This page has been archived and commenting is disabled.
Trustee to Seize and Liquidate Even the Stored Customer Gold and Silver Bullion From MF Global
Trustee to Seize and Liquidate Even the Stored Customer Gold and Silver Bullion From MF Global
Courtesy of Jesse's Cafe Americain
The bottom line is that apparently some warehouses and bullion dealers are not a safe place to store your gold and silver, even if you hold a specific warehouse receipt. In an oligarchy, private ownership is merely a concept, subject to interpretation and confiscation.
Although the details and the individual perpetrators are yet to be disclosed, what is now painfully clear is that the CFTC and CME regulated futures system is defaulting on its obligations. This did not even happen in the big failures like Lehman and Bear Sterns in which the customer accounts were kept whole and transferred before the liquidation process.
Obviously holding unallocated gold and silver in a fractional reserve scheme is subject to much more counterparty risk than many might have previously admitted. If a major bullion bank were to declare bankruptcy or a major exchange a default, how would it affect you? Do you think your property claims would be protected based on what you have seen this year?
You always have counter-party risk if you hold gold and silver through another party, even if they are a Primary Dealer of the Federal Reserve. As Ben said, the Fed offers no seal of approval.
If a Bankruptcy Trustee can pool your bullion into the rest of the paper assets and then liquidate it at prices that are being front run by the Street, you will have to accept whatever paper settlement that they give you.
The customer money and bullion assets are not lost, or rehypothecated or anything else. This is a pseudo-legal fig leaf, a convenient rationalization.
The customer assets were stolen, and given to at least one major financial institution by MF Global to satisfy an 11th hour margin call in the week of their bankruptcy, even as MF Global was paying bonuses to its London employees.
And in an absolutely classic Wall Street move, they are still charging the customers storage fees on the bullion which they have misappropriated from them. lol.
And now that powerful financial institution does not want to give the customer money and metal back. And they are apparently so powerful that the Trustee and the Court are reluctant to try and force its return to the customers, which is customary in this type of preferential distribution of assets prior to a bankruptcy, much less assets that were stolen. And keep in mind that in those last days the firm sent checks instead of wire transfers to customers so they could bounce them, and in a few cases even reversed completed wire transfers!
And so in the great Wall Street tradition they are trying to force the customers and the public to take the loss. The regulators and the exchange are aghast, and are trying to imagine how to resolve and spin this to preserve investor confidence and prevent a run on the system.
'Let them eat warehouse receipts.'
For many this would have been unthinkable only a few months ago. They had been cautioned and warned repeatedly, but chose to trust the financial system. And now they are suffering loss and anxiety, frozen assets, and the misappropriation of their wealth.
How more plainly can it be said? The US financial system as it now stands cannot be trusted to observe even the most basic property rights as it continues to unravel from a long standing culture of fraud.
Get your money as far away from Wall Street as is possible. And if you want to own gold and silver, take delivery and store it in a secure private facility outside the fractional reserve system.
Barrons
The Silver Rush at MF Global
By ERIN E. ARVEDLUND
December 17, 2011
It's one thing for $1.2 billion to vanish into thin air through a series of complex trades, the well-publicized phenomenon at bankrupt MF Global. It's something else for a bar of silver stashed in a vault to instantly shrink in size by more than 25%.
That, in essence, is what's happening to investors whose bars of silver and gold were held through accounts with MF Global.
The trustee overseeing the liquidation of the failed brokerage has proposed dumping all remaining customer assets—gold, silver, cash, options, futures and commodities—into a single pool that would pay customers only 72% of the value of their holdings. In other words,while traders already may have paid the full price for delivery of specific bars of gold or silver—and hold "warehouse receipts" to prove it—they'll have to forfeit 28% of the value.
That has investors fuming. "Warehouse receipts, like gold bars, are our property, 100%," contends John Roe, a partner in BTR Trading, a Chicago futures-trading firm. He personally lost several hundred thousand dollars in investments via MF Global; his clients lost even more. "We are a unique class, and instead, the trustee is doing a radical redistribution of property," he says.
