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The Gold "Rehypothecation" Unwind Begins: HSBC Sues MF Global Over Disputed Ownership Of Physical Gold
That paper gold, in the form of electronic ones and zeros, typically used by various gold ETFs, or anything really that is a stock certificate owned by the ubiquitous Cede & Co (read about the DTCC here), is in a worst case scenario immediately null and void as it is, as noted, nothing but ones and zeros on some hard disk that can be formatted with a keystroke, has long been known, and has been the reason why the so called gold bugs have always advocated keeping ultimate wealth safeguards away from any form of counterparty risk. Which in our day and age of infinite monetary interconnections, means virtually every financial entity. After all, just ask Gerald Celente what happened to his so-called gold held at MF Global, or as it is better known now: "General Unsecured Claim", which may or may not receive a pennies on the dollar equitable treatment post liquidation. What, however, was less known is that physical gold in the hands of the very same insolvent financial syndicate of daisy-chained underfunded organizations, where the premature (or overdue) end of one now means the end of all, is also just as unsafe, if not more. Which is why we read with great distress a just broken story by Bloomberg according to which HSBC, that other great gold "depository" after JP Morgan (and the custodian of none other than GLD) is suing MG Global "to establish whether he or another person is the rightful owner of gold worth about $850,000 and silver bars underlying contracts between the brokerage and a client." The notional amount is irrelevant: it could have been $0.01 or $1 trillion: what is very much relevant however, is whether or not MF Global was rehypothecating (there is that word again), or lending, or repoing, or whatever you want to call it, that one physical asset that it should not have been transferring ownership rights to under any circumstances. Essentially, this is at the heart of the whole commingling situation: was MF Global using rehypothecated client gold to satisfy liabilities? The thought alone should send shivers up the spine of all those gold "bugs" who have been warning about precisely this for years. Because the implications could be staggering.
Probably the core primary consequence of this discovery, which obviously has a factual basis, or else it would not lead to an actual lawsuit between two "reputable" firms (aka ponzi participants), is whether gold in the GLD warehouse, supervised by HSBC, is truly theirs, or has it all been hypothecated from some other broker who never really had the asset or the liquidity, and so on in what effectively can be an infinite chain of repledging one asset to countless counterparties. Because if there is on cockroach...
Suffice to say, expect either a prompt settlement in this lawsuit, or a fervent denial by all parties involved that any gold was misplaced. Because here is the punchline: each physical gold or silver bar has a unique deisgnator that should never be replicated, yet this is precisely what happened to lead to the lawsuit! In a non-banana world, there should never be any debate over who owns a given physical asset, as replicated ownership (note - not liens) effectively means someone stole the gold (or there was counterfeiting involved) and was never caught... until MF Global finally expired of course.
So in other words, is this the eureka moment when everyone realizes that any gold, be it paper or physical, is either a irrelevant electronic binary claim held in some semiconductor, or at best an asset in some vault, that the brokerage next door suddenly also has claims over?
The end result is that the biggest loser is Joe Sixpack who bought the gold, and decided to keep it in a bank warehouse for "safekeeping" only to realize said gold will never be seen or heard of again.
From Bloomberg:
Five gold bars and 15 silver bars underlie eight Comex contracts between the brokerage and client Jason Fane of Ithaca, New York, London-based HSBC said in a court filing yesterday. Both parties have asserted claims to the bars, creating difficulties for HSBC, which is storing them, the bank said, asking a judge to decide who the rightful owner is.
“HSBC has received conflicting instructions regarding ownership and disposition of the property,” it said. “Accordingly, HSBC is exposed to multiple liabilities with respect to the disposition of the properties.”
According to Fane’s letter, the five Comex gold contracts are for an average of 99 ounces of gold each.
Giddens, who is liquidating the brokerage, has transferred about 38,000 commodity accounts to other firms. Three transfers of collateral made and pending will give commodity customers more than $4 billion of their assets, according to court filings.
