Posted Mar 5, 2015 by Martin Armstrong
The biggest problem we have with central banks is that they are run by academics with ZERO real world experience. This applies not just at the Fed, but most central banks with the lone exception of Bank of China. The greatest danger this presents is that the money-center banks manipulate the central bankers during states of financial panic and they who are so frightened, they will do whatever the money-center banks tell them
In the USA, there is nobody who would investigate the dark corners of the Federal Reserve being manipulated by the NY bankers who walk of water without ice. However, the system is much more open in Britain where the bankers do not control the courts as they do in New York City. Consequently, the Bank of England (BoE) is now being investigated by the Serious Fraud Office (SFO) for being “too” friendly with the money-center banks during the crisis of 2008.
Last year, the BoE was cleared of “improper conduct” in the currency market manipulation allegations of the money-center banks. Nevertheless, major corporations are starting to wise-up to TRANSACTIONAL banking. A light is starting to go on that by no means can you go to these clowns for corporate hedging and advice for they will ALWAYS rig the game to make as much profit on the trading scalping clients until they bleed.
So while in the USA the banks can still bribe Congress to repeal Dodd-Frank and open the gates to money falling once again from heaven, that is not the case OUTSIDE the USA. Even the movie the FORECASTER is being shown around the world except the USA because of the elite control of the bankers who tell the Fed what to do and when, the Justice Department, and New York Federal Judges protect them every chance they get. We have NOBODY outside of their control to investigate anything.
Britain’s Serious Fraud Office’s investigators are now probing the central bank for possible fraud related to liquidity auctions between 2007 and 2008. During the financial crisis, the BoE invited banks to borrow money from the central bank, in exchange for collateral. This was conducted through a series of “liquidity auctions” where the funds were intended to prevent the banks collapsing.
The banks always warn that there will be a complete collapse of the 0financial system unless their losses are always covered, The SFO is looking into the bankers’ “conduct” that was connected to these liquidity auctions. This is the criminal investigative agency that is conducting the probe of the BoE. Being investigated for “conduct” issues can be a very wide range from price fixing and handing the government the worse collateral possible (FRAUD) to the leaking of confidential information for personal gain.
The tide is turning against the banks. We will see more and more corporations turn away from the banks as advisory entities. They just cannot be trusted when they are also the market-makers making commissions/spreads on the trading that are totally undisclosed. The day of the banks is coming to an end. It looks more like the next downturn will drive the spike right through their hearts. Just maybe, we may get back to the way its should be – RELATIONSHIP business, not TRANSACTIONAL where they have the incentive to manipulate markets for the quick buck and front-run clients.