2 Billion "loss" and Investing in Inflation

Journal roman_mir's Journal: 2 Billion "loss" and Investing in Inflation 4

Journal by roman_mir on Friday September 16, 2011 @11:50AM

Earlier it was reported that $2 Billion was lost in some shady trading transactions by Kweku Adoboli, a UBS trader. This of-course ran all sorts of alarm bells, having worked in banking it's difficult to imagine that it would be possible for a single trader to be able to trade with so much money without anybody noticing. It's much more likely that there is higher management involved in this and the poor sap, who will be set up for this will receive a few years of jail time, just like Jerome Kerviel of Societe Generale, who supposedly singlehandedly lost 4.9 Billion Euro in unauthorized transactions. Well, Jerome is serving a 3 year sentence, and it's unclear what will happen to Kweku, but what is clear is that what is being reported is just not the reality.

A bank does not just allow a trader to lose billions of Euro or Dollars. The most likely scenario is a robbery, likely done with knowledge (or at initiative of) one or more of banks' managers. I believe we are coming to a point, where it will become more dangerous to hold one's money at a bank, we are at a point in time that has never been tested before in history of human civilization, where all of the countries are on fiat currencies that are being devalued all at the same time. Anybody with real bank deposits (gold and otherwise), may want to think what is the most likely scenario that is going to play out when the proverbial fecal matter hits the rotary impeller device. It's likely that people closest to the funds will simply dump them into a truck and skip town, that is my contention.

Another interesting point to mention: in the same comment from 15 September, 2011, it is noted that 4 national banks (US Fed, UK, Swiss and Japanese national banks), have announced that they will devalue their currencies further to buy all sorts of short term sovereign debt (mostly 3-month US bills), and as was mentioned, DOW went up on these inflationary news, while the monetary commodities (gold/silver) took a sharp dive. As was explained, the commodities were most likely depressed on that day based on selling related to margin calls and leveraged trading, so it was predicted that the prices of these monetary metals are now going to go up higher on these bullish news (bullish for real money), and now the results are clear: gold and silver are sharply up. Obviously the traders realize what is in the bag - more inflation.

All of this combined together with more "weaker than expected" news on employment (who are these so called 'economists', that can never expect what is so obvious?), is yet another indication and proof that the fiat money based economies, and especially vendor financed economies are moving closer to the edge of the proverbial cliff.

Watch out and watch those banks, if you have real deposits, don't leave them there thinking that they are going to be safe.

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