China, Russia, Iran Dumping Dollar For Gold


International Forecaster

Something is going on that your government does not want you to know about. Very few journalists have written about it and little or nothing has appeared in the mainstream media. The story could be one of major stories of our time.

Western powers have tried to destroy gold as a backing for currencies for many years. Presently the major media won’t touch the story and that is understandable.

Something we have been writing about for years is the Shanghai Cooperation Organization known as SCO. Few have been listening and few have been interested in what their mission is and what they have been up to.

Some of the members are large oil producers and some, like China, are large oil users. Some have very large US dollar surpluses. As well, some are large commodity and gold and silver buyers. In fact, members are in a great part responsible for driving these prices higher. It is debatable, but we believe there is a conscious effort to accumulate gold and silver, dump dollars and to back their currencies with gold.

China and Russia are both large gold producers and for a number of years have been buying up domestic gold and silver production, so that it never reaches the market and does not affect prices. If anything the absence of sales tends to push the markets higher. As a matter of fact Russia and India are visible buyers. Even Iran with its oil surplus recently announced that they had purchased 340 tons of gold. Their recent gold purchases are very significant as affiliate members, which have access to the present and ultimate direction of the group. You might say buying gold has been a protective effort to shield members and close observers from the problems generated by dollar policies. They are accumulating gold, as many have been worldwide, for the past ten years, but particularly over the past few years.

This buying, for protection, has served to thwart the efforts of US policymakers, the Treasury, other central banks in Europe and the Fed, from being able to continue the blatant suppression of both gold and silver prices. The malefactors, except for forays into derivatives and futures, which are transitory, have lost control and suppression of gold and silver prices, and it is only a matter of time before all visages of any control will be visible. Since 1988, in August when Present Reagan signed the Executive Order creating, “the President’s Group on Financial Markets” and the subsidiaries that have grown out of that policy, that the Treasury won many if not most of the battles. The SCO in part changed that and now they and the public are winning the war for a fair and free gold and silver market. The current class action lawsuits, including RICO, are a testament to the market manipulation in silver, which is finally coming to an end. HSBC and JPMorgan Chase, the latter that is the major owner of the Fed, are going to be finally prohibited from rigging these markets. Their officers all belong in jail, but elitists never go to jail; they pay fines, and keep right on robbing the public.

Other SCO members and observers are accumulating gold as well, be it in smaller amounts. We might add that other nations observing Russia and China and their gold purchases are buying as well. These participants must believe that there could be a return to sound money; otherwise they wouldn’t be gold buyers. Buying gold is certainly preferable to holding US dollars, which have consistently fallen in value versus other currencies over the past ten years. Then again all currencies have fallen versus gold over that period, some 19.6% annually. It is nice to see nations are finally waking up to the reality that fiat currencies will all over time deteriorate versus gold. The temptation is enormous to deficit spend.

The most interesting aspect of the SCO is that they do not strive for political agreement such as the European Union. They are interested in economic stability and development and security. There is no overall binding laws. Nations retain their sovereignty, which is the exact opposite of what the elitists in the US and Europe desire, and that is world government. The SCO has provided great flexibility something that is non-existent in elitist controlled countries. Another interesting facet is that the SCO probably represents half of the world’ population, far more than the US and Europe. As these nations accumulate gold so does some of their citizens, which puts strong upward pressures on gold prices on a continuing basis.

In addition some of these nations, such as China, are spending dollars by buying natural resources and other things in other nations in an attempt to relieve themselves of excess dollars earned in trade. Both Russia and China fully realize that the US dollar is in serious trouble and has been for a number of years due to fiscal debt and the unbridled creation of money and credit by the Federal Reserve. They well know the dollar is in serious trouble and what the outcome will probably be.

As the economies of the US and Europe become more deeply mired in problems the economies of SCO nations more and more resemble the free economies of old that were very successful. You might say they have found their way back to basics and sound money. As the dollar comes under further downward pressure more nations will probably join the SCO to escape the clutches of European and American imperialism and bureaucracy, which for some years has been onerous and unsuccessful. What we see is a natural path by nations to extricate themselves from the control of Wall Street and the City of London, which have dominated the world for so long. All these facts considered we believe gold will find its way substantially higher with the participation of these nations, a factor the West never figured on. These ten nations are sucking excess gold out of the market every day and that will continue indefinitely.

