Silver

Is The Takedown Of Gold A Sign That The Entire Global Financial System Is About To Crash?

The Collapse Of GoldSomebody out there is sure getting prepared for something really big.  We have just witnessed a takedown of gold and silver unlike anything that we have witnessed in decades.  On Monday, the price of gold had fallen by more than 10 percent at one point.  It shocked investors all over the globe, and overall what we have just seen was the largest two day decline in the price of gold in 30 years.  The price of silver dropped even more rapidly on Monday.  It was down more than 14 percent at one point.  There was an atmosphere of “panic selling” as investors and financial institutions raced to liquidate their holdings of silver and gold.  But was this exactly what someone out there wanted?  As I wrote about the other day, big banks and news outlets all over the world have been boldly proclaiming for weeks that gold is entering a “bear market” and that now is the time for all of us to sell our gold.  In particular, Goldman Sachs reportedly told their clients earlier this month that they “recommend initiating a short COMEX gold position“.  Was that just a “good guess” on their part, or was something else going on?  Were they actually trying to help create a “selling frenzy” that would drive the price of gold much lower?

What we witnessed on Monday was absolutely jaw-dropping.  Just check out this chart of the price of gold over the past 10 years.  The takedown of gold on Monday sticks out like a sore thumb…

The Price Of Gold

And that chart does not even show the full extent of the collapse.  As I write this, the price of gold is sitting at $1355.20.

But this is just the beginning for gold and silver.  As I have warned repeatedly, the price of gold and the price of silver will experience wild swings in the years ahead.

For example, the following is what I wrote about gold and silver on August 7th, 2012…

I like precious metals myself, but if you are going to invest you need to get educated so that you know what you are doing.  If you go in blindly you are likely to get burned at some point.

In addition, you need to be prepared for wild fluctuations in price over the coming years.  There will be times when gold and silver absolutely soar and there will be times when they drop like a rock.

So if you are going to play the game you need to be able to handle the ride.

Monday was an example of what I meant when I said that “you need to be able to handle the ride”.  There are going to be a lot more days like Monday (both up and down) for gold and silver in the years ahead.

The foolish people are those that are scared out of their wits and that are selling off all of their gold and silver right now.

Sadly, there was reportedly a tremendous amount of panic selling of gold and silver during this collapse.  The following is what Dennis Gartman told CNBC on Monday…

“There are a lot of people throwing up their hands. Throwing positions overboard. Panic is everywhere,” Gartman said in a “Squawk Box” interview on Monday. “I’ve never seen anything like this. I mean it.”

It just shows that there are a lot of stupid people out there.  The following is an excerpt from another CNBC report about the panic selling that was happening on Monday…

“I think the last $20 has been margin selling. The market is falling like a knife. People are saying, ‘Get me out now,’ ” Phoenix Futures President Kevin Grady said. “You’re also seeing people selling energy profits to pay for metals losses. You’re seeing a tremendous amount of gold liquidation today.”

According to Dr. Paul Craig Roberts, Assistant Secretary of the Treasury under President Ronald Reagan, all of this panic selling is the result of an orchestrated takedown of gold and silver…

This is an orchestration (the smash in gold). It’s been going on now from the beginning of April. Brokerage houses told their individual clients the word was out that hedge funds and institutional investors were going to be dumping gold and that they should get out in advance.

Then, a couple of days ago, Goldman Sachs announced there would be further departures from gold. So what they are trying to do is scare the individual investor out of bullion. Clearly there is something desperate going on…

So who is behind all of this orchestration?  Well, according to Dr. Paul Craig Roberts, it is actually the Federal Reserve…

The Federal Reserve began its April Fool’s assault on gold by sending the word to brokerage houses, which quickly went out to clients, that hedge funds and other large investors were going to unload their gold positions and that clients should get out of the precious metal market prior to these sales. As this inside information was the government’s own strategy, individuals cannot be prosecuted for acting on it. By this operation, the Federal Reserve, a totally corrupt entity, was able to combine individual flight with institutional flight. Bullion prices took a big hit, and bullishness departed from the gold and silver markets. The flow of dollars into bullion, which threatened to become a torrent, was stopped.

In fact, Dr. Roberts says that former Goldman Sachs trader Andrew Maguire is reporting that the Fed orchestrated the dumping of 500 tons of naked gold shorts into the market on Friday…

According to Andrew Maguire, on Friday, April 12, the Fed’s agents hit the market with 500 tons of naked shorts. Normally, a short is when an investor thinks the price of a stock or commodity is going to fall. He wants to sell the item in advance of the fall, pocket the money, and then buy the item back after it falls in price, thus making money on the short sale. If he doesn’t have the item, he borrows it from someone who does, putting up cash collateral equal to the current market price. Then he sells the item, waits for it to fall in price, buys it back at the lower price and returns it to the owner who returns his collateral. If enough shorts are sold, the result can be to drive down the market price.

If any of the allegations above are even remotely true, then a whole lot of people need to be criminally investigated.

Meanwhile, many are considering this takedown of gold to be an ominous sign that another major financial crisis may be heading our way.

Just remember what happened back in 2008.  As Zero Hedge noted on Monday, the price of gold suddenly plunged 21 percent in July 2008.  That was just a couple of months before the U.S. stock market crashed in the fall…

The rapidity of gold’s drop is impressive, concerning, and disorderly. We have seen two other such instances of disorderly ‘hurried’ selling in the last five years. In July 2008, gold quickly dropped 21% – seemingly pre-empting the Lehman debacle and the collapse of the western banking system.

Is this collapse in the price of gold a harbinger of another major stock market crash?

Time will tell.

Meanwhile, many average Americans are wondering if they should dump their gold and silver while they still can.

As I mentioned above, gold and silver are going to experience wild fluctuations over the next few years.  When the next stock market crash comes, gold and silver are probably going to go even lower than they are today for a short time.  But in the long run gold and silver are going to soar to unprecedented heights.

Investing in gold and silver is not for the faint of heart.  If you cannot handle the ride, you should sit on the sidelines.  We are entering a period of tremendous financial instability, and holding gold and silver is going to be like riding a roller coaster.  The ups and downs are going to shake a lot of people up, but the rewards are going to be great for those that stick with it the entire time.

