Barclays Fined For Manipulating Price Of Gold For A Decade

It was almost inevitable: a week after we wrote "From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold" and days after "Barclays’ Head Of Gold Trading, And Gold "Fixer", Is Leaving The Bank", earlier today the UK Financial Conduct Authority finally formalized what most in the "tin-foil" hat community had known for years, when it announced that it fined Barclays £26 million for manipulating "the setting of the price of gold in order to avoid paying out on a client order." Furthermore, the FCA confirmed that those inexplicable gold raids which come as if out of nowhere, and slam gold with a vicious force so strong sometime they halt the entire market, had a very specific source:Barclays, whose trader Daniel James Plunkett, born 1976, "sent out a burst of orders aimed at moving the price of the yellow metal."

This took place for a decade. As the FT reports:

The FCA said Barclays had failed to “adequately manage conflicts of interest between itself and its customers as well as systems and controls failings, in relation to the gold fixing” between 2004 and 2013.

Some further details on Plunkett’s preferred means of manipulating the gold price.

The FCA said Mr Plunkett had manipulated the market by placing, withdrawing and re-placing a large sell order for between 40,000 oz and 60,000 oz of gold bars.

He did this in an attempt to pull off a “mini puke”, which the FCA took to mean a sharp fall in the price of gold. As a result, the bank was not obliged to make a $3.9m payment to the customer under an option contract.

Which is precisely what we have shown many times here for example in "Vicious Gold Slamdown Breaks Gold Market For 20 Seconds", when a sell order so aggressive comes in it not only takes out the entire bid stack with an intent not for "best execution" but solely to reprice the market lower. Recall from September:

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From BBC.com

China and Russia have announced a huge gas supply contract.

The deal between Russia’s Gazprom and China National Petroleum Corp (CNPC) has been 10 years in the making. No official price has been given but it estimated to be worth over $400bn.

Russia has been keen to find an alternative energy market for its gas as it faces the possibility of European sanctions over the crisis in Ukraine.

Shares in Gazprom rose 2% on the Russian market following the news.

The agreement is expected to deliver some 38 billion cubic meters of natural gas a year eastward to China’s burgeoning economy, starting around 2018.

The main argument has been over price and China is thought to have been driving a hard bargain.

Over the last ten years it has found other gas suppliers. Turkmenistan is now China’s largest foreign gas supplier, and last year it started importing piped natural gas from Myanmar.

Siberian power

Another sticking point has been the construction of pipelines into China.

Currently there is one complete pipeline that runs across Russia’s Far East to the Chinese border, called “The Power of Siberia”. It was started in 2007, three years after Gazprom and CNPC signed their initial agreement in 2004.

But financing the $22-30bn cost of sending it into China has been central to the latest discussions.

China is Russia’s largest single trading partner, with bilateral trade flows of $90bn (£53bn) in 2013.

The two neighbours aim to double the volume to $200bn in ten years.

Russia Holds "De-Dollarization Meeting": China, Iran Willing To Drop USD From Bilateral Trade

As an American I hope are folks know what they are doing, the petrodollar system allows for a ever increasing demand for dollars, this allows our dollar to be the world reserve currency without a gold back. Without the increasing demand for dollars and our FEDs massive money printing, we will not be able to export our inflation and we could see serious currency problems, up to and including hyperinflation. Twenty first century geopolitics with nuclear powers is not about the size of your aircraft carriers, but the size of your bank account minus your debt.  Remember Putin just wrote a fifty billion dollar check on some olympic games, here state side we would have to argue about shutting down the government or raise taxes to cover that expense. Can we afford to mess with Russia isn't this what Reagan did to them as part of the Soviet Union . - Gary 

Zerohedge.com

That Russia has been pushing for trade arrangements that minimize the participation (and influence) of the US dollar ever since the onset of the Ukraine crisis (and before) is no secret: this has been covered extensively on these pages before (see Gazprom Prepares "Symbolic" Bond Issue In Chinese Yuan; Petrodollar Alert: Putin Prepares To Announce "Holy Grail" Gas Deal With China; Russia And China About To Sign "Holy Grail" Gas Deal; 40 Central Banks Are Betting This Will Be The Next Reserve Currency; From the Petrodollar to the Gas-o-yuan and so on).

But until now much of this was in the realm of hearsay and general wishful thinking. After all, surely it is "ridiculous" that a country can seriously contemplate to exist outside the ideological and religious confines of the Petrodollar... because if one can do it, all can do it, and next thing you know the US has hyperinflation, social collapse, civil war and all those other features prominently featured in other socialist banana republics like Venezuela which alas do not have a global reserve currency to kick around.

Or so the Keynesian economists, aka tenured priests of said Petrodollar religion, would demand that the world believe.

However, as much as it may trouble the statists to read, Russia is actively pushing on with plans to put the US dollar in the rearview mirror and replace it with a dollar-free system. Or, as it is called in Russia, a "de-dollarized" world.

