* * *
Joe stood at the kitchen table, looking at a handwritten note left by Jane. The note was scribbled, not at all like her usual clear cursive form.
Dear Joe,
I am leaving you. I will be staying with Len and Brenda. I will continue to work in real estate; but I will need my earnings to run my business and feed myself. I do not anticipate enough money to pay rent, or to feed you.
I feel a lot of stress living with you. We await foreclosure even as we can barely pay the electricity and car payment. Day after day, I am unable to make a sale – we have little money coming in and I am scared.
I resent your unwillingness to seek a decent job or earn a decent income. When I come home at night, you sit in front of the TV, drinking your beer – beer that we cannot afford. You do not even make dinner for us.
Don't call me. I do not want to see you or talk with you.
Goodbye,
Jane
Joe's face contorted into a mask of rage as he crinkled the note into a ball and threw it against the wall. And then his expression took on the look of a raging monster as he picked up a chair and smashed it on the table – again, and again, and again – until all he held was a stick from the chair and the table top was laying on the floor. He dropped the stick, and then he dropped to the floor in tears.
Chapter 7
Josh was in his office, leaning back in his chair. He was facing out toward his twin corner windows, as though he were looking out at the skyline beyond. But he wasn't registering what he was seeing. His mind was elsewhere, pondering the news he had just received. Why did this have to happen today? The last trading day of September, 2009? Blimey!
Ring! Ring!
He picked up the receiver. “This is Josh.”
He paused, listening. And then said, “I’ll be right up.”
He hung up the receiver and strode out of the office, making his way to the elevators. He rode the elevator up to the 35th floor and then strode down the mahogany paneled hall, turning right into the first office suite.
Mikaela looked up as Josh walked into her office. Her chin, normally taut, was even more so. And her normally steel-grey eyes were more silver, as though sparks were roiling within. She gazed into Josh’s eyes as she leaned back in her chair.
“So, it’s happened.” She said this as though a glass of water had just spilled on the floor.
“Yes, it has. I guess this is what can happen when we sell enough gold short without covering. Especially when we sold it on the final day of trading for the quarter.” He paused. “Are they willing to accept a cash settlement in lieu of delivery?”
Mikaela’s eyes emitted sparks of anger. “I just got off the telephone with their bloody representative. We made an offer of spot price[37] plus 25% - about $1,250 an ounce. The asshole rejected the offer and informed me they wanted delivery of their bloody gold within five days – and if delivery didn’t take place, they would formally declare a default on delivery.” Mikaela paused. “And you know what THAT means.”
Josh indeed knew what it meant. Just a few years ago there occurred a default to deliver on contracts for commodity nickel. At the time, the Exchange imposed a $300 per ton penalty for each day that the delivery did not occur. But worse, the default had the effect of driving up the price of nickel even as confidence in the London Metals Exchange was lost. And when there is no confidence in the trading mechanism, then the entire system can go to hell in a hand basket.
Josh knew that AB Jorday was in a precarious position. If a default to deliver were declared, the price of gold would skyrocket. It would essentially bury AB Jorday in a tsunami of its own creation – a huge short squeeze that would demand they buy gold to cover their short positions at vastly higher prices – and this could possibly send the company into bankruptcy.
But worse still, the publicly disclosed turmoil in the gold market could see the dominoes fall – a collapse of the dollar and other paper currencies, spreading from there to a collapse of the bond market. And from there? ...The potential effects would be catastrophic!
“So,” Mikaela continued with an ironic smirk, “is there any way we can conjure up enough gold to meet this delivery?”
“I’ve already taken a poll of the major banks – HSBC, Deutsche Bank, Bank of England, various central banks – they tell me that all of their London Good Delivery Bars are committed through leases or various other means. I did find enough 90% bars at the Bank of England – the gold that FDR confiscated from the Americans[38] – but they're not London Good Delivery bars.”[39]
Josh was chagrined as he continued. “I’m sure you know that Deutsche Bank is also a counterparty;[40] so they are up against the same issue.”
