Is Deutsche Bank’s Gold Manipulation The Main Scam Or Just A Side-Show?

Tyler Durden's picture

Submitted by John Rubino via DollarCollapse.com,

For years now, the easiest way to finesse a debate over whether precious metals markets are manipulated has been to say, “well, if they’re not manipulated they’re the only market that isn’t.”

That was unsatisfying, though, because as the big banks got caught scamming their customers on interest rates, mortgage bonds, forex and commodities trades, those markets (presumably) began to operate more-or-less honestly. Gold and silver, meanwhile, kept right on acting strangely, for instance plunging in the middle of the night on no news but massive futures volume, to the detriment of honest investors and traders who naively bet their capital on fundamentals. The (already huge) amount of money thus stolen from gold bugs kept rising.

So it is with relief that fans of honest markets have greeted the news that at least one kind of precious metals manipulation has been exposed:

Deutsche Bank Settles Silver, Gold Price-Manipulation Suits

 

(Bloomgerg) – Deutsche Bank AG has reached settlements in lawsuits over allegations it manipulated gold and silver prices, lawyers for traders of the commodities said in court filings.

 

Attorneys for futures contract traders in two private lawsuits said in letters filed Wednesday and Thursday in Manhattan federal court that the bank has executed term sheets and is negotiating final details for the accords.

 

The German financial firm also agreed to help the plaintiffs pursue similar claims against other banks as part of the settlements, according to the letters. Vincent Briganti and Robert Eisler, attorneys for traders in the silver-fixing lawsuit, said Deutsche Bank will turn over instant messages and other communications to help further their case. Financial terms of the settlements weren’t disclosed.

 

“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,” attorneys Daniel Brockett and Merrill Davidoff said in their letter Thursday in the gold-fixing lawsuit.

 

Silver and gold futures traders sued groups of banks in 2014 alleging they rigged prices for the precious metals and their derivatives. Silver traders brought claims against Deutsche Bank, HSBC Holdings Plc, Bank of Nova Scotia and UBS AG. Gold traders additionally sued Barclays Plc and Societe Generale SA.

 

The traders alleged the banks abused their positions of controlling daily silver and gold fixes to reap illegitimate profits from trading and hurting other investors in those markets who use the benchmark in billions of dollars of transactions, according to versions of the complaints filed in 2015. Of those banks, only Deutsche Bank has reached a settlement.

 

Amanda Williams, a spokeswoman for Deutsche Bank, declined to comment on either accord. Rick Roth, a spokesman for Scotiabank, the operating name for the Bank of Nova Scotia, and HSBC spokesman Robert Sherman also declined to comment. Representatives from UBS, Barclays and Societe Generale didn’t immediately respond to requests for comment.

 

The silver case is In re: London Silver Fixing Ltd. Antitrust Litigation, 1:14-md-02573. The gold case is In re: Commodity Exchange, Inc. Gold Futures and Options Trading Litigation, 14-md-2548, U.S. District Court, Southern District of New York (Manhattan).

Deutsche Bank’s plea is of course just the beginning of the story. It will apparently name its co-conspirators, while providing details on how the scam was run. This will be interesting and amusing (those instant messages promise to be classic), especially at a time when those same banks are also in the news for falling earnings, rising layoffs and exploding loan loss reserves.

But is this gaming of the London precious metals fix the same thing as - or even tangentially related to - the main manipulation of the gold price, which is the practice of central banks “lending” their gold to big commercial banks, which then sell that gold on the open market to depress the price? These seem to be two different frauds, and if only the first comes to light while the second continues unimpeded, there’s no reason to expect precious metals to start trading rationally — which is to say in line with fundamentals like soaring global debt, ever-increasing money creation and general geopolitical and economic instability. At least not until Western central banks run out of gold.

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Rip van Wrinkle's picture

"At least not until Western central banks run out of gold."

 

What a ridiculous thing to say. They'll just print some more.

XAU XAG's picture

Who manipulated the price to $1900?????

 

It works both ways

 

 

J S Bach's picture

It's a side show.  The center ring scam is Rothschild's central bank fractional reserve fiat currency usury system which infects the entire world.

ShorTed's picture

Agreed, if they're willing to admit to it and cooperate in rooting out the other evildoers, it's definitely a sideshow.

tmosley's picture

I don't think it is a sideshow. I think this rigging was and is the lever which allowed that gold dumping to have an overlarge effect on the price. Basically, they were using that gold to satisfy the less than 1% of people/entities that demanded physical.

I suspect that once this lever is broken (if the Feds to step in to quash lawsuits against US banks), silver manipulation will be over, as that was funded by very limited mine production (again, using that to satisfy the <1% of people demanding physical). Gold manipulation might go on a little longer, as the OP said, until the governments run out of gold.