11 Economic Crashes That Are Happening RIGHT NOW

11 Economic Crashes That Are Happening RIGHT NOWThe stock market is not crashing yet, but there are lots of other market crashes happening in the financial world right now.  Just like we saw back in 2008, it is taking stocks a little bit of extra time to catch up with economic reality.  But almost everywhere else you look, there are signs that a financial avalanche has begun.  Bitcoins are crashing, gold and silver are plunging, the price of oil and the overall demand for energy continue to decline, markets all over Europe are collapsing and consumer confidence in the United States just had the biggest miss relative to expectations that has ever been recorded.  In many ways, all of this is extremely reminiscent of 2008.  Other than the Bitcoin collapse, almost everything else that is happening now also happened back then.   So does that mean that a horrible stock market crash is coming as well?  Without a doubt, one is coming at some point.  The only question is whether it will be sooner or later.  Meanwhile, there are a whole lot of other economic crashes that deserve out attention at the moment.

The following are 11 economic crashes that are happening RIGHT NOW…

#1 Bitcoins

As I write this, the price of Bitcoins has fallen more than 70 percent from where it was on Wednesday.  This is one of the reasons why I have never recommended Bitcoins to anyone.  Yes, alternative currencies are a good thing, but there are a lot of big problems with Bitcoins.  Why would anyone want to invest in a currency that could lose 70 percent of its purchasing power in just two days?  Why would anyone want to invest in a currency where a single person can arbitrarily decide to suspend trading in that currency at any time?

An article by Mike Adams of Natural News described some of the things that we have learned about Bitcoins this week…

#1) The bitcoin infrastructure cannot handle a selloff. Once the rush for the exits gains momentum, you will not be able to get out. Only those who sell early will be able to exit the market.

#2) The bitcoin infrastructure is subject to the whims of just one person running MTGox who can arbitrarily decide to shut it down whenever he thinks the market needs a “cooling period.” This is nearly equivalent to a financial dictatorship where one person calls the shots.

#3) Every piece of bad news will be “spun” by exchanges like MTGox into good-sounding news. As bitcoin was crashing yesterday by 60% in value in mere hours, MTGox announced it was a “victim of our own success!” So while bitcoin holders watched $1 billion in market valuation evaporate, MTGox called it a success. Gee, then what would you call it when bitcoin loses 99%? A “raging” success?

#2 Gold

The price of gold was down by about 4 percent on Friday.  Gold has now fallen below $1500 an ounce for the first time since July 2011.  Overall, the price of gold has fallen by about 10 percent since the beginning of the year, and it is about 22 percent below the record high set back in September 2011.

Yes, the price of gold is likely being pushed down by the banksters.  And yes, gold is a fantastic investment for the long-term.  But there will be times when the price of gold does fall dramatically just like we saw back in 2008.

#3 Silver

The price of silver fell by about 5 percent on Friday.  If it falls much more it is going to be at a level that presents a historically good buying opportunity.

Just like gold, there will be times when the price of silver swings dramatically.  But the truth is that silver is probably an even better long-term investment than gold is.

#4 Oil

The price of oil declined by about 3 percent on Friday.  Many will consider this a positive thing, but just remember what happened back in 2008.  Back then, the price of oil dropped like a rock.  If the price of oil gets below $80, that could very well be a clear signal that a major economic crisis is about to happen.

#5 Consumer Confidence

As I mentioned above, consumer confidence in the U.S. just had its biggest miss relative to expectations that has ever been recorded.  The following is from an article posted on Zero Hedge on Friday…

Well if this doesn’t send the market into all-time record high territory, nothing ever will: seconds ago the UMich Consumer Confidence plummeted from 78.6 to 72.3, on expectations of an unchanged 78.6 print. This was not only a 9 month low in the index, but more importantly the biggest miss to expectations in recorded history!

#6 Retirement Accounts

According to Wells Fargo, the number of Americans taking loans from their 401(k) accounts has risen by 28 percent over the past year…

Through an analysis of participants enrolled in Wells Fargo-administered defined contribution plans, the bank announced today that in the fourth quarter of 2012, there was a 28 percent increase in the number of people taking loans out from their 401(k) and that the average new loan balances increased to $7,126 from those taken out in the fourth quarter of 2011 – a 7% increase from $6,662.

Of the participants who took out loans, the greatest percentage were to people in their 50s (34.2%), followed by those in their 60s (28.9%) and then by those in their 40s (27.3%). The increase among participants in their 50s was nearly double the increase among those under 30. This is based on an analysis of a subset of 1.9 million eligible participants in retirement plans that Wells Fargo administers.

“The increased loan activity particularly among older participants is concerning because those are the years when workers can start to make ‘catch-up’ contributions and really need to focus on preparing for retirement,” said Laurie Nordquist, director of Wells Fargo Retirement.

#7 Casino Spending

Casino spending is declining again.  Many people (including myself) would consider this to be a good thing, but casino spending is also one of the most reliable indicators about the overall health of the economy.  Remember, casino spending crashed during the last financial crisis as well.  That is why it is so alarming that casino spending is now back to levels that we have not seen since the last recession.

#8 Employment In Greece

Over in Europe, things just continue to get worse.  According to numbers that were just released, the unemployment rate in Greece has soared to 27.2 percent, which was up from 25.7 percent the previous month.  That means that the unemployment rate in Greece rose by 1.5 percent in just a single month.  That is not just a crash – that is an avalanche of unemployment.

#9 European Financial Stocks

European financial stocks have been hit particularly hard lately.  And for good reason actually – most of the major banks in Europe are essentially insolvent at this point.  This week, European financial stocks fell to seven month lows, and this is probably only just the beginning.

#10 Spanish Bankruptcies

According to Reuters, the number of Spanish companies going bankrupt has risen by 45 percent over the past year…

A record number of Spanish companies went bust in the first quarter of 2013 as companies remained under intense pressure from tight credit conditions and meager demand, a study showed on Monday.

