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Opinion
Matthew C Klein

Goldman Made a Mint Hoarding Metal. So What?

Banks like J.P. Morgan and Goldman Sachs found it profitable to hoard metal in warehouses because pension funds and other institutional investors had crowded into the market.

Over the weekend, the New York Times ran a long investigative story explaining something that market insiders have known for years: Keeping industrial metals in warehouses can be profitable. It can be even more profitable if -- like Goldman Sachs, J.P. Morgan Chase and Morgan Stanley -- you own the warehouses and can sell the metals in the futures markets.

As Bloomberg News explained, this has led to complaints from commercial users of metal, including manufacturers of canned beer and soft drinks. They claim that the banks have been unfairly squeezing metals supplies, driving up consumer prices.