Exclusive: Coming Short Squeeze In Gold To Shock The World

"Today the outspoken hedge fund manager out of Hong Kong, who recently lit the gold world on fire with his comments about a coming short squeeze in gold, told King World News that managed money around the world is already beginning to convert paper claims on gold into physical metal. Kaye, who 23 years ago worked for Goldman Sachs in mergers and acquisitions and who is now the founder and principal shareholder of Pacific Group in Hong Kong, strongly believes that “only a small fraction of investors in the world need to do what we are doing to create an enormous short squeeze” in gold.

 

KWN will be releasing a series of written interviews today with Kaye which discuss the coming global systemic meltdown, and how it will impact investors and key markets around the world, including gold and silver. Here is what Kaye had to say in part I of this exclusive interview: “We know the claims on gold in the marketplace exceed, depending on various estimates, 100 to 150 times the amount of physical gold known to exist. So when a credible country like Germany has sufficient concerns about whether they can get physical possession and safe storage of fully allocated gold, it’s our contention that any prudent investor should be concerned.”

William Kaye continues:

“When the music stops, what the leverage in the system should tell you is there aren’t going to be enough chairs. So Germany, as a credible country, is saying, ‘We’re reserving our chair.’ Now this is exactly the type of catalyst that, as investors, we look for as owners of fully allocated gold ourselves.

We share many of Germany’s concerns...."

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/29_Exclusive__Coming_Short_Squeeze_In_Gold_To_Shock_The_World.html

China Just Threatened a Currency War if the Fed Doesn't Stop Printing

"The tension between Central Banks that we noted yesterday continues to worsen. This time it was China and the EU, not just Germany, that fired warning shots at the US Fed.

A senior Chinese official said on Friday that the United States should cut back on printing money to stimulate its economy if the world is to have confidence in the dollar.

Asked whether he was worried about the dollar, the chairman of China's sovereign wealth fund, the China Investment Corporation, Jin Liqun, told the World Economic Forum in Davos: "I am a little bit worried."

"There will be no winners in currency wars. But it is important for a central bank that the money goes to the right place," Li said.

Speaking at the same session, French Finance Minister Pierre Moscovici voiced concern that the euro was becoming overvalued as a result of quantitative easing and other stimulus actions taken by other nations' central banks.

"Certainly, the level of the euro is high and creates some problem," he said, attributing the single currency's recent gains partly to the return of confidence created by the European Central Bank and euro zone governments in starting to overcome Europe's debt crisis.

http://www.reuters.com/article/2013/01/25/us-davos-currencies-idUSBRE90O10620130125

So first Germany begins pulling its Gold reserves from the US, and now China and the EU are saying publicly that the Fed’s policies are damaging confidence in the US Dollar.

This does not bode well for the financial system. The primary role of Central Banks is to maintain confidence in the system. If the Central Banks begin to turn on one another it is only a matter of time before the system breaks down.

Remember, every time the Fed debases the US Dollar it forces the Euro and other currencies higher, hurting those countries’ exports. The Fed has recently announced it will be printing $85 billion every month until employment reaches 6.5% (obviously the Fed is ignoring the mountains of data that indicate QE doesn’t create jobs).

How long will the other Central Banks tolerate this before they initiate a currency war? Both Germany and China have fired warning shots at the Fed. And we all know that just beneath the veneer of goodwill, tensions are building between the primary players of the global financial system..."

at http://www.zerohedge.com/contributed/2013-01-29/china-just-threatened-currency-war-if-fed-doesnt-stop-printing

Russia to continue to buy Gold

"The Russian central bank will continue to buy gold as it seeks to diversify its foreign reserves away from paper assets it views as risky, First Deputy Chairman Alexei Ulyukayev said on Thursday.

The Bank of Russia has built up the world's fourth-largest foreign reserves, worth $530 billion, by buying oil export dollars to keep the rouble competitive. The hoard includes two rainy-day budget funds that guard against fiscal shocks.