These SCO nations are well aware that the surge of hot dollars created by the Fed out of thin air are headed their way and with them inflation. Brazil was the first nation to attempt to stop this onslaught by imposing a 6% tariff on interest and dividend paying Brazilian securities, purchased with US dollars. Over the last two years between stimulus and the Fed $2.5 trillion has been injected into the US and world financial system. As a result commodity and gold and silver prices have exploded. This has caused the dollar to fall in value versus other currencies and gold. There is no question more and higher inflation is on the way, as the Fed gets into QE 2. You can also bet that QE2 will not be $600 billion, but more than $2 trillion. Inflation is already showing up in food, petroleum products, airline fares and in many other items that we use every day. As usual the government says there is little or no inflation. Even competent economists still use government’s bogus figures. What can they be thinking of? They know what is going on as well as we do. That means we are embarking on the highest inflation rates in US history. Thus far the undertow of deflation has been superseded by government banking and Fed aggregate creation. The Fed, in order to subdue deflation and such spending has to always overshoot the inflation they create, so that they can be sure that deflation cannot take hold. This money and credit is in the process of working its way through the economy, spreading inflation as it winds its way through.

The only investors who are being afforded protection are those who have invested in gold and silver and commodities. That is less than 2% of the American population. We predicted in mid-May that QE2 and QE3 would take place for a combined $5 trillion over the next two fiscal years. In fact, the Fed was late in starting in June and as a result 4th quarter GDP growth will probably be 1% and the 1st quarter of 2011 will probably be in the minus column, as unemployment heads to 25% and extended benefits run out. We are not seeing growth; we are seeing forced feeding.

The Fed’s promises are not worth the paper they are written on. Ben Bernanke will print money until he cannot anymore and we have hyperinflation. That is because he has no other choice. He has no way out and he knows it won’t work. Tragically, this is where we are headed and there is no way to stop what the elitists have put deliberately in motion.

As long as quantitative easing is official Fed and Wall Street policy, gold is going to continue to rise with silver, and the stronger the case is that gold is the real world reserve currency. That means all currencies will eventually have to be backed by gold. We believe that elitists have accepted this fact and that was borne out recently by World Bank President, CFR, Trilateralist and Bilderberger Robert Zoellick. We can assure you that was no slip of the tongue. That was a cleverly planted trial balloon to get public reaction.

We do not see QE2 and QE3 as incompetence or bungling. It happens to be the only option available to the powers behind government. The same errors committed during the Great Depression of the 1930s are being repeated and economists, including Mr. Bernanake know they do not work. Yes, the Fed contracted money supply and when they let it loose again, it was too late for it to be in anyway effective. Next comes tariffs as an outgrowth of: currency wars; interest and dividend penalties on the inflow of hot, inflationary dollars and retaliatory tariffs as a result of losing 8.5 million jobs and 432,000 businesses over ten years to free trade, globalization, offshoring and outsourcing. Smoot-Hawley tariffs and even dumb Fed moves were bad enough, but Hoover’s raising of taxes by 150% was a monumental piece of stupidity.

At the root of all this is that the Fed is supposed to be saving the US economic and financial structure. They are not doing that, they are saving the banking system and Wall Street instead and these are the

miscreants that caused the problem in the first place. The result of this policy of zero interest rates and easy money is that few are saving.

There you have it, planned destruction. Is it any wonder the SCO members and observers are buying gold on every dip and will not stop doing so until they run out of dollars. Our only question is; what took them so long and why are they not buying more faster?

15 Responses

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  3. PotomacOracle says:

    Nothing changes until this changes:

    And the only way that will change is through a movement of revolt led by this nations monetary anarchists.

