RAPING THE ASSETS: What they say versus what they do

“The thing that I fear is confiscation. Confiscation of my assets, confiscation of my clients’ assets. I fear that this thing could get out of control. I think we’re a year away from the French fully nationalizing their banking system.” Thus spake Eclectica Asset Management CIO and co-founder Hugh Hendry  at the Milken Institute’s 2012 Global Conference yesterday. Hugh went on to specifically suggest that Hollande will nationalise the French banking system if elected.

It’s possible he’s right on the first point, but it really is a bit thick for a bloke in his position to start whingeing about seizure of assets. What about the seizure of my bank interest income? Of my pension take-out from draw-down? Of my right to write and read without being watched by an unelected GCHQ?

Here’s a slightly more accurate news story about assets, because it involves recorded behaviour rather than propaganda. Another asset removed from my investment armoury has been the right to buy gold. I got out of the sector because there isn’t a bank left on the planet I’d trust to pay up on a paper tracker. The Slog has posted since God was a Girl about the manipulation down of paper gold’s ‘price versus the upwardly mobile price of the real stuff. It’s just another asset seizure: thus,  although the paper gold price has been flattish over the past month, the physical gold market has been witnessing a buying frenzy.

Hong Kong gold imports into China totalled some 40 tons in the month of February, representing a 13-fold increase over the same month last year.  Over the last year, Chinese purchases have been eight times higher than they were in 2010. The IMF says 12 countries bought 58 tons or more last month — with Mexico, Turkey, Russia and Kazakhstan being the most prolific.

As I’ve been posting for years, you can’t have demand at that level alongside a flat price: this is a manipulated market. And feeding into the point I’ve banged on about during all those wilderness years of being dismissed as a mad conspiracy theorist, Cheviot Asset Management reckons that for every ingot of real shiny metal, there are 100 open positions in the ‘paper gold’ market.

Like I said last month, get hold of the real stuff…if you can. Because those who would oppress us – and those who can see what’s coming – are buying it like there was no tomorrow….which there may well not be. And those who would convince us that there is a recovery under way haven’t allowed even the President into Fort Knox since 1951. The security and armoury protecting the contents of Fort Knox outstrip those for the White House by some distance. A very telling choice of emphasis, that one. You can sort of imagine two rednecks having the discussion:

“Wha heeyell Jake, can you b’lieve that no ‘count nigra in the White House wants more protection an’ he wants to come in here?”

“Sheeyit Ezekiel, Ah daclayah, I ain’t wastin’ no ammo on some goddam black Commyerneeist.”

“You goddit Jake, an’ ain’t nooo way I’m lettin’ some light-fingered slave inta a place fulla gold. Askin’ fer trouble.”

“You ain’t wrong, Ezekiel.”

Just to round off on asset seizures, I discovered last week that Virgin Health is bidding to take over my local NHS Group Practice. I don’t remember reading/signing up for anything like that. Mind you, I don’t remember anything in the Camerlot Manifeso about barmy GP reorganisations and starving hospitals of funds either. But the plan is simple if one’s paying attention: flood the GPs with money, watch them screw up and get taken over by the Virgins…..starve the hospitals of funds, and then wring your hands and say look, they’re broke – we have to sell them.”

Maybe Andrew Lacklustre isn’t quite as stupid as he looks after all.

Related: Planet Earth to the Establishment…hellooo?

 

 

 

61 thoughts on “RAPING THE ASSETS: What they say versus what they do

  1. They will come for your gold when the time is right, just like they did in the USA with The Gold Confiscation Of April 5, 1933. Maybe that’s a cruel irony, you can hand them a useless piece of paper that says you own a ton of it!

  2. Perhaps your own, personal concerns (about interest income, pensions & the GCHQ) are sustained primarily by a disrespect for private property? In which case, HH is arguing your case, incidentally

  3. Isn’t the largest and most obvious asset ‘seizure’ the transfer of sovereign wealth to the financial system ?

    Would Eclectica Asset Management have anything now if this ‘seizure’ hadn’t taken place ?

    Would not Hugh Hendry have been bankrupted and had all his assets seized anyway ?

