Disconcerting macro economic issues
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In this show Al discusses:
- Segment 1 – From Kuala Lumpur Grant Williams discusses just why the UK Trail of the MF Global collapse could very well be an apocalyptic event.
- Segment 2 – From Vancouver, B.C. listeners get an update on Canasil Resources from Bahman Yamini.
- Segment 3 – Rick Ackerman, who brought the potential implications of the MF Global collapse to our attention provides his view.
- Segment 4 – From Colorado, David McAlvany discusses the subject of retirement funds and the government.
- Segment 5 – Al discusses New Zealand Energy with John Proust.
- Segment 6 – Dudley Baker of www.preciousmetalswarrants.com discusses the value of being cognizant of insider trading.
- Segment 7 – Al and Trader Rog discuss the resource markets in response to listener comments about under-performance.
- Segment 8 – David Madison, a long time listener, weighs in on the subject of “what you don’t know can hurt you”. And, there is a lot that you may not know!
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Keep it somewhere else. In a left wing friendlt country such as ours ( Conservatives have a slim majority and the Canadian press will jump on ad news for Harper like jackals and ingore what the leaders say or do from those 3 vile parties: libs, ndp and bloq).
After FDR banned the private possesseion of gold ( I assume other PMs too), obliged all American citizens and residents to surrender all their gold at $20, FDR Admin. raised the price to $35 BUT then, according to what I have read, anybody accessing their safety dep box, had to have a police officer present! This must have pleased Stalin!
Best thing is to do what I do: I do not talk about it to anyone. I hide me meagre 260 ounces around my home ( in the ground, under cement in my garage, under ceramic tiles,, get creative!). I only have 260 onz phyzz, I am a newbie but I have paper silver investments: ETFs, company shares,,,
Let’s be clear about “US confiscation of Gold” in 1933.
First: It was by executive order, signed April 5th, not by act of Congress.
(I do not believe such an order is Constitutional.)
Second: It requested turning in to the Federal Reserve, “Al gold coin, gold bullion, and gold certificates.” There was no mention of silver or silver certificates or other precious metals.
Third: While the Order required deliery on or before May 1, 1933 the actual compliance was very low.
The government has never actually, to my knowledge, reported the compliancecnumber, but even after raiding safety deposit boxes, the compliance rumored in the English press was less than 50%. (Given, as a reason in UK parliament for not trying the same approach.)
Morning cfs,
Thanks for bringing this up.
I think most would admit that this was a nonsensical action on the part of the govt.
Big Al
“be kept in your home”
This is the safest place in the world, but you have to be clever about it.
Also, you might want to park a make of man’s second best friend next to the goods (properly topped up, too).
Hi Shawn
You might consider Goldmoney.com or for non US citizens Peter Schiff has just started a new bank where you can store your gold and also spend it with a debit card. Europacbank.com
Morning Karen,
I wonder about the logistics of a U.S. citizen being able to draw down capital which is held in Goldmoney.com
If things got to the point where confiscation was a reality in the U.S. how would that affect the situation.
Interesting question that I will pose to James this week.
Best,
Big Al
Hi Al,
I never intended for my account at goldmoney to be for an emergency. As far as I am concerned it can stay where it is until things settle down. Would however be interested in the answer.
Karen,
Will call James tomorrow.
Al
shawn …… a melt down is coming…why risk the pm in a lock box…do you really trust any bank , or govt agency, that should be your answer.
,just where is safe, get creative…
…at some time in the future…ETFs, will only be paper, not
worth the paper it is written on..
SHAWN HELLO. You should do one of two things, take JAMES’s advice, or send it to me for safe keeping. I am sure JERRY will vouch for me, haha.
irish….Remember the 10% referral fee, and I vouch for you….
Okay gentlemen,
Here is my opinion.
First of all, I believe all debt should be paid off. I mentioned last week that I was going to sell my Toronto Dominion Bank stock on Monday a.m. and then buy either GG or something similar.
I have decided to take these proceeds and substantially pay down my mortgage. (Almost to nothing!)
For the time being, I am going to sit on both my production mining companies and the explorers.
In the case of a complete meltdown this could very well be a mistake, but I think that I know enough about the market that I can take advantage of moves in this sector and consequently limit my downside and not negate what I think is potential upside in some of my positions.
