Ranting Andy: MF Global – The Beginning of the End of Paper Markets

RANTING ANDY – It’s Monday morning, and I couldn’t be more ready to RANT.  My job is to keep you aware of the dangers around you, which increase with each passing day.  And some days on more than others, such as TODAY!

Don’t let the fact that a SUNDAY NIGHT SPECIAL wasn’t required the past few weekends, as they will be returning with a vengeance in the coming months, more likely before the end of 2011.  This weekend alone saw waves of “horrible headlines” highlighting the collapse of the European Union, and now it looks like the U.S. economic implosion is about to retake center stage.  Given the broad, intimidating list of such headlines, I am going to start today by going through them, before getting to my topic of the day – the long-term ramifications of the MF Global collapse.

Let’s start with Japan, the “Land of the Setting Sun.”  I am still reeling from learning last week that major Japanese industrial giants such as Honda and Toyota are moving manufacturing operations to China due to a lack of competitiveness caused by the rising Yen.  There is no greater financial enigma than Japan which, despite the world’s highest debt ratios, worst demographics, and a nuclear holocaust, cannot keep its currency from rising against the dying dollar.  Thus, anytime you see the PPT trying to influence your PERCEPTION by goosing the Dow, remember this incredible fact.  The Japanese have lost close to $600 BILLION this year defending the dollar against the yen, to no avail.  Japan is on its deathbed, yet is still a “spring chicken” compared to America.

Honda MOVING some core R&D operations to CHINA

Honda to BUILD hybrids in CHINA

Toyota to make car parts in China to boost sales

TOYOTA to manufacture Prius hybrids in CHINA

This inane situation, depicting the fatal hubris of global “financial leaders,” describes EXACTLY how the fiat currency system has destroyed itself.  Central banks such as the BOJ are political puppets charged with supporting the political aims of TPTB that APPOINT them.  They pander to the public by saying that a weakened currency will “increase competitiveness,” when in fact all it does is inflate costs for the Japanese public.  A lower Yen may yield increased “profits” for Honda and Toyota, but those “profits” don’t purchase as much in the marketplace because the currency they are denominated in has been diluted.  In other words, Japanese jobs may be temporarily “saved,” but society’s cost of living is reduced.  Ultimately, the only way Japanese companies can increase real profits is to send ALL jobs to China (just as the U.S. has done), creating the vicious loop of unemployment and requirements for increased government taxation, spending cuts, and MONEY-PRINTING.

And one more incredible headline before I drop the sorry topic of Japan.  Unfortunately, I cannot find a link to it, so I am simply publishing an excerpt below, the pathetic story of how desperate the Japanese government is to steal its population’s hard-earned savings to fund reconstruction.  Not only will you get paid just 0.18% interest while the BOJ inflates the yen into oblivion, but the added insult of a “letter of appreciation” from Finance Minister Jun Azumi, who probably will be out of office before the letter reaches your mailbox.

Azumi Says Thank You for Buying 0.18% Quake Bonds: Japan Credit 2011-11-20 15:01:00.0 GMT

By Monami Yui and Kristine Aquino

Nov. 21 (Bloomberg) — Japan is going direct to households to finance earthquake rebuilding, offering interest payments about a third lower than what it pays institutional investors.  Three-year reconstruction bonds for sale next month will pay a 0.18 percent rate, compared with 0.3 percent on reference five-year notes sold to banks. Investors will also get a letter of appreciation from Finance Minister Jun Azumi. The ministry has used Twitter and advertisements in taxis to pitch so-called retail Japanese government bonds, which are set for the biggest annual sale in three years. Rates higher than the 0.05 percent offered on standard bank accounts enticed buyers looking for safer investments as the Topix Index sank 20 percent this year. Japan boosted planned offerings of the securities, reducing its reliance on debt sold to banks.

Japanese Finance Ministers, 2006-2011

IN

OUT

   

 

Koji Omi

2006

2007

Fukushiro Nukaga

2007

2008

Bunmei Ibuki

2008

2008

Shōichi Nakagawa

2008

2009

Kaoru Yosano

2009

2009

Hirohisa Fujii

2009

2010

Naoto Kan

2010

2010

Yoshihiko Noda

2010

2011

Jun Azumi

2011

present

And Eastern bound to Iran, where the war drums beat louder and louder.  I have ZERO doubt that a MAJOR offensive is being planned by the U.S., Israel, and other American puppets like the U.K. in the not-too-distant future.  Thousands of American troops, fresh from deployment in Iraq and Libya, where the U.S. government FAILED in EACH and EVERY one of its stated goals, are being redeployed to the Persian Gulf awaiting marching orders.  Meanwhile, Obama and his gang of criminals prepare the nation for the next unapproved war declaration, to be paid for with YOUR tax (and PRINTED) dollars and YOUR children’s lives.

