A loophole hole in financial legislation is allowing banks to buy commodities and artificially influence markets. It’s a disaster and, yes, the sky is falling.
The law that allowed this abomination of a behavior to go on is known called the Financial Services Modernization Act of 1999, or the Gramm-Leach-Bliley Act, and it continued the tradition of Wall Street deregulation that had been started during the Reagan administration.
As part of its revisions, a situation was created that allowed American banks to merge in order to compete in a more global economy. To do this, Congress had to remove the barrier that prevented commercial banks from merging with investment banks and insurance companies.
What this did was allow commercial banks to start buying investment banks, which are permitted to buy and own commodities.
And buy and own commodities, they did.
According to Rolling Stone, “banks like Morgan Stanley, JPMorgan Chase and Goldman Sachs own oil tankers, run airports and control huge quantities of coal, natural gas, heating oil, electric power and precious metals.” Goldman Sachs even owns a uranium business.
The practice of owning stockpiles of raw materials and manipulating the means of processing and distribution fits right into the hands of these bankers driving up the costs of products and raking in unforetold profits.
Joshua is a writer and researcher with Ring of Fire. You can follow him on Twitter @Joshual33.