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Jacob Rothschild, John Paulson And George Soros Are All Betting That Financial Disaster Is Coming

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Michael Snyder tends to be extreme in his pessimism, but he presents arguments that are hard to dismiss. ~ Ilene

Jacob Rothschild, John Paulson And George Soros Are All Betting That Financial Disaster Is Coming

Are you willing to bet against three of the wealthiest men in the entire world?  Jacob Rothschild recently bet approximately 200 million dollars that the euro will go down. 

Billionaire hedge fund manager John Paulson made somewhere around 20 billion dollars betting against the U.S. housing market during the last financial crisis, and now he has made huge bets that the euro will go down and that the price of gold will go up. 

And as I wrote about in my last article, George Soros put approximately 130 million more dollars into gold last quarter.  So will the euro plummet like a rock?  Will the price of gold absolutely soar?  Well, if a massive financial disaster does occur both of those two things are likely to happen.  The European economy is becoming more unstable with each passing day, and investors all over the globe are looking for safe places to put their money.  The mainstream media keeps telling us that everything is going to be okay, but the global elite are sending us a much, much different message by their actions.  Certainly Rothschild, Paulson and Soros know about things happening in the financial world that the rest of us don't.  The fact that they are all behaving in a consistent manner right now should be alarming for all of us.

Let's start with Jacob Rothschild.  Apparently he believes that the euro is headed for quite a tumble.  The following is from a recent CNBC article....

You know the euro is in deep water when a doyen of the banking industry, Lord Jacob Rothschild takes a £130 million ($200 million) bet against it.

Okay, but the euro has already been falling dramatically.  In mid-2011, the EUR/USD was above the 1.40 mark, and right now it is at about 1.23.

Does it really have that much more that it can fall?

If the eurozone ends up breaking apart it sure does.

If there is a Greek default, or if Germany leaves the euro, or if a new currency comes along to replace the euro those currently betting against it will end up looking like geniuses.

Another big name in the financial world that is betting against the euro right now is John Paulson.  The following is from a recent Der Spiegel article....

One of these warriors is John Paulson. The hedge fund manager once made billions by betting on a collapse of the American real estate market. Not surprisingly, the financial world sat up and took notice when Paulson, who is now widely despised in America as a crisis profiteer, announced in the spring that he would bet on a collapse of the euro.

And as I noted in my last article, Paulson has also been putting billions of dollars into gold.

So just what are Rothschild and Paulson anticipating?

Could we be on the verge of a massive financial collapse in Europe?

According to the Der Spiegel article mentioned above, a lot of investors seem to be preparing for such a possibility right now....

Banks, companies and investors are preparing themselves for a collapse of the euro. Cross-border bank lending is falling, asset managers are shunning Europe and money is flowing into German real estate and bonds. The euro remains stable against the dollar because America has debt problems too. But unlike the euro, the dollar's structure isn't in doubt.

The financial world is starting to wake up to the fact that the globe is absolutely drowning in debt and it is not really good to be holding fiat currencies when a debt crisis erupts.

When men like John Paulson and George Soros start pouring huge amounts of money into gold, it is time to start becoming alarmed about the state of the global financial system.

The amount of money that these men are investing in gold is staggering....

There was also news last week in an SEC filing that both George Soros and John Paulson had increased their investment in SPDR Gold Trust, the world’s largest publicly traded physical gold exchange traded fund (ETF).

Mr Soros upped his stake in the ETF to 884,400 shares from 319,550 and Mr Paulson bought 4.53m shares, bringing his stake to 21.3m.

At the current price of about $156 a share, these are new investments of about $88m of Mr Soros’ cash and more than $700m from Mr Paulson’s funds. These are significant positions.

And the central banks of the world are certainly buying gold at an unprecedented rate as well.  According to the World Gold Council, the central banks of the world added 157.5 metric tons of gold last quarter.  That was the biggest move into gold by the central banks of the globe that we have seen in modern financial history.

But that might just be the beginning.

According to a recent Marketwatch article, there are persistent rumors that China has plans to buy thousands of metric tons of gold....

