Wednesday, December 28, 2011

What's In Store for 2012


There are still lots of brewing calamities that could cause a major financial panic in 2012.  Among them are:
  • The failure of one or more of the world’s largest banks
  • The outright debt default of one or more significant national governments
  • The US government takes further steps toward seizing the assets of private retirement accounts
  • A default in delivery by a sizable gold or silver exchange traded fund
  • A declaration of force majeure and the inability of the COMEX or London markets to continue operations
  • More concrete evidence that the Federal Reserve and other major central banks do not have all the gold reserves that they are reporting as being in their vaults
  • A continuing major downturn in the US real estate market
  • If governments around the world are uniformly unsuccessful at achieving major spending cuts
  • A detailed report of how and where hundreds of millions to billions of customer dollars were effectively stolen in the MF Global Holdings bankruptcy
  • Huge inflation of the money supply by major nations
There are more potential catastrophes than these few, but I think it gives you the idea.

If you have you're head in the sand, I would like you to realize that no magic cures for the world’s financial woes have been achieved, and if anything, the troubles are getting worse by the day.  I think you will only feel more comfortable once you have taken the steps to protect your family and assets.

To learn more on how you can do that, contact JLM Wealth Strategies.

Thursday, December 22, 2011

MFGlobal/JPM Scandal - All the Real News & Meanings for your investments

Via Robert Mish, excerpt from current issue of the Hat Trick Letter
subscription highly recommended.
(this is IMO the best newsletter for understanding the political-economic environment that your investments must consider and are affected by  & best value for cost of all such newsletters)

Also, at the end of this article below is the Peter Schiff interview with Ann Barnhardt on the MF Global debacle.
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This scandal may dwarf all 2008 scandals, even the brokerage & bank bailouts & Madoff
in what sacrosanct principles & protection for private property in America are gone, sacrificed to the power of corruption & cronyism. Segregated customer commodity accounts & even precious metal bars were either gambled away or stolen, in a sense, by MFGlobal top powers either alone or in conspiracy with their creditors & banksters. MFGlobal is now under bankruptcy receivership.   Investigations & lawsuits continue.
______________

◄$$$ THE MF-GLOBAL CASE DEMONSTRATES THAT DERIVATIVES TAKE PRIORITY OVER OTHER ASSETS, THUS SUBORDINATING ALL OTHER ASSETS. THE DERIVATIVES PERMIT THE PRIVATE ACCOUNTS TO VANISH. THE 2005 REVISED BANKRUPTCY LAW ENABLED DERIVATIVES TO GO TO THE TOP OF THE LIST, THUS WIPING OUT ALL JUNIOR ASSET POSITIONS. THE MORGAN STANLEY EVENT RECENTLY DEMONSTRATED THE SUBORDINATION RISK, BUT THE STORY WAS NOT DIGESTED PROPERLY, LIKE IT CAN BE NOW. $$$

The nasty vicious dirty structural detail has come to light. To see it, one must be diligent and alert when observing the events behind the MF Global bust and the ensuing battles. The highest subordinated position for derivatives has been made clear in a financial corporation structure, manifested during the MFG events unfolding under the JPMorgan pressure tactics. The pecking order had been established in the 2005 bankruptcy law during the Bush Admin. Most people paid attention to the individual bankruptcy changes, whereby a debt wipeout against assets was eliminated essentially, replaced by a more strict rule to abide by for debt restructure, with tax obligations carried over. Chapter 13 replaced Chapter 7.The more important item was the ruling for subordinated assets in bankruptcy for financial firms. The ultimate motive could be to destroy all private accounts, as the derivative mountain results in an avalanche of debt destruction that ruins private assets. The destructive levers are installed in the actual financial engineering machinery. Derivatives are set up to be a toilet plunger device that can ruin all brokerage accounts, all pension funds, and maybe all certificates of deposit.