  4. BeyondtheSmoke says:

    All these gold bulls are on an agenda and have lost most of their metals. In the history of mankind gold has always had only speculative value and except for used in jewelry it has no intrinsic value whatsoever like some other industrial metals or even silver. In hard times, gold can’t be eaten, planted vegetable or grown other useful stuff on it, at best you can stuff it under your pillow and sleep on it. Why feed the gold producers at ever higher price? China and Russia as you mentioned are big gold producers, who would benefit when gold is marching towards ever evident bubble price? Just look at the chart? Should it become necessary, governments can confiscate gold so for small citizens hoarding gold is not a solution and is in fact utter useless. It has happened before and surely can happen.

    It is amazing to see all these gold bugs getting worked up as such and try so hard to drag others onto their treadmill. If one is to profit from gold, one has to sell it, untill then it is all only paper profits. Once it’s sold, it’s back to the fiat currencies that gold bulls keep banging on about. Certainly fiat currencies have all sorts of flaws, but hoarding gold, and encouraging ever more average citizens to jump in, us surely not the answer.

  5. J. E. Dorner says:

    When you stop and think about it, these SCO countries don’t have to “wait till we go back on a gold standard.” They could agree to trade in gold and/or silver. In other words, as they trade with one another, at the end of the year, whoever has a trade deficit, would make up for it by giving the other country enough gold to zero the balance. Little by little, as more of these “gold holding” countries do this, the demand for the “world reserve currency” diminishes.

  6. Bud Wood says:

    Most western democracies want (need) voter support so the political benefits game is needed to garner that support. With most of the populace of the western democracies having high time preferences (“I want it now!”), borrowing provides the “now” as differentiated from savings and investments which pay-off slowly. When benefits are provided for hundreds of millions of people, indebtedness rises up very fast – – – until limits are reached.

    Folks, that’s where we are now. And we’re seeing the high time preference infants, who want their bottle (benefits) now, rioting in the streets. What do those demanding people expect their respective government leaders to do? Print paper money and spread it around? That’s about all that can be done and that’s the receipe for hyper something or other.

    Hope you enjoyed your democracy while it lasted.

  7. Measured in contant dollars and based on the consumer price index of 1960 $1.00=$1.00 Assuming the average inflation rate per year is 5% here is the following formula: (1.05)50=11.47-1.00=10.47 Rounding off to 10.00 $1.00:100%::10.00:X=1000% inflation 2010 dollar=10 cents. It takes $10 to buy what 1 dollar would buy in 1960. The dollar has lost 90% of its purchasing power since 1960.
    Since 1913 when the Federal Reserve enacted there has been 2,000% inflation. A 2010 dollar is worth 5 cents. The dollar has lost 95% of it’s purchasing power since 1913. When the dollar is devalued to 1 cent, you might as well use it for toilet paper. I find it quite interestin that most of international bankers have Jewish last names or is just a coincidence. I firmly believe it is a certain element that owns and controls monetary and banking system. For all paractical purposes I call them the Zionist bankers. The Zionist are political organization comprized of radical ultra orthodox Jews that are maskerading as Hebrews. Your own hold book condems charging interest, but you do not follow it. You follow the Cabala and the Babylonian Talmud. You are even in the higher eschalance of free Masonery, the illuminati. Your god is beelszubub the leader of the demons. Anyone who even mentions the word Jew is branded a racist by the Zionist Anti Defamation League. A Jew is a religion A hebrew is a race of people and a Israelite is a nationality. Who ever is controling the monetary and banking system, if the shoe fits, wear it!

    • Maitry says:

      Lets not lose track of the root of these problems, who is the biggest contributor to the zion movement and who controls and prints the $ dollar on paper? …yes the rothschilds.

      the reason for all this is simply because china and india were growing strong economically and “INDEPENDENTLY”, while japan were showing its distances from the u.s. this is a worry to the rothschild’s.

      it is a threat because they want to keep zionist on top of the food chain, controlling world affairs while making sure a threat does not arise to eradicate their agenda for world domination, therefore a rise in prices.

      the independence of any nation is a worry for these control freaks, your independence
      is also a threat to their agenda.

      • Maitry says:

        oh and just to add, whoever is in control we as the people will always be a slave to that system.

  8. The public says:

    The general population, normal people, do not have any sort of money to invest in gold. So, we are screwed either way.

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