Ellen Brown explains in 'The Leveraged Buyout of America' how speculators and bankers buy up the original commodity with borrowed money it's called a 'leveraged buyout'. The banks use the leveraged money to buy up massive stores of commodities, warehouse capacity and transport facilities. Once the big guys have secured enough of a commodity, they sell wildly, prices plummet, the speculators sell more of the commodity, more plummeting. Little competitors [or little countries] who can't hold out get weeded out. Then the speculators tighten the noose on supply, prices rise and they sell all they have stashed and all the more from the places they've bankrupted. If the commodity is potash, farmers crops may fail, people may starve, at which point the bankers buy up the land dirt cheap then REPEAT.
It works much the same way when the banks/speculators substitute stock in commodity companies as the investment instead of the commodity itself. Buy up huge amounts of whatever stock it is, prices rise quickly. Then sell, flood the market , prices of the stock drop to near nothing, so does the valuation of the commodity company owning it. Next use the profits from the leveraged original investment to buy up the companies stock 'dirt' cheap. Then hold back the warehoused commodity this company deals in resulting in prices rises on both the commodity and stock in the companies., sell your stock 'high'. make windfall money on both the stock and commodity...REPEAT.
The always informative Merv Richie wrote a great essay on manipulation of the aluminum market. Merv knows the topic well as he's centered in Terrace BC. His research and information apply equally well across most commodities and his reference links allow readers to delve as deeply into the ugly topic as they'd like.
Everything is a commodity, as the article 'The Empire Strikes Back: How Wall Street Has Turned Housing Into a Dangerous Get-Rich-Quick Scheme -- Again' says. "In hindsight, it’s clear that the Great Recession fueled a terrific wealth and asset transfer away from ordinary Americans and to financial institutions. During that crisis, Americans lost trillions of dollars of household wealth when housing prices crashed, while banks seized about five million homes."