The punchline:
The judge handling the bankruptcy said today he would deal in January with issues about distributing physical goods, such as gold and silver bars, after lawyers for some customers said they couldn’t get their share of the payouts because bars can’t be broken into pieces.
...indeed there is a reason why people say gold can not be diluted.
As for our advice: move any gold out of the LBMA or CME warehouse system immediately. And only treat any GLD investment as a day trading vehicle that can and will be lost the second there is a global liquidity or solvency freeze, because that particular asset will be wiped out as easily as "C:\format C:"
The brokerage case is Securities Investor Protection Corp. v. MF Global Inc., 11-02790, U.S. District Court, Southern District of New York (Manhattan). The parent’s bankruptcy case is MF Global Holdings Ltd., 11-bk-15059, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
Update: as reader D points out, none of this should come as a surprise: after all the UK financial regulator, the FSA, already warned about each step of this unwind back in March 2010.
3.1 In this chapter we consider restricting two practices we believe pose an unacceptable risk to protecting client money and assets, and financial stability.
a) Restricting the placement of client money deposits within a group
Scope
3.2 Please note that our policy proposals in this section apply to UK authorised firms that place client money in client bank accounts held with a group bank, credit institution or qualifying money market fund. These requirements will not apply to incoming EEA firms conducting investment business, as under MiFID regulating client assets is a home state responsibility. We will consider extending these proposals to general insurance intermediaries when we begin reviewing CASS 5 – Insurance Mediation Activity in the first quarter of 2011.
Intra-group client money deposits
3.3 CASS contains guidance requiring firms to conduct an appropriate level of due diligence on institutions with which client money is held and to ensure deposits are appropriately diversified. We currently allow firms to hold client money with a deposit taker within the same group as the firm subject to appropriate due diligence and diversification.
3.4 There is no standard market practice for depositing client money within a group structure. For example, a number of investment firms take an explicit decision to hold client money deposits outside of the group, while other firms deposit significant amounts intra-group. Existing handbook provisions seek policy outcomes that ensure an appropriate level of diversification is achieved to protect clients’ money.
3.5 CASS contains provisions regarding a firm’s selection of a bank, credit institution or qualifying money market fund. A firm must exercise all due skill, care and diligence in selecting, appointing and periodically reviewing the institution where the client money is deposited and arrangements for holding this money. Handbook guidance also provides a list of matters a firm should consider in the process.
3.6 The money deposited at a group bank is held on trust by the firm for the firm’s clients, but it is treated as an ordinary banking deposit at the bank. Put another way, all client money at the end of a chain will eventually be held as a deposit. There is always a risk that a bank with which the deposit is held will enter insolvency proceedings and at this point it becomes possible that not all money deposited in client bank accounts as client money will be available for return to the underlying clients. Accordingly, the regime does not envisage a 100% return to clients in the event that client money is lost due to a bank’s insolvency, with CASS providing that clients will generally share rateably in the loss.
3.7 The issue under consideration is not that the funds are held as a deposit, but that when held within a group, there is an increased contagion risk that both the investment firm and the group bank or affiliate will fail simultaneously (or one will fail shortly after the other).
3.8 The resulting risk is that a firm will place an inappropriate amount of client money intra-group, usually as a source of liquidity, which has a lower cost of capital than external sources. Furthermore, as a group’s financial position deteriorates, there is a risk that firms within the group will deposit more client money intra-group to fund operations. This may give clients an inappropriate level of exposure to the bank’s credit risk. It also may lead to clients unfairly bearing the risk of the group as a whole, rather than just the individual firm. The existing sourcebook provisions which address this mismatch of firms’ and their clients’ incentives can be strengthened so the risk to clients is mitigated in the event of a firm’s default.
