Miles Franklin Daily Gold & Silver Summary

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Market Recap for

Tuesday September 25, 2012


$1760.60 Down $3.90


GOLD - one year ago today

Up $103.40



$33.74 Down $0.23


SILVER - one year ago today

Up $2.81



$1624.00 Up $8.00



$634.00 Down $8.00



501.19 Down 7.79



185.92 Down 3.15



79.67 Up 0.13



1.2906 Up 0.0409



13457.55 Down 101.37



52.18 to 1

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quoteQuote of the Day

December gold closed up some at 1766, still bullishly well above 1700.
- Richard Russell

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daviddeskFrom David's Desk 

David Schectman 

There Are Always A Few People Who Get Angry If I Write Something That They Disagree With  

 I did get some negative feedback on the comments by Trader David R on Tuesday. Considering it was only a handful, and we mail to a very large mailing list, I am not surprised. I have stated this before, and evidently I need to state it again - I try and provide valuable information that I believe will benefit you. I try and present both sides of the view although I will support one over the other. The inflation/deflation debate is but one example. It is not my goal to tell you what to think; I try and get you TO think. You should be the ones who decide what is valid and what is not. But there are always a few people who get angry if I write something that they disagree with. That's preferable to being ignored. At least people are reading what I have to say. If I wrote this daily in such a way that no one would ever get upset with something that I said, it would be so "milk toast" as to be of no value whatsoever.

Now, back to the Trader David R comments. The ONLY reason I published his comments, which by the way were never meant to be circulated, but were personal emails from David R to me, was because they validated what Jim Sinclair was saying. And what was that? He stated that the big banks were long physical and short paper! Funny, no one complained about what Sinclair wrote, but when Trader David R said exactly the same thing, feathers were ruffled.

For the record, he is a "good guy." He is not part of the manipulation. He does not work for nor promote the bullion banks. He simply shares his views of how the markets work based on his 18 years of inside experience. He is also off the charts bullish on gold and silver. Here is one of his recent emails to me and you will see, his views are very much the same as ours:


QE3 has to be one of the most irresponsible things I have ever witnessed in my life!! Why gold is not at $2,000 is beyond me! I think we will be there by end of year and $3,000 next year.  Our future generations have just been sold out!!


To clear up any confusion on his position, he never said that the markets are not manipulated. Quite the contrary, he fully understands that they are manipulated. The only difference is that he believes the manipulation these days comes from the ultra large hedge funds and their ALGOS, not the banks. This is nothing to get upset over. The important thing is not WHO is doing the manipulation; it is that it IS being done. In the end, it's all the same. It will fail and it gives us repeated opportunities to buy gold and silver for depreciating dollars.


I have presented the manipulation story, via Bill Murphy, GATA, Ted Butler, Andy Hoffman, Bix Weir and many others since I started writing this daily. Nothing has changed here. I have offered you an intelligent, credible alternative explanation to these events, which by the way is not at odds with the overall premise of manipulation, and leave it to you to decide which answer fits best.


Now had I presented the views of Jon Nadler or Jeff Christian I would deserve the criticism that some of you have sent my way. Chill out. You need take nothing more from his comments than a validation of what Jim Sinclair wrote about the banks being long gold and silver. David R could not be more bullish on gold and silver for at least the next four years!


Here are two statements from Jim Sinclair that he published Tuesday (which can be found later in today's daily):


Jim's Mailbox

September 25, 2012, at 10:21 am
by Jim Sinclair

This is pure manipulation (by the banks) for accumulation.

Gold is going to and through $3500 and just like the 70s, the big boys are going to make the most money in gold over the shortest period of time

Once again, Sinclair is telling you the bullion banks are driving down the price so that they can continue to accumulate more physicals cheaper! He is discussing gold in the first quote and silver in the second. He is giving you an honest explanation. If you don't agree, no one is twisting your arm to make you change your mind. Remember, I am not trying to tell you how to think. I am presenting you with what I honestly believe to be the most valuable information I can find and I do have 30 years in this industry, which gives me a fair amount of insight.


Below is the latest from Jim Sinclair. He gets his criticism too, so I don't feel so bad.




David Schectman

Miles Franklin




QE To Have Major Economic Impact On Western Financial World

September 25, 2012, at 2:11 pm
by Jim Sinclair


My Dear Extended Family,


For years we took major criticism for saying that QE to infinity was guaranteed. Recently we took major criticism for even saying QE itself was possible. Now we take criticism for saying QE to infinity is going to have a major impact economically in the entire Western financial world.


All the talking heads and writers are on a tear saying QE will do nothing, emphasizing deflationary scenarios both from within the community to financial TV. Those that take that position are raving morons.


The markets today are full of normal manipulation based on the MSM disinformation that QE to infinity is a hollow tool. It is dynamite and will have an impact of historical dimensions, but not necessarily the ones the morons expect.


