Did the ECB Save COMEX from Gold Default?

Just in from Jim’s Mailbox - April 02, 2009

On Tuesday morning, gold derivatives dealers, who had sold short in the face of a fast rising gold price, faced a serious predicament. Some 27,000 + contracts, representing about 15% of the April COMEX gold futures contracts remained open. Technically, short sellers are required to give “notice” of delivery to long buyers. However, in reality, buyers are the ones who control the amount of gold to be delivered. They “demand” delivery of physical gold by holding futures contracts past the expiration date. This time, long buyers were demanding in droves.
In normal times, very few people do this. Only about 1% or less of gold contracts must be delivered. The lack of delivery demand allows the casino-like world of paper gold futures contracts to operate. Very few short sellers actually expect or intend to deliver real gold. They are, mostly, merely playing with paper. It was amazing, therefore, when March 30, 2009 came and passed, and so many people stood for delivery, refusing to part with their long gold futures positions.

On Tuesday, March 31st, Deutsche Bank (DB) amazed everyone even more, by delivering a massive 850,000 ounces, or 850 contracts worth of the yellow metal. By the close of business, even after this massive delivery, about 15,050 April contracts, or 1.5 million ounces, still remained to be delivered. Most of these, of course, are unlikely to be the obligations of Deutsche Bank. But, the fact that this particular bank turned out to be one of the biggest short sellers of gold, is a surprise. Most people presumed that the big COMEX gold short sellers are HSBC (HBC) and/or JP Morgan Chase (JPM). That may be true. However, it is abundantly clear that they are not the only game in town.

Closely connected institutions, it seems, do not have to worry about acting irresponsibly, in taking on more obligations than they can fulfill. Mysteriously, on the very same day that gold was due to be delivered to COMEX long buyers, at almost the very same moment that Deutsche Bank was giving notice of its deliveries, the ECB happened to have “sold” 35.5 tons, or a total of 1,141,351 ounces of gold, on March 31, 2009. Convenient, isn’t it? Deutsche Bank had to deliver 850,000 ounces of physical gold on that day, and miraculously, the gold appeared out of nowhere. More…

The Fed and the US Treasury engineered the housing bubble to target and destroy minority and poor communities with highly profitable economic warfare

From a very interesting blog [my emphasis]:

"...One of the dirty little secrets behind the housing bubble is the long standing partnership of narcotics trafficking and mortgage fraud and the use of the two in combination to target and destroy minority and poor communities with highly profitable economic warfare. This model is global. It is operating in counties throughout the world as well as in US communities.

Of all the actions that the Federal Reserve took to engineer this housing bubble, the one that I would note is Mr. Greenspan’s efforts to pacify Congresswoman Waters regarding allegations of government sponsored narcotics trafficking at a time when open Congressional hearings would have contributed to an important discussion of the operations engaging in mortgage fraud in minority communities. See, “Financial Coup d’Etat,” Chapter 16, Dillon Read & the Aristocracy of Stock Profits which was written in 2005 and published in April 2006, drawing from an article I first published in May 1999.

“On December 18, 1997, the CIA Inspector General delivered Volume I of their report to the Senate Select Committee on Intelligence regarding charges that the CIA was complicit in narcotics trafficking in South Central Los Angeles. Washington, D.C. ’s response was compatible with attracting the continued flow of an estimated $500 billion–$1 trillion a year of money laundering into the U.S. financial system. Federal Reserve Chairman Alan Greenspan in January 1998 visited Los Angeles with Congresswoman Maxine Waters — who had been a vocal critic of the government’s involvement in narcotics trafficking — with news reports that he had pledged billions to come to her district. In February Al Gore announced that Water’s district in Los Angeles had been awarded Empowerment Zone status by HUD (under Secretary Cuomo’s leadership) and made eligible for $300 million in federal grants and tax benefits.”

Alan Greenspan is a liar. The Federal Reserve and its long standing partner, the US Treasury, engineered the housing bubble, including the fraudulent inducement of America as part of a financial coup d’etat. Our bankruptcy was not an accident. It was engineered at the highest levels.

Your publication of Greenspan’s breezy and bogus history of the housing bubble insults your readership.

Best Regards,

Catherine Austin Fitts
Assistant Secretary of Housing - Federal Housing Commissioner, Bush I"

Source

Darkness Renewed: Terror as a Tool of Empire

April 1, 2009 By Chris Floyd - Empire Burlesque - Chris-floyd.com

"Here's a purely hypothetical scenario. Let's say you were a dedicated imperial militarist who believed that your country's security, prestige and financial interests could best be served by war and the ever-present threat of war. Let's say you had some really hot and juicy operations going on, endless deadly conflicts that were pouring hundreds of billions of dollars into your war machine and entrenching national policy even more deeply in the militarist philosophy – the machtpolitik – that you believe in. But there's a problem. The general public – the cow-like herd out there that doesn't understand grand strategy the way you and your fellow elites do – is growing weary, and wary, of your Long War. The national treasury is bankrupt, the national infrastructure is rotting, the nation's communities are dying; millions of people are out of work, losing their homes, losing their dreams, spiraling down into want, privation and despair. Yet you have big plans to escalate the war, expand your war machine, and maintain the global dominance that you believe is the right and natural role for your special nation – and its elites. What to do? How to galvanize the truculent, self-absorbed herd into enthusiastically supporting your vital agenda once more?..." Read all here

examples of intellectual and political bankruptcy: American liberalism

"For examples of intellectual and political bankruptcy, one could hardly do better than peruse the pages of the Nation, the American liberal publication. An excellent starting-point would be the magazine’s ongoing series, “Reimagining Socialism.”

