MF Global's Enormous Implications

I have been taking note of the events and actions associated with MF Global since it filed Chapter 11 in October.

Before we draw conclusions we must examine the facts.


First consider some facts about CEO Jon Corzine:




Hired by Goldman Sachs as a bond trader in 1975.


CEO of Goldman Sachs from 1994 to 1999.


He left Goldman in 1999.


He attended meetings of the Bilderberg group 1995 -97, 1999, 2003 and 2004.


US Senator for New Jersey from 2001 to 2005.


Governor of New Jersey from 2006 to 2010.


CEO of MF Global from 2010 to Oct 31, 2011 when it filed Chapter 11 bankruptcy.




Second, let us consider some of the impact of this particular bankruptcy from a story in the IB Times:

According to Trace Schmeltz, a partner at the law firm of Barnes & Thornburg, a deal was being worked out Friday with "a major FCM (futures commodity merchant)," wherein the merchant would post collateral on physical gold positions, allowing customers with physical gold accounts to trade on or liquidate their assets. Schmeltz asked the merchant's name be withheld, citing the fact "their legal might not be done reviewing" specifics of the deal.

 People liquidating their assets will have to accept a 28 percent reduction in the amount of assets. The haircut, as it is called, results from the fact that more than $1.2 billion dollars that should have been segregated in MF Global's customer accounts is missing, a shortfall that will likely be shared by account holders regardless of what assets their accounts held.

Previously, customer's gold assets had been frozen as a result of the proceedings undertaken by James Giddens, the court-appointed trustee for the liquidation of MF Global.
The unfreezing of physical assets is little solace to some market participants, who will lose money both from the haircut and as a result of having their assets frozen during a time of high volatility in the physical metals market.
Gerald Celente, a well-respected market forecaster who publishes The Trends Journal -- and who says he held a six-figure position in physical gold prior to the broker's collapse -- described the saga befalling physical gold traders like himself as "bulls--t."
"That this should have even been a question is an outrage," Celente told the International Business Times.
"That people had to hire a lawyer to get their gold back because some criminal group decided it wasn't theirs anymore -- you can only get away from this when you get to make the rules," he continued, adding that, as a trader "you're only as safe as the last loophole. You have no protection out there."
Celente was particularly aggrieved because, as he explained in a YouTube video shortly after the MF Global collapse, he had specifically requested delivery on his gold, rejecting the warehouse receipt most traders will usually accept.
"Now I know why you heard all those stories about people putting the money under the mattress for safety," Celente said "If you don't have it in your pocket, you don't own it."

Finally consider this report from Jim Willie:



If Jim Willie is correct, the Comex is insolvent.


They simply can't deliver anywhere close to the amount of gold and silver contracts that are traded.


 His theory that MF Global went down, at least in part, due to the inability to deliver precious metals may have an unpleasant truth hidden beneath it.


The missing money, part of which appeared recently at a JP Morgan account, (a bullion bank) is intriguing.


It may take months to get to the bottom of these allegations. 


Now, some members of congress are demanding the Department of Justice step in as this letter shows. 


If no one goes to jail for the obvious fraud that has occurred, it is my view that the American people will lose faith in public officials and even fuel further protests and civil disobedience.