Posts Categorized: General Editorial

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CONNECTICUT OFFICE: TORONTO OFFICE:

PO Box 577 Bay Adelaide Centre, East Tower

Sherman, CT 22 Adelaide Street West, Suite 3400

U.S.A. 06784 Toronto, Ontario

Phone: 1.844.364.1830 Canada M5H 4E3

Fax : 1.860.799.0350 Toll Free: 1.844.364.1830

www.tanzanianroyalty.com

Buckreef Gold Project Not Effected by New Laws in Tanzania

FOR IMMEDIATE RELEASE August 11, 2017

TORONTO, ONTARIO – Tanzanian Royalty Exploration Corporation (TSX:TNX)(NYSE MKT:TRX) hereinafter (the “Company”) announces that it is not affected by new laws in Tanzania.

“The new mining laws in Tanzania appear to be an action to gain a fair share of the financial rewards for the people and nation of Tanzania while still providing incentives to the investors. The proposed legislation is not nationalization.” stated James E. Sinclair, Executive Chairman.

Jim Sinclair co-authored a book titled “BOOM,” written in the 1990s with Mr. F. Vogl, former Director of Communications for the World Bank. “Boom” outlines the authors’ prediction for the economic development of China, Tanzania and India as those countries move into the modern Global economy. Many of the new laws adopted in Tanzania (and elsewhere) were outlined in the book. The authors’ premise, which is being borne out in present legislative trends states that to participate in the development of a foreign economy investing companies must enter into mutually beneficial contracts.

The Company executed a joint venture contract granting 45% for STAMICO, the State Mining Company, and 55% for the Company as investor. The Company carried all the costs for the Buckreef Project up front. These front end costs of the project shall be reimbursed out of production. Tanzanian Royalty paid to the Government of Tanzania US$3,000,000, a non-refundable up front fee, for the privilege of operating in Tanzania.

Public companies are required to comply with reporting regulations. Reporting is necessary for transparency. Reporting transparency is required not only for all exploration results but also for all economic and mineral information published on the Canadian and USA government regulatory sites, SEDAR & EDGAR.

To date, the Company has invested Cdn$21,981,125 in the Buckreef Gold Project.

The most recent Canadian National Instrument 43-101 report filed by the Company provides that an economic analysis has been carried out on the Buckreef Gold Project for a range of gold prices with $1,250 per ounce selected as the base case.  The analysis demonstrates that the Project is expected to generate a positive NPV at a 5% discount rate of US $243 million and a positive IRR of 53.7%.

Based on this economic analysis, the estimated value of STAMICO’s holdings in the Buckreef Project is substantial. STAMICO acts as agent for the Tanzanian federal government. The NI 43-101 revealed 1,064,000 ounces of gold to be mined at the Company’s Buckreef Project, which will benefit the Company and Tanzania.

“We believe the Company is in total compliance with all new mining standards. The Company was in compliance with the new laws in Tanzania prior to the adoption of these laws. There are no outstanding differences or disputes between the government of Tanzania and the Company. Due to corporate foresight, the Company’s actions and policies were well ahead of the new laws Tanzania has currently promulgated. The new laws will not impact our Company. These new laws will impact companies in our industry who have a history of exploiting Tanzania without benefit to the nation or it’s people. Our arrangement with the Tanzanian government should be a role model for the entire industry. We also take great comfort in the various economic and investor protection Treaties in place between Tanzania and Canada. We welcome and look forward to our continued good relationship with Tanzania, together with our exciting mining prospects there.” stated James E. Sinclair, Executive Chairman.

For more information and updates, please see the Company website at:

www.tanzanianroyalty.com

Respectfully Submitted,

“James E. Sinclair”

James E. Sinclair

Executive Chairman

For further information, please contact Investor Relations:

Michael Porter

Porter, LeVay & Rose

212-564-4700

mike@plrinvest.com

Cautionary Note Regarding Forward-looking Statements

Certain of the statements made herein may contain forward-looking statements or information within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Often, but not always, forward-looking statements and forward-looking information can be identified using words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or the negatives thereof or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements or information herein include, but are not limited to the Positive Feasibility Study on Buckreef.

