Toothless Sanctions:

Along with weak oil prices sanctions are hurting Russia. However the media don’t comprise news about how Russia is adapting to make Western economic manipulation toothless. With limited abilities to close transactions in dollars or euros, which make up a large share of foreign reserves, Russia is moving on to gold and the Chinese Yuan. In the sanctions battle, it is making sense to delink from the dollar and euro. Nonetheless a new wave of economic sanctions against Russia is possible, said German Chancellor Angela Merkel at the G20 summit in Australia. However, German Economy Minister Sigmar Gabriel said in contradiction that further sanctions would not solve current problems in Ukraine, but only aggravate the situation. Russia keeps denying the presence of its military forces there. It is in German interests not to impose more sanctions on Russia. As an exporting state, Germany has very good economic relations with Russia; that get a lot of gas and oil from Russia while it exports machinery and cars there. So it is in Germany’s vital interests to have good economic and political relations with Russia. Germany should end those sanctions.

Gold purchases by the Russian central bank ramped up alongside the Ukraine debacle. “As of August, Russian gold reserves surged 7% year-to-date. Another 200 tons of gold are expected to add to the total of 1,112 tons in reserve. At a total of 273 tons purchased in 2014, this would account for 6.8% of world demand.”

Russia’s delinking from the West comes with expanding trade with China. A second major energy deal is now in place, bringing the total, so far, for oil and natural gas deals to $800 billion. Although a bit absurd, for simplicity the value is quoted in dollars, as the transfers will be made in rubles and Yuan. China will secure nearly a fifth of the natural gas that it will need by the end of the decade, while Russia has a friendly and committed buyer for energy that doesn’t fall under the sway of the Western cabal.

Due to today’s currency crises financial assets are unlikely to preserve real purchasing power in this unfriendly environment, which will lead at least partial to international remonetisation of gold. Under pressure from economic sanctions, Putin may calculate that now is the time to play his ‘gold card’. Russia’s gold buying accounted for 59% of central bank gold purchases in the third quarter of 2014. Their gold stockpile is fifth in the world, and reserves are now valued at some $45 billion, which doesn’t include the value of recent purchases.

If Putin decided to back his currency partially with gold, this should hurt the US dollar as it suddenly faces competition from a credible, gold-backed currency, it is likely that other central banks diversify at least some of their dollar reserves into interest-bearing, gold-backed roubles. Countries importing oil from Russia would have an additional incentive to do so as they would be able to pay for Russian oil imports in roubles and avoid the sanctions.

And this idea now has become one of the most powerful drivers of gold demand. China doesn’t really care to tell people how much gold it has or is adding to its foreign reserves. The People’s Bank of China (PBOC) last updated in 2009, with official reserves at 1,054 tons. Anecdotal evidence and discrepancies in official demand hints at purchases that are much larger as China admits. Regardless, whether is known what the ultimate target is for the PBOC. – In a series of articles over the last several years by party officials, state-run papers have consistently cited a need to raise central bank gold reserves to 8,500 tons, to lessen dependence on dollar and euro reserves, but the major reason is promoting the Yuan to international reserve currency status. China, in fact is busy converting its foreign exchange dollars into gold. They bought a record amount of gold in 2013. The pace in 2014 hardly slowed. Global gold mine supply is about 56 tons per week, and there were many weeks this year the Shanghai Gold Exchange bought more than that. By some estimates, China has consumed some 70% of global gold production this year.

Securing massive deals with Russia that do not use Western currencies only accelerates the process of de-dollarization. Add up the projected demand between Russia and Switzerland, if the referendum passes, and you’re already looking at new demand equivalent to 14.3% of current worldwide demand.

Making some conservative assumptions China may be halfway its target of 8,500 tons reserve, but quoting other sources it may have close to 10.000 tons. – These purchases took place across a decade or two. But if half of that should be added as still being necessary that will account for an extra 5 to 10% of current gold demand. Anyhow, given the fragility of debt-laden Western nations, China wants to accumulate more, sooner rather than later, as long as it doesn’t drive up prices too much.

