Although terms like “free market” are often used to describe modern life, evidence of command-and-control markets keeps finding its way into headlines, most notably with Libor – the rigging of global interest rates (or the price of money) – shocking the world
What fewer know is the consistent investigation by national authorities into the rigging of precious metals prices by major banks. There have been more than a few. The Department of Justice antitrust division prosecutors investigation into the price-setting process, which was announced yesterday, is merely the most recent.
In 2010, Bill Murphy of GATA delivered groundbreaking testimony to the Commodities Futures Trading Commission (CFTC):
In 2013 a five-year investigation into the manipulation of the silver market closed. Reuters stated:
NEW YORK/WASHINGTON, Sept 25 (Reuters) – U.S. regulators on Wednesday closed a five-year investigation into alleged manipulation of the silver market, saying 7,000 staff hours of investigation produced no evidence of wrongdoing.
The decision by the Commodity Futures Trading Commission was a defeat for silver commentators and investors who urged the probe, saying big banks were using futures and options to hold prices down. Big traders had dismissed the investigation as a waste of time and the charges as a conspiracy theory.
…
Closing of the probe was a rare bright spot for Wall Street commodities players during a year in which the U.S. power market regulator has leveled record fines against two big banks, and the Federal Reserve is considering whether to rein in Wall Street’s ability to operate in physical markets.
But Democrat commissioner Bart Chilton, who had championed the silver inquiry, said he was disappointed.
“For me, there’s not been a more frustrating nor disappointing non-policy-related matter at the CFTC,” he said in a statement after the agency’s announcement.
The Gold Anti-Trust Action Committee, an advocacy group that believes the Federal Reserve and banks are colluding to keep gold and silver prices artificially low, said it was not surprised by the CFTC decision.
“We believe that the U.S. government is part of the trading operation. In essence, you are not going to have the CFTC turns against its own government,” GATA Chairman Bill Murphy said.
“We are not even slightly surprised and had expected this.”
A JPMorgan spokesperson declined to comment.
German’s financial regulator, Bafin, said in early 2014 that the precious metals manipulation case could be worse than Libor.
