The "Free Market" isn't free at all

Parasites all in a row.

It's Monday, and like many of you I have a burr under my saddle.  Where most of you are just pissed it's Monday, my heartburn is a little more complex.  The heat source of my slow burn?  The Big Banks....again.  They've found another way to screw us, and of course, since Congress gave them a wink and a nod, it's completely legal.  But should it be?

They've taken a page from the business plan of 'ol John D. Rockefeller.  He didn't actually drill for oil....he just had a stranglehold on the pipelines (and the refining process).

It seems a group of financial players, most notably Goldman Sachs, owns many of the warehouses where aluminum bought/sold on the spot market is stored.  *yawn*  I know.  

It's been one of those sleepy little secrets that hasn't drawn attention until now, but has cost us consumers big time....$5B over just the past 3 years.  Yet they've added absolutely NOTHING to the economy in the process.  They are the absolute definition of "parasite".

Huge 1500 lb blocks of aluminum that will ultimately be used in beverage cans, cars, etc, sit in one of the Goldman Sachs-owned Detroit area warehouses.  An end user, say Coca Cola, buys a bunch of them and they are shipped out.  This process before Goldman bought the warehouses took about 6 weeks.  Now it takes about 16 months.  

Why the delay?  Because Goldman's warehouses alone hold 1.5 MILLION tons, and they charge $.48 per ton per day storage fee.   Other big banks have similar schemes at play, too.

Coca Cola and other end users complained to the London Metal Exchange (who somehow is charged with setting the rules) and the LME issued an edict:  Warehousers must move out at least 3,000 tons per day.  

And now they do....from one of their warehouses to another of their warehouses down the street.  It's just a big shell game.  Oh, and it isn't as if the LME is truly impartial.  They get 1% of all storage fees collected.  *stinky*

And it gets worse.  Thanks to intense bank lobbying, the Securities and Exchange Commission has approved a plan that will allow JPMorgan Chase, Goldman Sachs, and BlackRock to buy up to 80% of the copper on the market.  They also have "interests" in oil, wheat, cotton, electricity generation, and more. 

Just FYI, JPMorgan is currently negotiating the terms of a $500M settlement with the Feds for electricity rate rigging.  *I'm not feelin' the love*

Experts say that by owning oil pipelines, port facilities, and warehouses, it gives them inside info on who's producing, moving, buying, and selling commodities, enabling them to make timely speculative purchases for themselves. It amounts to virtual "insider trading".  (A 2011 internal Goldman memo suggested that speculation drove up the price of a barrel of oil by a third, or about $10 per fill-up for the average driver.)

To my super-conservative friends who say we need less regulation and government interference (which I must admit sounds very good on paper), understand this:  The "free market" isn't free.  It's rigged.  

The bankers have simply set themselves up as middlemen.  They are adding NOTHING to the economy.  They are just parasites sucking the life out of society's producers.  Just because it's "legal" doesn't make it right.

S