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Category: Richard De Graff

  • It Can not happen to Me Chapter 18

    It Can not happen to Me Chapter 18

    IT CAN NOT HAPPEN TO ME.  GUESS WHAT?  IT WILL!!!

    Chapter 18

    The SHADY SIDE OF SILVER

    While everyone seems to ignore the casino atmosphere of the securities markets worldwide, there is a time bomb about to explode.

    The volatility of the silver futures market is like bungee jumper without a rope.

    It seems a complex game, but when you break it down, we all going to pay the devil. We all know it is wrong, but few speak up.

    For starters , The Federal Reserve Board of the United States and other central bankers around the world are keeping their funds which they transact business with other member banks artificially low.   This was done during the banking crisis, but they have failed investigate the abuses.

    One glaring abuse is a major bank can “borrow” a million dollars and with high frequency trades [i]and short the  silver contracts on the COMEX .[ii] They are selling contracts that they do not own. Another scheme is to place factious orders to sell to scare the buyers away. This drops the bids temporarily low. In an nano second the computers cancels the sells and instead buy at the depressed prices. These trades place an artificial cap on the price. Now the computers , some instances are trading among themselves with no human benefit.

    AS is the case of silver, the industrial demand far outstrips the world’s supply. The total amount used is 755.7 million ounces. Here is the breakdown for industrial uses. One can quickly observe that over half is for industrial use.

    Silver has unlimited applications in science, industry and art plus investments. Total demand in 2010 was 487.4 million ounces for industrial use only. 167 million ounces were used  for jewelry and 101.3 million ounces  were used in medals and coins which were probably increased in 2012 because of the Olympics. Silver is used 1000 ounce bars for industrial use. There is about 1.25 billion ounces of silver in the entire world in 1000 bars. These bars are not just floating to be plucked out of thin air. They are often broken down for use in computers and solar panels and mirrors just to name a few.

    J P Morgan Chase was reported to be short 95 million ounces as of August 18, 2012. The 8 largest silver traders are short 40.9% of the entire COMEX future trading on a net basis. These contracts are in 1000 ounce bars. This will take over 100 trading days for them to cover(buy back) their shorts sales. This could be the straw that broke the camel’s back as far as inflation is concerned.

    When industrial users discover they might have a delivery problem they more than likely double order. This in itself will put added pressure on the shorts and send silver on a par with gold. There is three times more gold around than silver. If silver ever reached the price of gold, forget the Euro and everything else. Heaven Forbid!!!

    What one can do. Own silver  for cash only. NOW

    What the authorities must do  worldwide.

    Raise Interest rates NOW.

    Abolish margin rates NOW.

    Bring back the uptick rule NOW.

    Reinstate the usury laws NOW.

    Hire outside Law firms  that will sue or try violators ona contingency basis. There only fee will be a fee based upon a predetimined percentage of the judgement. If they loose – no fee.  This will give would be violators second thoughts of breaking laws.  

    Finally go back to chapter one and review every chapter that I have written so far

    Cheerio !!!

       

    COMEX(Commodity and metal exchange) offers gold, silver, copper and aluminum contracts as well as FTSE Eurotop 100 and 300 stock indices.

     

    [ii] High frequency trades (HFT) are done by computing an allogrintem into a computer program that will trade silver contracts in nano seconds. This can also be done by posting factious offerings to scare away would be buyers causing the security to drop in value quickly. Then in a nano second it will buy back  the security. The difference in sale price and buy price is the profit. Using a million dollars on margin;  fractional change in price can be a tidy sum. It is estimated that 80 to 90% of all trades are  now HFT’s.

  • It Can Happen to Me. Guess what? It Will ! Chapter 17 Breaking Up the Banks

    It Can Happen to Me. Guess what? It Will ! Chapter 17 Breaking Up the Banks

    IT CAN NOT HAPPEN TO ME. GUESS WHAT? IT WILL !!
    Chapter 17   Breaking Up the Banks.

    “A GREEDY MAN BRINGS TROUBLE TO HIS FAMILY, BUT HE WHO HATES BRIBES WILL LIVE.” PROVERBS 15:27       When an industry is at the top or number one it has no place to go but down. This has been my observation for over 55 years. In the US Army it is called OJT (On the Job Training).  WE as citizens going into our local bank should be warned   WATCH OUT- THERE IS NO SUCH THING AS FREE LUNCH.