I am keeping my positions in the oil and gas infrastructure companies that I own because I am currently a big believer in the energy sector as I mentioned during the segment we did with John Proust of New Zealand Energy.
I am also going to sit on our “conventional” stocks because as Dave said last week in this forum, they have so far outperformed the resource sector.
As you can see I am nervous, as everyone should be, but I am not changing my game plan to go away from diversification.
I guess that we will all see just how this plays out.
Big Al
I believe Dave was incorrect in saying convential stocks have out-performed the resource sector. I have not looked at every S&P stock, but major resource companies e.g. Newmont in the S&P 500 seem to have out-performed most of the other S&P 500 stocks and certainly the index this year.
I guess I do not understand a decision to pay down a mortgage. Sure sell bank shares. (I’m shorting some US banks.)
However, if you believe there is going to be high inflation the logical choice is to borrow as much as possible. Providing you can service the debt)
I trust my stupid Government to produce inflation, high inflation, so I’m joining them, not fighting them. “It’s stupid to fight City Hall” my father always told me!
And if you can’t beat ’em, might as well join ’em!
Morning cfs,
I have been going over this decision, which I made yesterday a.m., and I may take a different course of action tomorrow morning. You make a good point and our mortgage is so low compared to the value that paying it down may not be prudent.
We are going into very interesting times and your point about if you can’t beat them, join them is well taken. That is actually what our CPA said.
Thanks for the comment,
Big Al
Perhaps Al wants to sleep better at night??
I guess I do not understand a decision to pay down a mortgage. Sure sell bank shares. (I’m shorting some US banks.)
However, if you believe there is going to be high inflation, the logical choice is to borrow as much as possible. Providing you can service the debt)
I trust my stupid Government to produce inflation, high inflation, so I’m joining them, not fighting them. “It’s stupid to fight City Hall” my father always told me!
And if you can’t beat ’em, might as well join ’em!
Sorry for the repetition. Double Trouble Dave.
Morning again cfs,
I do not agree with your comment about debt. Theoretically you are correct regarding mortgage debt, but I have chosen to stay away from all other debt as much as possible.
Best,
Big Al
“DOUBLE TROUBLE DAVE”.
….I LIKE YOUR NEW HANDLE.
DO NOT BE SHOCKED BY ANYTHING….THE CROOKS ARE OUT IN DROVES….THEY HAVE GIVEN THEMSELVES FANCY TITLES….AND LEGALIZED THE THIEFT BY THE
535 MEMBERS OF CONGRESS….
DAVID M…HISTORY..YOU ARE CORRECT…
“THERE IS NO NEW THING UNDER THE SUN”……ECCLESIASTES 1:9 KJV(BIBLE)
Tyler Durdens artical at zero hedge is an excellent explanation of how this debt works. Christopher Elias (thomsonreuters) on 321 gold has a less in depth artical.Bob Moriarity was correct I think when he just said enough debt in the system to shut all the banks down. Max Kaiser has been talking about the effects of pices of this for some time too. Jim Sinclair @ KWN is an excellent interview. Definatly the best explanation is Tyler Durden.
I wonder if we dont actually own our trading accounts or bank deposits does that go for mortgages too? My guess is we dont own the mortgage and maybe thats why in the U.S. some up to date mortgages got forclosed on.
An opinion? Al?
Hi Benb,
Yep, I do have an opinion.
First of all, the article by Tyler is great in my opinion. I have read it, re-read it and forwarded it to friends.
If you see my response above you will note that I have decided to do major damage to the bank’s position in our home. That should answer your question. I don’t want anyone to be able to mess with my “castle”.
Moriarty was probably correct when he state the extent of the derivative problem on our show about three years ago.
Stay tuned as I will definitely stay tuned to all listener comments.
Best,
Big Al
RE, seg 8 …… Hello FOLKS , I have just started up a SCAM INVESTMENT CO. So i want you all to send all your money to me, so i can invest it all to make MYSELF FILTHY RICH ALL you have to do is sign the contract, without reading the small print, which states you WONT GET A PENNY BACK. Why am i doing this ? WELL WHO IS GOING TO PROSECUTE ME , AS LONG AS I PAY MY DUES TO THE ELITE.