At issue is the safety of brokerage accounts for regular folks, like stock investors, like mutual fund investors, like 401k/IRA investors, the individuals who increasingly are treated like banker vassals. The vanishing act that befell 140 thousand MF Global account holders can happen to the rest of the people, not just farmers, energy firms, and exporters. CEO Jon Corzine was doubling down on bad European sovereign bond bets, using essentially futures contract account holders (other people) as collateral. If not used directly as collateral, then the accounts vanished when the bond bets went bad and the MFG firm went bust. Open the eyes to Clawback Risk more generally, as the ruined firm can snatch & grab all funds beneath it in the pecking order. The unaware public must be careful, or they could lose everything in bank and investment accounts, down to the last penny, even funds recently removed. Having FDIC insurance will mean nothing. The bankruptcy reform law in 2005 placed derivative claims in front of depositors in a business failure, which includes a bank failure. The colossus JPMorgan is claiming in the MF Global case is that the derivative trade is entitled to preference over those who had cash in accounts, maintained either as a margin deposit or free cash. The actual derivative contract is the Repo to Maturity trade on the European sovereign bonds. They are the higher order derivative contract in effect. If a major bank conglomerate goes bust and enters failure, the same claim supported by the same Bankruptcy Law can be invoked to confiscate the entirety of private bank accounts, even brokerage accounts, perhaps pension fund accounts, maybe even bank certificates of deposit. Here is a worse nightmare fact. If the individual suspects a ruin in progress, detects the impending blowup shortly before it happens, the risk still applies. All funds that were removed under 90 days before the failure event are subject to confiscation and loss, as in total loss. It is called the exposed risk through clawback! But the authorities must find the money or firm or person.
MY VIEW IS THAT THE HIGHEST SUBORDINATE POSITION OF DERIVATIVES IS A DEVICE DESIGNED TO WIPE OUT THE MAJORITY OF US PRIVATE WEALTH. It is intended to create a debt slave state. One might argue that major financial firms are attempting to cover their losses, to protect themselves, and to walk away with minimal damage. The Jackass disagrees. These are post mortem events, where the giant financial firm is dead, being carved up, and analyzed in an autopsy. No survivors emerge. A black hole has been constructed with added reinforced power. The subordination rule seems clearly a device to ensure that if the corrupt firms go bust, so will the individuals. It is the Mutually Assured Destruction principle at work. This fallout goes beyond the insurance coverage of the Federal Deposit Insurance Corp. The subordination rule permits the big busted bank to wipe out the individual funds, legally, without remedy. A cascade failure of several large banks would easily result in loss claims that would reach into the $trillions with millions of vanished private accounts of all types.
The Bank of America event several months ago shed light on the practice. BOA brought over $53 trillion in derivative contracts to their balance sheet, inherited from Merrill Lynch in the takeover. That was an marriage merger arranged by the FDIC, acting as Wall Street harlot. They wished to remove bank failures and mass liquidation, to keep America strong to be sure. At risk was and still is the $1.03 trillion in client accounts under ML brokerage. If BOA goes bust, all ML private stock accounts will surely vanish. The unaware and overly trusting individuals again are fodder before the Wall Street cannons. Account holders should worry.
The Market Ticker summarized. They wrote, "A fairly cogent argument can be made that what BOA did was tantamount to intentionally placing an armed financial nuclear device in the center of the board room table and then daring anyone, including the government, to come tamper with it and risk setting it off, knowing full well that if it explodes it is utterly impossible to contain the damage to our economy and financial system. Just in case you missed it, this risk is not limited to Bank of America. Go look at any of the large banks and their derivative book of business notional value and then tell me that it makes a bit of difference which institution we are talking about at any instant in time. If this risk has not sunk into your brain by now despite my incessant table pounding, you need to go for a psychiatric examination stat. This is not to say that you are about to have the entirety of your savings accounts, CDs, and similar funds disappear, because nobody knows exactly how much risk lies where with what in the US banking system (say much less the European one) and thus the odds of such an event cannot be qualified in any meaningful way. But as we have seen since 2007, executives will lie with impunity about their exposure and level of risk in this regard and despite the Sarbanes Oxley Law, which allegedly makes such lies (when reduced to writing in a quarterly or annual report) a crime nobody has been prosecuted for doing so. It is quite clear to me that the USDept Justice is intentionally running the clock on the statute of limitations so those who did and do so get away with it. The bottom line is this: The risk is very real as customers of MF Global have now discovered the hard way. If you are sticking your head in the sand at this point, you have no right of complaint when and if it happens to you." See the utterly frightening alarming Market Ticket article (CLICK HERE) and the Zero Hedge article (CLICK HERE).
MF-GLOBAL MARKET IMPACT
◄$$$ SUPPLY CHAIN INTERRUPTIONS SHOULD BE EXPECTED. AS PRODUCERS DEAL WITH THEIR BUSINESSES WITHOUT THE RELIABLE FORM OF RISK HEDGES, THE SUPPLY CHAIN WILL BE REDUCED IN VOLUME. MANY HAVE ALREADY LOST THEIR SEED (LITERALLY) MONEY AND SEED (FIGURATIVE) CAPITAL. AT GREAT RISK IS THE SUPPLY CHAIN IN THE NEAR FUTURE. EXPECT SHORTAGES AND HIGHER FOOD PRICES. $$$
MF Global has revealed many things, among them is how the inventories dwindle and the shelves might go empty. Producers and suppliers cannot properly manage risk. They are either pulling their funds out of risk-filled accounts, or struggling to recover funds from stolen accounts. As farmers, energy suppliers, and exporters find it increasingly difficult to build in a reliable form of risk hedge strategy, the supply chain will be reduced in volume from their withdrawal. What strain has been suffered on the banking side from insolvency, seen in shortages at ATM machines, has transferred to the tangible economy. Take one Minnesota farmer named Dean Tofteland, who for the first time in 25 years has missed his deadline to buy seed for the spring corn and soybean crops. The land in the North Central states enjoys sunlight until almost 10pm in June. His MF Global account of $200,000 is missing. He cannot buy seed at discount. He and other farmers find themselves in a cash crunch that will ripple far beyond the futures market, all the way to supermarkets. At least one third of farmer accounts is missing. They have postponed purchases of seed, land, equipment, and more. Actual decisions are affected on the farm, where US crop outlook has a big black cloud extended from Wall Street, the crime syndicate location. Look for lower supply of food products. Look for more shortages and higher prices. The supply chain is at risk. See the Reuters article (CLICK HERE).
◄$$$ THE MISSING MF GLOBAL MONEY WENT INTO JPMORGAN ACCOUNTS IN LONDON. THE US CONGRESS SHOW IS A PURE CHARADE. LIKE WITH THE MADOFF MONEY, THEY KNOW WHERE IT IS. THE APPEARANCE OF AN INVESTIGATION IS THE MASKED FACADE PRESENTED AS JUSTICE. THE UNITED STATES SIDE PREFERS TO KEEP THE FACTS IN THE DARK, TO SEARCH ENDLESSLY FOR MISSING FUNDS WHEN THEIR LOCATION IS KNOWN. THE TRUSTEE JUDGE IS SHOWING HIMSELF LOYAL TO THE SYNDICATE IN THE GRAND COVERUP. $$$
The MF Global executives working in London received lavish bonuses on the day before the bankruptcy filing took place on October 31st. The same offices received $500 million of the (never) missing funds raked from the segregated MF Global client accounts. The JPM hands are dirty. The story has brought new meaning to investing other people's money, since JPMorgan used client money to put a patch over a black hole created by both precious metals and the European sovereign debt. They used client assets as collateral. They cited the latter, since overseas, ignoring the former, since glaring publicity is not desired. KPMG was hired to recover funds for MFG clients in London. Richard Heis, a partner at KPMG Ltd inLondon, is involved in the recovery supervision. KPMG has recovered $500 million of MF Global funds, a story refused for release in the United States, the controlled news environment. The trustee has admitted that over $1.2 billion might be missing. The court appointed trustee James Giddens serves as the US trustee, which means he will lead the cover-up and whitewash. One of their first acts and deeds was to confiscate the account receipts so that clients could not prove their account value before they were rifled. A firewall of information has been created between New York and London. My figure for total loss (theft) remains much higher, since not included in the tally are scattered missing accounts that were cleared by MFG, caught closeby and dragged into the black hole descent into the vortex. A large body of other accounts caught near the hole are also missing. See the Cafe Americain article (CLICK HERE).
The MF Administrator claims to know the location of all the missing money. The story has not been publicly aired on the US side of the Atlantic, for obvious reasons. The press is controlled by the same criminal syndicate. The British administrator of MF Global Holdings Ltd has made it known that of the British unit's segregated client funds have been found. The KPMG executive Heis is still recovering customer assets. Heis is on record reciting the allegation in the "United States is that nobody knows where the money is. We know exactly where the money is." It is hiding in London. KPMG serves to supervise the special administration of the MFG London unit, officially to unwind failed financial firms. KPMG has been overwhelmed by the urgent need to unwind a huge pile, millions of positions. See the Bloomberg article (CLICK HERE).
BobO is an astute Hat Trick Letter subscriber. He summarized the ugly situation well, when he said, "OK, let me see if I follow this. MF Global included the standard Dewey, Cheatum & Howe law firm fine print and legally transferred their client collateral to their UK subsidiary, so as to circumvent stricter USrequirements. It was then legally pledged by MFG as collateral under more laxUK regulations for better rates on its own loans. The MFG creditors then allegedly legally seized it when MFG defaulted. Thus $1.2 billion is legally gone.In its place, a Congressional sub-Committee investigation." That sounds about right.
