JPMorgan is the gold market. They control 25% of all the gold contracts on the Comex. And they are on the long side of the trades. They are always on the right side of the trade and being long means betting that the price of gold will rise.
My timetable is anytime from the end of September, when gold typically moves up, or until after Bernanke leaves office. That’s six months max.
One of our followers sent me an article written by Michael Boskin titled The 2016 Disability Insurance. He suggested that I discuss it in the newsletter. No need to get into the article, but suffice it to say, it is another government program gone awry. The new fad is to issue warnings about Pension Plans. Jim Sinclair has focused on this subject for a while now too. We are walking in a minefield of problems just waiting to explode. These are but two and set against the big picture are just another couple of pimples on an acne-covered teenaged face.
But there is a much bigger issue than Disability Insurance and Pensions. It is bigger than manipulation of the gold and silver markets. I thank Bill Murphy and LeMetropole Café (www.lemetropolecafe.com) for calling attention to a very interesting article below. I think it deserves top billing today and I am presenting it at the beginning of the daily because most of our readers always read the opening section.
Commentary: All markets manipulated, capitalism getting killed
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) — Imagine 100 Goldman Sachs banks running America and the world. It’s happening. Forget politicians, Big Banks rule the world.
It was just a few years ago in “The Great American Bubble Machine,” a Rolling Stone feature, that Goldman was indicted by Matt Taibbi: “The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
Yes, till recently Goldman Sachs was boss, everywhere, the “world’s most powerful bank.” Taibbi: “From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression.” What an indictment.
Today every bank in the world is a Goldman wannabe. That’s capitalism at its peak. All competing to be the world’s most powerful bank. Seriously, look around: Your world really is dominated by this amazing new innovation emerging from capitalism — a bizarre conspiracy of Big Banks, maybe a hundred Goldman wannabes. These new Big Bank capitalists are rewriting the history of the world.
But we’re getting ahead of the story. Let’s review Goldman Sachs role in creating this new Big Banks Conspiracy.
Goldman Sachs, now the role-model for all global Big Banks
In “The Great Bubble Machine,” Taibbi says Goldman was the mastermind behind every great bubble in American history since it was founded in 1869 by Marcus Goldman and his son-in-law Samuel Sachs. Yes, one bank gets blamed for America’s amazing history: Bubble 1: the Great Depression. 2: tech stocks. 3: the housing craze. 4: $4 a gallon gas. 5: rigging the bailout … and now the latest Bubble 6: Global Warming.
Example: early on in this indictment, Taibbi focused on a chapter in John Kenneth Galbraith’s classic “The Great Crash, 1929,” titled “In Goldman Sachs We Trust” where the Harvard economist singles out Goldman’s “Blue Ridge and Shenandoah trusts as classic examples of the insanity of leverage-based investment. The trusts, he wrote, were a major cause of the market’s historic crash; in today’s dollars, the losses the bank suffered totaled $475 billion.”
That’s almost a half trillion in today’s dollars, prompting Galbraith to add: “It is difficult not to marvel at the imagination which was implicit in this gargantuan insanity … If there must be madness, something may be said for having it on a heroic scale.”
That’s Goldman Sachs key to success, crazy like a big fox, a mad money machine, an awesome Bubble Machine, making history, dominating the world from America.
Goldman Sachs mantra for domination: ‘Madness on a heroic scale’
Yes, Goldman Sachs’s reputation for over a century has been grown with this “madness on a heroic scale,” winning big because of its “gargantuan insanity,” constantly pushing the boundaries of ethics, integrity and morality while year after year since 1869 this “great vampire squid” keeps winning big.
So Goldman Sachs is the gold standard against which all other banks must compete, the front-runner in profits and wealth creation, the role model that defined the moral code necessary for competing in today’s financial world.
Goldman possesses a certain bold madness and borderline ethical behavior that today has not only been adopted by all its competitors on Wall Street but has also become the moral code running the collective brain of capitalists everywhere, corporate CEOs and Washington politicians.
And today it is being rapidly adopted by business and political leaders across the developed world, wannabes all competing, fighting to be the next Goldman Sachs.
All Big Banks now competing to be next Goldman Bubble Machine
Get it? Every bank in the world is now a Goldman wannabe. A subtle conspiracy. That’s globalization and capitalism at its best, all competing for a piece of the action, for the top spot formerly held by Goldman Sachs. Yes, a few short years ago Goldman Sachs was “the world’s most powerful investment bank.”