Within the gold market, there is unconfirmed speculation that China plans to buy up to at least 5,000 to 6,000 metric tons of gold and that it will start to buy during this year, according to Kevin Kerr, president of Kerr Trading International.

If China buys this much gold, that would exceed annual, global production of gold, he said. “We do not have enough gold for China to buy that much, and it will take China time to purchase this amount of gold.”

So what comes next?

Nobody is quite sure.

Another major financial crisis could erupt in Europe at any moment. A major war in the Middle East could start literally at any time.

Renowned investor Jim Rogers believes that things are really going to get "bad after the next election." Others believe that the action could start even sooner than that.

The truth is that even though we have not seen a "Lehman Brothers moment" yet, things in Europe just continue to get progressively worse. The following is from a recent article by Mark E. Grant....

Whether you turn your attention to Greece, Spain, Italy, Portugal or even Ireland; it is getting worse. Nowhere on the Continent are things improving and even in France and Germany the financial strains are beginning to show. It is not a question of Euro-bear or Euro-bull; it is just the numbers as they come rolling out month after month.

There is a growing realization in Europe that the euro simply does not work.  Italy is absolutely drowning in debt, the Spanish economy has basically descended into a depression, and Greece has been experiencing depression-like conditions for years at this point.

The euro is doomed. The only question is who is going to blink first.

Nobody wants to be the first to leave the euro. There are rumblings that it could actually be Finland that leaves the euro first, and that would please Germany just fine because they don't want to look like the bad guys in all of this.

But that doesn't mean that Germany won't eventually pull the trigger if nobody else does.  The German public is sick and tired of bailing out the weak sisters of southern Europe, and at this point it looks like it would take perpetual bailouts just to keep the euro together.

And recently there have been lots of little signs that Germany is starting to move slowly toward the exit doors.

In fact, I found it quite interesting that a giant euro sculpture was recently removed from the Frankfurt International Airport....

A massive € sculpture (identical to the one in front of the European Central Bank) was dismantled and removed from the Frankfurt International Airport in Germany Thursday.

The official explanation is ‘the plastic parts are getting weak after 11 years and the terminal needed the space‘.

Does € sculpture’s removal from the Frankfurt Airport indicate Germany is preparing for a surprise return to the Deutsche Mark?

Sure that might just be a coincidence, but it also could be a harbinger of things to come.

Sadly, most average people living in North America and Europe have absolutely no idea what is coming.  Most of them just want to be able to get up in the morning and go to work and pay the bills and take care of their families.

Unfortunately, millions upon millions of those hard working individuals are in for a very rude awakening.

A lot of people are about to have their current lifestyles totally turned upside down.

But it doesn't have to be all bad.

In fact, I found it very interesting to read about how some young people are responding to the depression in Greece....

In the spring of 2010, just as the Greek government was embarking on some of its harshest austerity measures, 29-year-old Apostolos Sianos packed in his well-paid job as a website designer, gave up his Athens apartment and walked away from modern civilisation.

In the foothills of Mount Telaithrion on the Greek island of Evia, Mr Sianos and three other like-minded Athenians set up an eco-community.

The idea was to live in an entirely sustainable way, free from the ties of money and cut off from the national electricity grid.

The group sleeps communally in yurts they have built themselves, they grow their own food and exchange the surplus in the nearest village for any necessities they cannot produce.

I think there is a lesson to be learned there.

When the system fails, it is going to be important to be able to live independently of the system.

Governments and big banks all over the world have been rapidly preparing for the coming financial collapse.

Perhaps the rest of us should be too.

If you can believe it, 77 percent of all Americans live paycheck to paycheck at least some of the time.

If another major economic crisis comes along, many of those people are going to be totally wiped out.

And there are already signs that the U.S. economy is basically on life support at this point.

Just look at the velocity of money.

In an economy that is growing and healthy, money tends to circulate very, very quickly.

But when an economy is sick, money tends to circulate very slowly.

And that is exactly what is happening right now.  In fact, the velocity of money is currently at the lowest level in modern U.S. history....