    Perhaps Hugh Hendry and all bankers would be better to consider the retention of their wealth as a temporary measure rather than be deluded that they still have a right to keep any of it.

    They would also be wise to relinquish it when asked or they might find that they end up relinquishing their lives at the hands of desperate revolutionaries in the next few years.

  4. Actually, the natural elites do & will continue to rise above the dirty scrum of distasteful, politically incorrect politicians. If forced to choose between the two, an area would be far more prosperous & safe when run amongst competing bankers, rather than competing politicians, Gojam

    • The world is already being run by “competing bankers”, the politicians are just their paid lackies. How else could you explain the total subversion of any consideration of the needs of the vast majority in the interests of a wealthy few in a democracy ?

      I also find your term “natural elites” condescending and insulting.

      You continue to defend the ‘ubermenschen’ at the end of the day it’ll be numbers that count.

      • There is not now serious competition between bankers, relative to the degree of commercial competition that will evolve.

        The future international financial architecture will not constitute a means of defending one monopoly, which it now is, more than anything else at least.

        Also, there’s nothing the matter with natural elites. Some people run really fast, because its what they love doing most, work hardest & lucked out on some “DNA” … This is not a phenomenon that, somehow, fails to be present amongst people doing business

      • Alister,

        You’re right, it’s a stitched up cartel.

        And it will ever be. Read your Adam Smith he understood that you couldn’t put two bankers in a room without them conspiring about how they could screw the public to enrich themselves.

      • “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty or justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.”

        - Adam Smith, The Wealth of Nations.

      • I will admit, gojam, I’m occasionally partial to a bit of Adam Smith

        Golden Rule: The Investment Theory of Politics (whole documentary)

        Nice chatting!

      • Don’t get me wrong, I believe that capitalism offers the best economic system but those that crow on about Adam Smith as the patron saint of unrestricted unregulated free market economy ignore that he was on of this countries finest social and ethical philosophers who was steadfastly against unrestricted, unregulated free market economies.

        He’d turn in his grave if he knew anything about The Adam Smith Institute which has hijacked his good name and dishonoured it

      • @gojam: I agree with much of what you say in this thread.
        But I think a better way of describing the relationaship between bankers and govt is that in the Brown boom years, the bankers did what the govt wanted of them: to lend money like there was no tomorrow, thereby creating a boom which Brown crowed about. When the bubble burst, the central role of banks in the economy required govt to step in and save them from collapsing. The latter can be described as the quid pro quo for their earlier appeasement. The actual relationship is a tad like sparring partners, but it’s the government who have the last throw of the dice.

      • Hi BT,

        I’m no fan of Gordon Brown, however, even I can’t bring myself to blame him for the impending implosion of the global economic system.

        I can blame him for encouraging personal debt to sustain his wonder boom, I can blame him for not regulating the financial system in the UK, I can blame him for becoming over reliant on the financial sector, and I can blame him for commiting the UK to unsustainable expenditure which simply raised false expectations amoung ordinary people, many of whom are deluded enough to think that this economic utopian mirage was unfairly snatched away from them, but I can’t find it in my heart to blame him for everything.

        I’m a little surprised that Alister posted a link to the documentary “The Investment Theory of Politics” as, having just watched it, rather than supporting the views he expressed in this thread, it absolutely supported my own views.

        It’s worth watching and not just because it validates my own arguments.

      • @gojam: I certainly wouldn’t want to blame Gordon Brown for everything either. Some others have blame too: BoE, the banks and also borrowers.

        The talk on TV News today is all about the role Mervyn King and BoE played in the Brown boom and subsequent collapse. Merv’s finally got his comeuppance :-). But it was Brown who was in control of the economy between 1997-2010, so he has to take most blame for events that followed. IMHO :-)

      • There’s a key difference between Gordon Brown’s bank sucking-up, and whats happenning now.
        At the time Gordon was doing the sucking, IT LOOKED LIKE IT WAS WORKING.
        Now, of course, we know it didn’t, but somehow the political elites are still doing it.

