Wall
Street banks know all about leveraging. They need to bring back the
huge quantity of money they stole from the U.S. economy that they have
secreted around the world (without paying a dime in taxes). The strategy
they adopted was to bring the money from the shadow banking sector into
the real banking world by "investing" in natural resources. The reason
for the choice is obvious --- high demand for the raw materials, high
liquidity in the marketplace for both the products and the futures and
related contracts for "trading profits" (like the "trading profits they
created with investor money in the mortgage bond market before any loans
were made), and an opportunity for virtually unlimited "leverage" where
they could control prices and bet against the very same investments
they were selling to their customers.
The
leverage comes from a primary investment in the warehousing and
transport of raw materials and secondarily taking positions in the
ownership of natural resources. This allows them to manipulate the cost
of raw materials --- like copper and aluminum (see articles below),
manipulate the politics in our country so that infrastructure repairs
and rebuilding is out off until there is a tragedy of a large collapsing
bridge killing thousands, and manipulate the bidding process for
natural resources (like the Iraq and Afghanistan wars) so that there is a
level of panic that causes the nation to send ten times the price of
rebuilding now. The natural resources market is basically the only game
they can play because it is the only marketplace that is large enough to
absorb trillions of dollars stolen from Americans and people all over
the world in the securitization scam.
Just
as securitization was an illusion, making the base investment (mortgage
loans) non existent at the same moment they were created or acquired,
so will be the exotic investment vehicles now being prepared for both
institutional and ordinary investors that will cover the multiple sales
of the same bundle of commodities. Here we go again! Another boom and
bust.
Tue, Aug 13
CFTC
subpoenas metal warehouse companies • The Commodity Futures Trading
Commission has reportedly subpoenaed Goldman Sachs (GS), JPMorgan (JPM),
Glencore Xstrata (GLCNF.PK)
and their subsidiaries for documents relating to warehouses they
operate for aluminum and other metals. • The agency has requested
information dating back to January 2010; it also wants documents
relevant to the companies' relationships with the London Metals
Exchange. • The CFTC's investigation follows allegations that the
activities of warehousing companies have artificially boosted the price
of metals, particularly aluminum. • Earlier speculation said the CFTC
had sent subpoenas to an unnamed metals warehousing firm.
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