The bank has also been a bullion buyer and the share of gold in its reserves is approaching a medium-term target of 10 percent, raising questions over whether it would keep buying gold."

at http://ausbullion.blogspot.com/2013/01/russia-to-continue-to-buy-gold.html

Embry - Powerful Entity Now Battling The Silver Manipulators

"Today John Embry told King World News that a powerful entity is now battling the powers that be in the silver market. Embry, who is Chief Investment Strategist at Sprott Asset Management also spoke about the increase in net-long contracts in the face of the declining silver price, the silver shortage, as well as the gold market. Here is what Embry had to say in this powerful interview: “I’m focused on this vicious takedown of gold and silver that’s been ongoing for the last month and a half. I’ve been following this story for the better part of 15 years and I can honestly say I don’t think I’ve ever seen a more intense, day after day takedown.”

John Embry continues:

 

“When London opened gold and silver were driven down for about ten consecutive days. The COMEX PM close was lower than the AM opening. This just bespeaks very aggressive manipulation. The question I ask myself is, ‘What’s bothering them? Why do they feel they have to do this?’

I think there are a lot of reasons....
This German news that came out a few weeks ago about them wanting to repatriate their gold is big. I think that’s very significant.

All of the comments coming out of Japan in the last few weeks about them finally capitulating and printing money hand over fist because they finally realize they are being swamped by deflation, that’s (also) hugely bullish for gold. But that sort of thing has to be buried by the powers that be.

 

It was also interesting last week, the oldest bank in the world, that Italian bank, came out and said they had a major problem in the derivates field. You put all of those (events) together and they are wildly bullish for gold and silver, yet the prices were clobbered.”

Eric King: “You mentioned that last week we actually had an expansion in open interest as they took down silver. It’s not liquidation. It’s short selling by the bullion banks.”

Embry: “It’s wild. One of the days late last week the number of outstanding silver contracts went up over 4,000 contracts. That’s a huge number, and it’s challenging the highs from when the silver price was $3 or $4 higher a month or two ago.

So the fact that there is no liquidation to speak of, somebody is standing in and taking on the powers that be because I think they realize what a strong hand they have (against the manipulators). The silver market is grotesquely undervalued and there are mounting shortages that are being documented all over the place.

I just see a supply/demand picture which is amazingly bullish, and when you superimpose that on existing short positions and the fact that the silver price has been held back so much, when this gets loose and runs I think people will be shocked at how fast it goes and how far it ultimately goes. I will reiterate, I have no problem with silver (priced) in the hundreds and hundreds of dollars.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/28_Embry_-_Powerful_Entity_Now_Battling_The_Silver_Manipulators.html

Fed To Create Gold Rally & Bond Plunge Next Week

"With continued volatility in gold and silver, today Michael Pento has written exclusively for King World News and he is predicting a rally in gold next week. Here is Pento’s tremendous piece: “The recent spate of better data on initial jobless claims has caused bond yields to rise, stock prices to rally, and gold shares to tumble in the last few days. For the sixth time since 2010, an oasis of improving economic data (that has proven to be ephemeral each time in the past) is once again giving investors the false signal of a robust and sustainable recovery.”

Michael Pento continues:

“This has, in turn, caused investors to once again wonder when the Fed would finally stop buying assets from banks and raise interest rates, which have been at zero percent for over four years. But the data on initial claims has been distorted by seasonal adjustments at the Labor Department. 

On an adjusted basis, initial jobless claims for the week ending January 19th dropped to 335k, which was the lowest level since January 2008....

 

“However, the raw data offers a different take on the labor condition. The unadjusted claims totaled 436,766 in the week ending January 19. That was 20k HIGHER than the 416k claims reported in the comparable week of 2012. The question is, how can initial claims be higher this year than the same week as last year; yet at the same time register the lowest level in 5 years?.

Other data on the jobs front confirms the view that the labor market is not improving substantially whatsoever. From the January Empire State Manufacturing Report released last week: “Labor market conditions remained weak, with the indexes for both the number of employees and the average workweek remaining below zero for a fourth month in a row.”

And then there is this from the Philly Fed’s Manufacturing Survey: “Labor market conditions at reporting firms deteriorated this month. The employment index, at -5.2, fell from -0.2 in December. The percentage of firms reporting decreases in employment (16 percent) exceeded the percentage reporting increases (11 percent). Firms also indicated a decrease in the average workweek compared with last month.”