Keep your gold investments. Gold is going to $3500 and beyond, about which there is no question. Stand tall. Don't trade, and shut off the gold naysayers sensationalists we have battled from $248 to today.


This is nothing different from the disinformation of early 1979. The Philadelphia Fed president is an example of MSM disinformation.


Regards,   Jim



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goldhighlightsGold Highlights

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holterBill Holter, Associate Writer for Miles Franklin

You just have to laugh!
Published: September 26th, 2012


While watching a little (as little as possible) CNBC, they did a piece on the "NFL".  For those of you who watched Green Bay intercept Seattle's last gasp pass of the game last night, only to be ruled a touchdown may have a clue where this is going.  CNBC had a big discussion about the replacement referee's and how they were ruining the game.  One of the female anchors said that it's not really worth watching because the final score doesn't represent what happens in the game.


Well, well, well...isn't that the pot calling the kettle black?  Take a look at the markets...ALL MARKETS!  They don't reflect reality in any sense of the word.  Everything is manipulated and no markets represent true "value".  They (CNBC) did a poll as to whether the bad refereeing would hurt the game and whether people intended to continue to watch.  Why don't they ask themselves the questions about their own baby, the markets.  The "referees" (the regulators) continually turn a blind eye, volume is down, everyone who has an IQ greater than their shoe size can see the manipulation and those who "don't" are just plain lying.  The "owners" (banks) just want you to keep on watching and keep on "gambling" so their cash flows continue.  CNBC already has an answer to their own question regarding the NFL.  If they would just look at their own ratings and advertising revenues, they know that the public is fed up, scared or just plain disgusted.  The public is already voting yet CNBC doesn't even realize that they themselves are the voting booth! 


180 Degrees Backward... Inflation Caused It  Published: September 25th, 2012


If you go back in time 50 years ago, nearly everything was 180 degrees backward to what we have today.  We had an economy that "made things".  In fact, we made more things and made them with better quality than any other country in the world.  "Made in Japan" meant that the product was cheaply made and would break easily.  Now, can you imagine working on your car with a typical ratchet set made in America?  Good luck if you have a frozen bolt.  Cars made in Detroit were the envy of the world, now if you want real quality, it is a Japanese, German or South Korean car you'll be looking at.


A good job, one where just the father of the household could support the whole family meant working in a factory, driving a truck or working a trade.  A weekly salary could provide the basics for a family of 4.  "Food stamps?"  What were those?   Do you remember the stigma attached and the embarrassment?  Unemployment?  Back then, unemployment meant a chance at finding a better job than the one you left.  Money was "real" (sort of) and it went far enough to just barely finish out the month with enough left over to put some away into a coin jar so the family could take vacation in the summer.


Now we have families where husband and wife both work (or collect a benefit) to make ends meet.  Rarely is there much left over at the end of the month so a small balance gets added to the credit card or home equity loan.  50 years ago, if you went into your bank and asked for a credit card or home equity loan, your banker would have looked at you like you were a bit queer or something, now, "don't leave home without it."  What once was the entire mortgage payment including the taxes, insurance, principal and interest is now no longer enough to just pay the taxes alone.  People who saved their entire lives and paid off their houses, now face taxes higher than what their total mortgage payments were years ago and have bank accounts that pay them virtually no interest.


So, is this just another piece where Holter waxes reminiscent?  No, all of this "happened" because of inflation.  Slowly but surely, the cost of living grew faster than Dad's salary so Mom went to work.  Then after another 10 or 20 years, Mom's salary couldn't plug the gap anymore so the balances on credit cards and home equity loans came into focus as a "third worker" and here we are in the midst of another and far greater Great Depression.


Many have proffered that we "just became lazy" which may be true to some extent.  Many have said that the "social programs" have offered too much incentive to not work and instead stay home and game the system, also very true to some extent.  But, the real problem has been the inflation caused by the fact that our money is not real.  Not that many really understand this concept but they do understand "it is not as real as it used to be."  Meaning that a hamburger, fries and a coke where you got change back for your Dollar, now costs $6 or more so how "real" to the average person is a $1 bill?


This outcome of course was carved in stone back in 1971 when we went off of the Gold standard completely.  The temptation to over spend, over tax, over borrow and thus OVER PRINT in a fiat regime is greater than the apple was for Adam and Eve.  The ultimate results were known then and are known now.  Which is why the system must be "reset" now.  Inflation has made the system untenable because life has become "too hard" for too many.  We have reached the point where 50% of our population collects benefits... which means that the other 50% are paying these benefits, this has been well publicized.  The obvious problem here which doesn't get publicized is that more and more middle class families, BECAUSE they are paying these benefits while being paid in inflating Dollars are getting "pushed" into the status of HAVING to collect.  There is not enough left for them to give... so they take.  I am not saying this is a bad thing for a family that cannot make it anymore, I am just saying that they are being "forced" and thus swelling the rolls of "takers" and thinning the rolls of "payers."


