Bill Holter's Answer:

I'm not really sure I understand the question.  Manipulation of markets has been going on far longer than for just this election cycle.  Gold and silver really came under the hammer going back to 1996 and before that with the London Gold pool which collapsed in the late 1960's.   

Are there not enough other events to point at?  Such as Ukraine, ISIS, Ebola, banks and financial institutions far and wide, Japan and Europe's economies, Fukushima, China and Japan arguing over south sea oil or even the U.S. and Russia fighting over Arctic oil or anything in the Middle East?  The "something to point at" can be big, small, a known or an unknown, finding something as a "cause" could be as easy as a sneeze at this point.  I suppose pointing at rigged gold and silver could be a cause but in my mind the end of this rig will be more likely a result of something else rather than a cause.  Just my thoughts...

Q: What would happen to the US economy and how would it impact the average person in the event that the US defaults on its Treasury bond payments to address the US debt?

Andy Hoffman's Answer:

There are several facets to this question, as it depends under what circumstances such an event occurs under.  However, under all scenarios, the ramifications will be utterly horrifying for our way of life.  And sadly, it mathematically MUST happen - whether by outright reneging or hyperinflation. 

Frankly, the latter scenario is unthinkable, as the U.S. has a "thing called a printing press" - in Helicopter Ben's words - which it will surely use, under all circumstances.  This is how hyperinflation occurs - and in fiat currency regimes, there really is no other choice.

Suffice to say, either an "explicit" reneging or "implicit" reneging via hyperinflation, the result will be a precipitous plunge - by perhaps 50% or more in the dollar's purchasing power, the end of its reserve currency status, universal hatred of America; and likely, draconian government actions (U.S. and others) and war.

In other words, what MUST happen WILL happen.  And thus, if you do not prepare beforehand, the impact on your financial net worth will be devastating.

David Schectman

Quotes of the Day

The SNB opposes the repatriation issue on the somewhat flimsy grounds that in a dire national emergency foreign holdings could be sold quickly whereas domestic holdings may be tied up. 

This appears to be disingenuous as many international buyers including the People's Bank of China and other central banks would likely be willing to buy the Swiss gold reserves in loco Switzerland, and then repatriate or take delivery to their own country.

Many Swiss look with alarm at the recent German experience, when Germany attempted to have their sovereign gold repatriated from the U.S. Of the 300 tonnes requested it has, to date, received a mere 5 tonnes. 

Speculation, even among more sober gold analysts, is that the central banks of the world no longer have the gold they claim to have. Some of the gold belonging to the people of the west appears to have been loaned, leased or indeed sold onto the market.

This may have been done in an attempt to suppress to gold price and maintain faith in the dollar, euro and other fiat currencies and indeed maintain faith in the fragile monetary and financial system.  

Much of the physical bullion is now in the very strong hands of store of wealth buyers in India, China and Asia. Other strong hands who have been allocating to gold are Asian and other central banks including Russia's central bank as stealth currency continue. 

That central banks have likely been involved in manipulating the gold price was confirmed again recently by Alan Greenspan in his recent essay in Foreign Affairs on gold as an invaluable monetary asset where he wrote "[the western central banks] all agreed to an allocation arrangement of who would sell how much, and when..."

- GoldCore, October 14, 2014

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Today's Featured Articles

Uncommon Wisdom (Saudis Declare War on Putin)

Zero Hedge (The Defining Problem Of Our Times (In 1 Simple Chart) (The Fed's 2% Inflation Target: The Ultimate Keynesian Con Job)(CIDRAP: "We Believe There Is Scientific Evidence Ebola Has The Potential To Be Airborne")

Frank Holmes (SWOT Analysis: Gold Appears to Have Reached a Bottom)

Bill Holter

Who Could've Seen It Coming?

October 15, 2014

I can almost promise you when the dust is clearing you will hear "who could've seen it coming" everywhere you turn in the mainstream.  You will hear the financial pundits say it, you will hear many titans of industry say it and you will certainly hear the politicians and regulators say it.  The politicians and regulators will be running around with signs on their foreheads that say "don't look at me" while babbling "who could've seen it coming?"

