Some commentators have, over the years, claimed that the price of silver has been manipulated by the large banks. They were always considered to be conspiracy theory nuts and bona-fide members of the tin-foil hat brigade.
Well, guess what? It turns out that they were right all along.
I had a friend create this video version of this post if you’d prefer that instead (this tool was used to create it):
Their allegations of price rigging were confirmed by Deutsche Bank (who admitted to being involved in manipulating the price of silver earlier this year). Deutsche agreed to settle a case brought against them for $38,000,000 – a measly fine for such egregious behavior. Had they not settled and pointed their finger at other colluding banks, that fine would have been much, much higher.
And as part of their settlement, the bank released 350,000 pages of documents and 75 audio tapes.
These documents show there was a silver market “mafia” of big banks including Deutsche, UBS, Barclays and HSBC all working together to artificially suppress the price of silver and fleece the general public in the process.
- Evidence of traders rigging the silver market
- Court documents detail private chats between bank traders
- Lawsuit alleges widespread rigging of precious metal market
- “Avalanche can be triggered by a pebble if u get the timing right” – UBS trader
- “If we are correct and do it together, we screw other people hard” – UBS trader
In the video below, Mike Maloney walks you through the historical silver charts and pinpoints the exact moments bank traders colluded together to rig the markets. The evidence leaves little to doubt. But as you’ll learn, there’s an upside for silver investors who accumulate physical metals.
The timeline Mike referenced in this video was created by Nick Laird at goldchartsrus.com.
While this is a joke to the young, naive, greedy and overpaid traders, it is important to remember that this is not a victimless crime. These traders were allowed to do this by the banks they work for, thereby defrauding retail silver investors and bullion buyers around the world.
|A cache of documents from Deutsche Bank AG include what a group of silver investors claim is a “smoking gun”: private electronic chats showing traders from numerous banks conspiring to rig prices from 2007 to 2013, according to a court filing in New York last week.The bank provided the documents to the investors after settling a lawsuit accusing it of rigging markets in precious-metals. As part of the accord in April, the bank paid $38 million and turned over more than 350,000 pages of documents and 75 audio tapes. The investors now want to use the chats to win permission from a judge to file a new complaint against other banks.
The traders aren’t named in the chats now in court filings; instead, they are identified by their bank, such as UBS Trader A. The chats have not been edited for spelling or grammar:
In Chats, Silver ‘Mafia’ Traders Flexed Muscle, Drew Blades
UBS and Deutsche Bank silver traders agreed to follow the “11 o’clock” rule where they would short silver at 11 a.m., timing their trades with a countdown sequence, according to court papers.
There’s more on this from Bloomberg here:
The important point to remember here is that this involves the smallest of retail bullion buyers (you and me) and investors being ripped off and defrauded by the largest players in the market – massive banks with massive liquidity provided to them by central banks (some banks were bailed out by taxpayers following the 2007/8 financial crash).
It is also important to remember that this creates an opportunity for precious metals buyers as the suppression of gold and silver prices in recent years means that gold and silver remain undervalued – especially versus the assets that banks and central banks favor – property, stocks and especially bonds.
Manipulation is an opportunity for investors as it allows them to accumulate gold and silver at artificially depressed prices. The history of gold market rigging and manipulation is of short term success followed by ultimate failure and then much higher prices. This was seen after the failure of the “London Gold Pool” in the late 1960s and gold’s massive bull market in the 1970s.
The gold and silver prices have likely been pushed about as low as they’ll go. The lower they are pushed in the short term, the higher prices will surge in the medium and long term.
So while the banks’ criminal behavior may make you angry (it should), as a result of their actions, now is a very good time to stock up on precious metals and take advantage of those artificially suppressed prices.