Of course, the crooked politicians won't change anything until they have to.  Well, NOW they pretty much have to because the standard of living has so eroded away that "average" is no longer enough.  Something must, and will change because there is no longer the ability of politicians to hide the cumulative effects of inflation.  Inflation has so gutted the system that we now face a system wide "reset".  It is THE only option left that can right the cumulative wrongs.  At the core of all of these "wrongs" is inflation.  This has always happened in the past and will always happen in the future.   Whenever a false currency that is controlled by the rocket scientist bankers is introduced... they will abuse their power and position.  It is no different than giving a bottle of whiskey to an alcoholic or a tomahawk to an Indian!

Read more Bill Holter articles on the Miles Franklin Blog
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sinclairJim Sinclair (

Review: QE3 To Infinity-The Final End Game

September 25, 2012, at 6:05 pm
by Jim Sinclair

Jim Sinclair's Commentary

Here is a review to offset the drivel pouring out of MSM declaring "QE to Infinity" as powerless and ineffectual.

Expectations of deflationary powers overpowering QE to infinity is rank madness pandered to by world-class morons in, and outside our community

My Dear Extended Family,

The final end game of QE3 to infinity, with a month or two off from time to time, will be a product of the long-term viability of the Federal Reserve Balance sheet and the impact on the dollar there from.

Let's review what has transpired and begin to look at what will happen:

1. OTC derivative manufacturers and distributors sold fraudulent paper to almost every entity as clients of the Western world financial system. Inherently the OTC derivatives manufacturers and distributors had part of the transaction on their books. No problem as long as the entire scam was a "Daisy Chain," a connected set of transactions that has the appearance of risk but when all netted out equals almost zero.


2. Until Lehman was flushed, and flushed it was, most all OTC derivatives could have been netted to zero in a derivative resurrection bank. Losers would have rejoiced and winners would have declared war. However when Lehman was forced into bankruptcy it broke the "Daisy Chain" (a chain of near risk-less transactions when netted) of the OTC derivatives scam. At this point winners had won huge and loser had lost huge and there was no longer a means of repair to the quadrillion-dollar scam. The problem has no practical solution other than transferring all losing paper to the balance sheet of the Federal Reserve where then it was anticipated no non-government "mark to market" audit would ever occur. It was the perfect hole to stick the junk into.


3. The size of the OTC derivative market stood at one quadrillion one hundred and forty four trillion as reported by the Bank of International Settlement, the counter internationally.


4. The Bank of international Settlements, seeing this outrageous number, changed their computer method of valuation to maturity assuming no failures and reduced the size of OTC derivatives of all kinds to a more acceptable but still huge number of $700 trillion notional value.


5. In the first and second round of QE the Federal reserve purchased OTC derivatives including the variety called securitized mortgage debt to remove them from the balance sheets of the Western world financial system, thereby improving the Western world's financial institutions balance sheet and preventing an international industry wide bankruptcy. That means the Federal Reserve has impaired its balance sheet in order to repair some of the balance sheet integrity of the Western world financial system. The amount they have purchased is significant, but not compared to total outstanding above more than one quadrillion dollars.


6. The reason for QE to infinity, QE3, is the failure of business activity in the Western world to pick up with early huge monetary stimulation so as to repair the balance sheet of the Western financial world financial system. The unseen crisis is the hidden weakness of the Western world financial system thanks to FASB (The gatekeepers of world accounting) which allows financial institutions internationally to hide their losses by valuing their paper at whatever the bank wants it to be with no reference to seek a market value, primarily because there is none to seek.


7. The crisis not seen by Fed observers is the true balance sheet condition of the loses on the trillions of dollar of worth-less paper fraudulent paper because numbers are given but no independent mark to market audit has been or is likely performed.


8. As QE3 to infinity moves ahead, the balance sheet of the Federal Reserve continues to acquire worthless paper in exchange for dollars. Junk moved onto the balance sheet of the US Federal Reserve as the common share of the USA, the US dollar continues to expand exponentially.


9. The end game problem is an extended recessionary business conditions going into 2015 to 2017 wherein the supply of dollars continually expands, the US Federal Deficit grows, US state deficit spending continues to grow and the quality of the Federal Reserve balance sheet proceeds to deteriorate further.


Therefore the end game is the perception of the weakness of the lender of last resort, the Federal Reserve's Balance sheet, as it impacts confidence the US dollar and US interest rates.

Now you know what brings about the end game.

In the future I will do small simple articles dealing with the impact on markets of a to be Bankrupt Central Bank, the US Federal Reserve. The end game could come sooner, but only if there was an independent "mark to market" audit of the Federal Reserve inventory of worthless paper, which remains unlikely no matter, who wins the election in November.

Those of you invested in gold and silver vehicles of all kinds (with the exception of ETFs and futures) rest well this weekend. $3500 will easily be a place gold trades. The Canadian dollar and blasphemy to the euro snobs, the Swiss franc, remain go to vehicles for cash positions. Yes cash because you to not have to pay to own them as you do with a sovereign paper with negative interest.

