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 late last week 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 BE GETTING FROM OUR BANKS ?
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.
Subscribers will be briefed again on this subject in
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