The recent nickel squeeze, which was unfairly stopped and reversed in order to protect short sellers from potentially infinite losses, is a perfect example of how the LME is manipulated, just like Wall Street, to benefit the super-rich.
The rules get bent and changed all the time on Wall Street, of course, in order to protect hedge funds. And we now know that the same thing is happening at the LME, which is governed and controlled by Chinese communists.
When the price of nickel on the LME rose to over $100,000 per ton before being halted recently, it appeared as though Chinese stainless steel giant Tsingshan Holding Group (THG) was going to face unprecedented losses. According to The Epoch Times, the manipulation that kept nickel from squeezing even more than that has effectively capped THG's losses at around $8 billion – but it would have been much worse had the free market naturally played itself out.
Conveniently, Russia's invasion of Ukraine occurred right as THG was on the hook for failing to deliver 200,000 tons of nickel sold short. This allowed the blame to fall on Russia (of course), which was kicked out of the LME trading market under newly imposed sanctions.
Then, for the first time since 1985, the LME, a 145-year-old trading institution, announced that nickel trading would be suspended until March 15. It also retroactively canceled all nickel trades executed on all platforms from midnight until 8:15 a.m. on March 8 when trading was officially halted.
"The LME also postponed delivery of all settled nickel contracts due for March 9 to 23 and set daily limits on nickel price fluctuations before resuming nickel trading," the Times reported. "The LME itself called these actions 'unprecedented.'"
To prevent any future potential losses of such magnitude from occurring due to bad bets, THG announced that it had "collaborated" (more like conspired) with the LME and a "syndicate of futures banks creditors" to reach a "silent agreement."
Simply put, THG will no longer have to deliver on this failed bet or any future failed bets because it is now held to a different standard than everybody else. So much for a "free market."
"The agreement shows that during the silent period, THG does not need to add margins and will not be forced to close the deal," the Times explains.
"The LME's prompt actions made it possible for THG to walk away from deals made unprofitable by uncertain margins and delivery difficulties. This raises an important question: why did the LME, an international entity, change its market trading rules to save a Chinese company?"
The answer to this question was provided by Jing Chuan, deputy general manager and chief economist for the Wuchan Zhongda Futures Company: Communist China and its many entities control the LME and use it for self-preservation and self-propagation, the rest of the world be damned.
"The LME's measures should be the most positive among the many incidents, and it also shows that the relevant domestic parties have taken the initiative, which is very effective in quickly resolving the crisis of the incident," Jing is quoted as saying.
According to Mike Sun, a North American private investor, the Chinese Communist Party (CCP) paid a pretty penny that the British could not refuse. Once again, money talks, and the rules for fairness go right out the window in an instant.
We now know that the CCP has the ability to directly influence base metal trading policies and prices on a whim just to protect its domestic enterprises. Keep this in mind if you are ever considering participating in the LME's "free market" for commodities.
More related news coverage can be found at Corruption.news.