Post by Entendance on Jun 7, 2020 2:35:06 GMT -5
"While the country was distracted with the Covid-19 lockdown and economic crisis, the Federal Reserve made a huge banking requirement change never before done in history. The Fed cut “. . . reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions.” (Read for yourself here) What does this profound change mean? Economist John Williams says, “The system is bankrupt, and they are just spending the money to prevent an immediate collapse as opposed to having it collapse right now. They have cut reserve rates back to 0%. The bailout of the banking system of the ‘Great Recession’ didn’t work. So, now, they are just printing money and bailing out whatever they have to. People have done this throughout history including the Weimar Republic (Germany hyperinflation) and Zimbabwe (also had hyperinflation). . . . We effectively have a Zimbabwe Fed.”
So, the Fed is going to print all the money it needs to bail out every bank that needs one? Williams says, “That’s exactly what they said they are going to do, and not only any bank, but any financial institution, the stock market, and with infinite money, you can do all sorts of things. But guess what? You also get a hyperinflation. They have crossed the line. That’s why you want to own physical precious metals.”
On the economy decimated by the forced Covid 19 lockdown, Williams, who is the founder of Shadowstats.com, computes data without all the accounting gimmicks to make things look better than they really are. Williams says, “We have about 40 million unemployed . . . which is about a 40% unemployment rate (using Shadowstats.com methods) and not 13% claimed by the government . . . . The pandemic collapsed economy took very heavy hits. The April numbers on industrial production had its worst drop in its 101 year history. The drop in April retail sales was the deepest drop in its 73 year history. That was a 60% to 80% contraction. . . . I think we are going to see a GDP contraction in the second quarter of about -50%. . . . April GDP is 50% down, and there you have the full effect of the collapse. . . . We will bottom out in the second quarter, and it might bottom bounce in third quarter, but it should start coming back in fourth quarter.”
Williams says not to worry about the hits on price crashing manipulations on gold and silver, especially in the face of massive record money printing. Williams says, “The price manipulation is to try to kill it. Central banks hate gold (and silver) because it shows they are not doing their job. I measure unemployment the way it used to be measured by the government, and I also measure the way inflation used to be measured. . . . Gold kept up with actual inflation and your actual out of pocket expenses. Gold is going up right along with real inflation. (ShadowStats.com computations say the real inflation rate in America currently averages 9% per year.) . . . . I am looking for a hyperinflation. As this money get pumped out there, you will continue to see prices rise, and you are going to see some acceleration there. In hyperinflation, it will be so rapid the currency is worthless to you.”
So, the Fed is going to print all the money it needs to bail out every bank that needs one? Williams says, “That’s exactly what they said they are going to do, and not only any bank, but any financial institution, the stock market, and with infinite money, you can do all sorts of things. But guess what? You also get a hyperinflation. They have crossed the line. That’s why you want to own physical precious metals.”
On the economy decimated by the forced Covid 19 lockdown, Williams, who is the founder of Shadowstats.com, computes data without all the accounting gimmicks to make things look better than they really are. Williams says, “We have about 40 million unemployed . . . which is about a 40% unemployment rate (using Shadowstats.com methods) and not 13% claimed by the government . . . . The pandemic collapsed economy took very heavy hits. The April numbers on industrial production had its worst drop in its 101 year history. The drop in April retail sales was the deepest drop in its 73 year history. That was a 60% to 80% contraction. . . . I think we are going to see a GDP contraction in the second quarter of about -50%. . . . April GDP is 50% down, and there you have the full effect of the collapse. . . . We will bottom out in the second quarter, and it might bottom bounce in third quarter, but it should start coming back in fourth quarter.”
Williams says not to worry about the hits on price crashing manipulations on gold and silver, especially in the face of massive record money printing. Williams says, “The price manipulation is to try to kill it. Central banks hate gold (and silver) because it shows they are not doing their job. I measure unemployment the way it used to be measured by the government, and I also measure the way inflation used to be measured. . . . Gold kept up with actual inflation and your actual out of pocket expenses. Gold is going up right along with real inflation. (ShadowStats.com computations say the real inflation rate in America currently averages 9% per year.) . . . . I am looking for a hyperinflation. As this money get pumped out there, you will continue to see prices rise, and you are going to see some acceleration there. In hyperinflation, it will be so rapid the currency is worthless to you.”
"Dear Friend of GATA and Gold:
A European friend well known to us who prefers not to fall under even more surveillance in his own country sends the observations below, for which your secretary/treasurer will take the responsibility of sharing with you.