Roe and others point out that, unlike other MF Global customers, who held paper assets, those with warehouse receipts have claims on assets that still exist and can be readily identified.
The tussle has been obscured by former CEO Jon Corzine's appearances on Capitol Hill. But it's a burning issue for the Commodity Customer Coalition, a group that says it represents some 8,000 investors—many of them hedge funds—with exposure to MF Global...
At stake is an unspecified, but apparently large, volume of gold and silver bars slated for delivery to traders through accounts at MF Global, which filed for bankruptcy on Oct. 31. Adding insult to the injury: Of the 28% haircut, attorney and liquidation trustee James Giddens has frozen all asset classes, meaning that traders have sat helplessly as silver prices have dropped 31% since late August, and gold has fallen 16%. To boot, the traders are still being assessed fees for storage of the commodities...
»
- ilene's blog
- 21461 reads
- Printer-friendly version
- Send to friend
- advertisements -
You really need to study political science.
Our government is elected to SERVE AT OUR PLEASURE. While our REPRESENTATIVES are given the power to perform SPECIFIC functions, they are also RESTRICTED in the actions they may pursue and the methods by which they accomplish them.
This is the nature of a contract: both parties have rights and obligations. When this contract is violated it may be partially or totally declared NULL and VOID. That is why the APPROVAL of the PEOPLE is necessary for the efficient rule by REPUBLICAN GOVERNMENT.
It is the nature of people to oppose change and therefore, to allow for the systematic abuse of their rights and property as they balance theft versus change. Still, there comes a time, in the course of human events...
I'm really quite happy with my political science, thanks. The problem I have is deciding the best and safest way to hold my PM's so that they can't be taken from me.
I don't hold them in the country in which I reside and I don't hold them personally either because estates taxes then come into play.
Political science is not going to keep the tax mans grubby mitts off my money, international law and some judicious tax planning however, will.
I choose to live in a place where there is no tax on investment gains, wherever I choose to store them.
1. buy all PMs cash, locally.
2. place in 4" x 2' PVC
3. Seal container and bury on public land.
4. Get a good nights sleep
Minimum of four feet deep. The government has sensors that can detect them at lesser depths.
from space..
and put a couple of gold plated tungsten bars (Fort Knox gift shop) above the real deal to confuse the gophers.
Stay up all night and watch for geeks with metal detectors.
Hope nobody builds on it.
Go grey early...
Incidentally, I think there is an issue with the time stamps on these comments. I am seeing a different order of replies every time I refresh the page.
Is anyone else having the same problem?
when you reply to someone else's post it gets inserted there, so everything moves down. also there are sometimes brief delays or the page refreshes on the server(?) so multiple replies post simultaneously..
Down through time it has been.
Afterall, possession is 9/10ths of "the law", no matter what some bankruptcy lawyer looking for another paycheck says...lol.
As John Lennon once said, possession is 9/10ths of the problem.
Everyone grows up ;-)
He adds: ‘I also saw John embark in some really brutal arguments with my uncle, who’s an old-time communist. He enjoyed really provoking my uncle.
'Maybe he was being provocative but it was pretty obvious to me he had moved away from his earlier radicalism.’
Read more: http://www.dailymail.co.uk/news/article-2009562/John-Lennon-closet-conservative-fan-Reagan.html#ixzz1gtBzvr00
HA! Tell that to the unfortunates who are referred to in this piece. Possession is 911ths of the law...what was under the WTC before it was 'molecularly dissassociated'? What is really in Fort Knox? When was it last openly audited? Who was the last independent US lawmaker to actually SEE it, and ASSAY it.
For over a year ZHeads have been informed that GLD and SLV exist as a paper trade on a global ratio of ~100:1 physical. It becomes more and more pressing for those that don't have possession of their own physical, that time is rapidly running out...
Well, I don't know if I would call hedge funds "the unfortunates" but I understand the theoretical value of a farmer locking in prices before delivery.
