US Commercial Banks And Savings Associations Use Of Precious Metals Derivatives Is Soaring

Hmmm. It sure is looking like the powers that be are creating infinite money and deploying it against the metals in secret. Here’s why…

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

Dear Friend of GATA and Gold:

The quarterly report from the U.S. Office of the Comptroller of the Currency showing bank trading revenue, published today and called to GATA’s attention by our friend J.H., contains a remarkable graph showing the increase in the notional value of precious metals derivatives held by “U.S. commercial banks and savings associations” quarter by quarter since 2001.

These derivatives, according to the chart, have increased from about $2.5 billion at the end of 2001 to nearly $50 billion in the quarter ended in July this year.

The chart is excerpted from the report at GATA’s internet site here:

The full report is posted at GATA’s internet site here —

— and at the OCC’s internet site here:…

Perhaps not coincidentally, the value of the precious metals derivatives jumps markedly in 2010 just before the seven-year smashing of monetary metals prices that began in 2011.

Anybody connected with the monetary metals business who is not on the status quo’s take and who looked at the chart might ask the question famously posed by Paul Newman’s Butch Cassidy in the 1969 film “Butch Cassidy and the Sundance Kid”:

“Who are those guys?”

That is, who are these commercial banks and savings associations and what are their connections to the U.S. government? Are they, for example, mainly primary dealers in U.S. government securities, formally agents of the Treasury Department and Federal Reserve?

Or do they include instead, say, lots of community institutions like the famous Bailey Bros. Building & Loan of Bedford Falls, New York, in the 1946 movie that romanticized locally based banking, “It’s a Wonderful Life”?

This might be an interesting course of inquiry for financial journalism, if there was any.

It might be a compelling course of inquiry for a world gold council or a silver miners association, if there were such organizations and not just shams using similar names.

Investment houses that have put their clients’ money into the monetary metals and the companies that mine them might do well to inquire too if they ever became more interested in creating value for shareholders than mining them for management fees.

Market analysts who chart prices with a mystical belief in the predictive power of “waves” and “candlesticks” might come closer to reality by wondering whether the derivative chart is exerting more powerful magic with the help of entities authorized to create infinite money and deploy it in secret.

Of course anyone who suggests that there might be institutions called central banks and an association of central banks called something like the Bank for International Settlements risks being derided as a “conspiracy theorist.” But then government operating in secret is the very definition of “conspiracy,” if language itself is to retain any meaning.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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