Thursday, March 8, 2018

London gold cartel seeking to expand their unallocated gold scheme by inviting in more banks to participate

The London Precious Metals Clearing Limited (LPMCL) is a group of five banks in the City of London who have the authority to set the standards for gold trading, and as GATA once testified to, are primary players in facilitating the fractional banking scheme.

The number of banks involved in this cartel has changed over the years, with there being six institutions back in 2012, and where there are now only five but with the addition of China's largest bank.

Yet where the LPMCL was once a very closed organization, so much so that they even rejected an application from Goldman Sachs to join, the cartel is rescinding this policy and is opening up for expansion under what they call an attempt to increase 'transparency'.

The five banks that settle every transaction in London's $6.8 trillion a year gold market are changing the rules of their clearing house to make it easier for newcomers to join. 
The reform is part of a broad overhaul of institutions that underpin the world's largest bullion trading center to make them more transparent after accusations of price manipulation by banks and traders and pressure from regulators. 
As that pressure increased, the number of banks clearing gold transactions through a company they own called the London Precious Metals Clearing Limited has dwindled from seven to five. They are HSBC, JPMorgan, Scotiabank, UBS and ICBC Standard. - CNBC
The primary purpose of the LPMCL banks is to provide vaulting and distribution to the LBMA as needed in the process of gold trading.  However according to GATA, this purpose is a bit more nefarious as these member banks also help facilitate the fraud that is the gold futures market where contracts can and are sold in greater numbers than the actual amount of gold allocated.
It is the primary standards-setting entity for the alleged fractional banking scheme that is spoken about so much by the Gold Anti-Trust Association (GATA). GATA alleges, among other things, that this group of banks is promising to "store" gold, silver, platinum and palladium in what is known as "unallocated storage," while keeping almost no metal in their vaults. The issue was made infamous at hearings held by the Commodities Futures Trade Commission (CFTC) in America on March 25, 2010. 
Most interesting is the fact that the LPMCL clearly states how they define unallocated storage. Many people who store their metals with these banks, however, don’t seem to understand the implications of what they are doing. According to the LPMCL, an unallocated account is "an account where specific bars are not set aside and the customer has a general entitlement to the metal. This is the most convenient, cheapest and most commonly used method of holding metal. The holder is an unsecured creditor." –
Seeking Alpha 


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