beefsteak
3rd June 2012, 11:45 AM
With continued turmoil in global markets, today King World News interviewed 40 year veteran Don Coxe, Global Strategy Advisor to BANK OF MONTREAL (BMO) ($538 billion in assets).
Coxe shocked KWN by saying that Europe is actively working to introduce gold backed bonds. He said, “They would have the security of gold.” Coxe stated we could see this take place “within the next three months ... because this crisis is developing so fast.”
Coxe also discussed the possibility of an emergency Fed meeting, but first, here is what Coxe had to say about the spectacular gold rally which took place on Friday 6.1.2012:
“First of all, a rally like this, you know a huge amount of it is short covering. The short positions had been building up on this. We were having one of the highest short positions on the gold futures that we’ve seen in a long time.
“The big story that’s unfolding is something I’m very interested in because I started writing about the odds of this last summer. As a result of that, I’ve been kept up to date about the discussions that are proceeding to try to find a way to save the euro, by getting at the gold reserves of the PIIGS countries.
"Some of them, particularly Italy, have huge gold reserves....
“So, there was a paper prepared by what are called, ‘The German wise men,’ last fall. It was immediately rejected by everybody in sight.
"They came back a few weeks ago with a revised version, where they came up with this formula where the countries would have the guarantees of all of their debt above 60% of their GDP (the legal limit under the Maastricht Treaty) -- they would be covered by a euro bond. And the countries who were getting this euro bond would pledge their holdings of gold.
"This wouldn’t have the situation, where as Jens Wideman of the Bundesbank said, 'We’re not going to use Germany’s credit card for those who spend too much.’ They would have the security of gold. This is under active discussion. I have reason to know they have been discussing it with people in the industry.”
This European gold bond is huge news.
When asked if this was bringing gold back into the financial system, Coxe responded,
“Yes, exactly. I did conference calls with people in our organization about this. I said, ‘Something like this could be unfolding because this crisis is developing so fast.’”
When asked if this event would begin to trigger a significant revaluation for gold, Coxe replied,
“At this point, how they would do it, and whether there would be any revaluation, what it would be is security for issuing specific bonds. But, of course, once you do that, what you do is you break the virginity of the system.
"Then you have to start looking at revaluations, you’re right. All of that will come.
"My own take is that I think there is a very good chance of this ... that within the next three months we will find that something like this has been done for some of the countries in the eurozone.
"That means that gold will have been moving back into the (financial) system.”
Coxe also discussed QE3
“The payroll number, what this did was remind people that the figure who said the US isn’t doing very well at all was Ben Bernanke. The market quite correctly assumes that this is going to mean that he’s going to be forced into QE3. He won’t be fighting it.
"But he’s got members of the Fed Board who, up until now, have opposed him because they thought the economy was stronger. So we have the combination of the eurozone, which may find a way to try to get some gold in to save its system, and we now have the reasonable prospect of money printing over here. In other words, the case for gold is starting to get quite wondrous.”
Coxe also added:
“If the European stock markets fall a further 15%, and banks are going down in Europe, I believe there will be an emergency meeting of the Fed Board. This happened once under Paul Volcker. And they will make a move in between meetings.”
-------------------------------
COMMENTARY:
this reminds me of the JES articulated points earlier (in last 24-36mo)
where Sinclair stated 2 things emphatically:
1) Gold backed bonds WERE coming...as of his Dean Harry Schultz "broad hints post" on Wed/Thursday last, it would seem "IT" IS here and now, not 90 days from now, just as predicted by JES.
2) The "Gold Certificate Clause" legal languaging" are still on the US Books. These were created in the 1930s, wherein the gold certificate ratio was still law of the land. It's basically "laying dormant" <---my words against the day which is now here.
Acc'd to JES, all that was needed was to re-jigger the new formula, and of course, on the QT--set foth the timing of the immediate revaluation of Gold (and the next severe leg down in the US$) taking US$ down below USDX 72.00 and ultimately into the upper 40s before all is said and done.
Since the FR is funding/backstopping the planet's banking system, via CDS, then it stands to reason EURO BOND AUTHORITY will be enacted -- backing up Merkel's Germany-- who now has supreme control in Europe banking since the fall of Greece and her bloodless coup de tat without firing a single shot! Remember, PIMCO alerted us via a tweet that significant weekend of the German takeover of all things Euro Banking. Seem to recall yours truly making a big deal out of this German coup de tat.
beefsteak
Coxe shocked KWN by saying that Europe is actively working to introduce gold backed bonds. He said, “They would have the security of gold.” Coxe stated we could see this take place “within the next three months ... because this crisis is developing so fast.”