 

 

For much more discussion on this, please check out this article.

This is exactly what happened back in the 1930s. The velocity of money absolutely plummeted. When people are scared, credit is tight and times are hard, money does not exchange hands as rapidly.

But this is just the beginning.

What we are experiencing right now is rip-roaring prosperity compared to what is coming.

Jacob Rothschild, John Paulson and George Soros are preparing themselves for the tremendous chaos that is coming.

Are you getting prepared?

 
 

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Tue, 08/21/2012 - 17:28 | 2725371 falak pema
falak pema's picture

the skull and boners call it "constructive chaos"; they should know, they are old hands at it. It started back in 1953 with Kermit R in Iran. All part of the Bundy brigade of skull n bones of CIA/intelligence clique.

All these guys drink the same milk. The Mongols called it koumis, and it united their best and most fearless. 

The magnificent three of current chaos all have this financial veneer of Oligarchs with a pedigree of behind the curtain shenaniganista brotherhood. 

Tue, 08/21/2012 - 17:19 | 2725352 reader2010
reader2010's picture

Make sure tax labor only.

Tue, 08/21/2012 - 17:27 | 2725382 AldousHuxley
AldousHuxley's picture

doom is good.

 

during depression, rich people with lots of paper assets lost money.....income and wealth disparity will decrease as richer you are more you have to lose on the market.

 

let the system reset.

let's see how

Tue, 08/21/2012 - 18:52 | 2725576 tenpanhandle
tenpanhandle's picture

nice try.  Rich people with mucho hard assets become new kings.  Previous paper rich become newly fucked.  Previous poor stay fucked.  Pardon the poor translation from the king's french.

Tue, 08/21/2012 - 17:13 | 2725327 GFORCE
GFORCE's picture

These are hedges against the worst case scenario. We're all free to make such hedges via gold or whatever else.

Tue, 08/21/2012 - 16:56 | 2725280 fourchan
fourchan's picture

they cause it then they predict it lol nice racket.

Tue, 08/21/2012 - 16:53 | 2725274 q99x2
q99x2's picture

Arrest them.

Tue, 08/21/2012 - 16:53 | 2725272 rosiescenario
rosiescenario's picture

More short term, as the EURO drops the $ goes up and since gold and silver are denominated in $, their price will likely head south, too.....in the shorter term. Longer term we know what will happen to the $'s buying power....

Tue, 08/21/2012 - 16:53 | 2725264 LouisDega
LouisDega's picture

Ok, Im doomed. What else ya got for me?

Tue, 08/21/2012 - 23:20 | 2726231 Savyindallas
Savyindallas's picture

why are you posting here you fool? Go get your affairs in order and kiss your loved ones goodbye.

Tue, 08/21/2012 - 18:47 | 2725565 tenpanhandle
tenpanhandle's picture

sorry, there is nothing else if you have to ask.

Tue, 08/21/2012 - 16:39 | 2725236 Big Corked Boots
Big Corked Boots's picture

These Greek guys with the yurts... who's land are they on? Fun to get "back to the land" provided it's their own land, not someone else's.

Tue, 08/21/2012 - 16:34 | 2725213 lasvegaspersona
lasvegaspersona's picture

REMEMBER

Only if you have more than 100,000 shares of GLD can you count on getting physical gold from GLD, everyone else gets cashed out. In a crisis you want to be holding physical not hoping you can take your cash and buy gold elsewhere.

be smart buy physical, leave GLD for hedgers

Tue, 08/21/2012 - 17:52 | 2725447 NotApplicable
NotApplicable's picture

You also have to be approved by the fund to be a "basket maker/taker."

Which means that there's not a handful of entities that can create shares from Comex paper, then redeem shares for shiny bars. I can only imagine the evil one has to be capable of in order to be approved for membership.

Tue, 08/21/2012 - 16:34 | 2725212 davood
davood's picture

Why is everyone quoting that Iron Bitch?  It was under her enlightened prime minstership that thousands of British children were fed mad cow tainted hamburgers knowingly, and not quite a few of them ended with mad cow disease.