Your watchman,   Jim


Can you beat the US Federal Reserve in the market place?

Federal reserve buying of treasuries is non-economic buying.  Non-economic buying puts the onus on the willingness of the Fed to go QE to infinity as now discussed amongst the establishment analysts. Therefore economic reasoning translated to an investment or speculative position can easily give a wrong signal for a market. A definition of non-economic buying is manipulation.

The question then is does the short on US treasuries have more courage and more funds than the Fed? The answer is at this time (defined as 2012 and 2013), probably not.


The following two forces will remain offsetting influences 2012 and 2013.

As Clinton sounds interest rate alarm, does Congress think it's for real?

By Tom Curry, NBC News national affairs writer

Updated at 4:50pm ET With a lame-duck session of Congress set for the weeks after the Nov. 6 election, members of Congress face the task of taking steps to reduce the deficit before inevitable interest rate hikes push the nation into a debt crisis with profound, long-lasting consequences.

Former President Bill Clinton gave a reminder of the task ahead as he renewed his warning Sunday about a surge in interest rates and a potential debt crisis.

"If interest rates were the same today as they were when I was president, the payment on the debt, that is, what the taxpayers have to pay every year, the financial debt (payments) would go from $250 billion to $650 billion a year," Clinton warned on CBS's Face the Nation Sunday.

Congress and President Barack Obama, he said, "can't let that happen" - so they must strike a deal on reducing deficits and debt.

While acknowledging that the U.S. economy right now is anemic, Clinton said, "When the economy starts to grow and people start borrowing money again, and banks start loaning money to small businesses and not just big ones, interest rates will go up, because there will be more competition for money."

Clinton has been trying for months to warn of what he sees as a danger. Last May he said as soon as the economy begins to grow "interest rates will go through the roof, the cost of financing the deficit will be staggering, and the private sector will be screaming for affordable credit."




Jim's Mailbox

September 25, 2012, at 10:21 am
by Jim Sinclair


Social, Political, and Economic Tension Rising as Global Economy Decays CIGA Eric

2012-2020 will likely prove as challenging as 1932-1940.

Headline: China carrier a show of force as Japan tension festers

TOKYO/BEIJING (Reuters) - China sent its first aircraft carrier into formal service on Tuesday amid a tense maritime dispute with Japan in a show of force that could worry its neighbors.

China's Ministry of Defense said the newly named Liaoning aircraft carrier would "raise the overall operational strength of the Chinese navy" and help Beijing to "effectively protect national sovereignty, security and development interests".

In fact, the aircraft carrier, refitted from a ship bought from Ukraine, will have a limited role, mostly for training and testing ahead of the possible launch of China's first domestically built carriers after 2015, analysts say.


Headline:  Iran Test-Fires Missiles Designed to Hit Warships

Iran has test-fired four missiles designed to hit warships during a drill near the strategic Strait of Hormuz, an Iranian military commander said.

The missiles were fired simultaneously and hit a "big target" the size of a warship, sinking it within 50 seconds, Gen. Ali Fadavi of the powerful Revolutionary Guard was quoted as saying by the semi-official Fars news agency.

The Fars report late Monday was the first indication of an Iranian military exercise taking place simultaneously and close to U.S.-led joint naval maneuvers in the Persian Gulf, including mine-sweeping drills, which got under way last week






It would seem Blythe has unleashed her flying monkeys, and put them into action when nobody else was watching or working.

Silver has just been absolutely smashed to $33.50 as 16.5 million ounces of paper Silver was dumped into the market Sunday night between 9:00 and 9:05 pm EDT. Just five minutes.

An obvious attempt to stem massive JPM derivative losses if Silver clears $36.00, replicating the infamous 02 May 2011 orchestrated market take-down/drive-by.

Gold was similarly 'bombed' since this was a collusive, planned, effort by the Cartel.

In the end, it won't work or 'save' them.

CIGA Richard

Dear Richard,

This is pure manipulation for accumulation.

Gold is going to and through $3500 and just like the 70s, the big boys are going to make the most money in gold over the shortest period of time





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LeMetropoleLeMetropole Cafe (



9/24 Gold And Silver Correct

Two key points to make...

*Major bank after major bank (see more below) is coming out with higher price targets for gold, for next year and beyond. As mentioned before, for so many to do so in such a short period of time is very unusual. These predictions are going out to their clients, most of whom probably have little, or no, gold exposure. This is bound to attract some significant buying of physical in some form. The accumulation effect of all this new buying should cushion price corrections and minimize the amount of their drops, orchestrated or no.

*Reports to us for weeks say the physical silver market is extremely tight if buyers want supply in size. During this time the price has been moving its way higher ... with corrections getting scarfed up by dealers who need to price supply. If these reports are correct, as we believe they are, then it is only a matter of time before silver makes new highs for its move back up.