AL……….That 30K you are thinking of investing on monday send it to my fund, & let me steal it…. Send it to ..”THE CROCKED IRISH FUND” Bank details.>>>J.P. SLIMEBAGS N.Y. Account no.>>>666 666 666 666. Sort code>>>666666. Hurry this GREAT OFFER ends soon.
Mr. Irish,
I will “wire” the funds to you on Monday. Please send instructions.
What a frigging mess, huh!
Big Al
AL….SEND IT WITH THE GOLDEN GOOSE…
Okay Jerry,
Can I keep the eggs?
Big Al
Yer 100% correct there, Big Tony.
WE NEED A NEW COLLOQUIALISM HERE AND I GOT ONE FER YA: TOO CRIMINAL TO FAIL!
HI KEN………………….LOVE IT.
I tell ya, big Tony…Does anyone believe anything will happen to Crookzine…er sorry…I mean Corzine when he’s giving $35000 a plate fund raising dinners for OBAMMIE???
And I tell ya, they ain’t serving crow at those dinners!
Morning Ken,
Isn’t it interesting that we seem to be rapidly reaching a very bad point!
Big Al
I dont know about you guys and gals but I dont what to do anymore, I really dont, just feel I am going to be robbed sooner or later by the government or an individual. I dont trust anyone with my money, the markets are rigged, even my gold and silver isn’t safe even if I have physical possesion (without a gun, being in the UK) dont know how much that would help me…any suggestions?
Dont succumb to fear, just plan harder!
Paint the inside of a Mayonnaise jar white, fill it with the goods and then tuck it in the Fridge behind a plate of crusty Spotted “Richard”, mate.
You’ll be OK.
You made me laugh, good plan, right now it’s in the freezer named as extra special lasagne…to be honest I fear the ‘government’ the most…
HELLO SUPERDOBBS Say it as it is…………SPOTTED DICK.
Hey guys,
Keep your emotions in control. If you let logic rule, you will rule yourselves and be okay!
I learned that a very long time ago.
Big Al
Superdobbs,
That’s funny, and I like the strategy.
Amen, to planning harder.
I actually wacehtd the video last night, and he looks like a really nice guy I love getting getting a look behind the scenes of how other people work and would say the whole thing was well worth watching.
Hi Al,
Do you or Roger have any opinion on the safety of Kitco’s Pool Accounts as a way to hold precious metals for your listeners? Thanx in advance.
HI Andrew,
I have no money in any of the Kitco products. It is a great site with a lot of great information, but I prefer to control my own destiny.
I would suggest that you call Kitco and ask all the questions that you feel are appropriate.
Best,
Big Al
WAIT TILL THE IRS OR TAX PEOPLE GET BACK WITH THEM…..AND SETTLE THE DISPUTE
THE GOVT. IS TRICKY AND THEY MAY DECIDE TO USE CORSLIM’S TRICK….YOU KNOW BIRDS OF A FEATHER,,FLOCK TOGETHER
Morning Jerry,
You make a very, very good point about the tax authorities.
I don’t believe that issue is settled and if it goes the wrong way it could destroy Kitco.
Best,
Big Al
Al…..thanks…,,by the way….I think I am going to stay with JERRY OUT OF THE BOX.
since some may get me confused with the other Jerry M…..since you corrected him, and rightfully so…..
just remember…I was the one who changed your mind on Ron Paul….from mr. cain…..
as always….OUT OF THE BOX JERRY
Yes Jerry out of the box you kind of did.
But I just felt at the time that Mr. Cain was the most electable. I was wrong I guess that means I am not the prettiest baby!
Big Al
All very interesting and provocative, but man, those zerohedge.com articles are virtually unreadable… the meandering run-on sentences are longer than most people’s paragraphs. The Reuters article is much easier to take in: http://newsandinsight.thomsonreuters.com/Securities/Insight/2011/12_-_December/MF_Global_and_the_great_Wall_St_re-hypothecation_scandal/
Hi Al,
Could you and Roger offer an opinion on the strange divergence between Friday’s performance of Frank Holmes’s fund USERX and the gold stocks. It cratered 14.48% while the HUI, XAU, and the Dow each posted gains of more than 1%. I do not own USERX, but wonder if it is a sign of things to come on Monday, or if there’s been some kind of error. I wouldn’t think that tax related redemptions could be this disruptive. Any opinion would be appreciated.
Never mind, Al. It turns out the culprit was an income dividend and long-term capital gains distribution. It sure made the chart look ugly!
