This Is The End Days Of The Current Economic System, And We Might Not Reach October: with Bill Holter

This is a full transcript of an interview of Bill Holter, conducted on April 19, 2016, by Dave Hodges, host of X22 Report Spotlight


Dave: Before we get started talking about a lot of different things, let's start off with gold manipulation and Deutsche Bank, and we'll move from there. Right now as we know, Deutsche Bank is admitting that they're manipulating silver and gold, and there are other banks that are implicated in this. Is this going to have an effect on the major gold market at this point?

Bill Holter: Well I think it certainly will; first off, Deutsche Bank is admitting guilt. This is the first time for any of theses fined companies to admit guilt. They are paying a billion dollar fine and are becoming state's evidence; in other words, they're going to squeal on others that were involved. As I understand it, this was about the fix, this was not about daily trading, so it just gets into the fix. My belief is you're going to see all sorts of civil class action suits that are going to be brought against Deutsche Bank and the others over manipulation. And the fact that they admitted guilt, it slam-dunked automatic win, or class action suits. The danger to Deutsche Bank, the danger to the cabal, is "Discovery". Once discovering begins and they've got to open their books, their emails, etc, this ought to be comical.

Dave: Is it strange that this news came out the same time that China's launching their gold-backed Yuan?

Bill: No, I don't. I think there's a whole list of stuff that's come out just over the last two weeks, this is all coming to a head. Today, April 19, is the day that "precious metal people" have been waiting for because China has begun their gold fix away from London, and also the ABX Exchange has opened up.

[Note: The ABX Exchange is the Allocated Bullion Exchange, which is the world's leading electronic institutional exchange for allocated physical precious metals. ABX has Modernized, Globalized, and Integrated the precious metal markets by redefining the way physical bullion is traded. We connect all major global liquidity centers and break down the barriers of entry to the global wholesale market for all market participants.]

Bill: My thought on this is that I don't believe this is going to be like a light switch. I think it's going to be like candle after candle being lit, and then all of a sudden the light switch goes on. What I think you're going to see happen is, the physical demand from Asia is going to push the price of gold and silver higher and they're going to force COMEX to come along.

[Note: COMEX is the primary market for trading metals such as gold, silver, copper and aluminum. Formerly known as the Commodity Exchange Inc., the COMEX merged with the New York Mercantile exchange in 1994 and became the division responsible for metals trading.]
  
Bill: If COMEX does not come along and recognize the demand, they are going to be arbitraged completely out of inventory. And with more or less a billion dollars, you can clean up both COMEX, and the silver, and gold that they have available to deliver. So it's not even a big number, it's a very small number, a billion dollars. 

Dave: So do you think gold is going to rise this year to where it's going to be hitting $50,000 worth of gold? Do you think because of what's happening with Deutsche Bank, what's happening today with China, and everything that's coming down the road here, do you think we're going to be heading to that area?

Bill: That figure would only be accurate if they had 1,300 tons of gold, I assume they don't, and I assume they don't because they have not done an audit since 1955, or 1956, and you can't use the excuse that it's too expensive to audit, but that doesn't cut it.

Dave: No, that's a ridiculous statement in itself.

Bill: I think that what we're going to find out this year is that the US does not have the gold. Even though several people have said that China will bring out their Yuan today, I think that they're going to allow the marketplace to take gold higher, and then they come out with a gold-backed Yuan, and when they do that, they'll come out with some audited numbers and they'll say, "We have  20,000 pounds of gold," or whatever the number happens to be, and I think, in my opinion, they have an absolute minimum of 20,000 tons of gold. I think they're going to come out and say, "We've shown you ours, now you show us yours." And it'll have to be an independent audit, it can't be an internal audit that just says, "Trust us." Because that's what this is about, it's about trust. The US has run the World on trust for what, 60, 70 years? And we've abrogated the trust.

Dave: Yeah, and I don't think anyone really trusts the US right now at this point, they want to see the proof. Let's just get into the economy, the last time we spoke it was back in December and the market was coming down in January, the market came down in February, and then all of a sudden we have this "boost-up" of the market. Of course all over the corporate media they're telling us, "Oh, look now, the market is above 18,000 points!" What has happened since December until now? David Stockman says we're in a "dead cat bounce" at this point, what do you think?

