Big Banks Know Something Big is Coming

by David EngstromAugust 24, 2015

Go ahead!  Admit it!  If you knew the markets were about to suffer major losses, as they did in the 2001 crisis and again in 2008, you would make immediate adjustments to your portfolio.  Knowing is the key.  But, how do we really ever know anything?  If you depend on the mainstream media to warn you . . . forget it! 

Such was the case in both recent crises.  Many investors were blindsided and little to nothing was done prior to those events to protect IRAs, 401ks and other savings and retirement accounts.  But, make no mistake.  Someone knew!  They even knew the day and the hour as it is said we were just hours away from total collapse before then Secretary of Treasury, Hank Paulson wrote a $700 billion check to bailout big banks, big insurance companies and big corporations.  The world was saved – just in the nick of time.  Who knew?  The banks knew.

Surely, if we knew what the banks knew then, we would have taken steps to protect our wealth.  What would you have done?  What should you have done?  In hindsight the answer is easy.  Diversify out of stocks, out of real estate and into precious metals.  After each crash gold rose to record highs with silver in hot pursuit.  Gains were staggering. Those who owned gold or silver were handed an opportunity to sell and capture monster gains.  Gains that could then be moved back into the markets to take advantage of trillions in stimulus that drove stocks and bonds back to record highs.

What do the banks know today?  This time is different.  While banks acted as though they were caught by surprise by crises past, warnings now are practically being shouted from the rooftops.   Not only do we hear the words but we can see the actions big banks are taking to prepare for something big.  Based on their actions, they are preparing for something even bigger than 2001 – bigger than 2008.  Hindsight has become foresight.

In his 2014 letter to shareholders, Jamie Dimon, CEO of our largest Investment bank, JP Morgan, warned shareholders, “There will be another crisis.”  Does he believe it?  His actions to prepare speak louder than his words and his words have invoked similar actions by some of the world’s largest banks.

JP Morgan itself has seen fit to stockpile physical silver.  Back in June, these actions garnered some headlines in the alternative media but nothing to speak of in the mainstream.  That may be changing.  This month (August) some of the largest banks in the world are showing their hands.  Something big is coming.

Following is a recap of actions being taken by big banks and brokerages to prepare for something big, as massive amounts of physical gold and silver are being stockpiled.  They know that, at the behest of the people, the Fed has made it clear - No more Bailouts!! 

July 2015 - Bank of Nova Scotia - House Account - 2.1 tons Gold

July 2015 - Mizuho Bank - Customer Account - 111 tons Silver

July 2015 - Bank of Nova Scotia - House Account - 4.3 tons Silver

July 2015 - JP Morgan - Customer Account - 125 tons Silver

July 2015 - JP Morgan - House Account - 180 tons Silver

August 2015 - Goldman Sachs - House Account - 4.4 tons Gold

August 2015 - Macquarie Futures Broker - .52 tons Gold

August 2015 - HSBC - House Account - 4.8 tons Gold

August 2015 - JP Morgan - Customer Account - 2 tons Gold

 

The above accounts for major deliveries of physical gold and silver from Comex inventories.  Wall Street is on the move.  At the Main Street level we see more signs that demand for physical gold and silver is on the rise.

 

In July 2015, U.S. Mint sales of just Gold Buffalos and Gold Eagles totaled 6.3 tons.  Sales of Silver Eagles were on such a rampant pace, the mint had to announce they were out of silver.  Still, by month end, the mint had delivered 172 tons of Silver Eagles alone.  Prior to running out, the mint was on pace to deliver more physical silver in one month than it had in any year between 2000 and 2007.  As I write, total August sales for silver are on pace to match July.  Gold deliveries are well off the July pace as silver appears to have taken center stage.

 

In July 2015, Billionaire Stanley Druckenmiller announced he was buying gold like a drucken sailor, having reallocated 20% of his portfolio into the GLD ETF.  While GLD may not be considered a pure physical play, this move is still indicative of a growing pro-gold sentiment and fear of what may be to come.

 

Joining rank with Stanley are several other notable investors, most of which showed little to no interest in Gold, of any kind, prior to Q2 2015.  Following is a short list of those noted investors and their reported holdings of GLD ETF as of June 30, 2015. 

 

Facebook – 1,872,700 shares

Wells Fargo – 1,679,400 shares

Halliburton – 1,547,000 shares

Citigroup – 1,175,000 shares

Microsoft – 1,398,100 shares

HDFC Bank Ltd. – 1,003,600 shares

JP Morgan – 777,300 shares

EBay – 327,000 shares

Sun Trust Banks Inc. – 457,300 shares

 

I think it is safe to put these investors into the 1-percenter group.  Call them Wall Streeters, call them Main Streeters – makes no difference.  They all want gold.  They all see something coming.  What do you see coming?  How will you prepare? 

 

 

RESOURCES

 

http://www.zerohedge.com/news/2015-08-16/billionaire-stanley-drucknemiller-loads-gold-makes-it-his-largest-position-first-tim

 

http://www.usmint.gov/about_the_mint/index.cfm?action=PreciousMetals&type=bullion

 

http://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsYTDReport.pdf

 

 

 

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