When Is It Going To End?

Investing Strategies, Strategies, Technical Analysis
Reading Time: 6 minutes

No, I’m not talking about the political hatred dividing our country. My concern is something deeper. If it doesn’t end, the political divide will grow worse.

Wall Street On Parade (WSOP) reports JPMorgan Chase is caught once again:

“…. JPMorgan Chase, the largest bank in the United States, has admitted to an unprecedented five criminal felony counts since 2014 and put on criminal probation three times. …. (That’s five felonies more than the bank pleaded guilty to in its prior 100 years of existence. Translation: this is not normal even on Wall Street.)”

This time they were fined $920 million for price manipulation in the metals market. WSOP tells us:

“That brings to more than $37 billion the total that JPMorgan Chase has paid to settle allegations of fraud and ripping off Americans since the financial crash of 2008.

…. To be charged with two more felony counts in the same year your three-year probation ends is the strongest proof that Wall Street has become a fraud monetization system where deferred prosecution agreements and fines are simply the cost of doing business on Wall Street. (Emphasis mine)

The deal is so sweet…it notes that “an independent compliance monitor was unnecessary” despite also revealing that the bank “did not voluntarily and timely disclose to the Fraud Section and the Office the conduct described in the Statement of Facts.” It was required to do that under its prior probation agreement that ended in January of this year.”

Bottom line, five felony counts, billions in fines, no one goes to jail; and the justice department decides, “an independent compliance monitor was unnecessary.”

It’s not just JPM. In 2017 Reuters reports: “Banks paid $321 billion in fines since financial crisis”.

Why are taxpayers bailing out banks who have a history of criminal behavior at an unfathomable level?

It’s time for a sanity check. I contacted our Fed expert, Chuck Butler.

DENNIS: Chuck, thanks again for taking the time for the benefit of our readers.

Craig Hemke writes:

“Understand that these are Bankers we are dealing with, after all. As such, they will pursue PROFIT through all means necessary. The recently convicted traders will be replaced, and efforts will be made to better conceal their footprints going forward.”

Chuck, this is in plain sight, yet the justice department does nothing that appears to change the behavior of the banks. Is this as bad as it looks?

CHUCK: Thanks again Dennis for inviting me to opine in your letter!

I believe it’s probably worse than it looks…Ed Steer reports these numbers in his Saturday letter. Did you know that it would take 185 days of production in Silver, to equal the amount of Silver that’s short on the books of these bullion banks? And for Gold, the number is 85 Days….

I’ve said that the fines make no difference as these bullion banks have made 10x the fines on the unlawful trades. To them, it’s just a cost of doing business….

Expect the manipulations to continue, and be more difficult to find in the future. And the real McCoy, if you will, of price manipulation is all the short trades that have no intention of being executed for delivery. As long as the Commodities & Futures Trading Commission (CFTC), turns a blind eye toward these trades, the real price manipulation will continue.

DENNIS: I was astounded when Hemke reported:

So, in summary…

1. The Enforcement Division of the CFTC runs a five-year investigation into silver price manipulation, only to immediately close the investigation once presented with irrefutable whistleblower evidence of said manipulation.

2. The head of the Enforcement Division, David Meister, quits the CFTC within a week of closing this investigation.

3. Meister then takes a job with Washington law firm, Skadden LLP.

4. Skadden LLP has been retained by Michael Nowak, former head of the JPMorgan precious metals desk, as his defense attorneys. The lead attorney defending Nowak is David Meister.

And there you have it. Abject corruption that is in your face and undeniable with another case of the Financial-Political Complex protecting its own.

Particularly in an election year, why aren’t some Congressional candidates screaming their head off? What’s going on?

CHUCK: OK, here’s where I used to get told to take my tin hat off… But not any longer… I’ve always contended that the man behind the price manipulator’s curtain is Uncle Sam. The Gov’t, in my opinion, can’t have Gold become more popular than the dollar.

Again, in my opinion, the Gov’t tells the Bullion Banks that they won’t be prosecuted for keeping the Gold price in check. And that’s why these bullion banks have never really been shut down or had traders and their bosses sent to jail.