    Albert Einstein said man’s greatest invention is compound interest. Banks love it when they can put it to  use to an unsuspecting public.  Any funds one gets to work down the principal will find that it has expanded.  At some point one will not be able to pay that principal or off.

    A funny thing happen on the way to the bank. They did it to themselves. Easy credit will kill the goose every time. You see in order to gain more wealth , banks had to issue more debt in order to lend more.  GREED – it is a killer. Once one starts making and spending money; one needs more. It is at the very top that one takes chances in order to gain more. Usually these chances are at the detriment of us the average citizen trying to provide for a family.

    The names of Corzine, LIBOR, JP Morgan-Chase; Dimon and Weill mean little to the average citizen-until  they want to pay off debt. This is when the “Rule of 72” comes into play. It is very simple. Just divide the interest rate you are paying into 72.  Your answer is how many years the bank is doubling its money on you. So if you are paying an 8% mortgage for 30 years divided by 72 is every 9 years. To me that seems fair because you are using the banks money.  Credit cards can work on a monthly basis and now one is “going where no man has gone before”-STAR TREK. Once a debt is in outer space it is up to the courts (and the courts have to follow the law) the debtor is a pawn to spineless attorneys who seek a quick reward for returning a pittance to the lender. This is legal larceny and a USURY law supported by all nations would halt this practice and create more jobs and distribute more wealth over a wider area.

    Once a bank has you in their indebtedness you lose your freedom. The more debt you take on; the deeper the hole you are in. If you are a lawmaker, one should open their safe deposit boxes. IN the days of yesteryear, politicians would accept tax free municipal bonds, but today they have to be registered. Now one finds cash that has been unreported?

    So Nothing big can happen until elections are held, because it is more likely that the legislators involved with any kind of finances are on the take. So our votes are very important. We must elect enough new members that a group can control any committee. This has to be done in a bipartisan spirit.

    So to break up the banks in a meaningful term we must have a majority turnover in world wide elections.  WE must enforce a strong Usury Law for the protection of us all.

    When JP Morgan has outrageous short positions in Gold and Silver futures on the COMEX and the CFTC is powerless to enforce them against this giant bank. The CFTC entire budget is around $200-$300 million while JP Morgan could spend $5 billion defending their illegal position. When a giant bank can out maneuver their government of laws – the bank should be broken up rather quickly.

    My next chapters will have to do with the brokerage and financial management part of the break up.

  • What Goes Around Must Come Around Chapter16

    What Goes Around Must Come Around Chapter16

    WHAT GOES AROUND MUST COME AROUND

    IT CAN NOT HAPPEN TO ME. GUESS WHAT? It will !!!

    Chapter 16

    On February 10, 1941 then Senator Harry S Truman made a speech telling the [1]Senate what he had found on his investigations of government waste in the war effort.  The Senate passed his resolution and authorized $15,000 and made him Chairman.

    That was the beginning of the “Truman Commission.” It saved the taxpayers over $15 BILLION dollars and saved thousands of soldiers lives. FDR even encouraged Truman to look into certain areas. Every report made by the committee was unanimous. During the course of the war the committee’s budget was increased from the initial $15,000 to $300,000. That is amazing considering how today this congress is so divided.

    Because of his positive efforts as a fine senator FDR chose him to become his vice President when he ran for a fourth term.

    Truman felt that people dealing with government funds , whether they are local, state or national have very little respect for those funds.

    It is my belief that when you have a boom period, people become very sloppy because IT IS NOT THEIR MONEY.   Then when times are tough which is usually the case after a boom period- good times can not last forever-they get too dependant upon those loose funds and create clever schemes to cover up their begotten gains.

    A perfect example of this is what went on with Fannie Mae and Freddie Mac the two giant government mortgage agencies that are now controlled by the Federal Housing Finance Agency at the cost of over $150billion. They (bureaucrats) are trying to figure out what to do with them.  These entities should be closed down immediately. The mortgages, if found, should be returned to the originating bank and serviced there interest free. I believe this is one of the reasons Collateralized mortgages (CMO”s) and derivatives were created as another way to fleece the public. The firms that created these monster fraud vehicles should be the ones to pay and forced to leave the business. This is a process of power and corruption. What goes around comes around. Too big to Fail should mean too big to save. The public worked hard to save and invest for a home, it is the politicians and the bureaucrats that squandered their savings and ruined their dreams. They are trying to muddy the thought process by bringing up the fact that there are some folks who have been paying. If they can pay the principal then forgive the interest payments. Give them a second chance – not the politicians.

