Our mission at maalamalama, besides helping our clients to protect and grow their wealth in the face of the criminality of the global banking cartel, has always been, since day one, to also be a spark to reinstate a sound, gold-based monetary system. Bankers have released so much propaganda and deceit regarding the inability of our current fraudulent monetary system to return to a gold-based monetary system that I have written two books to be released this month and next that refutes the banker-created drivel and propaganda regarding the inapplicability of a gold-based system. In my two books, to be released this month and next, titled
(1) The Golden Gift; and
(2) The Bankers’ Plot to Bankrupt the World & How We Can Stop Them!
I describe two important topics that the public-at-large still fails to grasp. One, I describe how the criminal banking cartel can counter-intuitively and periodically temporarily crush gold and silver prices in fraudulent paper markets even as global physical demand rises and physical supplies shrink and the importance of this sham to the banking cartel in seducing the retail investor to always make improper decisions about physical gold and physical silver (ie. not buying it). Two, I describe why retail investors should not fear this situation, how retail investors can use accumulation of physical gold and physical silver as an effective tool in fighting and defeating the criminal banking cartel and why purchasing physical gold and physical silver may be the only form of protection against the inevitable brutal collapse of our fraudulent monetary and banking system that is coming. If you have not yet read my previous article, you may join the 50,000+ people that read this article on my website and at the ZeroHedge website to discover why I believe that the criminal banking cartel’s end game is to crash our current banking & monetary system: The Criminal Banking Cartel’s End Game: A 100% Digital Monetary System
I will post information about how to purchase my two books on my website later this month if you are interested in reading more than just the below excerpt. Furthermore, I will be donating 100% of profits from the first year sales of both books to three very worthy organizations that provide care for orphaned children and children with learning disabilities (Future Light Kids, Two Sisters, and the Mulligan Project), and I hope to visit all three of these organizations in the near future. If we wish to change the extremely destructive path that the criminal banking cartel has placed us on, then we need to spread our knowledge and serve as a beacon of light to help one another understand this banking con game. Furthermore, though the price of gold and silver are guaranteed to exhibit more volatility as the global monetary system implodes and until it can diverge from the banking cartel controlled manipulation schemes executed in paper markets, we should not fear this volatility as the end game will create massive divergences in paper gold/silver and physical gold/silver prices with enormous upside to physical prices. I sincerely believe that if all of us understood the banking con game that all of us would convert the majority of our paper fiat savings into physical gold and physical silver by month’s end, using any interim, intra-day volatility to the downside to purchase the largest quantities. In the meantime, please find below an excerpt from my upcoming, not yet released book “The Bankers’ Plot to Bankrupt the World & How We Can Stop Them!”
Simply calling the criminal banking cartel’s bluff regarding their incessant manipulation of gold and silver prices is enough to stop it. We must have the courage to act. Simply knowing without doing, or being willing to do without doing is not good enough. The time has come for all of us to be willing to “do”. And if we are willing to do, we can make a huge difference in whether the future path of our world continues down our current path of darkness and destruction or whether we can affect a 180 degree turnaround and usher in a new age of enlightenment. Let me explain.
Over the past several years, several incidents have made it clear that despite the popular belief of the masses that the criminal banking cartel is too powerful to defeat, that defeating them is definitely within the realm of possibility. The fallout from JP Morgan’s media-dubbed “London Whale” this year and the SemGroup bankruptcy in 2008 aptly demonstrated this. The story about JP Morgan employee Bruno Iksil first broke when traders, using the size of price movements and trades they witnessed in a synthetic bond index known as CDX.NA.IG.9, suspected one trader of holding a singular massive position. Later, Iksil was revealed to be holding up to a $100 billion position in CDS (Credit Default Swap)exposure in this particular index. When the underlying bond market turned against Iksil’s massive bets in the CDX.NA.IG.9, reports started leaking that JP Morgan could be facing a $2 billion loss. Iksil’s position also revealed JP Morgan’s Blythe Masters to be a master liar as she had just appeared on CNBC to refute allegations that JP Morgan traders ever engaged in deliberate manipulation of markets just before the Iksil story broke. Remember, Iksil’s massive position was discovered when other traders witnessed that one trader’s moves were influencing the entire behavior of that index and put their positions at enormous risk, the very definition of manipulation. However, the downside of holding such a deliberately massive manipulative position also soon became apparent to the chagrin of JP Morgan’s Jamie Dimon and Blythe Masters — a small market moved against you could create enormous losses on paper at a very rapid rate.