U.S. to unveil new SANCTIONS on IRAN

On to Egypt, for those of you that thought all was well following the revolution and subsequent overthrow of petty dictator Hosni Mubarek earlier this year.  It looks like anarchy is again taking over, no matter how many posts to Facebook are made.  The “Arab Spring” is just getting started, and will shortly engulf the entire world thanks to HYPERINFLATION of fiat currencies as diverse as the dollar, Euro, pound, yen, and Yuan.

EGYPT morgue official – 35 DEAD in 3 day clashes

And on to everyone’s favorite basket case, and soon to be war-torn economic and political conflagration, EUROPE.  OK, let’s see what great news we have today, as TPTB desperately pray that blood emerges from a stone.

Ah, that didn’t take long.  Just hours after Europe awakens from its weekend stupor, stocks and bonds are violently CRASHING yet again.  You can blame it on this report that France is on the verge of being downgraded by Moody’s, but Moody’s doesn’t even rate as a viable entity in my mind.  The rating agencies are no better than street whores, paid by the very corporations, municipalities, and nations that rate them, essentially held at gunpoint by its supposed “clients.”  Rating agency reports have as much credence as “analyst reports” issued by investment banks rating their clients STRONG BUYS.  Believe me, I know, as I worked as a sell-side analyst for seven years and saw things that would make your blood curdle.  THAT is why I left Wall Street in 2005, never to return.

European BLOODBATH resumes after reports MOODY’S EYEING FRANCE DOWNGRADE

Frankly, what is going on in Europe is sheer pandemonium, and how the system has survived this long without completely freezing up, and subsequently imploding, is beyond me.  Printing money no longer provides even temporary respite for the cratering Euro Zone, and in fact, due to DEBT SATURATION, now has a net NEGATIVE result, as can be seen in SOARING, RECORD-HIGH CDS rates across the board

European CDS rerack, 5s-10s close to INVERSION for ALL CORE COUNTRIES

…a rate spike in the “European Investment Bank,” Europe’s small-scale version of the IMF, that will make you dizzy…

European BLACK SWAN sighted

…outright PANIC among European banks to get their capital OUT of the system as fast as possible, and INTO the jaws of the crocodile preparing to nationalize the ENTIRE system…

As ECB’s Stark Warns CONTAGION Has Spread To Euro Core, Bank CASH PARKED WITH ECB SOARS At Fastest Rate In Years

…SOARING debt issuance among ALL the PIFIGS (PIIGS plus France), and NO ONE to buy it except the Central Banks with PRINTED MONEY…

As DUMPING ACCELERATES, Here Is Who Is STUCK Buying Another €741 Billion In Italian Bonds

…cascading bank failures, preparing to launch into “Lehman-mode”…

Bank of Spain NATIONALIZES Banco de Valencia

…and secretive meetings among the continent’s most vicious arch-criminals, as they plot to STEAL any and all crumbs of value…

Germany’s SECRET PLANS to derail a British referendum on the EU

UK Treasury QUIETLY preparing for “Contingencies on Euro”

…as always, at the expense of the people…

Ireland – Germany is our MASTER

UKIP Nigel Farage – How dare you tell the Italian and Greek people what to do !!! Nov 2011

 
Meanwhile, leverage ratios are not only dramatically higher than they were at Lehman Brothers, but are EXPANDING each day as debt is increased while underlying equity evaporates into oblivion.  Lehman Brothers had leverage of roughly 35:1, and MF Global more than 40:1.  Thus, let’s give a round of applause to Deutschebank’s North American subsidiary, non-descriptly named Taunus Capital.

This disgusting, vile, soon-to-be bankrupt piece of garbage is the eighth largest bank holding company in America, so guess what?  WE get to foot the bill when this house of cards sporting a LEVERAGE RATIO OF 78:1 is vaporized in the coming months!

Deutschebank could transfer CONTAGION

And speaking of bankrupt garbage, can someone tell me HOW ON EARTH the “National Bank of Greece”, ticker NBG, is still trading?

