JPMorgan's New Metal Scheme
JPMorgan's won again – in the face of great controversy.
The fund finally won a two year battle with U.S. regulators. According to Reuters, JPMorgan Chase & Co. has officially been given permission to go forth with some controversial plans at the tail end of 2012.
These plans will permit all U.S. retail investors to trade physical copper quite easily via an ETF for the first time in our nation's history.
Meanwhile, industrial users fear this will inflate prices since a big chunk of the retail market will now covet the copper; typically more popular for its functional purposes in plumbing and cooling systems.
Bob Kickham is a senior vice president of sourcing at Luvata, a company that makes heat-transfer products used in refrigeration equipment and air conditioning. In an interview he said, "It's a sad day for industrial users and consumers. The outcome of the report is a nonsense."
They say the removal of up to 183,000 tonnes of copper, which would be used as collateral against shares in the funds, would have a "devastating" effect on the market.
While that is only a tiny part of a 20-million-tonne annual global market, fabricators worry that it accounts for the majority of the metal available in exchange-bonded warehouses.
They argue there is not enough metal available outside the exchange networks for immediate delivery to prevent a squeeze in supply because it is tied up in long-term contracts.
But that isn't the only concern.
Market manipulation conspiracy woes are in full force, and it's for good reason nowadays. Recent finance conspiracies that have been exposed to the public eye prove that a lot goes on behind closed doors...
JPMorgan is no stranger to the finance conspiracy game. Throughout 2012, it experienced quite a backlash of traducement after getting away with silver manipulation due to “lack of evidence” as the four-year manipulation investigation screeched to a halt in August.
The general public responded with outrage that the conniving banksters behind the manipulation schemes got away with true economic malice. Billionaires and silver investors like Eric Sprott openly admitted that silver was severely “undervalued” while gold ownership was under serious suspicion for being over-subscribed and over-pledged.
Once again, experts and the general public alike are a little worried about how JPMorgan is now manipulating another metal market with this new copper ETF.
Senator Carl Levin wrote a passionate letter detailing the problematic issues associated with such a plan of action. Back in July, his letter suggested that the JMP FX Physical Copper Trust had the immediate potential of creating a precarious “bubble and burst cycle” for copper. Senator Levin asserted that there are no other similar metal ETFs available on the NYSE and this copper ETF “will disrupt the market supply of copper by removing from the market a substantial percentage of the copper available for immediate delivery.”
Apparently the regulators have looked past these burdens...
On the contrary, other commodity ETFs have created some successful winners like the SPDR Gold Trust (GLD). It is the second-largest ETF in the market. The iShares Gold Trust (IAU) and the iShares Silver Trust (SLV), numbers two and three, also own the metal directly.
At this time, it is still difficult to determine exactly how this physical copper ETF will affect copper prices. JPMorgan definitely has the upper hand here: as they will now be able to market products through their investment advisory businesses.
Senior politicians, investors, and analysts alike remain skeptical and leery: they too believe JPMorgan is using this new copper ETF simply as a means to an end – a way to control and rig the copper market like they've done with silver and gold.
Chris Powell from GATA (Gold Anti-Trust Committee) believes this kind of market manipulation will bring about the untimely “destruction of markets. It's the manipulation of the value of all capital labor and goods and services in the world. What they are doing [The Gold Cartel and central banks] is really to seize control of everything economic in the world, and really surreptitiously, behind people's backs.”
Powell and Bill Murphy stand for GATA's fight against central banks and their stealthy means of manipulating the price of metals, sighting that it creates an unjust tyrannical system within our economy.
We will keep you updated with copper plays and alert you to any credible manipulation speculation schemes that may unfold along the way...+43
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There is something about all of this that just seems very, very wrong...