Once traders discovered the size of Iksil’s massive position, they started taking the opposite side of Iksil’s trade to deliberately move the market in the opposite direction, knowing that Iksil would then be left facing a huge conundrum. Iksil could choose to assume defensive strategies whereby newly assumed positions could hedge some of the growing losses on his open positions but unfortunately, would also contribute to increasing the spread on the losses of his original positions. Because Iksil chose to assume a massive position that could only be described as having a goal to manipulate the CDX.NA.IG.9 index to make profits for JP Morgan, once knowledge of this position became known, it immediately became vulnerable to be manipulated itself so that it would eventually implode. And in the financial world of vultures, once vultures smell blood, there is no saving the carcass from doom.
This is precisely what happened to Iksil’s position once other vultures gained knowledge of his position, and why soon after, many analysts estimated that JP Morgan’s minimum losses on this trade would double from $2 billion to $4 billion while other analysts have determined that a mere 100 bps move in credit spreads in the wrong direction could eventually cost JP Morgan’s loss to skyrocket from a $2 billion loss into a $20 billion loss. Thus, it was always in the best interest of JP Morgan CEO Jamie Dimon to conceal this position as long as possible no matter if he was aware of it from the very start, possibly as early as 2010, as many have accused and speculated, or whether he only became aware of it sometime during the first quarter 2012 as he has steadfastly claimed. Whatever the case may be, as soon as the losses mounted on Iksil’s position and the losses became known, his position, in essence, became indefensible from the attack of circling vultures.
Nearly the exact same scenario led to the downfall of SemGroup Holdings, a private firm based out of Tulsa, Oklahoma. Based upon SemGroup’s eventual declared $2.5+ billion in losses in 2008, analysts backward engineered a figure for SemGroup’s massive short position in crude oil of 50 million barrels, or approximately a whopping 17% of the entire US crude inventory of 300 million barrels at the time. So what made SemGroup’s short position blow up? Again, there is strong circumstantial evidence that another firm’s knowledge of SemGroup’s massive short position left it vulnerable to attack. Basically, the story goes like this. Citibank, Merrill Lynch and Goldman Sachs were all involved in a failed $1.5 billion private placement for SemGroup early in 2008. As a result of the standard due diligence and forensic accounting required for such a private placement, all three firms almost undoubtedly obtained intimate knowledge of SemGroup’s massive short position in crude oil during early 2008. Just as banks with knowledge of Iksil’s trading position have now squeezed Iksil’s failing position and caused Iksil’s losses to likely eventually balloon to multiples of the originally estimated $2 billion loss, many people familiar with the SemGroup’s contribution to the oil spike from $100 a barrel to $147 a barrel in 2008 suggested that Goldman Sachs had used their inside information (quite illegally by the way, if this is what indeed occurred) to take the opposite side of SemGroup’s position and deliberately force oil prices much higher at a time when SemGroup could least afford it. By squeezing SemGroup’s shorts and causing SemGroup’s already substantial losses to multiply, Goldman Sachs allegedly single-handedly was able to engineer the spike in oil futures from $100 a barrel to $147 a barrel in 2008, and in the process, profit massively from SemGroup’s demise.
