Gold and Oil: the highest echelons of international finance

Yet again, a wild week on Wall Street! Stocks swung hugely both up and down, while oil was crushed to mind-boggling levels. Why? Coronavirus has people fearful of collapsing demand and Putin would not agree to production cutbacks. This is likely Putin’s way of getting even for America’s interference in the Nord Stream gas pipeline to Europe. It will certainly put great pressure on the U.S. shale industry, and cause big problems for banks. Looking at the futures for tomorrow—the Dow is already down over 1000 points and oil has plunged another 20%. The 10-year treasury yield has dropped to 0.5%. Yikes! It’s history in the making!

What’s in store this week? Defaults, bankruptcies, nobody knows for sure, but I thought I’d pull out my “Another” doc and take some notes on what he said was coming. “Another” was a mysterious gent from the late 1990s who appeared on an Internet forum to share his extreme knowledge of the gold-for-oil deal that was made between the oil states and the Western World. He described the gold and oil markets as the highest echelons of international finance, and answered lots of questions in what was then the only gold forum online. For unknown reasons having to do with his “position” he wished to remain anonymous.

The quotations below are his words from that forum. There are hundreds of pages available, and I pulled only a small portion from the document.

What is the gold for oil deal?

“The Deal: We ( an oil state ) now value gold in trade far higher than currencies. We are willing to use gold as a partial payment for the future use of ‘all oil’ and value it at $1,000 US ( only a small amount of oil is in this deal ). And take a very small amount of gold out of circulation each month using it’s present commodity price. If the world price can be maintained in the $300s it would be a small price for the west to pay for cheap oil and monetary stability. The battle is now between CBs trying to keep gold in the $300s and the ‘others’ buying it up. In effect the governments are selling gold in any form to ‘KEEP IT’ being used as ‘REAL MONEY’ in oil deals! Some people know this, that is why they aren’t trading it, they are buying it. Not all oil producers can take advantage of this deal as it is done ‘where noone can see’.”

Whose deal is this, really?

“There is only one oil state that counts! Only one! They have made it very clear how important gold
is to them. If they had started buying outright, gold would have gone to $5,000+ in days. And
only a very few million ozs. would have been purchased! The message has been for some years,
‘we will accumulate thru the back door, using paper deals if you keep the price at or below the
cost of production.’ Do this and oil will remain THE driving force of the world economy! FAIL THIS AND WE WILL PRICE GOLD IN DOLLARS AT THE TRUE VALUE OF OIL TO THE WORLD! You see, gold is not a commodity. The CBs have used every weapon to keep it’s price low. Understand me, Gold is now, today, a devalued currency being used in world trade!”

So what is gold and oil really worth?

“Do you think the CBs are selling gold to keep the dollar strong? They don’t have to sell to
accomplish that feat! CB gold ( one billion ozs.? ) valued at it’s current commodity price is only
worth 300 billion, it’s nothing in that price range! They know what it’s US$ price is worth in terms
of oil! They are not stupid as they show. You should not think they are dumb! Invest in gold mines, will you? Notice how quick the Australian CB hinted at taking ‘gold in the ground’ if needed. This was said after their sale! The nature of the coming crisis will make the taking of investor property a piece of cake. You see, because gold is a commodity, you will be compensated at the commodity price of return + a fair profit, of course. How much further can they take this? The world private stockpiles that could be sold have been. The CBs are heavy into their own stuff now and are over their heads if they had to make good on all the private deals ( read my other posts ) . The economic game is ending now and has been from the start of 1997! Watch closely as the world currencies and markets fall one by one. Watch in absolute wonder as the demand for oil plunges and it’s price goes thru the roof. Yes, oil stocks will crash with the markets. And gold? You will never know it’s price. It will stop all trading as it slices thru $10,000+.”

What else did Another say about oil?

“Remember this; the western world uses paper as a real value, but oil and gold will never flow in the same direction.”

“You see oil flow is the key to gold flow. It is the movement of gold in the hidden background that has kept oil at these low prices. Not military might, not a strong US dollar, not political pressure, no it was real gold. In very large amounts. Oil is the only commodity in the world that was large enough for gold to hide in.”

“If the world price of gold gets too high then the oil price is falling. So long as gold stays cheap in currency terms oil will be in good supply.”

“If real physical gold trading dries up its price will rise forcing down the value of oil…You see, when paper trading ( of anything ) volume dries up it’s a bearish sign but when real physical gold volume drops it’s bullish! That’s because gold is being cornered on a scale never seen in history….How much is gold worth in terms of oil value? Just stop supplying gold to them in ultra cheep US$ terms and you will find out by watching the currency price of oil!”

“We know that oil is a consumed wealth of a momentary value that is lost in the heat of fire…The stars blink and it is oil wealth no more! It has become ‘the debt of nations’ now owed to you. Gold on the other hand is not a commodity as many assume, as it is truly ‘the wealth of nations’ meant to last thru the ages!”

“Before the future arrives gold will be, once again valued as money and can be truly counted on to appropriately represent all oil wealth!”

“Do the oil states think our military is there to protect them or protect oil? Fact: If the world bids up the price of gold, all deals will be off! It would be every nation for themselves. Oil would explode in price!”

“The US$ could be effectively lowered against most of the leading currencies by slowly taking it off
the oil standard!”

“The problem with gold physical supply is very real indeed! But, there is no way that the CBs will
continue to sell off an asset for it’s commodity price that has many times more value as money! The talk of sales will continue for years but the real act may come to a close very soon as they try to take the LBMA off the supply hook by offering “gray paper” deals.”

“There are only two threats to the world fiat currency system at present. The oil states could stop buying US$ for oil and drop all paper gold for real bullion. Or, the masses could buy up all the physical supplies thereby breaking the OIL/GOLD/US$ bond.”

“The falling markets worldwide are an early warning that the gold for oil deals are coming undone! As the big players are now heading for the exits in anticipation of exploding oil prices, the selling pressure from the CBs will quickly come off gold. The end of a parallel gold market pricing structure will leave many, many players holding nothing at all! The third world markets are the first to go as their currencies are crushed time and time again. Europe will be next, closely followed by the USA!”

“As for the US$ and T- bills held overseas, ‘they don’t really exist’!”

“The act being played out now is much larger than the business of ‘find the gold in the ground’! In the world today there are only three assets, gold, oil and currencies. The paper currencies, so long
admired and accepted are now in a war of self destruction. They will consume each other in an
end battle of ‘I’m the last man standing but have lost all use as a unit of value’.”

“Inflation? We are not speaking of currency price inflation here. This is currency “destruction”
because my national IOUs are being devalued by cheap oil supply problems!”

“You see, all currencies now compete with each other, not for value of wealth but for ‘USAGE’. The
game has now become ‘whose currency gets used the most for trading’ not for value against
goods! It was easy to know the currency that got used for oil would win this game. Today, all
currencies are traded against the dollar for its usage as a medium of oil exchange! Take away that
link and the entire currency/debt exchange system, as we know it will collapse! The US$ must be
maintained as the ‘most used’ if the other currencies are to have a chance to survive.”

“We are not going to see inflation or deflation again. What we are now seeing is the ‘destruction’ of our paper monetary system.”

“The Central Banks could hold gold down for some time, even with massive buying. Watch oil! If it rises much and gold isn’t sold off then the game is over.”

“The world is going off the dollar standard as the dollar is going off the oil standard, find this event ‘in your time’! We watch this new gold market, together, yes?”

What do I think?

It has been 20+ years since Another told us these things. The party is probably over. The can kicking, the monetary debasement, and the enormous debt load is coming to a head, and everyone has to face the problem now. The truth will come out. Hopefully—and I pray—we will all survive what I think will be far worse than the Great Depression. Plan for the worst and hope for the best; that’s what everyone should be doing.