Your Monies and Positions Are Not Safe

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by Simon Black: Can
You See This Gorilla?

Denver based
Barnhardt Capital Management is a futures brokerage firm that focuses
on agriculture, round-the-clock broker access, and inexpensive commissions.
At least, it used to be.

Barnhardt shuttered
its operations yesterday after six-years in the business. The firm’s
founder Ann Barnhardt posted the reasons online for the entire world
to see:

“I could
no longer tell my clients that their monies and positions were safe
in the futures and options markets, because they are not. And this
goes not just for my clients, but for every futures and options
account in the United States. The entire system has been utterly
destroyed by the MF Global collapse.”

Ms. Barnhardt
further explains that markets are completely fractured… that
the rule of law in the United States no longer exists. She decries
Jon Corzine of MF Global for having outright stolen customer funds,
and various exchanges and government regulators for having frozen
out customer accounts as a result.

Given that
the entire industry is “suicidally-leveraged” and exposed
to “European sovereign junk debt,” Barnhardt recommends
that ALL customers “withdraw from all of the markets as soon
as possible so that they have the best chance of protecting themselves
and their equity.”

We couldn’t
agree more with this sentiment. Our Chief Investment Strategist
Tim Staermose wrote just last week that cash is a great place to
be right now… and we’ve been arguing for months that markets
are completely broken. The market’s price discovery mechanism
has given way to rumor and political innuendo.

A real economy
cannot function under such circumstances. With Europe on the precipice
and roughly $600 TRILLION in global derivative notional value lurking
in the system, can a real collapse be that far off?

Famed hedge
fund manager Mark Mobius recently said, “There is definitely
going to be another financial crisis around the corner because we
haven’t solved any of the things that caused the previous crisis.”

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