Many thanks for clarifying Matthew.
Big Al
Very interesting interviews there, Big Al!
Thank you for bringing our attention to this here re-hypothecation issue.
Now I would like you to re-hypothesize on when the market is going to collapse again.
If you read that 0 Hedge article it sounds like this thing will dwarf the fallout experienced in ott 8.
It would seem another stock market meltdown should be imminent.
Morning Ken,
I agree with your thoughts and that is why I am selling my TD Bank stock on Monday.
Best,
Big Al
A warning to all you crooks out there>>> TOUCHA MA SILVER, I SMASHA YOUR FACE !!!
Big Al,
I thoroughly enjoyed David Madison – He nailed it when he said “History teaches you just as much – even more – than economics….that is SO TRUE!!!! Man history’s is a combination or REPEATED events.
All the best,
Marc
Big Al,
I bought CEF last month and I think it is safer than etf’s. Its like goldmoney or Sprotts fund which are independently audited. What do you think?
Marc
Hi Marc,
Well, Trader Rog certainly agrees with you.
Big Al
Marc….nothing new under the sun….
Morning Marc,
That was the first time I talked with David.
He strikes me as being intelligent and well informed. I will certainly invite him on the show again.
Best,
Big Al
I like the oil stocks your looking at. Where on this site can I see what you have bought. Thanks Gary
HI Gary,
I did not disclose the names of these stocks because I do not discuss them and they are not sponsor companies.
But, being transparent, here they are: Enbridge Energy Partners LP and Kinder Morgan Energy Partners.
Best,
Big Al
It appears to me that the rules for MLPs are not as constraining as I would like them to be. I divested my holdings in MLPs about 18 months ago. It seems to me there is a distinct possibility of hedging losses, not from mis-judging the market, but from broker problems. You should look at Cathlyn Harris’s article linked to Financialsense.
Morning cfs,
At this point I am comfortable with these two holdings. Again, diversification is my mantra.
Big Al
The financial situation in these bankrupt countries will result in the following government actions:
1) Capital Controls where assets are frozen in respective countries and not allowed to exit to another country will be fought as causing further decay in asset markets.
2) Capital Controls will be marginalized with internal restrictions of retirement account withdrawals where assets will be conscripted or drafted by respective governments and replaced with IOU’s of government bonds. This will kick the can down the road a bit longer by extending the road and we will see markets rebound for a short term only to eventually come to the end of the extended road paved with individual retirement accounts.
3) In 2013 the debt problem will emerge even worse than todays and governments will be planning for another round of confiscation which this time will include private non-retirement brokerage and bank accounts where a certain percentage is forced into government bonds. They will also be attempting confiscation of certain amounts of individual gold, silver and any asset of high value such as art, gems or anything that can be sold for cash, in other words it will be a soaking of the rich through confiscatory taxation.
4) Restrictions of travel either by plane, car, boat or whatever will in full force by these Western Governments.
1) Through 4) will by 2015 lead to world wide revolutions where many governments fall. Most of these will not be peaceful but will result in whole sale murder by government authorities.
The above is my prediction for the US if Americans allow this to happen by voting for the same people or any one of those being put front and center by the Main Stream media. It may happen anyway because democracy in the US may already be dead because the election process may already be rigged.
HI Clay,
Anything is possible, but I still have faith.
I pray that I am correct but, as you can see I am taking defensive action.
Best,
Big Al
As chief executive of MF Global, Corzine had to certify the financial statements of MF Globel under the Sarbanes-Oxley Act. Did everyone forget that as a senator he co-authored the Sarbanes-Oxley Act. Of course he stole the money and of course he will not go to jail.
As far as retirement funds, most pensions are through unions both public and private, I believe the 401 and IRA will be the first to go. Why would anyone think otherwise, look what the government has done to SS. I say get any money you can away from the government before it become illegal.
As chief executive of MF Global, Corzine had to certify the financial statements of MF Globel under the Sarbanes-Oxley Act. Did everyone forget that as a senator he co-authored the Sarbanes-Oxley Act. Of course he stole the money and of course he will not go to jail.
As far as retirement funds, most pensions are through unions both public and private, I believe the 401 and IRA will be the first to go. Why would anyone think otherwise, look what the government has done to SS. I say get any money you can away from the government before it become illegal.