There are Wikileaks memorandums from the ’70s when the dollar was first taken off the Gold Standard. Here’s something that I sent to our legal team back in the day, proving what I was saying was not a Conspiracy Theory, but a Conspiracy Fact!

A long memorandum written in March 1974 by a U.S. State Department official for Secretary of State Henry Kissinger and copied to future Federal Reserve Chairman Paul Volcker, then the Treasury Undersecretary for Monetary Affairs, describes the desire of the United States to prevent European countries from increasing the use of gold in the international financial system.

Their objective is to deprive the independent observer of any reliable benchmark against which to measure the eroding value, not only of the US dollar, but of all fiat currencies. – Peter Warburton

It emphasizes the longstanding U.S. government policy of subverting gold as a reserve currency in favor of the Special Drawing Rights issued by the International Monetary Fund, an agency largely controlled by the United States.

The memo’s author, Sidney Weintraub, deputy assistant secretary of state for international finance and development, wrote:

“To encourage and facilitate the eventual demonetization of gold, our position is to keep the present gold price, maintain the present Bretton Woods agreement ban against official gold purchases at above the official price, and encourage the gradual disposition of monetary gold through sales in the private market.”

DENNIS: You understand the inner workings of the Fed and banks very well. It looks to me like the banks are paying the fines with money from the taxpayer bailouts. Is that possible?

CHUCK: Do I think that’s possible? I feel it’s probable! Mainly because these bullion banks don’t have a separate account that’s titled, “future litigation fund.” Wouldn’t that attract the Mr. Magoo auditors that look into these banks’ finances? So, I’m sure, as an old boss of mine used to say, “It all gets worked out in the wash.”

It would be the last draw to consumers if they knew that their taxes were used by unlawful banks to pay their felony charges fines. While the banks think that their clients are as dumb as a box of rocks, the clients will figure out that they are aiding and abetting their unlawful trading.

Of course, Congress would blame it all on the other party. Your concern about increasing the political divide is understandable.

The banks were central to the scheme from the inception as they spent years and many hundreds of millions of dollars to overturn Glass-Steagall to allow this coup de grâce to be delivered to all holders of US dollars. – PBS Frontline: The Long Demise of Glass-Steagall

DENNIS: In 1933 Congress stepped up, passing the Glass-Steagall act, separating investment banks from retail banks. It was repealed in 1999. We had no bailouts for 66 years. Since it was repealed, we have had three massive bailouts, with no end in sight.

Is the solution as simple and reinstating Glass-Steagall, or do you feel more Congressional action is necessary?

CHUCK: Yes, I feel that reinstituting Glass-Steagall would be a major step toward the end of all this price manipulation. To work properly, it would also require Congressional oversight, with regular 3rd party investigations into trading practices.

It wouldn’t be that big of a deal, there are 8 major Bullion Banks that participate in these manipulations, and the smaller banks would be big scaredy cats if their big brothers were getting shut down.

DENNIS: My final question. While I ask, “When Is This Going To End”, perhaps the real issue is how. Congress must do their job and stop this madness, or things could get really ugly.

How do you see it ending?

CHUCK: Thanks again for inviting me. I’ve always thought that uber-demand for physical metals would be the thing to stop them. Demand for physical metals has gone berserk in recent years. Unfortunately, it’s going to take:

1. The reestablishment of Glass-Steagall

2. Sending CEO’s of these manipulators to jail

3. Congressional oversight.

Traders are very smart (I know I used to be one!); they’ll always find a way to shave some Gold & Silver to get them a profit on the side. The investigators will have to be sharp. And the only way to do that is to come in to a bank repeatedly, without warning, so the traders have to either be smarter than the investigator or shut down their unlawful behavior.

I wrote this in my Pfennig letter on 10-5-2020. I asked the question, “Why did it take the DOJ to find these unlawful trading practices, and not the CFTC”? In my mind, we have no need for the CFTC, if they are not going to “regulate” commodities.

Dennis here. I love Chuck, he tells it like it is. Until Congress feels a lot of pressure, nothing is likely to happen. Bankers will do what they always do; Congress is not doing their job! The saga continues…

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