Wed, 08/22/2012 - 06:53 | 2726561 Rogue Trooper
Rogue Trooper's picture

A hearty FUCK YOU....

Whatever, her failings, namely buying into that monetarist bullshit and not being able to finish the job, as a politician she had some values and had a bloody good go at transforming the UK.  Until the 'establishment' finally got rid of her and TPTB put in place that soft-cock-tory-'wet' John Major and the decline was back on track.....

Once again, FUCK OFF and don't post again you FUCKING TOOL

Now was I clear enough?

Read Murray Rothbard and do you-self a favour.

Tue, 08/21/2012 - 16:29 | 2725193 monad
monad's picture

RICO

Tue, 08/21/2012 - 16:16 | 2725132 Vegetius
Vegetius's picture

“The European single currency is bound to fail, economically, politically and indeed socially, though the timing, occasion and full consequences are all necessarily still unclear.” - Margaret Thatcher

Not so unclear now.

Tue, 08/21/2012 - 16:12 | 2725116 I am on to you
I am on to you's picture

But how nice people!!

Ill bet a sandwich a cup of coffee my old socks,that they are right,they set the gameplay,so yes they will make a hell lot of What?

Money?To what purpose would, that be,buying Art,Land(contry,s)Army,s, Football clubs, Tiger woods,The Hockey Stick,weather station in China:People,what do you care about people,said the living dead,Joacim Von Duck,whos running out of Air,and not all the shiny stuff of this Universe will by him more time:

Quote:Loads of shit!

Tue, 08/21/2012 - 19:17 | 2725633 CH1
CH1's picture

Tradin' in those fiat tokens, while they still can!

Tue, 08/21/2012 - 16:09 | 2725105 SmittyinLA
SmittyinLA's picture

Actually a euro currency collapse would crater gold, all the holders of gold in the EU would be forced to unload it to buy things like food and fuel, this giant dump of gold could and would overwhelm the planet's gold absorbing and consuming capacity (China and India couldn't absorb the slack with their economy losing sales in the EU from a EU collapse), gold isn't that useful and is replaceable with a variety of other metals and materials.  

A EU currency collapse would also crater global oil demand causing the OPEC nations to sell some of their gold to finance their massive debt and social services, it was only 4 years ago that oil cratered to below $40/ barrel.   

Tue, 08/21/2012 - 18:12 | 2725493 honestann
honestann's picture

That's just silly!  Individuals who have little or nothing [but debt] don't have any/much gold to sell.  People who have significant to substantial savings --- enough to hold significant to substantial gold --- will convert their fiat into gold and other real, physical goods as fast as they possibly can, creating a huge demand for gold and PMs.

I mean, really!  When fiat fails, where do YOU think all those soon-to-be worthless scraps of paper and computer bits will go?  People will convert all their liquid wealth into what?  Big Macs?  Are you kidding?  People will not hold onto their fiat until they are hungry for "yet another Big Mac", they will know quite clearly they need to convert their fiat into something real IMMEDIATELY.  Some will find its way into other fiat, fake, fraud, fiction, fantasy, fractional-reserve toilet-paper debt instruments, since a lot of people will remain morons until the very end.  But a lot will flow into gold.  You can be certain of that.

The point is this.  People who HAVE money don't need very much (if any) of their savings "to eat" or "drive to work"... and certainly not in the short run when they need to ditch their euros FAST.

Tue, 08/21/2012 - 21:58 | 2726040 mjcOH1
mjcOH1's picture

"I mean, really!  When fiat fails, where do YOU think all those soon-to-be worthless scraps of paper and computer bits will go?  People will convert all their liquid wealth into what?  Big Macs?  Are you kidding?  People will not hold onto their fiat until they are hungry for "yet another Big Mac", they will know quite clearly they need to convert their fiat into something real IMMEDIATELY. "

 

iToys?   The government can be ounted on to seize and redistribute grandma's savings account to quell the food riots.  But who knows how long the consumer electronics supply chain will be down.   Gotta stock up for the bad times!

