Me thinks this is the only way out for the US.

Later

MIDAS

Appendix

Good Morning Bill,
Well, this has the classic earmarks of a raid here and now as you observed yesterday, we saw HUI tracking down all afternoon yesterday in an ominous underperformance, and now overnight we have the "classic" stunt , the one they always use... namely the chart breakout to a marginal record high at 30.90, touching off buy stops to short into, (and add muscle to the raid when they sell), in short same old same old. A parting kiss from larry.

Plus JPM has to mark that position to market tomorrow night, plus China (fully aware of this) extended an engraved invitation to knock down the whole commodity spectrum in a thin market so they can buy them. I concede copper is not cooperating, but Copper is to the US as Rare Earths are to China, ...economic war material I expect JPM is licensed to take copper to 6 to 8 to put it to those Chinese good and hard.

So lets see if they try and raid, which leads me to my second thought, which I have never seen advanced anywhere, very probably because it appears so off the wall

And its this.With all requisite humility.

These raids have become almost perfunctory in the last year. They used to really clobber us for large, but in the last year or so the raids are kind of mousy, lots of sturm and drang, but diminishing damage to the downside.

In fact, the gold raids look somewhat like JPMs raids in the silver market, the takedowns are entirely related to trying to extricate themselves from the uncovered short position , and the primary buyers at the bottom of the raid are they themselves.

Well, do you suppose there is any possibility that the United States Government might in fact want gold UP. I beg your pardon? yeah, that’s what i said ...UP.

Is it further possible that this rather steady and disciplined 10 year bull market in Gold could at least in part be driven by the United States recovering their swapped and otherwise encumbered Gold , in short restocking Fort Knox. Sure they talk the talk, but just look at Gold's walk, because they in fact they are surreptitious BUYERS, undoing the encumbered tons they swapped out over the last 30 years.

Well, that’s just nuts. But not if there were two halves to the equation.

Here then is the equation.

The debts and entitlements of the US are unrepayable in real dollars, we all know the math is unworkable, they only possible way to resolve them is with a massive inflating away of today's dollars, perhaps so debauching the currency in the process that it loses its role as the worlds Reserve Currency. We will pay our debts with these dollars and the world (read China) can whistle.

The " New " Reserve Currency will be a reconstituted US Dollar backed by Gold. The United States will never willingly give up its hegemonic role as the worlds reserve currency. To be that new Reserve Currency, you better get your Gold back (if indeed it ever physically left) , and unwind trillions in decades old swaps. In short unencumber it for its new role as the backing for the New Dollar to come.

In short , they pay the present unpayable debts with grossly devalued "Old Dollars", and get Fort Knox organized as the linchpin of a forthcoming Gold backed " New Dollar" and forward we go. They can price Gold at whatever they like if they own the majority of it.

So, it sets up almost a comical irony, no , not almost, it is comical. GATA arm and arm with Uncle. I weep.

To suggest that GATA and the US are inadvertently on the same side of the Gold market for their own respective reasons has me laughing out loud, that this steady relentless multiyear climb from 250 in 2002, is the Federal Government covering decades of swaps, because if you look at the multiyear pattern, it is a bit redolent of a giant short being covered. Slowly and relentlessly. And they are at pains not to let it get loose. Nor however do they stop it.

Could the US government in fact WANT to gradually bring Gold back on to the reservation of respectability, tactically smacking GATA upside the head at hundred dollar increments, since you can hardly revalue it to 8000.00 from 250 bucks, it would look ridiculous.

Much better to ease it up I n a controlled disciplined fashion. Optics.

Bill Murphy's face will, one fine day soon, grace the new hundred dollar gold backed bill. Bill, get it? Now, that IS optics. :)
gs