Bank Watch ...

UndercoverElephant · Post by **UndercoverElephant** » 14 Jul 2012, 13:35

http://www.marketoracle.co.uk/Article35548.html

The Libor fixing scandal is amusing as everybody- all the talking heads and ‘experts’ are “shocked, shocked” to discover that this benchmark interest rate underlying trillions of dollars worth of financial transactions worldwide was being manipulated

This is despite more astute analysts such as Gillian Tett and others warning that rigging was taking place and LIBOR was a fiction as far back as in 2007.

A lack of transparency, a lack of enforcement of law and a compliant media which failed to ask the hard questions and do basic investigative journalism led to the price fixing continuing and the manipulation continuing unchecked on such a wide scale for so long - until it was exposed recently.

Similarly, the gold market has the appearance of a market that is a victim of “financial repression”.

Given the degree of risk in the world – it is arguable that gold prices should have surged in recent months and should be at much higher levels today.

The gold market has all the hallmarks of Libor manipulation but as usual all evidence is ignored until official sources acknowlege the truth.

However, like LIBOR the gold manipulation 'conspiracy theory' is likely to soon become conspiracy fact.

It will then – belatedly - become accepted wisdom among 'experts.' Experts who had never acknowledged it, failed to research and comment on it or had simply dismissed it as a “goldbug accusation.”

Financial repression means that most markets are manipulated today - especially bond and foreign exchange markets.

Many astute analysts are asking today (see Commentary) - why would the gold market be completely immune to such intervention and manipulation?

The last thing insolvent banks and governments want is a surging gold price.

peaceful_life · Post by **peaceful_life** » 14 Jul 2012, 13:35

Looks like the revelations are indicating a change

UndercoverElephant · Post by **UndercoverElephant** » 14 Jul 2012, 22:09

Having thought about this some more, the answer to why it was the UK's gold that got sold off may not be so mysterious. Just look at the size of our financial services sector debt (now) to GDP, compared to that of the US. The sad truth is that the US had Gordon Brown by the balls, because the UK is utterly dependent on its banks (or so went/goes the mythology) and because our banks were dependent on the US banking system.

We are in so much trouble...

biffvernon · Post by **biffvernon** » 15 Jul 2012, 08:14

The special relationship?

UndercoverElephant · Post by **UndercoverElephant** » 15 Jul 2012, 10:47

biffvernon wrote:The special relationship?

With a bit of luck, any remnants of "the special relationship" are going to be blown away by what is coming.

The UK has got some major decisions ahead of us regarding our future economic and political relationships. We're going to have to rethink our relationships with both the EU and the US at the same time, and at the same time as we have to find a new relationship with the whole of the rest of the world, in the wake of the collapse of our disgraced financial services sector.

biffvernon · Post by **biffvernon** » 15 Jul 2012, 11:38

What I meant was that the special relationship was that 'the US had Gordon Brown by the balls, because the UK is utterly dependent on its banks (or so went/goes the mythology) and because our banks were dependent on the US banking system'.

UndercoverElephant · Post by **UndercoverElephant** » 15 Jul 2012, 12:20

biffvernon wrote:What I meant was that the special relationship was that 'the US had Gordon Brown by the balls, because the UK is utterly dependent on its banks (or so went/goes the mythology) and because our banks were dependent on the US banking system'.

Yes. Or at least that's how it looks if you buy into the mythology. The reality is that the UK's financial services sector has bankrupted this country, not bankrolled it. We actually need the City of London like we need rabies.

raspberry-blower · Post by **raspberry-blower** » 15 Jul 2012, 14:21

UndercoverElephant wrote:
biffvernon wrote:What I meant was that the special relationship was that 'the US had Gordon Brown by the balls, because the UK is utterly dependent on its banks (or so went/goes the mythology) and because our banks were dependent on the US banking system'.
Yes. Or at least that's how it looks if you buy into the mythology. The reality is that the UK's financial services sector has bankrupted this country, not bankrolled it. We actually need the City of London like we need rabies.

