View Full Version : Extra! Extra! Feds Bail Big

mick silver
17th November 2008, 17:29

Gone are the days, if they ever were, when a watchdog press would dig out this story and splash it across the headlines in outrage. Instead, we have a private citizen to thank, who troubled to write his congressman, a CFTC official who guardedly alluded to the facts in his reply to the congressman’s inquiry, and silver analyst Ted Butler, who put the pieces of the puzzle together. In fact Butler had already put the pieces together back in a September article, before the CFTC letter that confirmed his suspicions was even written.

This story is more than a footnote. It is, as Butler says, a multi-billion dollar crime in progress. It is also critical to understanding what has happened to the American economy in 2008, and the path our federal government has taken to get us here.

The story begins in late 2007, when investment bank and big-time trader Bear Stearns (BS) announced fourth quarter losses of $854 million. In fact, Bear Stearns was in the news as far back as June, 2007, when some BS subsidiary hedge funds began to get into trouble. At that time it was BS that was going to do the bailing.

What was NOT reported to the public, then or later, was that Bear Stearns was almost certainly the single largest CRIMEX silver short, with over 30,000 contracts, equal to roughly 25% of annual world production. By March, silver prices had passed $20/oz., and the BS silver short position was deeply underwater. It was at exactly this time that JPMorgan Chase suddenly acquired BS for $2 per share, along with receiving USG guarantees of up to $30 billion (some say $55 billion, but I doubt the government will quibble with JPMC over a few billions) on some BS “hard to value” assets. Obviously, the huge, losing silver short position was one of those so-called assets.


17th November 2008, 17:40
Obviously, the huge, losing silver short position was one of those so-called assets.

UUUM, the last I checked the short was winning.

17th November 2008, 18:03
Thanks Mick for this article. It just backs up my suspicions about the economy. The stuff in the article gives me confidence in what's behind my personal 'game plan'. I've already come to terms with the fact the government and the banks will never fully be able to fix the problems with banks and funding because there was so much outstanding debt not on any books running behind all banking business already.

All the Ted Butler short articles haven't even scratched the surface of that fact. Seeing the spot price stay the way of those purchasing metals using credit is the real reason none of this junk is going to get straightened out. The best way for the average individual to protect themselves against the lousy 'business' (meaning speculative) practices going on is to stop them. In order to stop them, these banks, the Tresury, and the CFTC would have to admit wrongdoing. They'd have to be adults and say "Oops; we blew it. As far back as 2001. We have to stop the mechanism we've legislated to facilitate the growth in business." That growth is deceptive. The growth numbers facilitate the facade that all is well; despite the debt generated. The corporations keep shelling out dollars to look strong; when in reality all they are is more heavily in debt.

In fact, going into debt to grow a business is how everyone has been encouraged to behave. Especially this decade. Think about all the freedoms people take for granted in this country. They are willing to accept the fact they in essence give them up to deal with these stupid banks. The banks run their business WORSE than a poor person runs their budget. When TSHTF who are YOU going to help? The poor person in your community. You may not be able to lend money, but you can exchange food and stuff. You'll be telling the bank to take a hike.

To put a personal spin on this: I work for a large law firm. I know there are partners of this firm that earn 6 figure salaries. Because I have no debts; and they do (in the name of convenience - plus mortgages, and car loans. Hey, they can afford them right?) I have more cash flow then they do during the month. I've said this to a senior attorney, and he sadly agreed.

At a meeting I attended, the conversation naturally turned to the economy. I was surprised over 50% of the people at the meeting I was at don't have debt! The attendees have various backgrounds but all of us have jobs. So it's not because they are poor; it's because the way the debt products were made & marketed turned them off! Alot of these people had credit cards and car loans before. They got into paying off their credit cards and other loans without ME telling them to. We were all talking with amazement at how much better our lives were WITHOUT credit. So there really is a segment of the population that's not poor, and not in debt. This 'credit crisis' is going to pass them by with as little inconvenience as possible. Heck, reading this forum and the news has encouraged me to actually start an art business again. I'll be able to work while I'm getting old doing it. With out EVER having to go to a G*Da* BANK for a loan for this business ever!!