Will 2019 Bring a Free and Fair Gold & Silver Market? / Commodities / Gold & Silver 2019
JPMorgan Chase and a number of otherbullion banks are in a whole lot of trouble. Evidence detailing years ofrigging markets and swindling clients is piling up.
Deutsche Bank pleaded guilty two yearsago and forked over hundreds of thousands of documents. John Edmonds, a formerJPMorgan trader, entered his own guilty plea last month and turned state’sevidence.
The carefully cultivated system ofcaptured regulators may not help the banks this time.
FBI investigators and Department ofJustice attorneys are involved now. This investigation is out of the hands ofCFTC bureaucrats who hope to avoid rocking the boat and/or land high payingjobs on Wall Street someday.
The DOJ might be ready to actuallyprosecute crimes this time around. Bankers may have to explain to criminaljuries what they have been doing. When they have finished, class-actionattorneys and civil juries will get in on the action.
Perhaps for the first time since metalsfutures began trading, the possibility exists that crooked bankers will be heldto account. There is still a long way to go, and there is certainly plenty ofreason to doubt the Department of Justice will live up to its name. But thereis hope.
Recent Prosecutions Could Spark and End to Fake Markets forPrecious Metals
It is never too early for marketparticipants to be thinking about what free and fair metals exchanges mightlook like.
For starters, electronic metals marketsneed a direct, unbreakable connection to physical supply and demand.
Banks should not be able to meetextraordinary demand for metal with an unlimited supply of paper.
There are days during which futurescontracts purporting to represent the entire annual mine production ofsilver trade on the COMEX. Yet, once all thefurious trading is over, barely any actual silver changes hands. That must end.
High frequency trading must also go away.The system which allows preferential treatment for banks and institutions, is,predictably, being seriously abused. It is another way for Wall Street todivorce electronic trading in metals from physical supply and demand.
The metals markets need a lot moreaccountability. Notwithstanding the impending DOJ action, and any civiljudgements which may follow, the bullion banks and other crooked traders havebeen operating with impunity for decades.
Regulators don't seem interested or ableto enforce fair play. Market-based solutions, backed with the genuine threat ofprosecution and jail for those who break the law, are worth a try.
It should be easy to launch a metalsexchange. Anyone with an idea for better mousetrap should find the barriers toentry as low as possible. And if they cheat, they should not be able to do whatDeutsche Bank did in 2016.
The bank, as an institution, pleaded guilty.Not all of the individuals involved will face charges for their crimes. Thefines and restitution will mostly be paid by the bank’s shareholders – not theactual crooks.
Theremight already be a metals exchange which offers fair treatment to participantsif it weren't for the current stranglehold on financial markets. The WallStreet monopoly, enforced and protected by federal regulators, is thefundamental problem. It needs to be solved.#
By Clint Siegner
Clint Siegner is a Director at MoneyMetals Exchange,perhaps the nation's fastest-growing dealer of low-premium precious metalscoins, rounds, and bars. Siegner, a graduate of Linfield College in Oregon,puts his experience in business management along with his passion for personalliberty, limited government, and honest money into the development of MoneyMetals' brand and reach. This includes writing extensively on the bullionmarkets and their intersection with policy and world affairs.
© 2018 Clint Siegner - All Rights Reserved
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