The 2,564 firms filing for insolvency proceedings in first three months of the year was a 10 percent rise from the previous quarter and a 45 percent increase on the same period in 2012, the survey by credit rating agency Axesor said.

#11 Demand For Energy

Just like we saw back in 2008, the overall demand for energy in the United States is falling rapidly.  There are some shocking charts that prove this that were recently posted on Zero Hedge that you can find right here.

Yes, it is good for people to use a bit less energy, but it is also a clear indication that economic activity is really starting to slow down.

But despite everything that you have just read, the Dow and the S&P 500 have been setting new record highs.

And if you listen to the mainstream media, you would think that this stock market bubble can continue indefinitely.

Fortunately, there are a few voices of reason out there.  For example, just check out what Marc Faber recently told CNBC…

In the near-term, the U.S. stock market is overbought and adding that any more near-term gains portend big trouble for the market, “The Gloom, Boom & Doom Report” publisher Marc Faber told CNBC on Monday.

“If we continue to move up, the probability of a crash becomes higher,” Faber predicted in a “Squawk Box” interview, saying it could happen “sometime in the second half of this year.”

As I have written about previously, a bubble is always the biggest right before it bursts.  I hope that we still have at least a little bit more time before it happens, but I wouldn’t count on it.

The economic fundamentals tell us that the stock market should be plunging, not rising.  At some point the boys over on Wall Street will get the message and the market will catch up to reality very, very rapidly.

But for the moment, the American people are feeling really good.  According to CNN, Americans are now more optimistic than they have been in six years…

As the stock market continues to show record highs, the number of Americans who say things are going well in the country has reached 50% for the first time in more than six years, according to a new national survey.

So what do you think will happen for the rest of the year?

Do you think that the good times will continue to roll, or do you believe that the bubble is about to burst?

Please feel free to share your opinion by posting a comment below…

A Market Crash Is Coming

How QE3 Will Make The Wealthy Even Wealthier While Causing Living Standards To Fall For The Rest Of Us

The mainstream media is hailing QE3 as a great victory for the U.S. economy.  On nearly every news broadcast, the “talking heads” are declaring that Ben Bernanke’s decision to pump 40 billion dollars a month into our financial system is definitely going to help solve our economic problems.  The money for QE3 is being created out of thin air and this round of quantitative easing is going to be “open-ended” which means that the Federal Reserve is going to keep doing it for as long as they feel like it.  But is this really good for the average American on the street?  No way.  Despite two previous rounds of quantitative easing, median household income has still fallen for four years in a row, the employment rate has not bounced back since the end of the last recession, and new home sales have remained near record lows.  So what have the previous rounds of quantitative easing accomplished?  Well, they have driven up the prices of financial assets.  Those that own stocks have done very well the past couple of years.  So who owns stocks?  The wealthy do.  In fact, 82 percent of all individually held stocks are owned by the wealthiest 5 percent of all Americans.  Those that have invested in commodities have also done very nicely in recent years.  We have seen gold, silver, oil and agricultural commodities all do very well.  But that also means that average Americans are paying more for basic necessities such as food and gasoline.  So the first two rounds of quantitative easing made the wealthy even wealthier while causing living standards to fall for all the rest of us.  Is there any reason to believe that QE3 will be any different?

Of course not.

This time the Federal Reserve is focused on buying mortgage-backed securities.  Yes, the same financial garbage that helped cause the last crisis.  The Fed plans to gobble up tens of billions of dollars of that trash every month from now on.

But will the Fed pay true market value for those mortgage-backed securities?  If you believe that, I have a bridge to sell you.

So this is going to be a huge windfall for some people, and that does not include us.

Not a single penny of this 40 billion dollars a month will go directly into our hands.  The theory is that it will “filter down” to us eventually.

But that hasn’t happened with previous rounds of quantitative easing.

So where does the money go?

A recent CNBC article discussed a very interesting report from the Bank of England about the effects of quantitative easing….

It said that the Bank of England’s policies of quantitative easing – similar to the Fed’s – had benefited mainly the wealthy.

Specifically, it said that its QE program had boosted the value of stocks and bonds by 26 percent, or about $970 billion. It said that about 40 percent of those gains went to the richest 5 percent of British households.

Many said the BOE’s easing added to social anger and unrest. Dhaval Joshi, of BCA Research wrote that  “QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it.”

Wow.

Who benefits from quantitative easing?

According to the Bank of England, it is “mainly the wealthy” who benefit.

As I noted the other day, Donald Trump said essentially the same thing when he told  CNBC the following….

“People like me will benefit from this.”

As I already discussed above, a lot of quantitative easing money gets into the financial markets where it pumps up the prices of financial assets.

But not all of it goes there.

We were told that the whole idea behind quantitative easing was that it was supposed to get banks lending again, but this has not happened.  Instead, banks are sitting on unprecedented amounts of money.  Just look at how the first two rounds of quantitative easing have caused excess reserves being held by banks to explode from close to zero to over 1.5 trillion dollars….

Of course one of the biggest problems is that the Federal Reserve is still paying banks not to lend money.

Yes, you read that correctly.

The Federal Reserve is paying banks to park money with them.  So instead of risking their money by lending it out to us, the banks can just park it at the Fed and make risk-free profits for as long as they want.

Must be nice.

If the Federal Reserve really wanted banks to start lending again, all the Fed has to do is to stop paying banks not to lend money.

But of course if more than 1.5 trillion dollars suddenly started flooding into our economy (especially after you consider the multiplier effect) we would be dealing with nightmarish inflation unlike anything we have ever seen before.

So if you want to know why inflation was not even worse after QE1 and QE2 it is because more than a trillion and a half dollars is being parked with the Fed.

So did QE1 and QE2 do any good for average Americans?

Let’s go to the charts.

This first chart shows that the percentage of working age Americans with a job has stayed extremely flat since the end of the last recession.

Does it look like QE1 and QE2 made a difference to you?  I don’t see any difference….

Okay, but what about new home sales?

Did QE1 and QE2 help them?

Nope….

But the mainstream media is still buying the baloney the Fed is pushing.

The mainstream media is promising us that home sales will soon rise and that lots of new jobs are on the way.

