JPMorgan Chase and a number of other bullion banks are in a whole lot of trouble. Evidence detailing years of rigging markets and swindling clients is piling up.
Deutsche Bank pleaded guilty two years ago and forked over hundreds of thousands of documents. John Edmonds, a former JPMorgan trader, entered his own guilty plea last month and turned state’s evidence.
The carefully cultivated system of captured regulators may not help the banks this time.
FBI investigators and Department of Justice attorneys are involved now. This investigation is out of the hands of CFTC bureaucrats who hope to avoid rocking the boat and/or land high-paying jobs on Wall Street someday.
The DOJ might be ready to actually prosecute crimes this time around. Bankers may have to explain to criminal juries what they have been doing. When they have finished, class-action attorneys and civil juries will get in on the action.
Perhaps for the first time since metals futures began trading, the possibility exists that crooked bankers will be held to account. There is still a long way to go, and there is certainly plenty of reason to doubt the Department of Justice will live up to its name. But there is hope.
Recent Prosecutions Could Spark and End to Fake Markets for Precious Metals
It is never too early for market participants to be thinking about what free and fair metals exchanges might look like.
For starters, electronic metals markets need a direct, unbreakable connection to physical supply and demand.
Banks should not be able to meet extraordinary demand for metal with an unlimited supply of paper.
There are days during which futures contracts purporting to represent the entire annual mine production of silver trade on the COMEX. Yet, once all the furious trading is over, barely any actual silver changes hands. That must end.
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There are plenty of reasons we might see even lower official inflation numbers and a stronger dollar in 2016. But don’t think for a second that consumer prices or living costs will fall. They haven’t, they aren’t, and they never will in a sustained way – thanks to the Fed’s creation in 1913. This is where the deflationists have it wrong.
