I set great score by the accuracy of the material presented in my Blog. A single source of information is not enough.
The level set is that of a Jury; Does the material meet the standard of "Beyond Reasonable Doubt". Because the material is so far beyond what a person is exposed to the standard is higher. You can perform the checks & balances yourself. I hope you will as your life and the future of the Human Race hangs in the balance.
We live in a time that might occur once in 25,000 Years.

Sunday, December 11, 2011

The Loss of Trust & Market Failure

"When you accept money in payment for your effort, you do so only on the conviction that you will exchange it for the product of the effort of others.” Ayn Rand

In case you missed it the past month has produced the “Lehman Moment” for a 150,000 Investors who were basically robbed of $1.5 Billion USD. In the moment that these people had placed money into MF Global they did so with the same faith and confidence they might have when depositing cash into a Saving Account in the Bank.

They were sadly disappointed to receive a Margin Call that in fact the money had been bet by the Management of MF Global on high Leveraging and dangerous adventures and to add Salt to the wound the ‘Responsible Parties’ have not face any Legal Sanction. Fraud for some is Legal. For any of us without access to those in power we would be Handcuffed and Jailed.

The ripple effect is only just beginning, one Trader has publicly closed her business and stated she could no longer, in good faith guarantee the safety of her clients money. For every one of the 150,000 who were robbed another 150,000,000 at a conservative guess would be headed to their Computers and looking at the exposure they now have in a new environment, an environment that is now totally unpredictable.

How do you calculate Risk in this type of environment? All the Charts, Technical & Fundamental analysis you may perform is virtually worthless Risk Assessment is now a simple question. How do I preserve my wealth. Your wealth being the sum total of your labor in the years since you first became a member of the majority, the working class is anyone who through honest exercise of Mind & Body produces product and obtains payment in return.

When the Law is not applied with equality, when Interest Rates are lower than Inflation (through Government Intervention) we exist in the environment of Financial Repression. The Investor has been boiled down to holding depreciating cash, mostly in the form of  Paper FIAT Money. Money that for over 40 years is not backed by Gold or any other Asset of Substance.

Another underreported News item has been the result of the 27 Countries of the Euro Union that are now 26, Briton having decided that her best interests were served by not participating in the purchase of what is essentially Junk Bonds from ‘Under Capitalized’ European Banks. Put another way, Bankrupt Banks.

Unlike WW1 & 2 the English Channel is no protection for the Financial War that has been declared between the French / German Union V The British Financial System. We will see the ramifications of this in the months to come, like Atomic War it will be the Government that strikes first that will possibly survive the inevitable retaliation.

Countries are broke, Banks are Broke and the Gloves are off, like the victims of MF Global the consequences of the failure of Trust, trust being the glue and Rule of Law the Structure no longer exist. The individual has no choice now but to seek Survival, fallout from these Wars will begin climbing an exponential swing devouring all as War has a tendency to do, the least protected, the easiest ‘Marks’ will be either eroded or like the MFG victims wake up to find something else they thought was secure and safe will not be.

Take nothing for granted, no promise by Government or Corporation, no ‘Certificate’ has meaning. WW3 is here like the Neutron Bomb the buildings still stand but there is no escape from the Particle Storm

No comments:

Post a Comment