Wouldn't be too surprised to see some bank nationalization over this. Soverign immunity might allow them to keep up their leverage, but the silver price will become a flashing red light telling everyone that something is bad wrong, increasing demand for physical gold and silver both.

Pinto Currency's picture

 

 

Four aspects of the scandal:

1) the LBMA that trades gold and silver promises instead of gold and silver - there is no limit to the creation of promises to set the price

2) the bullion banks that collude to manipulate metals prices

3) central banks leasing sovereign gold into the market to manipulate the price

4) global debt markets that will now collapse

http://www.safehaven.com/article/41072/moving-to-the-post-lbma-era-gold-...

SuperRay's picture

Irony know if you're paying attention, but the Rothschild Zionist evil fuckers own the governments, not just the central banks. This doesn't end without blood. As far as I'm concerned ASAP. I'm sick of it

philipat's picture

Rubino seems not to understand that the CB's stopped lending REAL Gold when they set up the paper futures markets. They simply instruct their Agents, the Gold Cartel, to issue more paper contracts, printed Gold. How quaint that he would still believe that these paper contracts are actually backed by real Gold. Real Gold is much too important for CB's to put at risk.

dark fiber's picture

Manipulation is usually something along the lines of pump and dump, rinse repeat.  I don't think they intended to send the price to any particular long term level, just create enough (un)predictable volatility in order to mostly fleece the retail market.

Mr. Magoo's picture

If its being reported and we know about its another distraction. its the inside information that is not being reported and we dont know about is the real concern. But in the end Who cares, we all know this does not have a happy ending

XAU XAG's picture

Not many peeps get it dark fiber.

 

It's how all trading markets work.

 

 

back to basics's picture

No one manipulated the price to $1,900 and no, it doesn't work both ways.

Investor fear of a market collapse pushed the price to $1,900 and after Bernanke stepped it to reiinflate the market, he dealt with gold blatantly and viciously (he wasn't about to repeat Big Paul's mistake), aided by the fact that anyone with two functioning brain cells who saw through what central banks were hell bent in doing, often directly with the help of a wink and a nod from the FED, sold gold to buy equities.

So no, it doesn't work both ways.

XAU XAG's picture

Well Back to basics

It's all a mater of perspective

 

Manipulation is the same as trend as anyone playing the market has to go with the TREND (call it manipulation or whatever) or lose

 

The next crash, gold will drop as will stocks..........then Gold will rise again leading, just as before, stocks will rise as well as the bond market imploads.

 

You cannot manipulate against the trend.........short term but not long term

back to basics's picture

You don't happen to have a time line for those short and long term trends you speak of, do you? Because I've seen enough "this can't go on forever", "gravity will assert itself " and "soon" posts on here it's getting a little tiring. 

Because without those what you just posted is akin to saying that we'll all be dead someday, it's just that we don't know when or what happens to our lives in the meantime.

kliguy38's picture

you guys need to relax and get sum moar popcorn....you're way to serious

XAU XAG's picture

Trends are like tides.............some short some long.

 

I have posted this below

 

Go look..........who manipulted gold higher in Argintine and lower in swiss and USA??

 

 

Theonewhoknows's picture

Exactly just like you said it - my comment from few months back "Gold will be gaining on all fronts as the QE train is being continued (after FED, BOJ and ECB) - the war on cash will send gold up and up. http://independenttrader.org/war-on-cash-a-piece-of-a-bigger-puzzle.html"

They are doing gold bugs a favour by thinking that financial markets are the only one that matter - it matters to them, trying to get reelected not to the middle class. And now the new agenda will de to develue existing trillions of debt - of course they will steal our money through inflation to NOT PAY. The infaltionary escape from debt will make sure that there will be enough unemployment, maybe even more than enough. But students will be happy (with their debt they will be useful to be a 'dumb crowd' that follows 'omnipotent leaders') while everyone else's savings gonna disappear http://independenttrader.org/war-on-cash-a-piece-of-a-bigger-puzzle.html

 

tmosley's picture

Tell us, tiny little troll, what would the price action look like in an unmanipulated market? Perfectly still and even?

XAU XAG's picture

http://www.zerohedge.com/news/2016-01-08/gold-higher-most-currencies-201...

 

 

Who manipulated it up it Argentine and down in in swiss and USA??

holgerdanske's picture

Who has interest in a high goldprice? The FED, the government, the politicians??? no, they want to see gold gone, because that is the only thing they can't create at will.

So it is a bit naive to think a high gold price is as likely as a low one. Sure, if it was only traders, and no-one else, but that is precisely not the case here, in my view.

Canadian Renegade's picture

Nobody manipulated the price up XAU XAG. That was actual market forces and it would have gone higher if not for intervention.

It's blatantly obvious in a world where a third of government bonds yield negative rates that PM's are undervalued.

Badsamm's picture

Talked my friend into purchasing his first monster box of silver Eagles last week. first thing he said, "I hope they smash it lower, and I'll buy 2 more"

Soon enough this stuff will be hard to find

Handful of Dust's picture

So when will gold correct and accurately reflect real demand?