      • @Paul.J: The relationship between banks and government is complex and always has been. In many ways government exercise control over them (like fascist govts do) and they do what they’re told. That is what they did under Brown and the unsustainable credit boom is what happened. On Brown’s part, he waived any effective regulation.
        When it all went belly up, Brown had two options:
        - let them go down and pick up the pieces or
        - bail them out.

        For cowardly, vanity and political reasons, Brown bailed them out. It’s always easier for Labour to do that because “it’s only taxpayers money” and we already know that Labour govts never ever show a scrap of respect for that.

  5. VIRGIN HEALTH ????

    FFS, Branson is the devil incarnate, I think. The tax-fiddling tax exile crosses another rubicon.

    Is there nothing funded by the taxpayer that he won’t try to get his grubby hands on.

    If Murdoch is not a ‘fit and proper’ person, what does that make Branson? It’s time to stop this rape of Britain.

    • postscript:

      A&E Reception: “Do you have your membership card with you?”
      Asylum Seeker: “Que?”
      A&E Reception: “Sorry you’re not eligible….”

      • And sir, have you got your Frequent Flyer club membership card
        And it is the Upper Class or Cattle Class ……sir
        WTF, I use Ryan Air or Sleezy Jet, not Virgin…
        A&E Reception on-line: I’m sorry sir about your Cardiac Arrest but we don’t have beds available right now, please chose another date, press1 for another date of your choice, press 2 to try again, press 3 to order an oxygen mask, Press 4 to terminate your enquiry
        Gasp……

    • Both the two choices you put forward accept that the current economic system will continue.

      There is a third option. Global default, Debt forgiveness and a new start.

      Or perhaps you are misguided enough to think that the majority of people have some kind of emotional attachment to the current system which will always see them enslaved and impoverished by your “natural elites” ?

      • People share an innate, natural understanding that the breaking of contracts is something which should not be done.

        I would liken the situation of pollution & free energy…to honouring contracts paid & a haircut moment.

        In each case, the later option (free energy, a haircut moment) only becomes realistic after the first option (pollution, honouring contracts) has been fully utilised

      • “People share an innate, natural understanding that the breaking of contracts is something which should not be done. ”

        Only those that have ‘signed up’ to a contract and only then if all parties to that contract have honoured the letter and the spirit of that contract.

        China has ignored copyright law, indulged in industrial espionage on an epic scale, and kept it’s exchange rate artificially low which has unbalanced the economic system. China would be the biggest loser in any fresh start and they have no right to complain.

        As for the bankers, there is no contract I’ve signed which has given them the right to enslave the poor and their offspring for generations to come in debt bondage.

        Ultimately, you overestimate this “innate” reluctence that “people” have to break these unreal and virtual contracts of which you speak.

      • Agreed GJ. I’ve not signed any contract with the “natural elites” however my parents in their ignorance registered my birth which alas is a binding contract that allows the elites to set up a company in my name as a legal title to which fines, taxes etc can be attributed throughout my lifetime. Alister can take that contract and shove it up his “natural elites” a**e – I never saw the T&C’s and did not agree to said contract so contract law is moot. If people understood that reality behind this deceit then the “innate, natural understanding that the breaking of contracts is something which should not be done” would evaporate and hasten the dangling of said elites from lamposts up and down the country…

    • But giving taxpayers money to expensive private health care groups won’t save cash, will it?
      It will cost far more in the short, medium and long terms.

  6. Absolutely correct ! 100 to 1 fractional gold/silver bullion banking; naked shorting and margin reqirement hikes to manipulate the price. The problem for the UK public is 20% VAT on silver and what the price gold will be when they wake up and realise their wealth has gone. They will not be able to afford it.

    • @H…b: I understand the predicament.

      I’m torn between (a) not really really wanting to buy gold because it’s a medium/long term investment that pays no interest and might be difficult to offload without a big loss if prices fall at some time and (b) not wanting to miss the boat if the price shoots through the roof in a shower of sparks, as JW and a few others here say it will – or ought to – based upon what is believed to be coming down the tracks. Lots of other issues with it also…bid/offer spreads, CGT etc.