As chief executive of MF Global, Corzine had to certify the financial statements of MF Globel under the Sarbanes-Oxley Act. Did everyone forget that as a senator he co-authored the Sarbanes-Oxley Act. Of course he stole the money and of course he will not go to jail.
As far as retirement funds, most pensions are through unions both public and private, I believe the 401 and IRA will be the first to go. Why would anyone think otherwise, look what the government has done to SS. I say get any money you can away from the government before it become illegal.
As chief executive of MF Global, Corzine had to certify the financial statements of MF Globel under the Sarbanes-Oxley Act. Did everyone forget that as a senator he co-authored the Sarbanes-Oxley Act. Of course he stole the money and of course he will not go to jail.
As far as retirement funds, most pensions are through unions both public and private, I believe the 401 and IRA will be the first to go. Why would anyone think otherwise, look what the government has done to SS. I say get any money you can away from the government before it become illegal.
As chief executive of MF Global, Corzine had to certify the financial statements of MF Globel under the Sarbanes-Oxley Act. Did everyone forget that as a senator he co-authored the Sarbanes-Oxley Act. Of course he stole the money and of course he will not go to jail.
As far as retirement funds, most pensions are through unions both public and private, I believe the 401 and IRA will be the first to go. Why would anyone think otherwise, look what the government has done to SS. I say get any money you can away from the government before it becomes illegal.
Morning Karen,
The interesting thing here is that the situation is so complicated from an accounting standpoint that even my very senior accounting friend was unaware of this situation.
As Rick pointed out in his segment, it is possible that no rules were broken.
Now, Karen, that is absolutely a travesty in my opinion.
I’ll tell you, my level of concern has multiplied substantially.
Best,
Big Al
sorry everyone!! Just got a new computer and as you can see I have not yet mastered all the functions.
great input….another fact that makes you sick…but, great heads up info…
can not get that at any other blog…
HELLO KAREN………….YOU are so right.
Corzine should be forced to write on the chalkboard “I stole the money but I will not go to jail” 500 times, not you Karen! I certainly won’t forget the point you made …
John….I like that….make it 535 times…so there will be one for each member of congress
Gentlemen,
Thank you for the erudite presentations on MF Global issue and fractional reserve lending/re-hypothecation; your efforts have changed my simplistic concepts of international finance and banking into a more sophisticated concept of international beguiling and larceny. These presentations provided me with more education than any others you have had and I have no doubt that I will listen to this repeatedly over the coming days to make certain that all the implications become clear. I implore you to keep discussions on this issue coming.
Thank you again.
HI Tex,
Again, I want to stress it is not just us but everyone who makes this a valuable site.
I implore everyone to keep the intelligent comments coming.
Best,
Big Al
HI Karen,
Figure it out as soon as you can because your comments are very valuable!
Big Al
I apologise for bringing the tenor of this blog down, but did not you’ll think MF Global was most aptly named for a firm that apparently legally managed to steal $1.2 billion from its clients? That firm was run by a bunch of MFs, I do believe.
Hi David,
I do believe you are 100% correct!!
DAVID………..MF’s You nailed it.
Your show today (Sat. 12/10) hit home with me, especially the last segment. This past Tuesday morning, I decided to take delivery of a portion of my resourse companies in certificate form. I contacted TD Ameritrade to get the process understood by myself. I identified FIVE companies I wanted certificates for. To my surprise, my largest holdings (SLW, PSLV, & AUY) have $500 DTC fee. I was real disappointed to discover that Sprott was part of this scam. My only purpose was to get some of my investments out of the digital system and into my possesion. I was told that this DTC fee was a “rush transfer fee”. Any comment ??
Sprott needs your money to corner the silver market…..I think he is going to
try a HUNT BROS. on silver 2011 style……just my thoughts…
Morning Jerry,
As I have said to other comments, I hope that Eric and his associates have more integrity to any negative implications of your comments.
We’ll see,
Big Al
TRUST…..BUT, VERIFY…..he is not doing it for his health….
O^OTB..JERRY
I will be talking with Eric on Monday or Tuesday.
So far, I have seen nothing to fear.
Big Al
Morning Bob,
That is amazing and I will certainly look into it. I must admit that this is a consideration that I have never thought about.
