Since we received reports from the CFTC that market players have made
"repeated" and "fraudulent efforts to persuade and deviously
control" silver prices, we have heard that HSBC Holdings Plc and
JPMorgan Chase & Co. are facing an investor’s lawsuit of placing
“spoof” trading orders to manipulate silver futures and options
prices in violation of U.S. antitrust law. The investor, Peter Laskaris, alleges that starting in March 2008, the banks
colluded to suppress silver futures so that call options, or the right to
buy, would decline, and put options for the right to sell would increase,
according to the complaint filed yesterday in federal court in Manhattan. The
collusion was also intended to maintain prices at levels at which some
options would expire as worthless.
What
should we get from our banks at the heart of the financial system that
touches each one of us, every day?
Once
upon a time the banks had a limited influence on our lives. If
you needed a loan they were there to give it. They looked after
your money, for a price, but most day to day transactions did not involve a
bank, just cash. The same is still true in the underdeveloped
world now. But in the developed world the banks and the banking
system are part of every single aspect of our financial lives.
They are the veins and arteries of the financial body, the
economy. While they are healthy and supportive of the body the
heart of the central bank and the government can work well. But when
those veins and arteries harden, the entire body and heart have
all-threatening problems. And the banking system seemed to be in
good moral health until the credit crunch of 2007. Government
stepped in to save the entire financial system by saving the banking
system.
Since
then we have heard episode after episode of greed and dishonesty that has villainized bankers. When John D. Rockerfeller came to this point he suddenly was seen on
‘Movietone News’ singing hymns to clean
up his act. That may well be too late for the
bankers. These revelations no longer shock us but anger us,
because bankers just don’t seem to connect to a morality that should,
in the light of their extended role in society should be far higher than the
common man and capable of withstanding the fierce light of
publicity. With that extended role should have come a social
responsibility that warmed us to them as they combed through their structures
to remove practices that the general public would find disgraceful, but no,
as each disgraceful secret is uncovered we realize that we are at their mercy
until courts or government or a higher power steps in to put them on a
leash. Now our first thoughts are, “If they are doing that
in the silver market, surely they are doing the same in every other market
they are in?”
Is this happening in the Gold Market?
It is logical that the
CFTC will ask the same question of other markets and uncover similar
practices in those markets. We hope that the banking morality
that condoned these practices is at least sound enough to stop such practices
when they are seen in their systems. If so we should expect month
end options and futures markets as well as the physical markets should become
buoyant at month-end and not flat as ‘spoofing’ kicks
in. A look at Friday the 29th October’s silver
and gold prices [and other markets?] could prove a revelation?
The same traders, speculators and
bankers are deeply involved in the gold market too. One has to
commend commentators like GATA and Ted Butler and others who have been
shouting that this is common practice for a very long time only to be
treated with disdain by so many. We hope they keep up their
vigilance and keep the CFTC in the picture and doing their job.
Such results will certainly help to secure your profits in these markets.
The Age of Consequences
Bad banking practices have been going on
for a long time, perhaps millennia but never has there been a time when so
many have been exposed to the public eye. We have long considered
Politicians somewhat less than honest but they continue at the helm of
society. But again, never have so many dishonest politicians or
their practices been so exposed. We do live in an age of
consequences now and we do expect it to continue. What are the
results of this in the financial world? Distrust, doubt,
increasing regulation but worst of all declining confidence is spreading
across the world in the developed world’s attitudes and
practices. If these revelations keep on coming then the
description, moral turpitude would well describe the ways of the
West. Hopefully alarm bells are ringing in the right quarters and
action is being taken, or is it?
What
is a very visible consequence is the rising trust in gold as a wealth
protector and counter to the depredation of the developed world.
The advantage that the emerging world has is that they never trusted their
investments to ‘the system’ before and are now seeing why they
are right not to do so. One of gold and silver, for that matter,
is that they are outside the system of obligations by government [such as
currencies are bound by]. Once in your hand you alone control
it. That is, of course unless the financial situation governments
find themselves in becomes dire, then they are inclined towards following
President Roosevelt in 1933 and confiscate their citizens gold.
Many ridicule that possibility.
Banks
sell customer’s gold!
A
sobering example of just how government, the banking system and citizens can
end up against each other over gold came today, when we saw the report that
Vietnam's central bank has stopped banks selling gold deposited by customers
and using the funds for loans or for converting into foreign currencies,
partly to help take downward pressure off the dong. It is also concerned
that, if the value of gold continues to soar, banks could suffer heavy losses
when they have to buy gold back to repay depositors.
Julian D. W. Phillips
Gold/Silver Forecaster – Global Watch
GoldForecaster.com
Is your wealth effectively structured to avoid the
pernicious effects of the regulatory climate that we have moved into? It
should be and we can help you to do so professionally and within the law.
Please contact us for any help regarding this at: gold-authenticmoney@iafrica.com.
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