Much has already been written about the untimely demise of investment bank Bear Stearns.Most, if not all, that has been written to date – deals with issues related to equities / expiring options – or the share price.
Recently, new information has come to light which allows us to forensically examine the demise of Bear Stearns from a completely different angle – GOLD.
No-one should be surprised by this development.Up until the untimely demise of Bear Stearns, the most celebrated and at the same time misreported and misunderstood financial collapse in American History was that of Long Term Capital Management [LTCM] back in 1998.The treatment – or more properly stated, the decision to bail-out LTCM – was all motivated by GOLD.For a primer on the LTCM / GOLD nexus, readers can gain a nuts-and-bolts background in these two articles:
A full forensic reconstruction of the events surrounding the collapse / bail-out of Bear Stearns has not been possible until recently, with the passage of time and the recent release of Q2/08 derivatives report from the Office of the Comptroller of the Currency of the U.S.Here is the progression of J.P. Morgan’s gold derivatives position from Q4/07 [baseline] through to Q2/08:
The 12 billion drop in J.P.Morgan’s 1 – 5 yr. maturity is representative of the “netting effect” from co-mingling Bear Stearns derivatives book.
What folks need to realize is that a 12 billion injection [long or short] into the ‘relatively illiquid’ medium-term gold futures complex [1 – 5 yrs.] – has much more market influence than 9 billion notional [or a like amount] in < than 1 yr. - as occurred in March 08.Cumulatively, the shorts added by J.P. Morgan over a very short period of time, like days or a couple of weeks, is utterly mind numbing – akin to having an elephant jumping through a key-hole.That the gold market was able to absorb this almost unthinkable, intentional, premeditated “criminal shellacking” at the hands of J.P. Morgan Chase is a testament to how enormous global investment demand really is for GOLD.
That J.P. Morgan Chase – an institution with historic and deep links to the Federal Reserve – acted in a criminal fashion is beyond-a-shadow-of-a-doubt.They are and have unquestionably engaged in “INSIDER TRADING” and completely desecrated the COMMODITIES TRADING LAW BOOK.
Not surprisingly, the financial world is now waking-up to the fact that high-stakes games are being played in the “paper” [futures] gold arena.This is why the fraudulent futures prices of gold and silver have become bifurcated from the physical markets.
Sadly, when this criminal experiment fails completely – which it will - the perpetrators are going to “wrap themselves in the flag” and claim that they were conducting these operations in the name of NATIONAL SECURITY – but in reality to save the bankers and “un-savable” U.S. Dollar.
Bear Stearns and its employees got in the way of this criminal enterprise – largely because they were long gold.
Just remember, you heard it here first.
The J.P. Morgan Chase / Federal Reserve edifice is being run like a CRACK-HOUSE.For the sake of humanity, it needs to be shut down - NOW.
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