My Dear Extended Family,

Since 1971 (when Nixon closed the gold window) the Dow Jones increased 15-fold and the dollar gold price increased 45-fold. What does this really mean?

The stock markets, the economies, the GDPs, the increasing debt loads, and the financial industries are all corrupted and falsified. The Western economy has increasingly become a debt addict. Debt grows ever faster than the real economy.

The blatant falsifications of the financial industry served to hide the ongoing drama (debt/GDP). The entire financial industry doesn't represent the economy and its over productive debt load any more. That's why the Fed has to falsify financial industry paper gold to hide the evolving drama.

The entire world is now increasingly aware of the gigantic catch-22 we're in. The economy and financial industry is rapidly losing appeal. The affinity for gold metal therefore grows intuitively.

Gold value (anti-debt) will rise faster than the economy and the financial industry. Those in the know will leave the existing system and will move closer and closer to gold - the wealth preserve metal. A very natural process (transition) that grows from intuition (animal spirits).

This transition is irreversible. The Fed knows this as no other (corrupt) governing body. The money system and regime will try to keep this drama hidden from public awareness. This will backfire later on, sooner rather than later.

CIGA Patrick FG

Fed and Bank of Japan caused gold crash

Commodity prices have been falling since September, culminating in a rout over the past two weeks. That is a classic warning for the global economy. By Ambrose Evans-Pritchard
7:22PM BST 17 Apr 2013

It is becoming ever clearer that the roaring boom in global equities since last summer has priced in an economic recovery that does not in fact exist. The International Monetary Fund has had to nurse down its global growth forecasts yet again. We are still stuck in an old-fashioned trade depression, with pervasive over-capacity in manufacturing plant and a record global savings rate of 25pc of GDP.

German car sales fell 17pc in March. That should puncture the last illusions that Germany is about to pull Europe out of a self-inflicted slump.

As you can see from the chart below, the divergence between stock markets and the Deutsche Bank index of raw materials is astonishing to behold, so like the pattern in early 1929.

Steel has fallen 31pc this year. Brent crude is off 17pc since early February, and copper 15pc.

You have to be careful reading too much into commodities, distorted by China. The time-honoured cycle is a surge of investment that comes on stream at once with a lag. America's shale drive has turned the gas market upside down, diverting liquefied natural gas to Europe and Asia. Copper output in Chile rose 7pc last year. The crash in the Baltic Dry Index for shipping rates is partly a tale of too many ships.

Yet excess supply does not explain the collapse in gold over the past week. Cyprus may have been an incidental trigger. If the EU-IMF Troika is determined to strong-arm the Cypriots into selling most of their pint-sized holding of 14 tonnes, it may do the same to Portugal when the time comes, and then you are talking about the world's 14th biggest holding of 382 tonnes.

Bank of America says the gold crash since Friday has already discounted sales of the entire Cypriot, Portuguese and Greek gold reserves combined. "As we believe additional gold selling in the European periphery is highly unlikely, we find it hard to fully justify the sell-off," it said.

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