3.9 Imposing a hard limit on the proportion of client money which can be held intra-group is attractive and will mitigate concentration risk. However, limiting the level of client monies held within a group may increase overall credit risk where outside options are less highly rated. We have considered consulting on the basis of a 20% limit in order to fully identify stakeholders’ concerns, particularly if there is a knock-on effect on liquidity.
3.10 We have worked with firms during 2009 to reduce the concentration of client money held intra-group. During pre-consultation firms estimated that the proposals would result in an increase of approximately 10–25 basis points for additional costs, together with removing stable funding and increasing compliance and operational overheads.
3.11 Accordingly, we propose limiting the amount of client money held by a firm which can be deposited in intra-group client bank accounts to 20%. We understand firms may require some flexibility in holding money intra-group (for example, where a firm’s client specifically requests their money is held with that specific institution) and propose to address this on a case by case basis. We also propose changing existing guidance into a rule to provide a clear basis for our expectations.
3.12 We take this opportunity to highlight that our proposal to re-introduce a client money and asset return to the FSA (see below) which includes content regarding intra-group client money deposits.
b) Prohibiting the use of general liens in custodian agreements
Scope
3.13 Our proposals apply to all UK authorised investment firms and overseas branches of these UK firms. These requirements will not apply to incoming EEA fiirms conducting investment business as under MiFID regulating client assets is a home state responsibility.
3.14 Some firms in the UK appear to have inappropriately allowed custodians and subcustodians to include general liens covering, for example, group indebtedness to the custodian or sub-custodian in contractual agreements, or they have failed to pay due regard to this issue. As we have observed from LBIE’s insolvency, liens have contributed to significant delays or obstacles in an IP’s ability to recover assets from depots not under their direct control.
3.15 CASS 6.3.3G requires a firm to consider the terms of its agreements with third parties with which it will deposit a client’s safe custody assets. As part of this guidance, the firm should consider restrictions over the third party’s right to claim a lien, right of retention or sale over any safe custody asset in the account, as well as identifying client assets separately from assets belonging to the firm.
3.16 We believe the sourcebook can be enhanced with hard rules rather than guidance in this regard. This would enable us to effectively monitor compliance and take enforcement action where appropriate.
3.17 Accordingly, we are consulting on the basis of changing the existing guidance into a rule. We propose creating a rule that prohibits using general liens over client assets which are held under custodian agreements, except to cover the situation when a firm (or if the client has a direct relationship with the custodian, the client) does not pay custodian fees and charges to the third party holding the custody assets.
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Rehypothication - weren't they warned about this disgusting habit as teenagers?
Step 1: Buy physical gold and silver
Step 2: Hide safely until GLD crashes and burns
Step 3: Profit
Monedas
Thanks for the over zealous, pretentious retort to a pretty damn good question.
DollarMenu
Thanks for the analysis--I absolutely agree.
Warren Buffet thinks, because that is all he has ( LEFT). Solar and Reading RailRoad? LMFAO!
Warren: "Go to jail. Go directly to jail! Do not pass go! Do not collect $200.
Here's a billion:
1,000,000,000,000 (12)
Here's a trillion:
1,000,000,000,000,000,000 (18)
Your universe is approx 14 billion years old.
Your banks held approx $615 trillion in OTC's 2009 (source: BIS). God knows the total amount in 2011.
It's a joke. It's all a joke. Mother, forgive me?
Never divide by zero
Here in the US, we use the short scale.
100 = Here's a hundred (10^2)
1,000 = Here's a thousand (10^3)
1,000,000 = Here's a million (10^6)
1,000,000,000 = Here's a billion (10^9)
1,000,000,000,000 = Here's a trillion (10^12)
You must be from England or something. But point taken, a trillion is nothing to sneeze at in either system.
Hmm, true. +1 for the correction, my bad.
I also got the age wrong, apparently we're only at 13 billion +/- 0.17 years old (thought that had changed due to recent papers, but hey) and we can see 93 billion years (cubic) area.
