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MF Global: Was It A Hit?

Lawrence LepardZero HedgeNovember 19, 2011

MF Global: Was It A Hit?

Imagine you are Ben Bernanke, or on the Board of Governors of theFederal Reserve. The time frame is July and August of 2011 and the priceof gold is on a tear. Commodities inflation has been persistent and is

breaking out everywhere. Your prediction that inflation is containedand is a temporary phenomena are beginning to look absurd. What doyou do?

Simple. Hint that QE3, the primary drive of inflation, is coming and thenfail to deliver at the September FOMC meeting. That takes care of theprice of gold and the gold stocks. Ah, but those pesky commoditiesspeculators keep making money and trading against what you want the

markets to do. So what is to be done there? Hey Jon Corzine, how aboutyou tank the largest broker for the small commodities punters in theworld, and we let them twist in the wind? That will serve them right.Teach them to bet against the government approved scenario.

Think it did not happen? Well think again. All of the pieces fit. It sure isconvenient that all those commodities speculators are now out of thebox. Also, who will want to speculate on commodities in the future given

customer funds are no longer protected. Furthermore, commoditiesspeculators are not a very All American group. From the authoritiespoint of view they can say: screw them, who will feel sympathy? Hell,James Bullard, Fed Governor, in an interview on CNBC yesterday said theMF Global collapse proves that the system works. Yes it does Jim, for you.Personally, I have $90,000 at MF Global and I would like to have myhonestly earned money returned. Unfortunately, the odds of thathappening any time soon seem slim. In part because when MF Global

entered bankruptcy the judge appointed a Trustee whose law firm hasdone substantial work for JP Morgan, a deeply interested party. We willprobably never find out what happened here. But for those of us whoseeyes are open the results speak for themselves.

This whole mess stinks to high heaven. I am with Gerald Celente, if thelargest commodity broker in America can go bankrupt and nothing isdone, then where can you put your money and expect it to be safe? I, forone, do not accept that Jon Corzine is stupid enough to lever up MFGlobal 40:1 and use the proceeds and customer money to bet onEuropean sovereign debt. This was a hit, pure and simple. That is whythere is no resolution to the problem, and it is just another example of

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