Russia Bans Grain Exports as the End Game Trade Begins

Come you masters of war
You that build all the guns
You that build the death planes
You that build all the bombs
You that hide behind walls
You that hide behind desks
I just want you to know
I can see through your masks…

You fasten all the triggers
For the others to fire
Then you sit back and watch
When the death count gets higher
You hide in your mansion’
As young people’s blood
Flows out of their bodies
And is buried in the mud.

–  Bob Dylan, Masters of War

Think of the press as a great keyboard on which the government can play.
– Joseph Goebbels

Has the Decoupling Already Started?
Two weeks back I wrote that we were at some major inflection point with oil being at $80/b and the market having had a significant bounce from the lows.  At the time I pondered whether we might start to see a break down in the “risk on/risk off” mindset that has led to commodities and equities trading almost in perfect conjunction with one another since mid 2008.  I said that I thought no one was positioned for a powerful move higher in commodity prices coupled with a flat to down market and that I saw evidence there was a good chance this was about to happen.  I mentioned that agriculture, oil and precious metals would likely be the leadership to the upside in the commodities space should this occur.

Looking simply at the S&P500 and the oil price since that day we see that the oil price is up 3.4% and the market is up 3.1% so they have essentially moved together to the upside.  However, the Asia Tapis oil price benchmark has seen a much more parabolic move in that same time frame up 8.8%.  Meanwhile, wheat is up 32% and rice is up 12%.  It’s a very good thing that food and energy are not included in the core CPI because if people around the world actually had to eat and consume energy there might be a problem.

Russia Bans Grain Exports as the End Game Trade Begins
I am now more convinced than I was two weeks ago that we are once again in the “end game trade.”  Just like in the late 2007 to mid 2008 timeframe no one seems to notice or care.  Back then the parabolic rise in commodities was attributed to phenomenal ROW growth that had decoupled from the U.S. and so no one really worried about the moves until it was too late.  This time people don’t even seem to notice!  I don’t even hear a make believe storyline that attempts to explain away what is happening in a bullish context….yet.  The news this morning that Russian Prime Minister Putin has banned the export of grain and related farm products as a result of the drought is extraordinarily important.  While the ideological nitwits at the Federal Reserve who pray to a false economic religion and Obama’s economic dream team of Neo-Keynesian psychopaths will completely fail to grasp what is happening due their never having worked a job in the real world in their lives instead having spent their entire existence being fawned on by their fellow academics and bureaucrats, the Chinese and others know exactly what is happening…

Before you rush out this morning and sell things across the board take a step back and think about the world from the perspective of government leaders.  At a time like this when every government understands they will collapse overnight if they can’t feed their people don’t you think leaders are going to scramble like mad to get a hold of whatever food they can?  What about oil?  Do you think that countries like China might want to build up stockpiles as much as possible at such a juncture?  Perhaps this is why oil prices in Asia are up so much more than here at home.  Let’s also not forget that oil is rising as the economy has slowed.  It is at $87/b in Asia and this is as China has tightened and cooled things off.  What if they push on the accelerator again?  Then there are precious metals.  Anyone that doesn’t understand the comex is a manipulated illusion isn’t paying attention.  More and more investors around the world are coming to understand this, which is why there is a movement into the physical.  Real gold versus paper gold.  Which do you own?  The article in the FT the other day that seemed to uncover the mystery of the BIS gold swap is required reading (http://www.ft.com/cms/s/0/3e659ed0-9b39-11df-baaf-00144feab49a.html).  Here is one excerpt:

The gold used in the swaps came mainly from investors’ deposit accounts at the European commercial banks. Some investors prefer to deposit their gold in so-called “allocated accounts”, which restrict the custodian banks’ ability to use the gold in their market operations by assigning them specific bullion bars. But other investors prefer cheaper “unallocated accounts”, which give banks access to their bullion for their day-to-day operations.