Thus we have two clear examples of corporate goliaths that were punished for the assumption of extremely risky dangerous positions. Given this knowledge, and the extrapolation of futures data that leads many of us to believe that JP Morgan consistently holds more than 90% of the total net commercial short position in the silver futures market, Iksil and SemGroup have provided for us the blueprint to also collapse JP Morgan’s alleged illegal and immoral massive short position in the silver futures market — take the opposite side of JP Morgan’s trade. Up until this point, no financial group has taken the opposite side of this trade and tried to collapse JP Morgan’s allegedly massively manipulative short position in silver futures, because all financial groups likely fear that JP Morgan’s pockets will always be deeper to counter them because of JP Morgan’s intimate ties to the US Federal Reserve. Despite this alleged massive short position in silver, Blythe Masters is on record as stating that JP Morgan has “no stake in whether [silver] prices rise or decline.” Thus, I say it is time we all to put Blythe Master’s claim to task and that it’s time for JP Morgan to put up or shut up.
If the strategy of taking the opposite side of a hugely manipulative position allegedly helped Goldman Sachs kill SemGroup’s massive short position in crude oil and eventually bankrupt SemGroup and it this same exact strategy that allegedly helped hedge funds double, triple or perhaps increase by a factor of 10, JP Morgan’s CDS paper losses in a very short condensed period of time, then there is no reason to doubt that this same strategy would not work in chasing JP Morgan out of the silver futures market if they are indeed holding a massively large manipulative position in the silver paper market. So how could this be accomplished?
One way would be for hedge funds and speculators to start piling on long positions in the silver futures market to force prices to rise and cause a massive spike in silver due to the consequent necessity of JP Morgan to then also assume long positions to hedge the growing losses of their short positions. However, for reasons stated above, we know that this will never happen as those that have assumed long positions in the silver futures market have repeatedly been forced out of the market with massive losses due to JP Morgan’s utter dominance of the paper silver market and their periodic engineered silver crashes with the cooperation of MF Global, the US Federal Reserve, the SEC and the CFTC. Due to the massive distrust of the paper gold and paper silver market created by the enormous volatility that the banking cartel creates in this market from time to time, convincing institutions to very aggressively take the opposite side of a trade in a market that is so highly manipulated, as occurred with SemGroup and the London Whale, would be an exponentially more difficult task in the silver futures market. Furthermore, the criminal banks have illustrated that the CFTC will change laws, such as initial and maintenance margins in the PM futures market at any time to assist JP Morgan when JP Morgan’s silver short is in serious trouble. Thus, assumption of the opposite side of JP Morgan’s silver position in the paper markets may not be a viable option.
But there remains a second option — take the opposite side of JP Morgan’s alleged massively manipulative silver position not in the paper markets but in the physical market. If every one that read this article just converted a small percent of their paper savings into physical silver, eventually this action would cause such a massive divergence between physical silver price and the paper futures silver price that the fraudulent COMEX futures market would collapse and bring down JP Morgan’s alleged short silver position with it. In other words, the people could act as did Goldman Sachs versus SemGroup and hedge funds v. the London Whale and collectively serve the same purpose as a huge fund that decided to take the opposite side of the alleged JP Morgan silver short to squeeze their position and cause it irreparable damage. And since Blythe Masters is already on record as stating that JP Morgan has no stake in whether silver prices crash or skyrocket, then skyrocketing silver prices should not cause great economic distress for JP Morgan, and if it does, then she will once again be outed as a massive liar.
However, this solution to shaking JP Morgan out of their massive silver short position will work if only enough citizens around the world believe it will work. The problem we face now is primarily one of education, so I am depending upon each and every one of you to spread the world and to serve as a node of information transfer to your fellow citizens. The reason citizens have not yet taken this stand against JP Morgan, even those whom are furious with JP Morgan’s immoral actions in the finance world, is because they do not believe we can win. This false assumption has been spawned from the banking cartel’s massive volatility created in paper gold and paper silver markets and also simply by banker propaganda that is designed to raise doubt in our collective intellect and our collective ability to fight back. How many times, since 2008, have you heard bankers tell us that the situation is “too complicated for people to understand” and that only they have the “expertise to solve this economic crisis”? The truth of the matter is that their immorality in gaming the system for their benefit only is shockingly simple to understand and that the solutions we can partake collectively to bring them down are shockingly simple as well. However, the key word is “collective”. United, there is no way a few dozen families worldwide would ever be able to control 6.8 billion people and hold us hostage, but this is the situation we face today because we do not yet have the faith that we are powerful enough to affect positive change in the banking industry. During this fight for our economic freedom, too often we have fallen victim to the voice of doubt that bankers have planted inside our heads, telling us we are too dumb and too weak to make a change, and we have unfortunately have believed their drivel. I am here to tell you that we do wield the power to defeat them if we only support one another to first educate, second, believe, and third, act upon our beliefs.
