Deutsche Bank, HSBC Accused of Silver Fix Manipulation

By Patricia Hurtado Jul 25, 2014

Deutsche Bank AG (DBK), HSBC Holdings Plc (HSBA) and Bank of Nova Scotia were accused in a lawsuit of rigging the price of billions of dollars in silver, an allegation similar to earlier suits involving the London gold fix.

The banks unlawfully manipulated the price of the metal and its derivatives, an investor claims in a complaint filed yesterday in federal court in Manhattan. The banks abused their position of controlling the daily silver fix to reap illegitimate profit from trading, hurting other investors in the silver market who use the benchmark in billions of dollars of transactions, according to the suit.

“The extreme level of secrecy creates an environment that is ripe for manipulation,” according to the complaint. “Defendants have a strong financial incentive to establish positions in both physical silver and silver derivatives prior to the public release of silver fixing results, allowing them to reap large illegitimate profits.”

The lawsuit is the latest to be brought against banks alleging manipulation of a benchmark. Suits have been filed against Deutsche Bank and Bank of Nova Scotia, HSBC and other banks in federal court in New York over allegations involving the London gold fix

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When you see this happen, you’ll know it’s game over for the dollar.

Bill Holter says the new BRICS Bank is just another nail in the Dollar's coffin. It's half as big as the IMF and it gives countries the ability to escape the dollar and the jurisdiction of the US and the DOJ. The world has had enough of the US, witnessed by Germany's recent expulsion of the CIA station chief. It's all beginning to rapidly unravel. Be prepared! Podcast >>>

Probably one of the the best news letters I have come across is Simon Black's SovereignMan, I love the way he relates all the coming economic events to past history. This has all happened before in a previous time and place.

by Simon Black
www.sovereignman.com

July 15, 2014
Malaga, Spain

Exactly 70 years ago to the day, hundreds of delegates from 44 nations were busy at work in Bretton Woods, New Hampshire creating a brand new financial system.

World War II had just ended. Europe was in ruin.

And since the US was simultaneously the largest economy in the world, the primary victor in the war, and the only major power with its productive capacity intact, it was easy to dictate terms: the dollar would dominate the new system.

Every nation would hold dollars as the primary reserve currency, and the dollar would be redeemable for gold at $35/ounce.

Also, global commerce would be conducted and settled in dollars, and these settlements would clear through the US banking system.

Naturally this created substantial demand from foreign governments who needed to begin accumulating dollars for trade and reserves.

So through a variety of programs, from the Marshall Plan to the IMF and World Bank, the US began flooding the world with dollars.

Initially everything went according to plan.

But soon the US government realized something important– foreign demand for the dollar was so strong that they could get away with printing more dollars than they had gold.

This allowed them to run all sorts of deficits and spending initiatives– more war, more welfare, more waste… all with minimal accountability.

Initially the consequences were insignificant.

Sure, the price of gold in London was a few dollars higher than in the US (they called this the ‘gold window’).

But demand for the dollar was still strong. So why bother changing?

By 1971, the situation had gotten far worse. Another decade of war, excessive spending, trade deficits, and money printing had pushed many foreign nations to their breaking points.

Foreign nations’ dollar reserves far exceeded the US government’s gold holdings. And with confidence waning, many began redeeming their dollars for gold.

Only days later, Richard Nixon put a stop to this and unilaterally terminated the US dollar’s convertibility to gold.

Think about the magnitude of this decision: Nixon was effectively defaulting on US obligations to the rest of the world– a complete betrayal of their trust.

Yet despite this massive shock that reset the global financial system, the dollar somehow managed to remain the world’s #1 reserve currency.

You’d think they would have been grateful, thanking their lucky stars that the rest of the world gave them a second chance. But no.

Over the past 43 years, the US has continued to print, devalue, and mismanage the dollar.

Along the way, they’ve created epic bubbles and financial shocks.

They’ve run up the biggest deficits and debt levels ever seen in the history of the world.

They’ve bickered internally to the point of shutting down government.

They’ve passed arrogant, painful regulations and commanded the rest of the world to comply under threats tantamount to financial homicide.

They’ve unleashed their tax and securities authorities to terrorize anyone doing business with the US.

They’ve totally ignored foreign pleas to restructure the IMF and World Bank.

They’ve slammed foreign banks with record fines simply for doing business with nations that the US doesn’t like.

They’ve waged pointless wars. They’ve spied on their allies. They’ve meddled in other nations’ affairs.

And they’ve demonstrated absolutely no willingness or ability to improve.

Simply put, other nations are done. Fed up, really. And it’s not just words.

Consider that in a matter of months, the US will be overtaken by China as the world’s largest economy.

Not to mention, the total combined GDPs of China, India, Russia, and Brazil are roughly the same as the US and EU combined.

Just as the US was the biggest player back in 1944, China is the biggest player today. So it seems clear that the renminbi will become a critical component of a new financial system.

The renminbi already has experienced rapid growth as a dollar alternative for trade; in May, cross-border settlement surged 52% from the year prior.

