Large bank failures & the depletion of physical

Large Bank Failures, Unrest in US, and Depletion of Physical



As rebellion spreads to the United States, financial markets remain volatile. In Europe, the bailouts have, yet again, begun, as the French/Belgian banking giant Dexia has "failed." Both governments have pledged to take part in the rescue plan, which will entail printing of Euros, and perhaps even US monies dedicated to the cause of European stability. Dexia is the first public victim of the new European credit crunch, and there are sure to be more such banks, all across Europe.



The French government has pledged to lend Dexia "as much as it needs." Predictably, the philosophy of "too big to fail" is alive-and-well in Europe, as Dexia was bailed out once before in 2008. Earlier this year, European regulators deemed Dexia healthy during a bank "stress test." So, it is safe to assume-from here on out-that whenever a bank is determined "healthy" by regulators, that this is likely not true. The truth is that many of the largest banks in the world have bad debts on their books. As Michael Hudson reminds folks over and over: those debts that cannot be repaid, will not be repaid.



The IMF, which has taken an increasingly strong tone on Europe, will probably eventually step-in, and lend Europe capital. Much of it will probably stem from the Federal Reserve System in the United States, just as US taxpayer money has already gone to Europe. This took place during the 2008 banking crisis, as many European banks, such as Deutsche Bank, received US taxpayer money.



In the US, young people are taking to the streets to protest corporate policy, which is sure to put stress on the financial system. Should this movement continue to grow, international investors will lose confidence in the US Dollar as a safehaven. This movement could accelerate interest in silver, leading more young people to the metal as a store of value, i.e. a savings account, thus representing more long-term upward pressure for the metal. Instead of the famous bull on Wall Street being touched for good luck, it is now being guarded by NYPD. Interesting to note, JP Morgan-target of the "buy silver crash JP Morgan" campaign, and infamous silver manipulators-made, at the onset of the demonstrations, a donation of more than 4 million dollars to the NYPD foundation.



Expect that, as social dislocation becomes more intense, markets will become more violent. Large swings will transpire, and we will see more of what happened in the late summer, as the market had huge down days, followed by rather stable days.



That the precious metals markets having huge up days followed by huge down days could mean great buying opportunities, does not necessarily mean waiting for the perfect dip is the best choice of action. These physical markets are controlled by paper-bugs, who put trillions of fiat into play in order to oppress true price discovery. JP Morgan, for example, owns 78% of the silver derivatives. HSBC owns 20%. That means there is a paper-silver duopoly. This renders the $ price of the metals somewhat random, and does not actually represent the true value of the physical metals. There are only about 1 billion ounces of investment grade silver above ground-that is around six ounces of silver per individual on the planet! Actually getting physical "investment grade" silver (99.9% fine and above) should be considered when buying gold and silver, not simply timing the dip.



The economic policies being espoused by our leaders have no realistic foundation. That a nation can cut deficits and promote growth is "a very hopeful way of looking at the world, but unfortunately, it's not based on anything ever seen in economic history," says economic forecaster Peter Berezin, managing editor of the Bank Credit Analyst, in the Montreal Gazette article titled "Austerity obsession kneecaps Europe."



Irregardless, the Bank of England has launched a new quantitative easing program, pumping 75 billion pounds of new money into the economy, claiming that "the worst financial crisis in modern history demanded it."



Sir Mervyn King has warned against the obvious, arguing this program could force more inflation and promotes no confidence among savers. Regardless, King said he would not
push Britain into a recession" for the mere sake of helping savers. This is sure to send gold well over the 1,000 pound psychological price point.











sincerely,

Mark Lonneker

President of Liberty Coin and Precious Metals

Thoughts ?

 

Spreading purchase is always a good idea, however since the writer is likely to be biased towards PM, can't really determine the objectivity of the article.

PM is not extremely valuable, its production cost is still much lower than the current depressed spot. What is keeping the price afloat? Fear and generally losing confidence in other asset class (RE,stocks).

 

The surprising part for me was that JP morgan own 78% & HSBC own 20%

 

That's why Max keiser came up with the idea that expensive silver will kill JPmorgan.

But, for every short JPmorgan has, they have a long at some opposing asset class (whatever that might be).

So, that idea was a dud.

 

Renovator.. 1 billion investment grade silver divided by 6.5 billion people does not equal 6ozs per per person. more like 1/6oz per person.

Regards Errol43

 

apart from his maths can't disagree with any of that

 

At the current A$ exchange rate, 1000 pounds = A$1571 yet the Perth Mint site refers to circa A$1693. Does this mean it would be cheaper to buy in the UK, or is it a typo?

 

The only problem I have and funny as it may sound~try picking up 50k of silver and moving it quickly!
50k of gold can be easilly carried disretly on ones person
Although I like to talk up silver it does present physical storage and transport problems? Or is it just me?

 

25k of silver is difficult to move. Not to mention 50k.

 

I didnt write it !!!! its an email from Liberty coin & precious metals Email him & ask him where he went to school so you dont send your kids there :

 

Currrent net interest in silver is at its lowest in quite a while. A lot of the shorts have closed out on this latest dip.

 

Your right, since we are on the topic of JPM i don't understand why they won't look at going long on silver potentially sometime in the future that is to say i don't believe they are suppressing the price for any particular reason other than generating money for the firm.

What im interested in is what suppressing the price of silver will impact on in a positive way other than supporting industry's that rely on the metal. If we are talking about the suppression of gold then now i believe we can talk about doing that to make the USD appear stronger but i don't believe silver can be suppressed for the same reason.

 

Dexia is being nationalized which isn't a bailout American style where money is just thrown at 'em so they an give out bonuses to their execs.

 

I guess from an investor perspective, silver is still overvalued (relative to its production cost). If silver today is at $10 or below, I am sure JPM will go long on them.

If you remove the emotion and love of PM, you can start to see how JPM and any other institution perceive their assets (no emotional attachment, just cash cow).

 

does he mean that they hold 98% of the shorts rather than the derivitives? otherwise they would be atleast 48% long against their own shorts wouldnt they?

IRREGARDLESS....

 

Cost average stacking strategy says 'hi'

 

Sorry just had to point out - not a word. It's a joining of irrespective and regardless and is not recognized by most dictionaries. If it is, it is normally stated as erroneous or informal.

Warmest,
Ppss

 

Yes, making up words can be fun.

 

I don't know much about this stuff, but their share price has taken a real beating.

 

Investor confidence is down. They still make stupid amount of money. If they screw up, USA will bail them out again. To be honest, they should have a taste of austerity.