Posted Apr 24, 2013 by Martin Armstrong
“Martin, I have worked in the futures market for 20 years and what a great business! Unfortunately, Corzine turned up and destroyed our “Sleepy futures operation and hell.. what do they know….. I am an ex GS CEO…”. – Let me tell you for the record, he bought Greek bonds in size in 2010!! “Mr Corzine… you cant do that”!.. Well. the rest is history….
I digress, may I just simply thank you for your magnanimous missives, I know no other site where one can be so informed for no cost. Sir, you are doing us all a credit.”
Over my career, I believed I was perhaps too restless in search of something I could not find nor describe so I tended to try different things from banking to brokerage to hedge fund management. Those combined experiences have opened my eyes. Then having offices on every continent and over 240 employees, as Milton Friedman put it – I had a front row seat to observe a world few even knew existed. I began in computer engineering and saw RCA, which was at the top of its game, sell its computer division to IBM & Univac because it judged the computer as its experience with radio. I began to observe how big corporations made decisions and planted the seeds of their own destruction.
RCA (Radio Corporation of America) was one of the high flying stocks even during the Great Depression. No matter how bad it was, people wanted to buy a radio to hear how bad it was. RCA thought the computer began at the top of a cycle and would collapse like the radio becoming a crystal set for kids in a 5c & 10c store. They were wrong. Sold their future and became a tiny subdivision of GE. Oh. How the might have fallen!
I moved into the metals. I became one of the largest market makers in the CASH business for 1980. I wrote the laws for the State of NJ making gold not subject to tax in 1975 only to have the state later say it was & I may have misunderstood what the Senate asked me to do, The feds after 1980 came in and declared me to be a bank so they could seize all our records and investigate 3,000 customers to see if they paid their taxes.
I was probably the largest in gold industry as a market maker since I was the one the IRS targeted, not for my taxes, but for clients. I was a major shareholder of a bank and was on the board participating in decisions as to who got loans or not. We sold that bank to the NY boys.
I have been touted as starting the overnight markets because to make markets AFTER COMEX closed, which was unheard of in the 1970s, I used my international contacts, made markets after the close while competitors and others swore I was just speculating. In truth, I was selling in Hong Kong, yet I had to make physical delivery in London the next morning. This was scrap gold I bought from all the dealers that took 6 weeks to refine. I had to “borrow” physical gold in London to make delivery, then the next day do the trade on COMEX and swapped that position with the dealer in London. I got little sleep and then showed people how to do it. I became a partner in one of the oldest brokerage houses – one of the founding members of the LME in London and sold that to the Australians.
I have been called into virtually every crisis since the collapse of Franklin National Bank in the mid-70s. That got me well behind-the-curtain. Because of my computer skills, I could see how writing a program in the 1970s would track the world. When I was retiring from making markets, the analysis we provided was spun off as Princeton Economics. We were more than a decade ahead of everyone – the first to even create computer models for markets. Because of my background in Physics, competitors tried to mimic us hiring what became known as “quants” to try to also apply physics. When I warned of the 1987 Crash, the White House disagreed because we were the ONLY people with a model that was could forecast a rise in volatility. We recently published the 1985 chart handout for the World Economic Conference held in Princeton, New Jersey showing the amazing volatility projections for the decades that have now materialized.
We predated both Goldman Sacks & Solomon Brothers. I have seen the futures “trading” community take over Wall Street and not only flipped it on its head, but made proprietary trading the primary objective. They repealed Glass Steagal so they could trade with other people’s money and set the stage for the collapse of Western Civilization because they have created products that blow up consistently and it is all about just making money now.
These stories of “paper gold” and other nonsense are so far from reality, they can only be diversions to set people up to be perpetual buyers in order to sell and make money. They succeed in making people accept the losses and want more convincing them that they are not wrong so double up and you will see! Just go with the flow. This is about surviving the economic collapse these people have created by misinforming government and greasing their hands. Don’t worry. The world is collapsing anyway because politicians will not act until it crashes and burns. This has nothing to do with “paper” gold and pretending they are not really wrong and gold has not risen BECAUSE of all the “paper” shorts. That is brain-dead reasoning, twisting the very facts about a free market, borders on communism, and fails to appreciate that it is the “shorts” who buy during declines when nobody else has the guts to do so,
The investigations into WHO was short by the Senate during the Great Depression is WHY the stocks fell by 90% since nobody wanted to go short for fear that they would be hauled before the Senate and accused of treason. No shorts = collapse with no buying. The bullshit is good – but it is still bullshit. The assumption is only people who buy are “real” and they will always have the money to constantly buy more and the CONFIDENCE to always hold. This is just gibberish. Watch gold collapse and you will see CONFIDENCE evaporates so you may still believe, but will you put your money where your mouth is or just desperately try to convince others to buy to support your failing position? Only the fools die dead broke. People who listened to such stories when that same pitch was made by stock brokers – buy and hold – led to numerous suicides. This is a market. It is how it trades. That’s it. Learn and go with the flow or jump now because you will end up broke.
Remember an old adage. – God may be compassionate – Markets are not. Bullshit stories adorn the halls of all instruments. They are part of a sales pitch. That’s it. Just like municipal bonds have never defaulted. Right – Another good one! Try Detroit 1933 – ya they paid off in 1963. That’s a default in my book.