Before going any further, I do want to tell you there have been many who have seen it coming and have voiced their opinions verbally and in print.  Obviously, if you are reading this then you know I am included in this group who have been shouted down and labeled as "one of the crazies."  If you think about it, "us crazies" were the only ones who saw 2008 and the financial crisis coming.  We were the only ones who foretold "why" it was coming and have said all along that the "fixes" would not work.  Were we laughed at and ridiculed in late 2006 and throughout 2007?  Yes, of course we were but I don't remember the "fervor of our branding" as whackos as strong as it is now.  Maybe because the vast majority at the time were also long and recommending gold which was pushing new highs at the time.  Now, $1,230 gold which is some $400 higher than it was back then has "fallen" $700 from its highs so "we" must be even MORE wrong now?  If you cannot understand that increased physical demand should result in higher prices and when it does not ...there must be a logical (nefarious) reason for it, then you surely must know "why" the stock market has reached its levels.  Heck, even Bloomberg has reported on "it."  "It" being the "Plunge Protection Team" which many of us talked about well over 10 years ago only to be followed by blank stares, the rolling of eyes, snickers, and the whispers of "conspiratorial crazy."  

In any case, I figured I would write out a few thoughts now so when you do hear "who could've seen it coming" you can tell them "you" did!  If you ask anyone on the street today whether or not the U.S. government is broke, you will get an 80-90% answer of yes, the government is broke (even John Boehner publicly said, "We are broke").  Everyone knows this but yet expect life to go on and not change compared to the old days when we weren't broke?  Of course, dollars are issued (not really) and backed by this bankrupt government yet this 80-90% who believe the government is broke think that their issued dollars have value and are not affected by the bankruptcy of the issuer?  

Then, we have the banking and financial systems.  These are regulated, backed (FDIC and SIPC) by government agencies and supported by the Fed and Treasury, it should be "safe" to put your worthless currency into an overleveraged institution backed by a bankrupt government ...right?  It should also be safe to put your money into the bond market where all bonds are priced off of a benchmark of bonds issued by the bankrupt entity ...right?  And the stock market?  This should be safe because the Plunge Protection Team has your back, the Fed will never raise interest rates, tighten credit or reduce their balance sheet ...right?

As a side not, if even Bloomberg admits to the PPT supporting the stock market and the Bank of Japan publicly admits they are the biggest owner of Japanese equities, then what other markets might the central banks be "playing in?"  Yes I know, you are thinking the gold and silver markets ...but please don't go there because of the crazy looks you will get and who in their right mind wants to be labeled a "crazy?"

So we live in a land where the government has promised more than it can ever provide because the underlying economy isn't big enough, has too many sucking off the public and not enough worker bees.  The economy doesn't "make anything" anymore anyway but don't let that bother you.  15% of the population is in a "bread line" but since this is 2014, it's no longer politically correct to actually "stand" in a line...and in public no less!  Besides, those people were dopes back in the 1930's, standing in line is actually work.  We now have more recipients than we have donors ...who could've seen it coming?

Finance is now over 30% of the economy and manufacturing 10% or thereabouts ...farming even less, who could've seen it coming?  Derivatives are now about 20 times the size of the global economy and 10 times the size of the equity and debt markets, who could've seen it coming.  Mom and Dad both work today and some even more than one job, I'm only 54 years old and really cannot remember ANY of my friend's Moms working except for the school nurse, has something changed?  $1.2 trillion of student debt outstanding with an average graduate owing $30,000 ...which cannot be wiped clean in an honest bankruptcy?  50 percent or more of our population living from check to check with no savings at all?  Nearly 15 years where 95% of the population's standard of living has decreased because "nonexistent" inflation has grown faster than their paychecks?

I've only scratched the surface of the financials above and did not even get into social or public issues.  I didn't even get into racial issues either but ask yourself if we are now "more harmonious" between races, religions or even "nationalities" than we were back in the old days ...when we weren't broke?  As for social and moral issues, I really shouldn't go there but let me ask a question or two.  If an individual has poor morals, should they be trusted at their word?  Should an entire country?  I think this has been a common question and on a global basis recently.

Of course, we also have the largest military by leaps and bounds past the rest of the world combined.  Ask the average person if we have used our military wisely, fairly and justly?  Can a bankrupt treasury really afford the largest military in the world?  The average person can get the answer to this one correct also.  

I could keep on going and going with examples but I won't and rather finish with a few questions.  If it was the crazy lunatic fringe who foresaw the financial crisis coming, voiced it publicly (amidst laughter) and were correct not only in what happened but more importantly "why" ...then why are "we" still crazy?  Oh, I know, because gold and silver have fallen in price?  "We" say gold and silver prices have been "diluted" with paper substitutes, are we crazy about this or does it make common sense that "something" is negating the simple laws of supply and demand?