The point being that we've invented a system where our numbers are bigger than the known universe (and if we want to get onto "grains of sand", there's a good paradox there). Which is fairly insane. Especially if $1 gets you a chocolate bar. Now I'm left wondering if the physical space taken up by 615 trillion chocolate bars is larger than the volume of the Earth.
Bottom line: informationally, I'm not sure our current processing power can actually deal with that amount of data (given that each unit interacts with each other). Which is the real issue. It seems not only impossible to model, but actually impossible to track if every $1 is in action in the global economy at once (even as a nominally 'future' timed $1). 615,000,000,000,000 discrete interactions produces a stupid number if you're trying to model how flows etc happen. Banks have, quite literally, gone into this: http://www.youtube.com/watch?v=ou6JNQwPWE0
Which was the point of the divide by zero video.
No-one should have any faith that the Banks have any idea how these amounts are working, because, simply, they lack the processing power to model it. Ecology / climate models should have told them that...
there are more atoms, in a glass of water, than there are glasses of water, in all the oceans of the world.
Yes, yes, yes...
But if you've done fluid mechanics or fluid dynamics, you'll know the issue is modelling the fuckers.
Brilliant....can someone do the math on the chocolate bars? This reminds me of something from hitchhikers guide to the universe....
Mars bar measures 9.5 centimeters in length, 3 centimeters in width, and 2 centimeters in depth. It weighs approx 47g.
(Please note this is a standard UK / EU mars bar, not a US mars bar which is strange and doesn't count ).
57cm3 = 0.000057 m3
x615 trillion = 35,055,000,000 m3. Or approx 35.055x109
Or, approx: 35.055 Km3
The size of the Earth is approx: 1.08 x 1012 Km3
Mercury is approx 6.083 x 1010 Km3
Mars bars don't cost a $1, they cost 1/2 of that...So we're about 70 Km3
So, yes, not enough chocolate bars for a decent planet. More than enough to bury London or DC under though.
....Never divide by zero...
Alas, thats what our financial system is best at! And our politicians seem to think its the solution!
The Crimex, with its side-kick, never hearing-never seeing CFTC will probably attempt to wall-paper all this over the weekend.....'keep moving along, nothing to see here.....'
Let's tie them to the railway track....Buy physical gold and silver !!
No worries. Your colateral is in treasuries.
http://www.reuters.com/article/2011/12/09/us-rosenthal-mfglobal-idUSTRE7B828420111209
By law, any party holding property of clients of MF global have to hand that property back to the original owners/lenders.
IE: if you lend a bank money , and that bank goes under , but another bank took the money that you lent to the bank that failed, that bank has to give you back the money.
A lender can not collect on another persons loan to pay off the obligations of the original holder.
If I loaned you a dollar, but you already owed sam a dollar you cant pay off sam with my dollar and go bankrupt, sam would have to give me back my dollar.
Also, they are not allowed to loan what is loaned to them (this is why banks cant actually lend your deposits and why they are forced to counterfeit money digitially to make loans (credit)) all credit is private money, the borrower lends the money to the bank and the bank lends it right back to the borrower as credit (counterfeit digital curency), thats how loans increase the money supply, and thats how loans create bubbles.
Then the bank pretends it lent money and tries to collect on collateral that it has NO JUSTIFIABLE RIGHT TO COLLECT ON.
APPARENTLY YOU DO NOT KNOW HOW UK LAW AND AMERICAN BANKRUPTCY INTERACT.
YOU ALSO DONT KNOW THE RECENT LAWS PASSED BY CONGRESS REGARDING UNALLOCATED FUNDS IN MARGIN ACCOUNTS.
YOU HAVE A LOT OF LEARNING TO DO. SOME ACCOUNT HOLDERS HAVE NOW BECOME UNSECURED CREDITORS.
IMPORTANT LESSONS. READ THE FINE PRINT. NEVER WORK WITH A BROKER THAT HAS A LONDON SUBSIDIARY.