The ugliness of the story is beyond description. Several facets have emerged. Even the MF Global cash left on the morning after was scraped up by JPMorgan, claimed as its own so that the giant corrupt bank could pay the bankruptcy trustees and gain influence, like having JPM sit on the committee for disposition of the credit claims. They want to be first in line, the thief to decide on channeled funds. A ripe $25 million will go the trustees, whose early decision was to keep it from the customers whose accounts were looted. JPM was actually given a lien on all the company's assets, from which they stole. No money is missing. The trail is all clearly marked electronically. The Financial Regulatory Bill shined floodlights on the trails. Like with Madoff Funds, their locations are known but the US Congress charade is conducted to create an illusion of justice. The trustee's primary job will be to cover up the theft for JPMorgan. Nobody will go to jail, certainly not former Senator and Governor Jon Corzine. He might have a fatal accident, served up as a hit & run victim in order to create an even bigger black hole for evidence to vanish. Dead men cannot defend themselves and their burial sites usually contain a grand pile of papers that disintegrate, all figuratively speaking.
This is not a routine bankruptcy. This is a crime scene without the yellow tape. JPMorgan averted a COMEX default with a deft move of pure theft. The fate of cases like Highridge Futures Fund will be decided in the courts. They had an account with $50 million missing, even to appear on transfer lists. JPMorgan managed to snare some Italian Govt Bonds from the MFG dung heap at a ridiculously low discount price, after the bust. The move aroused the curious eye of the compromised Giddens, who as estate liquidator announced as MFG lender, JPM will be investigated by prosecutors but not prevented from continuing their criminal fraud. Whatever they find as evidence will be destroyed. US Bankruptcy Judge Martin Glenn in Manhattan overruled objections and supported MFG & JPM, demanding the victims prove their case, that recovered money (crumbs on the floor) could be part of the $1.2 billion missing from their segregated accounts. See the Bloomberg articles (CLICK HERE and HERE). Also, see the video that alleges JPMorgan averted a COMEX gold default (CLICK HERE).
◄$$$ THE CHICAGO MERCANTILE EXCHANGE SEPARATED ITSELF FROM MF-GLOBAL. EITHER THEY ARE TOSSING CORZINE UNDER THE BUS OR DEFYING THE LEGAL FORCES TO CATCH THEM, AS ATTENTION IS DRAWN TO MF-GLOBAL. IT IS A GIGANTIC CRIME SCENE, ONE TO BE REPEATED. MY BELIEF IS THAT CORZINE WILL BE SACRIFICED IN SOME MANNER FOR THE SAKE OF THE CARTEL. ALL WALLS ARE CLOSING IN ON CORZINE, THE NEW FALL GUY. $$$
The Syndicate occasionally needs to kill off one of its own to continue. Lehman Brothers was such a kill job. Their dead parts, along with the confusion, enabled several tasks to be done, thus perpetuating the criminal system. My belief is that they are protecting the cartel at the expense of what they paint as a lone operator in Corzine at MF Global, in a concerted strategy. If Corzine falls from grace and is prosecuted for felonies, then attention will turn away from the other criminals, like JPMorgan. Clearly the ex-GSax CEO was the patsy, to take the counter-party disastrous side of European sovereign debt for JPMorgan, which underwrote the derivative insurance. Also, another possibility, Max Keiser reports murder threats by Jamie Dimon of JPMorgan to Corzine personally if he did not follow explicit instructions on stealing client funds. It is more than just a matter of the money, but rather the removal of obstacles in the private camps that demanded Gold & Silver delivery. The client funds were the key to gigantic leverage within the criminal fraud. Not surprisingly, after the theft by MFG & JPM, the precious metals prices fell hard. Resistance was vacated from the premises. The only remaining problem for the JPM crime bosses is that the next victim will be the COMEX itself. It will resemble an abandoned warehouse that is better described as a whorehouse.
At the MF Global Senate hearings, in his oral testimony CME Executive Chairman Terry Duffy indicated clearly that one of the CME staff was told during their audit of MFG that the Jon Corzine was aware of large loans and disputed transfers made. The Duffy testimony directly contradicts Corzine during his earlier testimony, when he claimed to know nothing. The CME appears to have broken ranks with the banksters or cut off the patsy. Look for Corzine to be thrown to the wolves, tossed under the bus, sacrificed on the satanic altar. Pick your phrase, as all apply. An MF Global employee had advised the CME that Corzine had been aware of a $175 million loan made to Euro affiliates only days prior to the bankruptcy. The loan was from commingled customer accounts. The testimony calls Corzine a liar under oath before the USCongress. Technically, the transfers of customer funds for the benefit of the firm constitute serious violations the Commodity Exchange Act, which protects segregated accounts. The various testimony points to MF Global knowing about ransacking of client accounts and urging CME not to pursue the search for it. By the way, Duffy and the CME have made it very clear that CME will in no way cover losses (theft or vanish) suffered by MF Global clients. See the Zero Hedge article (CLICK HERE).
◄$$$ JPMORGAN INCREASED THEIR REGISTERED SILVER INVENTORY BY THE SAME AMOUNT THAT NOTICES FOR DELIVERY WOULD HAVE BEEN FORCED TO HAND OVER ON THE RAMPS. THOSE EXPECTING DELIVERY HAD THEIR POCKETS PICKED AT THE WINDOW. THE DATA IS IN FULL VIEW, NO SUCH THING AS COINCIDENCE IN WALL STREET CRIMINAL EVENTS. $$$
On its face, evidence mounts that JPMorgan simply converted 614k ounces of MF Global client silver into JPM licensed vaults. The corrupt kings tried to sneak a massive 613,738 ounce silver adjustment onto their books on November 25th, a thin pre-holiday day. It was deposited into The Morgue's eligible vaults on Friday November 18th. The giant criminal syndicate bank adjusted this amount of silver from Eligible vaults into Registered vaults on a single day! Joining them was Scotia, which followed up its 1.2 million silver ounce addition in the previous week with a hefty increase alongside JPM, theirs being a massive deposit of 2,395,835 ounces. Rather coincidental that Brinks had a nearly identical withdrawal the day before of 2,346,587 ounces. The huge question focuses on where this silver came from. This is hardly a simple client deposit at JPM vaults, since it was adjusted into Registered inventory. One should note that 1,420,916 of Registered silver was at that time currently unavailable, nowhere to be found in the aftermath of the MF Global collapse and scandal. The breakdown of storage data in the wake of the MF Global client silver theft reveals that Registered silver is missing from every single vault except JPMorgan's!!
Review the timeline. MF Global declared bankruptcy on October 31st. About a week later the CME began reporting that 1.4 million ounces of registered silver was unaccounted for and unavailable for delivery, including 627,182 ounces from non-cartel banks. About 7 to 10 days afterwards, JPMorgan suddenly reported a deposit of 613,738 ounces into eligible vaults. Exactly seven days later, JPMorgan adjusted this silver into Registered vaults. JPMorgan has not had a significant silver deposit in months prior to this bountiful day. Great work on the part of the Silver Doctors in the forensic analysis. Too bad they are not interviewed on CNN, CNBC, Bloomberg, FoxNews, or USCongress, nor mentioned in Wall Street Journal, Barrons, New York Times, London Times, Financial Times.
◄$$$ CORZINE HIMSELF IS THE MF-GLOBAL FIREWALL. THE SECONDARY FIREWALL IS HIS COZY FRIEND GENSLER FROM THE C.F.T.C. WHO RECUSED HIMSELF FROM THE CASE. CORZINE HAS HAD NO ACCESS TO DATA FOR DEFENSE, SINCE IT IS BEING DESTROYED AND CAPTURED, LIKE FUTURES ACCOUNT RECEIPTS. GENSLER CAN CLAIM NO ACCESS TO DATA ALSO, SINCE HE RECUSED HIMSELF. $$$
One friend of a colleague had his six-figure account stolen, since kept too close to the MF Global fire. He reported that the bankruptcy trustee did something very unusual. The trustee seized all account receipts, thus making it impossible for aggrieved client victims to prove the amount of their loss in the grand larceny.That is not the normal procedure and should serve to convince any reasonable observer that the coverup is well along. The JPMorgan accomplice thief absconded to London with the theft, home of John Pierpont Morgan and the site of their loyalty in service to the Queen. If this story and associated interview does not stir you the reader, then you have neither a pulse nor a conscience. Personally, the Jackass has seen the Corzine testimonies, and reaction was visceral, like it is with all Goldman Sachs scum. My attention was lost when immediately the placard was visible HONORABLE JON CORZINE before the Congressional Hearing. Somehow contempt was more apt than respect. The placard was a statement that the committee members planned to treat Corzine with kid gloves. The questions tossed at Corzine at the hearing were soft lobs. They accepted his thin excuses and shallow recollections. The respect given was out of line. One must have thought that Corzine was the wronged party! A couple of Congressmen even asked for his advice for a solution so it would never happen again.
We have seen this Madoff movie before. The money is not missing. It is tucked away safely in syndicate closets. The most pathetic display in my view was when Corzine claimed that his back office assured him that sending clients funds to the JPMorgan office in London office was alright. How absurd! The back office contains his subordinates, and they are not lawyers. He kept repeating he did not order this or that, did not instruct anyone to do this or that, when he left open how he probably did it himself. Corzine has friends in high places and will never see jail time, a Goldman Sachs directive decree. If the heat becomes too intense, my guess is Corzine might suffer an unfortunate accident or suffer a heart attack. If Poor Jon saw the Duffy testimony by CME before the US Congress, he must have very worried about his future and safety. The ensuing black hole would be very useful, kind of like Vincent Foster in the early Clinton Admin. He refused to go on orders to Switzerland to make a $250 million homage fee to the masters, as part of a gigantic fraudulent role program begun by Rubin that continues today, and also involves the Bank of England. The following photo speaks volumes.
◄$$$ LEGITIMATE HONEST FUTURES TRADERS WILL DEPART FROM A CORRUPT SYSTEM THAT CONFISCATES (STEALS, AGGREGATES) CLIENT FUNDS. MORE WILL FOLLOW THE BARNHARDT LEAD. THE INTEGRITY OF THE ENTIRE US-FINANCIAL SYSTEM IS FINALLY SEEN AS CORRUPT. ALREADY DEALERS SHY AWAY FROM PILING ON MORE RISK, REFUSING DERIVATIVE TRADES. $$$
Colleagues and followers of the Jackass knew the system has been corrupt for years. Finally the corruption is in full view, naked and bold, even desperate. The thieving JPMorgan has hidden behind their London skirts for protection, cowards to the end. The relatively young futures brokerage house called BCM Capital shut down for fear of having its clients accounts pillaged by Wall Street. The criminals in charge know no limits to their thefts. In an open letter, Ann Barnhardtmade an impassioned speech, perhaps the most damning indictment the Jackass has ever read or heard in a lifetime. This is a bonafide clarion call to beware of profession syndicate thieves. See the Zero Hedge article (CLICK HERE) and the Financial Sense interview (CLICK HERE) where she urged investors to flee paper assets. Ann Barnhardt made several key points in her note and delivered interview. The following are her main points.
  • The base of a leveraged account must be kept segregated and remain sacrosanct. Client funds are no longer safe, as the backstop has been shown as flawed in the current US system. A firm failure should see the company reduced to ashes, but the client funds left intact. That is no longer the case in the United States.
  • Jon Corzine of MF Global stole client funds at his firm. But he is a Wall Street friend and crony. The regulators compounded the problem by freezing accounts and refusing their liquidation, to put into safer pastures. (My view is the regulators enabled the last penny to be stolen.) No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate client positions.
  • The MF Global asset positions are not unique regarding exposure to European sovereign junk debt. The exposure is industry wide and continues to place client accounts at risk. The MFG leverage was estimated at 100:1 ratio, much greater than other firms. The CME did not backstop the MFG implosion because they knew a backstop would have been required across all of Wall Street. The problem is a systemic problem, not merely isolated to one firm.
  • Perhaps the most ominous dynamic is the risk of potential clawback actions. Such an onerous process permits a bankruptcy trustee to legally seize assets that departed a bankrupt entity in the time period immediately preceding its collapse. Funds withdrawn from MFG client accounts less than 90 days from the collapse could be seized by the trustee, like a black hole aftermath in suction. Regardless of client detection of fraud or insolvency or recklessness, the client funds might be vulnerable. This is a possibility.
  • The futures and options markets are no longer viable. Investors should withdraw from all markets, to protect their equity. The system no longer functions with integrity, overloaded with risk. The rule of law is non-existent. It is replaced with criminals aided by political cronyism. Barnhardt will return to the brokerage business only when the USGovt has been replaced and reformed.
The distrust is spreading, as the Barnhardt shutdown is not isolated. Once more a major Goldman Sachs related gigantic fraud has contributed to a market ruin. Counter-party fears see dealers refuse trades, while banks refuse to assist in buying sovereign debt at all, not submitting to official European pressure. Stronger creditworthy banks are increasingly turning down client requests to take on trades from weaker institutions, as dealers themselves focus on handling their own exposure to vulnerable banks. The most sturdy derivatives dealers have received a stream of client demands to initiate derivatives trades from riskier bank counter-parties since early September, when bond and Credit Default Swap spreads began to widen sharply. They were refused, despite many being submitted with collateral. The stronger locations cite regulatory limits being hit. Dealers who refuse wish to keep credit lines open in the event of further financial crisis, which appears very likely. An anonymous fixed income firm executive said, "We are left with no choice but to stop accepting these novations, because there is a limit to how much exposure you can take from a regulatory perspective, and also because we want to keep bilateral credit lines free in case [the EuroZone crisis intensifies]." Trade novation involves a dealer acting as intermediary between another bank and its client, initiating a derivative contract position. While not altering the risk profile on the trade for either counter-party, the dealer would accept additional counter-party risk to both the client and the original bank. See the Intl Finance Review article (CLICK HERE).
IMPLICATIONS TO PRIVATE ACCOUNTS
◄$$$ CLIENT ALLOCATED ACCOUNTS ARE NOT SAFE. THE DISPOSITION OF THE MF-GLOBAL ASSETS WILL POSSIBLY REACH INTO CLIENT GOLD BULLION STORAGE, CAUSING A FIRESTORM OF PROTEST. THE CLASS ACTION LAWSUIT AGAINST MF-GLOBAL (AND IMPLICITLY JPMORGAN) BY THE COMMODITY CUSTOMER COALITION UNDER THE DIRECTION OF KOUTOULAS WILL REVEAL SOME EXTREMELY SCUMMY DEVELOPMENTS. THE UNITED STATES IS BEING EXPOSED FOR ITS INDESCRIBABLY DEEP CORRUPTION. $$$
The bankruptcy trustee for MF Global is attempting to seize and liquidate even the stored client Gold & Silver bullion sitting in supposedly protected Allocated accounts. Warehouses and bullion dealers are being exposed as not safe to store private gold and silver, even with clear warehouse receipts. The futures market run by CME and the regulated system overseen by CFTC and CME are defaulting on obligations. The trampling of property rights is going much farther than with big failures like Lehman and Bear Sterns, where the customer accounts were kept intact and transferred to safety before the liquidation process. Being in possession of Gold & Silver within a fractional reserve scheme is subject to much more counter-party risk than admitted or imagined. Witness the Fascist Business Model in full glory at climax of systemic failure. The lesson learned is that counter-party risk exists and persist if the bullion metal is linked in the chain to another party or under their roofs, even if a market entity, large financial firm, or a primary dealer, even the US Federal Reserve. What is happening in the MFG case is a Bankruptcy Trustee has attempted to pool private bullion holdings with the rest of the paper assets, then forcing liquidation at prices that are being front run by the Street for even more syndicate profit after thefts.
Clients are soon to be forced to accept whatever paper settlement given, or work for several months to retrieve their assets. So far their assets have been frozen for almost a month, funds unavailable, while the markets fall. The forced action seems consistent with extensive rehypothecation of client assets, meaning the failed MF Global abused those assets by posting them as collateral in a failed investment speculative scheme. Jesse calls it a  pseudo-legal fig leaf, a convenient rationalization. The customer assets were stolen. They were used by MF Global to satisfy a urgent margin call right before their bankruptcy, even as MF Global was paying bonuses to its London employees. The weak-kneed trustee is too timid to attempt a clawback into JPMorgan accounts. Incredibly, the regulators and the exchange officials are in shock and disbelief on how far the exposed game has gone out of control, as they try feverishly to resolve and control the situation. They must preserve investor confidence. At risk is a run on the system, and full exposure of the US financial markets as grotesquely corrupt. See the CafeAmericain article (CLICK HERE). Assuming extremely deep corruption has been a mainstay in Jackass forecast success.
The class action lawsuit lodged by the Commodity Customer Coalition is making headlines, led by James Koutoulas, the acting attorney for the group and CEO of Typhon Capital Mgmt. It has revealed some sordid details on the large US financial firms and their emergency practices, basic theft, confiscation, forced liquidation, and trampling of property rights. The coalition represents 8000 investors with exposure to MF Global, many of them hedge funds. Koutoulas calls his action a declaration of war. He is very bold, whose interview on Bloomberg was seen. The trustee Giddens (a certain tool for the major banks) has proposed dumping all remaining customer assets into a single pool that would pay customers only 72% of the value of their holdings. The pile includes gold, silver, cash, options, futures contracts, and commodities. He wishes to act expeditiously, which means in a manner favoring the thieves and criminals. A full liquidation is easiest, and would not expose the illicit usage of client assets as collateral. It would not expose perhaps the lease of Allocated gold, its subsequent sale, and impossibility to return it under contract. Investors are raging mad, angry, fuming,vehement in protest. They oppose the radical solution in the redistribution of property. Clients with warehouse receipts for Gold & Silver bars have claims on assets that still exist and can be readily identified, or so they think.
A quick comment, an I TOLD YOU SO by a strong reliable veteran gold trader who has been a valuable source of information to the Hat Trick Letter for 3-1/2 years. He said late last week, "Not only have I been telling friends and clients what risk they take to leave their physical with the big Boyz and or whatever institution.If your metal is not in a vault where you have instant access and lift authority, and know that the physical is held in that vault in a segregated fashion, then you are royally screwed. A beneficial owner must have unrestricted access and disposal authority over his metal at all times, and exclusively that owner. The MF Global fraud will trigger other Allocated certificate holders to demand for their physical to be delivered. Much of their precious metal bars is long gone, leased and sold illegally. The surprise will be huge once they find out that these banksters are between 40 and 60 thousand metric tons in deficit. They have illegally been leasing gold & silver, replacing them with certificates, lying to clients, assuring them of their safety, over many years. That is a massive fraud soon possibly to come to light. Watch the Swiss lawsuits, if any information can be found." The Jackass has been repeating this man's warnings. More fallout is coming, certain to pressure the existing vaulted inventory and lead to greater scrutiny, like demanded audits. Those who removed their gold from Swiss accounts last year at Jackass urging have avoided the hundreds of lawsuits pending. They total multiple $billions in claims right here right now, the same gold trader mentioned. The syndicate has obstructed the story from hitting the news.
◄$$$ JPMORGAN APPEARS TO HAVE ILLEGALLY USED THIRD-PARTY ACCOUNTS AS COLLATERAL ON A GRAND BASIS. THE TOTAL HYPOTHECATION RISK FROM SNATCH & GRABS BY JPMORGAN COULD TOTAL $41 BILLION IN PRIVATE ACCOUNTS. JPMORGAN HAS ABUSED CLIENT FUNDS TOTALING HALF A $TRILLION, PLACING IT AS COLLATERAL FOR ITS DERIVATIVE BOOK. IF THEIR HIGH LEVEL POSITIONS FAIL, THEN INNOCENT ACCOUNT HOLDERS WILL BE WIPED OUT. JPMORGAN IS THE LEADING INSTITUTION TO USE CLIENT FUNDS AS COLLATERAL FOR TOXIC ASSETS. IN THE PROCESS, POTENTIAL DUPLICATE USAGE OF COLLATERAL IS REVEALED. $$$
Re-hypothecation is using third party assets as collateral, which seems improper but might be protected by hidden fine print in contracts and careful language in legislation. Wall Street firms have exhausted their own capital, and are heavily leveraged. They require any and all available capital within reach. Check the fine print for opening and maintaining client accounts. This entire sordid concept reminds a person of Compulsory Arbitration to deal with crimes in Halliburton camps in foreign lands, like multiple rape. The crime center is too close to the Wall Street smoldering corruption. Tyler Durden has revealed that Jefferies is MF Global's own AIG albatross. It appears that Jefferies has $22.3 billion in re-hypothecated assets on total balance sheet assets of $37 billion. In the news, they deserve the scrutiny. The firm has re-used collateral posted by clients to back their own trades and borrowed funds. From the most recent annual report posted by Jefferies themselves, the firm cites re-hypothecated assets totaling $22.3 billion in 2011, used to collateralize positions in government debt, asset backed securities, derivatives, and corporate equity. Compare to the total Jefferies balance sheet assets of $37 billion.
Durden accuses ten banks and brokerage firms on re-hypothication, with the venerable JPMorgan leading the pack. The colossus crime syndicate fortress bank has $546.2 billion worth of re-hypothecated assets. That is over $1/2 trillion of collateral from client collateral backing up its $90 trillion derivatives book!! Morgan Stanley, the bucket shop on Wall Street, also owns close to $1/2 trillion in such attachments. Durden concludes in colorful tones, "Yet Jefferies is just the beginning. With weak collateral rules and a level of leverage that would make Archimedes tremble, firms have been piling into re-hypothecation activity with startling abandon. A review of filings reveals a staggering level of activity in what may be the world's largest ever credit bubble." Clearly and obviously, the big US financial firms are broke and insolvent. They have resorted to broad and illicit schemes to attack and attack client funds and accounts.
Here is a compilation of firms engaged heavily in hyper-hypothecation. Goldman Sachs ($28.17 billion re-hypothecated in 2011), Canadian Imperial Bank of Commerce (re-pledged $72 billion in client assets), Royal Bank of Canada (re-pledged $53.8 billion of $126.7 billion available for re-pledging), Oppenheimer Holdings ($15.3 million), Credit Suisse (CHF 332 billion), Knight Capital Group ($1.17 billion), Interactive Brokers ($14.5 billion), Wells Fargo ($19.6 billion), JPMorgan ($546.2 billion), and Morgan Stanley ($410 billion). See the Zero Hedge article (CLICK HERE).
◄$$$ HSBC HAS FILED A LAWSUIT AGAINST MF-GLOBAL. A FIGHT COULD ENSUE ON A GRAND STAGE OVER DUPLICATE CLAIMS ON THE SAME GOLD BARS. THE CASE COULD EXTEND INTO CHALLENGES OF THE G.L.D. VAULT WAREHOUSE, WHOSE GOLD BARS MUST BE OVER-COMMITTED ALSO. OBSERVE THE PROCESS WHEREBY BULLION BARS ARE CONVERTED TO ELECTRONIC ENTRIES FOR CORRUPT PURPOSES. $$$
Two oversized tainted powerful dogs are fighting over $850,000 in gold bars. Be sure to know that at least 40 thousand tons have been duplicate sold. The common claims theme will become a fixture later. The case unfolding is the beginning. HSBC has filed lawsuit against MF Global over bullion bars in disputed ownership. At issue is the equivalent of 15 separate 1-kg gold bars, but the MFG contracts are caught in the middle. Watch to see if the case goes behind closed doors, or works toward compulsory arbitration like with the Blanchard lawsuit in 2005, anything to keep a lid on the story. HSBC claims it is exposed to multiple liabilities with respect to the disposition of the property. Some aggrieved parties want to divide the gold bars and distribute the money. They cannot define MONEY. See the Bloomberg article (CLICK HERE).
Once again the market overseers in gold management are accused of foul play. The position of the owner is in dispute. The brokerage firm was in distress, more like broken and deeply insolvent. The system is being asked to establish the rightful owner of gold worth about $850,000 and silver bars underlying contracts between the brokerage and a client. Here is the most important point. The amount of asset in dispute is irrelevant. Whether $1 million or $500 million or $1 billion, the principle is on trial. The possible crime could have been that MF Global used client assets as collateral in its toxic positions. It is called rehypothecating, or lending even doing a repo. They also might have used the same gold bars as collateral in duplicate fashion. The physical asset should not have been transferred in ownership rights under any circumstances. This case addresses the heart of the entire commingling situation. The case must decide where MFG illegally used rehypothecated client gold to satisfy liabilities.
Owners of gold bullion placed in warehouses too close to the corrupted brokerage action should be very worried whether their gold still rests where they are told it does. Some Hat Trick Letter clients have gold stored at the Delaware warehouse, but that is where JPMorgan operates. The HSBC case could easily extend into a total nightmare, a challenge of the GLD warehouse (exchange traded fund), supervised by custodian HSBC. The next challenges if pursued beyond this case could involve charges that an infinite string of pledges for GLD gold bars has occurred in an ugly daisy chain with countless counter-parties. As Tyler Durden says, if one cockroach is spotted, expect more. The thin flimsy defense has been that each bar has a unique serial number, a single owner, and under Allocated account rules cannot be touched or committed elsewhere. But Wall Street criminals do not abide by rules. They steal whatever is not nailed down. The investment community will next observe the process by which physical gold is converted to corrupted electronic entries for abuse, duplicate usage, and theft. See the Zero Hedge article (CLICK HERE).
◄$$$ SCHWAB ACCOUNT HOLDERS HAVE BEEN SUPPLIED WITH A WARNING THAT APPEARS MORE PLAIN THAN MOST. HOWEVER, THE SAME RULES APPLY TO MOST STOCK ACCOUNT HOLDERS. THE LAW ESSENTIALLY PERMITS THE LARGE CORPORATIONS TO USE THE CLIENT ASSETS AS COLLATERAL IN HIGH RISK GAMES. THE GIANT FIRMS ARE BROKEN AND INSOLVENT, THEIR LACK OF CAPITAL AS MOTIVE FOR THE ASSET ATTACHMENTS. THE THREAT COMES TO PERHAPS ALL PRIVATE ACCOUNTS THAT DO BUSINESS IN THE INVESTMENT ARENA, TENTACLES EXTENDED FAR & WIDE. $$$
Holders of Schwab stock accounts are subject to the following. "11. Pledge of Securities and Other Property - We may pledge, re-pledge, hypothecate or re-hypothecate, either separately or together with Securities of other customers, all Securities and Other Property that you, now or in the future, carry, hold, or maintain in your Margin and Short Account. The value of the Securities and Other Property we pledge or re-pledge may be greater than the amount you owe us, and we are not obligated to retain in our possession and control for delivery the same amount of similar Securities and Other Property." They can make bets bigger than your assets being collateralized for their purposes. A friend of my colleague recently deposited several $thousand in his futures trading account, two weeks after the MF Global bankruptcy. It vanished that day. What is happening goes much farther than having margined stock shares available for others to short. The risk of losing those borrowed shares is real. The practice is to put private account assets as collateral for the conglomerate asset positions. If they go to ruin, then the cascade occurs and private accounts are wiped out.
This hypothecation threat goes even farther, in a nightmare of legally extended tentacles. Check which firm is in charge of supplying margin credit to stock or mutual fund management. That firm, often a Wall Street giant bank, might grab as collateral the diverse client funds. Check which firm is in charge of brokerage clearing functions. That firm, often a Wall Street hidden cousin entity to serve a function, might grab as collateral the client funds. Check which firm facilitates asset management in actual transactions for pension funds. That firm, often more Wall Street players, might grab as collateral the client funds. The practice of hypothecation brings new meaning to the concept of borrowing other people's money. Worse, it serves as the potential blueprint for a great vanishing act of several $trillion in private US accounts. The MF Global case is demonstrating in a grand lesson how $trillions can vanish from millions of private US accounts of various types.
◄$$$ THE GREAT UNWIND OF OVERLY LEVERAGED US-BANKS WILL RESULT IN UNSPEAKABLE LOSSES, AS WELL AS GROTESQUE RAIDS ON PRIVATE ASSETS. THEY ARE NOT SECURE. THE DE-LEVERAGE PROCESS OF THE UGLY SHADOW BANKING SYSTEM HAS PUT AT RISK $TRILLIONS IN PRIVATE ASSETS. THEY ARE ENSNARED. $$$
The Shadow Banking is defined by Tyler Durden as "the near-infinite fungibility of electronic credit money equivalents within the infinitely interconnected modern financial system." The enormity of broker capital deficiency has been revealed by the MF Global bankruptcy, whose unraveling has shed light upon the shadow banking funding pathways. The re-hypothecation is the tip of the corrupt iceberg, certain to continue in its capital destruction. Witness a run on money market funds, asset backed commercial paper (ABCP), bond repos, synthetic contracts (interwoven among different contracts), structured products (leveraged against toxic bonds), putting great strain on securities lenders and the big banks, to the point that the USFed has had to provide tens of $trillions in phony money to keep the system going.
The grand drain on viable assets continues apace. The black hole of collapsing fiat money systems will digest, ruin, and lay waste to private capital, offsetting reckless derivatives, funding evermore liabilities, in the deadly reversal process of the fractional reserve system caught in a recursive loop. The process is a veritable pathogenesis, the center of which is the shadow banking system in London, for which New York is a mere subsidiary extended from the colony under tow. The process will continue until the United States suffers a total systemic failure. Their defense is synthetic liquidity. Their cannon fodder is private assets, like your accounts. The graphic chart shows the feeding process loop that accesses private accounts. See the Zero Hedge article (CLICK HERE). The MF Global crime scene is vast, and exposes many sordid criminal angles that will be revealed over time, by analysts, investigators, and court revelations. The US financial system is due for a vivisection, a living autopsy of profoundly rancid sick cancerous financial tissue.



