UBS Is About To Blow The Cover On A Massive Gold-Rigging Scandal

Zero Hedge ^ | 28 Sep 15 | Tyler Durden

[SkyPilot]

With countless settlements documenting the rigging of every single asset class, it was only a matter of time before the regulators - some 10 years behind the curve as usual - finally cracked down on gold manipulation as well, even though as we have shown in the past, central banks in general and the Fed in particular are among the biggest gold manipulators.

That said, we are confident by now nobody will be surprised that there was manipulation going on in the gold casino. In fact, ever since Germany's Bafin launched a probe into Deutsche Bank for gold and silver manipulation, it has been very clear that the only question is how many banks will end up paying billions to settle the rigging of the gold market (with nobody going to prison as usual, of course).

Earlier today, we learned that the Swiss competition watchdog just became the latest to enjoin the ongoing gold manipulation probe when as Reuters reported, it launched an investigation into possible collusion in the precious metals market by several major banks, it said on Monday, the latest in a string of probes into gold, silver, platinum and palladium pricing.

Here are the details that should come as a surprise to nobody:

Global precious metals trading has been under regulatory scrutiny since December 2013, when German banking regulator Bafin demanded documents from Deutsche Bank under an inquiry into suspected manipulation of gold and silver benchmarks by banks. Even though the market has moved to reform the process of deciding on its price benchmarks, accusations of manipulation have refused to go away.

Switzerland's WEKO said its investigation, the result of a preliminary probe, was looking at whether UBS, Julius Baer, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui conspired to set bid/ask spreads.

[SkyPilot]

The Fed, its banks, and many others are deep into this poison fraud.

Precious metals (gold and silver) have been manipulated for years - it is open secret. The Fed, traders, banks all know. But if it is exposed, then confidence in currencies will drop like a stone, including the USD.

The markets are already in a slow boil panic, because they are still riding on the heroin injections of QE.

I would not be surprised if a few more bankers (and maybe some investigators) are found to have committed "suicide" by the end of next month.

Also, expect those who hold "paper gold" certificates to be found holding worthless paper.

[sauropod]

for matt

[BullDog108]

"The markets are already in a slow boil panic, because they are still riding on the heroin injections of QE."

Heroin? More like methamphetamine. We are so screwed...

[Sawdring]

If the market is manipulated down, and you think the price should be a lot higher, isn’t this a good thing because you can buy at a lower price?

[The Toll]

It’s 2015. The only precious metal is Lead.

[Jet Jaguar]

Goldbug ping.

[SkyPilot]

It’s not a good thing. I would not celebrate making myself some bucks in the process either. I am looking at the Big Picture, and it is ugly. The entire global economic system is akin to an addict at a family intervention meeting. The whole thing could blow at any moment.

[SkyPilot]

Post #5 - amen.

[Disambiguator]

Also, expect those who hold "paper gold" certificates to be found holding worthless paper.

This was predicted a while back, and reposted last month: http://www.barnhardt.biz/2015/08/

[SkyPilot]

Yes, and when you read articles like the one you posted, you begin to grasp what a toxic stew it has all become. The crap tables in Vegas have more integrity than our markets, banks, and financial gamblers do, and that is not even an exaggeration.

[SkyPilot]

Case in point......

Now the opposite scenario: a STRONG basis. Let’s say cash silver is trading at $32.00 and the futures are trading at $28.00. A trader might take physical silver that he has in inventory and sell it in the cash market, and then immediately take those proceeds and buy back and equal number of ounces in the futures market and take delivery. Since the same number of ounces in the futures market cost $4.00 per ounce LESS, he would end up with the same number of ounces in his inventory PLUS $4.00 per ounce in CASH in his pocket. If he and many other traders saw this condition and they all sold cash silver and bought the futures, this would, again, converge the spread between the cash market and the futures market.

And no one goes to jail for this, let alone even be exposed. Enron execs went to prison for what exactly again?

[Lurker]

Don’t forget brass.

L

[The Toll]

More of a steel guy myself, but I won’t disagree.

[Lurker]

Brass is reusable. Steel is not. Hence my preference for brass.

[IncPen]

And no one goes to jail for this, let alone even be exposed. Enron execs went to prison for what exactly again?

Brings to mind the banking concept of 'fractional reserve'.

[CapnJack]

Well, whatever happens the real question I believe is ... will gold and silver spike afterwards? After all the investigations?

If it looks like it will ... buy buy buy now!

[Toddsterpatriot]

Let’s say cash silver is trading at $32.00 and the futures are trading at $28.00. A trader might take physical silver that he has in inventory and sell it in the cash market, and then immediately take those proceeds and buy back and equal number of ounces in the futures market and take delivery. Since the same number of ounces in the futures market cost $4.00 per ounce LESS, he would end up with the same number of ounces in his inventory PLUS $4.00 per ounce in CASH in his pocket. If he and many other traders saw this condition and they all sold cash silver and bought the futures, this would, again, converge the spread between the cash market and the futures market.

That's called arbitrage. It's not a crime.

Someone who thinks it is could be charged with criminal stupidity though.

[HonorInPa]

But... but... Glen Beck told me to buy gold.

[publius911]

Bookmark

[Toddsterpatriot]

Brings to mind the banking concept of 'fractional reserve'.

Taking deposits and loaning a portion of them. Yeah, sounds terrible!