“Yes, I already talked with Deutsche. They informed me they would negotiate their own agreement.” Mikaela paused, and then continued. “I'll arrange a meeting directly between us and the counterparty representative.”
* * *
The meeting was to be held at 10:00 am in a neutral place – a meeting room within the Excelsior; a five-star hotel in the City of London. Elaborately furnished and appointed, the facility provided a comfortable venue for high rollers conducting negotiations.
Josh’s take on the upcoming negotiation was simple. This was to be a game of chicken, or possibly brinkmanship. Josh knew it was important that AB Jorday find a way to settle – the stakes were just too damn high. What Josh did not know was the motive, or motives, of the counterparty. Did they truly want their gold? Or did they want a cash settlement? Or did they want to set up a ‘default to deliver’ so that it would reveal to the world the precariousness of the gold market – and by extension, the fraudulent paper money system?
Nor did Josh know the entire hand that Mikaela was holding. And this left him wondering.
The game began when Mikaela and Josh arrived at the meeting. They were five minutes late, and yet the representative for the counterparty, James Gardner, had not arrived.
Josh poured coffee and selected a breakfast roll, all the while wondering if Mr. Gardner would show up. He seated himself at the table and began eating while he watched Mikaela pour her coffee. She seemed not the slightest bit nervous.
They were finishing their breakfast just as a short, squat man entered the room. He strode purposely up to the table and seated himself across from them. Smiling, he held out his hand and said, “I'm James Gardner.”
“Hello, Mr. Gardner. I'm Mikaela Bradford.” She shook his hand.
Josh stood and reached across the table, saying, “And I'm Joshua Lindt.”
Introductions out of the way, their eyes met as they faced each other across the table.
James placed his hands on the surface and clasped them together. He smiled and said, “My client wants delivery of his 20 tonnes of gold, as stipulated in the commodity contracts he holds. What say you?”
Mikaela met James' eyes with a smile, and then she replied in her warmest manner. “Mr. Gardner, will your client accept cash in lieu of gold – at, say 25% above spot price?”
With an attitude of pure business, James replied. “No, Ms. Bradford. My client has instructed me to accept only gold.”
Mikaela turned her charm up a notch. “How about spot plus 30%, Mr. Gardner?”
Mr. Gardner paused and then smiled. “Again, Ms. Bradford. My client has instructed me to accept only gold.”
Mikaela replied, with a slight chill in her voice. “Mr. Gardner. If you do not accept a cash settlement, we will declare a force majeure[41] on our failure to deliver.”
Gardner was ready for this. He smiled. “Go ahead, Ms. Bradford. Of course you realize that a force majeure declaration will be invalidated by the Exchange.”
Mikaela smiled broadly, and then she said, “No, Mr. Gardner. The Exchange will surely uphold the declaration, since we control the regulators.”
Gardner took a deep breath and then replied with a deadpan expression, “But, Ms. Bradford, even if it's ruled valid, we can still publicize this transac
tion and let investors decide if they should be worried.”
Mikaela blinked. And then, as though she were sitting on a bed of nails, she smiled the most pleasant of smiles, and said “Very well, Mr. Gardner, I am prepared to offer you an equivalent amount of gold; but in 90% gold bars rather than London Good Delivery Bars.”
James held up in his hand a packet of paper commodity contracts. “Ms. Bradford. My client wants what is promised by these contracts – London Good Delivery Bars. I suggest that you stop playing around and commit to making the delivery.”
Josh could see Mikaela’s patience wearing thin – her face pinched. Was her hand shaking? But she again managed to present a winning demeanor. “Mr. Gardner. We do not have LGD bars to deliver.”
Mr. Gardner leaned back in his chair, stroking his chin as he met Mikaela’s eyes with his own. Josh thought he had the look of a man who was planning his next chess move.
“Very well, Ms. Bradford. I need to talk with my client. We will be in contact with you by close of business, today.”