[Note: A "dead cat bounce" is a temporary recovery in share prices after a substantial fall, caused by speculators buying in order to cover their positions.]

Bill: I wouldn't even call it a "dead cat bounce"; I would say that the markets are being jammed with derivatives. The markets since December, if you look at the first quarter of the year, earnings have declined, everything has declined, trade has declined. The economies all over the world and in the United States have gotten softer, and softer, and softer in an effort to hold the system together. The, if you want to call it the "plunge protection team", has bounced the stock market at the same time the ESF has been gobbling up Treasuries that have been sold. And speaking of Treasuries, one of the big events in the last couple of weeks has been the Saudis threatening to sell $750 billion worth of Treasuries if the 28 pages are released and if it's inferred that they were behind 9/11 or a part of 9/11. I just want to say that about specifically selling $750 billion in Treasuries, that won't really hurt us that much, but I want to go one step further; what does that mean? That would mean the Saudis are saying, "The Petrodollar is done. We're no longer going to be funneling dollars back into Treasuries, and not only that, we're no longer going to accept dollars for oil, we're going to accept Yuan." And probably China will become one of their biggest customers. And so that that would create a "monkey-see-monkey-do" scenario, where other countries would follow the leader, and the dollar would become less and less accepted for oil, and that will create less demand for dollars, and you'll see a huge collapse in the dollar.

Dave: So you're saying it has begun?

Bill: Yeah, I believe it has.

Dave: Where the Middle Eastern countries are moving away? Saudi Arabia, maybe Qatar maybe?

Bill: Well Saudi Arabia has made this threat, and Obama has already backed down, he backed down yesterday, saying that he would veto any bill that would allow these 28 pages to come out to implicate Saudi Arabia, and allow the families of the victims that died in 9/11 to sue Saudi Arabia directly. Basically what he's doing there is, he's choosing foreign policy; he's choosing Saudi Arabia over the American people. But it's obviously already come to, not serious blows, but punches back and forth where Saudi Arabia, in their own mind, has one foot out the door.

Dave: We know that a couple of days ago the Fed called an emergency meeting, and it was with finance ministers, we know the President was involved...what do you think that was all about?

Bill: The expedited meeting last Monday, in my opinion, had to do with all of what we're talking about, but I think that it specifically had to do with a bank in Austria that was bailed in, and there were 3 Italian banks that were on the verge of collapse last week. So that could have been "back-room policy" trying to figure out how to not let the derivatives "time-bomb". And the following day you had a meeting between Yellen, Obama, and Biden, and then the day after that, the G20 ministers from all over the world meeting in Washington. And last Thursday, I believe there was a meeting of the Joint Chiefs of Staff regarding the USS Donald Cook being buzzed again, and the reconnaissance Russian fighter that flew over it.

[Note: On April 14, 2016, the guided-missile destroyer USS Donald Cook reported that pairs of Russian Su-24 attack planes made numerous close-range passes. The planes appeared to be unarmed, but on at least one occasion, an Su-24 came within an estimated 30 feet of the Cook, which was in international waters about 70 nautical miles from the Russian enclave of Kaliningrad, which hosts Russian military forces.]

Dave: Now, where does the Fed go at this point? I mean, we see a lot of things breaking down: the economy, the economic indicators, like retail, GDP corporate earnings; they do not look good right now, so what does the Fed do at this point? How long can they keep this going?

Bill: Tongue-in-cheek, I would say they should "Punt", because there is nothing the Fed can do from here, the only thing they can do, is "PRINT". And I think that's what you're seeing. You're starting to see gold and silver move higher, you're starting to see the whiff of inflation, because the Fed cannot tighten; they tightened once, and you saw the reaction in January, end of December, January, February, there's no possibility to tighten. The only thing they can do is lower rates, go to negative rates, and print, print, print; that's their only option. So, behind closed doors, my guess is the only decision is: "Who and where do we give the money to?" Remember, they did lend out, and secretly lend out, $16 trillion dollars in 2008, early 2009; it was not discovered until 2010. So what prevents them from doing another $32 trillion, or $64 trillion, or whatever?