Gold timing -- and I might as well say this -- I believe there is only one safe, eternal repository of wealth -- and that is gold. Therefore, I believe that there is only one item worth buying at this time, and that is physical gold in the form of bullion coins. If you buy gold bullion coins, you can forget about timing. I don't care what the price of gold is now, in a month, six months, or five years from now. Gold is eternal wealth that you can physically own. So forget what you paid for the gold coins, and forget their price a year from now. Accumulate them and put them away in a safe place. They represent the safest form of pure intrinsic wealth, and they are the only items whose price you do not have to worry about. The reason is that gold has no true competition. Nothing on earth compares in eternal safety with physical gold.   -END-




Death of the US Dollar Hegemony: Military Intervention, Oil Sales, and the Inevitable Collapse

Posted on Sep 23, 2012

Kevin Hayden -

According to a recent report by Indy Media, Mexican crude oil will be sold to China without using the US dollar as its trading currency. Sources inside the Mexican government refuse to disclose if they have been in secret negotiations with China over possible crude oil sales.

If you're not familiar with the term petrodollar, or why a move such as this by China, Mexico, or Russia is of grave concern, allow me to give you a few points to consider and explain the situation -

In 1975, the members of OPEC agreed to sell oil only in US dollars. This was for a variety of reasons, but chief among them was to maintain a need for US currency and maintain its reign as the global reserve. Without this in America's back pocket, I'm sure that the Dollar would have even less value, to put it mildly.

Greenspan, in his first speech after leaving as Chairman of the Fed, said that gold prices were up because of concern about terrorism, and not because of monetary concerns or because he created too many dollars during his tenure. Gold has to be discredited and the dollar propped up. Even when the dollar comes under serious attack by market forces, the central banks and the IMF surely will do everything conceivable to soak up the dollars in hope of restoring stability. Eventually they will fail.


Most importantly, the dollar/oil relationship has to be maintained to keep the dollar as a preeminent currency. Any attack on this relationship will be forcefully challenged - as it already has been. - Ron Paul, The End of Dollar Hegemony


One such challenge was in November of 2000; Saddam Hussein ended his sales of oil in US Dollars, and instead, demanded Euros. From a business perspective, this was a no-brainer. The US Dollar was situated well below the Euro at the time. But the Powers That Be would not allow this.

In early 2001, Treasury Secretary Paul O'Neill was involved in some of the initial administration meetings surrounding Saddam Hussein and Iraq. O'Neill expressed concern over the cabinet's talk of how to rid themselves of Saddam and his threat to the Dollar. Shortly thereafter, the tragic events of 9/11 played out, and the administration and media tried to tie him to 9/11 and weapons of mass destruction. If you're able to connect dots with relative ease, it is easy to see that one of the motivating factors for the Iraq war was to regain and maintain US Dollar supremacy and little to do with weapons or physical threats to the United States.

Shortly after the initial "military victory," all Iraqi oil sales were once more carried out in US Dollars and the Euro was abandoned.

Venezuela: Coup and Countercoup, Revolution

When Hugo Chavez was elected President in 1998, the Clinton administration maintained a "wait and see" policy. Venezuela had been a faithful servant to US interests throughout the twentieth century, and despite the rhetoric of revolution spoken by President Chavez, few in Washington believed changed was imminent.

But after Chavez followed through on his first and principal campaign promise, to initiate a Constitutional Assembly and redraft the nation's magna carta, everything began to change.

The new Constitution was written and ratified by the people of Venezuela, in an extraordinary demonstration of participatory democracy. Throughout the nation in early 1999, all Venezuelans were invited to aid in the creation of what would become one of the most advanced constitutions in the world in the area of human rights. The draft text of 350 articles, which included a chapter dedicated to indigenous peoples' rights, along with the rights to housing, healthcare, education, nutrition, work, fair wages, equality, recreation, culture, and a redistribution of the oil industry production and profit, was ratified by national referendum towards the end of 1999 by more than 70% of voters. -


In 2000, Venezuela took over the presidency of OPEC, and with a goal of benefiting those countries that produced oil, as opposed to those who merely consume, Chavez's actions turned the $7 USD a barrel oil into $25 a barrel. Washington was not happy, to say the least, but sat on the sidelines formulating a plan to oust the President of Venezuela.

After 9/11 and the military campaign in Afghanistan, President Chavez publicly declared the bombing of Afghanistan and the killing of innocent women and children as an act of terror. "This is fighting terror with more terror," he declared on national television. The declaration produced Washington's first official response.

The National Endowment for Democracy, a US entity created by US Congress in 1983 and overseen by the State Department, began pouring hundreds of thousands of dollars into groups within Venezuela to help consolidate an opposition movement and make plans for a coup. School of the Americas-trained Venezuelan military officers began to coordinate with their US counterparts to organize Chavez's ouster. And the US Embassy in Caracas, with the recently arrived Ambassador Charles Shapiro, was helping to put the final touches on the coup d'etat. -


Shortly before the ouster, several top secret CIA briefings, uncovered through the use of a Freedom of Information Act request, detailed exactly how the coup would unravel. Once Chavez had been captured, a new President was immediately named and all that Chavez had done was condemned and reversed, much to the dismay of the Venezuelan people.

