It’s not the sort of thing that gives the Chumps “confidence” in the bankers’ paper-bullion “product
For those seeking economic truths (in a world saturated with corporate propaganda), it can often be useful and revealing to follow the work of the Apologists. In attempting to “explain” the transgressions of their Masters; it is nearly inevitable that details will slip out – details which their Masters would have rather remained secret.
A classic example would be when Jeffrey Christian of the CPM Group – an ex-Goldman Sachs banker and noted banking apologist – was testifying before the CFTC regarding the issue of manipulation in bullion markets. In attempting to ‘pooh-pooh’ the glaring/relentless manipulation taking place in these markets, Christian casually mentioned that “the gold market” was about one hundred times larger than the actual amount of bullion being traded.
Let me reiterate this: the actual total of assorted “paper bullion” and “bullion derivative” products in this market has leveraged the amount of real bullion being traded by a factor of approximately 100:1. Two points follow from this slip-of-the-tongue.
First, quite obviously in attempting to cover-up the serial manipulation of bullion markets the Western financial crime syndicate would have preferred that people didn’t know that every ounce of gold and silver being traded was leveraged (in aggregate) by roughly 100:1. It’s not the sort of thing that gives the Chumps “confidence” in the bankers’ paper-bullion “products”.
Secondly, given that this admission came from one of the bankers’ “friends”, and is now several years old; that 100:1 ballpark estimate must now be regarded as a very conservative figure. However, Jeffrey Christian is not the only one of the bankers’ friends to have been damning them with faint praise.
The legendary banking apologists of Bloomberg were recently attempting to stamp-out any fears that an imminent downgrade of the U.S.’s (farcical) Triple-A credit rating would lead to a plunge in U.S. bond prices – and soaring interest rates. They did this by pointing out that the credit ratings (on government bonds) made by the banking analysts at these ratings agencies are totally irrelevant. Said Bloomberg:
…Bond investors needn’t worry that a rating cut will hurt returns. About half the time, government yields move in the opposite direction suggested by new ratings, according to data compiled by Bloomberg on 314 upgrades, downgrades and outlook changes going back to 1974.
Thus according to Bloomberg, investors in government bonds could have gotten equally good “advice” on the direction of bond prices and interest rates for the past 40 years by flipping a coin – meaning that the services provided by these bankers were/are worthless (as a tautology of logic).
Of course here is where it gets interesting: credit ratings (i.e. the creditworthiness of nations) should matter in determining bond prices and interest rates. There are only two possible explanations as to how/why the credit ratings of Western sovereign debt have been totally worthless for (at least) 40 years:
1) The bankers working for the credit ratings agencies are utterly incompetent (or corrupt).
2) Western bond markets are so heavily manipulated that they simply do not respond to economic fundamentals.
Readers can choose the explanation that they find most plausible. Note that (1) and (2) are not mutually exclusive.
However, such revelations pale in comparison to the recent work of German propaganda-outlet, Der Spiegel. While Bloomberg’s apologist was merely trying to explain/defend the absurdly corrupt U.S. bond market; Der Spiegel was attempting to defend/justify “investment banking” as a whole.
Read more: Western Banking: Money For Nothing -- Literally