Pointing to the CEO of any "public entities debacles" is the right thing to do, particularly in these day an age when we all immediately turn to identify the guilty person(s) involved and everyone is "guilty until proven innocent"via internet, 24/7 news (breaking or not), Facebook, Twitter, etc. (all in less than 1 minute (although typing 140 characters or less, which in reality could take less than 30 seconds - including misspellings! is certainly routine these days). Having said that, are these losses only Mr. Dimo's fault? Is there any integrity left in the markets and investment circles? Are the employees and managers -whom really were disrupting all rules for their "own benefit(s)" acting selfishly?- or is it too naive, assuming Mr. Dimon's expertise in these matters, that these individuals were just really following their bosses orders? I couldn't agree more with the concept that if you want to gamble with your own monies...go right ahead... but gambling with other people's monies, particularly with Government insured deposits held by banks- is and should be penalized as criminal. Financial institutions are supposed to TRADE. That's why they called it trading! What JPM did was really...betting. Pure and simple. For it not to be penalized is just wrong!
To most people, the solution to a debt crisis is very simple: get rid of debt! The U.S. debt is up to $ 15.9 trillion which is 102% over GDP. When debt grows 21% per year and GDP grows by 1.1% is simply unsustainable. As we know, from history, excessive debt causes Governments to devaluate their currencies. A thousand years ago it meant adding lead to gold. Two hundred and fifty years ago, it meant printing more paper money. Today, it means one guy in a Federal office typing zeros on a laptop and 'selling' it to another Government. The reason why we don't have inflation (in spite of stimulus) is because money isn't moving. Banks don't want to lend money because they can get it FREE from the Government. This vicious circle must end: Less spending leads to less making, which leads to less spending...
Obviously, at some point, the velocity of money must go UP and with upcoming elections perhaps not until November. The only sector where there might be some opportunity until then is on precious metals markets. Silver in particular. The downside is $ 21; the upside is $ 47. Check it out today, see how the trend is going and ACT.
Joe Velarde
E-global Solutions. 2012.
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