Forward-looking statements and forward-looking information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information.  We have made certain assumptions about the forward-looking statements and information and even though our management believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that the forward-looking statement or information will prove to be accurate.  Furthermore, should one or more of the risks, uncertainties or other factors materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information.  These risks, uncertainties and other factors include, among others, the following:  gold price volatility; discrepancies between actual and estimated production, mineral reserves and resources and metallurgical recoveries; mining operational and development risk; litigation risks; regulatory restrictions, including environmental regulatory restrictions and liability; risks of sovereign investment; currency fluctuations; speculative nature of gold exploration; global economic climate; dilution; share price volatility; competition; loss of key employees; additional funding requirements; and defective title to mineral claims or property, as well as those factors discussed in the sections entitled “Forward-Looking Statements” and “Risk Factors” in the Company’s Form 20-F Annual Report dated November 25, 2016.

There can be no assurance that forward-looking statements or information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.  Accordingly, you should not place undue reliance on the forward-looking statements or information contained herein.  Except as required by law, we do not expect to update forward-looking statements and information continually as conditions change and you are referred to the full discussion of the Company’s business contained in the Company’s reports filed with the securities regulatory authorities in Canada and the U.S.

Cautionary Note Regarding Mineral Reserves and Mineral Resources

The terms “Mineral Reserve”, “Proven Mineral Reserve” and “Probable Mineral Reserve” used in this release are Canadian mining terms as defined in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council on August 20, 2000 as may be amended from time to time by the CIM.  These definitions differ from the definitions in the United States Securities Exchange Commission (“SEC”) Guide 7.  In the United States, a mineral reserve is defined as a part of a mineral deposit which could be economically and legally extracted or produced at the time the mineral reserve determination is made.

The terms “Mineral Resource”, “Measured Mineral Resource”, “Indicated Mineral Resource”, “Inferred Mineral Resource” used in this release are Canadian mining terms as defined in accordance with National Instruction 43-101 – Standards of Disclosure for Mineral Projects under the guidelines set out in the CIM Standards. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.

For a detailed discussion of Buckreef resource and reserve estimates and related matters see the Company’s reports, including the Form 20-F Annual Report dated November 25, 2016 and technical reports filed under the Company’s name at our website at: www.TanzanianRoyaltyExploration.com.

Cautionary Note to US Investors Concerning Estimates of Measured, Indicated and Inferred Resources

Note to U.S. Investors.  While the terms “mineral resource”, “measured mineral resource,” “indicated mineral resource”, and “inferred mineral resource” are recognized and required by Canadian regulations, they are not defined terms under standards in the United States and normally are not permitted to be used in reports and registration statements filed with the SEC.  As such, information contained in this report concerning descriptions of mineralization and resources under Canadian standards may not be comparable to similar information made public by U.S companies in SEC filings.  With respect to “indicated mineral resource” and “inferred mineral resource” there is a great amount of uncertainty as to their existence and a great uncertainty as to their economic and legal feasibility.  It cannot be assumed that all or any part of an “indicated mineral resource” or “inferred mineral resource” will ever be upgraded to a higher category.  Investors are cautioned not to assume that any part or all mineral deposits in these categories will ever be converted into reserves.

There can be no assurance that forward-looking statements or information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.  Accordingly, you should not place undue reliance on the forward-looking statements or information contained herein.  Except as required by law, we do not expect to update forward-looking statements and information continually as conditions change and you are referred to the full discussion of the Company’s business contained in the Company’s reports filed with the securities regulatory authorities in Canada and the U.S.

Posted by & filed under General Editorial.

President Carter is totally correct. You see the two parties, MSM and the elites actively destroying what is left of the American Democracy and the new President, by impeding all legislative action and false legal accusations. Simply put democracy no longer exists here. It is not going to return. With American people taking no offense to the nullification of their choice for President and all the actions by the Democrats to destroy him, gold, silver, and hiding seems the only road to survival. Then you ask survival to what?
No private currency over $50, no private banking anywhere, no law for the average family’s protection, a herd of snowflakes and millennials, tell me please what is left. Is this a world you care to live in?
Whatever happened to the Founding Fathers who said most seriously “Give me Liberty or give me Death?” Have we all become gutless weanies?