His main point -- that huge volatility will be injected into the gold market to facilitate government intervention elsewhere in the world financial system -- echoes the cable sent from the U.S. embassy in London to the State Department in Washington on the eve of the creation of the gold futures market in New York in 1974. The cable noted the London embassy's consultation with bullion banks about the futures market and provided this evaluation:
"The major impact of private U.S. ownership, according to the dealers' expectations, will be the formation of a sizable gold futures market. Each of the dealers expressed the belief that the futures market would be of significant proportion and physical trading would be minuscule by comparison.
"Also expressed was the expectation that large-volume futures dealing would create a highly volatile market. In turn, the volatile price movements would diminish the initial demand for physical holding and most likely negate long-term hoarding by U.S. citizens." The cable can be read here
A European friend well known to us who prefers not to fall under even more surveillance in his own country sends the observations below, for which your secretary/treasurer will take the responsibility of sharing with you.
His main point -- that huge volatility will be injected into the gold market to facilitate government intervention elsewhere in the world financial system -- echoes the cable sent from the U.S. embassy in London to the State Department in Washington on the eve of the creation of the gold futures market in New York in 1974. The cable noted the London embassy's consultation with bullion banks about the futures market and provided this evaluation:
"The major impact of private U.S. ownership, according to the dealers' expectations, will be the formation of a sizable gold futures market. Each of the dealers expressed the belief that the futures market would be of significant proportion and physical trading would be minuscule by comparison.
"Also expressed was the expectation that large-volume futures dealing would create a highly volatile market. In turn, the volatile price movements would diminish the initial demand for physical holding and most likely negate long-term hoarding by U.S. citizens." The cable can be read here
Our friend's observations follow.
* * *
I've no real idea of who is doing what in the gold market, but the shenanigans in the last two weeks have all the hallmarks of a managed retreat by the forces seeking to control the metal's price.
Clearly Friday's U.S. jobs report was an exercise in trying to paint a picture of the possibility of a fast economic recovery, but I'm not sure it had huge credibility after its initial impact on the markets. The U.S. Federal Reserve and Treasury Department have a really big problem of needing to keep interest rates low while procuring massive new funds. A few weeks ago they got a 20-year bond away at a yield around just 1.22 percent, and the gold price was under pressure as they were doing it. That's no coincidence, in my view.
I think we now can expect gold to be attacked whenever a major government fundraising is being arranged or some big economic news is being presented. President Trump will support all this as he appears to be heading for defeat for re-election in November. Given his record, I imagine that the positive official spin on economic news will become even more remarkable.
Attacks on gold will keep investor interest in the monetary metal and gold-mining companies relatively subdued. It's much harder to maintain a position when prices are so volatile.
Gold investors expect that suppressing interest rates can be successful only if vast amounts of dollars are created and that it is impossible to do this without gold going much higher, especially since official gold holdings have been depleted by years of price suppression. I would never rule out a gold revaluation or debt jubilee as some have suggested.
But to quote Clint Eastwood in "The Good, the Bad, and the Ugly," where he talks about the stash of buried gold just before the final shootout, "We are going to have to earn it."
Gold investors should expect chaotic swings in prices in the next few years unless or until gold returns to anchoring the monetary system. But the underlying trend should be up, up, and away.
These are very strange times." -CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc.
* * *
I've no real idea of who is doing what in the gold market, but the shenanigans in the last two weeks have all the hallmarks of a managed retreat by the forces seeking to control the metal's price.
Clearly Friday's U.S. jobs report was an exercise in trying to paint a picture of the possibility of a fast economic recovery, but I'm not sure it had huge credibility after its initial impact on the markets. The U.S. Federal Reserve and Treasury Department have a really big problem of needing to keep interest rates low while procuring massive new funds. A few weeks ago they got a 20-year bond away at a yield around just 1.22 percent, and the gold price was under pressure as they were doing it. That's no coincidence, in my view.
I think we now can expect gold to be attacked whenever a major government fundraising is being arranged or some big economic news is being presented. President Trump will support all this as he appears to be heading for defeat for re-election in November. Given his record, I imagine that the positive official spin on economic news will become even more remarkable.
Attacks on gold will keep investor interest in the monetary metal and gold-mining companies relatively subdued. It's much harder to maintain a position when prices are so volatile.
Gold investors expect that suppressing interest rates can be successful only if vast amounts of dollars are created and that it is impossible to do this without gold going much higher, especially since official gold holdings have been depleted by years of price suppression. I would never rule out a gold revaluation or debt jubilee as some have suggested.
But to quote Clint Eastwood in "The Good, the Bad, and the Ugly," where he talks about the stash of buried gold just before the final shootout, "We are going to have to earn it."
Gold investors should expect chaotic swings in prices in the next few years unless or until gold returns to anchoring the monetary system. But the underlying trend should be up, up, and away.
These are very strange times." -CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc.
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