COMEX PRESSURE POINT
The COMEX is under constant unrelenting pressure. They must shift around ill-gotten precious metal inventory in order to avoid a default. That would be embarrassing. The main device for maintaining order at the COMEX continues to be naked shorting of futures contracts, a blatantly corrupt practice. The naked short ambushes occur with greater frequency in recent months. The arrival of Scotia Mocatta as a provider of gold supply and naked short commitments will kill them eventually, as they have made a deal with the devils. The overnight dispatch of silver from the US to London has grown enormous. One can only suspect that the raids of GLD gold inventory and SLV silver inventory is much greater than is estimated even by its most ardent critics. The illicit sources for COMEX precious metal are fast drying up.
The new wrinkle to render damage to the COMEX is the arrival of the Shanghai Gold Exchange. The graphic displays the differential, a basis for potential arbitrage. Complex arrangements can be constructed that take advantage of the differential, basically buying the gold metal in New York, finding a way to make it available in Shanghai, where it is sold at a $20 to $30 higher price. The end result of the arbitrage is high volume drainage of gold in New York. The snapshot below is taken from December 7th. Several other snapshots are available, with similar price spreads. Finally COMEX based in New York, a major nucleus of corrupt financial markets, has some competition. Expect the spread to widen, the opportunity for arbitrage to grow, and pressure to build for a breakdown.
Sadly for the evil camp, they are fast running out of sources. They stole the entire MF Global private accounts, denied the clients their legal right to receive silver in delivery, and received legal protection by the US Govt and Appellate courts, after changing the law applied to financial firm liquidation instead of brokerage firm liquidation. It was a blatant maneuver that has depleted the COMEX of a major slice of legitimate business. The subsequent similar raid on PFG-Best had an echo effect, adding to the removal of COMEX clientele. The end result is that the risk hedge trade is finding ways to conduct their business without use of the indescribably corrupt COMEX. So the COMEX is being isolated in risk hedging just like the US Dollar in global trade.
The upcoming Petro-Dollar sunset has very uncertain timing indications. The assassination of Prince Bandar in Saudi Arabia, followed by the potential in capacitation of King Abdullah could work to weaken the foundation of the Petro-Dollar itself. Back in April 2010, the Saudis and other main Persian Gulf nations struck a deal with Russia and China for protection in the gulf region. That accord was not given much emphasis anywhere, nor publicity. But to the Jackass, who had a source at the meeting, the event signaled the sunset of the Petro-Dollar defacto standard. The Saudis would turn to Asia for protection and security, at a time when their crude oil trade was growing with Eastern nations, and when the North American production was made more available for the US demand in markets. The day is nigh where the Saudis accept non-US$ payments for crude oil. They might first accept Chinese Yuan, then Japanese Yen, then Korean won, then Gold itself through big Turkish bazaars. The Petro-Dollar is being isolated for sunset, and will be a key event is the removal of the US Dollar as center for global trade settlement. Also, the Saudi regime in my view does not have much longer to survive. Numerous companies and financial firms and export facilitators have exited from the United Arab Emirates in preparation for the fall of the House of Saud. The Saudi Arabian royals have unstable neighbors in every border, especially Bahrain,Iraq, and Yemen.
WILD CARD FACTORS
Numerous wild cards float on the global trade table. Bank strictures head the list, with imposed rules on account reporting abroad, with tax information requirements, and with capital controls. It is harder each month to move large amounts of funds. The forms to complete have become onerous and imposing, acting like implicit restrictions. It is harder each month to use simple bank cards at ATM machines. With a simple rule change, the banks cannot complete these transactions. The organized and patterned restrictions work to trap US Dollars within the local US borders. Consider it an internal mechanism to assist the global isolation of the US Dollar.
LOST GLOBAL RESERVE STATUS
The described isolation on numerous fronts, whether trade or COMEX or banks, all work toward the elimination of the toxic agent in the US Dollar. The world wants a more just, more functional, more efficient, more equitable global trade system. The United States has abused its global reserve custodian position too long. The world is fighting vigorously to remove it. The usage of the US Dollar as a credit card to finance its consumption binge without ability to pay will come to an end. The usage of the US Dollar as a device to enable powerful aggression in war to advance syndicate interests like vertically integrated narcotics will come to an end. The usage of the US Dollar as a banking monopoly device will come to an end. The usage of the US Dollar as an instrument for bond fraud will come to an end. The usage of the US Dollar as a free lunch device to finance the US Govt deficit will come to an end. When the US Dollar is no longer the global reserve currency, the door to the Third World will be opened wide. When the US Dollar is no longer the global reserve currency, the supply lines will be interrupted to the US Economy, giving off a prominent Third World stench. When the US Dollar is no longer the global reserve currency, the price inflation effect will become a national topic of grand debate and extreme anger. When the US Dollar is no longer the global reserve currency, the United States as a nation will experience tremendous additional isolation and hardship, as most Third World nations do. The level of corruption within the US Govt and US banking corner offices is already far more entrenched than any Third World nation. The vote fraud for US national elections is equally prevalent, but more sophisticated.
When the US Dollar is no longer the global reserve currency, the Gold Standard will be right around the corner, if not already in the implementation stage. The Gold price will react quickly to the removal of the US Dollar from its prized perch of abuse. The center of the new trade settlement system will be GOLD, which is not even being discussed by the enlightened denizens of the gold community. It will be the basis of the Letters of Credit, in the form of gold trade notes. The short-term credit that facilitates trade will have a truly magnificent grand Gold core. The common agreement will be to make the Gold price at least $5000 per ounce, probably closer to $7000 per ounce. They will in the process dismiss, overrun, and put into oblivion the COMEX and the LBMA, rendering them to the scrap heap of irrelevance.