"We are witnessing the death of abundance and the borning of austerity, for what may be a long, long time."
Bill Gross
Crony capitalists are never interested in the risk and rigor of 'free markets,' only in the surety of monopolies and obtaining a license from the authorities for extracting rents from them. They alternately create artificial abundance and scarcity to influence prices, with the objective of lining their pockets.
This move by JP Morgan to enlarge their warehouses and stockpile key commodities helps to demonstrate the growing scramble for resources which is a recurrent theme, and at the same time it shows the pernicious influence of mingling government guaranteed customer money and subsidized Federal Reserve funds with what is essentially private speculation.
JP Morgan is a bank that was rescued by public funds, and that exists at the sufferance of the US government and their money. Some of the pampered princes of the Republic would like to turn the financial sector into a new House of Lords.
Still, there may be a mutual interest between the government and their bankers in influencing the world's flow of key commodities. And if a few friends become wealthy in the process, well, so much the better.
Bill Gross
Crony capitalists are never interested in the risk and rigor of 'free markets,' only in the surety of monopolies and obtaining a license from the authorities for extracting rents from them. They alternately create artificial abundance and scarcity to influence prices, with the objective of lining their pockets.
This move by JP Morgan to enlarge their warehouses and stockpile key commodities helps to demonstrate the growing scramble for resources which is a recurrent theme, and at the same time it shows the pernicious influence of mingling government guaranteed customer money and subsidized Federal Reserve funds with what is essentially private speculation.
JP Morgan is a bank that was rescued by public funds, and that exists at the sufferance of the US government and their money. Some of the pampered princes of the Republic would like to turn the financial sector into a new House of Lords.
Still, there may be a mutual interest between the government and their bankers in influencing the world's flow of key commodities. And if a few friends become wealthy in the process, well, so much the better.
Reutersat http://jessescrossroadscafe.blogspot.com/2012/02/commodity-wars-jp-morgan-stockpiling.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+JessesCafeAmericain+%28Jesse%27s+Caf%C3%A9+Am%C3%A9ricain%29
JP Morgan adds muscle to metal warehousing money
By Josephine Mason and Susan Thomas
NEW YORK/LONDON (Reuters) - Investment bank JP Morgan (NYSE:JPM - News) is bulking up its metal warehousing facilities in Rotterdam and Chicago, industry sources say, in a business that consumers complain deliberately delays delivery of metals to boost revenues from rent.
London Metal Exchange rules allow warehouse companies to release only a fraction of their inventories per day, much less than is regularly taken in for storage, creating long queues to get metal out and guaranteeing rental income.
JP Morgan's aim is to fill its Henry Bath warehousing arm with inventory in the two port cities large enough to rival trading house Glencore's Pacorini and U.S. bank Goldman Sachs'(NYSE:GS - News) Metro.
The Pacorini and Metro facilities in Vlissingen, Netherlands and Detroit combined are estimated to hold around half of the global London Metal Exchange (LME) aluminium stocks which stand at just under 5 million tonnes.
Sources at JPM say the bank is pursuing a strategy to consolidate warehousing in the two locations to create the next Detroit or Vlissingen. A JPMorgan spokesman declined to comment.
"They (JPMorgan) are rebuilding stocks again," a high-level industry source in the Netherlands said.
Complaints about long queues, particularly in Detroit, prompted the LME to raise minimum delivery rates - 3,000 tonnes a day for operators with stocks of over 900,000 tonnes in one city - but traders and analysts say the new rules will make little difference when they come into effect in April.
The JPM strategy is likely to inflame consumers and traders already angry about the influence of warehousing companies on the flow of metal..."
