Adam English
|
Wednesday, July 24th
Every time someone in America buys electronics or a car — or even cracks open a can of beer — Goldman Sachs gets paid.
A breaking story from the
New York Times has all the details...
Three
years ago, this too-big-to-fail bank capitalized on special rules
created by the Federal Reserve and authorized by Congress by buying an
obscure company called Metro International Trade Services. It is one of
the largest warehousing companies for aluminum in the country.
Since then, it has manipulated the system to pull in massive profits.
In
spite of tepid demand for aluminum worldwide after the Great Recession,
the amount of time required for aluminum delivery has increased 20-fold
— from six weeks to 16 months — since the company was purchased. This
could be explained by shortages or logistical issues, if any existed.
The company is actively making the process inefficient.
Since
2008, the stockpile of aluminum grew from 50,000 tons in 2008 to a
massive 1.5 million tons today. Industry rules require at least 3,000
tons be moved out of warehouses each day.
However, instead of
delivering the metal to buyers, Goldman is just shuffling the metal
between warehouses to skirt the intent of the rules.
The
warehouses collect rent for each day the metal is stored. Storage costs
are a primary factor for the premium added to the price difference
between the spot market and the actual price charged for delivery.
Estimates show this premium has
doubled
since Goldman's acquisition. For every ton delivered, an extra $114 is
charged. With how much aluminum is used in everything from soda cans to
automobiles, estimates put the extra cost to American consumers at $5
billion over three years.
This business has been so lucrative that
Goldman plans to expand the operations. It recently filed documents
with the SEC outlining its plan to store copper in the same warehouses.
No Exception to the Rule
The list of manipulations by mega banks touches every corner of finance.
Virtually every commodity has been hit by massive positions that influence prices for illicit gains...
LIBOR
and delaying interest rate information amounted to $880 trillion in
manipulation alone, and affected every mortgage and loan worldwide. And
JPMorgan is all over the news, turning money-losing power plants into
profit centers by manipulating the market and being paid for not firing
up the plants.
But bring up any of these topics, and you'll hear
the same cynical responses. Mention silver manipulation, and it will be
dismissed as fringe conspiracy theory.
In an age where everything
is being manipulated, it defies belief that somehow silver prices aren't
being abused for illicit gains. It requires willful ignorance. The fact
is, there is plenty of evidence staring everyone right in the face.
Let's just have a look at JPMorgan...
JPMorgan's Silver Cash Grab
JPMorgan
inherited a massive amount of silver shorts priced between $20 and $21
when it took over Bear Stearns. Combined with HSBC, the two mega banks
covered 85% of all silver shorts.
That right there is a solid case
for manipulation — because the short position was so massive compared
to physical silver trading and long positions. What's worse, the U.S.
Treasury created the situation.
If the free market resolved the situation, silver would have more than doubled as the short position was covered and evaporated.
The
massive position was maintained for years because it wasn't easy to
wind down. Any large-scale attempts to unwind the position would be
countered by other big traders and result in a loss. JPMorgan didn't
have to, though; it simply needed to rig the system to turn a buck.
A
precious metal trader named Andrew Maguire sent detailed information in
an email to the CFTC on Feb. 3, 2010, about what to expect in two days
after he noticed signals from JPMorgan and HSBC traders using
after-hours high-frequency trades to crush prices.
His description
was perfectly accurate. The trader, selling four hundred contracts per
second, dumped 45,000 contracts into the market. Each was for 5,000 troy
ounces for a grand total of 7,000 tonnes. The seller then suddenly
shifted and started purchasing everything he could. Still moving far
faster than other traders, he or she walked with $3.6 billion.
In
more recent history, JPMorgan has been holding about 25% of the silver
short market with the largest eight commercial silver shorts account for
50% to 60%. Estimates put paper silver positions at 143 times the
actual amount of physical silver traded.
Massive volumes of sell
orders are placed and canceled in fractions of a second by them. The
lower sell prices still appear in market data for anyone that cannot
handle trading by the millisecond, leading to panic selling by other
(much slower) traders.
The high-frequency trading system then
snaps up the positions for profit. After all, they never sold anything
to begin with... they simply maintained short positions and canceled
sales to buy at discounts.
read more : >>>> http://www.silverseek.com/article/why-silver-manipulation-so-absurd-12327
MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet