Thursday, December 29, 2011

The Absent Volume Metals Melt Down and Conspiracy

If the bankers didn't have an MF Global bankruptcy they would have needed to manufacture one anyway. This is the kind of thing that will turn you into a conspiracy nut. The precious metals slaughter continues. I have a theory.

I'd like to turn your attention to one of the biggest banking crooks there is, JP Morgan. In fact, it is primarily JP Morgan that shorts the silver market- selling virtually unlimited puts. Please read this quick story. http://articles.businessinsider.com/2011-12-21/wall_street/30541472_1_mf-global-vulture-customer-money

Now let me explain my theory and premise about the metals markets. First of all, as Turd Ferguson notes, the rush into the dollar and out of the euro has strengthened the dollar. Obviously there is an inverse relationship between fiat money and real money. The dollar against gold and silver. When the dollar strengthens, the metals trend down. When the dollar is printed and inflated- thus weakened- the metals take off. So we have that scenario. But then it gets interesting.

I am going to try and paint my version of the big picture here. I will also invite my friends to add to or make corrections if need be.

Thousands of commodity traders and customers of MF Global lost access to their money which was on deposit with MF Global when MF Global went bankrupt on Oct 31. Since then, anyone trading futures in any kind of commodity via MF Global was forced to stop. Their funds were stolen.http://dealbook.nytimes.com/2011/12/28/mf-global-scrutinized-on-moving-of-money/

Now the lawsuits have started. This is because there are multiple claims on the finite assets of MF Global. http://www.businessweek.com/news/2011-12-12/hsbc-sues-mf-global-brokerage-over-850-000-worth-of-gold.html We know that MF Global hijacked at least 200 million and gave it to JP Morgan in advance of the bankruptcy.  How convenient. Now people are lining up to sue.

Rehypothecation is a practice that occurs principally in the financial markets, where a bank or other broker-dealer reuses the collateral pledged by its clients as collateral for its own borrowing. So client funds, including physical assets were frozen and seized because bankers had priority claims. Claims on the money and assets of depositors at MF Global. Is that possible? Yes. It is a fantastic fraud, one which demands that MF Global CEO Jon Corzine be put in jail. But being the elite and connected bastard that he is (Obama's  top campaign bundler) all that Corzine has done is spew a few lies and evade a few questions. He walks free with his 100's of millions in personal assets I might add. This after testifying in that Congressional dog and pony show designed to make it look like some measure of due diligence is taking place.

In the meantime, since Oct 31...metals markets have taken a complete dive. Why? Who the fuck wants to deposit money with a commodity broker and trade paper metals knowing that your money can be legally stolen from you? Here is Ann Barnhardt's site. http://barnhardt.biz/ She closed shop as a clearing agent because she could no longer guarantee customer funds... although she primarily cleared cattle futures. In Colorado. Lots to like about Ann.

This is a market with no buyers. Nobody is going to catch a falling knife. The bankers are having their bankers holiday- selling gold and silver contracts and covering short positions. I wish that were the end of this story but there is one more piece. Paper still drives the physical price of metals. For now.

Position limits. In the coming weeks, futures speculators (like big banks) were going to be regulated. They no longer could issue an infinite number of contracts on underlying commodities regardless of available supply. In other words, big speculators (read banks again) were losing significant leverage- leverage that they had used to manipulate markets. Position limits regulations are already under fire and headed to court. Read the last paragraph here: http://www.cftclaw.com/2011/10/cftc-finalizes-position-limits/

Bottom line. The metals markets are broken. There are no buyers. The price is almost straight down and the volume is non existent. It makes sense to me in light of what I have conveyed here today. Who benefits? The bankers. As always. Time and time again, they show us who runs the markets. They have a bought and paid for Congress and President. In a square game, you might stand a chance. This game is so hopelessly crooked with a deck stacked against you that you are an idiot if you sit down to play. I am talking about paper markets. This is a necessary piece of the end game.

Where will this slide end? I'm not sure. This is getting really ugly. There is absolutely no integrity or even an illusion of integrity left in markets. Our country is breaking down on so many levels, that it is hard to fathom.

I am going to take one last significant stab at adding to physical metals soon. I am expecting a tremendous, hard reversal this year. The world is still bankrupt. However,  I have no illusions that the crooked bankers won't try anything and everything within their power to maintain control over markets and us. They have demonstrated that to me in ample fashion over these past two months. If I wasn't a conspiracy theorist before then- I certainly am now.

6 comments:

Anonymous said...

I've been invested in PMs since 2004 and this is the first time that I am honestly scared. Normally on a sharp correction I buy some more (buy into weakness in other words) but this time for some reason I feel different.

Theres so much negativity towards PMs now and much talk about the end of the bull market.

I just don't know anymore. What I can say is that if I sold ALL my PMs tomorrow...I wouldn't know where to invest the funds or what to do with them.

Anonymous said...

Seems like the MF "debacle" may have been pre-packaged so as to ultimately weaken and perhaps destroy physical PM holdings. Physical PM is the only antidote to fiat currency, and burgeoning support for sound money over the last 3-4 years concerns, if not scares, the banking elite. How does the elite fix that challenge to their sovereignty? Offer up MF as a sacrifice, knowing full well that MF's leader is untouchable. Add market uncertainty in paper PM contracts and simmer. It almost takes care of itself.

hac5x3 said...

It just gets better and better. The trustee on the bankruptcy does work for JP MORGAN and was recently relieved by the Judge. You can't make this stuff up.

Brian said...

Wow. These bastards just take care of each other don't they?

Anonymous said...

It gets even uglier. MF Global may have been sacrificed because the COMEX and its parent CME would have been unable to deliver the gold and silver they claimed to hold for MF Global clients. When enough of those clients filed claims for December physical metal delivery, there were only 2 choices open to CME: 1) face a Failure to Deliver, which would totally trash the CME / COMEX system; OR 2) collapse MF Global and "lose" the assets of the clients silly enough to demand physical metal deliveries. As MF Global imploded, the long arms of JP Morgan came out of nowhere and grabbed all they could. I suspect that HSBC was doing some of that grasping as well.

Brian said...

Ooohh...I never thought about that. Maybe it was all choreographed with precision and the upper echelons are all in on it. Bankers and politicians. Makes sense. Thanks.