“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx
May 25, 2015
Four of the biggest banks in the world – Citigroup, JPMorgan Chase, Barclays and Royal Bank of Scotland – just plead guilty to felonies. Their federal crime was conspiracy to manipulate the price of U.S. dollars and euros. These banks were rigging foreign exchange rates of world currencies.
A fifth bank, UBS, pled guilty to rigging interest rates – a different felony charge.
In the words of U.S. Attorney General Loretta Lynch, law enforcement action was taken against “international financial institutions that for years participated in a brazen display of collusion and foreign exchange rate market manipulation”
To put it in simple terms, these banks were speculating on the exchange rate of every form of money on earth.
These five banks have racked up a total of nearly nine billion dollars in fines for their currency rigging.
These fines are a pittance compared to the profits just two of these banks – Citigroup and JPMorgan Chase – racked up over the past four years – a total of 120 billion dollars.
Trading on world currency exchanges occurs daily. It is a 5.3 trillion dollars a DAY economic activity.
Compare that to the world trade in goods, which has stagnated. In 2012, the world export of goods was worth about 50 billion a day. This is only one percent of the world currency trading. In other words, 99 percent of daily trading does not correspond to anything other than speculation.
With so much of the global economy based on speculation, it should come as no surprise that the banks will not be barred from doing the very same thing in the future.
As a condition of their probation, the banks are simply required to send a letter to their clients, explaining a bit more information about how they operate.
According to a reporter at BloombergView.com, who has studied the letters sent out by the banks:
“There is no promise of reform here: The Justice Department caught the banks doing things that it didn’t like and fined them billions of dollars, but won’t stop them from doing most of those things.... The Justice Department doesn’t like these practices, the banks like them fine, and they’ve agreed to disagree.... And the banks are careful to make clear: They’re going to keep happening.”
Compare that to what pleading guilty to a felony means for an ordinary person. There is usually jail time. And for many, their whole future life is disrupted.
But for the banks there is no jail time and no stopping the practice. It’s like the equivalent of paying a parking fine for a felony crime!