From David's Desk 

David Schectman

More on Germany's repatriation of their gold from the Fed

Our oldest granddaughter Molly is taking college courses in Barcelona this winter. One of her classes is on democracy in Western Europe. She learned that over 30% of French citizens support the Skin Heads (a.k.a a later-day version of the Hitler Youth, right on down to their use of the Swastika) because they want all foreigners out, starting with the Muslims from North Africa and of course, the Jews. The Skin Heads are responsible for overturning head stones in Jewish cemeteries and for attacks on Jewish students and elderly. Usually, nothing is done. The more things change, the more they stay the same. Why would any Jew still want to live in France? Beats me! Are we already forgetting the lessons of WW2? It seems like some of the French have. I think it's going to be a very long time before I see Paris again!

Check it out. Platinum is now selling at the same price as gold. Spot price for an ounce of either is about $1,680. Last spring I suggested our readers buy platinum, which at the time was selling for $150 an ounce less than gold. It turned out to be a very good time to buy platinum.

In today's daily, Jim Sinclair, Bill Murphy (LeMetropole Cafe) and Andy Hoffman add to yesterday's discussion on Germany's repatriation of her gold. This has the potential to set the gold market on fire. Today it will be interesting to see what the "official" statement from the Bundesbank says. If the published rumors are accurate, then today could be gold's Fourth of July with all the fireworks that go with it. It will bring to the forefront the issue of whether the US really owns all the gold that they claim to have stored at Fort Knox, but never allows an independent audit to verify that its really there. If the unthinkable occurs, and we really have sold and leased out our gold, where will the US come up with one half of a year's supply to satisfy the Germans? And if they have to go into the market to source it, what will happen to the price? And what will happen to the credibility of the Fed and the dollar?

Personally, I expect delays, excuses and games to be played, but no immediate delivery back to Germany. That is all it will take for gold to soar. This event may set off an avalanche of similar requests to repatriate gold stored at the Fed by numerous smaller countries. It's going to be put up or shut up time for the Fed. This one can't be swept under the rug. Who knows? Maybe the Fed will come up with the gold and silence the "conspiratorial" voices among us. Bix must be on the edge of his seat this morning! And Murphy too!

Here is what Ranting Andy had to say:

ALL POLITICIANS ARE LIARS; and thus, it shouldn't have surprised anyone when this SHOCKING, WATERSHED ANNOUNCEMENT emerged last night; that the Bundesbank has demanded most - if not all - its New York and Paris-stored gold to be returned to Frankfurt...

It Begins: Bundesbank to Commence Repatriating Gold from New York Fed

In other words, the German FEAR of American CORRUPTION became too much to bear; so much so, they "called the Fed out" in front of the ENTIRE WORLD. And better yet - in perhaps Zero Hedge's GREATEST ARTICLE OF ALL TIME - they finally acknowledged the GRAND SCALE of WESTERN GOLD MANIPULATION...

In simple game theory terms, the first party to defect from the prisoner's dilemma of all the bulk of global gold being held by the Fed, defects best; then the second, and the third. Until, in this particular case, the last central bank to pull its gold from the NY Fed and the other 2 primary depositories of developed world gold, London and Paris, just happens to discover their gold was never there to begin with; and instead, served as collateral to paper gold subsequently re-hypothecated several hundred times, and whose ultimate ownership deed is long gone.

I CANNOT OVEREMPHASIZE THE IMPORTANCE OF THIS HISTORIC EVENT; once and for all, PROVING the Fed is not considered the bastion of freedom and financial strength decades of PROPAGANDA have purported. Not to mention, the likely ramifications of such a profound disclosure...

- Tuesday Morning Commentary 1/15/2013 

Here are Jim Sinclair's comments:

German Bundesbank Begins Officially Repatriating Gold From The Fed - jsmineset.com 

My Dear Extended Family,

According to Handelsblatt, a respected publication, Germany is serious about repatriating significant amounts of gold held outside of Germany, mostly by the Federal Reserve. This sends a message about storing gold near you and taking delivery no matter who is holding it.

When France did this years ago it sent panic amongst the US financial leadership to the degree of monetary aggression. Why? The inviting question has always been does the US have fungible gold assets to the degree claimed.

Have you signed the petition for audit of US Gold that Bix sent you yesterday?