Jim


Jimmy Carter Is Correct That the U.S. Is No Longer a Democracy


August 3, 2015
On July 28, Thom Hartmann interviewed former U.S. President Jimmy Carter, and, at the very end of his show (as if this massive question were merely an afterthought), asked him his opinion of the 2010 Citizens United decision and the 2014 McCutcheon decision, both decisions by the five Republican judges on the U.S. Supreme Court. These two historic decisions enable unlimited secret money (including foreign money) now to pour into U.S. political and judicial campaigns. Carter answered:


    It violates the essence of what made America a great country in its political system. Now it’s just an oligarchy with unlimited political bribery being the essence of getting the nominations for president or being elected president. And the same thing applies to governors, and U.S. Senators and congress members. So, now we’ve just seen a subversion of our political system as a payoff to major contributors, who want and expect, and sometimes get, favors for themselves after the election is over. … At the present time the incumbents, Democrats and Republicans, look upon this unlimited money as a great benefit to themselves. Somebody that is already in Congress has a great deal more to sell.”

He was then cut off by the program, though that statement by Carter should have been the start of the program, not its end. (And the program didn’t end with an invitation for him to return to discuss this crucial matter in depth — something for which he’s qualified.)
More…

Posted by & filed under General Editorial.

Counting the steps to a cashless/digital currency? Count this one. Crypto-currencies have been around for a while, and Bitcoin has been one of the most successful. Banking institutions have allowed them to remain so far, only because it reinforces their agenda toward a cashless/digital currency. The more accepted digital (crypto) currencies are, the easier it will be for governments and financial institutions to push their agenda of eliminating physical currency.

Virtual currency has a future, but it may not be what you think. In order for central banks and sovereigns to easily employ digital currency, it must be accepted. Ultimately, central banks and sovereigns must have no digital competition. In the meantime, the crypto-currencies have been left alone so that people will embrace the idea of being cashless. Many people in all segments of the population are already virtually cashless. Payments are made online, by debit/credit cards, bank transfers, etc. No physical money changes hands, only digits on balance sheets are used as payment. As more and more people subscribe to a cashless transaction basis, the easier the it will be for a central bank or sovereign to employ it. The other virtual currencies (so-called “money”) will simply self destruct. Many will turn out to be new Ponzi schemes or be regulated out of existence. The crypto-currencies presently in place are the beta tests for governments and central banks for the cashless future, in which all “money” is virtual, all reportable, all controllable and all accessible to banks and sovereigns, and best of all – regulated by them.

Federal Reserve Full Faith and Guarantee Treasury bills in low denominations with the ability to make change is the future. They will be known as Federal Full Faith money (F3M). Your wallet will be overseen by the banking system and the government when everything we perceive to be “money” is digital. This will not apply to gold which is outside of that system.

In the USA for example, the $100 bill has to be removed from circulation via a turn in for exchange for smaller bill denominations. Can you imagine El Chapo’s posse showing up with tractor trailers full of $100 bills for the exchange? He would also need three times as many tractor trailers to bring back his smaller bills.

We all need to be mindful of what is actually taking place in our currencies and consider carefully if this is what we want. If we don’t want it, we need to not subscribe, or worse, merely accept by our silence. India accepted the government’s removal from circulation the larger denomination of the nation’s physical currency/money. This is a move toward a digital, cashless future. Be aware, that as nations of people around the world, we deserve what we accept.

Jim

Posted by & filed under General Editorial.

My Dear Friends,

This article is not only correct but an enlightened perspective. In my opinion, this is not only what is going to happen but reveals so many truths that the article is worthy of study, and should be required reading. Understand this article is necessary in order to comprehend what is happening. This is happening now, not in some far away future.

Forget the one world conspiracy theory.

The Pyramid Structure of society is too small at the top, with room for only one person. All group theories are hogwash or simply a tool for accomplishing the final goal of that “one” at the top. The $100 and $50 USD have very short term life remaining. Their life could be months, but not years.

Recently India cancelled all large bills. India has a huge population who are known to be unruly. Yet, it is interesting that India has thus far survived this dramatic change in monetary/currency policy.

The coming reset will be a combination of market activity and edict. Few if any know what it will look like, and even fewer will know how to make a fortune because of it. I understand how to do this, and so do you who have remained with us the last 14 years. Some know and others will find out. We are on the precipice of a wealth transfer. Some of you are already prepared and just haven’t realized it yet.

