartel, in a gloriously pitiful attempt to stop gold or to at least slow it down this week, has now expended its last market-crashing power by use of yen hits, having used up the remaining 500 or so Dow points they had at the beginning of the week. Gold just yawned and was spectacularly unimpressed by all this blather. The cartel stopped the resource stocks from making new all-time highs (barely), but they have only delayed the inevitable for a few days. If you consider the jobs report of only 18,000 new non-farm jobs with 5% official unemployment, this is the same scenario we saw last year when the Fed was setting up for a surprise .5% rate decrease. Such a decrease would send gold past the ozone into the stratosphere even if February gold futures are rolled over at the end of January. In addition, with the economy going into a recession and consumer spending going into the tank while the subprime and credit-crunch debacles continue to deteriorate and a derivatives thermonuclear meltdown looms, the dollar has not got a snowball's chance in hell of putting on any but the briefest and weakest of rallies. So now it would appear based on all the foregoing that the cartel has shot its proverbial wad, leaving only two courses of action.

First, the cartel can try to press a further yen-hit on gold by unwinding the carry trade further and by creating a bigger liquidity drain that will take the stock markets beyond a 10% correction, thereby plunging them into a 1929 crash scenario from which they may never recover and which may send gold to the moon as a safe-haven from the ensuing stock market bloodbath. This hardly seems like a viable alternative for several reasons in addition to gold's potential for a safe-haven explosion.

First, the cartel is out of gold to sell in support of this move. What gold is left is being held by banks for dear life as Anglo de-hedges. Second, the large specs have protective derivatives to profit from any downturn, the greater the downturn, the greater the profit. Third, the cartel would then be unable to have their final run-up and rip-off like they did in the dot.com bubble because it would be too expensive to resurrect the stock markets even assuming that such a stock market resurrection was possible. Fourth, and most importantly, this is an election year, and the GOP is toast if the stock markets go down. There are those with selfish interests among the Illuminati who do not want that to happen because they want to stay in power themselves or provide a fighting chance in the upcoming elections for those they wish to put in power. Also, this could send Ron Paul's campaign into overdrive.

The second alternative is to simply give up the gold battle, weaken the yen, and everyone have a party. They could still try to put a lid on gold under this alternative using gold leases and sales, but they do not have enough left to do anything but slow it down slightly. This would bring them to the final stock market blow-off top they are looking for so they can exit using Project Turquoise leaving the sovereign wealth funds, pension funds, insurance companies and hedge funds holding the proverbial bag as the stock markets plunge into oblivion. They wanted to use their sale proceeds to buy gold on the cheap, but the credit-crunch, caused by their own greed, has cut them off from utilizing that alternative by causing everyone to flee to gold as a safe-haven and by weakening the markets to the point where only the combined intervention of the PPT and carry traders can keep them from exploding and going down in flames, much less propelling them further upward. Even now, the Fed is going to further multiple auctions and increasing the amount of loans to be auctioned from $20 billion to $30 billion, so the system is still locked up and may never recover again. It may be now or never for the cartel and its hopes for a stock market blow-off top.

The cartel is trying to rip off the sovereign wealth funds, pension plans, insurance companies, hedge funds and other big players mainly through two diabolical methods. First, there is the final blow-off top we just spoke of previously where the insiders will jump out the back door at the last minute without anyone's knowledge using the dark pool of liquidity provided by Project Turquoise. Those left holding stocks after the insiders bail will find that they own little more than an empty shell that has been drained of assets by corporate raiders, or by losses sustained due to hyperinflation, high interest rates, recession, depression, derivatives downgrades and losses incurred when derivatives are marked to market, not to mention potential losses from credit default swaps and interest rate swaps that may occur in the inevitable derivatives washout that will make the subprime debacle look like a tiny blip on the radar screen. Second, the cartel is using devaluation of the dollar to force some of these entities to invest in the US, with any unused dollars being useful for little more than a bonfire when the dollar finally crashes. If not invested in hard assets, stocks, bonds, derivatives and/or commodities, hyperinflation will render dollar-denominated forex reserves worthless. Once this money is invested, it is subject to the final rip-off using Project Turquoise and/or to ensuing devaluation in the inevitable depression to follow. And the ensuing depression will not only push down the value of hard assets, it will bankrupt most of the surviving companies. No company is sacred, not even the Fed, because some of the Illuminati have secretly stashed away tens of thousands of metric tonnes of gold and they will use this to establish a new currency and to buy assets from old bankrupted companies, be they central banks, transnational corporations or otherwise, at fire sale prices with the idea being to glom all the assets and reform them into new bigger banks and bigger companies that will form the core of the new world government and corporatist fascist system - order out of chaos! Even many of the Illuminati may not survive because they have bungled their plans for world government and a world economy big-time! So buy gold, silver and their related assets or prepare to get vaporized!!! Yes, Russia, China, Japan, the Orient and the Middle East - that means you too!!!

America’s current problems began in 1988. We began a recession in 1989 that lasted through 1992. It was accompanied by a national real estate correction that saw house prices in California fall 40% overall, and where expensive homes fell 55%. The Fed had a great opportunity to purge the system, but Sir Alan Greenspan and Wall Street had no intention of allowing that to happen.

The course was set. It was then a question of when the financial system would become so corrupted that it would crash. We have reached that point. At one time crashes were relatively unpredictable events. Crashes happened and the causes were examined later. Today, governments and central banks have manipulative authority. They plot and scheme with corporate America, Wall Street and banking to continually loot the country. It is called corporatist fascism.

Up until seven years ago the strong dollar policy and gold suppression held sway. The reason for gold suppression was to keep the price down, not allowing gold to reflect true economic conditions. In addition, in a one-world system of government and a world monetary system, there would be no need for gold reserves. The proceeds from the sales of gold were used to manipulate gold, silver and other markets. In the meantime, India, the Middle East and Asia were major gold buyers. There were other buyers as well. Buyers you haven’t heard about. The sellers were buyers. The elitists who control the central banks, who sold the gold of the people, have also privately and secretly been repurchasing the gold for themselves. The longer gold stayed cheap, the more they liked it. A good example was in 1997-98, when England virtually gave their gold away under the auspices of now PM Gordon Brown at about $272.00, the buyers for almost all that gold were the Rothschilds, for themselves and others. In mid-October 1987, when the US hit the gold market illegally, dropping gold $100 an ounce in a day, the same Rothschilds were the buyers. They and other Illuminists have been buyers all the way up. The reason is that just in case their scheme for world government doesn’t work, they will still control vast amounts of gold to restart a currency or currencies based on gold reserves. These people are not dumb. We can assure you of that.

That system worked well up until seven years ago when some investors began to realize that the US battle to maintain a strong dollar was futile and that is when gold sales by governments and central banks got serious. No more strong dollar policy. That policy was no longer possible. The dollar was finally doomed.

The elitists are now faced with a major predicament. All currencies are falling against gold and they are running out of gold for sale. We now have a credit crisis that is international and we have falling real estate markets in the US, UK, Spain and Ireland. Investors and some central banks are switching to euros and yen, which in time will fare little better than the dollar. They still do not get it either.

Now, international banking is scrambling for survival in a battle that has already been lost. We fully expect their financial system will move from one calamity to another over the next three to five years. Yes, we could have that one staggering blow that could take the system down, but do not plan on that. The elitists are still arrogantly in control. In spite of that, they have lost, and the system will continue to deteriorate as stagflation takes gold and silver to previously unexpected heights.