Between April 12-13, Venezuelans began pouring into the streets of Caracas, demanding a return of President Chavez and an ouster of the coup leaders. Meanwhile, the Bush administration had already issued a statement recognizing the coup government and calling on other nations to do the same.


But the coup resistance grew to millions of people, flooding the areas surrounding the presidential palace, and the presidential guard, still loyal to Chavez, moved to retake the palace. Word of the resistance reached military barracks throughout the country, and one in Maracay, outside of Caracas, acted quickly to locate and rescue Chavez and return him to the presidential palace. -


As one can clearly see, if any country dares to threaten US Dollar hegemony, they are placed on a terrorist list, or plans to topple the sovereign government are put into place. We see this time and time again, most recently, and most blatantly, with Libya.

Libya and al-Qaeda

With Saddam dead, and Venezuela blacklisted in the eyes of the world, the US Dollar maintained its title as the world's reserve currency. But then our long-time friend and leader of Libya, Muammar Gaddafi, made a bold suggestion. Instead of merely dropping the US Dollar in oil deals, Gaddafi suggested that the Euro be dropped, as well. He advised African and Arab countries to adopt a regional currency, the gold dinar, for use in transactions. Libya, being more in control of its oil resources than any other country, and having no outside, intervening central banks, was poised to change the global oil landscape.

It should be noted that Libya was supplying Italy with a majority of their oil needs, along with several other European nations, having oil that was easily refined by UK standards compared to many other supplies.

Numerous African and Arab countries signed on to Gaddafi's idea of using gold for transactions, but the West would have none of it. One of Gaddafi's closet friends and allies, French President Nicolas Sarkozy, was one of the first to condemn the move and support military intervention in the sovereign country, calling the idea a threat to the financial security of all mankind.

An interesting side note, and motive, regarding France's resolute indifference to the fate of Gaddafi involves Sarkozy receiving �42 million from Gaddafi to fund his 2007 Presidential campaign. Laws prohibited Sarkozy from accepting cash of that magnitude and by laundering it through various Panamanian and Swiss bank accounts, was able to win France's election. Later, Gaddafi's sons would threaten to tell all and provide details of the illegal arrangement.

Soon thereafter, NATO-member countries, lead by Italy, France, and America, signed on to the use of military intervention in the oil-rich nation.

One seldom mentioned fact by western politicians and media pundits: the Central Bank of Libya is 100% State Owned. Currently [pre-intervention], the Libyan government creates its own money, the Libyan Dinar, through the facilities of its own central bank. Few can argue that Libya is a sovereign nation with its own great resources, able to sustain its own economic destiny. One major problem for globalist banking cartels is that in order to do business with Libya, they must go through the Libyan Central Bank and its national currency, a place where they have absolutely zero dominion or power-broking ability. Hence, taking down the Central Bank of Libya (CBL) may not appear in the speeches of Obama, Cameron and Sarkozy but this is certainly at the top of the globalist agenda for absorbing Libya into its hive of compliant nations. - Eric Encina, Market Oracle


Once the international community got on board with military intervention in Libya, under the guise of "humanitarian aid", the West began arming insurgents and mercenaries from around the region, including admitted and known top-level al-Qaeda members, with Tripoli and Gaddafi in their crosshairs. After providing prolonged aerial support and bombing campaigns, along with extensive ground combat, NATO-member countries had allowed the 'rebels' to topple Libya's capital city.

As Gaddafi and his entourage fled the city in a convoy, traveling under diplomatic white flags, French and American warplanes, along with unmanned aerial aircraft, stopped the convoy with air-to-ground missiles. Insurgents and paid al-Qaeda members surrounded the entourage, pulled the Libyan Head-of-State from his vehicle, and promptly executed him. Within hours, the black flag of al-Qaeda was hoisted above government buildings in Tripoli.

Shortly thereafter, Secretary of State Hillary Clinton applauded the efforts and handed over the Libyan Embassy in Washington, DC, to the "rebels." The state-owned oil company, along with the Central Bank of Libya, was also handed over to shadowy factions within this rebel group and the threat to the American Dollar was no more. Oil once again was exported in US Dollars.

Iran, China, Russia, and Mexico

If you need further proof that American Dollar Hegemony will be protected at all costs, look no further than Iran, and perhaps, eventually, Syria. Both countries are tied to international terrorism in every mainstream media story, and are the epitome of evil, but what you rarely hear is that they, too, recently suggested the use of gold in oil transactions - a move that is often met with military intervention and "humanitarian aid."

Iran, with the complicity of major trading partners like China, India, and Russia, is preparing to phase out the petrodollar and begin taking payment in gold and yuans: a calculated move which would only be possible with the military strength of Russia and China behind it. India jumped on board back in January of 2012, and in early September, China and Russia both announced that trade between the two nations would exclude US Dollars.