 

at  http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/29_Fed_To_Create_Gold_Rally_%26_Bond_Plunge_Next_Week.html

Hagel Warned Obama Of Rogue Pentagon Leading A 'New World Order'

"As Chuck Hagel seeks support for his nomination to become Secretary of Defense, Bob Woodward has released a story about a White House trip the former Senator made in 2009.

The Washington Post reports:

According to an account that Hagel later gave, and is reported here for the first time, he told Obama: “We are at a time where there is a new world order.

"We don’t control it. You must question everything, every assumption, everything they” — the military and diplomats — “tell you. Any assumption 10 years old is out of date. You need to question our role. You need to question the military. You need to question what are we using the military for."

at  http://www.businessinsider.com/hagel-warned-obama-about-out-of-control-pentagon-new-world-order-2013-1#ixzz2JIiA0451

Startling Relationship Between Gold Price & U.S. Gov’t Debt Suggests What Price for Gold in 2017?

"Here is the scatterplot with the relationship: (The most recent datapoint, 9/30/12, is the one farthest to the right on the chart.)

To see this a little better, I multiplied the gold price by 7 so the scale would be about the same, and charted both together over time. See below:

[Below is another look.]

[While]…it would seem like a no-brainer investment thesis to buy gold at today’s price as a proxy for the not-otherwise-investable thesis that US total government debt will increase in the future, one must consider the possibility, however, that the gold price has already anticipated the future increase in US government debt..."

at http://www.munknee.com/2013/01/startling-relationship-between-gold-price-u-s-govt-debt-suggests-what-price-for-gold-in-2017/

Is the First of Many Currency Crises Just Now Unfolding? Are Gold & Silver About to Take Off As a Result?

"I expect the eventual endgame to this whole Keynesian monetary experiment that has been going on ever since World War II [will] finally terminate in a global currency crisis. [That being said,] I’m starting to wonder if we aren’t seeing the first domino – the Japanese yen - start to topple…[It has] cut through not only the 2012 yearly cycle low, but also the 2011 yearly cycle low and never even blinked [and should it continue its steep decline] and break through the 2010 yearly cycle low [of 105.66] I think we have a serious currency crisis on our hands. Needless to say, if the world sees a major currency collapse… it’s going to spark a panic for protection – to gold and silver. Wouldn’t it be fitting that at a time when they are completely loathed by the market they are about to become most cherished?..."

at http://www.munknee.com/2013/01/is-the-first-of-many-currency-crises-just-now-unfolding-are-gold-silver-about-to-take-off-as-a-result/

Historic Move By The US Has Just Guaranteed Hyperinflation

"Today James Turk spoke with King World News about a historic event which has just taken place in the United States. Turk states that this situation is not being accurately reported in the mainstream media. He also believes that because of this unfolding drama, “It is all but certain now that the dollar is headed for hyperinflation.” Here is what Turk had to say: “The huge bases in gold and silver are getting bigger, which is very positive, Eric. The only thing the drop in price over the last few days has done is set up a retest of this significant and growing support.”

James Turk continues:

“We are seeing just another example of how the central planners intervene in the precious metal markets by selling paper to drive the price down during month-end option expiry. This maneuver maximizes the profit for their agents - those bullion banks facilitating the gold price suppression scheme – so that the calls they've sold to investors and financial institutions expire out of the money. It also ensures that as many call buyers as possible lose money, which helps the central planners foster a negative sentiment for the precious metals.

We have seen this time and again, Eric. Contributing to the manipulation is the FOMC meeting this week, during which the central planners like to put a lid on gold and silver prices while they announce their new money printing schemes. And then watch out for Friday when the unemployment report is released, usually a time of wide price swings aimed to trigger stops. None of this is new. But there is something new and important happening in Washington DC....

“The politicians have finally done it, Eric. The House passed a debt ceiling bill that throws away the last semblance of any discipline on federal spending. It is now all but certain now that the dollar is headed for hyperinflation, assuming the Senate and then the President go along with the measure passed by the House a few days ago, and the indications are that they will.