FreeShitter's picture

When some folks hang some bankers.

Ghordius's picture

as soon French warships have been in NY harbour often enough and have loaded up the last of the ingots

oh. sorry. that must have been a flashback from the late 60's. don't mind me, carry on

Catullus's picture

How about reflect actual supply.

The stackers will tell you they don't care about the fiat price of PMs. And neither does anyone who buys it for an inflation hedge. It's a just a beta for them

quadraspleen's picture

 

 

Limited hangout.

Cognitive Dissonance's picture

Exactly. Venting some pressure over here so you don't look over there.

quadraspleen's picture

 

 

And "over there" could be anything. It's interesting it came out so close to Mossack as well. Another limited hangout.

I wonder who benefits from all of this misdirection

*cough*

saldulilem's picture

So little has been written about the shanghai gold exchange coming online this week, supposedly being THE game changer. I'm eagerly waiting on this development.

XAU XAG's picture

If your playing the gold market 

 

And you want more gold ............would you want the price up or down?

 

Of course if you are making money on the spread ........you don't care as long as you are playing the right direction (trend)

quadraspleen's picture

Of course if you are making money on the spread ........you don't care as long as you are playing the right direction (trend)

 

And of course, that's all the "manipulators" care about, and think the relatively small group who trade care about, and of course, unless you hold phys, why should you care about the price of AU and AG or who "manipulates" it.

I think this message was for Main St, not investors or PM dealers, who are all waiting for the price to go up. I think it's gonna go down, but I am a pessimist where PMs are concerned, despite holding phys.

I also think the Chinese exchange will have far less effect on price than we all think. A bit like Doha was for CL...

Kagemusho's picture

Douche-uh Bank bows out of gold market.

China joins LBMA, den of the fixers.

Douche-uh Bank starts to sing like a canary about dirty Au trading deals.

China launches the Shanghai Gold Exchange tomorrow. Trading in Yuan only. Just like "No tickee, no shirty" it will be "No Yuan, no shiny."

I may be missing a hell of a lot of dots, but the general outline is becoming clear. Au and Ag are on the launching pad, and burning Fed Reserve Notes will be the fuel.

Leading most Americans to wind up saying "Oh fuckee, oh shitty."

 

NoBillsOfCredit's picture

What's the difference between the Yuan Note and a Federal Reserve Note?...Wait for it....Nothing! Both are scams.

milanolarry's picture

The bullion banks are running out of silver, not gold. Perhaps that is the reason why Deutsche Bank pleaded guilty, because the scam is ending one way or the other.

XAU XAG's picture

JPM has it all...............last time ZH looked

ebworthen's picture

"Buying" Gold that you don't hold is the biggest scam.

No different than "buying" food shares - & finding empty shleves when you're starving.

indygo55's picture

Selling gold that you dont own is a pretty big scam too.

 

dearth vader's picture

Pretending you own 8,100 tonnes of the stuff and never allow an audit is an even better scam, no?

Kaervek's picture

I agree, although I would move the quotation mark to "gold" and "food" as the buying actually happens, but the counterparty fails to deliver on it's paper promise of the "asset"

maneco's picture

Even the Vatican Bank is involved in the gold price suppression scheme. Manipulating the London fix is just the tip of the iceberg!

"Gold Price Suppression, Paul Volcker and the Vatican Bank":https://youtu.be/KQuyKBt5COY

FreeShitter's picture

You can always count on the vatican to do satan's work.

Ghordius's picture

bollocks. that pitiful, small banking affair commonly called the "Vatican Bank" hasn't even the resources to do such a manipulation

a tip for you: only because you can watch it on YouTube does not mean it's true

khnum's picture

The Federal Reserve is a scam

The markets are rigged

Commodities are rigged

The war on terror is a scam

Bernie and Trump have proven the election process is a joke

Religion is a scam

US foreign policy is a protection racket

The US dollar is monopoly money

and all involved in the above are above the law.

Wellcome to Planet Rothschild

Ghordius's picture

"Planet Rothschild"? That one did run on physical gold. Through the Rothschild-controlled Bank of England issuing the global reserve currency

sorry, but like Captain America, you sound like you were frozen in ice for the last seventy years or so

khnum's picture

No that was Enron 43 AD were now Enron 44 Fiat currency with Enron 45 carbon credits on the way I think you'll find management hasn't changed

Ghordius's picture

I beg to differ. Management has changed as well as the location of the issuer of the global reserve currency and the backing of the global reserve currency

again, under Rothschild's management of the Bank of England, the British Pound was the global reserve currency and it was backed by gold

and British warships showed up wherever payments were due, or contested

logicalman's picture

Head office moved from UK to us, is all.

Pumpkin's picture

Woe unto the inhabitants of the Earth.