Sadly, the truth is that things have steadily gotten worse for average Americans over the past 4 years despite all of the money printing the Fed has been doing.  If you doubt this, just read this article.

But this is all that Ben Bernanke seems to have left.  When printing money doesn’t work, his answer is to print even more money.

QE3 is likely to cause agricultural commodities and the price of oil to rise even further.

So unless you can convince your employer to give you a corresponding raise, this is going to mean that your paychecks are not going to go as far as they did before.

And so that means a lower standard of living.

In a recent article, Bruce Krasting issued an ominous warning….

Higher inflation expectations in the US will filter around the globe. Post the extraordinary steps Ben took yesterday, people will be stocking up on “stuff”. Things like rice, flour, cooking oil, soy, wheat and sugar. If you can eat it, buy it now. It will be more expensive in a month. While your at it, fill up the gas tank, the price is going up next week and every week for the next few months.

In addition, the policy of the Federal Reserve of keeping interest rates as low as possible is absolutely crippling the finances of many retirees.  Even the former president of the Federal Reserve Bank of Atlanta, William F. Ford, recognizes this….

One of the overlooked consequences of the Federal Reserve’s recent rounds of monetary stimulus is the adverse impact those policies have had on the interest income of savers. The prolonged and abnormally low interest-rate structure put in place by the Fed has made life particularly difficult for retirees and others who depend on conservative interest-sensitive investments. But the negative effects do not stop there. They spillover into the overall performance of the economy.

Just about everything that the Federal Reserve does these days is bad for ordinary Americans.

But the Fed is not going to stop.  The Fed is addicted to money printing now, and as a recent article by Peter Schiff explained, the Fed is just going to “up the dosage” until it gets what it wants….

The Fed will try to conjure a recovery on the backs of currency debasement. It will not stop or alter from this course. If the economy fails to respond to the drugs, Bernanke will simply up the dosage. In fact, he is so convinced we will remain dependent on quantitative easing that he explicitly said he won’t turn off the spigots even if things noticeably improve.

This is complete and total incompetence by Ben Bernanke and his cohorts over at the Fed.

Economist Marc Faber believes that Ben Bernanke should resign, and I agree with him….

“If I had messed up as badly as Bernanke I would for sure resign. The mandate of the Fed to boost asset prices and thereby create wealth is ludicrous — it doesn’t work that way. It’s a temporary boost followed by a crash.”

And yes, a crash is coming.

Bernanke can try to put it off for a while, but every action he takes is just making the eventual crash even worse.

And some in the financial community clearly recognize this.  For example, credit rating agency Egan-Jones downgraded the credit rating of the United States to AA- on Friday.

The primary reason they gave for the downgrade was QE3.

Ben Bernanke and the Federal Reserve are destroying the U.S. dollar and destroying our financial system for a short-term economic sugar high.

It is utter insanity.

That is why we desperately need to get the American people educated about the Federal Reserve system.  It is at the very heart of our economic problems and yet neither major political party is willing to blame the Fed for the problems that it is causing.

A bunch of unelected bankers that are not accountable to the American people are running our economy into the ground and the American people do not even realize what is happening.

Please share this article with as many people as you can.  Hopefully we can get the American people to understand that more money printing is definitely not the solution to our problems.

The Crazy Things That One Whistleblower Says Are Happening At JP Morgan Will Blow Your Mind

Rampant silver manipulation?  Rampant gold manipulation?  Rampant LIBOR manipulation?  Hiding MF Global client assets?  These are all happening at JP Morgan according to an open letter reportedly written by an anonymous employee of the firm.  The whistleblower also warns of a “cascading credit event being triggered” by derivatives related to Greek government debt.  Unlike Greg Smith at Goldman Sachs, this whistleblower has chosen to remain anonymous for now.  According to the letter, the whistleblower is still an employee of JP Morgan and has not resigned.  But that does make it much more difficult to confirm what he is saying.  With Greg Smith, we know exactly who he is and what he was doing at Goldman.  As far as this anonymous whistleblower is concerned, all we have is this letter.  So we must take it with a grain of salt.  However, the information in this letter does agree with what whistleblowers such as Andrew Maguire have said in the past about silver manipulation by JP Morgan.  And this letter does mention Greg Smith’s resignation from Goldman, so we know that it must have been written in the past few days.  Hopefully this letter will cause authorities to take a much closer look at the crazy things that are going on over at JP Morgan and the other big Wall Street banks.

This anonymous letter was addressed to the CFTC, but unfortunately it looks like the CFTC has already chosen to ignore it.

The original letter from this anonymous whistleblower has already been taken down from the CFTC website. When you go there now, all you get is this message….

“The Comment Cannot Be Found. Please Return to the Previous Page and Try Again.”

Fortunately, there are many in the alternative media that copied this entire letter from the CFTC website.

The following is a copy of the original letter that the anonymous whistleblower from JP Morgan submitted to the CFTC….

———-

Dear CFTC Staff,

Hello, I am a current JPMorgan Chase employee. This is an open letter to all commissioners and regulators. I am emailing you today b/c I know of insider information that will be damning at best for JPMorgan Chase. I have decided to play the role of whistleblower b/c I no longer have faith and belief that what we are doing for society is bringing value to people. I am now under the opinion that we are actually putting hard working Americans unaware of what lays ahead at extreme market risk. This risk is unnecessary and will lead to wide-scale market collapse if not handled properly. With the release of Mr. Smith’s open letter to Goldman, I too would like to set the record straight for JPM as well. I have seen the disruptive behavior of superiors and no longer can say that I look up to employees at the ED/MD level here at JPM. Their smug exuberance and arrogance permeates the air just as pungently as rotting vegetables. They all know too well of the backdoor crony connections they share intimately with elected officials and with other institutions. It is apparent in everything they do, from the meager attempts to manipulate LIBOR, therefore controlling how almost all derivatives are priced to the inherit and fraudulent commodities manipulation. They too may have one day stood for something in the past in the client-employee relationship. Does anyone in today’s market really care about the protection of their client? From the ruthless and scandalous treatment of MF Global client asset funds to the excessive bonuses paid by companies with burgeoning liabilities. Yes, we at JPMorgan that are in the know are fearful of a cascading credit event being triggered in Greece as they have hidden derivatives in excess of $1 Trillion USD. We at JPMorgan own enough of these through counterparty risk and outright prop trading that our entire IB EDG space could be annihilated within a few short days. The last ten years has been market by inflexion point after inflexion point with the most notable coming in 2008 after the acquisition of Bear.