Today’s world includes four Wall Street banks each with assets over $1 trillion, each more than Goldman. Plus eight other big global banks each have over $2 trillion total assets, including, among the 100 largest, Barclays, HSBC, Deutsche, ICB-China and Japan’s Mitsubishi.
Yes, this new world is changing fast. Back in 2008 the world’s financial banks were in ruins. Wall Street sunk into virtually bankruptcy. Goldman and its Wall Street too-big-to-fail co-conspirators had trashed the global economy, triggered a virtual depression, and Wall Street’s casinos lost over $10 trillion of Main Street retirement funds.
But thanks to their Trojan Horse in Washington, Treasury Secretary Hank Paulson, a former Goldman Sachs CEO, the banks were able to deceive, con and manipulate Congress into bailing out not only Paulson’s old firm, but all his buddies in the Wall Street banking community, by giving away over $30 trillion of free cheap money, to be paid for by future generations of taxpayers, investors and a high-unemployment, weak recovery.
Yes, the Goldman Bubble Machine phenomenon turned into a rapidly spreading virus after 2008, infecting all banks worldwide. How? Pure capitalism, competition grounded in basic human psychology, behavioral economics and neuroscience research.
As we wrote recently, this “moral bankruptcy” virus was hard-wired in the collective brain of all the world’s bankers — a virus that began a long time ago in the Goldman Bubble Machine and now, since the banking industry’s 2008 near-death experience, has morphed into the new Big Banks Conspiracy that’s taken over the world.
Mass corruption is now the ‘new normal’ for global Big Banks
Don’t believe me? Any doubts about the world domination trend driving the Big Banks Conspiracy, then go to “The Big Picture,” one of the world’s leading financial blogs run by Barry Ritholtz, author of “Bailout Nation.” Last week he posted a powerful “Washington’s Blog” on the “Manipulation” that’s is a pandemic of corruption across America and the global banking world. That analysis of “Manipulation” is brilliant. Here’s a summary:
But before you read: You must mentally translate all references to “manipulation” into what they really mean, phrases like: corruption, scam, con job, gaming, cheat, fraud, price-fixing. Why? Because that is the real meaning: Wall Street and the world’s Big Banks are not merely engaged in “manipulations” common in commercial transactions.
The banking industry is engaged in a subtle conspiracy of unethical, immoral, dishonest, corrupt, illegal, and outright criminal behavior, for profits … cheating investors and taxpayers, conning the government, buying off politicians and setting America up for a massive crash, bigger than 2000 and 2008 combined. Their rationale? That’s the logical next phase for capitalism!
Far worse, this dark behavior has already metastasized far beyond the pre-2008 actions of the Goldman Sachs Bubble Machine. Today this behavior is everywhere. “Everything is rigged.” This corrupt behavior is so pervasive among banks; even the American people seem to accept it as part of our economic “new normal.”
Yes, this behavior is so common not only do bankers believe it is essential to compete in today’s capitalist world, their clients in Corporate America and throughout the global business world accept it.
Big Bank Conspiracy has ‘broken virtually every law on the books’
Today, “big banks manipulate every market they touch … huge government subsidies were used for speculation … throwing money at banks doesn’t help the economy.” In fact, despite his delusion of saving the world economy, Fed Chairman Ben Bernanke’s policies were “a major source of the crisis.” To stabilize the economy we need to “break up the banks,” but unfortunately “the big banks own D.C. politicians.”
The Washington’s Blog on “The Big Picture” is the must-read of 2013, exposing how Wall Street and the banking world are taking over America. Read some of their more than 50 links to all the toxic examples of the banking conspiracy driving our world to the third market crash of the 21st century, a collapse of the economy and the Great Depression II.
Beyond the tens of millions of overcharges in energy markets, Wall Street’s “Big Banks have manipulated virtually every other market as well — both in the financial sector and the real economy — and broken virtually every law on the books.” Yes, they’re corrupt.
Here are more examples of the Big Banks Conspiracy’s illegal manipulations: They “have been conspiring for decades to manipulate commodity prices” with a wholesale “takeover of the real economy as well as the financial system.” Their conspiracy includes widespread insider trading … rigging Libor interest rates for $800 trillion in assets, which still hasn’t stopped … price-fixing the $1,200 trillion derivatives market … currency markets are “massively rigged” … gold, silver and oil prices are illegally fixed … Today virtually “everything can be manipulated through high-frequency trading … stocks, bonds, options, currencies and commodities.”
