Another bit of the jigsaw falls into place...
http://news.goldseek.com/GoldSeek/1342184400.php
So, while Lehman was in the death-throws of collapsing – after Barclays couldn’t be induced to touch them with a “barge pole” - J.P. Morgan “advanced” 138 billion [collateral perhaps?] to Lehman so they could “perform/settle trades” –– mostly, if not all reimbursed/paid for by the Fed. While this “stabilizing trade” was being instituted – short term rates simultaneously careened down to zero from 200 basis points [2 %]. Then, in the immediate aftermath of the collapse – J.P. Morgan’s less than 1 yr. component of their swap book grows by 8 Trillion in one quarter while their overall book was contracting by more than 6 Trillion in notional???
I hope I haven’t lost anyone here because these facts are MUCH STRANGER AND HARDER TO BELIEVE THAN FICTION.
What appears to have happened here: J.P. Morgan did not want to be identifiable as the originator of 8 Trillion worth of less than 1 yr. Swap instruments – so they pre-funded Lehman to strap these positions on - positions they KNEW IN ADVANCE they would inherit once Lehman’s collapse was official. This way – no more unwanted attention would be drawn to J.P. Morgan [the Fed / U.S. Treasury in drag].
Barclays clearly knew how bad the whole situation was – being the last ones to see the horror that was Lehman’s books - and were likely the only counterparty in the proceedings who acted in an informed, financially responsible manner.
So Barclays have pointed the finger at the Bank of England and "Whitehall", and in response the BoE has aggressively denied they issued any instructions, even though it is quite obvious they did exactly that. From this we conclude that some people within government, treasury and BoE did indeed know what was going on, but it is now looking like it wasn't Gordon Brown in charge of the strategy after all. Instead it looks like the US Federal Reserve / Treasury was pulling the strings, and that in addition to condoning/ordering the rigging of LIBOR they were also rigging other markets illegally and they were doing it through the trading desk of JP Morgan Chase.
What we have here is a grand conspiracy being co-ordinated from the very top of legitimate world power - the Presidency and Treasury of the United States of America. The conspiracy involves numerous politicians, several major banks in the UK and US, and the banking regulators, and it involves the systematic rigging not only of LIBOR but also of the price of precious metals. Indeed it looks this systematic, illegal rigging
began in the gold market all the way back in 1994. And ultimately the motive wasn't personal gain (at least not directly), but an attempt to prevent the collapse of a global economic system where the fiat US dollar was the world's reserve currency.
What's this got to do with oil?
Here's some background info:
http://fofoa.blogspot.co.uk/2009/07/how ... ar_05.html
http://www.henryckliu.com/page162.html
The seeds of this crisis were actually sown in the early 1970's, and this was in response to the collapse of the previous gold-based monetary system. Why did that happen? Because the US was losing the war in Vietnam, and at the same time it was heading towards its own internal peak oil. Other countries were turning their dollars into gold, as was allowed under what was left of the Bretton-Woods system, and the US was running out of bullion, so Nixon "closed the gold window" and unilaterally imposed on the rest of the world a monetary system they would not have agreed to by choice, because it rigs the whole economic system in favour of the US. When the US also passed its own internal peak oil, nothing was left backing the dollar. From that moment onwards, the US was vulnerable to a catastrophe which ultimately destroys the economic hegemony of the US: the system could only keep working if the price of gold could be kept in check. This did not start to become a serious problem until 1994, but from that point onwards the price of gold has NOT been determined by the free market. There has been an invisible hand at work to make sure that the gold price could NOT act as "canary in the mine" and cast doubt on the long-term stability of the fiat-dollar based monetary system. And once you've started down the path of rigging the gold market like that (in relatively good times!), then you certainly can't stop when times get harder. Instead, the interventions have to get more extreme, and harder to hide. So "they" were already manipulating the gold market long before 2008, but when Lehman's was facing bankruptcy in September '08 they reached the point where further manipulation of the gold market wasn't going to be enough to stop the dollar system collapsing. That is why the US Fed/Treasury ended up "in drag", rigging the markets (which markets? how wide does this go?) through JP Morgan. And that is the context in which the LIBOR rate-fiddling in 2008 took place.
Now I may have got this all horribly wrong, but it feels like it is beginning to make a bit more sense to me now. The big decisions that led us into this unholy mess were all the result of the big-decision-maker's hands being forced. The last time those decision-makers actually had an active choice (rather than having their hand forced) was after WWII when the US held all of the trump cards (including massive oil reserves, an undamaged industrial base and half of the world's gold). At that point an agreement had to be made about the way the world's monetary system worked. The UK and other major players tried very hard to implement a system where the fiat currencies would be tied to physical assets, but the US insisted that the whole world should use US dollars and that in order to keep the system "fair", the US would agree to exchange dollars for gold to anyone who demanded it. By the early 70's, a combination of failed foreign policies and peaking domestic oil production led the US to a point of crisis where it could no longer "keep the system fair" without heading towards national insolvency: it was going to run out of gold bullion. So Nixon had no choice but to "close the gold window" and unilaterally impose a fundamentally unfair monetary system on the rest of the world, and from that point onwards the future economic/financial health of the US has been utterly dependent on the price of gold remaining under some sort of control. Since then, the US authorities have had to choose between rigging the gold market, or letting the free market send the price of gold skyrocketing and thus alerting the entire world that the dollar-based fiat money system is doomed. And since 2008 the only way they have managed this is by rigging not only the gold market, but also the official LIBOR rates.
Now also think about Gordon Brown selling off the UK's gold at deliberately depressed prices because a major US bank was in trouble due to being "short on gold" to the point it was going to go under. It is now becoming clear
why this happened. It wasn't because the reckless banks had made the wrong bet. On the contrary, they were making bets they "knew" couldn't possibly go wrong, because they knew that the Federal Reserve would do anything possible, legal or illegal, to make sure the price of gold was kept under control. What I still don't understand is why the gold that was sold off at that time was the UK's gold, rather than that of the Fed. There would appear to be two potential answers to that question. The first is that we are missing a crucial piece of information that explains why the UK or Gordon Brown would be compelled to do such a thing (maybe some other scandal they wanted to keep hidden?) And the second is that the Fed couldn't sell any physical gold
because it had none left to sell.
Sorry for the very long post. Any thoughts appreciated.
UE
We must deal with reality or it will deal with us.
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