As many investors have been alluding too for some time, price-fixing seems to be rampant all over the precious metals markets, particularly in Gold and Silver. Just in the past two days, this “crazy” speculation has finally been confirmed, as Deutsche Bank has admitted to fixing the price of both silver and gold on the physical and COMEX futures market.
According to Reuters,
“Deutsche Bank AG agreed to settle U.S. lawsuits accusing it of conspiring with other banks to manipulate gold and silver prices at investors’ expense, court papers show.
The settlements were disclosed in letters filed in Manhattan federal court by lawyers representing investors and traders who accused Deutsche Bank of violating U.S. antitrust law.
Terms were not disclosed, but both settlements will include monetary payments by the German bank. Deutsche Bank also agreed to help the plaintiffs pursue claims against other defendants.”
Although Deutsche Bank was the only one to settle in the lawsuit, other banks have also been accused of rigging metals markets, as Reuters goes on to state,
“The plaintiffs accused Deutsche Bank of conspiring with Bank of Nova Scotia, Barclays Plc, HSBC Holdings Plc and Societe Generale to manipulate prices of gold, gold futures and options, and gold derivatives through twice-a-day meetings to set the so-called London Gold Fixing.
They also accused Deutsche Bank, HSBC and ScotiaBank of a similar conspiracy to manipulate silver prices by rigging the daily Silver Fix.”
This comes despite the fact that in 2008, the Commodity Futures Trading Commission (CFTC), the government agency responsible for regulating these banks, conducted its own investigation and found no wrongdoing.
To many gold and silver bullion investors, this comes as no surprise. Yet what is very interesting is that Deutsche Bank has not only agreed to a “valuable monetary consideration” for their fraudulent activity, but according to Zero Hedge, they also agreed to expose the other banks’ rigging; having also “agreed to provide cooperation to plaintiffs, including the production of instant messages, and other electronic communications, as part of the settlement”
Does this mean that Deutsche Bank is going to backstab the other criminal banks and help uncover the puzzle as to how these banks have been rigging prices of precious metals for quite some time? We don’t know yet, but it will definitely be something to watch going forward. If it does checkout, it could have massive ramifications for the pricing of silver and gold going forward, as well as the pricing of other currencies and assets. The entire global structure could really be in jeopardy of a complete re-evaluation, depending on what is uncovered.
To give a basic explanation on the importance of this to those new to finance: it is essential to understand that for hundreds of years, if not much longer, gold and silver have been a stable form of money, unlike many paper fiat currencies in existence. In fact, gold and silver have been a constant hedge against the inevitable collapse of all fiat currencies. As a result, many investors access currency prices and asset prices based on the their relationship to gold and silver prices. Since gold and silver are rare metals with a fixed supply, they can be a great way to tie down the market compared to currencies which seem to have unlimited supplies, as central banks continually inflate currencies.
To protect the perceived value of fiat currencies and suppress the perceived value of gold and silver, many banks have colluded in daily secret meetings to fix the price of these metals, as well as flood the market with their paper receipts, well in excess of the actual physical supply. This dilutes the price of metals and props up the price of fiat currencies. This works too, as long as there isn’t a big gold and silver run, where people rush to redeem their receipts in order to obtain the actual physical metal into their own possession. Similar to a bank run, the entity would collapse since the credit supply is way higher than the actual physical supply. The price of gold and silver could also shoot up if indeed the price was adjusted to actual levels. Invest at your own risk.
What is very interesting to note, is that this comes at a very peculiar time, as several other noteworthy data points have popped up on the radars of many financial analysts:
- The Federal Reserve Board of Governors just held two “expedited special meetings” behind closed doors.
- The Fed Chair. Janet Yellen, had an emergency meeting with President Obama and Vice President Biden, following their special meetings It is extremely rare for both the President and Vice President to meet with the head of the Fed.
- The Panama Papers have unveiled a massive network of offshore money movement/shadow financial system. It just happened to be a list of crimes by the U.S. State Department’s most wanted list.
- There was an emergency meeting over the past weekend of Italian bankers to engage “last resort” measures for dealing with 360-billion euros of bad loans in banks that have only 50 billion in capital.
- Just days ago, Wells Fargo and Goldman Sachs agreed to defrauding the government and investors as to the quality of their mortgages, ultimately leading to the housing bubble collapse of 2008
- U.S. banks expected to report worst quarter financially since the start of the Great Recession.
- Germany has been attempted to repatriate its gold from the Federal Reserve.
- The Shanghai Gold Exchange is set to launch in April as the Chinese benchmark for the price of gold. This is potentially a counter balance to the London Exchange, which dominates the global market now.
Let’s just say that there is a lot going on in the global financial markets right now, and it doesn’t seem to be small incident either. The big fish are scrambling and the question is why? Only time will tell what will ultimately come of this, but it’s heavily speculated amongst Austrian economists, that this U.S. is in another bubble and in very real danger of bursting, along with other economies around the world. Everything is interconnected at this point, so one lynch pin could set the whole thing a blaze.
More than ever, it is time to pay attention and read in between the lines in order to protect your hard-earned wealth in such turbulent of times. The people at the top don’t really care about your assets, so getting knowledgeable yourself is the only answer. We will continue stay on top of this as it unfolds. Be safe, and stay alert!
Further reading and context to this developing story can be found in the sources below.
Sources: http://www.reuters.com/article/deutsche-bank-lawsuit-metals-idUSL2N17H1IA, http://www.zerohedge.com/news/2016-04-14/first-silver-now-gold-deutsche-bank-admits-it-also-rigged-gold-prices-legal-settleme, http://www.reuters.com/article/us-silver-fix-lawsuit-idUSKBN0FU29920140725, http://www.activistpost.com/2016/04/banks-this-week-emergency-meetings-summits-crashes-and-terrible-bank-reports.html, http://thefreethoughtproject.com/wells-fargo-admitted-robbing-citizens-deceiving-govt-charged/, http://thefreethoughtproject.com/wells-fargo-admitted-robbing-citizens-deceiving-govt-charged/, http://www.reuters.com/article/us-china-gold-idUSKBN0UJ0J520160105