 

Tue, 08/21/2012 - 17:26 | 2725379 Peter Pan
Peter Pan's picture

Gold would not be dumped. Instead it would go into circulation to enable those transactions that would otherwise not take place in a collapse to continue taking place.

Tue, 08/21/2012 - 18:29 | 2725534 kito
kito's picture

Bullshit. All gold jewelry by the masses will be sold in a heartbeat....only the ones that hold bars and coins as a means of asset protection will hold their pms in anticipation of a societal collapse.......

Tue, 08/21/2012 - 18:43 | 2725559 tenpanhandle
tenpanhandle's picture

bulshit, bullshit.  The masses will be out of jewelry before the collaspe except for all the people who buy jewelry for investment purposes i.e. the people of India.

Tue, 08/21/2012 - 17:23 | 2725364 SAT 800
SAT 800's picture

Your're wrong. A typical example of making up a story that appeals to your "common sense" and then believing in it. A failure of the Euro will cause an enormous price spike in the precious metals; obviously.

Tue, 08/21/2012 - 19:19 | 2725643 CH1
CH1's picture

When there's nowhere else to run, they run to gold.

Tue, 08/21/2012 - 16:32 | 2725203 Tinky
Tinky's picture

Virtually no one who has significant gold holdings will need to "dump" any of it to pay bills if the Euro collapses.

Looking forward to your next hypothesis.

Tue, 08/21/2012 - 17:38 | 2725408 shovelhead
shovelhead's picture

Don't be like that...

I know that when I need a loaf of bread I'll dump all my gold to get it instead of  trading a couple of '64 90% dimes for it.

I mean, that only makes sense , right?

Saudi's have oil but they're going to be the ones dumping gold?

Cargill & ADM will be switching to hand sickles and threshing bees?

Must be a Liberal Arts degree holder who will buy gold when it hits $40 after the crash. :0

 

 

Tue, 08/21/2012 - 21:43 | 2726006 Toronto Kid
Toronto Kid's picture

Yes, if you are starving you'll pay anything to eat. This is common sense.

But what is also common sense is more and more gold is valued by the big players while they, except for China, keep up the 'gold is worthless you may as well sell' schtick. Anytime the politicians begin buying while encouraging you to sell ... that should tell you what you should be doing.

Look, if it wasn't gold, if it was toothpaste. If Obama went on national tv and called toothpaste worthless, and then Soros starting buying caseloads of $5 a tube toothpaste, wouldn't you wonder what was up and maybe put a few tubes of toothpaste aside. I mean, it's only five bucks a tube. Cheap!

Methinks your main argument against gold is right now it is so damn expensive. $1600 is a hell of lot of money to part with in return for one ounce of yellow metal. But there are folks on the 'net, gold proponents, whose arguments are beginning to make sense.

Do you think the US national debt is unwieldy? Does Europe look like a stack of dominoes, and if European banks go under, will your local bank go under?

And if you read fofoa, you buy gold now to convert to New Money once all the crap has shaken out.

So, I quietly stack. I haven't got the best hoard. Or the biggest. But quietly I stack. Not outrageously so. No, right now my outrageous stacking is of #10 cans of pinto beans and rice ... because I too would part with an ounce in return for a loaf of bread if times got hard enough.

The question really is do you think times are looking to get hard?

Tue, 08/21/2012 - 17:04 | 2725306 odatruf
odatruf's picture

This was going to be my comment too. 

Tue, 08/21/2012 - 16:21 | 2725156 Nadaclue
Nadaclue's picture

That is my thinking as well.

I currently hold very little gold but a chest full of fiat and other metals.

I am hoping that when it happens, physical will be obtainable as it seems like every time the market has tanked in the past, the retail dealers all seem to experience prolonged outages due to "System Difficulties" .

No doubt to keep the sellers from dumping and buyers from snatching up a deal.

I'd like to hear others thought's on this matter.

