Best of the Week
Most Popular
1.UK General Election BBC Exit Polls Forecast Accuracy - Nadeem_Walayat
2.UK General Election 2017 Seats Final Forecast, Labour, Conservative Lib-Dem, SNP - Nadeem_Walayat
3.UK General Election 2017 Forecast: Conservative 358, Labour 212 Seats - Nadeem_Walayat
4.Theresa May to Resign, Fatal Error Was to Believe Worthless Opinion Polls! - Nadeem_Walayat
5.UK House Prices Forecast General Election 2017 Conservative Seats Result - Nadeem_Walayat
6.The Stock Market Crash of 2017 That Never Was But Could it Still Come to Pass? - Sol_Palha
7.[TRADE ALERT] Write This Gold Stock Ticker Down Now - WallStreetNation
8.UK General Election Results Map 2017 vs 2015 vs Opinion Polls - Nadeem_Walayat
9.Orphaned Poisoned Waters,Severe Chronic Water Shortage Imminent - Richard_Mills
10.How The Smart Money Is Playing The Lithium Boom - OilPrice_Com
Last 7 days
Gold Back With A Vengeance As Bitcoin Bubble Bursts - 26th Jun 17
Crude Oil Trade & Nasdaq QQQ Update - 26th Jun 17
Gold and Silver Ongoing Consolidation May End Soon - 25th Jun 17
Dollar May Become “Local Currency of the U.S.” Only - 25th Jun 17
Sheffield Great Flood of 2007, 10 Years On - Unique Timeline of What Happened - 24th Jun 17
US Stock Market Correction Could be Underway - 24th Jun 17
Proof That This Economic Recovery Narrative is False - 24th Jun 17
Best Cash ISA for Soaring Inflation, Kent Reliance Illustrates the Great ISA Rip Off - 24th Jun 17
Gold Summer Doldrums - 23rd Jun 17
Hedgers Net Short the Euro, US Market Rotates; 2 Horsemen Set to Ride? - 23rd Jun 17
Nether Edge By Election Result: Labour Win Sheffield City Council Seat by 132 Votes - 23rd Jun 17
Grenfell Fire: 600 of 4000 Tower Blocks Ticking Time Bomb Death Traps! - 22nd Jun 17
Car Sales About To Go Over The Cliff - 22nd Jun 17
LOG 0.786 support in CRUDE OIL and COCOA - 22nd Jun 17
More Stock Market Fluctuations Along New Record Highs - 22nd Jun 17
Understanding true money, Pound Sterling must make another historic low, Euro and Gold outlook! - 22nd Jun 17
Green Party Could Control Sheffield City Council Balance of Power Local Election 2018 - 22nd Jun 17
Ratio Combo Charts : Hidden Clues to the Gold Market Puzzle - 22nd Jun 17
Steem Hard Forks & Now People Are Making Even More Money On Blockchain Steemit - 22nd Jun 17
4 Steps for Comparing Binary Options Providers - 22nd Jun 17
Nether Edge & Sharrow By-Election, Will Labour Lose Safe Council Seat, Sheffield? - 21st Jun 17
Stock Market SPX Making New Lows - 21st Jun 17
Your Future Wealth Depends on what You Decide to Keep and Invest in Now - 21st Jun 17
Either Bitcoin Will Fail OR Bitcoin Is A Government Invention Meant To Enslave... - 21st Jun 17
Strength in Gold and Silver Mining Stocks and Its Implications - 21st Jun 17
Inflation is No Longer in Stealth Mode - 21st Jun 17
CRUDE OIL UPDATE- “0.30 risk is cheap for changing implication!” - 20th Jun 17
Crude Oil Verifies Price Breakdown – Or Is It Something More? - 20th Jun 17
Trump Backs ISIS As He Pushes US Onto Brink of World War III With Russia - 20th Jun 17
Most Popular Auto Trading Tools for trading with Stock Markets - 20th Jun 17
GDXJ Gold Stocks Massacre: The Aftermath - 20th Jun 17
Why Walkers Crisps Pay Packet Promotion is RUBBISH! - 20th Jun 17

Market Oracle FREE Newsletter

The MRI 3D Report

Gold, The Real Reason for the Fall of Dominique Strauss-Kahn

Commodities / Gold and Silver 2011 Jun 12, 2011 - 02:41 AM GMT

By: Andrew_McKillop

Commodities

Best Financial Markets Analysis ArticleRequesting anonymity in return for speaking, senior French financial officials have disclosed their interpretation of why and how Dominique Strauss-Kahn known as "DSK" in France, fell suddenly from world power as head of the IMF. Cited on French blog sites, these officials see nothing less than a threat to world monetary stability and the integrity of the global economy, behind the dramatic sleaze operation that felled the woman-chasing, globetrotting freespender with a B-movie sting in a Manhattan hotel room.


Not only the USA is in financial and monetary meltdown and shackled by snowballing debt. In the European and Middle East-North African Arab region, monetary crisis is now in high gear. Not only DSK but finance ministers and central bank governors across the region know that if the dollar crumbles further, and regional debt and monetary disorder racks on and up, it is the euro which also will fall, creating a tidal wave of panic across Europe, the Arab world and further afield.

