goldman_sachsForget monsters and ghosts and that nonsense. This is the stuff nightmares are made of.

The latest episode of Wall Street’s manipulation of commodity prices was revealed Sunday in a remarkable New York Times article by David Kocieniewski that showed how Goldman Sachs, just by warehousing 1.5 million tons of aluminum, has managed to raise the price of every beer and cola can the world over. Goldman doesn’t own the aluminum, yet in the best tradition of middlemen who add no value to the product but manage to nonetheless take a hefty cut, it owns a vast expanse of warehouses outside Detroit, where much of the nation’s aluminum is stored. And stored. And stored.

Before Goldman bought the warehouses three years ago, the Times reported, aluminum ingots generally were kept in the warehouses for six weeks before being shipped to factories to be turned into goods. Now they linger on average for 16 months, during which Goldman collects a daily storage fee from the banks, hedge funds and traders who own the ingots — a fee that is factored into the metal’s spot-market price and that raises the price for all aluminum sold on that market, no matter where it’s stored. (Goldman thoughtfully pays those traders a premium so they won’t suffer too much from the lengthy rentals.) Regulations imposed by the London Metals Exchange — which until last year was owned by banks, including Goldman and Barclays, that are its members — say that an ingot can remain in a particular warehouse for only a certain period, so Goldman employs truckers to move the ingots from one warehouse to the next in its vast storage yard.

The last sentence shows you what lengths they will go to get around regulations and make money no matter what the cost to the rest of the world. It’s too late and I’m too frustrated to even begin to comprehend ho massive these banks have become and how much power they have. Even when they fail they succeed by getting bailed out with our money. You can read the full article here.

Posted by James Poling

A socialist, tinkerer, thinker, question asker and all around curiosity seeker. If you'd like to reach me you can use the contact link above or email me at jamespoling [at] gmail [dot] com.

7 Comments

  1. Wow. While I’m glad a truck-driver has a job driving trucks from one warehouse to another, this is the pinnacle of absurdity.

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    1. Definitely. What’s sad is that they’re probably doing the save thing with food while there are people starving.

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      1. I’m sure you’re right. One-third of the world’s population is starving, another third is driving the food from warehouse to warehouse to run prices up. Sounds like an American capitalist.

        Peace,
        LBD

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  2. Leave your ethics at the door when you join the Goldman team. Despicable.

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  3. Hey noobs, GS is no longer at 85 Broad (pictured). They are at 200 West.

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  4. Remember when Halliburton got caught doing the same thing, driving trucks across the desert from warehouse to warehouse, except there wasnt even anything IN the trucks? But the taxpayer got charged for it all the same? Unregulated Capitalism doesnt work, and is nothing more than a Ponzi scheme. America has a cartel, not an economy.

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  5. […] One Example of How Big Banks Are Manipulating Our Lives and How Dangerous It Can Be […]

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