Mikaela's smile was pinched as she said, “Very well, Mr. Gardner. I will be delighted to talk with you further.”
* * *
Josh's telephone rang. He pressed the speakerphone button and said, “This is Josh.”
Josh heard Mikaela's breathless voice at the other end of the line. “Joshua! Please come to my office!”
“Right away!” Josh placed the telephone on its cradle and rose from his chair. He stood in thought for a moment, and then he made his way up to Mikaela's office.
“They went for it,” Mikaela grinned with fire in her eyes. And then their eyes met, and she said again, “they went for it!”
“Blimey,” Josh whispered. And then he shouted, “Bloody way to go!”
Then Josh tilted his head and asked, “Where did you get the gold? We've scoured the world looking for it!”
“That?” Mikaela smiled. “I borrowed it from GLD. You know, the Exchange Traded Gold Fund?”
“I know, I know,” he was smiling from ear to ear. “Blimey! I can't believe you pulled it off!”
They embraced in their joy, holding each other close – and feeling ecstasy wash over them. And then their intensity receded, and they looked at each other as they continued their embrace. Mikaela gazed into Josh's eyes, hesitated, and pressed her lips on Josh's; and Josh knew right there the rush of emotion and passion they both felt!
And then Josh felt her hand press against him, below his belt. She slowly massaged him, pressing her touch through the fabric of his trousers even as her tongue probed deeply into his mouth ... massaging his lips, his tongue. He was feeling aroused, growing more intense, and aching to feel her flesh against him.
While touching him, she ended her kiss and looked into his eyes with a seductive smile. And as they gazed on each other, she ran her ruby red tongue over her lips, allowing the passion of her seduction to connect them even deeper. “Blimey,” Josh whispered, “you're in heat!”
She smiled and looked still deeper into his eyes. And as she watched his face, she loosened the clasp on his belt. “Oh my, what have we here?” She said as she drew the belt from his waist, ever so slowly. She hefted the belt, feeling its texture as she ran it through her fingers.
And then she laid a length of the belt over each of Josh's shoulders, pulling the belt against the back of his neck. Josh felt her eyes on him. And he felt her passion as she circled his neck with the belt. Again, she ran her tongue over her lips while gazing at him with seductive, sultry eyes. And then she pulled the belt tight, so that Josh's neck was held firm in its grasp.
“Time to take those clothes off,” she whispered. She drew the belt still tighter as she smiled. “Take ‘em off – now!”
Josh was on a ride of passion; and yet he had a gnawing thought in the back of his mind. My God this is dangerous. Doing this with the boss is never a good idea!
With a hell-‘n-damnation fire in his groin, Josh used the belt around his neck for balance as he reached down and unlaced his shoes.
“Now the trousers,” she commanded.
Still looking at her, he unbuttoned his trousers and let them fall to the floor. He stepped out of them.
“Now,” her voice had a mildly sadistic quality, “drop your shorts.” And then she smirked. “It looks like they're too small for you anyway.”
“Bu – but –” he began to say.
“ – no buts,” her voice was sharp as she looked into his eyes. She pulled the belt just a bit tighter. “Drop 'em. Now!”
Compliant, Josh dropped his shorts to his ankles. He stepped out of them.
Holding the two ends of the belt tight, Mikaela walked him to the sofa and sat him down. She kicked off her pumps and stood in front of him, his head just about hip-high.
“Now,” she commanded, “pull down my skirt.”
Josh began by unbuttoning her skirt at the waist. He then pulled it down, sliding it over her hips, and then over her thighs. And as her skirt moved lower, he could see more and more of her underpants – until finally, a small red thong was revealed. Oh damn! This is gonna be trouble, he thought as he brought her skirt to the floor. She stepped out of it and kicked it out of the way.
“Now,” she commanded, “pull down my thong.”
Blimey but this is dangerous, Josh thought. He grasped the thong by the straps and slowly pulled it over her thighs, then dropped them to the floor. She kicked them to the side.
