Deutsche Bank, Germany’s once-respected giant bank, has admitted being a party–together with a cartel of major Wall Street and select other international banks–in deliberately manipulating the price of gold over a period of years. As well, the German bank, in a court settlement with litigants in a US court, has agreed to name the names of other big banks involved in the criminal enterprise. As this drama unfolds in coming weeks and months, the world may well see the price of gold soar to new heights to reflect the true global market demand. This is huge.
The first time I came across evidence that select Wall Street and other major international banks, in cooperation with the Federal Reserve, were deliberately suppressing the world gold price was in the aftermath of the global stock market crash of October, 1987. That was when the Dow Jones stock index lost 23% in one day. John Crudele, an exceptionally persistent financial journalist with the N.Y. Post and John Williams of Shadow Government Statistics and an exceptional economist, informed me at the time of the gold manipulatipon reports. The reason for the fix, which then-Fed chief Alan Greenspan reportedly orchestrated, was to prevent a stampede by panicked investors out of risky stocks and bonds into gold. Had gold profited from the stock panic, it could well have been an early end to the dollar system. It worked then to prevent a gold rise.
Now, on April 15, in a case tried in United States District Court in New York, Deutsche Bank wrote the Court that it has agreed on a mutual out-of-court settlement with the group of market traders suing the bank. Included in that settlement is a bombshell. Deutsche Bank will also turn over evidence it has to aid the traders in similar lawsuits against other major banks accused of being in the gold and silver price-fixing cartel. The German bank stated to the Court that it will turn over instant messages and other communications to help further their case:
“In addition to valuable monetary consideration to be paid into a settlement fund, the term sheet also provides for other valuable consideration such as provisions requiring Deutsche Bank’s cooperation in pursuing claims against the remaining defendants,” the bank’s attorneys wrote to the Court.
The traders bringing the lawsuits against Deutsche Bank and others allege that the banks abused their position of controlling the daily silver and gold price fix to reap illegitimate profit from trading, hurting other investors in the silver market who use the benchmark in billions of dollars of transactions.
Notably, the Commodity Futures Trading Commission (CFTC), the US government agency allegedly mandated by Congress to regulate those banks and their commodity derivatives trading, initiated its own investigation in 2008. After a five-year-long “investigation” into allegations of price rigging in silver markets, in 2013 the CFTC dropped the case. The chairman of the CFTC was Gary Gensler, a former senior partner at Goldman Sachs, probably just coincidence. Today Gensler is Hillary Clinton’s presidential campaign finance manager. OhOhOh…
Whom the gods would destroy…
The subtitle in English of my latest book, The Lost Hegemon, is taken from the classic Greek expression, “Whom the gods would destroy, the first make mad,” as in insane. It certainly applies to the handful of Wall Street and very select EU banks that have been deemed “too big to fail.” The same insane banks implicated in the gold and silver market manipulations have also been sued for manipulation of the London key international interest rate, LIBOR, as well as manipulating specific currencies.
Just days before the Deutsche Bank bombshell, Wells Fargo and Goldman Sachs admitted to defrauding the United States government for nearly an entire decade, a fraud which subsequently led to the housing market collapse. Running the bailout of his Wall Street cronies as US Treasury Secretary for that Tsunami collapse was former Goldman Sachs chairman, Henry Paulsen. In short some of the largest banks in the world are being exposed as criminal enterprises.
The dam breaks
The daily London gold price is “fixed” in a special room at Barclays Bank under the auspices of the members of the London Bullion Market Association. The bullion fixing banks are Bank of Nova Scotia–ScotiaMocatta, Barclays Bank, Deutsche Bank AG London, HSBC Bank USA NA London Branch und the French Société Générale. In addition to Deutsche Bank, banks being currently sued in New York for being a part of the rigging cartel include HSBC Holdings Plc and Bank of Nova Scotia and the giant Swiss UBS. The list is about to expand and we can be sure JP MorganChase, Goldman Sachs and select Wall Street banks are already in the targets of hundreds of class-action lawsuits being readied.
One day after the dramatic Deutsche Bank news, two class action lawsuits seeking $1 billion in damages on behalf of Canadian gold and silver investors were launched in the Ontario Superior Court of Justice.
The first class action alleges that the defendants, including The Bank of Nova Scotia, conspired to manipulate prices in the silver market under the guise of the benchmark fixing process, known as the London Silver Fixing, for a fifteen year period. The case is “on behalf of all persons in Canada who, between January 1, 1999 and August 14, 2014, transacted in a silver market instrument either directly or indirectly, including investors who participated in an investment or equity fund, mutual fund, hedge fund, pension fund or any other investment vehicle that transacted in a silver market instrument.”
An identical class action lawsuit was launched for gold manipulation.
Now that the price-fix dam has broken and Deutsche Bank has in effect agreed to turn on its fellow commodity-fixing bankers, it’s certain that countless discussion between aggrieved traders and investors and their lawyers will result in a flood of costly litigation chocking Wall Street and City of London banks and their Continental co-conspirators. Interestingly, this ought to unblock the blockage in gold markets worldwide just as China, obviously fed up with the Wall Street gold price games, has created a Shanghai Gold Market intended to replace London and New York under quite different rules. This could well be the dawn of a new golden era, literally and figuratively.
F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook”.