Respectfully,

Jim

ReservenBundesbank will deutsches Gold zur�ckholen 

14.01.2013, 21:07 Uhr

Nach der Gr�ndung der Bundesbank wurden gro�e Teile der deutschen Goldreserven aus Sicherheitsgr�nden bei den Alliierten deponiert. Nun soll das Gold aus New York und Paris zur�ckgeholt werden.

FrankfurtDie Bundesbank hat ein neues Konzept ausgearbeitet, wo sie k�nftig ihre Goldreserven lagern will. Nach Informationen des Handelsblatts sieht dieses Konzept, das am kommenden Mittwoch bekanntgegeben werden soll, vor, den heimischen Standort aufzuwerten, in New York daf�r weniger Gold zu lagern und �berhaupt kein Gold mehr in Paris zu horten.

Damit reagiert die Notenbank auch auf einen Bericht des Bundesrechnungshofes, der die Jahresabschl�sse der Bundesbank pr�ft und ihr empfohlen hatte, ein aktuelles Lagerstellenkonzept zu erstellen und zu dokumentieren.

More...

Charles De Gaulle was the first person in modern history to call the hand of the USA on its then obligation to convert French held dollar reserves into gold. I was a senior trader at the time. 

History will look back on this salvo fired across US war financing as being the beginning of the end of the US dollar as the reserve currency of choice.

The reaction on the part of the US was to cut the tie between the dollar and convertibility. This again raises the question of does the USA have fungible gold to the degree that is claimed without 3rd party audits or any viewing publicly whatsoever.

If it is true as reliable sources today reported that Germany wishes to repatriate a significant amount of its gold, then that request is a modern version of the first salvo that Charles de Gaulle fired at the US treasury over convertibility.

Assume that no close violated Alf's downside price and it is possible that today's revelation concerning Germany is an event leading to gold's first main target above the recent high of $2111. It is significant because under normal circumstances no major central bank would insult another major central bank in that manner.

Today's report, if true, is a salvo fired at the concept that the USA has all the gold it claims and all the gold it stores for others. If true, this event is the most important gold development since Charles De Gaulle called the US hand that it would stand by convertibility which many then assumed it could not because even then the amount of gold held was publicly questioned.

Please review the following video of Charles De Gaulle

DE GAULLE predicted the US monetary crisis in 1965

There is also an excellent commentary, later in today's daily, from LeMetropole Cafe. You may wish to read that account too.

Sincerely,

David Schectman

Miles Franklin

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The Holter Report

Bill Holter

QE to "Oblivion!"
Published: January 15th, 2013

Yesterday we were told by the president that "raising the debt ceiling doesn't allow us to spend more, it allows us to pay our bills."  Really?  Not spend more?  Then... what happened to the $2 trillion+ "raise" of the debt ceiling just 18 months ago?  Was that not "spent?"  If it wasn't "spent" then where did it go?  To pay interest?  No, can't be that because we are not paying any more interest today than we were 10 or 15 years ago even though the debt is 3 times higher.  (Neat trick huh?  Take on 3 times more debt but cut the interest rates by two thirds and presto!  You don't pay anything more in the way of debt service).

How disingenuous?  Raise the debt ceiling... we promise not to spend it.  Does anyone see that if they DON'T "spend it" we will immediately enter a statistical depression?  This is exactly where and what HAD to happen with the Ponzi con game that was set up in 1971 when Nixon took us off of the Gold standard.  Allowing the creation of unlimited "money" through the "unlimited" creation of debt meant that the only way to continue the game was to do exactly that... create UNLIMITED amounts of debt.  And here we are at "the moment of truth" where the debt service that did not rise because interest rates were lowered... mathematically is going to rise.

Never mind that interest rates will rise as demanded by Mother Nature.  No, debt service will rise even if rates don't because of the AMOUNT of the national debt.  We have crossed the Rubicon where where interest payable must finally rise simply because the amount of debt which was "hidden" in plain sight is so large and getting larger.  You see, we didn't "feel" the additions of debt (other than living in an economy that was far stronger than it would have been without the incurrence of and spending of the debt) because as interest rates went down and debt was rolled over (refinanced), the debt service did not rise.  That game is over because interest rates cannot go negative for any length of time no matter how badly Ben Bernanke, Tim Geithner and the rest of the tragic cast would like them to.

