Of course, US Attorney General Eric Holder, who oversees the FBI, has done a fair imitation of a Brooks Brothers store window mannequin for four years, but surely somewhere in the trackless labyrinth of American law enforcement there exists some dogged rogue investigator with a filament of nagging curiosity who might piece together the clunky train of events that may amount to the financial crime of the century. For instance, it can’t be so difficult to determine who was behind the several hundred ton mass dump of paper gold contracts a week or so ago. There must be a pretty simple record of the transaction, retrievable with a warrant or a subpoena. Whatever entity did it — still ostensibly unknown — knowingly generated losses in the neighborhood of a billion dollars for itself. Was this just the cost of doing business? Or a favor owed, say, from a bank to its godfathers at the Fed, carried out to make the dollar look relatively a lot less unsound than it really is? Or a ruse to allow the custodians of bullion in US depositories re-acquire at bargain prices gold that has been stealthily hypothicated into oblivion? Or just to divert attention from their inability to make good on contracted deliveries of actual physical gold.

     No official has yet answered why the Federal Reserve Bank of New York told the German government a couple of months ago that it would take seven years to return that country’s gold held in safekeeping (across the ocean from the Russians) since the Cold War. The NY Fed must have a vessel under contract that makes the proverbial slow boat to China look like an ICBM.

      Doesn’t anybody want some answers to these questions, including how come the two aforementioned major newspapers published front-page stories calculated to justify, if not provoke, the most extreme negative sentiment in the precious metals markets, seemingly coordinated with Goldman Sachs advisories to short those markets? And what about a glance at the trading records to see who executed massive naked shorts? Wouldn’t it be interesting if they were the same parties as the dumpers? And why? — other than a strenuous intervention in the markets to make those markets look unreliable? Does anyone even remember that the purpose of financial exchanges is to verify and authenticate the clearing of trades to provide confidence that markets are honest so that real business can be conducted?

     What the interveners have accomplished is only to prove that the gold and silver derivatives markets are unreliable. They may have smashed the trade in that kind of paper, but only achieved a firmer divergence between the derivatives markets and the bullion markets where, for example, the premiums on delivery of silver ounces makes the price exactly equal to the pre-smackdown price. Anyway, nobody believes that the London Bullion Market Association (LBMA) or that the New York Commodity Exchange (COMEX) can deliver. Meanwhile, runs on bullion contracts were starting to uncover a contagion of swindling in precious metals obligations that pervaded the western banking system. It was not a coincidence that the smackdown happened three weeks after the Dutch bank ABN Amro notified clients that it would only satisfy demands for redemptions of gold held in its custody with equivalent cash payments. “No gold for you today!” A fair inference based on subsequent events would be that all the custodians of physical gold bullion have misreported their holdings. And now that actions by the European Union and its agents have ventured into the dangerous territory of plain confiscation, there is not a whole lot of faith throughout the western world by people who are paying attention that an account of any kind in any financial institution is safe. There is good reason to fear runs on everything.

     Because the smackdown organizers pulled off their operation in a panic, they probably ignored the potential further negative consequences of their stratagem, namely a worsening loss of confidence in banks generally and in the trade of abstract financial instruments in particular, including currencies. Nervous public officials may be brooding on imminent “bail-ins” and currency controls, but the public may be ready to bail out of the prevailing banking model into things that have been considered more money than “money” for a few thousand years, namely real gold and silver. The basic fact remains: there isn’t enough to go around.

7 Comments on "Kunstler: Aftershocks"

shortonoil on Mon, 22nd Apr 2013 2:49 pm 



There you go again James, telling like you see it. How is a sleazy TBTF bankster suppose to make a living with people like you running around.

Next time you open an account with JPM — they’re not going to give you a free toaster!!

Plantagenet on Mon, 22nd Apr 2013 3:43 pm 



Kunstler’s description of Eric Holder as a “store mannequin” is generous….at least a mannequin is serving a useful purpose.

J-Gav on Mon, 22nd Apr 2013 5:14 pm 



For anyone still dreaming of a gold (or bi-metal) standard coming back, ponder Kunstler’s last sentence. In addition, the market always has and always will be manipulated. Thirdly, nobody knows exactly how much gold anybody’s got … though are articles published pretending that we know. A case in point: the US is required by law to conduct a yearly audit of its reserves … the last audit of Fort Knox was done in 1954! Supposedly, the US has far and away the biggest reserves of any country, some 8000 tons, more than double n°2 Germany (with Italy, France, China, Russia etc also in the top 10). But who knows for sure?

DC on Mon, 22nd Apr 2013 5:14 pm 



I see JHK subscribes to two myths. The first, that ‘homicidal Chechen nobodies’ were responsible in Boston(not even remotely proven as yet), and the second, that even if the system is corrupt, that dogged persistence and (honest) investigators exist in the US law enforcement system and all it would take is one of them to buck his superiors and bring the 1% criminals to ‘justice’.

A little Hollywood for someone as grounded and practical as JHK. Surely he knows what happens to whistleblowers or people inside the system that actually try to enforce the law(rarely happens) in his country? Even if his imaginary investigator did exist, and pieced together the latest round of market manipulations, the case would be closed before it ever got off the ground.

Not one of his better articles, but no one hits a home run every time.

rollin on Mon, 22nd Apr 2013 6:49 pm 



I guess the non-collapse of suburbia and oil has given JHK liitle to talk about except that ever deceptive creation – money.

Fool me once shame on you , fool me twice shame on me. An old and appropriate saying. Wasn’t the housing derivative’s crash enough of a lesson to not trust the big banking/investment system? No evidence of real changes in the system, so why trust it now?
The other old saying “Show me your money” or in this case “Show me your gold.” should be the order of the day.

GregT on Tue, 23rd Apr 2013 3:29 am 



If TPTB, are willing to wage war on other sovereign nations, murdering hundreds of thousands of people, including our sons, daughters, mothers, fathers, sisters and brothers. What makes anyone believe that they are not capable of killing a few people in the homeland to achieve their goals?

BillT on Tue, 23rd Apr 2013 4:06 am 



J-Gav, the market is manipulated, granted, but there is no reason a gold standard will not underpin the next currency used after the current one collapses. Of course it will be valued so high that most cannot dream of really owning any gold, but so what.

DC, as I see it, this is just another ‘false flag’ to slip more of the Police State into the system. The ‘event’ conveniently happened hours AFTER all of the dignitaries were safely home. Same as for 9/11 when no one of any importance was present.

rollin, suburbia IS collapsing. The rot just takes time to be visible. 48 million in the soup lines and counting…

GregT, you are correct. Those killed in 9/11 and Boston were just collateral damage in the game being played today. No one of public importance was hurt. Just common sheeple and there are too many of them anyway in the minds of the elite.