Wednesday, June 4, 2014

Barclays Manipulated Gold as Soon as It Stopped Manipulating Libor

Readers should be aware of a few subtexts here.  Yes, the manipulation of gold prices is now out in the open (and no, gold bugs are not conspiracy theorists), as is the manipulation of LIBOR (and all markets, including the US Treasury bond market in the form of overt QE).  Us skeptics were right all along.

The more nuanced take-away message of Barclays manipulating gold and interest-rate markets is that they are not the only bank manipulating markets.  Not even close.  In fact, they may be one of the smaller players.

BNP Paribas is certainly not the only bank dealing with terrorist organizations or money launderers.  Not even close.  HSBC was notably fined for laundering money for organized crime and drug cartels.

What is the common thread amongst these banks exposed in criminal activities?  They are all non-US banks.  What are the chances of 100% compliance from every US bank regarding market manipulations?  Zero.  In other words, these foreign crooked bankers keep company with US banks.  The global financial system--is global in nature, after all.

This is nothing more than scapegoating of foreign banks, while protecting domestic banks in their financial crimes-in-progress.  It is a nuanced form of trade and currency wars all wrapped up in fines paid from the perps to the regulators in order to maintain a seat in the arena of financial boondoggles.

The banks (and bullion banks) act as proxies for sovereign governments in any case, so it's not in the governments' best interests to have these banks fail.  Governments need to manipulate markets in order to mask the structural problems in our global financial system.  So while they will scapegoat a few banks to maintain a semblance of enforcement, they need to take care of their complicit bankers.

Regulators aren't shaking down banks--they are partners in crime.  What money authorities are doing is stealing from the masses by diluting fiat currencies and masking the debasement with market interventions.

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