I will outline in detail the “how” as the time approaches. My 14 year veterans will not be surprised to know they are already there.

Sincerely,

Jim

By Peter Koenig

Global Research, July 20, 2017

Electronic money, a cashless society, is perhaps the ultimate and most direct means of the New World Order (NWO), also called One World Order (OWO), to control us all via its financial system. A system that the NWO would like to maintain as the world’s financial system, albeit, it has already been reduced to the western world’s financial system.

Why reduced to the Occident? – Because the Orient, China, Russia and the other countries belonging to the Shanghai Cooperation Organization (SCO) and to the Eurasia Economic Union (EEU) have already largely delinked themselves from the western dollar-based system of fraud. They are saved from slavehood.

This reminds of one of the oldest and world’s worst criminal agent against humanity – still alive and kicking – Henry Kissinger:

“Who controls food, controls the people; who controls energy controls entire continents; and who controls money controls the world.”

He is, of course, right on all fronts, and has given us this clue already more than 40 years ago. But nobody has really seriously taken it to heart and acted upon these edicts.

Many, including me, have written about freeing the world from the NWO money control.

http://www.globalresearch.ca/globalization-is-the-demise-of-humanity-towards-an-economy-of-peace-with-an-alternative-monetary-system/5545014

Deglobalizing would be a first step towards freeing us all from the bloody claws of the Washington implemented, and Dark State directed NWO.

Critics often talk of an overhaul and reform of the system. This monetary system cannot be reformed. It is privately owned and rotten to the core. None of the private owners, the Rothschild, Rockefeller clans et al, would allow interfering with their wealth, usurped of the back of the world’s workers and populace at large. Former attempts (e.g. under JFK) to bring the FED (Federal Reserve) under national reign, have resulted in failure.

Compare the dollar-based monetary system to the European Union – which cannot be reformed either. Any ‘reform’ is just fiddling at the margins – as is inherent in the term ‘reform’. And that’s not good enough. As we know by now, the EU was not the construct of Europeans, per se, but an idea behind the ‘deep state’, already at the onset of Phase II of the Great Hundred Year War (WWII – September 1939 to September 1945). Phase I (WWI – 1914 – 1918), as well as Phase II were induced to weaken Europe, to make her ready for full domination.

Imagine a ‘Picador’ of a Spanish bullfight, whose job it is to weaken the bull to the point where the torero and matador have a relatively easy task subduing and killing the bull. Well, Europe is the bull. They don’t want to kill Europe altogether, good old Lady Europe, because they need her as a stepping stone for subjugating the rest of the world, for vital trade that helps justifying and generating the unlimited dollar machine – and, as a cushion to the East, where massive military troops and weapons can be stationed in the name of NATO, to eventually launch, what they would like to think, is the final blow on the East, starting with Russia.

For all this the European (non)-Union was created, her Brussels hub, dominated by the non-elected European Commission (EC) which also dictates most of the rules imposed on her 28-member states – and which are all not-so-coincidentally run by neoliberal, some close to neofascist governments. Of course, by adhering to the Brussels dictate, they have become devoid of national sovereignty. That is a must. A sovereign country would not submit to the horrors of police state and militarization that are in the coming. The euro with the Wall Street (Goldman Sachs – GS) run European Central Bank (ECB) is just a logical add-on to the fake EU. By now, many serious scholars have concluded that neither the EU nor the euro are sustainable, but are doomed to collapse sooner or later.

The EU and the euro are a complex construct, largely manipulated and carried forward by the Dark State’s main secret services, CIA, NSA, Mossad, MI6 with close collaboration of Europe’s national secret services. Hence, the creation of a complete political and monetary vassal, the European Union and her currency, equally fraudulent as its master currency, the US-dollar.

***

It is not by chance that today’s western US-dollar based monetary system, with its center, the Federal Reserve (FED), has been created just at the onset of Phase I of the Hundred Year war, i.e. WWI. In 1910, Rhode Island Senator, Nelson Aldrich, with his heart close to the world of bankers, organized a ”hunting trip” for five top Wall Street (WS) bankers to travel in disguise by train to Jekyll Island, off the coast of Georgia, where they concocted in a few days the concept of the modern FED – which was to become the ‘mother’ of the new dollar-based world monetary system, now reduced to the western monetary system. The Federal Reserve Act was signed into law in December 1913 by President Woodrow Wilson.

President Woodrow Wilson (Source: Wikimedia Commons)

On his death bed, in 1924 Wilson apparently declared,

“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. “

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Dear POTUS,

Can you not see that the resistance movement against you is a modern form of a coup intent on stopping you in any way required legal or illegal? They have no plans to stop the resistance movement for the next 4 years, if then.

In a war you never give the opposition any information, nor do you set yourself up to be outnumbered by those sworn to remove you by any means required.

You expose yourself to interrogation by those who despise you. This will not result in the highest good.

You might as well have a private conversation with the former White House hopeful Satan and her associates, the fallen.

JES

Posted by & filed under General Editorial.

My Dear Extended Family and Friends,

On Memorial Day we remember the men and women who died while serving in our armed forces of the United States of America and all of our past war dead throughout our nations history.

Memorial Day is sometimes confused with Veterans Day, which is commemorated on November 11th of each year. Veterans Day celebrates , commemorates and honors the service of all our military veterans. On Memorial Day, we honor those who gave their lives in military service for our country.
Many of us will be enjoying the long weekend with family and friends. Parades, concerts, and picnics are often the order of the day followed by fireworks displays. We have so many freedoms and so much to be thankful for in the United States. Our enduring gratitude is due to those men and women of our armed forces who made the ultimate sacrifice for our American way of life. Let us take the time to pay our respects and personal tribute to our fallen heroes on this day of remembrance.

Have a good and safe holiday weekend.

Respectfully yours,
Jim & Bill

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Dear Jim,

Due to its criminal hyper-manipulation, gold¹s price has become a paradox.

Paper gold’s weakness actually reflects the forthcoming strength of the physical gold market. I feel this statement, as paradoxical as it seems, hits the nail on the head.

Best regards,

CIGA GG

Dear GG,

Contained in this statement is the basis for my conclusion and the formation of long term plan since gold made its high in it last bull run from 1968 to 1980.

Those that read my writings have heard the plan at least once a year since my exit from the paper gold business in 1980.

In the period of 1968 to March 1980 it was rumored that I was the largest volume gold trader in the world. If there was someone larger I never met them.

In 1980 the Wall Street Journal ran an article “Bull Takes off his Horns,” which I hold as a reminder of that period.

The statement that GG points out in the opening note to me finds its roots in the school of “Free Gold.” This group of thinkers is absolutely correct on its main subject, gold itself. Like any other group there are offshoots that hold various views that can cloud the main thesis. In my opinion, their foundation is the only correct answer to what gold is, how gold functions in the economic system, why the paper gold market was started, by whom it was started and for what purpose the paper gold market actually exists. This school of thought goes on to predict that the future of gold’s value is not as an alternative currency for the exchange of good and services but as a storehouse of value for holders both public and private.

In March of 1980, which was the end of the 1968 gold bull market, a client of one of my firms came to visit. He was extremely happy for the experience and came to thank me. I told him that he was thanking the wrong person. His great success was based on his courage and understanding that made him so successful. The client was Carl Seaman of Seaman’s furniture in the New York metropolitan area. Carl had made himself one of the first 1% due to inherently knowing Jesse Livermore’s discipline that major fortunes are when you are right and do not deviate. He was one of the world’s greatest traders.

I asked Carl if he would wait for me for a few moments. I called the accounting department on the 8th floor requesting a check for the collective balance in all of Carl’s accounts. That check was indeed a hum dinger. I held it and asked how many feet away was the revolving door to my firm’s main office. He replied about 20 feet. I handed Carl his checks and asked him never to come back again, to call me only as a friend. We will never do this again in the way we did based on paper gold.

I told him I anticipated a bear market in gold of no less than 15 years and that I was in the process of selling all my firms and then I would walk out the same door.

The next fortune in gold will be made via long physical gold margin free in an enormous way. Due to the volatility of the price of gold there can be no margin involved nor paper gold derivatives.

The formula is simple to expound but very hard to exercise. It called for full utilization of our capital individually to identify a huge deposit of gold relatively inexpensive to mine. The key is NOT to sell the gold produced but to get your leverage from bullion refiners, not banks, that loan to producers as part and parcel of their business. The strategy is to own a gold mine that mined its product, paid the host government their royalty and other charges, then use the production as the basis to borrow funds required for operations at an inexpensive rate. We then put all our funds in US 10yr. T Bonds yielding almost 15%.

