Downgrading Glencore to junk would trigger THE MOTHER OF ALL COLLATERAL CALLS on TRILLIONS in commodity derivative bets.
by Bix Weir, Road to Roota:
It’s happening faster now.
For the last 6 months I’ve been SCREAMING about the significance of the downgrade of Glencore’s credit rating and how it will rip a huge hole in the manipulation operations of physical oil, gold and ESPECIALLY SILVER!
Just do a search on my website for “Glencore” and you will find out how significant Marc Rich’s metal rigging operation is…
SEE: Road to Roota Search
Our friends over at Zerohedge know EXACTLY how big it is and have just posted an article that the ratings agencies CANNOT ignore anymore…
“Less than two years later, going long Glencore CDS may have been the best risk/return commodity trade in the world, as over the weekend GLEN CDS blew out to new post-crisis highs of 1,128 bps, nearly 7 times wider than the 170bps from March 2014, but more troubling is that Glencore’s 2021 bonds just hit a 5 year low, taking out the September crash levels, and trading at about 64 cents on the dollar. These are currently rated “investment grade” by the less than credible rating agencies.”
If you have seen the movie “The Big Short” you will know that in 2008 the ratings agencies were so corrupted by the banks that they ultimately conspired with them until their AAA rated bonds blew a hole in the entire system. Although nobody went to jail, they were read the riot act about their behavior and barely kept their companies alive claiming they learned their lessons.
Fast forward 8 years and they are doing the exact same thing…Glencore still has an investment grade credit rating even though the world knows they are on their knees with no hope of getting back on their feet. The REASON that the ratings agencies have not downgraded Glencore to junk is that it would trigger THE MOTHER OF ALL COLLATERAL CALLS on their TRILLIONS in commodity derivative bets.
So what will the ratings agencies do now? Downgrade Glencore and set off the implosion or risk falling into compliance with the criminals and subjecting themselves to another round of reputation killing scrutiny and legal liability?
I guess we will find out next week.
The only way to be SAFE at this moment is by being OUT of the system with silver, gold, bitcoin and physical cash in your own possession?
Nothing else will survive. Not your stocks, not your bonds, not your money market fund, not your CD’s, not your checking account and not your equity in your home. Nothing else.
The saying “Better safe than sorry” will only be the mantra for a few more weeks before it changes to “It’s too late!”
May the Road you choose be the Right Road.
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