Can The "Rig" Survive An Economic War?

September 3, 2016

I did not plan to write another public article so soon after the last one. However, today's topic(s) are very important and very connected in my opinion.  I apologize for the length…but I can't make this stuff up, I just try to tie it together.  First, we have been hearing the word "rigged" on a daily basis and pertaining to many facets of our life.  We hear the word regarding markets, politics (specifically elections), our rule of law and judicial system, and even when it comes to lawmakers and bribery.

Bill Gross formerly of PIMCO, at one point managed the largest pool of money on the planet. He is no fool.  I would also believe because of his fame, tenure and reputation, he would not lightly claim that markets are "rigged".  Not only has he claimed this for several months, he now says THE FED "has mastered market manipulation"!   Please understand this is a VERY BIG statement on his part as he is (was?) a member of a very exclusive club (and we ain't in it).  Do you suppose he would risk his reputation and inclusion in "the club" lightly on just a suspicion?  Or do you believe he is a man who firmly believes what he says and does so out of a steadfast conscience?

Speaking of "rigged", there are those out there who will agree that ALL markets are rigged ...except of course for gold and silver because "they would never do this" or "central banks could care less" about gold.  It was just last week where we saw $1.5 billion worth of gold sold in just seconds we witnessed another $4.7 billion dumped all at once. Someone Just Dumped Almost $5 Billion Notional Gold Into The Futures Market    These two trades combined represent over 6% of global annual production or about three weeks’ worth.  As I have said 20 times before, no one has this amount of gold to sell and no trader who wanted to keep his job would ever sell like this, period.  You have again witnessed IN YOUR FACE MANIPULATION!

The argument that all markets are rigged "except" gold and silver is hilarious.  The rigging BEGAN in these markets for the simple reason they are the only credible threats and competition to fiat currency, namely the dollar.  In order to keep the façade in place, the rigging has spread from market to market.  If gold and silver were not suppressed, could we have zero percent interest rates ...or the buying power that fiat currencies currently afford ...or stocks at many multiples of book value and 20 times +++ earnings?  No, we would already be living in a very different world ...and one that will certainly arrive when the rigs finally fail!

Oh, and one more election related point.  We are told that two states' polling systems have been "hacked" ...and that none other than Homeland Security (doesn't the word "homeland" remind you of Germany a few years back?) will monitor the polls.  Boy do I feel better!  As soon as I read this one, my first thought was "it's over".  They have shoved this down our throats, hook line and sinker!  If this one flies, we can't even blame Congress for "passing it so we can see what's inside"...!

As the title suggests, we are now on the verge of economic WW III.  The EU is pressing Apple for back taxes of $14.5 billion.  I don't get it, why now?  This has been known for at least 10 years.  I can remember John McCain suggesting we lower corporate tax rates or create an amnesty program where U.S. corporations are allowed to bring untaxed revenue back to home at far reduced rates...and that was 8 years ago!  Of course, the next question is "who is next"?  We already have hints that McDonald's and Amazon are in the crosshairs.  Is this retribution for the US fining BNP Paribas last year?  Is this Europe's plan to re liquefy their system?  Can you imagine what this will do to our financial system should $100's of billions be claimed and actually paid to the EU?  WOW, what a wealth transfer.  My next questions are, how will the U.S. react to this?  Will this create an all-out economic war?  A hot war eventually?  What will happen to the "rigs" in place on the markets?  Will Europe attack our rigs and we attack theirs?  Can the rigs survive an economic war?

Lastly, China reportedly just issued the first "SDR bond" in many, many years. 

In Historic Event, China Sells First World Bank SDR-Denominated Bonds In Decades | Zero Hedge     If nothing else, this is another step away from the dollar.  China will soon be included in the SDR basket, this move looks to me like they are "bringing forth" the SDR and back into the system.  It is almost like China is creating a new market, maybe even underwriting it if you will.  In no way shape or form can this move be seen as dollar friendly.  In fact, I am sure the U.S. did not invite China into the SDR and neither did they give blessing to the SDR bond issuance.  I guess a funny question related to the body of this writing would be, how will the U.S. rig the SDR market?

Sadly, the US has painted itself into a very ugly corner.  The economic truth doesn't work so the markets must be painted, bullied, and shackled.  As our "rigs" have affected the rest of the world, they are pushing back.  In some cases quietly and others quite publicly.  The world sees us as "no more truth, no more justice and the American way has become lie, cheat and steal because you can get away with it."  The ugly truth provided from foreigners will expose our financially naked system and leave us as lonely pariahs stuck solo in a corner.  Unfortunately, we as citizens will bear the brunt of all the lies piled up over the years as payment for a standard of living that never really was...

Post script: Story broke recently that Deutsche Bank failed to deliver gold. If this is true, it is game over.  We await clarification as to what really happened and will comment at that point. 

Holter-Sinclair collaboration

Comments welcome,

Bill Holter writes and is partnered with Jim Sinclair at the newly formed Holter/Sinclair collaboration. Prior, he wrote for Miles Franklin from 2012-15. Bill worked as a retail stockbroker for 23 years, including 12 as a branch manager at A.G. Edwards. He left Wall Street in late 2006 to avoid potential liabilities related to management of paper assets. In retirement he and his family moved to Costa Rica where he lived until 2011 when he moved back to the United States. Bill was a well-known contributor to the Gold Anti-Trust Action Committee (GATA) commentaries from 2007-present.

Gold falls on firm dollar, China rate cut lends support