'Gold-Fix Cartel': How Western Banks Were Caught With Pants Down

© REUTERS / Leonhard FoegerGold bars and a Swiss Franc coin are seen in this illustration picture taken at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna November 7, 2014
Gold bars and a Swiss Franc coin are seen in this illustration picture taken at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna November 7, 2014 - Sputnik International
It has turned out that Germany's Deutsche Bank AG and other Western financial institutions have been up to their eyeballs in gold and silver price manipulation for years; experts believe that in the light of this China's Shanghai Gold Market will take on a new significance for investors.

Deutsche Bank AG, the Bank of Nova Scotia, Barclays, HSBC, Societe Generale, UBS AG and other reputable Western banks have recently been accused of manipulating gold and silver prices, futures, options and other derivatives for years.

Remarkably, on April 14 Deutsche Bank admitted the fact that it had been involved in the conspiracy together with other members of a "cartel" and agreed to name the names in the US federal court.

"We expect that now that DB [Deutsche Bank AG] has 'turned' that much more curious information about precious metals rigging will emerge, and will confirm what the 'bugs' had said all along: that the precious metals market has been rigged all along," financial blog Zero Hedge reported on April, 14.

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American author, researcher and risk strategic consultant F. William Engdahl echoes Zero Hedge's stance in his article for New Eastern Outlook.

It is not the first time that Wall Street bankers and other international financial institutions have been spotted rigging precious metals' prices, most notably the price of gold, Engdahl stresses.

"The first time I came across evidence that select Wall Street and other major international banks, in cooperation with the Federal Reserve, were deliberately suppressing the world gold price was in the aftermath of the global stock market crash of October, 1987. That was when the Dow Jones stock index lost 23% in one day," the researcher narrates.

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Indeed, on October 19, 1987, the United States faced a severe stock market crash: within one day — the notorious "Black Monday" — the Dow Jones Industrial Average (DJIA) swiftly lost 508 points. The crash prompted deep concerns regarding apparent inefficiency of the US' monetary system.

"John Crudele, an exceptionally persistent financial journalist with The New York Post and John Williams of Shadow Government Statistics and an exceptional economist, informed me at the time of the gold manipulation reports," Engdahl continues.

"The reason for the fix, which then-Fed chief Alan Greenspan reportedly orchestrated, was to prevent a stampede by panicked investors out of risky stocks and bonds into gold. Had gold profited from the stock panic, it could well have been an early end to the dollar system. It worked then to prevent a gold rise," the researcher underscores.

The exposure of Deutsche Bank's fraud in mid-April has already had a domino effect: a day later two class action lawsuits against the infamous "cartel," including the Bank of Nova Scotia, were launched in the Ontario Superior Court of Justice on behalf of Canadian gold and silver investors.

"This is just the tip of the iceberg: with DB's official 'admission,' countless other plaintiffs will step up, and everyone who may have 'lost' money trading gold over the noted 15 year period will surely demand to be made whole," Zero Hedge wrote Saturday.

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What does it mean for the gold market?

According to Engdahl, the exposure has dealt a heavy blow to the Western banks' credibility.

He suggests that in this context alternative gold markets, most notably China's Shanghai Gold Market, will take on a new significance for foreign investors.

"This could well be the dawn of a new golden era, literally and figuratively," the researcher emphasizes.

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