Tuesday, July 10, 2012

Systematic Wealth Confiscation

"[S]ome accounting irregularities are being investigated regarding company accounts...What this means is no customers are able to trade except to liquidate positions. Until further notice, PFGBEST is not authorized to release any funds" - that is the notice given to brokerage customers of PFGBest, Peregrine Financial Group.
"PFGBest is not authorized to release any funds."   Get used to seeing brokerage notices like that.  That is what happened with MF Global.  It's also, in part, what happened with Lehman.  There's also a common thread behind these brokerage firm collapses:  JP Morgan and the systematic confiscation of your wealth.  JP Morgan was one of Lehman's big custodial banks, JP Morgan was the custodian for MF Global's failed book of investments and JP Morgan is the custodian for PFGBest's FX business, which is around $220 million - the amount of missing client funds.

If anyone wants to read about the details, including PFG's CEO's attempted suicide, you can do so here: LINK.  If the PFG CEO really wants to end his life, I'd be happy to be his Dr. Kevorkian.

This whole situation is almost boilerplate like MF Global.  What surprises me the most is that no one in blogosphere or the media has connected this "boilerplate" to the Lehman collapse.  JP Morgan made off with several billion in Lehman assets then.

This kind of adventure, if the Obama Administration does not start dismantling JP Morgan and cracking down on this extreme financial fraud, will be become a weekly event.  The beauty of the MF Global situation is that it set up the boilerplate for customer funds to be confiscated within a rigged jurisprudence framework.

It gets back to the necessity for everyone to unload their IRAs, get out of their 401k's to the extent possible, and get as much of their invested wealth IN to precious metals and OUT of the financial system.  People can "pooh pooh" this advice, but they'll regret it.

Back in 2002, I made the statement that the insider elitists would hold up the system to loot every last crumb of middle class wealth and that the IRA's/401k's would be the last go.  It's starting to look like I was right.  In fact, I just got off the phone with a very good, long time friend who accused me back in 2003 of "seeing black helicopters in the sky" (i.e. I was a whacked out conspiracy theorist).  His greeting this morning was: "I can't believe how right you've been about all of this."

By the way, anyone keeping their precious metals IRA account, or any other precious metals-related account, at PFG Precious Metals, you can probably kiss it good-bye.  Will Monex be next?


  1. This overlays nicely with LTCM & browns bottom, no?

    Lies, Damn Lies and LIBOR
    By London Banker

    I've been hesitant to write about the LIBOR scandal because what I want to say goes so much further. We now know that Barclays and other major global banks have been manipulating the calculation of LIBOR through the quotation data they provided to the British Bankers Association. What I suspect is that this is not a flaw but a feature of modern financial markets. And if it was happening in LIBOR for between 5 and 15 years, then the business model has been profitably replicated to many other quotation-based reference prices.


  2. michael schumacherTuesday, 10 July, 2012

    and the irony of this is that alot of MFG clients got placed at PFG without consent.

  3. Where Are The (Legally-Imposed) Guillotines?

    May have?

    How the **** does a company claim to have $200 million on deposit when in fact it has less than $10 million and nobody cross-checks that claimed money on deposit with the institution where it is to insure that the company is not lying?

    Again, WHAT THE ****?

    Look, this is pretty basic stuff. It appears that as far back as February the money was missing and nobody in the so-called "regulatory" apparatus caught them?


    And please tell me that 2010 and 2011 year is a misprint, because if not the money has been gone for more than two years.

    There have to be dozens of people who had direct knowledge of this and willfully cooperated or looked the other way. It's impossible for the facts to be otherwise.

    You think any brokerage is safe? Any futures merchant? Any account -- anywhere?


    Nobody has gone to prison for any of this crap!



    You want my damn vote, you want my support, you want me in the markets and you want me to invest, generate economic activity and consume then those of you in government from the federal level on down are going to do this and you are going to do it RIGHT DAMN NOW.

    This isn't a negotiation.