“Now, you worthless slave, it’s time for you to dine.”
Josh hesitated. “But –”
His hesitation ceased when she pulled the belt tight around his neck. “Do it,” she commanded.
He put his face up to her and nuzzled.
“That's a nice boy,” she purred. “Keep going.”
She spread her legs and lowered herself so that she opened up to him. And for Josh's part, he nestled his nose and his mouth between her legs, nuzzling her.
“Ooooo ... ahhh,” Mikaela whispered.
Josh had his hands free, and so he spread her still further as he massaged her.
She moaned, again and again as he aroused her even more. He paused, noting with satisfaction that she was full, and flushed. She put her hand on his head and pull him into her, and then moaned as he massaged her even more.
“Ooooo ... ahhh ...” Mikaela was breathing heavily as passion flowed out from her skin.
And feeling her passion, Josh became even more aroused.
“Oooooh ...,” Mikaela breathed as she began moving her hips, riding him. “Ooooo, Josh,” she whispered. “Stiffen that tongue – give it to me ...”
And Josh obliged, as he drove deeper between her hips, sliding it across her delicate flesh. And for her part, she was now thrusting.
“Oh God,” she moaned as she rolled her valley over his mouth. “Oh God! Oh God!” She clenched her hands around the belt as her body went into spasms, and as she jammed her flesh against his face. “Oh God,” she shouted, spasms still rolling through her body.
With one final touch, Josh pulled his face away from her and watched as her spasms diminished. Until she finally looked down at him and smiled. Her body shook, and then she whispered, “That was nice, Josh. Very nice!”
Josh smiled as he looked up at her. Their eyes met.
Mikaela released the belt and stepped away. She reached down and picked up her thong and skirt. “Thank you,” she said, pulling the garments up and over her hips.
All the while, Josh watched in wonderment, he was still gasping. He gestured to his groin and said, “Aren't you going to help me?”
Mikaela laughed at him, then said, “I suggest you come by my place for some real fun!”
“But –”
She interrupted him and said, “How about dinner tonight?”
Josh nodded and said, “Sure. I'll pick you up here at five o'clock.”
“Okay,” she replied. “You may go.”
“But –”
She interrupted him, “I'll see y
ou at five.”
Josh put on his clothes walked out.
* * * * *
Josh's telephone rang. He noted it was Mikaela's caller ID and pressed the speakerphone button. “This is Josh.”
Mikaela's voice came over the wire. “Will you please come up?”
Josh made his way up to Mikaela's office. He walked in to find Mikaela nervously seated at her desk, fidgeting with a pencil.
She looked down at the desk. “I just got a call from James Gardner – the man who represented the Asians' interests in the gold settlement.”
“And?” Josh prompted.
Mikaela swiveled nervously in her chair. “They had the bars assayed.”
“So, what's the problem?”
“The bars are gold-plated tungsten.”
“Bloody hell,” Josh spat. He sucked in a deep breath and said, “What are they going to do?”
“They want real gold.”
“Obviously! Are we going to be able to deliver?”
“Yes, I just got off the phone with HSBC. They can help, but it will take a bit of time.”
“And Gardner has agreed to wait?”
“Yes.”
Chapter 8 – Circa Late 2009/2010
Too Big to Fail - Too Big to Exist
“WASHINGTON D.C., November 6, 2009 (International Press) – Senator Bernie Sanders introduced legislation that would break up financial institutions that are too big to fail. “If an institution is too big to fail, it is too big to exist,” Sanders said. “We should break them up so they are no longer in a position to bring down the entire economy. We should end the concentration of ownership that has resulted in just four huge financial institutions holding half the mortgages in America, controlling two-thirds of the credit cards, and amassing 40 percent of all deposits.” Sanders' legislation would give ...
* * * * *
Chairman Cohan seated himself at the conference table and looked at Secretary Tamblin, and then over to New York Fed President Tom Turin. “Let's get down to business.”
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