Switzerland

As part of a global investigation into how much physical gold central banks have stored at what location and how much is leased out, we submitted the local equivalent of a Freedom Of Information Act (FOIA) request at the central bank of Belgium (NBB) to obtain information about the amount of Belgian official gold reserves, the exact location of all gold bars, the type of gold accounts NBB holds at the Bank Of England (BOE) and how much is leased out and to whom. The outcome of this research was not what we had expected...

Forget Norway. Japan. Iceland. Switzerland. Or any of the other places around the world that are notorious for being painful on the wallet. Venezuela is now the most expensive country in the world, hands down. To give you an idea, the cost of a 15-minute taxi ride to the beach yesterday afternoon totaled an eye-popping $158.

Like other banks, Deutsche has been caught up in the Libor-rigging scandal, and faces another investigation in Switzerland for suspected price-fixing in the precious metal market.

Gillian Tett, ourselves and many others have warned that Deutsche and its massive derivative book has the potential to be a ”European Lehman Brothers”. Is Deutsche Bank, the largest holder of Warren Buffett’s “financial weapons of mass destruction” derivatives in trouble?

And now the real shocker: there is over US$100bn in gross financial exposure to Glencore. From BofA: "We estimate the financial system's exposure to Glencore at over US$100bn, and believe a significant majority is unsecured. The group's strong reputation meant that the buildup of these exposures went largely without comment. However, the recent widening in GLEN debt spreads indicates the exposure is now coming into investor focus."

Moves will be made to ban physical cash in the coming months.

The U.S. dollar is looking good worldwide and, in fact, so is gold - it’s just that, at present, the dollar is in the number one spot. But, unlike gold, the dollar is at risk. U.S. debt has placed it in a precarious position from which it will most certainly fall. The dollar is not a truly strong currency; it is essentially, “the best looking horse in the glue factory.” It will be the last to go, but it will indeed go. We may have a bit of time before that happens. Whether it’s measured in months or years, we can’t be certain. A gold mania is not imminent, but we believe it is inevitable.

The Western gold space has learned a great deal about the Chinese gold market and global gold flows, though we’re always left with loose ends. For example, the issue regarding PBOC gold purchases; how much gold do they truly have and where was it bought? Does the PBOC buy 400-ounce Good Delivery (GD) bars in London and covertly transports these gold bars to its gold vaults in China mainland, or are the Good Delivery gold bars shipped to Switzerland, refined into 1 Kg 9999 gold bars, sent forward to the Chinese mainland where they’re required to be sold through the SGE gold exchange and from where they can be bought (in clear sight) by the PBOC.

Neoliberal economics is blind to reality and serves to justify the destruction of the economic prospects of the Western World. It remains to be seen if Russia and China can develop a different economics or whether these rising superpowers will fall victim to the “junk economics” that has destroyed the West. With so many Chinese and Russian economists educated in the US tradition, the prospects of Russia and China might not be any better than ours. The entire world could go down the tubes together.

"...there’s an enormous and growing disconnect between the cash and physical markets for gold. This is exactly what we would expect to precede a major market-shaking event based on a physical gold shortage."

The best position for a tyrant or tyrants to be in, at least while consolidating power, is tyranny by proxy. That is to say, the most dangerous tyrants are those the people do not recognize: the tyrants who hide behind scarecrows and puppets and faceless organizations. The worst position for the common citizen to be in is a false sense of security and understanding, operating on the assumption that tyrants do not exist or that potential tyrants are really just greedy fools acting independently from one another. Being the clever tyrants that they are, the members of the central banking cult hope you are too stupid or too biased to grasp the concept of conspiracy. If you cannot identify the agenda, you can do nothing to interfere with the agenda.

The fallout from the emissions scandal that triggered a harrowing plunge in Volkswagen's shares and now threatens to derail the German economy continues as Detusche Bank delivers a sobering assessment, the Green party blames Berlin, BaFin lanches an investigation, and the town of Wolfsburg panics.

In short, the next round of the great crisis is beginning.  It will take time to unfold, but we have reached Peak Central Bank Intervention. When Central Banks loosen policy and the markets fail to respond, you're in the End Game.

"There is a chance that the Fed, like a number of central banks in recent years, may find it impossible to escape the effective lower bound to which policy rates were cut during the dark days of the crisis some seven years ago."