One little known secret of the global economic collapse of 2008 is that the same six individuals who caused it, just happened to be the same six individuals who were arrested and convicted for the same crime 20 years earlier. Surprised? They were the brains behind the financial firm of Charles H. Keating, best known for controlling five US Senators notoriously known as the Keating 5. After the scandal, those six evil geniuses went to banks like Goldman Sachs, JP Morgan and Citigroup, where they invented the financial instruments that destroyed the world in 2008. And just as the banks simply recommitted a brilliant crime invented by someone else, today they’re doing the exact same thing.



Banks cornering the market on everything

Perhaps the best historic example of what’s going on today is that of the Hunt Brothers’ worldwide cornering of the market on silver, giving them a 700% profit in a matter of months. In 1979, Nelson and William Hunt had accumulated one-third of the world’s silver, not including government holdings. By hording the precious metal and refusing to sell, they drove the price up from $6 per ounce to $48 per ounce.

Unlike today where the big banks fully control much of the US federal government, the Hunt Brothers had no such protection. At the behest of other corporations taking a financial hit, most memorably Tiffany’s who took out a full page ad in the NY Times exposing the fraud, federal authorities changed the law and the Hunt Brothers found themselves pinched in their own scam, suddenly losing $1.7 billion they didn’t have.

Authorities realized to their horror that a Hunt bankruptcy would lead to the bankruptcy of their brokerage firms, which would cause the collapse of Wall Street’s banks invested heavily in them. Sound familiar? Instead, the largest financial firm, connected to Prudential, received a $1.1 billion bailout and the dominos were kept from falling.

Cornering the market on aluminum

Flash forward to 2013. One can easily see that what Enron did by hording energy and refusing to release it to the people, and the Hunt brothers’ same scam with silver, is now repeating with banks such as Goldman Sachs and JP Morgan attempting to corner the market on as many commodities they can. The most blatant, documented and recent example is aluminum.

The publication Too Much Online, put out by the Institute for Policy Studies, recently detailed the secret activities of Goldman Sachs in their current effort to corner the market on aluminum, as well as other valuable commodities. Comparing today’s big banks to Al Capone and the Chicago Mafia, the publication writes, ‘Racketeering, of course, is still going strong. But the getup of our contemporary racketeers has changed somewhat. Our most highly compensated racketeers today don’t wear fedoras. They fill power suits. Our top racketeers these days don’t run from the law. They run Wall Street.’

Explaining what allows the banks to do what they’re doing, the publication details, ‘In 2003 the dam broke. The Federal Reserve Board, as one expert analyst told a Senate hearing last month, “razed the walls between deposits and commerce” and allowed Citigroup to buy up a nonfinancial business. In 2005, another Fed waiver let JPMorgan Chase enter the physical commodities business.’

Goldman Sachs aluminum scheme

Writing, ‘No bank rushed more boldly than Goldman Sachs,’ the account describes how three years ago, the bank bought a string of 27 aluminum warehouses around Detroit. Not knowing what demand will be in the future, manufacturers that rely on aluminum – like Pepsi, Coke, GM, Ford, etc. – buy large amounts of aluminum and store it in warehouses such as these for their day-to-day use.

While the manufacturers own the aluminum, Goldman Sachs owns the warehouses, trucks, drivers and dock workers. As the report details, before the bank’s take-over of the warehousing industry, manufacturers like Pepsi and Coke could obtain their needed aluminum in no more than 6 weeks. Under Goldman’s control, that lead-time has skyrocketed to as long as 1.5 years! Just as Wall Street banks don’t make their money banking, and instead make it on outrageous fees, so is the case with the aluminum.



By dragging out the delivery for a year and a half, Goldman Sachs is able to charge companies like Pepsi and Coke 1,000% more for storage than the previous warehouse owners did. In 2011, Coca-Cola filed a formal complaint with their global regulator, the London Metals Exchange. The complaint charged that Goldman Sachs “intentionally created” a warehouse bottleneck simply to charge additional fees and drive up the cost of aluminum, which the bottler accused the bank of having a large stake in.

Goldman outsmarts world government

The report reminds readers that the London Metals Exchange is, ‘a private body with bankers among its decision makers.’ Seemingly ruling on behalf of Coca-Cola and other users of aluminum, the market overseer altered the rules and mandated that the aluminum warehouses double the amount of aluminum they ship out from their warehouses every day. But Goldman Sachs isn’t knows as ‘evil geniuses’ for nothing.

Take one guess what the Goldman Sachs aluminum warehouses did? They doubled their daily shipments of aluminum from their warehouses all right, but not to America’s manufacturers like Coke and Pepsi. The account from Too Much Online quotes a New York Times investigation last month.

‘The bank, to meet the new rule, simply started shipping aluminum bars from one of its warehouses around Detroit to another,’ the report quotes the Times piece, ‘Each day, a fleet of trucks shuffles 1,500-pound bars of the metal among the warehouses. Two or three times a day, sometimes more, the drivers make the same circuits. They load in one warehouse. They unload in another. And then they do it again.’

Calculating what this scam has cost consumers and regular people, the Times pegs that amount at $5 billion and growing everyday. Warning that aluminum isn’t the only heavily-used metal being allowed to be cornered by the world’s banks, the SEC recently approved an application by bank-backed investors to warehouse as much as 80% of the globe’s copper.

The report also quotes New York Times reporter David Kocieniewski explaining that these commodities schemes aren’t limited to aluminum and copper. The big banks are also attempting to corner the oil, wheat, cotton and coffee industries. In doing so, Kocieniewski says they are bringing, “billions in profits to investment banks like Goldman, JPMorgan Chase, and Morgan Stanley, while forcing consumers to pay more every time they fill up a gas tank, flick on a light switch, open a beer, or buy a cell phone.”



Too big to fail, too big jail

The report closes with another example of how this criminal banking scam is occurring everyday, all around us. It points to just one instance from last summer where JP Morgan was accused and penalized for cornering the energy market in California and withholding electricity to drive up the prices they charge the state’s residents, exactly what Enron did to the state 20 years earlier.

The Federal Energy Regulatory Commission ruled that JP Morgan Chase defrauded California residents into overpaying the bank $125 million. The federal agency ruled that JP Morgan pay back that amount, plus a $285 million fine. None of the actual criminals were charged however. And as one critic pointed out, the $285 million fine is the equivalent of one day’s revenue for the bank.

The report ends with a quote from Los Angeles Times financial analyst Michael Hiltzik, “If you could steal $125 million, with the only downside being that if you got caught you might have to give the money back and lose a single day’s income, would you give it a go?”

Read the full story from Too Much Online

 

Related Whiteout Press articles:

List of Goldman Sachs Employees in the White House

Goldman Exec resigns, blast Bank, Blankfein responds

Warren Buffet, the Devil in the Details

What caused America’s Economic Collapse?

 

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