What I proposed was a public mining company that held all it’s gold refined and above ground not in a bank, but in a non-financial company, in a refinery that is not in North America and does make loans to its clients based on refined to market product. The price that I envisioned the entity might be worth is many billions assuming my final prediction is correct.

The fight to build this has been enormous. It has required close to everything I have and 19 years of life.

The strategy has required 100% dedication of my time and finance to fight in many instances attempts at the largest claim jump in history by the Chinese, using every modern method known to financial engineers.

They have not succeeded. There is much more to be done and risk therein, but survival has been the key so far in this field while awaiting the next bull leg in the final gold bull market.

A recent NI 43-101 for the first time has hinted at the developing size of this strategy that I believe will write history because of the basic tenets of “Free Gold” in a somewhat different way that “Free Gold” anticipates.

In 2013 CIGA Belgium wrote the following letter that I feel you should read and re-read now. If you do you will be one of the very few that really understands all about gold and its outrageous future. You will understand the huge selling into the paper market and why it is limited in time by its own construction.

CIGA Belgium has permitted me posting excerpts as long as his identity is confidential.

Dear Jim, (written to me on February 18th 2013)

We are only just now arriving at a time period that will bring about “The Currency Wars”. Everything prior to this was only a preparation period to build an alternative currency. The years spent traveling this road were done to prepare the world for an escape medium when the dollar finally began it’s “price” hyper-inflation stage.

Few investors can “grasp” that in reality, our dollar has already been hyper inflated, but without the higher price effects. Years of deficit spending, over borrowing, debt expansion have created an illusion that the dollar was immune to price inflation. This illusion is evident in our massive trade deficit as it carries on with no negative effects on dollar exchange rates. Clearly other investors, outside the Central Banks were helping in the dollar support process without knowing they were buying into a dying currency system.

The only thing that kept this process from showing up in the prices of everyday goods was the support other Central Banks showed for our currency through exchange intervention. As I pointed out in my other writings, this support was convoluted at best and done over 15 to 20 years. Still, it’s been done with a purpose all this time. That purpose was to maintain the dollar for world economic trade, without which we would all sink into depression. Indeed, the mainstay of this support required an ever expanding world dollar base. There is simply no way the old dollar debts along with the new ones could have been serviced without this money expansion.

The entire long term process is/was very clear to a few major financial players as they prepared for the dollar’s retirement as a reserve. Their main strategy for dealing with this was found in several positions. One was a long term buying of real physical gold. The other was the acceptance that all trade and investments would eventually transition away from dollar use. To combat this they began to denominate their paper assets and business transactions in other currencies (now the Euro holds the main transition flow). This was done because, as the dollar prices of real things first show real signs of rising, all forms of dollar derivative contracts would begin to unravel.

Better said, the process of dollar contract failure would show up in the form of discounts on these derivatives from par value. Because most of our “end time” dollar world has built itself into a huge derivative game, this discounting will occur across the board in almost everything we deal in. Not just gold.

The first signs that official dollar support is winding down is seen in real world pricing and official policy. The most obvious “first” price sensitive arena to reflect a “real coming inflation” is not gold as so many think, it’s the stock markets. Their long term bull run, mostly starting around the early 80s completely reflected this official sanction of world dollar expansion without price inflation. It’s only in the last year that we can see where equity markets are telegraphing a transition into dollar expansion “without world support”. Better said, major price inflation is coming on a level equal to hyper status. Many stock markets have headed straight up in reflection of this.

Another area where we see this change is in crude oil. For years, every rise in crude prices was quickly shut down from added supply. Done to add the producers portion of help to the dollar support effort. Even war in the oil fields was not allowed to create a dollar destroying price rise. Once the Euro was born and seen in operation as a possible “backup” currency, added crude supply to keep prices low was no longer available. Prices have risen and fallen in a broken fashion that will continue it’s upward bias. This policy change is not only a vote of confidence in Euroland, it’s also a Euro reserve support function that will lead to much higher physical gold prices later. Oil around $30 (and $45+ later) now values gold upwards to $930 using the old one gram = one barrel from a pre 1971 gold dollar price ratio. This has fueled ongoing trade in gold by the BIS as it seeks more physical gold supply outside the LBMA paper contract world. A process that can only further destroy the present contract gold illusion as expressed in a paper dollar gold marketplace. Eventually, $930 gold crude will become the absolute bottom pricing range as real dollar price inflation begins.

