The Golden Jackass makes the SHOCKING claim that perhaps 60,000 tons of allocated, segregated gold have been improperly used by the cartel to settle Asian margin calls!
He states that we will see $5,000/oz gold not from quantitative easing or the public entering the bull market, but from the cartel banks replacing what they improperly used in their leveraged games from allocated gold accounts!
Willie also informed The Doc that it appears that Morgan Stanley was used by the cartel to prevent a collapse in treasury bonds in 2010, and believes that Morgan Stanley was set up at the time by cartel banks as the next major financial firm to fail. He states that there are no buyers for treasury bonds, and that the only demand for treasuries are interest rate swaps creating false, artificial demand, and that these IR swaps were what caused the 10 year rally & ‘flight to safety’ in 2010.
Doc’s exclusive interview with Jim Willie is a full half-hour of The Golden Jackass in perhaps his most shocking and explosive interview ever!
FULL MUST LISTEN INTERVIEW BELOW!!
Jim Willie began the interview by discussing market rumors regarding troubles at Morgan Stanley:
One of my source’s father is a fund manager at Morgan Stanley. The word that I have heard is that ‘everything is going to hell.’
Morgan Stanley has big problems with their liquidity and insolvency. They are having problems with antiquated software from Smith-Barney era. He said that there are many long-standing veterans at Morgan Stanley who are SELLING ALL OF THEIR STOCK BECAUSE THE VETERANS EXPECT MORGAN STANLEY TO BE THE NEXT LEHMAN BROTHERS AND TO FAIL SOON!
Morgan Stanley is one of the largest brokerage houses in the US. Several years ago they merged with Dean Witter. They also merged with Smith-Barney. If you take their 7,500 brokers, and 200 accounts per broker, that’s 3.5 million accounts.
We’ve had MFGlobal erupt last Oct 31st. PFGBest collapsed earlier this summer. We’ve had a court ruling from the Sentinel management fun- a case from 2007- the court actually ruled that since they couldn’t prove malicious intent and motive to deceive and to steal, all those segregated private accounts have indeed been lost, and there’s nothing illegal about the action.
We’ve got all these cases where the courts are basically saying Doc that private accounts, even if they’re segregated, in brokerage firms can vanish. The billboard is very clear. Private accounts, even though segregated, CAN BE STOLEN!
The courts are saying these accounts aren’t segregated and should not be first in line, even though they are segregated!
The Doc asked whether the rehypothecation issues could escalate from futures accounts to brokerage accounts and deposit accounts:
That’s where I think we are going. There is a chain of priority- it’s like an upside down pyramid. The most risky brokerage accounts are futures accounts. We’ve seen futures accounts lost with MF Global and PFG. They have stolen segregated accounts. Next in the chain is private segregated stock accounts.
Unless and until the public sees private segregated stock accounts vanish at a giant conglomerate firm like Morgan Stanley, they will not wake up!
No one is protesting against these big banks for stealing from these segregated futures accounts. It’s because they’re futures accounts! The point is they’re segregated private accounts, and in bankruptcy law they are 1st in line during bankruptcies!!
This is very big, and I expect we’re going to see a jump into private brokerage accounts. It doesn’t look like it’s going to be Merrill Lynch, it looks like it could be Morgan Stanley. If a brokerage firm like Morgan Stanley goes to dust and customers have no access to their accounts, I’m expecting some of the private segregated accounts are going to go missing.
That’s how the public wakes up.
The Golden Jackass states that the cartel used Morgan Stanley to control the 10 year rate in 2010 using $8 Trillion in interest rate swaps and that MS is being set up as the next firm to fail by Goldman and JPM:
If you look at the office of the comptroller of the currency, you will see reports issued quarterly. In late 2010, these OCC reports on the derivatives showed that the big 4 banks were loaded with derivatives, but one stuck out- Morgan Stanley.
Morgan Stanley put on $8 TRILLION in interest rate swaps in the first half of 2010. I call them the designated hitter for Wall St. Why wasn’t it JP Morgan, BOA, or Goldman Sachs? My theory is simple: THEY EXPECTED LATER TO KILL MORGAN STANLEY! Lehman Brothers was killed because they had huge mortgage bonds and other things that weren’t exactly desirable. Bear Stearns was killed because they were pro gold and short the dollar.
Morgan Stanley created the false impression of a flight to safety in US treasury bonds. Take a look at the 10 year yield early in 2010. It was moving up to the 3.5% range! Alarm bells were going off! They were talking about QE and bond monetization by the Fed! China was backing out of buying treasury bonds! We had more supply, and less demand, and a rising 10 year yield. Suddenly we had a tremendous ‘flight to safety’. What a bunch of propaganda!
The OCC report’s report which reveals Morgan Stanley’s activity of $8 trillion in interest rate swaps, during the exact 6 month period that the 10 year yield went from 3.5% to 2%!
This made history! They called it a flight to safety! This during a period of growing debt and shrinking buyers!
I believe Morgan Stanley was set up as the next Wall Street firm to fail!