Renminbi settlement banks are being set up from London to Canada, and the central banks of both France and Luxembourg have signed agreements for renminbi clearing.

There have already been numerous Western companies (like McDonalds) that have issued renminbi-denominated bonds.

And even the provincial government of British Columbia issued a renminbi bond earlier this year. It was a whopping five times oversubscribed.

I’d expect within the next 2-3 years we’ll start seeing trade settlement in renminbi, even when none of the parties are in China.

Today, for example, a transaction between a Paraguayan merchant and a company in Angola will likely settle in US dollars.

Soon, I think we’ll start seeing that transaction done in renminbi. And once that happens, you’ll know it’s game over for the dollar.

Shortly after, national governments in western countries will issue renminbi bonds (perhaps Greece or Portugal will be first). And eventually, even the US government itself.

Today, 70 years after Bretton Woods, leaders from China, Russia, India, Brazil, South Africa, and several other nations are hard at work in Fortaleza, Brazil creating a new development bank that will compete against the US-controlled World Bank.

This is a major step in an obvious trend towards a new financial system. Every shred of objective data is SCREAMING for this to happen.


It’s a different world. Everyone realizes it except for the US government, which is still living in the past where they’re #1 and get to call all the shots.

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Group’s political influence is growing

China Daily Web Editor: Wang Fan

The Fortaleza summit of the BRICS leaders is a milestone. For the first time, the meeting of the group’s five members is not merely a business forum but is branded with strong political elements.  [Special coverage]

Global politics – including unrest in Iraq and Ukraine – are part of the summit discussions.

The political aspects are reflected in the Fortaleza Declaration issued by the leaders on Tuesday.

The proportion of the agenda that is devoted to political elements greatly outweighs that of previous years. For the first time the discussions include political coordination. The first part of the leaders’ private dialogue dealt with global governance and regional crises. The second part deals with economic and financial cooperation.

Observers said the inclusion of the political agenda would give developing nations an increasingly united voice, and thus more clout on major global issues.

To that end, the sixth BRICS summit has embarked on a course that positions the group for a bigger role in both the political and economic spheres of the world, and to compete with Western countries for an equal voice.

The BRICS nations account for 29.6 percent of the world’s territory, and more than 42 percent of its population. Last year, the members’ combined GDP was 21 percent of the world’s total. Despite slowing growth, the members’ economies have expanded twice as fast as those of developed countries.

Understandably, after building strong economic bonds, the BRICS group wants to see a new international political architecture to serve their long-term strategic interests.

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BRICS bank to be headquartered in Shanghai

FORTALEZA, Brazil – The emerging-market bloc of BRICS on Tuesday announced plans to establish a development bank and a contingent reserve arrangement (CRA).

 The five members of the group – Brazil, Russia, India, China and South Africa – laid out the designs of the New Development Bank (NDB) and the CRA in a declaration released following their sixth summit in this Brazilian city.

 The NDB, to be headquartered in Shanghai, will have an initial authorized capital of 100 billion US dollars, and its initial subscribed capital of 50 billion dollars will be equally shared among founding members, according to the Fortaleza Declaration.

 The Africa Regional Center of the NDB will be established in South Africa concurrently with the headquarters, added the document.

 The CRA, with an initial size of 100 billion dollars, "will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements," said the declaration.

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Germany Said to Review ‘No-Spy’ Purchasing Rules Amid U.S. Row

By Cornelius Rahn and Amy Thomson Jul 11, 2014

Germany’s Interior Ministry is reviewing rules for awarding government contracts for computer and communications equipment and services as a political rift with the U.S. widens, people familiar with the matter said.

The ministry will probably issue new purchasing guidelines in the coming weeks to replace its “no-spy-order” dated April 30, said the people, who asked not to be named because the deliberations are private. Details are being worked out, and may require suppliers of components of a bidder’s goods or services to guarantee they don’t hand over confidential data.

Any tightening of procurement procedures could affect U.S. technology companies such as International Business Machines Corp. (IBM), Cisco Systems Inc. (CSCO) and Microsoft Corp. (MSFT) as they vie for government contracts. U.S.-German tensions escalated yesterday after Germany expelled a top intelligence officer from the U.S. embassy in Berlin.

“They’ll come under scrutiny, those contracts with U.S. suppliers, as they come up for renewal,” said Andrew Rose, a London-based security and risk analyst at Forrester Research. “There is a definite point here about privacy and respect that Germans are trying to draw a line under.”

German federal and local agencies spend $28 billion on technology and communications hardware and services annually, of which at least 1 billion euros ($1.4 billion) of contracts are handled by the Interior Ministry.

Pamela Mueller-Niese, a ministry spokeswoman, didn’t immediately answer phone calls and an e-mail seeking comment. Marie-Ann Maushart, an IBM spokeswoman, and Nadine Papenfuss, a Microsoft spokeswoman, declined to comment, as did Patrick Rothwell, a representative for Cisco.


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