Because the federal government is running an operating deficit, it needs to borrow dollars. So the federal government needs the debt ceiling to be raised periodically to enable it to keep borrowing. The federal government reached the current $16.4 trillion debt ceiling a few weeks ago.

The mainstream media reported that the House has now extended the debt ceiling to May 19th. But that is not accurate. What the House actually did is suspend it. Bloomberg accurately reported that the House acted to “temporarily suspend” the debt ceiling.

In other words, the House is proposing to eliminate the debt ceiling, meaning that there will be no limit on what the federal government can spend until May 19th when the debt ceiling must again be considered.

But here's the really important point: These two words used by Bloomberg in reporting this event - temporarily suspend - are chilling, Eric. These are the exact same two words that Nixon used in his August 15, 1971 speech announcing that he was breaking the dollar's link to gold.

His temporary suspension has now lasted 42 years, which is the key point I am making here. T his suspension of the debt ceiling is not going to be temporary. Each time it comes up for consideration, the politicians will just keep extending the suspension again and again. They will always take the soft political option.

When Nixon broke the dollar's formal link to gold, he removed the constitutional check on the power of the government to inflate the dollar, sending the US government over the fiscal cliff. Nixon’s action in 1971 has directly led to the financial mess the US is now in. However, the debt ceiling still provided some constraint..."

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/28_Historic_Move_By_The_US_Has_Just_Guaranteed_Hyperinflation.html

Kissinger: The Iran Nuclear Situation Will Come To A Head In The 'Very Foreseeable Future'

"Henry Kissinger recently gave an ominous forecast on the future of Iran's nuclear program: that it will be taken care of one way or another very soon.
Speaking at the World Economic Forum at a Swiss ski resort in Davos, Kissinger said, "People who have advanced their view will have to come to a determination about how to react or about the consequences of non-reaction," he said.
"I believe this point will be reached within a very foreseeable future."
Also at Davos, Agence France Presse reports that President Shimon Peres said, "There will be more attempts to try and negotiate, but there will always be in the horizon a military option, because if the Iranians think it's only economic and political, they won't pay attention."
Kissinger, Peres and Defense Minister Ehud Barak all seem to think that the Iran nuclear situation will come to close in some way in the next few months..."

at  http://www.businessinsider.com/kissinger-gives-forecast-for-options-on-iran-2013-1#ixzz2JCu3GjN3

China Successfully Tests 'Carrier Killer' Missile In The Gobi Desert [REPORT]

"China's PLA "sunk" a U.S. aircraft carrier during a war game in remote China using its DF-21D "Carrier Killer" missile, reports Taiwan paper Want China Times.

The China Times is a 63 year old Taiwanese paper slightly slanted toward unification, but with a solid reputation and accurate reporting.
The Times report originates with a Google Earth image published at SAORBOATS Argentinian internet forum.
The photo shows two big craters on a 600 foot platform deep in China's Gobi desert that Chinese military testers used to simulate the flight deck of an aircraft carrier.
There has been talk of the DF-21 for years with estimates of its range, threat, and theater changing implications, but this could be the first known test of the rocket.
The Dong-Feng-21D ballistic missile is expected to ring China's coast on its truck-mounted launcher, posing a significant threat to U.S. Naval forces in the region.
The 21D is particularly deadly in that it streaks to the atmosphere guided by satellites and possibly GPS enabled drones, and then drops faster than sound straight down on its targe
Lacking a horizontal flight path could make it much more difficult to defend against and with the Navy's new carrier's running at $13 billion plus per ship, losing one would be as great a financial blow as it would be psychological and tactical..."

at  http://www.businessinsider.com/chinas-carrier-killer-missile-test-proves-df-21d-lives-up-to-name-2013-1#ixzz2JCtKeiJZ