Most citizens, by and large, still have shockingly little understanding of what drives gold and silver prices, and they do not understand that the banking cartel can drive down gold and silver spot prices considerably at times even when institutions and sovereign entities are consummating massive physical purchases of gold and silver. And that is why the people should fight back in the physical market. If one should purchase 5,000 ozs of silver today and the cartel drives silver down $3 an ounce, at the end of the day, you still have 5,000 ozs of silver and the price drop is merely illusory and in my opinion, one that will be easily recouped in the future. Why? Because the current dynamics of the physical market and the downward spiral of our global monetary system says it will. Remember that massive purchases of physical gold and physical silver were reported out of the East during this latest Western banking cartel takedown in paper prices. What does this indicate? – that in the future, the prices of gold and silver will rebound massively, despite any interim volatility or another banking cartel takedown that may happen. I fear that most people do not understand just how close we are to the end of our current global monetary system and that taking action now to protect oneself from the implosion of our criminal fraudulent monetary system is quickly becoming less of an option but rather an absolute necessity.
The only reason that these massive physical purchases of gold and silver are not causing a massive divergence between spot and physical prices right now is because these physical purchases that have been transferring massive quantities of physical gold from West to East have been completed out of the view of the public. Perception is very important in the determination not only of paper prices but also of physical prices. If the retail investor joins in this physical buying spree and gold and silver coins become scarce, then this situation, because it would be visible to the retail investor, would eventually cause a massive divergence in price between the spot and physical prices of gold and silver because the perception of gold and silver supplies will finally match the reality of physical gold and silver supply. At the current time, perception and reality of physical gold and silver supplies DO NOT MATCH one another. This is how we can still suffer depressed prices of gold and silver even as physical supplies are tightening.
Thus, for all intents and purposes, we need to change the perception to match the realities of the physical gold and silver markets in order to drive the stake into the heart of the alleged JP Morgan short position in silver. Three weeks ago, in my article Fear & Panic are the Banking Cartel’s Weapons V. the Gold & Silver Bull. Patience and Logic are the Best Defense, I stated, “at times like this, when gold and silver have taken a fairly brutal hit in a condensed period of time thanks to low daily trading volumes both in PM futures and PM stock markets that make it very easy for the banking cartel to manipulate them, it can be difficult not to sell out of everything and run for the hills if one allows emotions to dictate one’s decisions (always a bad move). Especially at a time when fundamentals mean virtually nothing and speculators like JP Morgan and Goldman Sachs are constantly rigging markets and gaming the system through their High Frequency Trading (HFT) programs, it is difficult not to become emotional with your investment decisions. Thus it is important to take a step back from the here and now, and to look at the big picture to re-gain a better grasp of where asset prices will be heading in the future and to re-establish the proper perspective with which to evaluate your decisions… I would interpret this as a sign that a major bottom is imminent rather than sign that the gold and silver bull are finished.”
Despite Citigroup technician Louise Yamada releasing an article that very same day in which she stated that weakness in gold and silver was likely to continue with gold likely to retrace to $1,500 an ounce or lower and silver likely to retrace to $25 and then possibly $20 an ounce, I contradicted her with my own view. Since May 16th, one day prior to when I wrote this comment, gold has moved 5.5% higher from a low of $1526.70 and silver has moved a very significant 8.8% higher from a low of $26.73. And even if I’m wrong about gold not retracing to the $1,400 level again due to another banking cartel engineered decline in PM prices in the future (which is possible as the landscape changes in the future), the big picture people need to understand to gain the confidence to take action and shutter the alleged and immoral JP Morgan silver short is that the occasional massive and artificial banker-created volatility in paper prices of PMs is entirely irrelevant to the protection physical PMs will provide when the global monetary system continues to implode. If people can grasp this one concept, then I’m convinced that people will collectively act in a decisive manner to finally assume the opposite side of the alleged JP Morgan silver short as hedge funds did with the London Whale and as Goldman Sachs did with SemGroup.