Leaving that thorny issue aside...they are claims on ownership.
My point with physical is, if you don't have it in your hand in this day & age you can claim whatever you want.
But it is outside of your possession, you traded it or fiat...for a claim of ownership to it. One in that position is now confronted with the very real prospect that they are at the mercy of a different set of laws. The laws of man instead of nature, where possession of it means more than whatever paper ticket they now hold in their hand.
The Sate giveth, and the State taketh away, anytime it pleases. The only stuff the Sate can't take from you is stuff that is outside of the State, i.e. overseas.
Which means that the only stuff you can 100% own is the stuff that ISN'T in your possession...
Which is by default, owned for you.
There is a lot of law on this...
Harlequin001
"overseas."
Yeah, that sure worked out for the German Jews that sent their hard assets to a "trustworthy" Swiss banker.
New World Overseas Confiscation of your hard assets- you deposit $1 million in gold, Swiss banker invests $100,000 from your gold, for a hitman.
Bonus for Swiss Banker; no broken teeth to extract from gold.
good morning nmewn
You're a conspiracy theorist aren't you?
I am not a German Jew.
I never suggested you were a German Jew.
But "overseas" is not safe either.
I am not a conspiracy theorist, but I have a degree in Scepticism, and have nearly completed my doctorate in Cynicism.
"I am not a conspiracy theorist, but I have a degree in Scepticism, and have nearly completed my doctorate in Cynicism."
Two very worthwhile life achievements.
Good evening Kayman, sorry I missed you earlier.
not too far behind me then.
I got mine at the school of hard knocks, and the university of having the shit kicked out of me...
My problem is that nowhere is 'safe' my issue is that owning assets personally is a guaranteed loss due to the governments right to levy any taxes it chooses...
Overseas is not far enough brother, when dealing with certain States' reach.
Ask the Iraqis. Or Afghanis. Or those with Swiss Bank Accounts. Etc.
You do understand don't you that the US has no influence in Switzerland, only a right to information under certain circumstances approved by the Swiss courts?
Even then they cannot prevent or touch assets held offshore by or for Americans, they can only levy taxes against you personally as a US resident on any benefit or gain you might have or be entltled to.
All accounts set up correctly are untouchable by the US, it is a matter of disclosure by US residents that is the problem.
For clarity, I don't recommend Switzerland as a jurisdiction of choice for US nationals to invest, but then if you read my other comments you will deduce that I don't recommend Americans invest anywhere directly, how could I when you are subject to worldwide taxes?
I would say that the right to information over a so called secret or confidential account by a government which is not Swiss is most certainly a rather powerful influence. The US authorities have been turning the screws on the Swiss for a while now. It will get worse globally so the Swiss better focus on making more Chocolate and Watches (as well as advanced industrial components) because their cozy offshore haven is doomed.
If the tax man cometh there is little place to hide, as you say in your last remark. This will be so almost universally and not limited only to US Citizens.
And what is to say that the overseas state cannot take it from you as well?
Exactly what state is it that you implicity trust 100% not to take your posessions?
Please to identify same, since even Switzerland bows to the iron fist of the USA.
I didn't say that. Having assets overseas buys you time, because in the short term they may be untouchable by your own government, wherever it is...
Mans Law is a very fungible thing in my estimation.
I've yet to find a place overseas that is not controlled by "the state" in some description...if there were such a non-authoritarian place (unyielding to the whims of the majorities passing fancy) I would imagine they will experience unprecedented population growth in very short order.
If its all the same to you I'll keep my trust in things beyond my control and and my PM's close to hand where they can both be defended. And no, it doesn't mean shovel & mason jar in the backyard or locked in a personal safe. It can be junkyards, lakes, hollow trees for the physical. Deep inside the soul for the metaphysical.
Besides, neither one is of any use to me whether they are stolen from me or I'm dead protecting them, so I might as well get my money's worth out of both ;-)
"unfortunate" could be replaced with other descriptions, though I understood from the article that traders:
"..have paid the full price for delivery of specific bars of gold or silver—and hold "warehouse receipts" to prove it."
