Re: [A-List] JP Morgan's *$23tn* derivative bust?

["Anne Williamson" <annewilliamson@xxxxxxx>]

Well, yes, the price of gold is the critical element in the overall
game -- as the gold market is the "alarm bell" that rings when
irresponsible money pumping becomes imprudent; today the
game is criminally imprudent.  Keynes's "Gibson's Paradox"
addresses the historic relationship between the price of gold
and interest rates (they are inverse of one another).  Larry Summers,
who wrote about this paradox with a co-author when he was still
just a humble man of Harvard (!) in the late 80s.  Summers concluded
the only way to beat it was for the govt to "fix" (rig) the price of gold,
which is just what has happened.  Of course, the dollar as the reserve
currency is greatly affected by this game, thus Rubin's "strong dollar,"
which is crushing US manufacturers and producers (esp. agriculture,
a California farmer can not sell an avacado as cheaply as one imported
into his own local markets!), and enabling the swift and relatively easy
looting of foreign nations (Argentina, sacrified to the gold game due to
their
peso/dollar peg is a real time demonstration of what the rigging can do.)
But Morgan has taken it a step further, exploiting the artificially-obtained
low gold price as the "underlying asset" which has allowed them to place
interest rate derivative bets of $23 trillion - simply unbelievable. A
rising price of gold and/or volatility due to the action of the bond
vigilantes
in the market would ruin them.  So they are threatened by a free gold
market and/or current market action involving the constant threat to
those employing "shorts," i.e. a "short squeeze."  If gold is allowed
to find its natural level in the market, however, all hell truly breaks
free for Morgan.  -A.

----- Original Message -----
From: Mark Jones <mark.jones@xxxxxxxxxxxxx>
To: <a-list@xxxxxxxxxxxxxxxxxxx>
Sent: Sunday, December 23, 2001 6:05 AM
Subject: Re: [A-List] JP Morgan's *$23tn* derivative bust?


> At 23/12/2001 00:08, Christian wrote:
> > >With a rigged gold market and a constantly strong dollar, J.P.  Morgan
> >Chase built up a 23 trillion dollar derivative rate position that is ON
> >THEIR BOOKS RIGHT NOW! That unfathomable mega-position is one that cannot
> >tolerate interest rate and general market VOLATILITY as they are SHORT
> >volatility.
> >
> >Does anyone have any idea of how you would short volatility? Would this
mean
> >short selling fixed rate interest swaps?
> >
> >Also, if Henry or anyone else has article or book references for the gold
> >market situation, I'd appreciate it.
>
>
> presumably he means they couldn't stand a *rise* in the price of gold, ie
> fall in the dollar, because this would force Greenspan to raise rates.
Wild
> guess I'm afraid.
>
> Mark
>
>
>