But wait just a minute, I had a funny thought.  During the fiscal cliff talks didn't the president dig his heels in and say that "spending will not be cut, only taxes will be raised?"  So  by saying yesterday that "raising the debt ceiling will not allow us to spend more" he means that now, spending won't be cut or raised?  Is this even possible?  "Frozen" spending?  I highly doubt it.

The real point is this, debt service will now and in the future take up more and more of the "spending pie," it has to mathematically.  And because it is not possible to tax enough to match spending we will HAVE to borrow more on a continual basis to "pay our bills" as we were told.  This is the root system to the fabled "QE to infinity" that Jim Sinclair so aptly named.  In reality the "infinity" part is not true as "infinity" can never really be attained.  In reality, QE to "oblivion" is where we are headed.  Do the math yourself; QE can never be stopped, for that matter it can never even be slowed down.  ...And the result?  Economic, financial and social oblivion!  This is not grandstanding or fear mongering, it is math, pure and simple.  "QE to oblivion."

LeMetropole Cafe (www.LeMetropoleCafe.com)

1/15 German Bombshell Fuels Gold ... Potential Of News Is Staggering

Behind Closed Doors

by James Turk

...Let's put one and one together here to see if we can come up with an answer. According to Virgil Mattingly, the ESF has authorized gold swaps, presumably in the recent past (circa 1995). According to Ted Truman, the only outstanding swap facility of the ESF (circa 1995) other than the one established for Mexico is their facility with the Bundesbank. Ergo, the ESF has a gold swap facility with the Bundesbank.

It's an interesting proposition, and one that fits well with another newly discovered fact. Some very interesting sleuthing by Mike Bolser, who has been assisting Reg Howe in his lawsuit against the BIS, has revealed that the Treasury has made a small but very significant accounting change. Mike noticed that the Treasury Department has changed the designation of nearly 1700 tonnes of inventoried gold at the US Mint's facility in West Point, New York (approximately 21% of the total US Gold Reserve) from "Gold Bullion Reserve" to "Custodial Gold".

The August 2000 Status Report on US Treasury Owned Gold stored at West Point has a designation of "Gold Bullion Reserve". But the September 2000 and subsequent status reports inexplicably designate this same gold that is stored at the US Mint in West Point as "Custodial Gold".

This change was made without explanation, so rather than let the matter remain unexplained, Mike diligently contacted the Treasury asking what seemingly are two uncomplicated questions. Would the Treasury please explain why they made this change, and what does this change in designation mean with respect to the ownership status of the gold at West Point?

They are simple questions, but perhaps they touch too close to a nerve. Not surprisingly, the Treasury so far has not responded to Mike. I have some views on what Mike discovered, and why the Treasury is so quiet about it. I think this change in asset classification is related to the ESF gold swaps. Here's my thinking.

The change Mike spotted possibly occurred as a result of accountants looking at the financial statements of the US Mint being prepared for its annual report ending fiscal year 2000. Note that the previous director of the Mint (Phillip Diehl) resigned in early 2000, so this was the first annual report signed by the new director (Jay Johnson). If there is one thing that government bureaucrats do well, they take great pains to call things by their right name. To do otherwise would put their job in jeopardy if something under their responsibility came under Congressional scrutiny, and it was subsequently determined that the name assigned to something was incorrect or misleading.

Therefore, this change in the descriptive label for nearly 1,700 tonnes of gold at West Point from "Gold Bullion Reserve" to "Custodial Gold" was purposeful. It happened for a reason. This conclusion is all the more plausible because the Treasury did not change the classification from "Gold Bullion Reserve" to "Custodial Gold" to describe the gold stored in Fort Knox or at the US Mint in Denver. Maybe new US Mint director Johnson saw something he didn't like. What could that have been?

I've already put one-and-one together to establish that the ESF has "gold swaps" with the Bundesbank. It therefore does not require much conjecture to add one supposition to the equation by concluding that the gold in West Point has been swapped with gold owned by the Bundesbank, thereby necessitating its reclassification from "Gold Bullion Reserve" to "Custodial Gold". Here's what I think has happened...

***

For the entire James Turk piece go here (remember that name brought to your attention recently: TED TRUMAN)...

http://www.lemetropolecafe.com/pfv.cfm?pfvID=1470

***

Think about it. If James and GATA are correct, and the odds are high that we are at least to some degree, the ramifications of this "S" hits the fan time could be earthshaking. How is the US to give Germany its 1700 tonnes back, or whatever has been sold, without buying it from another country or buying it in the open market, without violating US law?