The collection of short essays by a variety of liberal and “left” commentators in the US, is a response to the breakdown of world capitalism and the discrediting of free market ideology, a phenomenon that even the mass media acknowledges. Popular hatred for the corporate-financial aristocracy is increasingly a fact of American daily life.

The Nation’s response is a pre-emptive effort to convince its readers that socialist revolution is impossible and the best of all possible worlds would be the emergence of mass reformist pressure on the Obama administration and the Democratic Party.

The series prompted a sardonic comment this week in Britain’s Financial Times, one of the more astute voices of bourgeois opinion. Columnist Michael Skapinker (”Dangers in a World of Disillusionment,” March 30) notes that “Oddly, those who should be rejoicing most at capitalism’s humbling are as lost as everyone else.” He observes that the Nation “has now published an extensive series of essays called ‘Reimagining Socialism,’ in which one writer after another admits they cannot reimagine socialism.”

[...] via The Nation and “socialism”.

what the financial crisis really is

This short article is really a must read. Quote:

"...With a good chunk of the bailout money going to Kissinger-affiliated firms like A.I.G., JPMorgan Chase, and Goldman Sachs; and with the recent reshuffling of strategic partners (bye-bye Bear Stearns and Lehman Bros, plus the many community banks that have been taken over or shut down because they bought into the toxic mortgage schemes); and with the new investment opportunities that Geithner is now promising Wall Street firms, we see what the financial crisis really is — a well-structure M&A (merging and acquisition) project of the United States of America, which follows perfectly Kissinger Associates, Inc. strategic goals..." Read all here

financial capitalism explained by dogbert

Decoupling Set to Increase

The most synthetic, clear-sighted analysis on the subject of the matter of the current troubles in the world economy and their "solutions" I've seen up to now, concluding with a most plausible forecast, from John Browne on Financial Sense:

"This week, the leaders and finance ministers of the 20 most economically important nations, or G-20, will convene in London to develop coordinated policies that they hope will prevent a worldwide depression. The leaders will also consider greater transnational regulatory oversight of the financial industry and the future of the U.S. dollar as the world's 'reserve' currency. By any reckoning, this meeting will be the most important international economic conference since Bretton Woods in 1944, or the Great Powers economic meeting in Rome in 1922.

All the leaders are now acknowledging what was formerly in dispute: that the world is facing a severe recession. But as is evident by the pre-meeting media blitz, the London G-20 will reveal a split of the group into two opposing camps.

On one hand we have the Americans and the British who have been calling most loudly for a 'team' approach, in which all nations 'pull together' in support for spending-based remedies. To some extent we are indeed all in it together. The shock currently felt by the American consumer is has translated into massive losses for exporting countries around the world. But this does not mean that all favor massive government spending along the lines envisioned by Pennsylvania Avenue and Downing Street.

In fact, many of these countries are leading the other side of the debate. The Europeans, led by Germany with its inbred fear of hyperinflation, have balked at the Anglo super-stimulus approach. The continental powers all maintain socialized medical care, comprehensive social security and unemployment benefits. They can therefore afford to accept high levels of unemployment before they face riots and insurrection in the street. The United States has no such cushion.

The German view is that recession is the natural cure for excessive inflation and growth. They see that the world economy is overleveraged, based on the reckless injection of cheap dollars under Bush-Greenspan. They believe that their economies will not return to health unless deleveraging is allowed to take place. These leaders understand that deleveraging will create massive unemployment, but they are prepared to accept it in order to allow their economies to restructure in a competitive manner. In short, they will accept short-term pain for long-term gain.

The Anglo-Saxons, led by America and socialist Britain, believe that the solution is to spend their way out of recession. Even Lord Keynes would balk at their non-solution of sending good money after bad in such an overleveraged environment. The Anglo-Saxons know they are falling off a cliff, but they are trying to break the fall with additional capital borrowed from the other developed and developing economies. One must assume all this is being done to help political leaders survive the next election cycle, because the long-term consequences will be an even larger crisis -- and even the collapse of the dollar.

If the German-led Europeans are joined by the Chinese and Australians, the opposition to a global spending binge will be impossible to overcome. A fundamental split will then develop in the recovery and restructuring rates of the world's economies. The forces of decoupling will be reinforced, and the Anglo-Saxon economies will exit from the center stage of the global economic order.

Such an outcome would also raise to a crescendo the current calls for a gold-linked global reserve currency to replace the U.S. dollar. If that were to occur, exchange controls would surely be imposed to stop a panic run out of the Anglo-Saxon currencies.

Investors should watch the G-20 meeting with very great care and look behind the inevitable, bland 'groupthink' final communiqué of superficial cooperation. While this class of grade-A economies looks harmonious, the Anglo-Saxons are most afraid of the impending D's: deleveraging and decoupling." Source