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Central banks get discounts for trading EVERYTHING through CME Group and Comex
8:45p ET Saturday, August 30, 2014
Dear Friend of GATA and Gold:
When a high school graduate told GATA's conference in Washington six years ago that "there are no markets anymore, just interventions" --
-- he didn't know the half of it.
For Zero Hedge reports tonight --
http://www.zerohedge.com/news/2014-08-30/its-settled-central-banks-trade...
-- that Eric Scott Hunsader, founder of market data research firm Nanex in Winnetka, Illinois (http://www.nanex.net), which exposed the algorithm trading responsible for the flash crash in gold futures on January 6 this year --
http://www.zerohedge.com/news/2014-01-08/proof-golds-latest-slam-was-not...
-- has discovered documentation at the U.S. Commodity Futures Trading Commission showing that CME Group, operator of various futures markets, including the New York Commodity Exchange (Comex), has been providing to central banks outside the United States, since at least July 1, 2013, a program of discounts for trading equity market, bond market, and commodity market futures, including gold and silver futures.
... Dispatch continues below ...
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The documentation consists of a letter, dated January 29 this year, from CME Group's managing director and chief regulatory counsel, Christopher Bowen, notifying the CFTC of changes to the discount trading program for central banks. In his letter, Bowen insists, "The program's incentive structure does not impact the exchanges' ability to perform their trade practice and market surveillance obligations under the CEA [Commodity Exchange Act]. The exchanges' market regulation staff will monitor trading in the program's products to prevent manipulative trading and market abuse."
The letter is posted at the CFTC's Internet site here --
http://www.cftc.gov/stellent/groups/public/@rulesandproducts/documents/i...
-- and, for safety's sake, at GATA's Internet site here:
http://www.gata.org/files/CMEGlobexCentralBankIncentiveProgram.pdf
Of course the CME Group letter does not say that any central banks have actually been using the trading discount program. But it does confirm that the trading mechanism has been established, and presumably it would not have been established and maintained if there had been no interest among central banks. In any case more documentation is available, as the CME Group letter says: "The program is subject to the exchanges' record retention policies which comply with the CEA."
That central banks are active in the currency and government bond markets long has been grudgingly acknowledged. GATA has documented extensively the surreptitious interventions of central banks in the gold market:
http://www.gata.org/taxonomy/term/21
And now the CME Group filing with the CFTC indicates that central banks are surreptitiously active in the markets comprehensively, bringing their power of infinite money creation to bear against ordinary market forces and ordinary investors -- without even telling them.
Those who expect the stock market bubble to pop may want to reconsider as long as central banks are prepared and equipped to buy everything.
This dispatch will be sent separately to representatives of most major Western financial news organizations. Will even one of them decide that comprehensive surreptitious market intervention by central banks is news?
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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