And on to America, where as usual I have as many “horrible headlines” depicting outright, blatant CORRUPTION as those describing the ongoing, accelerating economic and banking COLLAPSE.  Regarding the former, I’m not sure where to start as so many revolting stories came to my attention this weekend.

But I have to start somewhere, so I might as well commence this section of cancerous prose with a delightful article describing the greatest corporate blight in American history, Goldman Sachs…

The GOLDMAN SACHS Goodfellas

…which together with JP Morgan, aims to DESTROY every CENT of your capital, either by outright stealing, confiscation through their government connections, or inflation via control of the Federal printing presses. 

What’s this, JP Morgan is seeking to buy a stake in the LME?  Fantastic.  So now JPM can be the largest PAPER gold and silver short on both sides of the Atlantic.  All you need to read is the below snippet to know EXACTLY how deep the corruption runs, and how much deeper it intends to be taken. 

JP Morgan, the Wall Street banking giant, is a leading candidate to buy a stake in the London Metal Exchange (LME), a deal that would catapult it past rival Goldman Sachs and make it the bourse’s biggest shareholder.

HINT:  I’m talking to everyone that thinks they will make money in PAPER gold and silver investments.

JP MORGAN in talks over LME STAKE

And speaking of LEVERAGE and PAPER investments, here’s an article that even astounds me, RANTING ANDY! 

As most of you know, I view ETFs to be the spawn of the devil, outright FRAUDS that will eventually be eviscerated by the markets and banished to the murky, corrupt depths whence they came, while investors lose EVERYTHING.  GLD and SLV are ETFs created by the U.S. GOVERNMENT for the purposes of market manipulation and investor rape, but many others were created by sociopathic financial criminals, not much different than computer hackers implanting viruses on your hard drive to steal its contents (credit card numbers, etc.), before destroying it with a FATAL ERROR.

My view has always been pragmatic, in that anything that can’t be explained probably is fraudulent, just as Judge Judy says “if it doesn’t make sense, it’s probably not true.”  NOTHING makes me more disgusted than “Direxion,” the fly-by-night financial sociopaths that created 2x leveraged ETFs for essentially every sector, such as the “double-short gold fund” or the “double-long financials fund.”  There is NO DOUBT in my mind these funds are fraudulent, and will one day all be BANISHED from the financial markets, if “financial markets” even exist after the coming currency armageddon.

Just as corporations, municipalities, and nations worldwide believe the cure for too much debt is still MORE debt, “Direxion” has decided to INCREASE the leverage of many of its 2x funds to 3x, the more to steal your money with and create increased volatility, i.e. losses. 

These are NOT the ETFs you are looking for

Speaking of volatility, another hearty round of applause for the now GLOBAL, 24/7 government market manipulation!   Thanks to their unending quest to influence PERCEPTION by attacking PAPER gold and silver, propping stock and bond markets, and wreaking havoc with foreign exchange rates, market volatility is EXPLODING into the stratosphere, essentially wiping out ALL paper investments, EXACTLY as I predicted it would.  Long, short, it doesn’t matter; ALL PAPER investments are losing, and WILL continue to do so until NOTHING is left.

NEW NORMAL – A year’s VOLATILITY bunched into 6½ hours

Even “non-traditional” investments are being destroyed by bankers, such as my beloved Mets, who not only are being run into the ground with more debt, but are doing so with the “expressed written consent of Major League Baseball.”  First, the team’s owner is sued for being an accomplice to Bernie Madoff, then it refuses a $200 million equity investment from David Einhorn, which could have fixed the team’s financial problems and handed ownership to one of the largest private owners of PHYSICAL gold in the world, and finally it plans to take $140 million of new capital in a DEBT offering that will send the team still closer to the fate of its West Coast rivals, the L.A. Dodgers.

Selig PERMITS Mets to INCREASE DEBT

I cannot SCREAM louder that you will likely lose EVERYTHING if you remain in “traditional investments” such as stocks and bonds, even quicker if you attempt to do so on leverage or by “trading.”  There’s a reason that just 0.1% of the population earns HALF of all capital gains, and that reason is the outright CONTROL over the markets by the AXIS OF EVIL in Washington, London, and on Wall Street.

