The Gold Lease Scam

From the 1980's one U.S. investment bank was notable for creating a new range of "derivative financial products" Firstly, the interest rate currency swap. Also the gold lease.

This is the same team and era that spawned famous traders. Rich and famous traders who brought companies to the brink (and over the brink) . One case in example LTCM.

Many of these whiz kid traders should be labeled "Financial Terrorists" since they cause just as much misery to their victims as a religious fanatic with a bomb.(Think about Enron and the life savings of its employees).

It is time to stamp out these "greed factor" Social manipulators armed with "rocket science" maths on their side that not many can understand. In particular the first generation traditional bankers who are their bosses. Actually, there is no proof that analysis of any indicator has any ability to predict future prices. However in the markets it is like a cult religion and therefore must be learned. It also serves as a bit of insurance for the trader if he screws up he can tell his boss "I was watching this indicator, or chasing that moving average". His boss being of the same "cult" will probably see his viewpoint and let him off lightly.

Most of these people have come from "old money families"

I am going to talk about the "gold lease" (One financial product that scammed the central banks of the world). Basically it goes like this.

When the global system decoupled from the gold reserve standard (where central banks were expected to carry enough gold in their vaults to support all the money in circulation) Central banks were left holding large amounts of gold in their vaults. The Financial Terrorists decided it would be a good idea to invent a financial instrument called the "gold lease" The theory is, The investment bank would take physical delivery of the gold and pay the central banks a low rate of interest originally 1 pct. (Better than nothing, already my life). The leases took the place of gold in the central bank vaults and everything looked great, until after about a year the central bankers realized that they had been duped. The price of gold had risen, They had entrusted the investment bank with all their gold. The gold had all been sold outright in the commodities markets and the investment bank continued to rollover (renew) leases at 1 pct or similar low rate. By the sales of the gold to the markets, the investment bank was able to re-invest in diverse markets making higher levels of interest and pocket the difference. When the world's central bankers finally realized what was going on it was ludicrously too late. Rather than admit they had been duped (The worlds top bankers had been scammed), and the fallout effects on the global economy they decided to keep quiet and pretend it hadn't happened and that they were still rolling over gold leases.

Where is this investment bank now? Part of a another nearly failed (some would say already failed) institution called Citibank. Where is the accountability. None!

The worlds financial markets continue to be abused by the bankers that work as traders. Now into the third generation, we have adopted globally the American style of Human Resources HR management. These people are for the most part low level management incapable of much original thought. Copying the old IT managers rule which was . "If you buy IBM, you will never be fired", the HR managers went on a similar tact themselves, When recruiting for finance and trading it was modified to "If you hire a PhD, you will never get fired".

So, we now have in our financial markets bright traders who are Indian, Chinese, Pakistani all who are brilliant, eminent and well trained "SCIENTISTS" who have been persuaded to work in finance for the financial advantage. While the scientific community cries out for talent. These highly educated guys are trained to work in the Newtonian world where they learn that

1. The speed of light is constant.

2. The force of gravity is constant over distance.

3. The laws of thermodynamics are constant.

etc etc.

These guys know how to work with constants. When however in financial markets the market turns 180 degrees in the blink of an eye, the PhD traders missed it and what's more do not know why! I have been in finance since I was 17 and have seen all of these types of people first hand. Its not so many years ago when traders were putting long dated trades on the bank's trading book because of "positive carry" (Means it looks profitable in the near term), so that they could inflate their multi-million dollar bonuses. They would also boast about it in the market bars after.

Currently white collar crime and financial terrorists are looked as naughty children. These crimes do not have sufficient punishments. I think that the following should be minimum in such cases as financial terrorism is proved.

1. The person is made instantly bankrupt and all his or her global assets are seized forever.

2. That person is banned for life from holding a public office or a directorship in a company

3. That person is never to be allowed credit in the future including credit cards.

4. At least a 10 year prison term with no special low security privileges.
5. No appeals.

The problem is, the law makers, and the lawyers, are all part of this "merry-go-round" and support the old money system. The old money money has all the aces and would never allow that to happen. Shame. It needs the average American to realize that the freedom of America and the American dream are no more than a fantasy planted by the super rich, and only achievable when you are in that little niche group.

The average man has to wake up, start thinking (which is difficult), and see what is really happening around him. The working man has the power in his hands to change the world if he would only think.