It’s official: JP Morgan has cornered the gold-derivatives market in the US.
To corner a market means to control a sufficient percentage of the total to be the biggest player in the field and, thereby, be able to determine prices and policies. JPM owns 60% of US gold derivatives valued at $65.4 billion.
However, those contracts are backed by only $1 billion in physical gold. That means the bank would be wiped out if gold speculators decide they want real gold instead of paper contracts for gold. If or when that happens, the physical-gold market will skyrocket, and governments likely will come to the aid of the banks by halting trading “to protect the world economy” of course. What would happen then is anyone’s guess. These are interesting times.
http://www.zerohedge.com/news/2014-02-01/market-cornered-jpmorgan-owns-over-60-notional-all-gold-derivatives
To corner a market means to control a sufficient percentage of the total to be the biggest player in the field and, thereby, be able to determine prices and policies. JPM owns 60% of US gold derivatives valued at $65.4 billion.
However, those contracts are backed by only $1 billion in physical gold. That means the bank would be wiped out if gold speculators decide they want real gold instead of paper contracts for gold. If or when that happens, the physical-gold market will skyrocket, and governments likely will come to the aid of the banks by halting trading “to protect the world economy” of course. What would happen then is anyone’s guess. These are interesting times.
http://www.zerohedge.com/news/2014-02-01/market-cornered-jpmorgan-owns-over-60-notional-all-gold-derivatives
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