The problem that many have ignored about MF Global is not so much the dollar value of the 'missing money'. Its the fact that customers were shut out of their accounts and were unable to act, at the exact time that the criminals put on the most intense manipulation scam of the year. So these customers that account for a large chunk of the legitimate trading in the commodities market were unable to exercise delivery of their contracts, or sell in orderly fashion. Instead they were forced to watch as the sector was carpet bombed.

This is an old trick of the big banks. Recall back in 2008 when the news came out that a few resource funds were overleveraged and had margin calls. A raft of shorting suddenly appeared in the major stock holdings of these funds as specs were front-running the fund liquidation. The market crashed far lower than it would have if not for the predatory shorting. Now in that case there was nothing illegal about the market action. This time around, it is rotten to the core.

By freezing out the retail players and allowing the big banks to trample the futures market, much more money was lost by those who could not trade, and huge profits were won on the short side by the bankers. Physical bullion was stolen from customer accounts and liquidated in the process. That is very convenient for a bullion bank that is short gold and unable to make a delivery demand. Also, contracts that would have been called for delivery were frozen and thus no additional bullion demands were piled on from those accounts.

The way that clients have been left to swing in the wind from this gang rape is a warning to all that the banking interests will come first in any showdown. Sure, most of the money involved will eventually be 'found' and returned, in time, without interest. The trading losses while all this was being sorted out will not be returned. The short term damage to the metals and the entire sector from the disorderly downdraft will not be compensated. And the crooks that were responsible for the mess, through irresponsible leverage and shady transactions, are let off the hook and end up with a hefty profit. Oh yeah, and no one goes to jail...

I bought more bullion during the last few weeks, at the cheapest prices I have paid in over a year. I guess I got to 'profit' from the crisis too, but I did so with honour and integrity, buying a dip while others were in panic mode. You CAN make money the old fashioned way. Too bad the crooks will screw everyone in their way to make it by fakking the system and their own customer base.

cheers!

mike