Thanks for this input,
Big Al
Hi Al,
David Madison’s mention of Etrade is alarming. How safe is my account with etrade if I just do basic stock trading??
Ditto. My question too. Al, in your opinion, how safe is my account with e-trade referring to David Madison’s comments….
Morning Tim and Karen,
I will research this question tomorrow and have a Daily Editorial which explains my findings.
Big Al
thanks for this information. I feel very lucky and grateful that I sat down to listen to your show today. Have my retirement funds (IRAs, ROTH) at Fidelity. After your guest mentioned them as a purveyor of the rehypothecation method I picked myself up off the floor and called them. Course the young man I talked to didn’t have that info. Monday AM am proceeding to taking a look at liquidating my postitions and having the money turned into physical gold… either in my hands or with GOLDMONEY or GOLDSILVER. thanks thanks thanks…
Morning tricky rick,
Please, please and please be very logical and unemotional about your decisions.
Ascertain the safety of your holdings where they are and determine if it would make sense to put them somewhere else before you jump ship.
Remember, cooler heads always prevail.
Big Al
The term that comes to mind is receipt of stolen goods. I’m sure the counterparties to MFGlobal’s bad deals acted in good faith. Doesn’t matter. If you buy a stolen car it gets returned to its rightful owner. These deals were paid off with stolen money. The money must be returned.
I am not buying this we don’t know where the money went crap. If that holds then we are dealing with the crudest form of money laundering.
Morning FredB,
That is exactly what it is – CRAP!
Big Al
Al,
Another great program. This is one of your hardest hitting programs in my view. You truly drove home that we are in a house of cards and the wind is picking up momentum.
Do you think that the world financial powers can hold this together until next spring?
Thanks for all you do.
Bob in Iowa
Morning Bob,
I must tell you, I really don’t know. We are in uncharted waters and the waves are getting really high!
Big Al
Such a deep anersw! GD&RVVF
As per Rogers comments, I agree 100%. Having said that and even though I know Roger is right about trading being the way money has been made, I don’t know how much longer this trend will continue because like David McAlvany points out, it all depends on confidence and the rule of law. CEF is not an ETF because it is based on proper accounting principles and not some of the more “Modern” schemes like SLV or GLD. Basically these ETF’s are based on confidence and I dare say that the upcoming process of adjudicating these and other hypothecated assets will quickly freeze liquidity in the financial system. Central banks like the Fed have been working overtime to cover these financial bombs in the banking system however politics in the so called “rule of law” can undermine these central bank purchases hence the MF Global legal circus. This is not good for confidence and unfortunately the so called leaders of Germany, France, Great Britain, Japan and the US to name a few are represented by the worst people possible to provide confidence. I think this is why technocrats were installed in Greece and Italy, and I would not be surprised if many more nations end up with Bank appointed leaders.
Al: I don’t want people to think this is like screaming “Fire” in a packed theater, but Martin Armstrong is saying things that scare me to no end.
http://creditmatters.podbean.com/2011/12/09/interview-with-martin-armstrong-12-09-2011/
Morning Clay,
Screaming “Fire” in a packed theater (great analogy by the way) is exactly what could happen today.
As David aptly brought up, that would be the straw that breaks today.
Time for clear thinking an a lot of prayer,
Big Al
HI ALL YOU LOVELY PEOPLE………”DONT TRUST ANYBODY WITH YOUR MONEY”
HELLO CLAY…MARK MY WORDS . BY THE END OF 2012 EVERY COUNTRY IN THE EURO ZONE , WILL HAVE A TECHNOCRAT INSTALLED ……. FOR THIS IS “THEIR” PLAN.
Tony: I am worried that it won’t stop there, but eventually cover the whole Western World starting next with the US. Difficult to imagine that the Federal Government of North America will actually do war against the United States, but with a large number of Americans actually supporting and thinking that the Federal Government is the US, this can easily happen.
Brokerage companies like Charles Schwab have both non margin and margin accounts, but this does not necessarily mean that all non margin accounts are not put at risk should Schwab go bankrupt. As far as I know Schwab, Fidelity and others like them do have derivatives in their money market accounts because in a sense all money markets have some degree of derivative insurance to supposedly limit risk. David Madison could very well be correct in what he said, but if you listen carefully David is not absolutely sure.
