Monday, September 21, 2009

IMF's "Gold for Drugs" Program

Yes, yes, it must be harvest season, the IMF has announced another $13B installment (403 Tons) under its "Gold for Drugs" program. Careful readers of this blog understand that the IMF's primary purpose is, and always has been, to finance the modern trillion $ drug trade between East and West.

Our President once wrote that his favorite professors were the Marxists:
"To avoid being mistaken for a sellout,I chose my friends carefully.The more politically active black students.The foreign students.The Chicanos.The Marxist Professors and the structural feminists and punk-rock performance poets." - Barack Obama, Dreams From My Father
He probably didn't know anything about "punk-rock performance poets," but one thing Karl Marx actually understood was the British gold for opium trade:
"The English East India Company, as is well known, obtained, besides the political rule in India, the exclusive monopoly of the tea-trade, as well as of the Chinese trade in general, and of the transport of goods to and from Europe. But the coasting trade of India and between the islands, as well as the internal trade of India, were the monopoly of the higher employés of the company. The monopolies of salt, opium, betel and other commodities, were inexhaustible mines of wealth. The employés themselves fixed the price and plundered at will the unhappy Hindus. The Governor-General took part in this private traffic. His favourites received contracts under conditions whereby they, cleverer than the alchemists, made gold out of nothing." - Karl Marx, Genesis of the Industrial Capitalist
95% of today's heroin producing opium originates in Afghanistan (street price: somewhere between $500B and $1T), where the USA and NATO have successfully monopolized, cultivated, and more than doubled world opium production. It is then laundered through the traditional British outpost banks to find its way to the big time consumers like China, and other old fashioned dopers that still do business in specie.

It is no coincidence that Britian's HSBC bank (Hong Kong and Shanghai Banking Corporation) hosts the paper gold ETF, GLD, which is designed to pump the price of gold by issuing fractionally backed paper-gold shares. GLD claims to hold physical reserves, but no one knows how much because "physical reserves" can be paper gold, according to Exchange Rule 104.36:
"The purpose of this Notice is to confirm that the Exchange would accept gold-backed exchange-traded funds ('ETF') shares as the physical commodity component for an EFP transaction involving COMEX gold futures contracts, provided that all elements of a bona fide EFP pursuant to Exchange Rule 104.36 are satisfied."
And from the GLD Prospectus (bold emphasis added):
"The creation and redemption of Baskets [= 100,000 shares] requires delivery to the trust of the amount of gold and any cash represented by the Baskets being created or redeemed."

"The number of ounces of gold required to create a basket or to be delivered upon the redemption of a Basket gradually decreases over time due to the accrual of the Trust's expenses and the sale of the Trust's gold to pay the Trust's expenses."
In other words, we systematically steal gold to pay our own salaries and bonuses. The GLD prospectus is careful to prohibit anything resembling an audit:
"the Trustee may have no right to visit the premises of any subcustodian for the purposes of examining the Trust's gold bars or any records maintained by the subcustodian, and no subcustodian will be obligated to cooperate in any review the Trustee may wish to conduct of the facilities, procedures, records or creditworthiness of such subcustodian."
Nor will HSBC say where, whatever metal they might own, is:
"the Custodian has agreed that it will hold all of the Trust's gold bars in its own London vault premises except when the gold bars have been allocated in a vault other than the Custodian's London vault premises"
Readers of this blog also understand that a pound of 70% opium traditionally commands one ounce of gold on the Hong Kong/Shanghai underground market. These conduit banks have every interest in a high gold price... least... ...while they are selling.

My question is, after the IMF recently announced another 400 ton payment of physical metal, a full eighth of their alleged total gold reserve, why does HSBC hold one of the largest short positions against gold on the COMEX? Hmmm, I wonder...


  1. I had to laugh when I recently heard that profits in the opium trade were off some 10% (and not through the efficacy of any interdiction program). Gambling, prostitution, drug use - is nothing sacred in this depression?

  2. "New U.S. Anti-Poppy Strategy"

    "In June, as a result of President Barack Obama’s strategic review of U.S.- Afghanistan policy, the United States began to implement a new strategy for dealing with Afghanistan's opium poppy and heroin trade. Phasing out the practice of poppy eradication, or destroying the crops in the fields, which has proven ineffective, they began to concentrate on interdiction efforts, or attacking the warehouses and drug bazaars controlled by powerful drug lords.

    Coalition forces will no longer destroy individual poppy fields, said Ambassador Holbrooke. "All we did was alienate poppy farmers who were poor farmers, who were growing the best cash crop they could. ... The Afghan farmers are not our enemy. The Taliban are."

    Heh. What an excuse to keep the spice growing and flowing out in the open, overtly, but say the strategy now is to "attack" (or collude with?) the nameless and nefarious "pushers" in the background, where one cannot actually see or measure the reults of the "eradication," such as a level;ed poppy field. Strawberry fields forever. Heh.

  3. Nice article, but I don't understand what they are talking about.

    It has always been US policy to reimburse opium farmers for any drugs destroyed by the military. (which sounds a little too much like "harvested")

  4. I guess the point I was trying to reach for was that now the growers are sanctioned by coalition forces to carry on out in the open with bumper crops of nice fat juicy poppy fields, but on the other hand coalition forces are supposedly wiping out the product to deprive the drug lords at the bazaars. Or could it be they are merely replacing them on a different street corner. Bizarre? I know, Iknow...but it passes the time. Thanks for bringing up another interesting subject, FDR.

  5. So, we are to believe gold price will remain elevated as long as IMF is selling then plummet once they end the selling spree?


The USA's political-economc system is best described as:

On Nov 2, 2010, I plan to vote (FOR or AGAINST) my incumbent congressman

Free Hit Counter