Commodities fundamentally unsound?

Ann Barnhardt of Barnhardt Capital Management closed up shop last week. She said in an open letter, “I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not.”

Just ask Gerald Celente.

2 weeks ago I was at a bar in Omaha Nebraska talking to a cattle man about business. Like Barnhardt in her parting letter the fellow I was talking to expressed his concern with how the cattle markets were moving. He did not like the feel of the market. Add to the sketchy markets the fact that practically half of Texas was liquidating it’s cattle because of the extreme drought creating all kinds of opportunities for shennanigans and he was an uneasy guy.

A Map of Drought Conditions in Texas in 2011

I also have watched as weird things have happened in silver and gold, my markets of particular interest over the past year and it concerns me greatly.

It is getting to the point where physical assets are the only honest game. Problem is it’s hard, if not impossible for many types of businesses to hedge with such assets. My friend in Omaha was doing his best.

As always when it comes to commodities and options especially, you had better know what you’re doing. Looks like at least one person who does is cashing in her chips.

From Barnhardt’s letter-

“Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.”

Click here for Ann Barnhardt’s blog and the entire letter.