Marc Faber : The Markets are Manipulated

"Marc Faber : “The problem with shorting the markets nowadays is that you have this huge intervention by governments. Look at bonds of Italy Portugal and Spain–they rallied last year, there was a huge profit opportunity, and I admit that I missed it, but the profit opportunity came about as a result of government intervention. I feel the markets are — some people say it is intervention. I can call it manipulation. If manipulation continues, you do not know how far they will go. The only thing I know is one day the markets will punish the interventionists, the Keynesians and the monetary that the Federal Reserve and ECB has enforced because the markets will be more powerful one day. How will this look like? Will the bond market collapse or equity markets become a bubble, which would be embarrassing for the Fed’s sake if the U.S. market became a gigantic bubble and at the same time the economy does not recover.” - in Bloomberg"

at http://marcfaberchannel.blogspot.com/2013/01/marc-faber-markets-are-manipulated.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MarcFaberBlog+%28Marc+Faber+Blog%29

3 Incredibly Key Charts For Battered Gold & Silver Bulls

“Debt in most countries has been growing exponentially. Last year in Europe almost every single country grew its debt. If they don’t grow the debt the political leaders will be thrown out of office. Rajoy, the Prime Minister of Spain, had a landslide victory a year ago. Now with austerity his approval rating is down to 15%. So we know austerity will not work.

As long as these countries continue to run deficits, it’s guaranteed the currencies will continue to decline in real terms, which is against gold. In 1965, Charles De Gaulle gave a superb speech in which he said most countries accepted that the dollar was as good as gold. He said that will lead to the US going massively into debt.

De Gaulle, stated that “A currency system must be based on an indisputable money base that doesn’t bear the mark of one country.” He said that “There is only one standard that meets those criteria and that must be gold.” That was back in 1965, Eric.

A few years later De Gaulle demanded the US pay all of their debts to France in gold. Of course as we all know that forced Nixon to close the gold window in 1971. That was the start of the monetary experiment and explosion in money printing in the world, and this is only going to accelerate in the next few years.

I’ve included the gold chart below which shows that gold is up almost 7-fold since 1999. During the last 13 years gold has reached overbought situations a few times. We saw it in 2006, 2008, and again in 2011. Every time gold has reached those overbought situations we’ve seen a consolidation.

 

Compared to the previous rises this has been a relatively mild consolidation. This last consolidation has finished in my view. All of the major moving averages have caught up nicely to the price of gold and it is now preparing for liftoff.

The balance sheets of all central banks are continuing to grow and I’ve included a chart of the Fed’s balance sheet (see chart below). The Fed’s balance sheet has now gone over $3 trillion. $3 trillion is an absolutely massive amount. The total borrowings are now actually over $3.1 trillion.

So the Fed continues to print money to finance the deficits. They are also there to finance and backstop the precarious nature of the banking system. We’ve seen the balance sheet of the Fed consolidating in the last year, just like gold. But now as you can see on the chart above that it’s breaking out again and I think we are ready for the next move higher in the Fed’s balance sheet.

What we are witnessing right now is a perfect Ponzi scheme with the central banks buying up the government debt. But like all Ponzi schemes it will fail and it will fail badly. They will be constantly printing up new money to finance the debt and as this accelerates we will see the hyperinflation I have been predicting for quite some time.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/25_3_Incredibly_Key_Charts_For_Battered_Gold_%26_Silver_Bulls.html

What To Expect After This Week’s Gold & Silver Smash

"There has been a great deal of propaganda from the Fed and mainstream media claiming that the world is on the road to recovery. Today one of the wealthiest and most street-smart pros in the business spoke with King World News about the reality of what is really taking place, the gold and silver smash, and where markets are headed from here. 

 

Rick Rule, who is the CEO of Sprott USA, said, “We are in the midst of a commodities super cycle of the same dimension we experienced in the 1970s.” The 1970s was an extremely difficult period, and it eventually culminated in a flight from fiat currencies into gold as the world experienced a period of tremendous turmoil.

Here is what Rick Rule had to say: “We are in the midst of a commodities super cycle of the same dimension we experienced in the 1970s ... By the way, I don’t disagree that there are attempts being made to suppress the price of gold, but the market is bigger than the morons who are trying to suppress it. As far as I’m concerned, the harder they try to suppress it, the bigger the ultimate move will be. 

 

At some point in time rational people, people who can add and subtract, are going to say, ‘Would I rather have my wealth held in the form of a floating abstraction, like a euro, yen, or US dollar? Or would I rather have an asset that is not simultaneously somebody else’s responsibility? Something that can’t be printed and counterfeited.’