TOP 0.1% earn HALF of ALL U.S. Capital Gains

YOU are not invited to dinner, as YOU are the main course.  And until you convert your PAPER assets into something with UNIVERSAL, HISTORICAL VALUE, such as PHYSICAL GOLD and SILVER, you are simply serving more of your internal organs for dinner, which they are probably eating with fava beans and a nice chianti while they LAUGH at your stupidity for playing their RIGGED GAME.

George Carlin – “Who REALLY controls America” – YouTube

So you still don’t believe me, huh?  Especially newer readers, many of whom are still idealistic about how “great” America is, and optimistic about how it will “survive” this crisis and remain “the world’s greatest superpower.”  Fine, I’ll just have to bring out my BAZOOKA to prove what you are fighting against, quite apropos as I am about to discuss MF Global. 

Ladies and Gentleman, I present you Vice President Joe Biden, with Jon Corzine, one of President Obama’s largest campaign contributors, whom if not for MF Global’s demise, would have been the third straight Goldman Sachs-pedigreed Secretary of the Treasury…

VP Biden says he called Jon Corzine for advice

 
…as well as the President himself, with his good friend, esteemed benefactor (and perhaps lover), the aforementioned king of Washington and Wall Street fraud himself.

Meanwhile, in economic land, the “Super Committee” charade has reached its end, with not a shred of hope for an agreement by Wednesday’s deadline.  Rating agencies may not be credible, but are certainly moving in that direction for fear of being swept up in the tsunami by continuing to rate JUNK at “Triple-A.”  S&P’s downgrade of the U.S. to AA+ included language stating it would consider further downgrades if the government “does not make progress in paying down its debts.”

Well, let’s see.  That was just three months ago, when the U.S. debt was $14.1 trillion, compared to $15.1 trillion today, with the debt ceiling about to be breached and subsequently raised to $16.4 trillion with little, if ANY spending cuts.  And even if there are eventually any cuts, NONE would occur in 2012 (how convenient in front of thePresidential election), a year when the fiscal deficit is projected to be $1.5-$2.0 trillion!

http://www.zerohedge.com/news/goodbye-super-committee-hello-stupor-committee-its-official-no-agreement

Just as the first downgrade prompted gold to soar from $1,620 to $1,920 in three weeks, the impact of DEBT CEILING DEBACLE II will be similar.  Look past the current Cartel shenanigans, as in their death throes, they are throwing EVERY illegal trick at PAPER gold and silver they can find, including the “kitchen sink.”  The letter of the law is long-dead, taken over by the iron fist of tyranny, governed by NO ONE and regulated by THEMSELVES!

Word from the CFTC is  they will NOT be defining the word “swap” this week as suggested by Bart Chilton.  When called for an explanation, the CFTC spokesperson said they were “too busy with the MF Global situation to hold an official meeting”.  Basically, they are too busy dealing with a problem created by their own lack of regulation to implement laws meant to prevent problems BEFORE the they happen. HA!  Of course, we know the truth. The CFTC is delaying any such implementation to prolong the con game and not to CAUSE the pending global meltdown.  In the end they WILL implement the laws but it will be too little, too late.

I believe this desperate PAPER attack will be the last chance to purchase PHYSICAL gold below $2,000/ounce, and PHYSICAL silver below $50/ounce, in our lifetimes, and more likely, EVER!

$15 TRILLION U.S. Debt, Supercommittee IMPASSE to SUPPORT GOLD

FINALLY, on to MF Global, which was been so kind to supply the following headline AS I PREPARED to pen my first line on the topic!  Apparently, not only is $600+ million of client funds lost, likely into the belly of JP Morgan to pay for year-end bonuses, but the amount of the total fraud may be VASTLY higher, by at least $1.2 billion and potentially much more.

http://www.zerohedge.com/news/mf-global-trustee-says-commingling-shortfall-may-be-double-previous-estimate-could-reach-12-bil

This failure, of a “derivatives broker” spreading cancer in the underworld of financial corruption, run by one of America’s top white-collar crime bosses, may be the “Lehman moment” that triggers the long-awaited domino effect of bank failures, fueled further by Europe’s EBOLA virus, of course.  But not only that, it may PERMANENTLY destroy the concept of “futures markets” AND “investment banks,” as least for several generations. 