If you agree that the fa�ade, charade, house of cards, Ponzi scheme or whatever you'd like to call it is on its way down, please read my work tomorrow.  I plan to write about some common sense preparations which by no means will be a complete "survival guide".  Hopefully it will make your brain churn a bit as to what might be needed to be done.  There is a possibility of "the worst case scenario" actually occurring, if this is the case, you should be thinking like a caveman here and now. 

Ebola - Insult to Injury

October 14, 2014

First, let's start with the blindingly obvious; i.e., the "injury" noted above. Which is increasingly indisputable clarity of a world hopelessly mired in deep expanding recession. What we witnessed in 2009-14 - you know the "recovery" in which global debt, inflation and unemployment surged - was the "eye" of a Cat-5 economic hurricane caused by the world's printing presses dating to the "Big Bang" of August 1971. And now, the powerful "back end" of the storm is here; which until the Ides of October arrived, was "2008, with one temporary exception."

With the U.S. 10-year Treasury yield down to 2.18% this morning, even MSM cheerleaders like CNBC are on the verge of throwing in the towel on "recovery" propaganda in hopes of salvaging whatever ratings they still have. The "most damning proof yet of QE failure" - i.e., plunging rates despite said "recovery" is now completely understood worldwide. Thus, from this day forward, anyone that even intimates economic improvement will be laughed at. Even Obama's most indoctrinated speechwriters will have difficulty crafting the Democrats' strategy to maintain its slim Senate majority next month. Then again, this time around, no one seems to care who wins the Senate - as diehard Democrats and Republicans alike are starting to realize America has become a nation of "one-party Fascism," in which it matters not who wins. A year ago, we wrote of how voters simply choose candidates promising the most entitlements. However, America's outlook has since deteriorated so badly, I don't think most could care less either way. Our guess is we have a record low voter turnout; and no matter who wins, a President with a kindergarten Congress too focused on future re-election to even debate critical issues.

Back to the financial world, yesterday's pitiful PPT efforts to reverse the stock market's plunge failed miserably - with the Dow plummeting 200 points in the day's last hour and the NASDAQ continuing its horrific, well-deserved meltdown. Highlighting what we wrote in "TPTB are losing control of paper markets," we witnessed miserably failed "Dead Ringer" and "Hail Mary" attempts, as well as repeated attempts to push precious metals down. They're at it again this morning; but yet again, PMs are higher whilst global equities, bond yields, commodities and most currencies are lower. The news couldn't be worse, with Chinese auto sales growth down to their slowest rate in 19 months; Eurozone September Industrial Production down 1.8%; Germany's ZEW business sentiment survey down for the 10^th straight month to negative 3.6; the IMF warning of "elevated financial and liquidity stability risks"; the commencement of EU hearings regarding the German Constitutional Court's objections to QE; the U.S. small business sentiment index down 1%; and even the world's greatest book-cooker, JP Morgan missing earnings! And for the icing on the cake, Italy's rising Five-Star political party - controlling roughly one quarter of Italy's Parliament - has introduced legislation for Italy to secede from the Euro currency. But have no fear; as the PPT, in one of the most brazen acts of desperation even I can recall, just came in and juiced Dow Futures nearly 100 points higher - for absolutely ZERO reason, other than to try and prevent today from morphing into "Black Tuesday." Simultaneously, gold was "Cartel Heralded" at the COMEX opening, in TPTB's all-out attempt to prevent a third-straight violation of "Cartel Rule #1" - i.e., "thou shalt not allow PMs to surge, whilst the Dow plunges." However, the day is still young - and the powerfully negative forces strengthening with each passing hour.

Ah, "tapering" - we hardly knew ya. Incredible, how just a few weeks of falling stocks and the MSM's focus has turned 180 degrees - from potential Fed rates hikes some "considerable time" in the future to the reality of "QE to Infinity"; and, gasp, the real possibility of a forthcoming QE4 announcement. We've long pounded the table that the Fed could care less about the economy - but instead, stock market gains for the "1%," enabling "recovery" propaganda. And now that stocks are falling - notwithstanding the aforementioned PPT activity - the FOMC will be thinking long and hard of its upcoming October 29^th "word cloud," six days before the mid-term election. Again, we cannot emphasize enough that at its September 17^th meeting, the FOMC said absolutely "Nothing!" hawkish; and that was before October's economic and financial market meltdown. And thus, we could not be more definite that the "Countdown to the Yellen Reversal" has commenced - potentially, far sooner than even the most dovish doves might imagine.