Coxe also discussed the possibility of an emergency Fed meeting, but first, here is what Coxe had to say about the spectacular gold rally which took place on Friday 6.1.2012:
“First of all, a rally like this, you know a huge amount of it is short covering. The short positions had been building up on this. We were having one of the highest short positions on the gold futures that we’ve seen in a long time.
“The big story that’s unfolding is something I’m very interested in because I started writing about the odds of this last summer. As a result of that, I’ve been kept up to date about the discussions that are proceeding to try to find a way to save the euro, by getting at the gold reserves of the PIIGS countries.
"Some of them, particularly Italy, have huge gold reserves....
“So, there was a paper prepared by what are called, ‘The German wise men,’ last fall. It was immediately rejected by everybody in sight.
"They came back a few weeks ago with a revised version, where they came up with this formula where the countries would have the guarantees of all of their debt above 60% of their GDP (the legal limit under the Maastricht Treaty) -- they would be covered by a euro bond. And the countries who were getting this euro bond would pledge their holdings of gold.
"This wouldn’t have the situation, where as Jens Wideman of the Bundesbank said, 'We’re not going to use Germany’s credit card for those who spend too much.’ They would have the security of gold. This is under active discussion. I have reason to know they have been discussing it with people in the industry.”
This European gold bond is huge news.
When asked if this was bringing gold back into the financial system, Coxe responded,
“Yes, exactly. I did conference calls with people in our organization about this. I said, ‘Something like this could be unfolding because this crisis is developing so fast.’”
When asked if this event would begin to trigger a significant revaluation for gold, Coxe replied,
“At this point, how they would do it, and whether there would be any revaluation, what it would be is security for issuing specific bonds. But, of course, once you do that, what you do is you break the virginity of the system.
"Then you have to start looking at revaluations, you’re right. All of that will come.
"My own take is that I think there is a very good chance of this ... that within the next three months we will find that something like this has been done for some of the countries in the eurozone.
"That means that gold will have been moving back into the (financial) system.”
Coxe also discussed QE3
“The payroll number, what this did was remind people that the figure who said the US isn’t doing very well at all was Ben Bernanke. The market quite correctly assumes that this is going to mean that he’s going to be forced into QE3. He won’t be fighting it.
"But he’s got members of the Fed Board who, up until now, have opposed him because they thought the economy was stronger. So we have the combination of the eurozone, which may find a way to try to get some gold in to save its system, and we now have the reasonable prospect of money printing over here. In other words, the case for gold is starting to get quite wondrous.”
Coxe also added:
“If the European stock markets fall a further 15%, and banks are going down in Europe, I believe there will be an emergency meeting of the Fed Board. This happened once under Paul Volcker. And they will make a move in between meetings.”
-------------------------------
COMMENTARY:
this reminds me of the JES articulated points earlier (in last 24-36mo)
where Sinclair stated 2 things emphatically:
1) Gold backed bonds WERE coming...as of his Dean Harry Schultz "broad hints post" on Wed/Thursday last, it would seem "IT" IS here and now, not 90 days from now, just as predicted by JES.
2) The "Gold Certificate Clause" legal languaging" are still on the US Books. These were created in the 1930s, wherein the gold certificate ratio was still law of the land. It's basically "laying dormant" <---my words against the day which is now here.
Acc'd to JES, all that was needed was to re-jigger the new formula, and of course, on the QT--set foth the timing of the immediate revaluation of Gold (and the next severe leg down in the US$) taking US$ down below USDX 72.00 and ultimately into the upper 40s before all is said and done.
Since the FR is funding/backstopping the planet's banking system, via CDS, then it stands to reason EURO BOND AUTHORITY will be enacted -- backing up Merkel's Germany-- who now has supreme control in Europe banking since the fall of Greece and her bloodless coup de tat without firing a single shot! Remember, PIMCO alerted us via a tweet that significant weekend of the German takeover of all things Euro Banking. Seem to recall yours truly making a big deal out of this German coup de tat.
beefsteak