Wall Street banks and commodities fraud - World Socialist Web Site
On Wednesday, the US Senate Permanent Subcommittee on Investigations released a detailed report documenting yet another aspect of the insider dealing, price-fixing and general criminality that pervades the American financial system.
The 400-page report gives some insight into the extraordinary and malevolent power of a handful of banks and financial institutions. These corporations, the largest of which control hundreds of billions and even trillions of dollars in assets, dominate the economy and control the political system.
The document focuses on the role of three of the largest banks—Goldman Sachs, Morgan Stanley and JPMorgan Chase—in the physical control of commodities, including energy resources and metals. “The current level of bank involvement with critical raw materials, power generation and the food supply appears to be unprecedented in US history,” the report states.
After the deregulation of the commodities markets in the late 1990s—part of a broader banking deregulation under the Clinton administration—trading in commodity-related assets increased enormously. A vast array of derivatives were developed to allow for speculation on commodities, with the market in these assets increasingly divorced from its initial purpose of enabling producers and buyers to hedge against shifts in commodity prices. Markets such as the Commodity Mercantile Exchange in Chicago are now dominated by speculators, who control as much as 70 percent of all assets.
