By James Sinclair
JP Morgan is credited with the bank rescues of 1907 by the power of his person, position and capital. He demanded that banks reinstate their willingness to lend to each other.
Mind you, this is not the whole story. As always, the historian creates history. Had the markets continued lower, Morgan would not have been able, by any means, to reinstate financial confidence.
JP Morgan issued an invitation to Jesse Livermore to visit with him in his Ivory Tower office. It was at this meeting that JP Morgan asked Jesse Livermore, the largest short seller of 1907, to cease short selling. Jesse Livermore came from humble beginnings as compared to JP Morgan. Jesse was complimented that Morgan approached him making such a request, PRIOR to taking any of the reported action he planned to take. It was critical to his plans that the then ILLEGAL short selling ceased. Without Livermore’s cooperation all other plans he had would have failed.
Short selling in 1907, although commonly done, was illegal. JP Morgan knew that unless the major short sellers could be neutralized the crash of 1907 would have broken the nation - if not the world. The key difference between the crash of 1907 and the collapse of 2007– 2011 is that for some reason the opposite has occurred.If Jesse Livermore were the top gun of all hedge fund managers on the planet today his meeting with today’s JP Morgan would give him a free pass to wreak hell and mayhem.
Because the key criterion in the comparison of 1907 to 2007– 2011 has been missing, this nation if not the world haven’t a snowball’s chance in hell.
Gold is going to $1,200 and then to $1,650. The USDX is going to .72 -.62 -.52 regardless of all the BS spin and for hire butt kissing pundits.
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