"Crude oil is the standard currency of the world. Not the Yen, not the Pound, not the Dollar. More money is transferred around the world in crude oil than in any other product."


"On Friday, Sept. 7, Russia announced, that as of today, we will supply China with all of the crude oil that they need, no matter how much they want... there is no limit. And Russia will not sell or trade this crude oil to China using the American dollar." -Interview with Natty Bumpo on the Just Measures Radio network, Sept. 11


These duo actions by the two most powerful adversaries of the U.S. economy and empire have now joined in to make a move to attack the primary economic stronghold that keeps America as the most powerful economic superpower. Once the majority of the world begins to bypass the dollar, and purchase oil in other currencies, then the full weight of our debt and diminished manufacturing structure will come crashing down on the American people. -


China is currently the 3rd largest importer of oil in the world. China's trade with Iran accounts for 16% of their oil imports, and if Venezuela got in on the deal, it would rise to 40% of their oil being imported and purchased in something other than the US Dollar. Add Russia and you've got an incredibly sizable amount of oil being sold outside of the dollar realm.

With the most recent stories surrounding Mexico, it would appear as though US Dollar hegemony is over.

These large gold purchases by the Mexican Central bank and the successful restriction of the US dollar from use inside Mexico, along with a closer relationship with China and speculation of secret petroleum deals that do not include using the US dollar, are sure to raise new concerns in global markets as this story continues to unfold. These strategic moves on the part of Mexico's Government and Mexico's Central bank are said to be protective measures to shield Mexico from what it sees as the imminent and unavoidable devaluation of the US dollar. - Von Helman, Indy Media


Does America dare stand up to both China and Russia over the matter? Intervention in Iran along the lines of what Libya or Venezuela experienced would cause an uproar across the entire eastern half of the continent and unleash a new cold war with the other superpowers of the world. War and military action aside, the destabilizing effect these actions have on the US Dollar means it will not last, period. Market experts from around the world are watching and anticipating a Dollar devaluation, and perhaps a very rapid one.

Major countries are buying and hoarding gold, prepping their economic markets and oil systems for using other currencies, and bracing for a dollar crash; don't you think it would be wise to do the same?



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schoonDarryl R Schoon (

Stagflation In Extremis and The Explosive Rise of Gold

Posted Tuesday, 18 September 2012

Stagflation is where economic growth slows, unemployment is high and prices rise.

Stagflation's appearance in the 1970s was like an outbreak of three-headed children. It wasn't supposed to happen. Prevailing wisdom-an oxymoron among economists-held that high employment and rising prices were economic handmaidens; and that, conversely, slowing economies and inflation were mutually exclusive


In the 1970s, for the first time in capitalism's history stagflation appeared, i.e. prices rose and economic growth stagnated; and, while economists would search for reasons to explain the apparently inexplicable, it was only because they avoided the obvious that they did not find the answer.

In August 1971, President Nixon upon the advice of Milton Friedman-the same Milton Friedman who erroneously taught Ben Bernanke economic contractions can be reversed by monetary expansion-ended the convertibility of the US dollar to gold.

The consequences of cutting ties between paper money and gold were not what Friedman expected. Friedman believed-belief is the operant word here-that 'free-market forces' would bring floating currencies into orderly market-driven valuations. Friedman was wrong-again.

The historic severing of ties between money and gold instead would result in extreme currency swings along with slowing growth, rising unemployment and rising prices, i.e. stagflation. Friedman's advice would make a mockery of the Phillip's Curve-the inverse relationship between the rate of unemployment and the rate of inflation-as it later would make a mockery of money itself.

In Time of the Vulture: How to Survive the Crisis and Prosper in the Process (3rd edition, 2012), I discussed what happened when Nixon cut the ties between the US dollar and gold in 1971:  

It was as if someone removed a pin from the axle of international commerce when the US dollar was no longer convertible to gold. Previously, the US dollar was linked to gold, and other currencies were linked to the dollar. Everything was stable. It is no longer so. Once the pin connecting gold and paper money was removed, everything changed. The axle of international commerce began to vibrate and lately it's been getting much worse. The fear is that the wheels are now about to come off.

Stagflation was the result. No longer constrained by the need to exchange costly gold for increasingly worthless pieces of paper money, governments began to debase their currencies until monetary restraint was as rare as celibacy in an era of drug induced free-love.

Cutting the link between the US dollar and gold not only allowed governments to debase their currencies (the US dollar had previously connected all currencies to gold); it would eventually bring about the destruction of capitalism itself via excessive levels of debt.

John Exter, central banker extraordinaire, opposed cutting the ties between the US dollar and gold. His objections, however, were overridden by Paul Volker, then President Nixon's Under-Secretary of the Treasury for Monetary Affairs.

Instead of raising the price of gold as Exter recommended, Volker decided to instead cut all ties between the US dollar and gold, the course of action Milton Friedman had recommended to President Nixon.

