Is JPMorgan Joining Up with Gold Bugs?

People fighting for liberty, limited government, and honest money may have an unlikely ally according to Tom Luongo of the Gold, Goats N Guns blog. He recognizes a split in the monolithic powers running the world. Commercial banks may not be on board with the effort to establish a socialist world government.

Major Wall Street Banks, and JPMorgan in particular, are seeing their key traders convicted of criminal price rigging in the precious metal markets. The long running manipulation, with cover from some federal regulators, has earned the bank widespread hatred among gold and silver investors.

Now it appears the bullion banks have largely exited their notorious, concentrated short position.

Luongo expects the Federal Reserve may be willing to stay the course on tightening, even if it hurts.

If he is right, the banks have decided they hate socialism even more than they love gorging on free money.

When World Economic Forum founder Klaus Schwab says we will “own nothing and be happy,” it is as much a threat to bankers as it is to the rest of us. A world where most people are eating bugs and where population control is more important than economic growth looks mighty grim to nearly all of us.

Wall Street banks also likely oppose the move toward central bank digital currencies. It will be bad for conventional banking if access to capital is underwritten by social credit scores rather than FICO scores – and if deposits are managed by a centralized ledger.

The authoritarian model in China is being embraced by Davos elites who are pushing centrally planned globalism for Europe and the United States.

At the moment, that agenda isn’t faring too well. President Joe Biden’s approval numbers are in the tank amid backlash to his Davos-hatched “Build Back Better” schemes.

Prime ministers in both England and Italy have recently resigned. If Italy elects someone to lead them out of the European Union, it may well be the EU's death knell.

The value of the euro is sinking and may fall much further as the European Central Bank struggles to keep interest rates far lower than the U.S. For the moment at least, the Federal Reserve appears content to keep hiking and ratcheting up the pain.

U.S. banks landed a punch of their own when they stopped taking European debt as collateral in the repo markets more than a year ago.

There will be consequences to tighter monetary policy.

For now, however, there are forces offsetting some of the negative effects. U.S. equity markets, for example, are faring better than many expected because investors see no better alternatives.

The economic outlook in Europe is poor, and it could be just as bad in China.

A wave of capital is coming to America. That does not mean the fiscal sins of the U.S. have been forgiven or forgotten. Luongo just expects the reckoning will arrive here after it has blown up the European Union and, perhaps, the Chinese Communist Party.

The wide scale loss of confidence happening in Europe and China is coming here as well. The grim reaper eventually comes for all badly abused fiat currencies. In the meantime, tangible assets will continue their ascent in nominal terms.

When the reckoning arrives here, Americans should remember that central bankers are responsible. For now, we can become better prepared for what’s coming by shoring up our holdings of hard assets.

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