Albeit , The Douche Bags that be. Will find some micro, cosmic, quasi ( death star), to blame fallibility on.)
Disclosure:
I recently did one of those cute rants about banks (here) where I stated: Disclosure: Big Bank, moved to the east recently.
That was, of course, HSBC.
Oh, and format c:\format C: is useless: try del /F /S /Q from the root directory or sudo rm -Rf / for linux.
comex shitting ... bricks
Comex? That is what of (? what in the F/X market) ?
If you don't have it in your possession you don't own it. If it's written on paper it is worth the paper it is written on. Keep physical gold and silver "cool, dry and nearby". Can I can make it any more simple!?
He was being snarky.
He's not into this side of the market, and doesn't care.
Just a friendly head's up.
So for a 401K, is it safer to buy the physical gold/silver and have to store it under the Trustees (Sterling Trust) care (and pay a small fee and have slow redeemable options) or buy reputable physical ETF's like Canada's CEF, and Sprotts PHYS/PSLV (and pay a higher premium but can liquidate more quickly)? I mean can either of these be taken like MF Global?
If you rely on a belief system in which a magic formula such as '401K' has any efficacy, you are still doomed to suffer when the 'Bonfire of the Paper Vanities' is finally lit. Unlearn these sorceries and you will become free. Any vehicle whose purpose it is to avoid taxes on paper profits will be swallowed up when the F5 whirlwind rips the roof from the archive. The criminals will absorb all digital values in order to fulfill their own parasitic mandates. BUY SEED NOW!
Spend some time on ZH, read the articles and the comments. You'll get the general idea that 1) The system is falling apart; 2) you need to learn to protect yourself and that means unlearning much of what you believe to be true if you're going to survive; 3) don't expect family, friends or your financial advisor to agree with what you read here and 4) stop paying attention to the mainstream media because they exist to keep you complacent.
Two recent articles to get you started on the current state of things:
http://www.zerohedge.com/news/egon-von-greyerz-there-no-deus-ex-machina-left
http://www.zerohedge.com/news/why-uk-trail-mf-global-collapse-may-have-apocalyptic-consequences-eurozone-canadian-banks-jeffe
Good luck.
I like smart girls
This was a takedown, Scrabble tripple word score. Stole $1.2Billion in customer cash, avoided pending comex gold default, improved balance sheet of JPM. Brilliant solution for tripple score. Should be 6x score for using the too big to jails to pull it off.
The reality is that for every paper dollar of contracts, there is less than 1 cent of real assets. Soon, everybody is going to realize this.
Read:
http://www.wix.com/andrewcostell3/simple-wealth-book
I am going to take the 72% of my cash arriving from MF Global the next few days (hopefully) and go physical. I have learned my lesson. I just hope I get the remaining 28% back before and my fiat currency becomes worthless.
Im very happy for you....I hope eveything works out....there are still people on this planet who care about each other and WE are the ones we've been waiting for....
'WE are the ones we've been waiting for...'.
Big arrow up for you. Effing brilliant!
Buffett = Scum =financial terrorist= traitor= gallows.
In the Disney (child exploitation groomer) movie Wallee, during the first few segments where Wallee is going to work, he rolls over "BnL" bucks, they are everywhere like litter, the implication is that over consumption and worthless currency had a part in the destruction of that society. And of course what do Keynes, Lenin, Albert Pike, and some Rothschild shit bag all say; "the surest way to destroy a society is to debauch the currency".
The false prophet from the Alex Jones Show Rev. Lindsey something, said on air one time that it "is their (the elites) code that they have to let you know what they are doing".
I think putting their plans in cartoons must qualify in some sick way that "oh ya, we told them that we were going to destroy their society by debauching the currency in that Walllee movie".
It must be part of Satan's deal with God that he can rule with deception but has to give us some "disclosure", Lucifer is at the top of that Freemason pyramid, Albert Pike acknowledges so in Morals and Dogma.