DSK's shuttle diplomacy and IMF financial firefighting was in high mode, when he disappeared from the scene leaving a sordid scrabble for the role of new IMF chief, pitting Europe, Japan and the USA against the world's only creditor countries: China, India, the Arab petromonarchies, Russia, Brazil and a very few other, small net creditor countries. For Europeans, the threat posed by Arab spring revolts now moving into all-out civil war in several theatres is at least as great as its own internal meltdowns featuring the PIIGS, the UK, Eastern and SE European EU27 countries.

GOLD AND MONEY
Each time an Arab regime falls and its long-time head of state flees - often to Saudi Arabia but very surely not in the Gaddafi case - its central bank's official reserves of gold will have no relation at all to what smaller amount is still left in its vaults. In the Tunisian case it is known that the wife of ousted strongman Ben Ali took at least 22% of the central bank's official reserves in one fell swoop. When Mubarak finally abandoned all attempts at crushing Egypt's democracy protestors, his family and henchmen scooped an unknown quantity of gold from its central bank vaults. The official reserve of 75.60 tons unchanged for 22 years is now extremely unlikely to be the real reserve. When Gaddafi and his sons who remain alive flee from Libya, its official gold reserves, flexibly estimated at anything from about 143 tons to over 220 tons will in no way correspond with what is left. If or when the Bachr al Assad regime of Syria tumbles, and al Assad and his family and henchmen possibly flee to Tehran, certainly not Riyadh, its official gold reserves of 25.80 tons, unchanged for over 30 years, will rather surely not be what the incoming regime will find left in its central bank.

Any country whose central bank has little or no fiduciary and official gold, and is edging near civil war or is in civil war, and has an economy in meltdown will also have a money that is worthless. International currency market speculation will ensure that, fast.

Financial firefighters have a single unchallenged world leader: the head of the IMF. By a touching act of faith and self-delusion, the IMF is thought able to "mobilize" financial resources, and especially gold, to restore confidence in any country's money, in return for draconian austerity measures aimed at impoverishing its ordinary citizens. The financial sector, both national and international is given full access to all national assets in a riot of private profiteering, increased social stress and competition for jobs, public squalor and national humiliation.

THE DSK GOLD SCAM
On the eve of DSK's easily-organized "honeypot sting" in a New York hotel, instantly removing him from the levers of power inside the IMF, he was due to meet with Germany's Angela Merkel and Eurozone-17 financial and monetary leaders, ostensibly to discuss IMF-backing for European national financial bailouts in Greece, Portugal and Ireland, and other countries, totalling hundreds of billions of euro. Germany is the undisputed money-master in Europe, with a huge trade surplus and an unswerving mercantilist strategy of turning its trade surpluses into gold: Germany holds more than one-third of all official gold in Europe, and its national reserve of about 3402 tons places it second-only to the USA, and well before third-ranking IMF by tonnage held.

Germany is therefore always interested in buying gold, especially at a low price, which the IMF is unquely placed to facilitate and organize. Methods used by the IMF feature the issuance - or printing - of its own near-money Special Drawing Rights, and the swapping of these for central bank gold from "assisted countries". The aided country will, through IMF magic, report an increase - not a decrease - in its central bank holdings despite the physical gold being transported out of the country. The official logic is that raised amounts of theoretical-only gold in its central banks vaults will stem speculation against the national currency, as part of the economic healing process. When this produces new economic strength, the central bank can buy back the gold it swapped for SDRs, using these to exchange for dollars, euro, yen, British pounds or Swiss Francs and cover its trade deficit crisis, budget crisis, or other transitional economic stress during "IMF adjustment".

Since late 2007 when DSK ran the IMF, its operations were multiplied about 100-fold in size, reflecting the size of financial crises not affecting the traditional prey of the IMF - low income Third World countries - but newly bankrupt richworld urban-industrial democracies of the OECD. The Third World remedies of the IMF, basically impoverishment of around 60% of the population and enrichment of the 40% designated "emerging middle classes", are unlikely to work either in Arab revolt countries, or Europe or the USA - but the IMF has no other medecine.

The DSK-led financial firefighters therefore had no choice but focus the real and hard assets of its aided victim countries - central bank gold. In this context a high gold price is vital, despite this being heresy for the IMF whose official mission is to matain or restore confidence in fiat paper moneys by pushing down gold bullion prices whenever and wherever it can. Emerging and leaked comment on DSK's "last days at the IMF" from French financial officials indicate massive plans to sell gold to Germany. The process, under full crisis conditions, would include channelling stolen and looted gold from the central banks of collapsing Arab dictatorships, and massive gold swap deals with the central banks and money authorities of near-bankrupt and nearing-bankrupt but gold-rich European countries, especially Portugal, Greece, Spain, Belgium and Romania.

Anything could go wrong in a high-risk ultra-secret set of negotiations. The counterparty to handing over gold to any official but secret buyers, which as well as Germany could have included the USA, China and India, Russia, Brazil and the Arab petro-states, is simple: cash. The process therefore also needs and generates large gold sales, with telltale daily traces in gold bullion trading and daily gold price movement.

We can provisionally conclude the scam failed and DSK had to rapidly disappear. Certainly this year, probably by late summer, the failure of the DSK operation will be clearly shown. Signs could include a radically toughening of the German stance on financial aid to Eurozone states, serious weakening of the euro, and revelations of missing gold in several Arab states, followed by an explosion of gold prices.

By Andrew McKillop

Contact: xtran9@gmail.com

Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2011 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Nancy Kelley
12 Jun 11, 18:51
So the DSK Conspiracy Theory is born

DSK caused his own downfall because he was led by a) his incredible ego and b) his dick.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife