This is just a quick note relating Bob Chapman’s take on MF Global with my comments.
Chapman is the gold and silver Guru. He is a former Army intelligence officer with an IQ of 185.
Chapman believes Jon Corzine was told to blow up MF Global and was granted immunity. Corzine had 25 years as a bond trader at Goldman Sachs and knew better than to make one sided bets. No excuse for that in an age of Credit Default Swaps (a kind of insurance on commodities and bonds.) He points out that we do not know who was on the winning end of all those bad investments. It could have been an arranged transfer of funds from the customers at subsidiaries of MF Global to a Rothschild or Goldman Sachs affiliate. We will not know until Corzine is arrested.
Chapman believes Corzine was granted immunity from prosecution to persuade him to steal 3 billion dollars. The whole reason for destroying MF Global was to wipe out the futures contracts of silver and gold investors who had wanted to take delivery. This crushed the market and cancelled the obligations to fill futures contracts that big banks and brokerage houses had sold in behalf of the FED. This saved them a few billion dollars they don’t have.
Of course Ben Bernanke has committed himself to funding all of the bad debts in Europe plus the US deficit and unlimited bad investments of the big New York banks. In short there is a massive inflation coming our way and a few tens of billions in the commodity markets manipulation scam will be small change at the end of the day.
All of this will money printing will force interest rates up crushing the economy and sending unemployment over 30% in America and Europe.
But in the meantime silver and gold price increases were beaten back for a couple of months. This makes the euro and the dollar look good for now. This is just a temporary fix. Gold and silver will resume climbing. Silver has a magic price at %50 where the FED will sell short tens of billions of dollars every day to beat down prices for paper silver. As I said before, when silver reaches $53 an ounce, there will be no resistance other than normal profit taking.
MF Global has taught us all a lesson. Do not go into the futures market expecting to take delivery. The bankruptcy receiver might just steal your money in segregated and dedicated accounts while allowing JP Morgan to get hold of 1.2 billion dollars in unsecured money. That is illegal.
All of this fraud has forced small investors out of the stock market and the futures market. The only game in town is silver and gold bullion or mining shares. The passage of the National Defense Authorization Act also has been correctly interpreted as a war against freedom. That means canned food and lead will also be good investments in addition to bullion.
My take is that the COMEX and the LBMA (London Bullion Market Association) will run out of bullion. Eric Sprott is buying a billion and a half dollars in silver starting as soon as next week. James Turk is doubling the silver held for customers in his vaults. And China allows bank depositors to hold money in silver accounts. India is also buying more silver. Hedge funds are paying 6% to investors who are taking a lot of risk. One of these days the average investor will compare the return on gold and silver to that 6% and buy bullion.
Please be advised that a rise in interest rates will temporarily make your currency look good. But anyone who buys into a currency with a rising interest rate will have to dump it all very soon or lose everything to inflation. Rising interest rates will kill the bond market and force a margin call for tens of trillions of dollars in unsecured CDS which guarantee the value of bonds. Rising interest rates will make paper currencies look good for a month or two.
2012 looks like a very bad year for everyone. But anyone in paper dollars, paper euros and paper pounds will be clobbered.
I must caution you that I am not a registered financial advisor. I do not know you or your personal situation. Do not construe this as economic advice. Please consult a professional (not CNBC) before investing.
You might want to take a look at this related article I wrote last month.
2012 Timeline: Assets Seizure, Hyperinflation And Debt Slavery