OK, now that said "injury" has been discussed, let's get to the "insult" that is the potential "black swan" of Ebola. Yesterday, news that a nurse caring for the Dallas Ebola patient contracted the disease herself became a media frenzy when CIDRAP or Center for Infectious Disease Research and Policy said, "There is scientific evidence Ebola has the potential to be transmitted via infectious aerosol particles, both near and at a distance from infected patients, which means healthcare workers should be wearing respirators, not facemasks." In other words, it may be capable of airborne transmission.

Let's forget for a second that a whopping two people on the entire continent have contracted Ebola, or that respected doctors have spoken emphatically of how low the risks of an Ebola pandemic are. I mean, let's face it. In today's gossip-focused, fear-mongering media world, no good "story" can be wasted - or opportunity to spend taxpayer dollars on spectacle. Thus, yesterday's "quarantining" of a flight at Logan Airport, or highly-publicized Marine "Ebola training exercise." To us, it sounds like a bunch of election-seeking politicians have seen the movie "Contagion" a few too many times - or perhaps, read Steven King's "The Stand."

Anyhow, reality or not, the "Ebola scare" is rapidly causing the same kind of "flight fear" as the post-9/11 environment - when nearly everyone with non-essential flight plans cancelled them. Diana and I - who coincidentally, started dating September 9^th, 2011 - cancelled a sky-diving reservation later that month, given the morbid fear that crept into our consciousness. But as it turned out, the 2001 "terrorist scare" turned out to be nothing - "shoe bomber" propaganda notwithstanding; just as Ebola likely will today. And even if a handful of others contract it, the impact on air travel may well be significant at the worst possible time for a rapidly collapsing economy. Just look at the damage yesterday's airline stock plunge caused, and tell us what you think the market is discounting. Ominously, the airlines index is screaming the same "DEPRESSION" signal as countless other key sectors from homebuilding, to building materials, technology, consumer discretionary and energy. Frankly, the only group that hasn't yet collapsed is the Fed's "pet" financial sector. But have faith, there will be justice - and that right soon!

And speaking of "justice," we have NEVER been more confident in the prospects for precious metals to recapture their role as the "once and future kings' of money. The "pent-up" demand in Western markets is unprecedented in global history - and once Whirlybird Janet confirms "QE to Infinity," the astounding amount of Western PM under-investment will be a sight to behold!

Radio Appearance with John Stadtmiller - October 14, 2014

October 15, 2014

Andy Hoffman joins John Stadtmiller of the Republic Broadcasting Network to discuss the gold and silver markets, U.S. unemployment rate, manipulation of the markets, currencies collapsing around the world and the U.S. dollar. To listen to the interview, please click below.  

Saudis Declare War on Putin - www.uncommonwisdomdaily.com

Brad Hoppmann | October 14, 2014

You may have noticed a pleasant surprise at your corner service station this week: lower gasoline prices. Are SUV owners finally getting a break?

Yes; and they can thank Saudi Arabia for the lower prices.

However, Vladimir Putin isn't thanking the Saudis. He is more likely cursing them. They just threw his regime to the wolves.

What do the Saudis have against Putin? Nothing... and everything.

Uncommon Wisdom Daily

The Defining Problem Of Our Times (In 1 Simple Chart) - www.zerohedge.com

Submitted by Tyler Durden on 10/13/2014 19:36 -0400

"Hyperinflation and hyper-deflation are just two different forms of the same phenomenon: credit collapse.

Arguing which of the two forms will dominate is futile: it blurs the focus of inquiry and frustrates efforts to avoid disaster."

Continue reading on Zero Hedge.com.

***

The Fed's 2% Inflation Target: The Ultimate Keynesian Con Job - www.zerohedge.com

Submitted by Tyler Durden on 10/13/2014 16:39 -0400

The old adage that if something is repeated often enough it is soon assumed to be true couldn't be more apt with respect to the Fed's 2% inflation target. 

That Keynesian central bankers peddle this nostrum with a straight face is amazing in itself, but it is at least understandable because it gives them a reason to keep the printing presses humming. That journalists repeat it with no questions asked is even more remarkable. It proves that the impending replacement of financial journalists with robo-writers may not be so bad after all. It won't make any real difference.

Continue reading on Zero Hedge.com.