I wish to remain anonymous as of now as fear of termination mounts from what I am about to reveal. Robert Gottlieb is not my real name; however he is a trader that is involved in a lawsuit for manipulative trading while working with JPMorgan Chase. He was acquired during our Bear Stearns acquisition and is known to be the notorious person shorting in the silver future market from his trading space, along with Blythe Masters, his IB Global boss. However, with that said, we are manipulating the silver futures market and playing a smaller (but still massively manipulative) role in manipulating the gold futures market. We have a little over a 25% (give or take a percentage) position in the short market for silver futures and by your definition this denotes a larger position than for speculative purposes or for hedging and is beyond the line of manipulation.

On a side note, I do not work directly with accounts that would have been directly impacted by the MF Global fiasco but I have heard through other colleagues that we have involvement in the hiding of client assets from MF Global. This is another fraudulent effort on our part and constitutes theft. I urge you to forward that part of the investigation on to the respective authorities.

There is something else that you may find strange. During month-end December, we were all told by our managers that this was going to be a dismal year in terms of earnings and that we should not expect any bonuses or pay raises. Then come mid-late January it is made known that everyone received a pay raise and/or bonus, which is interesting b/c just a few weeks ago we were told that this was not likely and expected to be paid nothing in addition to base salary. January is right around the time we started increasing our short positions quite significantly again and this most recent crash in gold and silver during Bernanke’s speech on February 29th is of notable importance, as we along with 4 other major institutions, orchestrated the violent $100 drop in Gold and subsequent drops in silver.

As regulators of the free people of this country, I ask you to uphold the most important job in the world right now. That job is judge and overseer of all that is justice in the most sensitive of commodity markets. There are many middle-income people that invest in the physical assets of silver, gold, as well as mining stocks that are being financially impacted in a negative way b/c of our unscrupulous shorts in the precious metals commodity sector. If you read the COT with intent you will find that commercials (even though we have no business being in the commercial sector, which should be reserved for companies that truly produce the metal) are net short by a long shot in not only silver, but gold.

It is rather surprising that what should be well known liabilities on our balance sheet have not erupted into wider scale scrutinization. I call all honest and courageous JPMorgan employees to step up and fight the cronyism and wide-scale manipulation by reporting the truth. We are only helping reality come to light therefore allowing a real valuation of our banking industry which will give investors a chance to properly adjust without being totally wiped out. I will be contacting a lawyer shortly about this matter, as I believe no other whistleblower at JPMorgan has come forward yet. Our deepest secrets lie within the hands of honest employees and can be revealed through honest regulators that are willing to take a look inside one of America’s best kept secrets. Please do not allow this to turn into another Enron.

Kind Regards,
-The 1st Whistleblower of Many

———-

Another Enron?

If what this letter says is true, then the problems facing our financial system are more serious than most of us thought.

And the allegations of corruption at JP Morgan are absolutely shocking.

But this is not the first whistleblower to come forward to the CFTC with charges of rampant market manipulation by JP Morgan.

Back in 2010 I wrote about the stunning allegations that a former silver trader named Andrew Maguire presented to the CFTC.  The following is an extended excerpt from that article….

———-

Back in November 2009, Andrew Maguire, a former Goldman Sachs silver trader in Goldman’s London office, contacted the CFTC’s Enforcement Division and reported the illegal manipulation of the silver market by traders at JPMorgan Chase.

Maguire told the CFTC how silver traders at JPMorgan Chase openly bragged about their exploits – including how they sent a signal to the market in advance so that other traders could make a profit during price suppression episodes.

Traders would recognize these signals and would make money shorting precious metals alongside JPMorgan Chase.  Maguire explained to the CFTC how there would routinely be market manipulations at the time of option expiries, during non-farm payroll data releases, during commodities exchange contract rollovers, as well as at other times if it was deemed necessary.

On February 3rd, Maguire gave the CFTC a two day warning of a market manipulation event by email to Eliud Ramirez, who is a senior investigator for the CFTC’s Enforcement Division.

Maguire warned Ramirez that the price of precious metals would be suppressed upon the release of non-farm payroll data on February 5th.  As the manipulation of the precious metals markets was unfolding on February 5th, Maguire sent additional emails to Ramirez explaining exactly what was going on.

And it wasn’t just that Maguire predicted that the price would be forced down.  It was the level of precision that he was able to communicate to the CFTC that was the most stunning.  He warned the CFTC that the price of silver was to be taken down regardless of what happened to the employment numbers and that the price of silver would end up below $15 per ounce. Over the next couple of days, the price of silver was indeed taken down from $16.17 per ounce down to a low of $14.62 per ounce.

Because of Maguire’s warning, the CFTC was able to watch a crime unfold, right in front of their eyes, in real time.

So what did the CFTC do about it?

Nothing.

Absolutely nothing.

———-

You can read the rest of that article right here.

So will the CFTC do anything about all of this?

Based on past history, probably not.

Basically, the CFTC is a government agency that appears to do next to nothing.

Another scandal involving JP Morgan has come out in recent days as well.

This one involves their credit card division.  If you have a moments, you should really read the recent American Banker expose of credit card debt collection practices at JPMorgan Chase.  It exposes some things that will absolutely blow your mind.

Linda Almonte, a former executive at JPMorgan Chase’s Credit Card Litigation Support Group, has revealed some incredible stuff regarding the debt collection practices at the company.  Almonte says that she was shocked at what she saw when she began examining the details of a $200 million package of debt collection judgments to an outside debt collection agency….

Nearly half of the files her team sampled were missing proofs of judgment or other essential information, she wrote to colleagues. Even more worrisome, she alleged in her wrongful-termination suit, nearly a quarter of the files misstated how much the borrower owed.

In the “vast majority” of those instances, the actual debt was “lower that what Chase was representing,” her suit stated.