Dave: Nothing, nothing! I mean, they can do whatever they want!

Bill: And I want to go back just a little bit to the Saudi thing. The ESF, the Fed, they can buy those sold Treasuries, but what they can't do, is if foreigners are selling dollars and pushing the value for the dollar down on International Markets, they can't buy dollars by printing more dollars.

[Note: ESF stand for, the Exchange Stabilizing Fund. It  is an emergency reserve fund of the United States Treasury Department, normally used for foreign exchange intervention. This arrangement (as opposed to having the central bank intervene directly) allows the US government to influence currency exchange rates without affecting domestic money supply.]

Bill: They would have to do that with either foreign reserves, or gold; we don't have a lot of foreign reserves. We have very little in the way of foreign reserves, and the thought was, "Why should we?", because we were the reserved currency. As far as the gold is concerned, I firmly believe that our goal has been mobilized over the last 10, 15, 20 years, to suppress the price, and most of that is gone. So trying to support the dollar has become the "Achilles' heel." That's what the Fed cannot do.

Dave: Now, there are rumors that the Fed is talking about creating more of this currency and handing it directly to the people.

Bill: Well yeah, that's what I saw yesterday, "helicopter money", which is basically printing money; that's outright, "helicopter dropped" monetization.

[Note: "helicopter money" is a term used as a means of providing an alternative to "Quantitative Easing", when interest rates are close to zero and the economy remains weak or enters a recession. Economists have used the term 'helicopter money' to refer to two very different policies. The first set of policies emphasizes the 'permanent' monetization of budget deficits, and the second set of policies involves the central bank making direct transfers to the private sector financed with base money, without the direct involvement of fiscal authorities. This has also been called a "citizens' dividend", or a distribution of future seignior-age. The idea was made popular by the American economist Milton Friedman in 1969, although starting in 2012, economists have also called this idea "quantitative easing for the people."]

Dave: So do you think people are going to take the money and go spend it? Or do you think they're going to keep it and hold onto to it? If they actually did this, would this actually help?

Bill: If they actually do it, yeah, I think a lot of people will spend the money, it's obviously inflationary, anybody can save their money, but they'd be an idiot because it's something that's going to go to zero; if it's free, then what's it worth? I mean really, that's the entire argument between fiat currency and gold and silver. Gold and silver takes your real capital, your real labor, real machinery, to dig gold and silver out of the ground; it costs money to create that and turn it into usable form. It doesn't cost anything to create dollars, it doesn't cost anything to create Euros, Yen, Pounds, or whatever! It's just keystrokes on a computer; they're worthless, and that's what this is all about! It's real money verses fake money, and this is the "end game", and these are the end days of the current system!

Dave: We're in April and many people are saying, "Oh, things are rapidly falling apart, and I don't know if we're going to make it to October, or maybe even before that..." I mean, if we're talking about China coming online with the Yuan, and maybe it's going to be backed up with gold, we see that gold now is continually moving up since December, I think it's up about $200 or so at this point? And it seems like they were trying to suppress it, but they just can't bring it back to where it was and we're seeing corporate earnings there, it's a disaster, the whole thing is a complete disaster, and everything else that we're looking at is not looking good, so where is the economy going? I mean, what is going to happen next here?

Bill: This is the "end game", and I've said all along that I believed the "end game" will be a collapse of the derivatives edifice. Derivatives have been used to price markets, they've been used to suppress markets, levitate markets; and the real economy itself is shrinking. The real economy "spits off" cash flow, so to speak, and that cash flow is declining because the economy is declining. The amount of debt, the amount of derivatives that the real economies must support, have only gotten bigger and bigger and bigger. So we're getting to the point where the debt service, the collateral margin, is not big enough to hold up the financial system. So while we're watching the real economy contract, I think you're going to see a point in time where, I'm not so sure that we're going to get to October. I can see it all unwind and happen, and if you get a failure somewhere, and I've said it many times, if you get a big enough failure somewhere, you'll see the entire system close within 48 hours.