The banks identified in the swaps were HSBC, Societe Generale, and BNP Paribas.  First of all I think it’s insane for anyone to have gold within a bank.  The entire purpose of gold is to escape the banking system once it becomes so big, complex and fraudulent that there is no place to go but collapse upon its ponzi scheme structure.  I smell a rat in this BIS deal.  People are not going to be happy when they try to redeem their paper gold.  I can’t tell you how many people I know that are selling GLD (HSBC is the custodian!!) and buying physical.  Of great significance is also the fact that on every orchestrated comex plunge physical buying accelerates.  As an example, the U.S. Mint reported selling only 85,000 coins in the first twenty one days of July but then sold 57,000 in the last seven days of the month.    This sort of behavior is what will limit the downside.  There are enough smart people with lots of money that see the current system for the fraud that it is and are getting out while physical gold is still available.

Massive Social and Geopolitical Change is Coming
What is happening at the moment on the world stage is that essentially the governments of all major countries on planet earth are on the verge of collapse one way or the other.  While there are certainly many differences between the governments of China, Russia and the United States for example, there is one huge similarity.  They are all highly bureaucratic centrally planned economies.  What is so interesting about the present time is that we are witnessing the end of the current monetary and financial system that has dominated the world since 1971.  This will also invariably mean that we are about to witness dramatic political and social change in virtually every country on earth.  The very elite in the United States know this which is why they are using their puppets in D.C. to pass laws that will put the citizens into a neo-feudalistic debt slavery so that they will not revolt once it becomes clear to all that the politicians are a bunch of crooks and scoundrels that have sold them out entirely.  On a positive note, I think a critical mass has already been achieved in the U.S. and I think D.C. will collapse under its own weight.  As I wrote to a small group of friends earlier this week as relates to the fact that a sheriff there stated “

Our Own Government Has Become Our Enemy.”:
It doesn’t matter what you think about the AZ law.  It is merely a microcosm for a bigger battle being waged between states rights and the gulag federal government.  The second American revolution HAS begun and it started in Arizona (I thought it might be Texas).  Either way, what I expect to happen in the months ahead is more and more people are going to STOP obeying federal laws and ultimately states will also simply not obey.  This is not necessarily what I am endorsing I am just telling you where I think this is headed.  This will put the Federal government into a corner where they will need to respond.  The stock market is being used as a government weapon to make people think things are ok when there is a massive tempest brewing that will wipe away the entire structure.  Either way, the revolution will not be televised.  Commerce will increasingly move to a black market model (l have heard big discounts are being offered in Greece if you pay in cash and that will be here too). 

This all fits into the whole “Dangers of a Failed Presidency” concept that I wrote about around a month ago.  Washington D.C. has now officially lost the mandate of the people it governs and this is a very dangerous scenario.  If history repeats itself the government will look for a way to vilify another country or a group of people within the country.  As such, I implore everyone that reads this to be as vigilant as possible in the months and years ahead.  Do not accept war (don’t we have enough wars) and do not allow the government or media to demonize a particular subset of the American people.  This is the oldest trick in the book, it’s the divide and conquer or export chaos strategy.  Right now we need to identify who sold us out and how they did it.  Therefore when things crumble we know who the culprits are and we don’t let them change the story and divert anger and confusion elsewhere.      

My Interview with Max Keiser
Last week I did another interview with Max Keiser and I have attached the link.  I want to address something I said that has gotten many comment and that needs clarification.  When discussing a new political party in the U.S. I said the word Progressive.  This was totally misunderstood by many people and I can see why.  I am not a politician and I don’t want to be one.  The word brings to mind concepts and an ideology to which I do not adhere.  That should be clear from everything I have written for years but to some apparently it wasn’t.  I believe in the U.S. Constitution as the law of the land and I think it has been trampled on by both political parties for far too long.  I believe that financial oligarchs, and the multi-national military/industrial complex have hijacked the U.S. via the Federal government and the Federal Reserve and are implementing immoral and unconstitutional policies extraordinarily detrimental to the American people.  I just wanted to clear all this up and hopefully will never have to address it again.

http://www.youtube.com/watch?v=piXQGmJTt_g

A MUST WATCH Video with Yuri Bezmenov
Please take the time to watch this video interview from 1985.  Yuri is an ex-KGB agent and he discusses the process of brainwashing a nation and describes how this is being done in the United States.  It is 25 years later.  Mission accomplished.

http://www.youtube.com/watch?v=zeMZGGQ0ERk&feature=related

Mike

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