Ok, ok, ok.
First off, it is "Wall-E".
Second off, "child exploitation groomer". WHAT THE FUCK?
Wall-E is alone on a planet. He falls in love with EvE who is a mature, white, sleek adult robot. No children there.
We meet the fatties (HI AMERICA!) - John the fattie meets Jane the fattie after their mobiles crash. No children there.
Little girl loves her teddy. Everyone she interacts with is already in love so... Apart from the Captain, but he's in love with the idea of knowledge.
Ok, Mr Super Morality Man, I'm all ears for this one (and btw - I happen to think that the Lion King is a fascist tale, and that most Disney films are sick ideological tropes)
/sigh. Ok, I was trolled. Leaving response here due to shame.
I should have specified that I think the Disney media franchise grooms child viewers for exploitation.
For example, what do the recent cartoon about "how to keep a Dragon" and the cartoon Jungle Book 2 or 3 or whatever have in common? It is sick and I can't bring myself to type it, but I noticed the same gist in advertisements for both movies. Hint: it has to do with ejaculation.
Then there was the "sailing space movie", where the kid's Dad takes off and then the old pirate takes him on a joy ride in his scooner, the old prirate is at the tiller at first, but then he hands it off to the kid, and you can clearly see that the handle of the tiller is a phallus.
This subject is embarrassing but true. The elite are child abusers and there are sick people running the show in this country.
I " Hypothesize/ or what ever spelling? A marriage' Of debt' , Sunday!
If I were to pontificate<>
Being unable to clear your trades next week or after is gonna ruin all our days.
Take delivery, register your trades in your name and take all clearinghouses out of your finances.
I remember seeing the Cour silver miner working in the mine, the guy punches a clock in the am, rides an elevator a mile underground into a dark, dank, cave, spends the entire day mostly by his lonesome lying atop an excavator scooping and loading the blasted rock and rubble onto a platform that hauls to the surface. The guy does this all f--k-- day long. The amount of rubble this guy excavated in one day that I recall was about 10-12 truckloads yields a chunk of unrefined metal the size of a loaf of bread. Silver easy to mine and refine? don't think so, and it appears that the ore close to the surface is pretty much gone. Be your own Central Bank, keep stacking.
Isn't Jon Corzine the crooked sonofabitch that tried to sell the New Jersey Turnpike to a Cayman Islands Holding Company? How's that going pards???
Anything is possible with those paper silver funds, while a CEF prospectus will keep you busy reading for a whole 12 pages, the last SLV offering memorandum kept me in suspense for over 100 pages. It goes without saying from this old grizzled and gray skinflint, their is something to be said for a prospectus that prides itself on being thin to win A
"multiple liabilities with respect to the disposition of the properties.”
Seriously guys, it's like ur allergic to the spontaneously self-regulating nature of free markets.
I hope the invisible hand of Adam Smith comes and spanks yo ass.
-
Small world: I actually know Jason Fane.
One of the lawyers representing HSBC's lawsuit recently announced a career change. Maybe the thought of digging into this MF shit made him crack. His new career isn't much different from being a lawyer:
http://youtu.be/BUpa1lW-Uyo
dupe!
"Because if there is on cockroach..."
Are you fucking serious? Are you offshoring the writing of these articles to China to save money?
What are you talking about? That is an American saying.
Used with great effect by exterminators.
I can't believe I'm saying this, but NEWT seems to know what's up...
Generation Zero 2010 DOCU DVDRip XviD-DERANGED
GREAT documentary... @ TPB
I give up.
Ron Paul inspired me to meet my enemies.
I'm tired of fighting. Let's have a conversation.
I think America should end our wars.
your enemy is yourself and death; so you will never know peace until you have faced them; its a fight of a lifetime, so enjoy it.
