Systems are Breaking in Treasury Bond Market-Dr. Jim Willie

http://usawatchdog.com/systems-are-breaking-in-treasury-bond-market-dr-jim-willie

“I don’t think the Fed is going to taper its bond buying. I believe they are going to double it. The Fed will say let’s continue QE, and instead of suffocation from rising rates, we’ll have drowning from rising costs. . . . They are going for drowning because it’s slower.” - Dr. Jim Willie

 

Jim Willie: The Gold Climax Event

http://silverdoctors.com/jim-willie-zirp-the-death-knell/#more-24437

Jim Willie: Death Knells for the USDollar- Gold & Silver Set to EXPLODE

http://www.silverdoctors.com/jim-willie-death-knells-for-the-usdollar/#more-14531

Deflationists and Blind Eyes

And now for the (knockout) counterpunch from Jim Willie. 

http://financialsense.com/contributors/jim-willie/deflationists-and-blind-eyes

COMEX and LBMA default?

Thanks to Dick for another gem.

Could a default, or "failure to deliver" in the COMEX or London Bullion Market Association be imminent? It probably has occurred already. There is a widening gap between the prices of paper gold contracts and physical gold bullion, due to price suppression schemes by the bullion banks and central bankers. Jim Willie believes the bifurcation of futures contracts and physical gold prices will occur when the physical shortage of gold is exposed.

http://www.financialsense.com/fsu/editorials/willie/2010/0203.html

The paper gold market and the physical gold bullion market have finally separated in a practical manner, meaning actual gold has almost no role anymore in London paper contract settlement. The absence of gold in London requires extraordinary tactics to settle contracts and to obtain gold bullion. Red tape procedures delay delivery for individuals, and bribes accompany gold delivery demands as standard practice. The London Bullion Market Assn has almost zero gold, its supply having been drained in high volumes since early December, a process currently in acceleration.

The public is unaware of government and central bank intervention in markets. They are also unaware of the pipeline between Wall Street and Washington, DC. The populist anger expressed by Congress and the Obama Administration is manufactured, armed with public opinion polls. You know the best way to eliminate taxpayer-funded banker bonuses? Don't bail out the banks in the first place. The media is complicit, cheerleading green shoots, while ignoring accurate data.

The financial press is critically important precisely now, for not spilling the facts on the current gold market breakdown and divergence. Much of the pressures are hidden though, since the financial press networks report only the official paper-based prices. Do not expect to read in Reuters or Bloomberg or the Associated Press or Wall Street Journal or the New York Times or Investors Business Daily or Barrons that a grotesque gold shortage exists in the London metals exchange or at the COMEX in New York and Chicago. They will not report that London is virtually drained of gold, yet still sells gold contracts. Accurate news reporting would accelerate the breakdown and remove the possibility for time extension. The press will not report that billionaires are emptying their gold bullion accounts at rapidfire pace, out of gross distrust of the bankers, since gold leasing has illegally been standard practice for many years. Imagine selling lumber contracts without wood delivered. Imagine selling mortgages without home titles delivered. Actually, Wall Street did precisely that from 2003 to 2007.

Gold bull market: a bubble?

Skeptics claim the decade-long bull market in gold is a bubble waiting burst. The reasoning is that the rally in gold lacks fundamentals. Here is a counter argument given by Jim Willie.

One must suppose that skyrocketing gold investment demand and rush to diversify out of a collapsing dollar do not qualify as fundamental. And the absence of metals exchange gold inventory also does not qualify as fundamental. And the Chinese pledge to lift their gold reserves 10-fold to 10 thousand metric tonnes in eight to ten years, that is not fundamental either. And the G-20 pledges to formally move toward an IMF basket of currencies, known as the Special Drawing Rights, and away from the USDollar, that is not fundamental either. And the Saudi announcement of a phase-out of sales for crude oil in US$ terms over the next few years, neither is that a fundamental. And the grossly insolvent banks in the Untied States, England, and Europe, which are simultaneously struggling, unable to extend loans, desperately suckling from government teats, that is not fundamental either. Burnedstein plainly fails to recognize that the entire world is grasping for something tangible within the global monetary system overrun by toxic paper, and that anchor reached for is gold.