It is now the second anniversary of a campaign to
"crash" JP Morgan by encouraging people to buy silver (see max
The idea is that JP Morgan has a large naked short position in silver. If
people buy physical silver it will drive the price up and deprive JP Morgan
of the metal it would need to cover its short position, thus causing prices
to rise further until JP Morgan collapses.
I don't want to waste any more electrons debunking this
conspiracy theory. I have written many times on this topic, most recently in
Letter to Ted Butler).
I want to call attention to something else. There is an
old cliche in America, "cutting off your nose
to spite your face." It is usually said in admonition when someone is
doing something out of spite, and he will be the primary victim.
If it were true that JP Morgan had a huge short
position in silver, and a rising price could cause
them to "crash" then is this something that people should want to
occur? To answer that, everyone should be clear on two things. First, what
happens when a company collapses? And second, who are JP Morgan's creditors?
When a company collapses, it defaults on its debts. The
creditors of JP Morgan are "we the people" including our bank
accounts, our employers' payroll accounts, our pension funds, our insurance
funds, our annuities, our brokerage accounts. Creditors also include farms,
grain elevators, food processing plants, the electric power companies, etc.
Other banks are creditors of JP Morgan as well; it is implausible that any
would survive the collapse of JP Morgan.
Without any money in the bank, and without a job to
earn more, how will you buy food? What happens when everyone else faces the
same desperate circumstances?
If you want to buy silver, go buy silver. It is one of
the two monetary metals. It won't cause any banks to collapse. The silver
price may rise or fall in the short term, though it is in a long-term rising
We face a serious crisis. While the banks have played
their role and it may be tempting to wish ill upon them, causing a banking
collapse is not a serious solution. Many of us are working to avoid collapse.
Accelerating collapse does no good for anyone.