Peter Schiff interviews Ann Barnhardt Dec 21, 2011 . Ann Barnhardt explains MF Global debacle and the corruption and bluntly explains why she closed her firm down due to the crisis of MF GLobal. Ms.Barnhardt is very independent and has the luxury of speaking the truth.

  

Monday, December 5, 2011

Unemployment Trend is Here to Stay

The following is re-printed from FutureMoneyTrends.com. It's too good to not re-post and share with others. It's re-printed in its entirety. I recommended signing up for their email updates.

Unemployment Trend is Here to Stay

For the past few years we have shown our subscribers that the demographics shift in the U.S. will lead to a new normal in the U.S. unemployment rate. The math is simple, as the largest generation in U.S. history finds itself with no kids in the house, their spending will collapse, and as they downsize their lives, they will save more as they enter their retirement years. Will they retire and leave some job openings? Yes and no, most likely a person who is 65 will retire at the top of their pay for their employment category. Years of service will have a lot to do with their pay, so a 25 year old who replaces them will start at a much lower pay. Thus the problem of having a 72% consumer driven economy, 80% if you live in California. As baby boomers retire, the people replacing them won't make as much, bringing tax revenues down and becoming a drag on consumer spending in an economy that is dependent on constant growth.

With the credit bubble bursting, or at least starting to burst as of 2008, spending will continue to disappoint, inevitably leading to a new normal for unemployment, we expect long term unemployment to be a new normal. Currently, the average duration of those unemployed is 40.9 weeks, this number will move closer to 1 year by the end of next year. However, as the baby boomers age, we expect this number to reach 2 to 3 years for the average duration by 2015. The oldest baby boomer is currently 65 years old and the youngest is 47 years old. Now according to Harry Dent's research using census information and the BLS consumer expenditure survey, we know that the average person peaks in their spending habits at age 46, after that spending begins to fall and by their 50's it begins to collapse. So looking at this large generation that dwarfs the generation before it and after it, spending is already collapsing for this group and will accelerate going forward. By 2015, all baby boomers will be over the age of 50. Knowing this trend is crucial in making ones life decisions, especially for those running a business. For example, running a business that caters to the elderly is probably a great idea, however, opening a business that caters to people in their mid 40's, like Harley Davidson as noted in Dents two most recent books, maybe not such a good idea.



Our point in bringing this to our member's attention is that if you can find a job or have a job, do what you can to bring your 'A' game everyday. This decade will not be friendly to those who follow the conventional wisdom plan of get good grades, go to school, and find a company to work for with great benefits and a matching 401k. This decade is going to be about survivors, what businesses are going to survive and even thrive in an environment where spending is collapsing in a consumer driven economy. For the next 10 to 15 years we will be facing a deflationary environment met by the full forces of an inflationary central bank and government. Expect the government to change the rules, taxes, regulations, and 401ks, it's all on the table as our economy shifts from the constant credit bubble to reality.

401k's

401ks have been around since the early 1980's, however, the way conventional wisdom speaks to them, you would have thought Adam and Eve were maxing out their 401ks. The 401k is an experiment, one that is a derivative of the fiat currency system itself. Think about it, if people saved their wealth with money, a constant unit of account, they wouldn't have to worry about losing purchasing power. Yes, many would love to invest, but certainly having millions of people blindly send their earnings to a fund manager who only has a 20% chance at beating a Dow Jones Index fund probably wouldn't be something they felt they HAD to do. The income tax system, also a derivative of the fiat currency system, has also forced people into 401ks in order to avoid paying income tax. It's kinda like someone beating you up and then offering you some medical care. First the government creates a fiat currency system which makes it so you have to grow your money by at least 3% in order to just keep pace with inflation, then they tax your income stealing what is rightfully yours. Yet, in order to make it all better, they offer you pre-income tax 401ks in order to escape the very fiat currency and tax system they have created!

***For those who are heavily invested in 401k's and easily get heart burn, it might be a good idea to take some Tums prior to reading any further.

By the way, has anyone ever considered how much the Wall St. traders and their high-frequency algorithmic trading computers appreciate the 401k system? Seriously, think about it, you only buy with 401ks, you buy on the 1st and the 15th or whenever you get paid. Of course to every person buying, someone is selling, and that is the beauty of it for Wall St. Since the early 1980's they are guaranteed to have a constant wave of automatic buyers to sell whatever it is the hell they want to sell. This is one reason FutureMoneyTrends.com staff is almost exclusively in the micro-cap or small cap market. If a stock is large enough, be on the radar for high-frequency trading, then we want nothing to do with it. We buy stocks for two reasons, we are either partnering with companies to help build them or we are trying to make a fast trade in order to make some quick profits.

However, we have no interest in going up against Wall Street's computers or buying your standard mutual fund that can't even beat the Dow, which in reality isn't even reflecting earnings anymore, it is just reflecting what traders are speculating the FED will do next. So, when it comes to 401ks who typically give employees around 10 fund options, the people making money are selling them or selling stocks to the automatic buyers. Of course people are only buying up until they can cash out at a later date, hopefully at the lowest tax bracket. Which is the plan of course, assuming you did everything right according to conventional wisdom, 'they' expect you to be in the lowest tax bracket. Ever wonder what tax bracket Wall St. traders and corporate executives plan to retire in? It sure isn't the lowest one.

Real Unemployment

Back to the unemployment numbers, the headline rate dropped from 9% to 8.6%. That is a huge drop, in fact, it had the media in a frenzy over how great the economy was doing. The report was nothing more than an illusion though, in order to see the rate drop, 487,000 people were taken out of the labor force. In fact, in the past year, 1.8 million people have dropped out of the labor force, even though the working age civilian population rose by 1.7 million. The BLS since 2008, has only expanded the labor force by 38,000 people! Yet from 1948 to 2007, the average annual increase in the labor force was 1.6 million. Think about what the REAL unemployment rate should be? Does anyone actually think that the labor force only expanded by 38,000 people in the past 3 years?

Other numbers that didn't make headlines, people looking for a job rose by 192,000, U-6 unemployment was 15.6%, 2.6 million people were unemployed but gave up looking for work, and 8.5 million people want a full time job, but are working only part time. Remember, if you want a full time job, but are working a part time job, you are considered fully employed according to the BLS U-3 data, which is what the media reports to the public.

GOLD

Central banks are buying gold, a lot of it, apparently even they don't want to hold each others' notes and government bonds. Well, with the exception of the FED who looks like they may come in to help bailout the entitlement society in Europe. Central banks, the masters of creating our paper currencies, purchased 150 tons of gold in the 3rd quarter of 2011. That is more than DOUBLE of what they purchased in all of 2010. The bank of Korea just last week reported that it increased its gold reserves by 39% in November. As the currency war heats up, we expect this trend to continue.

China's Ghost Cities

By now most of you have probably seen reports about China's ghost cities, these are cities that are being built in anticipation of growth. Some of the cities have only 1 in 5 units being lived in. Now, looking at this it certainly does scream the word 'bubble.' It is something right out of Keynes playbook and is certainly creating a lot of false demand. However, we would like to point something out that no one else has. Even though this is a bubble, no doubt, this could actually work out in China's favor if you look at the 'long game.' China is building these cities with $100 oil, $35 silver, and other commodities that may be priced much higher in the future from scarcity and global inflation.

Looking at our peak oil video or silver shortage video, you will see what we are talking about. We can actually use our own lives as an example, staff members at FutureMoneyTrends.com have made it a point to purchase items that could become scarce in a depression or inflationary environment, things like food, petroleum based products, and ammunition. We have purchased many of these items way in advance at today's prices, one of our staff members has 2 years worth of supplies in her garage. Now from the suppliers' perspective, this is creating an artificial sales number as there really isn't this much current demand, the demand is simply being borrowed from the future. However, from our staff member's perspective, this is buying stuff she needs in the future at today's prices and today's availability.



For now, China clearly has a property bubble, but in 10 years when silver is north of $1,000, this may very well pay off for them. Just saying...


Focus on the trends, share our emails with friends and family.


www.FutureMoneyTrends.com

Wednesday, November 30, 2011

Gerald Celente - The Lew Rockwell show - 29 November 2011



Gerald Celente and thousands of other investors were ripped off MF Global. No one has been indicted. Jon Corzine, former Governor of New Jersey, and CEO of MF Global is a free man walking the streets.

Still think your investment accounts are safe? Don't forget during the Great Depression, banks stole from depositors. History is simply repeating itself and it's going to happen on a much larger scale.

Monday, November 28, 2011

Yet Another Clue For The Masses (That Bankers Run It All)

You might think I'm kidding. Do bankers really determine policy? Do bankers really determine who has the best chance of getting elected? Do bankers have unfettered access to limitless piles of money?

Perhaps, maybe, no... who knows? Well, here's another clue to help you decide for yourself: http://www.bloomberg.com/news/2011-11-28/secret-fed-loans-undisclosed-to-congress-gave-banks-13-billion-in-income.html

My advice stays the same. Keep in the banks only your monthly capital expenses. Nothing more. As this article points out, banks are operating on very thin ice and that includes the very largest banks in the country! So more than likely, you bank at one of these banks. Is this not pause for concern to you? The Too Big Too Fail Banks require secret loans to maintain operations.

We're on a slippery slope here.