Wed, 08/22/2012 - 01:10 | 2726354 mharry
mharry's picture

How do you fit those Fiat's in a chest? Sorry, trying to laugh at the hopelessness of it all. I came here to learn and oh boy did I, now I drink myself to sleep. That's OK though, atleast I know what's going on.

Tue, 08/21/2012 - 17:20 | 2725353 Panafrican Funk...
Panafrican Funktron Robot's picture

"retail dealers all seem to experience prolonged outages due to "System Difficulties""

The other explanation:  fiat price volatility makes real money dealers skittish.

Tue, 08/21/2012 - 16:24 | 2725164 RockyRacoon
RockyRacoon's picture

Nickels!  Stockpile 'em in bank rolls only.  Heavy and hard to store?  That's what they said about silver in 1965.  They'll do in a pinch for a handy trade deal in bank-wrapped rolls.  Then if times get worse you can bust up the rolls for pocket change.

Tue, 08/21/2012 - 18:37 | 2725542 tenpanhandle
tenpanhandle's picture

or for loading in yer 12 guage.

Tue, 08/21/2012 - 18:50 | 2725573 Manthong
Manthong's picture

Nickel shot... the third millennium answer to the silver bullet?

Maybe in a 10 gauge.. dimes barely fit in the Mossberg 500.

 

Tue, 08/21/2012 - 19:09 | 2725611 Conax
Conax's picture

a 12 ga can shoot dimes.  Dimes were a quick choke check in the old days, if a dime falls through the bore it ain't full choke.

Tue, 08/21/2012 - 19:58 | 2725740 Manthong
Manthong's picture

Old days.. silver dimes.

I've heard of it but never shot dimes out the 12 ga..  what do you do, just blow 'em through the choke?

..and how many and how do you load them?

..sounds like fun.

Tue, 08/21/2012 - 23:43 | 2726265 Conax
Conax's picture

Farmers would load up rock salt to dust trespassers back when I was a kid. They say a mean deputy at the jail where they held Billy the Kid had loaded his shotgun with about 18 dimes. Billy escaped, got the gun and killed him with it as the legend goes. 

I would warn against over loading cartridges. safety and all that.

Tue, 08/21/2012 - 21:03 | 2725915 Papasmurf
Papasmurf's picture

Take a chop saw and cut the choke off.

Tue, 08/21/2012 - 21:49 | 2726027 mjcOH1
mjcOH1's picture

"Take a chop saw and cut the choke off."

 

Or save the barrel and screw in the cylinder bore choke.

Tue, 08/21/2012 - 18:05 | 2725480 Disenchanted
Disenchanted's picture

 

 

"Then if times get worse you can bust up the rolls for pocket change."

 

Put them in a sock and you can bust up some heads...

Tue, 08/21/2012 - 17:14 | 2725337 Manthong
Manthong's picture

No risk play.. except for maybe a sore muscle or two.

SHTF insurance and the moment they take the nickel out of the nickel, you are up on the trade.

If it doesn’t’ play out (low chance) you always have what you started with.

$500 gets you 10,000 pieces of the only circulating coin with bullion potential left in production.

Tue, 08/21/2012 - 22:07 | 2726075 FeralSerf
FeralSerf's picture

$500 just gets you beer money.  If you could somehow get $100K of them, then maybe it would be interesting.   That many nickels, if you could get them, would be a problem to transport and store for most people.

Tue, 08/21/2012 - 15:10 | 2724890 zilverreiger
zilverreiger's picture

Rothschild's bet was 200 million IIRC this is peanuts to these trillion wielding lizards, zo do not exclude a fake signal. Paulson has consistently been wrong.

Remains soros..

Tue, 08/21/2012 - 17:40 | 2725418 max2205
max2205's picture

Didn't he sell low on NFLX ?

Tue, 08/21/2012 - 18:09 | 2725488 divide_by_zero
divide_by_zero's picture

Soros just went long FB and BBY, so who knows. These 3 are more likely trying to engineer a financial disaster in order to bet on it, more their modus operandi.

Tue, 08/21/2012 - 17:48 | 2725431 dark pools of soros
dark pools of soros's picture

no that was me..  @50

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