It is now the second
anniversary of a campaign to "crash" JP Morgan by encouraging
people to buy silver (see max Keiser http://www.youtube.com/watch?v=H4IBUTHyROs).
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 my (Open 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 trend.
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.