The 50-plus examples of the Big Banks Conspiracy also includes: Price-fixing of billions in fraud against local governments and pension funds … bogus fees to store gold bullion, without ever owning gold … frauds in mortgage origination fees … cheating homeowners in foreclosures … charging unlawful mortgage fees … pushing bad investment deals “then betting against the same investments.” … illegal front-running and “wash trades” … “participating in various Ponzi schemes” … “cooking their books” … and “bribing and bullying rating agencies to inflate ratings on their risky investments.”
Bottom line: Goldman Sachs has become just another second-stringer in the new global Big Banks Conspiracy as capitalism appears about to self-destruct Adam Smith’s ideal and trigger the third major market crash of the 21st century, followed by a collapse of the economy, driving America and the world deep into a new Great Depression. Be prepared.
–Le Metropole Cafe, August 7, 2013
Paul Farrell is no lightweight…
Paul Farrell writes the column on behavioral economics for MarketWatch. He’s the author of nine books on personal finance, economics, and psychology, including “The Millionaire Code,” “The Winning Portfolio,” and “The Lazy Person’s Guide to Investing.” Farrell was an investment banker with Morgan Stanley; executive vice president of the Financial News Network; executive vice president of Mercury Entertainment Corp; and associate editor of the Los Angeles Herald Examiner. He has a juris doctor degree and a doctorate in psychology.
–Market Watch, August 7, 2013
My reason for highlighting this article is because, over the years, we have written about the manipulation of gold and silver by several of the large New York bullion banks, and have shined the spotlight on JPMorgan and Goldman Sachs. A number of our readers have told us that its nonsense; gold and silver are not manipulated. MSM has ridiculed Bill Murphy and the good folks at LeMetropole Café. Murphy and Chris Powell have documented their case sufficiently to garner respect, but they still are considered “fringe” because of their views on manipulation. Actually, so has Andy Hoffman who writes his own newsletter for Miles Franklin (though the views he expresses are his and not necessarily those of Miles Franklin).
LeMetropole Café are blackballed by the MSM and they are never allowed airtime or articles in major publications. They are the poster child “Conspiracy Nuts” and I for one happen to disagree. I have followed their work for over 10 years and they are only presenting the facts, that too many people refuse to consider.
But here is an article, written by a man with superior credentials who goes well beyond LeMetropole Café’s gold and silver manipulation thesis. After you read this, decide for yourself. If you think he is over the top, that’s fine, it’s your choice. I think that he deserves to be heard.
I think it is very important that our readers understand that we think manipulation is now a fact of life, and the deck is stacked against all of us. It’s not just gold and silver. It’s not just a couple of large banks. It’s the new world that we live in.
Rather than despairing over this, I think it is another very good reason to do everything in our power to gain financial independence and own assets that are outside of the system. Granted, it doesn’t look like gold and silver are exempt from the manipulation now, but that day is coming. Gold and silver will break free and when they do, the explosion will be heard round the world. In fact, they may be the chink in their armor and their Achilles heel.
Luminaries like Jim Sinclair and Eric Sprott have told you where they think gold and silver are headed – and if they are correct, fortunes will be made; but there are other reasons to own precious metals. Physical metals, in your possession, offer a degree of financial safety and security that no “paper” investment can give you. And that includes mining shares and ETFs. They represent the “investment” side of precious metals, the paper side. The shiny gold and silver coins and bars in your possession, or safely stored outside of the country, are the ultimate form of insurance, one that any rational person hopes never to have to rely on.
All it takes is a little faith and a little patience. This is where you want to shelter a significant portion of your wealth. It might be our best or only option to break free from this out-of-control monster that we have allowed to take control.
Finally, before I hand this over to Bill Holter I want to briefly comment on Ranting Andy Hoffman’s Wednesday newsletter. Andy expressed his views on Homeland Security and 9/11. Miles Franklin’s view is that these topics are best left for the likes of Alex Jones and Brasscheck. I know we have readers who like to enter into this controversy but we also cater too many who would be offended by it. The fact is, topics like this have no place in our newsletter. Our focus is elsewhere. Andy’s views are Andy’s views and should not be taken as the Miles Franklin position. Andy has free reign to write pretty much what he wants to, but we really do not want to focus our readers on issues outside of finance and the economy. We have a disclaimer at the end of his Rant, but I am making a special point, in this instance, to distance myself from his comments and the topic in general. No disrespect meant to Andy or to anyone who agrees with his comments.