    It's a demand and I call upon all 330 million Americans to rise and speak this IDENTICAL demand in concert.


  4. What you and Jim Sinclair need to now concentrate on - What are the consequences of all these lies boiling up, ie Liebor, MFG, PFG and much of the looting.

    The big consequence is that more QE is not coming our way soon. In light of what is surfacing - politically QE will be a no go. Ahh but only if it is going to the people direct.

    At least Biderman is another who is waking up to the fact that QE will not be had easily.

    And perhaps a discussion on - When is "QE to infinity".

    None of the China physical matters.

    Apart from the usual suspects anti Gold there is also a group which consider themselves the "good guys" who are actively wanting to spoil the "Gold Standard" because it is the Elite who probably own most of it!!

    One of them to research is Dr David E. Martin - author of The Twelve Apostles - interview here - http://www.youtube.com/watch?v=SUL-YE6b3Xw

    1. Biderman is a blow-hard who likes to hear himself talk. There will be no more QE IF they want the system to collapse. If you think that's what they want at this point in time, then you should bet on that.

      I'm sticking with my original statement 10 years ago that "they" would hold up the system long enough to loot ALL middle class wealth. Back in 2002 I alread knew that housing was toast.

      They need more time at this point, which means more QE at some point.

    2. I agree that the QE will not come in any time soon and the systematic fraud committed by the bankers with the support of the judiciary will only make matters worse. It is this very issue and the protect the OTC derivatives position at all cost that will drive the price of gold down if it breaks $1500. So break of this $1500 level is extremely crucial http://bit.ly/N1y7mG

  5. The Elites Are Now Totally Discredited
    “Elites are discredited, not just in the US but throughout the world, including possibly in China if the economy there continues to do poorly. And it’s not just government elites, it’s also business elites, particularly financial elites in many countries, including the US, the bankers and the like. They will end up hanging a few. I suppose I’ll be spared because I’m too old.”
    “You look at the recent elections in France where the extreme right and the extreme left represented something like 30% of the vote. I think that’s troublesome because (it means) there is very little trust in the authorities, very little trust in government, very little trust in business, particularly in big business.

    That creates an environment which is, I’m not saying they are about to storm the Bastille, as they did in 1789 in France, I’m not saying they are coming down with their pitchforks, but it is, to me at least, a troubling phenomenon which does not speak well for the future if it continues....


    1. Not sure what you are saying about China.

      1. They regularly have 100,000 man riots and demonstrations that are totally spontaneous and the looting is organised through swarming.

      2. The Urghurs often get onto a bus in the North outside the tourist areas and shout in Urghur get out before they throw a hand grenade into the bus and all the Han are killed.

      None of this stuff makes the news. The Chinese live hand to mouth if the food prices breakout like the commodity complex recently has then starvation will become a reality in China as the iron rice bowl has gone by the way. The result will be revolution ala Eygpt. The Chinese are acutley aware of this possibility. Their choices are war on the borders or war at sea with the West to distract the domestic population. Talk to a Chinese guy in say a skate board shop and they will tell you how it works.

      I don't know who is saying this about the French revolution but Dave produced a very interesting chart from zero hedge showing the migration of fiat money systems and France like England under Cromwell or the American colonies under Washington was imploded for a reason. If you doubt me read Cornwallis's letter to Washington (supposedly of surrender) it makes fascinating and very strange and prescient reading.

      Nobody yet has anything to gain from imploding China but they could simply by letting inflation run riot if this happens the Communist elite will choose between war with the West over the China Sea or taking over countries on the borders.

  6. Dave good post, I'm with you on the looting. Just too much out there not to confiscate or inflate away. Do you believe that a misstep could hasten the process? Also your view (unloading) of the IRA/401K was surmised by me but it's the first reference I've seen. What's your take on the mine nationalization's? Don't these guys own these countries? The only thing I trust anymore is Baseball and the fact that the pitchers ERA averages are going to go down if Billy Martin becomes your Coach!