The sure way to align perception with the reality of tight supplies in the physical gold and physical silver markets that have resulted from the banking cartel’s take down of paper gold and paper silver prices last month is to start preparing for the end of our current global banking system by converting fiat currencies into physical silver right now. If you are still apprehensive about doing so, then consider starting out small. Merely convert part of your savings into physical silver right now and continue to do so every month. If we can convince enough people around the world to do this, then we would all be re-assured in a positive feedback loop by the resultant rising silver prices. The only reason that JP Morgan has been able to temporarily knock down silver prices every time it makes significant runs higher in price is because enough people do not buy physical silver and continue to engage JP Morgan on their home turf of paper silver derivatives such as futures and the SLV ETF. However, draw JP Morgan out of the paper silver game and on to the turf of physical silver by converting bogus paper fiat currencies into physical silver and holding tight through their attacks on paper silver prices, and this will spell the end for any manipulative silver shorts held by them.
Silver is a small enough market and it is priced at an affordable enough price right now that nearly every one, rich, middle class or poor, can participate in this scheme to help end our current fraudulent banking system. Christine Lagarde, the head of the International Monetary Fund, aptly illustrated why we all need, as a collective group of global citizens, to act now and put an end to the scams big banks are imposing upon us. Ms. Legarde warned this week, in June of 2012, that the world risks a triple crisis of declining incomes, environmental damage and social unrest unless countries adopt a more sustainable approach to economic growth. This is one of the most incredibly hypocritical statements yet to be uttered by a banker because her organization is one of the organizations most responsible for economic instability across the entire world. If we do not act now, banksters will be sure to achieve the destruction of our current system that they desire in order to establish a 100% digital monetary system that will be their deceptive “solution” presented to us to save us from economic instability. In reality, such as solution will only further push all of us deeper into economic slavery. There are those that question the validity of exposing big bank scams and pushing them into a bankrupt state as many have intelligently observed that it is only us, the taxpayers, that will be continued to be punished for the banks’ immoral behavior with the imposition of more massive bailouts. While this unpleasant conundrum may be true, at least the accumulation of physical silver (and physical gold) will protect us as the prices of gold and silver should continue to soar under these conditions. Thus, the accumulation of physical gold and silver will serve as a hedge for us for conditions that we know will happen as a result of our actions with one enormous added benefit. The accumulation of physical gold and silver will provide us with the power to determine our future course of action after our current monetary system implodes instead of leaving this power concentrated in the hands of the immoral global banking cartel. At the present time, the smaller silver market versus the much larger gold market (in terms of market capitalization) affords us the best opportunity to do so, and if all of us would convert just a small percent of our fiat paper savings into physical silver, I sincerely believe that we can achieve our mission of putting the power to determine our future back in our hands.
For a much more comprehensive and detailed discussion of this topic and other topics critical to surviving the coming brutal collapse of our global monetary system, please visit our website to purchase a full copy of The Bankers’ Plot to Bankrupt the World & How We Can Stop Them! next month when it becomes available.
About the author: JS Kim founded maalamalama after becoming disgusted with the immorality of Wall Street and deciding to walk away from the commercial banking industry seven years ago. He founded maalamalama as a way to help people preserve and grow their wealth in the face of massive industry fraud with a higher mission to spark a new financial renaissance that will reinstate a sound gold-backed monetary system that benefits all citizens of the world. His Crisis Investment Opportunities investment newsletter, launched in June 2007, has returned a cumulative 161.44% return since the date of launch until June 11, 2012. Follow us on Twitter @skwealthacademy. Please see the disclaimer on our maalamalama website regarding any information contained in this article.