JP Morgan Secretly Stockpiles Silver and Gold—Blood Money

By Dominique de Kevelioc de Bailleul

Leave it to Max Keiser to pick up on the Silver Doctors article, titled, “Is JP Morgan Shorting Paper Metals While Acquiring Massive Physical Stockpiles?

If Keiser, who himself appears to have once been a clever and scheming juvenile delinquent, believes the article’s supposition reeks of the devil’s sulfur, there may be more than a sliver of truth in it.

The Silver Doctors cite Jim Sinclair, ‘Mr. Gold’, who has said two things which would most likely prove to be foolhardy not to believe.  One, that the Fed would embark on “QE to infinity.”  And, two, the bullion banks would amass the lion’s share of the bull market profits in the rise in gold and silver prices.

The first looks like a done deal.  The second will most likely pan out as well, which takes us back to the Silver Doctors article.

The ‘Doc’ goes on to quote, David R, a veteran bullion trader, who has traded at the desks at AIG, Barclays, and UBS.

They [JP Morgan] buy the physical silver at the same time they sell the future (on Comex) futures trade in contango (higher price than spot physical) they get zero interest rate cash from FED so borrow the money for free, they own the vaults to store the silver…. so as the future comes to maturity they can either settle against their physical long or roll the future to collect more free contango…. This is pure arbitrage paid for by the FED.  This has been going on for over 30 years and why shouldn’t they be allowed to have 25% of the Open Interest?  There is no manipulation because they are short the futures and long the physical and have “ZERO” price risk, but nice profits!  It’s brilliant trading and completely 100% legal and that’s why they will never be charged with manipulation because there is none going on. Sometimes it’s just that easy!

Of course, it’s that easy.  Banks make money on spreads on every damn thing they touch.  But as Ted Butler and the fine folks at GATA have argued: when a single trader becomes dominate within a single market, it’s size, alone, affects price discovery.  That is, indeed, illegal, going back to the late 19th century—a time when the U.S. faced some of the nasty side-effects of an industrial revolution gone unfettered.

The man who fought the monopolists of the early 20th century, armed with the Sherman Anti-Trust Act of 1890, Teddy Roosevelt, must be rolling in his grave at the suggestion that JP Morgan’s “brilliant trading” is “perfectly legal,” as trader David R. suggests.  In fact, there’s nothing brilliant about JP Morgan’s criminal activity in the bullion markets.  The scam is not new; it’s as old as the hills.

According to Wikipedia, the lead author of the Sherman Anti-trust Act, Ohio Republican Senator John Sherman said the purpose of the Act was “to protect the consumers by preventing arrangements designed, or which tend, to advance the cost of goods to the consumer.”

In the case of the silver market, the cost to the consumer is inflation—in everything, especially in those things consumed each day for survival.  If the bullion markets are suppressed to give the U.S. dollar an advantage over the competition—bullion, the Fed can create more dollars, thereby forcing holders of the commodity (the dollar) to take a purchasing-power loss.

And with the latest mortality statistic revealing that more deaths in America come from suicide than from the result of an automobile accident, one must have to wonder how many of these suicides were the result of extraordinary bad economic times.

Another author of the Act, Senator George Hoar of Massachusetts, said, an entity that “merely by superior skill and intelligence…got the whole business because nobody could do it as well as he could was not a monopolist …(but was if) it involved something like the use of means which made it impossible for other persons to engage in fair competition.”

By the way, after the 1890 U.S. Senate ratified the Sherman Anti-Trust Act by a vote of 51-1, the House unanimously passed the bill with a vote of 242-0 on Jun. 20, 1890.

Can anyone image today’s Congress taking such a stand against the largest cancerous tumor of them all, JP Morgan?  Of course not.  Maybe Gerald Celente’s latest suggestion to boycott the upcoming general election is as good as Max Keiser’s suggestion to buy as much silver as one can.

The bottom line to the JP Morgan bullion prices suppression scheme is, if bullion prices reflected the weakness of the U.S. dollar, the Fed would have to stop printing them.  Congress would be forced to make the tough decisions regarding the public account, and the wrongs can be righted more quickly with less, much, much less pain—and most likely less suicides, too.

