LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

COT Gold, Silver and US Dollar Index Report - September 20, 2019
By: GoldSeek.com

Fed’s Gold-Bull Impact
By: Adam Hamilton, Zeal Research

GoldSeek Radio Nugget: Michael Pento Ph.D.
By: Chris Waltzek Ph.D., GoldSeek Radio

Panicky Fed Flooding Overnight Markets with Cash
By: Mike Gleason

Semiconductor Sector; a Market & Economic Leader
By: Gary Tanashian, NFTRH

Gold Consolidates As The Fed Loses Control
By: Stewart Thomson, Graceland Updates

Precious Metals Update Video: Gold consolidating, watching recent lows
By: Ira Epstein

Serious Inroads, But Still Unfinished Business
By: Ted Butler

A Message to My Former Colleagues at Overstock
By: Patrick Byrne

Repo Rates And Gold: Something Big Is Happening
By: Dave Kranzler

 
Search

GoldSeek Web

 
Bullion Banks’ Manipulation Schemes Put Taxpayers at Risk


 -- Published: Tuesday, 9 July 2019 | Print  | Disqus 

- Clint Siegner

Gold and silver bugs are well aware that JPMorgan Chase dominates precious metals futures trading. Russ and Pam Martens of the financial blog Wall Street on Parade just identified how much control they have.

There are more than 5,300 FDIC insured banks in the U.S. Just two of them, JPMorgan and Citibank, hold 75.7% of all precious metals derivative contracts (primarily futures) in possession of the nation’s banks.

Other major Wall Street banks, including Goldman Sachs and Bank of America, are barely even in the game.

Manipulation

The market dominance implied by the outsized positions of these two banks is troubling enough. Metals investors have been pleading with regulators to step in for more than a decade, so far to no avail.

The most interesting part of the story, however, isn’t the monopoly power these banks wield in the futures markets. That’s been pretty well understood. Rather, it is the massive increase in the size of the position since the 2008 Financial Crisis.

Ten years ago, FDIC insured banks held metals contracts valued at less than $15 billion. Today they hold $38.6 billion – an increase of 157%.

Again, JPMorgan and Citi control more than three quarters of that position. It is one more confirmation that the futures markets are hopelessly broken and corrupted. Price discovery is not organic, it is rigged.

Regulators turned a blind eye as the bullion banks issued freshly printed contracts to any and all speculators willing to bet on higher gold and silver prices. There is effectively zero constraint on the supply of paper contracts. Demand is never enough to overwhelm supply and push prices consistently higher.

Piles of evidence now show the bullion banks using their dominant position and inside information to rig price movements lower – by hook and by crook. They profit over and over again from their huge, and perpetually growing, short position.

We continue to marvel at the lack of concern from regulators. These banks are, at this point, in plain view building monopoly positions in the highly leveraged futures markets. And they may be relying on price rigging to make those positions profitable.

It isn’t just that this sort of activity is crooked. It is also exceptionally risky.

These banks are FDIC insured, and FDIC funds may not be sufficient in the event of a major collapse. (Some believe it would be better if the FDIC did not exist and people had to think carefully about where to do their banking.)

Taxpayers could wind up footing the bill in a couple different scenarios...

For one, these bankers could be wagering more than they can afford to lose on highly leveraged derivatives of all sorts. We saw it happen in 2008, though the banks were rewarded with bailouts instead of being closed by officials.

The banks could also finally be held accountable in court for what they have done.

JP Morgan

It may seem unlikely to jaded gold bugs, but there is hope.

The game is changing because the traditional bank regulators are losing control.

Bankers may be forced to answer to prosecutors, citizen juries, and class action attorneys in the next few years.

The Department of Justice is investigating now. One Vice President at JPMorgan and one bullion bank (Deutsche Bank) have already pled guilty. Both agreed to cooperate by providing evidence against other executives and banks involved in their rigging schemes.

As hard as it may be to imagine, JPMorgan and Citi could be bankrupted by fines, loss of trading privileges, and massive civil judgments piled on top of a loss of client and investor confidence.

Yes, we’ll understand if people scoff at the notion of a major Wall Street bank finally paying for their sins. It will be a first.

Clint Siegner is a Director at Money Metals Exchange, a precious metals dealer recently named "Best in the USA" by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals' brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.


| Digg This Article
 -- Published: Tuesday, 9 July 2019 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.