There will be a banking crisis and it will be worldwide. If you don't own hard assets or have your currency offshore and/or held in domestically in insurance contracts with mutual life companies, I urge you to start taking action. As this article indicates, the banking system would have failed without the actions from the Fed to prop a failing banking system at the expense of the people.

What happens when reform actually happens and the Fed is abolished? There will be a necessary disruption to the banking system. All the evils of the Fed and fractional reserve system will have to be purged from our economy. It won't be pretty. And this is the good news if the choice is voluntary.

We might not have a democratic solution to ending the Federal Reserve. The global banking system might collapse long before the masses finally figure out the treacherous motives and deception of the Federal Reserve. If you're wondering what the Federal Reserve is and how it was created in the first place, I highly recommend you purchase from Amazon.com a copy of The Creature From Jekyll Island by G. Edward Griffin.

Monday, November 14, 2011

60 Minutes: Congress Trading Stock on Insider Information?



Here's an article titled: 12 Facts About Money and Congress That Are So Outrageous That It Is Hard To Believe That They Are Actually True I encourage you to read it.

If all of this upsets you, it's time to learn that voting either Democrat or Republican is not the answer. Politics is a game of influence and quid pro quo. We elected our current president with virtually no track record and based solely on people believing in two words: Hope and Change. Now 3 years later, hope has been squandered and change continues to mean more of the same. Meanwhile, in that same election, there was a congressman from Texas with a 30 year track record of unwavering principles who has represented the common man unflinchingly. He runs under the Republican ticket but make no make mistake, he is a Libertarian.

If you don't know who I'm talking about. Go to youtube and search for Ron Paul. Listen to him speak. Investigate his track record. Compare his to your candidate of choice. Make your own decision.

If you want this country to return to its previous glory, we have to be educated and informed about the better options that exist. This is as true when it comes to our retirement and banking strategies as it is with who we choose to stand with when we head to the voting booth. Do not rely on the media to influence your vote. The media is bought and controlled by the financial, banking, and corporate elite who have their own special interests in keeping with the status quo. They have already decided their favorites. They will never endorse Ron Paul which is why I encourage you to do your own homework.

Perhaps instead of Occupying Wall Street, people who learn about stories like this will focus their attention on Occupying Washington D.C and the White House. You'll have one choice in November 2012. Make it count.

Thursday, November 10, 2011

Are the Federal Reserve and Its Primary Dealer Banks Manipulating the Stock Market? by Gary D. Barnett

The U.S. economy has continued to falter since the housing bubble burst. Virtually every part of the economy has worsened, and continues to do so. This is also true on a global scale. Whether discussing unemployment, housing, inflation, GDP, retail sales, etc., the picture is clear, we are still in a depression. Even though the economic picture is bleak, the stock markets have continued to go up in value during this period. Why is this happening?

After the market collapse of 2008 and 2009, where losses were generally around 55%, the markets have gone up substantially. During that same period were QE1 and QE2. This is no coincidence. Bernanke took full credit for the rise in the stock markets, and for good reason. The "Quantitative Easing" programs were structured to transfer money (out of thin air) from the New York Fed to its primary dealer banks. This is done when the Fed purchases treasury bonds from these dealers, some of which include Goldman Sachs and J.P. Morgan, along with 18 others. This process infuses the banks receiving this money with instant liquidity. During QE2 for example, from November 3rd of 2010 through June 30th of 2011, the New York Fed bought from its primary dealers $770 billion worth of treasuries, not the $600 billion it claimed. These banks acquired many of these treasuries during the bailouts by trading worthless securities for full value treasuries. This was, by the way, at taxpayer expense.

There is a direct correlation between these bond purchases and stock market performance. When QE1 ended, after an increase of approximately 90% in the markets, the markets began to fall. After falling about 23% from those highs, QE2 was announced, and began in November of 2010. The markets proceeded to go up again until QE2 ended in June of 2011. After the money stopped flowing, there was a sudden drop of over 18% from July through September of this year.

Now it gets even more interesting. In just the past two weeks, the stock markets have gone up about 11%. During that same time frame, the Fed has purchased $39.9 billion of treasuries from its dealer banks, in the same manner as it did during QE1 and QE2. If continued, this is an $85 billion a month pace, similar to that of QE2. But remember, there is no announced QE3, and no report that I’ve seen has mentioned anything about this bond buying, but it is going on nonetheless.

The only survivor left standing in this economy seems to be the stock market. This performance should not be happening given the dire economic conditions we’re in today. This tells me that when the money stops for good, and the markets crash, all else will follow. In my opinion, the New York Fed is doing everything possible to make sure that the markets remain somewhat stable, and it is taking a lot of money to keep up this sham. Every time the money starts flowing, the markets rise, and when the money stops flowing, the markets go down. There is now a clear pattern, and it is directly related to money pumping by the Fed, money that goes directly to its primary dealer banks. This allows the banks to make large trading profits running up the markets, and allows the government to point to the markets as a sign that things aren’t so bad after all. This is a lie!

By going to this page of the New York Fed Permanent Open Market Operations, you can easily see how many purchases, and in what amounts, have taken place in just the past two weeks. Then compare what has happened in the stock markets over this same time frame. The same can be done for QE1 and QE2. This direct correlation is not accidental nor is it coincidental. Something is very wrong here, and the Federal Reserve is smack in the middle of this fraud.

The Federal Reserve System is not only destroying the value of our hard earned money, but it is involved in lies and manipulation, and is cloaked in secrecy. It is bailing out banks all over the world with fake money. The Federal Reserve is rotten to the core! How could any sane people allow one entity, a very corrupt one at that, to control the entire monetary system? That is a travesty, but it can be remedied. The Federal Reserve should be abolished immediately, and those running it should be prosecuted for their crimes! If it is not abolished, the value of our hard earned money will simply disappear into the dustbin of history, and most will be left with nothing!

October 17, 2011

Gary D. Barnett [send him mail] is president of Barnett Financial Services, Inc., in Lewistown, Montana.

Copyright © 2011 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.

Thursday, October 27, 2011

Would An Economics Class Help You Understand The World Today?

I don't think an economics class today or even one taken 10 or 20 years would help much at all in understanding why the world is experiencing an unprecedented global financial collapse. Academia teaches Keynesian economics which naturally benefits the government (and it's government grants that support academia in it's study of Keynesian economics... see how self serving it is?).

Although I write much about bankers being the bad guys, they actually need willing co-conspirators in order to execute their plan. After all, without a partner in government to legalize the actions of bankers, they couldn't possibly get away with as much as they do. Make no mistake, bankers need a willing partner and government is that partner in crime. In order for joint effort to work, there must of course be a way for politicians to benefit. Imagine how difficult it would be for politicians to be elected without promising endless entitlements or if they had to pass higher and higher taxes in order to pay for social contracts and endless wars. Politicians needs a way silently tax us. That's where the bankers come in and this is how inflation comes about. It's a stealth tax caused by the creation of money from nothing.

What our government can't collect in taxes from its citizen base, it must borrow from the Federal Reserve which of course has a blank checkbook. Keep in mind, this is not a checking account but a blank checkbook! The check is written from the Fed and taken over to the Treasury and viola, new money is created. The politicians can now pay for anything it wants and the bankers can sit back to collect the interest on money it created from nothing. It's a corrupt system but each party benefits which is why the fraud continues unabated.

Until we have an honest money system, we can't really expect to have honest politicians. Getting back to economics, Austrian economics is the only area of economic study to correctly predict the booms and busts we've experienced since the creation of the Federal Reserve. I highly recommend following the Ludwig von Mises Institute on Facebook or Twitter. Austrian economics is based on sound money principles. For a quick and funny introduction to Austrian vs Keynesian economics, watch this video. It's hilarious and to the point.

Will The Dollar Crash?

It's not a matter of it could happening. Our politicians are incapable of correcting what was set in motion many decades ago. They are, with a few notable exceptions, subservient to the powers that put them in position of leadership.

When banks control the money supply, they have the ability to buy power in form of elected leaders, media outlets, corporations, etc. How do they do that? By having a window to the money making machine.

The Federal Reserve doesn't have a dual mandate like most people think. Congress has been duped and so have the rest of us although the awareness of the deception is spreading now. The Fed has one mandate and that is to serve the biggest banks.

The Federal Reserve is a cartel meant to stifle competition (which is what a cartel is supposed to do) and it has been overwhelmingly successful in doing that since it's creation in 1913.

I'll keep it simple. The only reason why what we're seeing in Greece hasn't happened here is because Greece can't print their own money. We can and that's exactly what we have been doing. However, before long other countries aren't going to buy our treasuries. The Federal Reserve will have to put itself in position to buy the treasuries. It's already started happening. That's what QEII was.