What is true for individuals is true for nations. Having a conversation is also fighting. It cleans the head. Just like making love cleans the spirit, if its love.
well, well, well, old bob-the-bigot is now willing to throw off his ignorance and renounce his racist beliefs?
wonders of this world will never cease!
Wow. After reading the article and many of the comments, all I can say is Wow! This seems to me a major game-changer and I am in a near constant state of amazement that there are actually people who have (probably) serious money in GLD and SLV and the like and yet these funds are likely nothing but vapor.
Epic thread is epic? Best article PLUS best Trav trolling in ZH history, +10.
This thread was epic Fight Club. Most entertaining and informative.
I am you new "Laaaandlord".
This must be why Central Banks own physical bars of gold and silver...not the paper stuff?
My guess they will settle, as TPTB will never allow this can of worms to be opened.
However if they do......I'll buy my own island ;-)
http://www.youtube.com/watch?v=Y7LG86wGG8s&feature=related
Steve Earle - No Place to Fall (Townes Van Zandt cover)
.
TOWNES VAN ZANDT
"No Place To Fall"
(Townes Van Zandt)
If I had no place to fall
And I needed to
Could I count on you
To lay me down?
I'd never tell you no lies
I don't believe it's wise
You got pretty eyes
Won't you spin me 'round
I ain't much of a lover, it's true
I'm here, then I'm gone
And I'm forever blue
But I'm sure wanting you
Skies full of silver and gold
Try to hide the sun
But it can't be done
Least not for long
And if we help each other grow
While the light of day
Smiles down our way
Then we can't go wrong
Time, she's a fast old train
She's here, then she's gone
And she won't come again
Won't you take my hand
If I had no place to fall
And I needed to
Could I count on you
To lay me down?
http://www.youtube.com/watch?v=m2lge0ZnSEI&feature=related
tvz. ...
Duplicate
http://www.youtube.com/watch?v=IjlIEC8tr-A
Time Has Come Today - Steve Earle
.
"time has come today
young hearts can go their way."
.
speaking of duplicate !
.
Die Hunns - Time Has Come Today
http://www.youtube.com/watch?v=_CH0XTD6fUc&feature=related
.
the original .....
.
Chambers Brothers - Time Has Come Today (live)
http://www.youtube.com/watch?v=_I4S61Do-Qs&feature=related
Brilliant. But this is his best.
Steve Earle: The Revolution Starts Now.
http://www.youtube.com/watch?v=AirdHLCj4MY&feature=related
http://www.youtube.com/watch?v=EG8ZUaLACZ8
Harvey Organ has posted this today regarding this apparent gold run:
The two ETF's that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.
Thus a default at either of the LBMA, or Comex will trigger a catastrophic event.
See: http://harveyorgan.blogspot.com/2011/12/extremely-important-more-fallout...
"... just ask Gerald Celente what happened to his so-called gold held at MF Global, or as it is better known now: 'General Unsecured Claim',"
I presume Celente should've practiced what he preached.
With so much shit around about to hit the fan, should we be 'shorting' it or taking a long position?
definitely
Hyper-hypothecation. The international banking/clearing/ponzi system is a Möbius Strip of Picasso hieroglyphic instructions and seamless Euclidean pathways; checks writing checks. Escher1,000,000,000,000. This sucker's goin' down.
Australian Housing Bubble Starts to Pop!
End of the Property Dream' - Business Review Weekly
'In the ten months to October, seasonally adjusted home prices in Melbourne are down 5.8 per cent, second only to Brisbane's 7.5 per cent fall in that period, according to RP Data.' - The Age
'Glut and doubt blow house prices down - The value of houses and apartments fell for the 10th consecutive month in October ... a glut of unsold properties.' - AFR 1st Dec
'There's still more than 300,000 homes for sale around Australia' - Tim Lawless, RP Data The housing bubble is striking closer to home for more Australians by the day.
From The Daily Reckoning web site. The Global situation looks bleaker by the day....