Isn't that different in this case to hedgers who were trading paper? People like Celente, who are rightfully angry, really should have known better. This event has smashed the last remnant of trust in the system, that presumably was also based on a contract. Law. Jurisprudence. It was physical - now stolen physical - not just a promisory note. It was paid for, therefore owned. Not 'shared' (though possibly rehypothecated), which it will be now if pooled for creditor distribution.
And didn't the same amount of metal suddenly appear on the Morgue's table?
Previously content with fleecing the outsiders, the system has turned cannibalistic.
The Basque region.
they have 2000 years of saying "fuck you" to whemever they did not like. Even the Romans and Muslims cut deals with them rather than attempt to fight them.
They've been on my radar for a while too.
I like their attitude ;-)
That's good, but you shouldn't assume that 'the State' is your state. Having goods overseas buys you the opportunity to own assets and more importantly to move those assets under a different legal system to the one you are in. That can be useful when the shit hits the fan back home. There are many stable jurisdictions on this planet, not just the US, but if hollow trees and lakes is good enough for you, that's good.
Personally I'd like some protection from the system of rewards given to anyone turning in other trying to trade goods for physical metals as has happened at various times in the past...
Personally I'd like some system of rewards of physical metals given to anyone turning in the criminals as happened at various times in the past. =bounty
I didn't say they were criminals.
I am referring to todays hoarders of PM's who believe they will be able to exchange physical metal for goods post collapse without paying any taxes on the gain, if gain is what you might call it.
and whilst I think you jest, and you refer to other 'criminals', history records that many others were deadly serious about it, to the detriment of pm holders...
ahh, now i see yr meaning...yes jest, i meant the criminals at MFG, JPM, WH, Squidsville etc.. exchanged for physical bounty, as happened in times previously during the last 'Wild West'.
Nmewn, you are in fine form this morning, enjoying reading your posts.
Why, thank you. I do enjoy the exchanges.
Given enough time, I'm sure I can find my mouth with my foot ;-)
You are not alone...
We're cool.
I think I understand what you were driving at...diversifiation. But before that (at least for me) is risk management. With a 401k hanging out there (still) I don't put all my eggs in the states basket. Any state.
Enjoyed it...take care.
***To boot, the traders are still being assessed fees for storage of the commodities...***
And if they don't pay those storage fees they are going to be in deep shit!
Physical metals in your hands are the only way to go.
yes, but Physical metals in your hands makes you a target
wear it...full metal jacket
Being a target has more to do with presentation than with possession. There are people who die millionaires many times over- all to the surprise of their neighbors and co-workers.
That loss is a certainty, that's why we have taxes...
Was there still anybody who didn't know the MF global funds disappeared into a black hole?
They didn't see it coming.
Hang them all.
Don't worry. The banksters will have Congress pass retroactive legislation making all of this legal. And anyone objecting is a terrorist.
Don't worry. The banksters will have Congress pass retroactive legislation making all of this legal. And anyone objecting is a terrorist.
Ergo, the newly discovered terrorists can then be sent to Gitmo to reflect on their impertinence.
There, fixed it
FEMA is closer, and the view through slits in the carriages rather scenic. When the whole US is Gaza no more need for Gitmo.
If you own gold you are a terrorist. Those that escape the fiat ponzi via gold, (when the system has burnt to the ground and people are raging mad) will be targeted as being responsible for the collapse. If you hadn't sold all your fiat to buy gold our fiat would still be worth something. You have caused through your actions the destruction of the USA therefore anyone who can be shown to have purchased precious metals or be in possession of the same will be arrested and charged with engaging in terrorist acts. The gov. therefore encourages it's citizens to report all people they suspect are engaging or may have engaged in the purchase or exchange of precious metals to HLS. Because of the seriousness of these offenses citizens are empowered to shoot all perpetrators who resist or attempt to flee prosecution.
Have a nice life bitches
Goodbye futures markets -- hello a Brave New World.