      • Gold is a barometer, in my opinion, and it has been held down as not to show how devalued Fiat money is going( ie theft ). most currencies going down together hide the big devaluations.
        There is no CGT on Sovereigns or Gold/Silver Britannia because it is legal British currency. Possible problem if the “authorities” think you are overly profiteering though!

    • For every buyer there is a seller, only one of you is doing the right thing.
      Who will that prove to be I wonder?

      • I dunno, but if you find the answer, please let me know privately, so i can adjust my position immediately ;-)

  7. John, I am a moderate to agnostic believer in bullion. Yes, there is manifest evidence for manipulation, but when did any of us get the best prices when buying/selling investment products? What concerns me more is the lack of progression of the gold mining sector. If there was even a 50/50 chance of, say, Pfizer making a wonder drug, the share price would soar on the prospects, not on the news. The prospect is that at some stage, the real market for bullion will assert itself. The holes in the ground are not saying this at the moment. Perhaps prudent diversification into bullion coins for a portion of all that spare cash earning zilch would be a hedge. Curiously, the Royal Mint are still issuing sovereigns, at a profit, no doubt.

  8. I dunno who’s buying physical gold “like there’s no tomorrow” but its price is best described as treading water at the moment. $1653 = last night’s closing price.

    I think Hendry is probably wrong to suggest that Hollande will nationalise French banks unless any banks become officially insolvent. That is not the way of 21st century fascism. They’re quite happy to leave them as private entities but exercise cosy *control* of them. They’ve been doing that for years all over Europe, UK and US. In the UK we do it via the BoE and control is set to increase as Merv The Liar gets into his stride. Expect something similar in France, not nationalisation. What they might do is offload the bad debts to a new bad bank, funded by taxpayers.

      • @H…b: LOL.

        This morning I see Sky News and MSM are all busily discussing Merv’s speech of last night and all agreeing that Merv and the BoE played a key role in the UK’s economic collapse, due to his gross mismanagement of monetary policy from 2002. They’re all using virtually the same terms & words that I and several others used back in late 2007/early 2008 when this mess first emerged. I cannot understand why it’s taken them four years to catch up.

      • Sure, all I’m saying is that the old nationalisation model (communism) has gone out of fashion a lot these days. That was the internal war that took place between Old and New factions of the Labour Party: the former hangs on to communist state ownership a-la Stalin, and the latter supports the fascist model of private ownership with heavy state control a-la Mussolini/Hitler.

        But I do understand that France still has a lot of state owned industries which it can’t bring itself to get rid of.

      • BT,

        The left/right or Privatisation versus Nationaliasation is out of date.

        Ask yourself if you’s approve of the Privatisation of the Army, Fire Service, or Police Force ?

        Few would,

        The question isn’t Privatisation OR Nationisation ? The question is what should and what should not be Nationalised ?

        We may disagree where the line should be drawn, I would like to see Water renationalised, but it isn’t Communistic to be in favour of some forms of Nationisation.

        If I’m wrong and you’d like to see a Privatised Army or Police Force then I apologise for my presumption.

      • @gojam:
        The main reason in favour for any industry or public service to be state owned is if central planning or co-ordination of that industry/service is necessary, clearly beneficial or if national security is involved. There may be one or two other good reasons. The police and law/order is one.

        In practice, there are rarely any financial benefits to state ownership …in fact it’s invariably quite the opposite …and some. There’s the issue that state owned industries/services soon become overstaffed political footballs (eg NHS) and subject to cutbacks when times are hard (virtually every state owned service in my lifetime). The water, electricity & gas industries were starved of investment under state ownership and WE are now paying the price for that.

        In this respect, the old Left/Right paradigms still exist: The Trade Unions like state ownership and manipulate things in that direction, because they can then hold the British public to ransom, as they do. Old Labour is their mouthpiece and fellow comrade. The Tory Party learnt the lesson and privatised many of these industries and New Labour was the new face of Old Labour that purports to support that. But of course we should not assume that a privatised industry suddenly becomes free of state control. Oh no. The govt introduced Regulators who are supposed to protect consumers. But IME many of the regulators have relationships with the industries they regulate which are far too cosy and tend to place the industry’s needs as a higher priority than the consumer. Ofcom and British Telecom come to mind.