I put quotes around “futures markets” because, for all intents and purposes, their original M.O. of enabling manufacturers to hedge production and costs has been permanently overridden by speculation, leverage, and fraud, supplemented by the most corrupt regulatory system in financial markets history.  Likewise, “investment banks” are no longer anything of the sort, as they are now principally engaged in borrowing FREE money from their paid-in-full government puppets to make leveraged bets with insider information, aiming to DESTROY, in the process, as much capital and competition as possible.

Jeffries and six other banks SUED for FRAUDULENT MF Global bond issuance

In fact, the letter below, from a Colorado-based commodities broker, explains exactly what MF Global has wrought on the “investment world,” which again I put in quotes because, in the words of GATA’s Chris Powell, “there are no longer markets, just manipulations.”  In other words, what you see today on your screens is the sum total of a decade of MONEY-PRINTING, HIGH FREQUENCY TRADING, and GOVERNMENT-BACKED, WHITE COLLAR CRIME.  For the record, I no longer expect a “crash,” but instead an end to ALL trading of stocks, bonds, and currencies for a time TBD when the coming market holiday is forced upon us by necessity.

ENTIRE SYSTEM UTTERLY DESTROYED by MF Global collapse

I believe the concept of PAPER trading is in the process of being PERMANENTLY destroyed, or certainly well into the future when a new system, based on avoidance of the current system’s failures, arises.  In its stead, I expect PHYSICAL assets to take over ALL trading, and not just in the Precious Metals markets.  Margin, short-selling, futures, derivatives, ETFs, and even options will likely fall in the wake of the most historic collapse in the HISTORY of financial markets.

Even for RANTING ANDY, this would appear to be going out on a limb, but all one needs to do is OBSERVE what is happening, and inside you will KNOW I am right.  As Darth Vader stated so eloquently in The Empire Strikes Back, you KNOW it to be true.

You know it to be true.

 
Readers, I receive MANY emails from people starting to understand how dire the situation is, and how few their options to PROTECT THEMSELVES.  I sit here today with the Cartel attacking PAPER gold by $46 (what a coincidence, at EXATLY 3:00 AM EST, EXACTLY at the PM Fix at 10:00 AM EST, and EXACTLY 12:00 PM EST), without a worry in the world knowing my assets are in PHYSICAL gold and silver, sitting in a vault maintaining their value for all posterity. 
 
As GLOBAL MELTDOWN II accelerates into a full-blown ECONOMIC CONFLAGRATION, the Cartel will attack PAPER gold and silver investments still harder, until first the premiums of PHYSICAL over PAPER explode (as they did in late 2008), and finally the PHYSICAL prices themselves blow sky high.

I KNOW what it’s like to FEAR that PHYSICAL gold and silver will not be available to purchase, or have delivered, and KNOW you will not like the feeling one bit when it happens to you.  No matter what other assets you hold, be they stocks, bonds, real estate, currencies, or “cash,” you WILL be destroyed by TPTB, who seek only to rule the world, and its assets, at YOUR EXPENSE.  Do not put yourself in that position, simply use days like today to make the important decisions required to save yourself from what’s coming down the road at 1,000+ miles per hour.

5 Responses to Ranting Andy: MF Global – The Beginning of the End of Paper Markets

  1. aurick says:

    Speechless… this is indeed a rant to be cast in bronze 300 feet high and affixed to the side of Mt Rushmore… Andy, you are an inspiration. I’m totally blown away – again! By the way, you are probably aware that the date of Dec 21, 2012 has been brought to our attention by the ancient Maya, with their “Tzolkin” calendar which comes to the end of a 5,125 year cycle on that date. This, apparently, is when our current historical period ends, and another begins. Many other cultures, not least the North American Hopi, believe that a great paradigm shift will take place not too far in the future, and I would think that it is perfectly obvious that the relentless breakdown of the global monetary system is an harbinger of that shift. We are living in extraordinary times, and there can be no comparison with the experiences of any previous generation. The ongoing acceleration of global economic, financial and political events is now a “new normal”. From here on in, things are going to get rough, but what else could be expected? Take care, and keep on with your sterling work.

  2. James Minshew says:

    Thank You Andy for all of your advice.

  3. RANTING ANDY says:

    Aurick,

    Thanks so much, much appreciated.

    Andy

    P.S. At this link, you can get on my FREE daily email blog list.

    http://visitor.r20.constantcontact.com/manage/optin/ea?v=001bKOpVPk0q4eUbieRzj3Gzg%3D%3D

  4. earl leon says:

    Thanks for connecting the dots where most of us can’t even see…

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