***

CIDRAP: "We Believe There Is Scientific Evidence Ebola Has The Potential To Be Airborne" - www.zerohedge.com

Submitted by Tyler Durden on 10/13/2014 21:46 -0400

We believe there is scientific and epidemiologic evidence that Ebola virus has the potential to be transmitted via infectious aerosol particles both near and at a distance from infected patients, which means that healthcare workers should be wearing respirators, not facemasks. 

To summarize, for the following reasons we believe that Ebola could be an opportunistic aerosol-transmissible disease requiring adequate respiratory protection: i)

• Patients and procedures generate aerosols, and Ebola virus remains viable in aerosols for up to 90 minutes; ii)
• All sizes of aerosol particles are easily inhaled both near to and far from the patient; iii)
• Crowding, limited air exchange, and close interactions with patients all contribute to the probability that healthcare workers will be exposed to high concentrations of very toxic infectious aerosols; iv)
• Ebola targets immune response cells found in all epithelial tissues, including in the respiratory and gastrointestinal system; v)
• Experimental data support aerosols as a mode of disease transmission in non-human primates.

Continue reading on Zero Hedge.com.

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SWOT Analysis: Gold Appears to Have Reached a Bottom - www.kitco.com

Monday October 13, 2014 13:51

Strengths

Kitco.com

• After the one-week holiday, Chinese consumers returned to the gold markets. Gold futures rose this week as many anticipate the Chinese will take advantage of lower gold prices. Indeed, gold seemed to withstand recent decreases in oil prices as well as increases in the dollar, implying that many investors are taking advantage of the bargain prices. On Friday, the Bank Credit Analyst highlighted that gold prices are unlikely to break down after successfully bouncing off support at $1,200 and are poised to stage a relief rally into the end of the year.

• Franco-Nevada Corp. has entered into an agreement with Lundin Mining Corp. to acquire a gold-silver stream. Lundin recently purchased an 80-percent interest in Freeport-McMoRan's Candelario/Ojos del Salado mining complex in Chile.

• There was a significant amount of positive news from many companies this week. Balmoral Resources Ltd. reported that its drill results revealed a higher-grade potential at its Martiniere property. Romarco Minerals, Inc. received its awaited 401 Water Quality Certification for its Haile project. Lastly, Richmont Mines raised its gold output view to 85,000-90,000 ounces, claiming strong performance from Island Gold mine.

Weaknesses

• This week, Deutsche Bank recommended shorting gold due to the strong dollar environment. 

• A continuation of the prevailing socialist model in South America, Chile's Supreme Court granted a petition by the Diaguita communities to overturn a resolution to develop the El Morro gold-copper project joint venture (JV) in Chile. This is the third time Goldcorp's El Morro project has been suspended in three years.

• This week Luna Gold established a special committee of independent board members to look into strategic alternatives. The stock tumbled as much as 30 percent on the news.

Opportunities

Multiple opportunities relating to the Swiss National Bank Gold Initiative:

• Switzerland has decided to hold a vote on the initiative, which would force the central bank to hold at least 20 percent of its assets in gold. The initiative, scheduled for a November 30 vote, would forbid the sale of any holdings and require them to be held in Switzerland.

Kitco.com

• If passed, the Swiss National Bank would have to buy roughly 1,500 tonnes of gold over five years to meet the 20-percent requirement. Since 1993, the Bank has reduced its gold holdings by 1,550 tonnes, the largest liquidation by any central bank. Changing from the largest seller to a rapid buyer should create serious tailwinds for gold.

Kitco.com

• The initiative put forth in Switzerland is part of a larger theme relating to increased gold purchases by central banks. Global central bank reserve holdings had been declining without interruption since 1989 until the financial crisis. Since 2008, there has been a steady rise in central bank gold holdings. With the possibility of substantial purchases from the Swiss National Bank, this rise should continue.

Threats

• This week, BMO Capital Markets, Morgan Stanley and ANZ all reinforced their negative outlook for gold prices. While this consensus is negative, such wide consensus agreement usually coincides with a reversal in the going trend.

• The World Gold Council is calling on India to mobilize and monetize its household savings imbedded in physical gold stocks. If the Indian government decides to use the idle gold from households and temples, it would reduce the need for future imports, which would be negative for global gold demand.

• Uncertainty from residents of the Mokopane area in the northern Limpopo province of South Africa is threatening to hold up Robert Friedland's platinum project. The billionaire promised the residents a 20-percent stake in the project, but the residents remain unsure of the exact method of repayment for the project.

Frank Holmes

CEO and Chief Investment Officer

U.S. Global Investors

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