Almonte says that she warned that this sale of debt collection judgments must be stopped, but that a company executive told her that “she had better go along with the plan to sell the misrepresented asset“.

Almonte refused to go along, and she was fired on November 30th, 2009.

You are probably thinking that this sounds very much like the “robo-signing” foreclosure scandal and you would be right.

The more we dig into these giant financial companies the more corruption we find.

It really is shocking.

And remember, JPMorgan Chase is also the company that makes more money whenever the number of Americans on food stamps goes up.

JPMorgan Chase issues food stamp debit cards in 26 U.S. states and the District of Columbia, and they actually want more Americans to go on food stamps so that they can make bigger profits from the division that issues them.

So now are you starting to understand why so many Americans are upset about the corruption on Wall Street?

This isn’t a “conservative issue” or a “liberal issue” – it is an American issue and the outrageous behavior of these firms has brought our financial system once again to the edge of disaster.

Over the past six months, more than 350 prominent executives have resigned from major banks and financial institutions all over the globe.

Is this a sign that the rats are fleeing a sinking ship?

Do they know something that we don’t?

What we do know is that the financial crisis in Greece is far from over and the European financial system is getting closer to a complete meltdown with each passing day.

Very few of the things that caused the financial crisis of 2008 were ever corrected and our financial system is even more vulnerable today than it was back then.

In the end, this entire pyramid of debt, leverage and corruption is going to come crashing down really hard, and the consequences are going to be absolutely catastrophic.

Gold, Silver And Oil Are All Skyrocketing And That Is Bad News For The U.S. Economy

The following is one statement that you should get used to seeing: “The price of gold set another record today.”  Today, spot gold reached a new all-time record of $1461.91 an ounce before settling back a little bit.  Silver is also skyrocketing.  At one point today silver hit $39.75 an ounce.  It seems inevitable that at some point we are going to be talking about $50 silver.  The price of oil is also continuing to relentlessly march upwards.  At last check U.S. oil was at about $108 a barrel.  All of this is great news for those that are investing in gold, silver and oil, but all of this is also really bad news for the U.S. economy.  Why?  Well, because when these commodities go up in price it is a sign that the U.S. dollar is dying and that our country is getting closer to economic collapse.

Traditionally, there has been an inverse correlation between the price of gold and the value of the U.S. dollar.  Usually when the U.S. dollar goes down, the price of gold goes up.

One of the main reasons why gold has been so strong over the past year is because the U.S. dollar has been rapidly losing value.

So why is the U.S. dollar declining?

Most economists point to all of the quantitative easing that the Federal Reserve has been doing.

So exactly what is quantitative easing?

Well, it is basically like playing Monopoly with someone that reaches under the table and pulls out a bunch of extra money when they are almost broke.

The Federal Reserve has been creating huge amounts of money out of thin air and has been pumping it into the financial system.  It is essentially cheating, and it is highly inflationary.  The rest of the world has not been amused.

But quantitative easing is not the only issue.

The truth is that whenever the U.S. government goes into more debt, more money is created.  The U.S. has been running trillion dollar deficits for several years now, and this has created a lot of new money.

This is another reason why it is so important to get the U.S. government debt situation under control.  The Obama administration is projecting that the budget deficit for this fiscal year will be about 1.6 trillion dollars.  This is highly inflationary and it will continue to destroy the value of the dollar.

In addition, the rest of the world is beginning to have serious doubts about the sustainability of U.S. government debt.  They are starting to lose faith in the U.S. dollar and in U.S. Treasuries.

In fact, investors are losing faith in paper currencies all over the globe.  The euro is on the verge of a massive crisis.  On Tuesday, Moody’s downgraded Portuguese government debt for the second time in a month.  Portugal needs a bailout, but they are far from alone.  A half dozen European nations are experiencing a financial meltdown and the European debt crisis could spiral out of control at any moment.

Because of all of this financial instability, investors have been seeking some place safe to put their money.

For many investors, precious metals and commodities have been the answer.

In fact, silver has been doing even better than gold lately.  On Wednesday, silver set a new 31-year high for the third day in a row.

People are even starting to talk about the possibility of $50 silver.  Most analysts would have considered such talk complete nonsense a year ago.

But now nobody is laughing.

The price of oil is also soaring.  Some of that is due to inflation, but not all of it.  The truth is that when it comes to oil there are other factors at play.

Unfortunately, a high price for oil is far more damaging to the U.S. economy than a high price for gold is.

The U.S. economy has been designed to use massive amounts of cheap oil to transport massive quantities of goods over vast distances.  When the price of oil goes to $100 or $150 a barrel, it fundamentally changes the dynamics of our economic system.

Nobody has ever been able to prove that the U.S. economy can successfully handle a price for oil over $100 for an extended period of time.

Do you remember what happened back in 2008?  The price of oil hit a record high in June and then the entire financial system came unglued just a few months later.

The price of oil affects the price of almost everything else.  Almost all forms of economic activity use energy.  Almost all goods have to be transported a significant distance.

When the price of oil goes too high, some types of economic activity simply become unprofitable.  If the price of oil stays this high from now on, there are many businesses across America that will be forced to close.

A high price for oil is also going to hit U.S. consumers really hard.  According to AAA, the average price of a gallon of gasoline in the United States is now $3.70.

Many are convinced that the average price of gasoline is going to shatter the all-time record of $4.11 that was set back in July 2008.

So how much did a gallon of gas cost a year ago?

One year ago the average price of a gallon of gasoline was just $2.83.

Over the past 12 months the average price of gasoline has gone up about 30%.

So has your paycheck gone up by 30% over that time?

The truth is that wages have been very stagnant in the United States for a long, long time.

That means that U.S. household budgets are being increasingly stretched.  People have to fill up their cars so that they can get to work or to school.  Americans can cut back on pleasure driving to save money, but most of the driving that all of us do is to get to places that we have to be.

So if gas costs more that means that consumers are going to have less to spend other places.  Consumer spending accounts for approximately 70 percent of the U.S. economy, so any slowdown in U.S. consumer spending would be extremely significant.