Although the Chinese and Russian central banks are the biggest potential buyers of gold, but there is also India. And don’t forget Switzerland, as the upcoming gold referendum will be of significant influence, it has the potential to boost gold demand for years to come. These central banks are hardly alone. Worldwide, central banks have been net purchasers of gold for 14 straight quarters. If yet a big player like a central bank started to use the COMEX to expand its gold holdings, it could overwhelm the COMEX’s relatively small inventories. “Warehouse stocks registered for delivery on the COMEX exchange have declined to only 870,000 ounces (8,700 contracts). Almost that much can be demanded in one month… 6,281 contracts were delivered in August.” – And for silver: “COMEX is on the hook for nearly 600 million silver ounces in December but only holding an inventory of just over 60 million ounces, close to a 10-1 ratio of “obligation versus ability to perform”!

Availability:

The physical markets will be swept clean by a systemic “run”, rather sooner than later.  “The paper markets may go down further making physical pricing stronger, Already for silver is seen a sub $16 on paper with nearly $20 physical – with premium included. The average person will marvel at the prices of gold and silver but that will not be the real story, as the gold and silver markets will be defined by “availability” …or lack of it.  What will happen when gold and silver prices are breaking out to the upside and there is no product availability?” THIS surely is going to define the market.

“What if COMEX silver was moving to $20 but you couldn’t get any for $30? Or COMEX at $50 and your $100 bill could not entice someone to part with an ounce of silver?”  When the fiat system does finally collapse which it mathematically will, real metal will go “no offer” for any amount of fiat money. Lack of availability is now happening. When people want something and are told they cannot have it they want it even more!

If you have waited to this point to purchase silver or gold, the market told you something two weeks ago.  As the market has spoken and told: “if you want $15 silver, you can’t have any”! Remind the danger is what will happen when prices are higher and “you can’t have any”?  Don’t let this happen to you!

The big banks aren’t stupid either. They will see these problems coming, and can probably induce some holders to add to the supplies, not likely too many speculators will take delivery. But a short squeeze could definitely lead to huge price spikes. It could even lead to a collapse in the confidence in the futures market, which would drive gold much higher.

Signs of high physical demand from Russia, China, India, and small investors buying coins from the mint indicate that gold prices should be rising. “The GOFO rate (London Gold Forward Offered rate) went negative, indicating tightness in the gold market.” Indicating that at least on a short-term basis, the gold forward rate is pricing in a shortage of physical gold and concerns regarding delivery. This is great news. Supply goes down, prices go up. Maybe it’ll kill off some of the perpetual short positions too.

Gold can be used as collateral. Usually there is charge for this privilege, but today they pay extra if someone lend them their gold, – meaning gold in hand today is worth more than paper currency. Only people swapping gold and want it back have to question, – “Will it be available on return?”

Concerns about China’s central bank wanting to de-dollarize its holdings should be adding to the interest in gold. In other words, all the rumors around gold don’t add up. Expect currency debasement to drive gold even higher, and so continue to own gold, and if not, the economic fundamentals will drive the gold price much higher in the long term. Also it could be a matter when big banks will lose their ability to manage the futures market.

Over centuries, gold had proven useful. It may not be perfect money. But it was the best yet discovered. Some crypto currency, such as Bitcoin, may eventually prove more useful. But that is for the future to decide. For now, gold works. “Fiat,” or paper, money does not. Economically spoken, since the supply of gold is limited, consumer prices tend to remain stable. The supply of credit is also limited, because the currency is limited. When demand for credit increases, the price of it – the interest rate – goes up. And the credit-fueled boom comes to an end.

But for now, the Federal Reserve, the Bank of Japan (BOJ), and the ECB have decided that they want you to take your money out of your bank account and place it into the stock market.  Apparently they have models that say this is a good thing. Or they just want you to spend it. And to be sure that you follow their wishes, they don’t leave you any better options — and so virtually every hard asset has been targeted for price suppression. Except real estate because, people have to borrow a lot of money from the banks for that, so they encourage and cheer your participation there.