The most recent example of official policy change toward the dollar was found in the Washington Agreement. It marks the end of Euroland support for the paper gold markets that helped maintain a dollar/ oil settlement bond. In the beginning (1980s) it was a joint effort by at least two factions that has today become only a single effort by one faction. The US/Britain.

Even with this, the US accepted a reworked IMF gold structure. Because of this, they (US) are today operating two policy positions that contradict each other. One tries to use an escalation of the gold price to maintain IMF support for foreign US debt, while the other tries to keep the “gold trading desk” of several market makers solvent through an even lower price.

This places Euroland, the BIS and major world physical gold players on a direct collision course with the US backed contract gold marketplace. The effects of this will “most likely” be seen in a literal flood of new paper gold entering this arena in an effort to maintain “bookkeeping” credibility for the market makers. Today we see the beginnings of this change impacting the market as it is evolving into little more than a large paper float that exists mostly for this “bookkeeping” purpose. It will stay viable until dollar price inflation dries up to physical supply that to date still sells into this market. No doubt, the mine companies will become the very last sellers to support this arena. Possibly, selling into it’s paper pricing all the way down.

For years, gold bugs have figured that gold would be the next dollar escape mechanism. Not another currency. They gave little thought to the reality that our modern world could not, would not price gold as a “reserve free trading asset” without a digital paper money reserve to do it in. Once the dollar begins it’s decline through price inflation, it’s use as a reserve and more importantly it’s use to establish a gold market will stop. This will cause an unexpected delayed positive impact on gold values as gold’s paper marketplace goes through tremendous convulsions. We may see dollar price inflation in all things, yet gold values fall as contracts fail from constricted supply. Eventually, even the mining sector will be forced from shareholder loses and poor contract price economics to abandon the dollar pricing contract system. I expect that during this time the physical price of gold will be soaring as it’s lack of trade constricts supply. Most paper gold traders today, don’t understand how a real dollar price inflation shrinks physical gold trade, no matter how high or low the price goes. Further, they continue to use the various dollar gold derivatives even as their paper supply mushrooms. A process that forces the contract gold price down. Yet, all the while they are proclaiming that they are “in the gold market” and bemoaning how the manipulation of the metal is giving them loses.

It’s important for new players to understand that no government or private banker in the world today can manipulate the dollar price of traded physical gold once real price inflation begins in the reserve currency. A failing currency system would find governments and bankers selling into a virtual “black hole” of demand.

Prior to dollar price inflation effects, the impact of official policy can only manipulate paper contract prices. Just because traders are willing to sell physical gold for a paper settled contract price doesn’t mean that’s the real gold value in the world today. More to the point, this is simply a temporary condition that could exhaust itself before price inflation, once physical delivered against paper prices dries up. Thereby forcing contract prices into discount and destruction.

This modern paper market is relatively a new concept in world gold trade. It was created by banks, western traders and mine operators themselves over the last 15+ years. They supported this market by buying into it instead of buying and trading only real gold. True, the paper promoters may have been dishonest in presenting the effects of this process, but no one was forced to use it! Without user cash flow giving credibility to these paper derivatives, the market would not exist in it’s present form. Yes, it’s true that the Euroland and dollar faction agenda, along with oil interest and indeed physical gold traders all benefited from this investors market making cash flow! But this is reality for any investment where a buyer of a contract abrogates the security of present real ownership into a paper position with counterparties risk. Even today, call option buyers give their money away in support of this illusion, instead of buying coins outright. Truly, western gold paper traders and gold stock investors today a have evolved and in no way represent what the term “gold bug” used to mean. Today, physical gold advocates are the real gold bugs as they now posses the real leverage paper players only think they have!

CIGA Belgian

Bill Holter’s comment on the above is exchange is:

Dear Jim,

I believe it was Isaac Newton who theorized for “every action there is an equal and opposite reaction”. Just as stretching a rubber band too far, the “reaction” often times is much faster and far more violent! As an addendum, wasn’t it an “Apple” that fell on his head?

Best,

Bill