Already a substantial percentage of the American people are feeling quite stressed about gas prices.

According to a recent Associated Press-GfK poll, approximately two-thirds of the American people believe that rising gasoline prices will cause significant hardship for their families over the next six months.

We are heading for some really difficult economic times.  As I wrote about recently, this economy has millions of Americans feeling depressed, but that is not the appropriate response.

Rather, once we understand how bad our economic problems are we should feel empowered because then we can start focusing on real solutions.

And somebody really needs to start focusing on solutions because panic is starting to abound.  Many top corporate insiders are selling off stock like there is no tomorrow.  The biggest bond fund in the world, PIMCO, has been getting rid of all of their U.S. Treasuries.  When Wall Street big shots start freaking out you know that the hour is late.

It certainly doesn’t help that the Middle East is in a state of chaos and that the Japanese economy is falling apart as a result of the recent disasters.

In these uncertain times investors are seeking something safe.  They are turning to real “global currencies” such as gold, silver and oil.  Paper currencies are rapidly losing favor and rampant inflation is on the horizon.

So where do all of you think that gold, silver and oil are going?  Feel free to leave a comment with your opinion below….

Precious Metals: 10 Things To Know Before Jumping Into Gold And Silver

As the global economy became increasingly unstable during 2010, investors all over the world flocked to precious metals such as gold, silver, copper and platinum.  The price of gold set an all-time record high last year, and gold investors were euphoric.  Many analysts are projecting that prices for gold, silver and other precious metals will continue to soar throughout 2011.  But does that mean that everyone should just suddenly jump into gold and silver?  No, it does not.  Precious metals are not for everyone.  Just like any other kind of investing, it is absolutely crucial that you get educated before you get involved.  Investing in precious metals is very different from other kinds of investments.  There are significant hazards and pitfalls to watch out for.  But if you take the time to do it right, investing in precious metals can be very rewarding, and it can potentially be a great way to protect your wealth against the tremendous inflation that is coming in the years ahead.

The following are ten key things that you should know before jumping into gold and silver….

#1 Precious Metals Markets Are Highly Manipulated

Big financial institutions, and even governments, openly manipulate the precious metals markets.  This is an open secret that you should know if you plant to invest in precious metals.  Those who think that they can jump in and out of gold or silver and make a killing usually end up learning a very painful lesson.  Investing in precious metals should be done for the long-term unless you really, really know what you are doing.

So why is long-term investing safer?  Well, as we have seen over the past few years, the short-term manipulation of gold and silver prices usually gets trumped by the long-term trends in the end.

But that doesn’t mean that gold, silver and other precious metals won’t take some very significant short-term tumbles.

The following “mini-documentary” does an excellent job of examining some of the strange things that we have seen in the precious metals markets recently….

#2 The Long-Term Trends Are Very Favorable For Precious Metals

As the U.S. dollar has declined, gold, silver and other precious metals have been going up, up, up over the past decade.  Investors all over the globe have been flocking to the safety and stability that they provide.

Just check out the following chart which shows how the price of gold has risen dramatically over the past decade.  In fact, this chart is a little out of date.  At one point during 2010, the price of gold exceeded $1400 an ounce.  As you can see, those who have been investing in gold for the long-term have been doing very, very well….

Many analysts are extremely bullish on gold right now.  For example, Peter Schiff believes that the price of gold is going to eventually hit $5000.

So does that mean that what Schiff is saying is actually going to happen?

Nobody can tell you for sure what is going to happen.

But one thing is for sure – we are entering uncharted territory in world financial markets.  At this point, just about anything is possible.

#3 Gold Holds Value Over Long Periods Of Time

In ancient Rome, an ounce of gold would buy you a nice suit.  A hundred years ago, an ounce of gold would buy you a nice suit.  Today, an ounce of gold will buy you a nice suit.

Meanwhile, the U.S. dollar has lost well over 95 percent of its value over the last 100 years.

So which is better to hold on to for the long-term – U.S. dollars or gold?

#4 The Value Of The Dollar Is Going Down

Usually (but not always) when the value of the dollar goes down, the value of gold goes up.  As the U.S. government and the Federal Reserve have been flooding the system with new dollars, investors across the globe have been flocking to precious metals.

At some point in the years ahead we are going to be facing some very, very serious inflation.  When that time arrives, U.S. dollars are not going to be worth a whole lot.  But all of that gold and silver you have stored up still will be.

#5 Physical Gold Is Preferable To Paper Gold

When investing in gold, it is much more preferable to actually take possession of the physical gold than it is to have a piece of paper that says that you have invested in gold.  Someday when the financial system crashes, you may find that your “piece of paper” is not going to do you much good.

#6 Diversification Is Key

When investing in precious metals, it is important to diversify.  This spreads out your risk.  Some investors accumulate as many different precious metals as they can.  Others diversify by getting precious metals from a variety of dealers or by accumulating it in different forms – coins, bars, jewelry, etc.

It is always wise not to put all of your “eggs” in one basket.

#7 Accumulate Different Denominations If You Can

In the future, if you actually need to spend your precious metals you don’t want them all to be of the same denomination if possible.  For example, if you need to buy a little bit of food, you don’t want to only have high value coins.  Variety is a good thing, and accumulating different coin denominations is another way that you can diversify.

#8 You Cannot Eat Precious Metals

Investing in precious metals should be done only after you have gathered together an adequate emergency food supply.  If the global economy completely shatters, having gold and silver is not going to be good enough.  You are going to need lots of food for you and your family.  So be sure to take care of the necessities before you invest in precious metals.

#9 Do Not Advertise That You Are Accumulating Precious Metals

Don’t go around telling everyone that you are storing up precious metals.  That is just going to make you a target.  Investing in precious metals is something to be done quietly.

#10 Get Educated

I cannot stress this point enough.  If you want to invest in precious metals, you need to get educated.  People that do not know what they are doing are at much greater risk of getting burned.  Be smart enough to realize what you do not know.  Don’t be too proud to ask for advice.  Seek out reputable dealers.  If you take the time to do things right, then you will have the best chance for success.