When this all happens, it’s going to get ugly, and it’s going to get uncontrollable! Like the Tower of Babel, the interest rate swaps tower is destabilizing, and it becomes more unstable whenever the 10 year makes a sharp move. The 10 year recently dropped below 1.4%, and has now spiked back to 1.7%. The 10 year’s move from 1.7% to 2.4% early in 2012 was the real cause of JP Morgan’s ICD9 losses which JPM blamed on bad European derivatives bets.
The bank’s entire system is to support the treasury bonds using the artificial demand of interest rate swaps! There is no actual buyer at all! It’s not the Chinese, it’s not the Japanese, it’s not the Russians, it’s not the Koreans, there are no buyers!
The only demand for treasuries are interest rate swaps creating false, artificial demand, and the IR swaps are what have caused the 10 year rallies and the ‘flight to safety’!
My sources tell me an entity from the East has sabotaged JP Morgan’s IR swap machinery. It will break and will not stop in it’s deterioration until it’s completely broken. It’s not stoppable! It’s coming apart at the seams!
The European government bonds are showing that they’re broken by going to 7%.
The US bonds are showing they’re broken by going to 1.5%!
Jim Willie also made the astonishing claim that the cartel has used 60,000 metric tons of allocated investors’ gold to satisfy margin calls from eastern interests:
I call it the Great Paper Solution Delusion. I was asked recently if the large banks are naked short gold, why don’t they just print some money and make the margin call go away? I stated it’s not that simple, their margin calls aren’t fixable by cash.
My friend asked, why not, all margin calls are fixable by cash! I replied then why are they off market?
These cases involve banks that must come up with gold to get out of margin calls in off-market transactions!
The banks have off-market transactions. Why are they off-market? If they’re just standard French gov’t bonds or Spanish bonds or short gold futures, why are they off-market?
My best gold source told me that since Feb 29th, 5,000 metric tons of gold have left NY and London banks and have been shipped East. This was in early July. 5,000 metric tons of gold were lost from the cartel banks: I’m talking Royal Bank of Scotland, JP Morgan, Barclays, Citi, BOA, Goldman Sachs. They’re losing their gold!
I kept asking my source, why do they need physical gold to settle their contracts! He said, it’s the nature of the contracts.
These are not standard contracts. When I asked who the counter-parties were, he responded the same entities in the East that have had the gold shipped to them.
What on earth is going on? Why can cash not settle margin calls? What is the nature of these off-market transactions? Why can only gold be used to satisfy the margin call?
My conclusion is that these cartel banks have improperly used ALLOCATED gold, and the Eastern entity is pissed off! The Eastern entity has the opportunity with their margin calls for the replacement of their improperly accessed gold from allocated segregated accounts.
It cannot be satisfied with cash because the original margin was placed with allocated gold improperly!
This contact of mine has updated this figure now that we’re into September, it’s up to 6,000 metric tons! 6,000 metric tons of gold have moved East, and I’m deducing that it’s largely allocated gold because cash could not be used to settle the margin call! The fact that it’s off-market, and only gold can satisfy it means that gold was used in the setting of the margin!
If they want their gold back, I’m suspecting that it’s allocated accounts!
My same source says that the LIBOR situation opens the door for lawyers and investigators to go in and examine the banks’ books during the discovery period, and as that happens, they’re getting access to other information.
The biggest scandal coming is not LIBOR, but the improper usage of allocated gold accounts. If 6,000 tons from allocated accounts have been sent East to satisfy margin calls, it’s JUST THE BEGINNING!
The same source informed me in 2010 that over 20,000 tons of allocated gold have been improperly used! In 2011 he informed me that the total had risen to 40,000 tons of allocated gold that have been improperly used from allocated, segregated accounts! Now he’s telling me that perhaps 60,000 tons of allocated, segregated gold have been improperly used!
The Doc replied that if the cartel is using allocated gold to settle margin calls they are likely using silver as well:
Jim Willie: Absolutely, there’s a tremendous amount of allocated silver gone. What makes silver more acutely a problem is that the above ground supplies have been depleted for 3-4 years. The major 6 billion ounce silver stockpile that Teddy Roosevelt ordered back in 1910 that was used by both the military and the US Mint was depleted in 2006 or 2007.
If you look at the annual output you’ll see that silver production is in decline. I see big problems with steady ongoing output declines going forward.
Jim Sinclair has been predicting $10,000/oz gold based on money printing. Based on the fact that you can’t expand the money supply without seeing the price of gold go up hand and hand! It’s a function of how much new money they’re pumping into the system.
If it’s 40,000 tons of allocated gold have been used improperly by the cartel banks. If the event comes that the cartel has to replace that under pressure of prosecution or worse, if some of the banksters disappear thanks to the Eastern enforcer, the Eastern coalition may force the cartel banks to replace their gold.
I believe we will see $5,000/oz gold not from the public entering the market, but I believe we will see $5,000/oz gold from the cartel banks replacing what they improperly used in their leveraged games from allocated gold accounts. We will get to high prices in gold from bankers replacing the gold that they improperly took from allocated accounts so that they avoid jail time. I’m talking about 40,000 tones- that is an order of magnitude larger than the coming public purchases.