The bottom line is this, all fiat currencies fail. All of them. Read the dollar bills in your wallet. You are holding bank IOU's. It says Federal Reserve Note at the top. Do you see it? Just like the Mortgage Note you signed to buy your home, it's an IOU. It was created from nothing and like all IOUs, interest is being charged.

Who do you think collects the interest? Banks, of course. It's a scam and we don't know it, but the big banks and the Fed know it and they'll keep the con going for as they possibly can. With the ability to issue debt based money, bankers can control not just individuals but entire countries. Our money, and by extension our country, is controlled by bankers. It's so easy to see if you just know where to look.

The endgame: people holding dollars will be wiped out. These dollars won't be worth the paper they're printed on. A dollar is not money. It's the ghost of money. Once people figure this out (and they are starting to), more people will be running for the exit. When that time comes, it'll be a stampede.

Could a miracle happen? I suppose. I think people would be best diversifying out of the dollar until that happens. Just don't hold your breath. I do believe the greatest transfer of wealth will happen in our lifetime in the next 10 years, possibly sooner. Those who study and know how to prepare will wealthy overnight compared to those have faith in the govt and our financial system and are decimated. Voting left or right will not be a solution. Neither side can prevent what will happen. Only the free market can correct it and the longer the crash is delayed, the worse it will be.

Friday, October 14, 2011

Herman Cain vs. Ron Paul On Predicting The Economic Collapse



The anchor sets him up to take so much credit and to show everyone how much smarter he is than every other political candidate, however he maintains his unbelievable modesty and doesn't even mention himself. He pushes arrogance to the side and only talks about the other problems soon to face America. This is the man who should be President of the United States.

Ron Paul doesn't need Keynesian advisers to inform him on the state of the economy. He's been a life long student of Austrian economics.

Thursday, October 13, 2011

Becoming Your Own Banker/Infinite Banking Concept (IBC)- More Q &A

Q. Why would anybody who is not borrowing now, enter into this complicated scheme?
A. First rule of finance is that everything is financed. Pay cash and the interest that otherwise would have been earned on that cash is lost forever. Finance the purchase with a bank/finance company and interest is paid to a 3rd party and then of course, any future interest on the money once paid in full is also lost forever. So even if one is not borrowing in the traditional sense right now, they are paying cash and succumbing to opportunity cost. IBC eliminates opportunity cost because your pool of money is always working for you earning interest and dividends even if you use it to pay cash elsewhere.
I don't know if it's complicated more so than it's just not widely understood by the masses yet. We all grow up outsourcing our individual banking function to the local bank so that becomes our norm. What happens when the banks control the flow of money? They get to call the shots. The idea of doing something different always seems complicated at first. IBC puts the individual in the driver's seat by allowing them to create a reservoir of money that they control. This reservoir of money becomes a cash-in system vs. the cash-out system that our local banks operate for their benefit, not ours.

Q. Why do we need to pay interest to our own bank?
A. Additional interest further capitalizes your bank for future opportunities. The interest becomes capital that not only benefits the family with an increased death benefit and increased cash value but the money is also safe, liquid, and growing contractually in a tax-deferred environment. The question I ask: in the final analysis, where is the best place for your cash? Mutual funds, real estate, bonds, stocks, etc.? There isn't another option that provides the benefits and safety IBC does. Not only that, an IBC policy allows the cash value to be used for any purpose including the purchase of mutual funds, real estate, bonds, stocks, etc. It doesn't restrict options. It safeguards them.

Q. Why do we need an insurance company to make our own bank a reality?
A. None of the other options for our cash can recreate the banking process. Banking is a process, not a product. Additionally, we use a life insurance company because it is a financially solvent institution unlike a bank which operates by lending more money than it carries in reserves (Fractional Reserve Banking). We need our money to be safe and liquid at all times. (Banking secret: banks purchase more cash value life insurance with their assets than any other corporation in the world!)

I think to best understand the answer to this question, we should think of traditional banking as if it were a Shakespearean play with four main characters:

1. Shareholders - them - owners of the bank business looking to make a profit
2. Employees - them - operators of the bank there to earn a living
3. Savers - possibly you - the banks aren't going to lend their own money so they pay interest to the savers for the use of their money.
4. Borrowers - definitely you - banks make their money from lending and so it needs borrowers like you to take out loans for cars, mortgages, college tuition, etc.

The borrower is the most important character in the play (banking process). Without the borrower, the savers wouldn't earn interest on their money, employees couldn't earn a wage, and shareholders couldn't turn a profit.

With a mutual based life insurance company (mutual meaning owned by policyholders), the borrower is not only the saver (each whole life contract is contractually guaranteed to grow each year) but the borrower/saver also participates in the profit of the company because dividends are paid to policyholders, not shareholders. Now instead of the traditional bank cast of players, we have an IBC cast of players that looks like this:

1. Policyholder-you
2. Employees-them
3. Savers- you
4. Borrowers-you

A mutual based life insurance company replicates the banking process that happens at a traditional bank. We just need to adjust our thinking to recognize the players in the play. We don't want the responsibility of running the business so instead we'll hire the employees. As with all businesses, there are expenses. Employees symbolize the expenses one pays in the whole life policy but like any expertly run business, the employees are necessary and help maintain and grow profitability. The same thing happens with an IBC policy. Each year, the policy (banking business) becomes more profitable and is in fact contractually guaranteed to become profitable. There is no other business that can offer the same guarantee and no other business in the world as important as the business of banking. If we don't control our flow of money by creating a family banking system, the banks will always be there to profit from the use of our money. It should be no wonder to anyone what happens in this world when bankers position people in a corner.

"Businesses come and go, but the business of banking is eternal." - R. Nelson Nash, author of Becoming Your Own Banker

Q. Is the desire to do better than banks the right rationale for embarking into something so complicated and not free from expenses?
A. I believe the proper perspective or rationale is to replace your cash-out banking system with a cash-in banking system. Cash out means gone forever. The traditional banking system wants us to subscribe to their way of banking because they profit from lending our own money back to us. It is very parasitic in nature. I have to argue that a traditional banking system is far more expensive because the lost interest we lose by not controlling our money can literally add up to hundreds of thousands of dollars in person's lifetime. Ever checked the amount of interest paid on a mortgage or a car. How many homes do we buy in our lifetime? How many cars do we purchase in our lifetime? How many kids do we send off to college? How many major purchases do we pay for with cash?

Nothing in life that is worth having is free. Traditional banking is certainly not free. We just think it is or complain when we have to pay any sort of fee. The truth is traditional banking is far more expensive than starting an IBC policy which is contractually guaranteed to break even and become profitable. Every dollar of premium is eventually accounted for. What is the cost of the much larger death benefit and all the living IBC benefits at that point?

There is no better business to begin and participate in, especially considering that banking is a fundamental process of our economic lives. Once understanding this truth, a person should want to start learning how to profit from the banking process they are already are utilizing anyway. If you don't, your traditional bank is very happy to profit from you and make no apologies for doing so.

Q. How might IBC appeal to different age groups and family circumstances?
A. Each IBC policy is customized for every individual. No two policies are alike. At the end of the day, this is a savings vehicle. It's how the majority of people saved money before mutual funds offered mom and pop an entry into the world of speculation.

People once faithfully paid into their whole life policies when insurance salesman went door to door collecting premium. Nowadays the idea of saving money is foreign because speculation rules the street. People now invest with their savings. Investing to save is not saving. It's still just speculation.

Most age groups and those from all circumstances I have encountered can and have benefited by having money saved for future use. Retirees are the one group that have posed a challenge with IBC because they are no longer producing income to capitalize a policy. However, they have more assets than any other group and could capitalize a policy over a set number of years by re-directing non-incoming producing assets into an IBC policy. This would be done to safeguard their assets from exposure to stock market loss while creating a greater legacy for heirs and providing the living benefits of IBC. All our worthy benefits. An insurance contract also does what Wall Street cannot do which is guarantee income for life. That perhaps is the greatest scam Wall Street gets away with...



John A. Montoya
JLM Wealth Strategies, Inc.
john@JLMws.com
(925) 386-6639 Office
Authorized Advisor-Bank on Yourself®
CA Life#0C42222
DRE #01390017
NMLS #342818

Audit/End the Fed Movement infiltrating Occupy Wall Street



The Occupy Wall Street movement has no specific demands because it doesn’t understand the Federal Reserve Banking System. Students like this one are helping to give Occupy Wall Street a clearer sense of direction by educating the protesters as to how we got where we are today.


Tuesday, September 27, 2011

Trader on BBC says Eurozone Market will Crash




When you've been lied to for a very long time, it is difficult to accept truth.

Friday, September 23, 2011

It's Over - A Realtor Finally Speaks The Truth



Here's a realtor who actually gets it. Listen at 6:18 where he talks about 401ks and IRAs. As he points out, it's a fraud.

I recommend reading The Pirates From Manhattan by Barry Dyke if you want to dive into how exactly Wall Street is ripping investors off.