My suspicion is that over time, more people will become comfortable with gold than they are with fiat currencies ... The Chinese government isn’t trying to suppress the price of gold. It’s encouraging Chinese individuals to own gold...."

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/26_What_To_Expect_After_This_Weeks_Gold_%26_Silver_Smash.html

Are Higher Interest Rates the End of the World?

"It’s amazing what you can get used to if it just goes on long enough. Everyone with a family has experienced this personally, but it’s also true at the societal level, where one decade’s impossibility becomes the next’s normal. Not so long ago, for instance, interest rates signified the amount by which a bank CD or bond would increase your wealth each year. But today’s rates are so low that most fixed income instruments are now functionally the same as a checking account, simply a place to park your spare cash until you need it – not an investment that will grow with time. Zero interest rate policy (ZIRP) has created a depressing, in some cases impoverishing “new normal” for savers and retirees.
But the opposite is true for governments, for whom borrowing used to lead to higher interest expense, which in turn widened budget deficits. That’s no longer the case. In recent years, rolling over existing paper as rates have fallen has actually lowered the interest expense of investment-grade countries. Consider the following two charts. The first shows US government debt nearly tripling since 2000. The second shows how much its interest expense has risen: Not at all.


After a decade of massive deficits and rising debt, Washington’s interest expense remains modest because each new bond issue (and each rollover of existing paper) has been at lower rates. If you’re getting a Ponzi-like vibe, you’re right. This game can only go on as long as interest rates keep falling..."

at http://dollarcollapse.com/interest-rates-2/are-higher-interest-rates-the-end-of-the-world/

German Gold-Not Last One Holding the Bag-Tom Cloud

"Germany recently announced it was moving some of its gold back to the homeland. Investment manager Tom Cloud says, “People are starting to pull away and take care of themselves. . . . You don’t want to be the last guy holding the bag.” In his 35 years of investing, Cloud says, “I am now seeing countries buying gold that are talking to me. . . We have banks buying the heaviest they have ever bought.” When it comes to silver, Cloud contends, “There is a real shortage out there. . . . You’ve got industrial buyers competing with the investor.” Cloud predicts, “There will be a time we’ll see a parabolic rise in the price of gold and silver, but we’re not there yet.” Join Greg Hunter as he goes One-on-One with Tom Cloud of CloudHardAssets.com."

at http://usawatchdog.com/german-gold-not-last-one-holding-the-bag-tom-cloud/

Jim Rogers : Printing Money will lead to more Currency Turmoil

"Jim Rogers : Printing money will lead to more currency turmoil as well as more inflation and higher interest rates. This is going to end very badly. - in cpi financial"

at http://jimrogers1.blogspot.com/2013/01/jim-rogers-printing-money-will-lead-to.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogspot%2FWOHK+%28Jim+Rogers+Blog%29

Massive Squeeze Coming As WGC Confirms Gold-Backed Yuan

"King World News is pleased to break the news first in the world for our global readers that the World Gold Council has now confirmed the Chinese are going to back the yuan with gold. Today a legend in the business, Keith Barron, who consults with major companies around the world and is responsible for one of the largest gold discoveries in the last quarter century, informed KWN of this development and also stated, “... the gold and silver bulls are going to begin to trample the bears at some point in the near future.”

Here is what Barron had to say: “This is what I have heard firsthand regarding the silver shortage. I spoke to a dealer where I purchase gold and silver in the United States. He just told me that immediately after the Presidential Inauguration his firm immediately began selling the hell out of monster boxes of US silver eagles.”

Keith Barron continues:

“This dealer informed me that business is absolutely crazy right now and he can't keep product on the shelf because it's flying out the door. I would also like to mention two items which are very important that the KWN readers should be aware of.

 

The first one is regarding an investment group….

“This is actually a hedge fund named Pacific Group, which is converting 1/3 of its hedge fund assets into physical gold. They have already taken delivery of $35 million worth of gold bars. The head of the fund was quoted by Bloomberg as saying, “In our judgment we are in the early stages of what would likely be the world's largest short squeeze in any instrument.”