    1. LOL. Mine nationalizations are to be expected. First in the "rogue" countries and probably eventually here. But we'll have a massive move higher in the entire sector before that happens here.

      Retirement fund confiscation in some form is coming. Just a matter of time. They've already had symposiums in Congress on ideas. One idea floated in 2008 was replacing everyone's retirement fund with a retirement annuity that is annuitized by Treasuries. Neat way to finance the Govt, huh?

  7. Dave, I know you have mentioned previously that Fidelity is one of the few brokerages that are trustworthy (though trustworthy is a relative term among thieves and Wall Street). All the same, I pulled most of my money out of my Fidelity account and used it to buy physical gold and silver. Granted, I didn't have a large amount in Fidelity, but an ingot in hand is worth two shares in the account.
    The elites can steal all the paper wealth they can, stealing physical, especially well hidden physical, that is a different matter. Even the Romans with all of their legions couldn't force gold and silver out of the hands of hoarders, the elite will find the plundering of privately held PM's to be just as hard if not moreso.
    (Many who are buying gold and silver are also buying lead, if you get my point. I'm not advocating violence, just reporting what I hear.)
    Keep up the great work.

  8. Hola Chico,

    How bout that mighty USD.

    1. LOL. Ya about as mighty as Warren Buffet's hard-on without viagra. I've thought about doing a post about the relative non-strength of the dollar given the given turmoil in Europe and the money-printing in Japan. But I've let it go. The dollar can't even get the mid-80's. It's like this: "help help, Becky Quick has her lips wrapped around my pecker and I can't get it up."

  9. Dave,
    What is the inherently safest structured institution: retail bank, Fidelity type brokerage, or Scottrade type brokerage? Obviously not MFG type. I'm guessing Scottrade because they don't appear to be attempting to make any money for themselves via trading/money management/loans. They are simply accountants making money from transaction fees and skimming on interest rate plays off customer cash accounts. Have there ever been large scandals at such shops?

    1. None of it is safe. But there's degrees of "safety." Scottrade loans out your securities - aka hypothecation. That is not safe. If you want a safe brokerage situation, get your stock certificates physically delivered to you. It hurts your liquidity but it's safe. Any brokerage firm can engage in the type of fraud PFGBEST's CEO engaged in. Financial industry fraud is rampant, widespread and unregulated by the Obama Govt.

  10. Dave, I just spoke to Scottrade today regards hypothecation. They say that only accounts that have a signed margin agreement are at risk of having their assets/certificates(?) hypothecated. Thus, cash only and IRA accounts do not have have such agreements/risk. I don't have any margin agreements, so I'm good on this at least.

    Do you see any other brokerage custodial risks?

    Also, regards certificates, the rep at Scottrade said that it was not Scottrade who sent/dealt with the certificates, but an intermediary. AND that in many cases it was not possible to get them, and surprise, surprise, in cases where it was, they charged high fees to do so.


    1. Your rep is wrong. Any security that is held in street name regardless of whether it is margin, cash, or IRA can lent out unless you specifically sign an agreement that forbids the lending of your securities. And even then it doesn't prevent the fraud inherent in the system. He's also wrong about it being expensive to delivery your physical securities unless Scottrade charges a high fee for doing so.

      The bottom line is that no matter which brokerage firm you use, there is risk inherent in using any intermediary as a custodian for your assets. The question is, to what extent do you trust an intermediary? The only way avoid that risk is to not use intermediaries.

      At some point in the collapse of our system, no intermediaries will be safe. NONE. I don't think we're they're yet or I wouldn't use Fidelity for my personal account plus Schwab and a private depository for the money invested in my fund.

      The trick is to determine at what point will it be too late? I don't have an answer for that.

  11. Actually, I was just going to write back that he DID say it was held under Scottrade's name, despite the fact that it was a cash only or IRA account.
    Which got me thinking, if it IS in there name all the time... Seems to make fraud frighteningly easy.
    Thanks again.