It’s been said, “Evil knows no boundaries.”  That evil is the Fed’s no. 1 stockholder, JP Morgan.  How Alan Greenspan, Jamie Dimon, Robert Rubin, Lloyd Blankfein and the other Den of Thieves can sleep at night is another puzzle for another time.  There’s a lot of blood on their hands, and for one, Blankfein, appears to have no idea why his hands are stained red.  What an anthropomorphic example of a living and thriving cancer.

God have mercy on these pathetic and perfect examples of humanity’s worst.

Peter Schiff slams Obama, Geithner and Buffett

As global stock markets crash in the backdrop of a soaring gold price, Euro Pacific Capital CEO Peter Schiff unleashed a series of salvos on the Obama Administration in the handling of the budget crisis, and slammed billionaire investor Warren Buffett for encouraging continued profligate policies of the White House and, by implication, the Congress.

Standard & Poor’s downgrade of U.S. debt kicked off a firestorm of financial and political calamity that has now required an all out damage control operation from the White House and the government’s go-to “private sector” operative Warren Buffet.

“In Wall Street parlance, any downgrade means get the hell out … If they [rating agencies] go from a Strong Buy to a Buy, it means, you know, look out below,” Schiff told Max Keiser of Russia Today’s Keiser Report.

“What S&P is saying, as far as I’m concerned, is get out of U.S. debt, any dollar-denominated debt, because what they’re really downgrading is not Treasury bonds, but the dollar.”

And, immediately after the S&P downgrade, investors fled the dollar—in mass.  As U.S. Treasuries soared (dollar positive), gold sailed past Treasuries (dollar negative), turning what seemed like a dollar-positive event into a catastrophein the dollar in purchasing power against the ultimate currency, gold.

Even the Wall Street Journal headlined an article on Monday, following the rating agency’s announcement of a U.S. downgrade on Friday, heralded U.S. Treasuries as the “gold standard” of debt, in a well-place position atop Yahoo’s financial news feed.  The orchestrated response, crafted over the weekend, couldn’t be more obvious to those following closely the 3-year-long slow-motion global financial crisis.

Of course, the U.S. has other options apart from defaulting in a manner Argentina, Mexico or German had defaulted in the past.  Instead, it appears the U.S. has predictably chosen to inflate its way out of overburdening debt, which Schiff said, is the point of S&P’s downgrade.

“Because S&P knows—as Alan Greenspan said, and Warren Buffett said—they don’t have to default, they can print,” Schiff explained. “But that’s worse, especially if you’re a bondholder; you get paid back in Monopoly money.”

In complete agreement with European leaders, Schiff went on to ridicule a rating agency system that rates the world’s largest creditor, China, below the world’s largest debtor, the U.S.

“Why is China, the world’s biggest creditor nation—we owe China trillions—how could they be rated AA-, and we’re rated AA+?” Schiff asked, rhetorically.  ”What kind of twilight world is the world’s biggest debtor a bigger risk [meant to say, better risk] than world’s biggest creditor?”

Then, in a typical Schiff rapid-fire rant, U.S. Treasury Secretary Timothy Geithner entered Schiff’s sites.

Geithner, who said S&P made a math error in its calculations of projected U.S. deficits, calling the error a “$2 trillion mistake,” only serves as a red herring, or a canard, as Keiser put it in his question to Schiff about Geithner’s comments.

Schiff responded to Geithner’s comment by pointing out that the Congressional Budget Office (CBO), a political arm of the White House, had made grandiose growth and unrealistically low inflation assumptions in its forecast, which Schiff implied, were nothing more than typical self-serving propaganda budget forecasts out of Washington.

“The reality is that we are going back to recession,” Schiff scoffed.  “So you take all those rosy scenarios and throw them in the trash can where they belong.  The budget deficit is going to be much worse than both the Administration and S&P believe.  So they’re all wrong on the math.”

And on the subject of Warren Buffett’s comment following the S&P downgrade announcement, in which, he said U.S. Treasuries should hold a “AAAA rating,” Schiff again commented by implying that Buffett is a has-been, a kept man of the rigged system, and has become more of a humorous sideshow during the crisis than a man whose comments should actually be taken to heart by investors.

Buffett’s opinion is “moronic,” said Schiff.  In his advanced age, “senility is catching up with Warren.”