Dave: Wow, so I mean, at the same time that this is happening out in the Middle East and in the Baltic Sea, and you just mentioned that the Joint Chiefs of Staff had a meeting about the Russian plane coming very close to the USS Donald cook, how does all of this fit in? Why are we seeing these events occur out in this area, and why is the US screaming and yelling about all of this? Do they have a plan?

Bill: Well my opinion is, and I'm not a military guy, but my opinion is, if you remember two years ago the USS Donald Cook was buzzed, and stories came out that all their electronics were shut down, and my opinion is that it was just done again. If you recall two years ago, the mainstream press didn't even mention the Donald Cook; this time around, the Donald Cook was mentioned pretty widely in the mainstream media, and also about the reconnaissance plane that was covered by the mainstream media. If I had to guess, my guess is that this was Russia, more or less, putting a shot across the bow and maybe a test by them; maybe it worked or maybe it didn't work, I have no idea, but my guess is if they truly have the technology to shut down the Donald Cook, but that it basically was an "in your face" from Russia to the United States. They know that our Military is weakening, and that we're spending less on it, and even the Military themselves are saying that we can't fight a two-front war now.

[Note: A Two-front war is a war in which fighting takes place on two geographically separate fronts, executed by two or more separate forces simultaneously, or nearly simultaneously, in the hope that their opponent will be forced to split their fighting force to deal with both threats, therefore reducing their odds of success.]

Dave: That is true, and I also read something about the Marine Corps, that  only one-third of it is now functional, so yeah, so this does not look good, and it seems at this point that, from my perspective, is that Russia is continually trying to push peace in the Middle East, and the US is kind of  on the other side trying to still reach their goal of removing President Assad, and I don't know where this is all going to end up later on.

Bill: Dave, the US is kind of "more" on the other side. The US has been trying to start a war for a couple of years, and I've testified several times, that my opinion is the US is trying to start a war so that they can blame the financial collapse on it as "cover". In other words, they will say, "Our policies were working, but if it wasn't for this war we'd be fine. But because of the war this happened, and that happened, and whatever." So yes, it does appear to me that Russia/China are trying to stand their ground, and avoid war, but this is about strength and weakness, and I believe the back-and-forth is China, from a financial standpoint, and Russia from a  military stand point, showing, "Hey, we're standing here, we're strong."

Dave: They're strong and the US is getting weaker and weaker...

Bill: And we're getting weaker and weaker as a function of, "We carry too much debt, we overspend every single year..", I mean it's ridiculous! If it were not for 0% interest rates, it it were not for interest rates dropping like they have right now, if rates were 7% or 8% percent, we wouldn't be able to pay the interest on the debt. 

Dave: We're all talking about the economy completely falling apart, most likely this year, do you think in conjunction with that, do you think they will create some type of false-flag event to say, "Hey, it wasn't us, it wasn't the Central Bank, or Obama, it wasn't me, it was because of another group or country?

Bill: All I will say on that is, based on past history, I think that's pretty obvious. And Dave, you keep mentioning, "the economy is falling apart"; please understand that when you say, "the economy is falling apart", the economy collapsing is going to be about credit not being available to the system. When credit ceases, when credit is not available to the system, distribution breaks down, and your weekly trip to Walmart is going to cease to exist because, there won't be any goods on Walmart's shelves. Distribution uses multiple, like 5,6,7,8,10 different credit transactions, to get a product from all forms, into your hands.

Dave: So, all distribution will break down during this time period and...

Bill: All distribution will be affected. There will certainly be some products that are available, as available as they were before, but there will be some products that will simply not be available.

Dave: At this point, I guess we're going to see a scenario like in Argentina, Brazil, Venezuela, where we see inflation, where we see people trying to get these products, shortages, we're going to have something very similar to that?

Bill: Right, well obviously when you have shortages, then you have bidding for goods, and you offer more dollars, and that's a reverse view of hyperinflation; when goods become scarce, the people bid for them.

You Tube Video -    https://www.youtube.com/watch?v=k3fdrEZFFJI