    Some of these instruments have been traded into oblivion and should be trashed with the creator of these funny money obligations taking the loss. That is if they can be found. This will ultimately be a good savory bone for the beleaguered savings industry.

    When a mortgage was submitted to the Fannie Mae or Freddie Mac those funds left the local community and fleeced the pockets of bureaucrats inWashingtonD.C…Simply put – more fingers tasting the pie.

    IT BEHOOVES EVERY NEWLY ELECTED POLITICIAN IN EVERY DECOCRATIC FORM OF GOVERNMENT WORLDWIDE TO INVESTIGATE FOR WASTE AND CORRUPTION IN THEIR COUNTIRES.  Some agencies should be dropped and other downsized and maybe some increased. The main purpose is to recover ill-gotten gains even if they were transferred to other entities. This will help bring down government deficits and reduce government debt. If Harry Truman’s committee saved billions of dollars in the early 1940’s; think of all the moneys that can be saved today. One of the wealthiest cities in the world today is WASHINGTON.DC.

    Governments should not get into the people’s business, but they must set fair and honest rules so the participants are guaranteed an equal chance. Participants that break the rules should be severely punished.

     

    [1] Plain Speaking An Oral biography of Harry S Truman, Chapter 13

    Merle Miller

  • WE THE PEOPLE……..

    WE THE PEOPLE……..

    WE THE PEOPLE…

    CHAPTER 15

    IT CAN NOT HAPPEN TO ME.  GUESS WHAT? IT WILL!!!

    The following message is for every citizen of every country that has the right to choose their own elected officials.

    Come July 1, 2012 the world is in financial agony. A tsunami of easy credit has flooded our shores. The blame game has erupted with all its fury as nations pockmark each other with vicious language to placate their voters.

    The real culprit is us – the voter. We voted them into office. We are to blame. There have been and will be many important elections this year and WE THE PEOPLE must take control of our destinies. Elected officials fear us and have been buying us off with various entitlements for decades. If it did not work, then they just, made it larger. So today, as our bankers joyfully watch and estimate their future net worth, we are slowly falling into an abyss with a stench of sulfur.

    Considering these elections, one’s party affiliations do not matter, because it is the candidate’s beliefs that are of the utmost importance now.

    Which candidate favors reinstating the USURY LAW where the maximum interest rate should be limited to 8%. The Rule of 72 is what bankers live by. All one has to do is to take 72 and divide it by 8 the answer is how many years it will take the bank to double its investment in you. The Usury law was dropped in the mid 1970’s because interest rates were 14% and everyone was maxing out their credit cards (that is borrowing the most they could) and buying a US Government bond at 14%. Then they would pay of the credit card and net 6%. This is called disintermediation and not very healthy long term. So congress was forced to drop the law. But they also failed to reinstate it when the danger expired. It is my suspicion that some members on key committees received special favors.

    If you have a 30 year mortgage on your home and you are paying 8% to the bank; the bank will make 3.33 times on helping you on your mortgage by providing the necessary funds. This is where they provide an important function in your community. The higher rate you pay the quicker they double their money. This is why past legislators legalized as max rate – to protect you from unscrupulous bankers. Remember bankers have the moral obligation to protect our deposits for our advantage not theirs.  Dividends should come from earnings before bonuses are distributed.  Public trust comes before employees looting.

    Credit cards are a bastard. They are figured in months not years.  This is legalized extortion.  Pure and simple.

    Enacting or reinstating the USURY LAW will benefit the individual and corporations while reducing the bankers’ bonuses.

    A candidate must be willing to petition the Federal Reserve to raise margin rates across the board to 100% for 3 to 6 months worldwide. This will stop all the abuses going on in the market place and make it safe for honest investors. This will halt high frequency trades that are computer driven and benefit a few while harming millions. Hedge funds that use easy credit to skirt regulations will be halted. Best of all derivatives and collateralized debt instruments will go the way of the dinosaur.

    Stop Quantitative Easing (QE) dead in its tracks. Go for Quantitative Giving (QG). QE goes to the largest corporation and unions where the money trickles down through the officers and union leaders before long term good is completed.

    With QG the Fed must raise fed funds to the 1-2% range so banks restart increasing their savings account rates. This will encourage investors to increase their debt from short term to longer term because they have more confidence in the future.

    QG is giving a large stipend to everyUScitizen over the age of 21($50,000 -$100,000) to use as he or she sees fit. Pay down debts etc. with the proviso that at least 10% should be used to purchase a new product. This will getAmericagoing again create jobs and new businesses.  The public knows best- not bureaucrats inWashingtonD.C.