Is the right answer.
Financial institutions in the square mile routinely create tax losses through off balance sheet trading - at the end of each quarter they buy up such losses to minimise their tax burden. This results in the financial sector paying a fraction of its dues in taxes.This is at best disingenuous - and should be treated for what it actually is - FRAUD.

A lot of these losses are created in the murky world of derivatives where nobody knows exactly who owns what or why. All the financial institutions - to a lesser or greater extent - are exposed to these and the only way to fully get a grip of the situation is for all the vaults to be opened up to scrutiny and everything is marked to market.

Another thing that the square mile does very well is to facilitate the transfer of funds to offshore tax havens through a variety of accounting tricks and sleight of hand. Not that there have been any accounting scandals in the City, eh?

If the square mile were to pay its full due, then it could do no worse than start with the imposition of the Robin Hood tax

If it doesn't then it should be allowed to die without taking everything down with it

raspberry-blower · Post by **raspberry-blower** » 15 Jul 2012, 17:06

The true extent of the amount of hidden subsidies given to banks (as up to 2010):
http://www.positivemoney.org.uk/consequ ... ing-banks/

biffvernon · Post by **biffvernon** » 15 Jul 2012, 18:07

The most blatant subsidy, and it doesn't seem to be hidden at all yet rarely mentioned, is the way the BoE is lending money to the banks at 0.75% who then lend to us at a rate of ten times that and more.

JavaScriptDonkey · Post by **JavaScriptDonkey** » 15 Jul 2012, 21:32

Probably best not to forget that the City is also where Government bonds get bought up. Bonds that continue to finance our liquidity.

You can break the City only after you pay back the debts owed and reign Govt spending in to within limits set by what can be raised by ordinary taxation.

Little John · Post by **Little John** » 15 Jul 2012, 23:06

JavaScriptDonkey wrote:Probably best not to forget that the City is also where Government bonds get bought up. Bonds that continue to finance our liquidity.

You can break the City only after you pay back the debts owed and reign Govt spending in to within limits set by what can be raised by ordinary taxation.

Bullshit.

It's all bullshit. There is no money. It's all just credit lent into existence. It can wink out of existence in via default just as easily.

None of it is sustainable. It is going to be defaulted on no matter what. The only pertinent question that remains is the form of the default; inflationary or deflationary

Little John · Post by **Little John** » 15 Jul 2012, 23:14

biffvernon wrote:The most blatant subsidy, and it doesn't seem to be hidden at all yet rarely mentioned, is the way the BoE is lending money to the banks at 0.75% who then lend to us at a rate of ten times that and more.

Exactly. The plain fact is, they shouldn't be trying to re-inflate the economy anyway as it wont work (due to the physical limits to growth) and will only serve to devalue the currency. Which is nowhere near as clever as it sounds given that we have to import 40% of our food along with every other conceivable consumer item.

However, even assuming, for argument's sake that re-inflation was going to work, there is no logical reason why they should not simply put it into the accounts of each and every citizen as a "citizen's dividend". This would be both more efficient than pushing it through the banks as well as requiring less money because people would not have to service the interest payments on it if it was in the form of a loan.

The reason the above solution is not being implemented should be blindingly obvious. All of this QE being pushed into the banking system has got bugger all to do with saving our sorry arses. It is about keeping the banking system afloat. That is all it is about.

PS_RalphW · Post by **PS_RalphW** » 16 Jul 2012, 10:59

We import 40% of our food by price. I doubt it is 40% by calories or nutritional value.

Farmers seem far more aware of limits to growth than the rest of the population, judging by R4 farming today and similar programmes. They are thinking long term and can see trends like increasing energy costs, and plan accordingly.

If we inflate the currency we also inflate away a lot of debt. Not good for people who see their life savings destroyed, but if the government decided to default or let the banks go under, then those savings are gone anyway. There are no good options.

Of course climate change (if this summer is anything to go by) could do a lot of damage to our food security, more through unpredictability and extremes than steady drift. I think we could get by on our existing food production, but it would take rationing and very changed priorities.

biffvernon · Post by **biffvernon** » 16 Jul 2012, 11:27

This 40% thing, however it's measured, is an economic construct. If the economy changes the numbers can change. We could, physically, produce far more human food than we do.