This goes back to what we were talking about the last time I was interviewed on KWN regarding gold repatriation back to Germany. Basically what these guys are saying is if everyone goes to claim their gold at the same time, the world will witness an incredible short-squeeze.

I believe the world will see that short squeeze in gold. The Germans have given the U.S. 7 years for a small portion of their gold, which is supposedly stored at the Fed, to be repatriated. But I'm sure that if it starts to look difficult to get it back the Germans will accelerate the process. This will simply add fuel to the massive squeeze which lies in front of us. This will literally cause a feeding frenzy as the gold market explodes higher.

The second thing I want to make KWN readers aware of is the report which was commissioned by the World Gold Council. This is an incredible document, especially coming from the World Gold Council because it's basically saying that the Chinese are going to back their currency with gold. This would, in turn, displace the US dollar and make the Chinese yuan the world's reserve currency.

The Chinese are sitting on piles of dollars right now, and while the US continues its decline, the reality is that all of the fiat currencies are in a race to the bottom. We just saw the Bank of Japan yesterday talk about opening up QE and printing vast sums of money. This will be an attempt to reverse their deflation with inflation. This move by the Japanese is very, very bullish for gold.

But between what is happening with the set up for the coming short squeeze in gold, coupled with the Chinese moving to back the yuan with gold, and the shortages we are seeing in the silver market, the outlook for gold and silver going forward are spectacular. Quite frankly, the gold and silver bulls are going to begin to trample the bears at some point in the near future.”

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/23_Massive_Squeeze_Coming_As_WGC_Confirms_Gold-Backed_Yuan.html

China May Now Have World’s 2nd Largest Gold Reserves

"Today acclaimed money manager Stephen Leeb stunned King World News when he said the Chinese may already have the world’s second largest gold reserves, eclipsing Germany to grab the number two spot. Leeb knows China is incredibly secretive about its insatiable accumulation of gold, and believes they are not fully disclosing their entire gold position to the world at this point. Here is what Leeb had to say: “I’m focused on precious metals and this fascinating battle between the East and the West, Eric, especially China and the United States. There is an economic ‘Battle Royale’ going on right now, and I think the Chinese definitely have the upper hand.”

Stephen Leeb continues:

“They have a stronger economy and a clear plan as to what they want to accomplish. They have a much longer-term perspective, and this spells very, very tough times for the United States. I wish it weren’t true, and I wish this country would wake up.

But everywhere I look right now I see limited resources and roadblocks even with such things as technology.."

 

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/1/23_China_May_Now_Have_Worlds_2nd_Largest_Gold_Reserves.html

Japan Threatens To Fire On Chinese Fighters — China Says 'There Will Be No Second Shot'

"When Chinese and Japanese fighters met for the first time over disputed islands in the East China Sea earlier this month, Japan promptly declared its right to fire tracers at China's jets.

Though met with outrage by China at the time, Japan continues promoting the live firing which Chinese military academics are calling the "first shot".

The Tokyo AP reports Japan believes it's simply following protocol:

“Every country has procedures for how to deal with a violation of its territory that continues after multiple cautionary measures,” Japanese Defense Minister Itsunori Onodera said Wednesday when asked if tracer shots would be fired against intruding aircraft that refuse to change course. “We have response measures ready that are consistent with global standards.”

If Japan's using the talk of tracer fire to gauge Chinese reaction, it was not disappointed.
The Chinese Foreign Ministry said Sunday his country is on "high alert" and that Japan and the U.S. are ignoring the fact that "the islands are China’s inherent territory."

Never to be left out, Chinese military academics quoted in Beijing's state-run media provided far more fiery replies:

“Japan’s desire to fire tracer warning shots as a way of frightening the Chinese is nothing but a joke that shows the stupidity, cruelty and failure to understand their own limitations,” Maj. Gen. Peng Guangqian of the Chinese Academy of Military Sciences was quoted saying by the China News Service and other state media..."

at  http://www.businessinsider.com/live-weapons-involved-china-japanlife-fire-attack-drills-tracers-japan-f-15s-2013-1#ixzz2IeAFATwy