     

  • IT CAN NOT HAPPEN TO ME. CHAPTER 14

    IT CAN NOT HAPPEN TO ME. CHAPTER 14

    IT WILL NOT HAPPEN TO ME. GUESS WHAT?  IT WILL!!

    Chapter 14

    Pity the Greek Citizens – Not the Politicians

    What you see and hear about Greece will slowly come our way. Socialism is a great deal for the politicians as long as they can provide openhanded gifts to the populace. As long as they could borrow money and put off the consequences until they could leave office – fine.

    Once when no one will submit bids for their debt the game is really over. They better have an escape route to Argentina ready.

    Once they joined the European Union, they lost their freedom to default for they are now tied to everyone else. A simple solution would be debt holders to forgive interest and go for the principal only. This would cause severe pain among the bankers whose salary is paid. Right now they are still in control, but slowly losing it as citizens start to revolt.

    Now dear reader, this is how it will happen to you. Hospitals that depend upon government assistance will start to run out of supplies because they can not pay. Try blood bags, plastic gloves used to stop the spread of diseases’ from staff and patients.  Unable to pay staff and nurses, and to matters worse all medical plans must be p[aid in full first.

    Utilities can not pay for gas from Russia’s Gazprom. Italians stop supplying for the same reason and also their need locally overrides the Greeks need.

    Greeks import some 40% of their food supplies. All of its oil and gas is imported, and almost all of its drugs and elixirs.

    Its main industries are tourism and shipping. With high unemployment and a rising crime rate their outlook is more than bleak.

    There is not easy way out for the Greeks, and all the solutions would be long term. Necessity will force changes in life styles. It will not come easily either. What they need is a Pericles and or a Spartan Police force.

    Meanwhile Portugal and Spain are not far behind. Then there are the Italians and then France. Eagan Jones has just reduced their rating of Germany to AA, they are a private rating agency that is a step above the rest in my humble opinion.

    Another long term solutions is to have term limits for all politicians. This makes it harder for them to con the public. It is more interesting watching a newly elected official trying to win votes knowing that he has a short time to prove his worth to the electorate.

    One thing is certain, the world wide economy will be slowing down as countries and their corporations prove their credit worthiness. This era is a “game changer” and we will need new rules and safeguards to protect us from the robber barons of yesteryear.

  • It CAN’T HAPPEN TO ME. GUESS WHAT? IT WILL!!!

    It CAN’T HAPPEN TO ME. GUESS WHAT? IT WILL!!!

    IT CAN’T HAPPEN TO ME.   GUESS WHAT?   IT WILL!!

     

    Chapter 12

     

    The Flow of Money

     

    Money goes where it is treated best.  This really means money goes where the owner of money is treated best.

    States that have low taxes have the lowest unemployment rate because there is less money for bureaucracy and more for investments. Investment means jobs for the individual.

    Now doing business with an honest profit motive versus wiping out the spread between profit and loss sounds good, but in reality can be the cause of the opposite result.

    Case in point is the Stock commissions. When the authorities moved to the decimal system versus fractions the middleman was wiped out. Investments now became gambles. Many firms sprung up over night advertising first 100 trades free. So the unwary would buy 10,000 shares of a penny stock.

    Volume exploded on the upside. So did volatility because the  “pros” did not have the funds available, made possible by market spreads, to support stocks.

    To supplement lost income the “street” invented ways to fleece the unwary and line their pockets. Instead of working with clients and protecting them; it became an all out war.

    First it was the Options market. In the beginning over 80% of all trades were losers; I do not know if it has improved much over the years. Number one rule is: There is no such thing as a free lunch!

    Then came the big bombs. So called “bunker busters” under the guise of derivatives and collateralize mortgage obligations or CMO’s.

    One can collateralize anything providing they have a willing buyer. The “spread” is humongous versus the honest stock exchange commissions of yesteryear. This is why some firms have billion dollar earnings QUARTERLY.

    This fiasco has become such a financial nightmare there is no easy way out except to ban all future trades and let the existing ones wind down under their own steam.

    The markets have become giant casinos for daily trading.  Increasing the cost of investments will cause one to invest versus trade for penny profits.

    By raising margin rates across the whole spectrum of investments will stall SPECULATION.

    This experiment in negotiated rates to benefit the little guy has backfired. The little guy is dead and buried. The survivors are petrified.