Let's again say the GATA camp is only partly correct about the gold loans, gold swapped, and gold no longer there. Should other central banks, or the investment world, believe GATA is correct, or be willing to go there, it could set off a panic. Numerous central banks could call in their gold loans. Where would the gold come from? What about gold holders in unallocated gold accounts? What if they suddenly began to ask for their gold too?

You get the picture!

Meanwhile, even as silver made new highs on its close, the price of gold was stopped cold at the 1% limit mark. The Gold Cartel is not through with their shenanigans by a long shot.

And soon after the Comex closed, the predictable Gold Cartel threw another temper tantrum with a PLAN C hit. First the XAU and HUI gave up half their gains, while gold was take down $4+, and silver sent back right below that pivotal $31.40. The sickos are a nauseating bunch.

The AM Fix: $1681. The PM Fix: $1680.50.

The gold open interest fell 4709 contracts to 440,838, which is a bit perplexing. The silver open interest only rose 619 contracts on the substantial rise in price. Thus don't know whether the late rally yesterday was due to shortcovering or new buying.

Outside market forces were not supportive for the moves in gold and silver today. The euro was lower, oil lower, and DOW lower. The big news, which moved gold higher, clearly was the report on Germany's gold. But, you would never know it by the lack of response it received from the mainstream gold world and The Muppets on CNBC. Nary a word, so it must be super bullish for them to be so silent.

Kitco headline at the end of the day:

Gold Ends Up on Short Covering, Speculative Buying,Bernanke Boost - Kitco News, Jan 15 2013 2:15PM

That is pitiful!

Congrats to Lars Schall, Peter Boehringer, and Demetri Speck of Germany who have all been so dogged in their efforts to get to the truth about the true status of Germany's gold. Jim Sinclair offers his opinion on just how important those efforts just might be...

German Bundesbank begins officially repatriating gold from the Fed

According to Handelsblatt, a respected publication, Germany is serious about repatriating significant amounts of gold held outside of Germany, mostly by the Federal Reserve. This sends a message about storing gold near you and taking delivery no matter who is holding it.

When France did this years ago it sent panic amongst the US financial leadership to the degree of monetary aggression. Why? The inviting question has always been does the US have fungible gold assets to the degree claimed.

Have you signed the petition for audit of US Gold that Bix sent you yesterday?

Charles De Gaulle was the first person in modern history to call the hand of the USA on its then obligation to convert French held dollar reserves into gold. I was a senior trader at the time.

History will look back on this salvo fired across US war financing as being the beginning of the end of the US dollar as the reserve currency of choice.

The reaction on the part of the US was to cut the tie between the dollar and convertibility. This again raises the question of does the USA have fungible gold to the degree that is claimed without 3rd party audits or any viewing publicly whatsoever.

If it is true as reliable sources today reported that Germany wishes to repatriate a significant amount of its gold, then that request is a modern version of the first salvo that Charles de Gaulle fired at the US treasury over convertibility

Assume that no close violated Alf's downside price and it is possible that today's revelation concerning Germany is an event leading to gold's first main target above the recent high of $2111. It is significant because under normal circumstances no major central bank would insult another major central bank in that manner.

Today's report, if true, is a salvo fired at the concept that the USA has all the gold it claims and all the gold it stores for others. If true, this event is the most important gold development since Charles De Gaulle called the US hand that it would stand by convertibility which many then assumed it could not because even then the amount of gold held was publicly questioned.

Respectfully,

Jim.

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About Miles Franklin

Miles Franklin was founded in January, 1990 by David MILES Schectman.  David's son, Andy Schectman, our CEO, joined Miles Franklin in 1991.  Miles Franklin's primary focus from 1990 through 1998 was the Swiss Annuity and we were one of the two top firms in the industry.  In November, 2000, we decided to  de-emphasize our focus on off-shore investing and moved primarily into gold and silver, which we felt were about to enter into a long-term bull market cycle.  Our timing and our new direction proved to be the right thing to do.

We are approaching $200 million a year in precious metals sales.  We are rated A+ by the BBB.  We are recommended by many prominent newsletter writers including Doug Casey, David Morgan, Ron Hera and LeMetropole Caf�.  Our reputation for service, education, quality product and pricing is outstanding.

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