Long time a comin'
Question: What role does fractional reserve banking have in taxes that the IRS collects to service US Debt? Does the FED leverage taxes by some ratio? I guess what I'm asking is: How big is this pyramid scheme?
It's really simple folks, scratch below the surface and you will see there is no gold. Not only is there no gold but there is no money either. It's a perpetual ponzi scheme thats only purpose is to suck the money and gold out of the system only to be stashed away by a few privileged oligarchs. What is happening now is the inability to run the perpetual ponzi because the peak has been met where the outflow becomes bigger the the inflow. It's not rocket science, it's very easy to understand if you take the time to understand the big picture. This has been going on for decades however we have now crossed the rubiCON and there isn't enough resource to turn back... So while the bitchfight begins over ficticous shiny stuff and digital 0.000's on balance sheets across the globe, soon they will realize that what they thought was real, is really nuttin more then iou's meanwhile the real stuff had already been looted and spent a long time ago...
http://www.youtube.com/watch?v=7GSXbgfKFWg
Corzine seeking new position at ECB?
http://www.youtube.com/watch?v=1yXGsqy9R7E
Look over there! No, I said don't look that way, look over there..
Finland Threatens to Exit Rescue Fund If No Unanimity
IDBI MF Launches 540 Days Fixed Maturity Plan
NFO Period from 5 December to 13 December 2011
IDBI Mutual Fund has launched a new fund named as IDBI FMP - Series II - 540 Days (December 2011) - A, a close ended income scheme with the duration of 540 days from the date of allotment. The New Fund Offer (NFO) price for the scheme is Rs. 10 per unit. The new issue will be open for subscription from 5 December and closes on 13 December 2011.
The investment objective for the scheme will be to generate regular income through investments in debt and money market instruments. The scheme offer dividend option (payout) and growth option.
The scheme will allocate 100% of assets in money market instruments, debt instruments (including government securities, floating rate debt instruments and securitized debt). Investment in securitized debt not to exceed 50% of the net assets of the scheme.
Investment in Derivatives will be up to 50% of the net assets of the scheme. Investment in derivatives shall be for hedging, portfolio balancing and such other purposes as maybe permitted from time to time. The cumulative gross exposure through money market instruments, debt and derivative positions should not exceed 100% of the net assets of the scheme. Minimum application amount is Rs. 5000 and in multiples of Rs. 1 thereafter. The fund seeks to collect a minimum subscription (minimum target) amount of Rs. 20 crore under the scheme during the NFO period.
Entry and exit load charge will be nil. Units of the plan will be listed on the National Stock Exchange, in order to provide liquidity. Benchmark Index for the scheme is CRISIL Short Term Bond Fund Index and will be managed by Mr. Gautam Kaul.
I simply can not choose between gold and silver.I like
them both for different reasons,so I buy both.
50%gold 50% silver and adding to mantain my ratio
witch provides me a great entry point over the years.
We're about to see Dawin's theory of natural selection come into play -
No friend no. We're about to see Nassim Taleb's confirmation bias theory come in to play for the over privileged who've used meaningless biology theories as a license for grand theft spanning generations.
Close though. You missed it by that much.
There are good reasons to prefer physical gold and silver to the paper variety, but I fail to see how the MF Global "The Producers" scam of pledging the gold HSBC are holding for them/their clients to multiple parties has any bearing on the gold HSBC is holding for GLD...unless you believe the trustees of GLD are borrowing against their own clients' gold and using the proceeds to buy Eurozone sovereign debt. :-)
Things are mos def bad, but not that bad.
"Too Fast To Stop" - Hank Paulson On What Happens When A Bank Run Results From Terrified Depositors (You) Who Start Withdrawing All Of Their Cash
To all ZeroHedge newbies, take 1min 12secs out of your life and watch this video clip from Too Big To Fail in which Treasury Secretary Paulson explains to his wife how fast it might all collapse
http://bit.ly/uhDW4e
George ... The Greek ... From Canada