There was a thread yesterday about Jim Cramer and Gamestop (GME) stock.
Although I disagreed with just about everyone in that thread, it did cause me to do a little digging.
I found this lecture by Patrick Byrne. He explains how Goldman Sachs creates FAKE shares of stock that do not exist, and this is how their company is so profitable.
The problem is, it has caused massive leverage in the system, and could be one of the reasons for a stock market crash (the money printing by the Federal Reserve is the other reason).
Goldman Sachs and the other prime brokers are THE SOURCE of ALL fake shares in the marketplace (and basically, all the fuckery in the marketplace).
The part where he explains HOW they create the fake shares is about 10 minutes of the presentation, and starts at about 3:00 (then, he goes on to talk about how to solve the problem with blockchain):
https://www.youtube.com/watch?v=COQvMsbb-Cw
- Almost 100% of the profits of Goldman Sachs comes from their "Securities Lending" operation
- That operation is focused mostly on "hard to borrow shares"
- They identify stocks that people want to short, then they lend those shares out
- They do NOT have to actually own the stock when they lend it out
- This allows GS to lend out shares that do not exist
- Since they are also a prime broker, most of this lending is necessarily to hedge funds, which are the investors who are shorting stock that does not exist
Goldman Sachs and the other 5 prime brokers are the SOURCE of all the fake shares out there.
This is EXACTLY the same as the "money changers" from centuries ago, when they created more money certificates than were actually backed by gold on deposit. Same exact scam, just with stock instead of gold.
It is always good to know the names of the criminals to prosecute. Now, it's just a matter of finding the prosecutors and getting them into office.
The problem is: What if the guys in the Risk Department are being fooled? What if they are told there are 10,000,000 shares to lend of XYZ, but there really are none?
This happened with GME just a few weeks back. Fidelity suddenly showed 13 million shares available to short. They were quickly called out on it and said it was a mistake. Only 2 million shares should have been available. The price was driven down substantially.
Keep in mind this is coming from a stock that has only issued 75 million total shares and Fidelity routinely reports 8 or 9:1 buy/sell ratios. This just doesn’t add up. Apes have been holding for a year and DRSing shares for months now.
Liquidity is drying up. More and more fuckery is being used to keep it suppressed. They may eventually cheat it into nothing, but I have a feeling the Federal Reserve and cabal are going down this time.
I wonder which broker supplied Fidelity with the fake shares.
It was claimed Vanguard by one tiny MSM article that could not be substantiated. All brokers are shady. If you are using a broker that shut off the buy button last January then good luck. I don’t trust any of them though. DRS is the only way to assure they don’t sell off your positions in the name of market stability or shut off other buy/sell buttons when the shit goes down.