The following video contains some more facts and figures about investing in gold.  I do not know anything about the organization that put this video together, but this video is well produced and it presents a lot of important information about gold in an entertaining manner….

Barack Obama And Ben Bernanke Continue To Defend Quantitative Easing, But For The Rest Of The World The Verdict Is In: They Hate It

Even as Barack Obama and Ben Bernanke publicly defend the Federal Reserve’s new $600 billion quantitative easing program, top finance officials around the globe are expressing alarm and outrage.  But what did Obama and Bernanke expect?  “Quantitative easing” is little more than legalized cheating.  For a moment, imagine that the global economy is a giant game of Monopoly.  Essentially what Bernanke has done is that he has just reached under the table and has slipped another $600 billion on to his pile of money, hoping that the rest of the players will not call him out on it.  The rest of the world has heavily invested in the U.S. dollar and in U.S. Treasuries, and this new quantitative easing program is going to devalue all of those holdings.  If the Federal Reserve continues to go down the road of monetizing U.S. government debt, other nations are rapidly going to get spooked and will soon refuse to invest in U.S. dollars and U.S. Treasuries.  When that day arrives, it is going to cause mass panic in the world financial system.

Already, investors across the globe are flocking out of the U.S. dollar and into safe investments such as gold and silver.  On Monday, gold closed at an all-time record high of $1,403.20 an ounce on the New York Mercantile Exchange, and silver closed at a 30-year high of $27.43 an ounce.

Unfortunately, our leaders seem absolutely clueless about what is really going on.  In fact, Barack Obama is very much in Bernanke’s corner.  During his trip to India, Barack Obama made it clear that he very much supports this new round of quantitative easing by the Federal Reserve….

“I will say that the Fed’s mandate, my mandate, is to grow our economy. And that’s not just good for the United States, that’s good for the world as a whole.”

This is the exact opposite of what Barack Obama should be doing.  He should be demanding accountability from Ben Bernanke and the Federal Reserve.  He should be trying to get the U.S. financial system back on some kind of solid footing.

But we all know that is not going to happen.  Obama had no problem renominating Bernanke to another term, and Obama has publicly supported him at every opportunity.

Well, if Obama isn’t going to do it, shouldn’t some of our other representatives in Washington D.C. be calling for the resignation of Bernanke?  After all, how many chances does one guy get?  Bernanke’s record is littered with so much gross incompetence that it makes Wade Phillips of the Dallas Cowboys look like Coach of the Year.  The video posted below shows Bernanke reassuring the public over and over and over between 2005 and 2007 that the U.S. economy was in great shape and that we would continue to experience solid growth….

How long is it going to be until everyone wakes up and starts acknowledging that “the emperor has no clothes” and Bernanke is running the U.S. economy into the ground?

At this point, Bernanke has lost virtually all credibility.  In 2009, he promised the U.S. Congress that the Federal Reserve would not monetize U.S. government debt, but now that is exactly what is happening.

Most of the top finance officials in other countries realize what is going on, and they are really starting to make their displeasure known.  The following are just a few examples of the global outrage that has been expressed about the Fed’s new quantitative easing program over the past few days….

*Xia Bin, an important member of the monetary policy committee of China’s central bank has called the Fed’s new quantitative easing plan “abusive” and is warning that it could set off a global economic meltdown.

*On Monday, Chinese Finance Vice Minister Zhu Guangyao expressed his extreme dismay regarding the Fed’s new quantitative easing scheme….

“As a major reserve currency issuer, for the United States to launch a second round of quantitative easing at this time, we feel that it did not recognize its responsibility to stabilize global markets and did not think about the impact of excessive liquidity on emerging markets.”

*German Finance Minister Wolfgang Schäuble, who has called current Fed policy “clueless”, says that he is absolutely disgusted with the Federal Reserve at this point….

“They have already pumped an endless amount of money into the economy via taking on extremely high public debt and through a Fed policy that has already pumped a lot of money into the economy. The results are horrendous.”

*Luiz Inácio Lula da Silva, the President of Brazil, says that he is incredibly upset about QE2 and that he is going to arrive for the G20 meetings in Seoul ready “to fight”.

*Bloomberg is reporting that at the upcoming G20 meetings, Russian President Dmitry Medvedev is going to “insist” that any future quantitative easing measures be globally coordinated.

*Even some top Fed officials are speaking out publicly against this new round of quantitative easing.  For example, Kansas City Fed President Thomas Hoenig recently made the following statement about the new direction the Fed is taking….

“I worry that by pumping in significant amounts of dollars we then build the inflationary pressures for the future, and we do encourage then an easier credit environment that helped create this problem in the first place.”

The Federal Reserve had better hope that the rest of the world does not get scared off from buying U.S. government debt.  According to the Wall Street Journal, in order to repay maturing bonds and finance the budget deficit, the U.S. government will have to come up with 4.2 trillion dollars over the next year.

If the rest of the world cuts back on buying U.S. Treasuries, the Federal Reserve is going to find itself with a gigantic mountain of debt that it will be forced to monetize.

So what happens someday when China, Japan, Russia and the major oil producers in the Middle East decide that enough is enough and they are not going to buy any more U.S. debt?

Don’t think it can’t happen – these nations are not stupid and if they realize that the U.S. dollar is going to continually keep falling in value there could be a dramatic move away from U.S. debt.

If the rest of the world quits lending massive amounts of money to the U.S. government, our leaders will be faced with three options.  The U.S. government could start trying to operate within a balanced budget (which would crash the economy), interest rates on U.S. government debt could be raised until people would be willing to invest in Treasuries again (which would probably crash U.S. government finances and the economy), or the Federal Reserve could just start monetizing most of the debt on a regular basis (which would likely eventually crash the entire world financial system).

In order for the current world financial system to maintain stability, it is essential for there to be faith in the U.S. dollar and for there to be faith in U.S. Treasuries.  Once faith in them is lost, it will only be a matter of time until the world financial system totally crumbles.

This new round of quantitative easing could be the “tipping point” that opens the door to the eventual complete and total collapse of the U.S. dollar.  Let us hope that the dollar does not completely fail any time soon, but with jokers like Bernanke and Obama running the show, there is not much reason for optimism.

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