Exter later commented on the significance of that act:

The final link between the dollar and gold was broken. The dollar became nothing more than a fiat currency and the Fed [and especially the banks] were then free to continue monetary expansion at will. The result..was a massive explosion of debt

Gold Wars, Ferdinand Lips, The Foundation for the Advancement of Monetary Education, New York

After 1971, the era of gold-backed money was over. All currencies are now paper coupons issued by heavily indebted governments with expiration dates written in invisible ink.


As prices rose in the 1970s, so, too, did the price of gold. In less than 10 years, gold went from $35 to $850. But the de-linking of the US dollar from gold not only ushered in higher gold prices but the heretofore unseen phenomena of stagflation and a level of economic instability commensurate with a monetary unit of now uncertain value.


Removing gold from paper money led not only to an era of economic instability; but it would eventually bring about the collapse of capitalism itself. Capitalism needed gold-convertible money to instill confidence in its debt-based paper banknotes; and without gold, capitalism's confidence game would collapse, a collapse Buckmins ter Fuller had predicted.


Removing gold from capitalism is no different than removing lime from cement. It's not going to work as well as before. In fact, it's not going to work at all. Without gold, capitalism is like cement without lime, a recipe for disaster. The more cement, the larger the disaster.

Capitalism's demise could well result from today's hyper-variant form of stagflation-stagflation in extremis. Instead of a slowing economy and rising prices as in the 1970s, today we are facing a contracting economy along with unceasing money printing by central banks.

As a result, hyperinflation, not inflation, may accompany today's contracting economies. In that scenario, inflation may well become virulent and once that line is crossed there is no going back-an outcome Friedman and Volker didn't consider when they removed gold from capitalism's fraudulently leveraged foundation of fractional reserve banking and paper banknotes.


Today, we are about to experience stagflation but this time it will be stagflation in extremis; and this time gold's rise will be explosive. The below chart (2007) shows the similarities between gold's rise in 1979-80 (wave 5 of III) and today's similar positioned projected takeoff point to far higher prices.


Regarding the above chart, its authors, goldrunnerfractalanalysis, stated:

 ...We developed a price target back in 2006/2007 for Gold to reach the $10,000 to $12,000 range during this Gold Bull.  Anything above that range would mean that the "Stagflation" comparison to the late 70's was exceeded and "Hyper-inflation" would become a real possibility.[bold, mine]

... The Dollar Printing since December of 2011 fulfills the need for a pretty constant acceleration of Dollar printing in effect to stave off a true period of deflation.  The parabolic printing of Dollars leads to a parabolic devaluation of the Dollar and parabolic Gold.  This is all about Dollar devaluation, not so much where the Dollars are going.  Thus, the economy will continue to deteriorate creating the need for more Dollar printing, QE.

Stagflation compared to the 1970s, i.e. in extremis, is now in motion. Hyperinflation is a possibility and gold's explosive rise, measured in hyper-inflated US dollar could easily surpass the previously estimated $10,000-$12,000 range. What that price will be is anyone's guess-and, at this point, a guess it will be.

Gold's final resting place will be atop the banker's crematorium where the ashes of their paper money will be the only evidence left of the immense power they once held over humanity.


The bankers' money printing in the endgame, QE etc, has staved off capitalism's inevitable collapse but at an extremely high price; as the coming rendering will be of an even greater magnitude than if the collapse been allowed to take its 'natural' course.

Of course, the word 'natural' is unknown in the bankers' dark lexicon drawn from the recesses of their self-serving and societally destructive self-interests. The bankers' world, however, is ending; an ending predicted in 1981 by Buckminster Fuller in The Critical Path.

In my current video, Bucky's vision of the coming better world, I discuss Buckminster Fuller's extraordinary vision, a vision that gives direction as well as hope as we enter ever deeper into the crisis Bucky foretold.

Buy gold, buy silver, have faith

By Darryl Robert Schoon


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oddsnendsOdds & Ends

John Mauldin


Stock holdings have obviously declined since 2007:

mutual funds   

US house values remain 30% below their 2006 peak level and now match their 2003 level.  

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aboutAbout Miles Franklin

Miles Franklin was founded in January, 1990 by David MILES Schectman.  David's son, Andy Schectman, our CEO, joined Miles Franklin in 1991.  Miles Franklin's primary focus from 1990 through 1998 was the Swiss Annuity and we were one of the two top firms in the industry.  In November, 2000, we decided to  de-emphasize our focus on off-shore investing and moved primarily into gold and silver, which we felt were about to enter into a long-term bull market cycle.  Our timing and our new direction proved to be the right thing to do.

We sell over $100 million a year in gold, silver, platinum and palladium.  We are rated A+ by the BBB.  We are recommended by many prominent newsletter writers including Doug Casey, David Morgan, Jean Paul Louvet, LeMetropole Caf�.  Our reputation for service, education, quality product and pricing is outstanding.


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