Details Emerge Of Just How Big Of A ‘Volume Discount’ Govts & Central Banks Get by CME Group

We already know that certain players get “volume discounts” for “trading” gold & silver futures, but now we know just how big those discounts are…

by Chris Powell of Gold Anti-Trust Action Committee (GATA)

Dear Friend of GATA and Gold:

Central banks and governments that are secretly trading futures contracts in the United States on CME Group exchanges qualify for discounts ranging from 7 percent for two-year U.S. Treasury futures to 15 percent for gold and silver futures to 60 percent for Eurodollar futures.

Central banks and governments receiving these trading discounts cannot trade directly but must use CME Group clearing member firms for their trades, raising the question of whether those clearing members are able to trade for their own accounts on the basis of inside information from central banks, creators of infinite money.

These details of the secret futures trading by central banks and governments are contained in a CME Group memorandum describing the discounts and posted at the CME Group’s internet site last month —

— and copied to GATA’s internet site just in case:

The trading discounts, according to the memorandum, are available to “a non-U.S. central bank, multilateral development bank, multilateral financial institution, sub-regional bank, aid coordination group, or an international organization of central banks.”

These terms apparently would not exclude the U.S. Treasury Department or Federal Reserve if they acted through the U.S. government’s membership in international organizations like the Bank for International Settlements, International Monetary Fund, or the World Bank or through other central banks.

Indeed, last month an official of the Federal Reserve Bank of New York celebrated a century of cooperation by central banks in secretly rigging markets throughout the world:

The futures trading discounts extended by CME Group to governments and central banks were disclosed in 2014 by Eric Scott Hunsader of the market data firm Nanex in Winnetka, Illinois, through his research into CME Group’s filings with the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission:

But last month’s CME Group memorandum discloses details that seem new, starting with the percentage discounts provided and the requirement that central banks conduct their secret trading through intermediary firms associated with CME Group.

The memorandum was called to GATA’s attention by James Anderson of SD Bullion, who interviewed your secretary/treasurer for on Friday:

Documentation of this secret trading in futures markets by governments and central banks has been provided by GATA to mainstream financial news organizations but they refuse to report it or to question governments and central banks about it.

Since governments and central banks have the power to create infinite money, they easily can become bigger than any market and the ordinary functioning of markets cannot be relied upon to defeat them. Only fearless journalism by large financial news organizations might do that.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
[email protected]



About the Interviewer and Posting Author

James Anderson has a BA in finance from Loyola University New Orleans. He has both worked and invested in the physical investment grade bullion markets prior to the 2008 global financial crisis.

James’ twitter is @JamesHenryAnd and he has authored SD Bullion’s complementary 21st Century Gold Rush Book.