Confidence should not be a game of chicken, nor should it be tested by crying Fire in a crowded theater. Therefore for this and other reasons I expect some very large money printing to accelerate rapidly, and you can be certain that all bankruptcy filings are now monitored and limited by the Fed and other Central Banks. The MF Global disaster is like a Fire in a completely full theater, and if all the money is not quickly returned, soon the bankers will begin seeing mass panic. Should panic accelerate, it will be obvious that it is meant to happen as part of an evil plan and will not work out to the planners desire.
I did not get around to listening to the second half of your show until the commercial breaks on the Iowa Presidential debate.
Re: Section 6: Insider dealing.
This important in two regards, but has to be interpreted carefully.
First: The sale or puchase of shares gives information about how the insiders feel about the prospects for the company. BUT, for sales of shares you also need to know if the insider involved is also receiving a dollar salary or just options/stock.
Second: The giving of options is very important. (I know this also raises money for the company) I consider the giving of options as parallel to the Federal reserve printing dollars. It dilutes and therefore reduces my share holding as a fraction of the company. If I see any company giving out more than about 5% or above of its total share quantity each year, as an incentive, I will tend to sell off my holdings, because I believe such a company is not acting in the best interest of its shareholders. Because its options to insiders and options/warrants associated with raising funding probably means that this company will have to double in capital value every 5 years for my shares just to stay the same value. For companies with no dividend, the only way I can make money is for my shares to increase in value, so I watch insider trading and options very carefully. My first rule of investing is don’t lose money; if in doubt, get out!
Morning cfs,
Very good point about the option situation.
Thank you,
Big Al
Re: Segment 8:
Under Rule 15c3-3, it is my understanding that a stockbroker-dealer is limited in rehypothecation to 140% of the debit balance of your account. i.e. it has to be:
1. A margin account.
2. Have money borowed.
If you don’t work on margin, the stock-broker is not allowed to co-mingle or otherwise use your assets; certainly not use your stock for shorting purposes and stay within the law, in the US.
The latest estimate is that about 1 million accounts in the US will suffer some loss.
MF Global customers should eventually get back about 71 cents on the dollar, I believe. But, of course, they will also have lost the use of their funds during the settlement period, and the settlement may also be further reduced by litigation expenses, a consequence of the CME’s completely hands-off,” nothing to do with us” attitude.
David: I believe you are correct as Rule 15c3-3 does restrict the use of “Margin” accounts by brokers to 140% inside the US, however certain funds, bonds, money markets and other asset classes can be rehypothecated to extreme outside the US even if it is a non margin account.
Last year many of these brokers restricted accounts from opening new positions in Treasury based cash funds. Those who already had treasury based cash funds were allowed to keep and maintain, but no new positions were made. I think the reason given by the Brokers for this action was the profit of managing treasury based cash transfer or slush funds was too low due to 0% interest received, but perhaps it was for another reason altogether. In any case, any cash account which provides interest payments above say 1% is highly suspect for high Risk.
Al,
Thanks, I feel so good after that interview with david. Everybody sounds so depressed. Remember Christ said when you see all these things approaching, Look up for your redemption is close at hand. Al, this is time to understand that mankind has truly messed up a system which God allowed us to command with our own will and they he will come and correct the wrongs that we have made with righteousness. So cheer up, where were going we don’t need money anyway.
Tim
Morning Timothy,
Your comments are very appropriate.
Kathy and I are off to church now. (Where we go pretty much every Sunday) The services certainly put a correct perspective in our lives.
God bless,
Big Al
Al,
Thanks for running the David McAlvany piece (Segment 4).
bobby
HI Bobby,
David is a very valuable guest on our show.
Best,
Big Al
Dr Ron Paul’s views on the inverse relationship between government size and economic growth is now supported by an ECB study.
http://www.ecb.int/pub/pdf/scpwps/ecbwp1399.pdf
Perhaps you can interview the authors-António Afonso
and João Tovar Jalles
Thanks Tex,
Great idea,
Big Al
One issue that keeps on recurring in my mind is how safe would gold or silver bullion be in a safety deposit box at a so called reputable CDN bank if there is a financial meltdown. I don’t think it should ever be kept in your home or in a safe on your premises. How should people store these items in order to maximize protection, very few people can afford the options of a “Doug Casey”. Would it be preferable to split your bullion and keep it at two different banking locations. Any other thoughts would be appreciated?