In short, everything the central planners have tried has failed to bring widespread prosperity and has instead concentrated it dangerously at the top. Whether by coincidence or conspiracy, every possible escape hatch for 99.5% of the people has been welded shut. All the people are captives in a dysfunctional system of money, run by a few for the few that is heading for a complete disaster.

Iran launches Middle East’s ‘biggest’ gold plant:

Iran has opened a new gold processing plant, the biggest in the Middle East, hoping to double its production of precious metals. Using a unique technology, it will mine up to three tons of gold per year. The new facility is located near one of the country’s richest mines, Zareh Shuran, in northwest Iran, in an area where gold, silver, and mercury are extracted. The plant’s production can reach three tons of gold per year and doubles the total of Iran’s gold production. It is expected that the plant’s gold production capacity will soon reach six tons per year. Silver and mercury productions are expected to hit 2.5 and 1.5 tons, respectively. The gold ore reserves of the Zareh Shuran mine are estimated at 20 million tons.

Moscow and Tehran also are discussing plans for Russian companies to help construct power plants in Iran, in return for crude oil; sources close to the trade talks now underway in Tehran estimate the first stage of the contract could be worth up to $5 billion.

G20 a total Cabal failure:

The G20 meeting ended in Australia with a total defeat for the cabal and its agenda, multiple sources said. The cabal tried to use the Ukraine as an excuse to start war against Russia as a way to rebuild Western economies and keep itself in power. However, instead, the French, British and Germans abandoned the cabal controlled Americans and joined with the vast majority of the planet to support a BRICS led initiative for a new Marshall plan for the planet, the sources say. Fortunately, the attempts to inflame the sentiment for war using the Ukraine and ISIS went nowhere with most world leaders. Merkel and Putin had a 4-hour private meeting; the two leaders speak each other’s native language fluently. Judging from various sources; Germany would distancing itself from the US regime and the EU Cabal-ruled Nazism, to join Russia in Eastern Europe by signing a free trade agreement between the German led part of the EU and the Russian led Eurasian Economic Union. Germany would pay in German Marks for Russian gas as the French gave the impression of their intention to pay for Russian oil and gas in French Francs.

The Secret Illuminati Power Revealed

‘Politics blinded them?’ Putin says sanctions against Russia may backfire on Ukraine:

This interview with Putin is instructive to read.

http://rt.com/news/205871-putin-ukraine-sanctions-ard/

Where is the gold price heading?

Are Russia and Europe buying more gold? Will the Swiss vote ‘yes’ in its gold referendum? Is there a chance for QE4? – Peter Schiff comments on some of the most recent headlines surrounding the gold market and also to share his thoughts on the U.S. economy. The Fed will raise rates not because they want to, but rather because the central bank will be put in a corner with a sinking dollar and accelerated inflation. – Read the details in my next week’s essay. – “Gold is going to $5,000,” Schiff says. “I think when this decline is over… gold is going to take a rocket ship back up.” Tune in below to see why he thinks that this is the best fundamental environment for gold he’s ever seen, and why he thinks this deflation scare may be a hoax.

And this is from Mr Doom – Mark Faber about Gold Price, US Dollar & the Swiss Gold Initiative

Marc Faber: “Look. The forecasting record of people is horrible, in particular, the forecasting record of the Federal Reserve. So, I don’t know, maybe it will go below $1,000 but my sense is that it will not stay below $1,000. – I would use the current weakness as a buying opportunity. – I’m telling everybody, you as an investor, and me as an investor, we cannot trust the government. – I am my own central banker. I keep my own physical gold. I do not trust anyone of these FCKs. Of all the currencies I see in the world, there are only four that I like: Gold, Silver, Platinum, and Palladium. Nothing else.”