        When you say you’d like to see water re-nationalised, I don’t know why that is. I cannot believe it’s because you believe the state can run water better than a private company because there are no examples of that.
        So it must be to do with water charges. That probably means the Regulators are at fault – or not, because ‘they know’ the industry was starved of investment funds when it was nationalised and it’s now trying to catch up. Re-nationalisation would not solve that problem, it would make it worse and taxes would rise to fund future investment.

      • BT, it’s been about 20 years since Water was privatised you can’t blame lack of investment while it was nationalised.

        I agree with most of the points you make concerning nationalisation in general.

        But I can’t understand how you can’t see that water is a matter of national security. You’re making distinctions between ‘good’ nationalisation (ie Army, Police) and ‘bad’ nationalisation (ie telecommunications)

        Regardless you accept that some nationalisation is right (even if you never thought about it that way.

        I want a Minister responsible for my water supply. I want resevoirs built, pipes repaired. I want 100% of the revenue channeled back into the system rather than into shareholders pockets as has happened over the last 20 years.

      • @gojam: I dunno what investment level is required in the water industry but I’d say it runs into many £billions to operate a water system and I do think the current mess is mainly a consequence of past lack of investment.
        The privatised industry cannot pour countless £billions in one year, so it get done over a number of years. Maybe it’s too slow, I dunno.

        I have no fixed position on whether the water industry ought to be state owned or not. But when it was privatised (also gas/elec) I thought it was done wrongly. The govt should have created a new model of PLC which split revenues more towards investment, meaning lower dividends. In my mind, water/gas/elec should have become a ‘grannies and orphans’ investment. I think that would have dealt with the criticism those industries now get but would have maintained the benefit of not having them run by the state, which has never run anything properly.

      • Fair points BT, :-)

        I just think it’s not proper to privatise vital resources where there can be no real competition. Water, Gas, and Electric all come from the same source regardless of which company you use.

        But of the three, water is the worst. In my region the water company are going to add flouride to the water. The vast majority don’t want (overwhelmingly) yet none of us will be able to get water without flouride added from a different water company. It’s a monopoly, a liscence to print money.

        And I think that 20 years is plenty of time for those private companies to stand up and take the rap for their lack of investment in that time.

        It is not satisfactory that water is being rationed in this country. This 3 years of low rainfall line is bollocks, utter bollocks. It’s just a way of deflecting the blame away from their incompetence and greed and on to capricious nature.

      • @gojam. Agree with you entirely.
        BTW get a reverse osmosis water filter.
        That will take out most fluoride and much more.
        I’d recommend an additional alkaline filter to balance the PH as reverse osmosis makes the treated water a little acid.
        There are other filters you can add too.

      • @gojam:
        Well, I can’t argue against anybody who has a fundamental belief that Water supply should not be privately owned. However, I will say that just because there is no competition in the industry does not IMO mean it should not be privately owned. If that rule was applied to other industries the likes of Microsoft and 10,000 other industries across the western world would all be nationalised in some vain belief that they would operate more in the consumers’ interest. Yet the evidence is absolutely counter to that. Governments cannot run a p*ss up in a brewery but fritters £billions of our money trying to! Then there’s the political football issue.

        Here’s what I believe should have been done when water/gas/elec were privatised (and it is never too late!!):

        - the govt should have created a new model of Ltd Company, such that (eg) Thames Water plc would have become Thames Water Public Utility plc.
        This new model would have applied limitations on what dividends were paid, perhaps a fixed 5% pa. Given their dominant position in the market, they would have become a sound investment for ‘grannies & orphans’, not a stock that was traded on the casino exchanges.

        - the new model would have limited foreign ownership to something far less than it is today.

        - by definition, that new corporate model would have also specified that profits were ploughed back into investment.

        - an effective Regulator who has a duty to enforce the corporate set-up and one that was more focused on consumers.

        On fluoride in your water, this would probably happen whether the company is owned privately or by the state because it’s almost certainly a government directive (or EU directive) that’s being followed.