Voice of Russia reports citing Russian press sources that the country's Ministry of Finance is ready to greenlight a plan to radically increase the role of the Russian ruble in export operations while reducing the share of dollar-denominated transactions. Governmental sources believe that the Russian banking sector is "ready to handle the increased number of ruble-denominated transactions".

According to the Prime news agency, on April 24th the government organized a special meeting dedicated to finding a solution for getting rid of the US dollar in Russian export operations. Top level experts from the energy sector, banks and governmental agencies were summoned and a number of measures were proposed as a response for American sanctions against Russia.


Well, if the west wanted Russia's response to ever escalating sanctions against the country, it is about to get it.

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China signs mega east Africa rail deal

Nairobi (AFP) – China on Sunday signed a deal to build a $3.8 billion rail link between Kenya’s Indian Ocean port of Mombasa and Nairobi, the first stage of a line that will eventually link Uganda, Rwanda, Burundi and South Sudan.

Under the terms of the agreement, Exim Bank of China will provide 90 percent of the cost to replace the crumbling British colonial-era line with a 609.3 kilometre (379 mile) standard-gauge link and Kenya the remaining 10 percent.

Construction is due to start in October and take three-and-a-half years to complete, with China Communications Construction Co. as the main contractor.

Once the Mombasa-Nairobi line is completed, construction would begin to link east Africa’s largest economy with Kampala, Kigali, Bujumbura and Juba.

The deal was signed at State House in Nairobi and witnessed by presidents Uhuru Kenyatta of Kenya, Yoweri Museveni of Uganda, Paul Kagame of Rwanda and Salva Kiir of South Sudan.

"This project demonstrates that there is equal cooperation and mutual benefit between China and the East African countries, and the railway is a very important part of transport infrastructure development," Chinese Premier Li Keqiang said.

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Quiet revolution of the emerging countries

As the Ukraine crisis heightens, the so-called BRICS countries – Brazil, Russia, India, China and South Africa – are becoming less willing to accept US world supremacy.

The goal of the emerging countries is clear – to change the global order with the United States as the hegemonic power. "The BRICS countries are a group of nations unsatisfied with the international order," said Peter Birle, head of research at the Ibero-American Institute (IAI) in Berlin. "The importance of BRICS could rise if Russia remains permanently excluded from the G8," he added.

According to Birle, the five emerging countries seek to permanently upend the power constellations established in 1945 and relativize the US position. "All these countries view themselves as emerging powers with a great future ahead of them," he said at the 15th Stuttgarter Schlossgespräch, an annual conference involving a panel of international social science, culture and politicis expert. This year’s talks focused on the relationship between Brazil and Europe.

Flexing muscle

In particular, Brazil is looking to growing cooperation among the five emerging countries. Directly after the World Cup soccer tournament and three months ahead of the presidential elections in October, the country will host the next meeting of BRICS countries in Fortaleza on July 15 and 16. The key issue on the agenda is the establishment of a joint development bank with capital stock of US$100 billion (72 billion euros).

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India displaces Japan to become third-largest world economy in terms of PPP: World Bank

By ET Bureau | 30 Apr, 2014, 06.59AM IST

NEW DELHI: India has displaced Japan to become the world’s third biggest economy in terms of purchasing power parity (PPP), according to a World Bank report released on Tuesday.

The 2011 round of the bank’s International Comparison Program (ICP) ranked India after the US and China. The last survey in 2005 had placed the country on 10th place.

PPP is used to compare economies and incomes of people by adjusting for differences in prices in different countries to make a meaningful comparison.

India’s share in World GDP in terms of PPP was 6.4% in 2011 compared with China’s 14.9% and the US’ 17.1%, the latest ICP showed. The survey covered 199 economies.

"The United States remained the world’s largest economy, but it was closely followed by China when measured using PPPs. India was now the world’s third largest economy, moving ahead of Japan," the report said. More >>>

World Bank: China to overtake US as biggest economy THIS YEAR

 Frik Els | April 30, 2014

A new study by the World Bank predicts that the US will lose its status as the world’s largest economy later this year.
Previous studies forecast the US will only lose the top spot – which it took from the United Kingdom in 1872 – at the end of this decade at the soonest.
The report by the International Comparison Program at the World Bank estimates total economic output between countries by using purchasing power parity or PPP which takes into account the relative costs of goods and services and inflation rates, rather than simply using volatile exchange rates which give you nominal GDP figures.
The World Bank’s updated methodology for PPP indicates that the gap of $3.4 trillion in 2012 (on a nominal basis that gap was closer to $8 trillion) has now shrunk dramatically.
In 2005, the ICP estimated China’s economy was less than half the size of the US, accounting for only 43.1% of the US total. That proportion grew to 86.9% in 2011. More >>>>