        I remain of the view that many of the criticisms of water being privately owned would not be solved by a return to state ownership. In fact they would be even worse. IMO the solution is a proper corporate set-up combined with rigorous regulatory enforcement.

  9. Every Euro, every £5 note, every dollar bill, every share certificate is nothing more than a piece of paper. The entire system depends upon the trust and belief that someone somewhere will give us something tangible in exchange for that piece of paper. Once that belief and trust is abused, the game is up.
    I would be interested if any Slogger could briefly explain what happened in the Weimar Republic, when you needed a wheelbarrow-full of Deutschmarks to buy a loaf of bread. How did Germany get out of that? Because that’s where we are headed.

    • At the end of the day none of this is about finances, or politics… this is all about power. As the TPTB see the people’s waning trust in the fidelity of their economy’s and they’re future… they will respond with totalitarianism, and THAT is how Germany got out of it…

    • Read When Money Dies or Dying of Money by Adam Ferguson and Jens O Parsons for any excellent overview of the Weimar collapse.

    • The Weimar republic was just one country.
      Scrpit was still convertable in other currency’s to gold..
      We now have EVERY currency being fiat,with no
      convertability at a fixed rate.
      Weimar provides only one lesson for us ,because the situation
      is different,. That lesson is ;the rise of the NDSAP and Hitler, would
      never have happened except for that hyperinflation.
      If you look a the Gold /mark price over that period ,there were
      periods when gold plateued for a while, for no logical reason.
      As Mark Twain said about bankruptcy,
      It goes slowly,and then suddenly……….

      • The Weimar hyperinflation happened in 1923. They eventually got out of it by instituting a new currency, the Rentenmark, worth a trillionth(!) of the old Mark. After that Weimar actually had a good, prosperous couple of years with falling unemployment and rising standards of living, until the Depression happened. It was that, with harsh austerity and unemployment, that actually brought the Nazis to power.

      • Winston , was Ernest Hemingway who said that , Mark Twain said the other appropriate for the occasion : “History doesn’t repeat itself, but it does rhyme.”

  10. Well,it is raining here on the South Downs,and buying gold is about as appetising as 51 degrees in the swimming pool.As Dave said,we are not even half way through the mess,and that is before the French vote for a return to la la land.MarK has fessed up,sort of,to his central role,as a member of the Havana 3,to the destruction of the UK economy,and ,out of the blue,Ron Paul tells FT readers the fact that central bankers are idiots,an unfortunate truth that did not recommend him to being endorsed by his party.So,we await the 2012 summer of European riots in jobless Athens and Madrid,spilling over to Rome,and our boys will doubtless contribute to a joyous football festival in Ukraine.And then there is twitter,Louise Mensch,look, BSkyB is still a bargain at 710p,the empire will be reshuffled,but the stand out buy for us Gordon Brown(sorry, Garry) pensioners is R..o.u.io.

  11. Pingback: John Ward – Raping The Assets : What They Say Versus What They Do – 3 May 2012 | Lucas 2012 Infos

  12. Nobody is sure how much tungsten those rednecks
    are guarding.Is it a coincidence that the last audit
    of that ‘gold’ was done just prior to the development of
    the non invasive gold purity testing ?

  13. After we bought our house we decided to move some shelves in the storage room. We discovered a safe build into the cement foundation of the storage room floor. The neighbors said the former owner was famous for distrusting banks and paid cash for everything he bought. Now, if the neighbors knew him that well then how safe was his money (gold) if things got really bad.
    JW they are coming for your gold they already know that you got some mate.

  14. I’m not seeing why Hugh Hendry is being called a “banker” and being discussed as if he’s Jamie Dimon. He’s in no way, shape, or form a banker. He runs a (relatively) small group of hedge funds that if bailed out, either directly or via a counter party, I’m not aware of it. I don’t believe he’s at all a fan of ZIRP, or any policy of any central bank anywhere. In fact he’s ripped some new aholes on the tube about the cheap money bubbles that blew up all around us, and the havoc they’ve wreaked. Please let me know if I’m somehow misinformed.

  15. Pingback: ANALYSIS: New Treasury figures betray the Lansley hospital starvation strategy | A diary of deception and distortion

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