Sunday, April 11, 2010

The Sunday New York Post Publishes the Andrew Maguire Silver Manipulation Story

I have been telling Bill Murphy, Chairman of GATA, repeatedly that his email bombshell at the CFTC silver market hearings two weeks ago ripped the tightly sealed lid off of Pandora's Box with regard to the extreme fraud and manipulation in the gold and silver markets.

Although the whole episode, and the implications of what was revealed, has been overtly covered up by the mainstream financial media in this country, the story and the related facts backing up this story have been getting widespread attention globally.  In fact, Murphy was scheduled to have interviews with Bloomberg and CNBC Asia after the CFTC hearings, and those interviews were abruptly cancelled by those two networks.

Well the Rubicon has been crossed - "alea iacta est" - "the die has been cast" (Julius Caesar) - we have reached the point of no return and what is about to unfold cannot be stopped.

The New York Post has published the Andrew Maguire silver manipulation story, including some of the emails Maguire exchanged with the CFTC outlining exactly how and when JP Morgan silver traders would manipulate the market and create huge windfall, albeit illegal, profits. The CFTC was going to bury those emails. But Maguire sent them to GATA after it was made clear to him that the CFTC was going to bury them. Bill Murphy then read them verbatim at the CFTC hearing two weeks ago, much to the obvious surprise and horror of Gary Gensler, chairman of the CFTC.

Here is the NY Post story in all its glory. Word to me from a very good friend of mine in NYC who knows someone at the NY Post is that JP Morgan went "all out" to try and prevent this story from being published. I guess it's true that we're as guilty as our darkest secrets:

Metal$ are in the pits -Trader blows whistle on gold & silver price manipulation

"There is no silver lining to the activities of JPMorgan Chase and HSBC in the precious-metals market here and in London, says a 40-year veteran of the metal pits.

The banks, which do the Federal Reserve's bidding in the metals markets, have long been the government's lead actors in keeping down the prices of gold and silver, according to a former Goldman Sachs trader working at the London Bullion Market Association.

Maguire was scheduled to testify last week before the Commodities Futures Trade Commission, which is looking into the activities of large banks in the metals market, but was knocked off the list at the last moment. So, he went public..."

Here is the link to the full story:  JP Morgan and Illegal Silver Market Manipulation

Anyone who has looked at all the evidence compiled by GATA over the past 12 years, and who reads this story in the NY Post and STILL does not believe that the gold and silver markets are fraudulently operated by the big NY and London banks is also the same person who believes that OJ Simpson is innocent.

"Veni, vidi, vici" - "I came, I saw, I conquered" - Julius Caesar


  1. The MSM is now reporting some of the truth probably because they now see their own destruction coming. Either out of fear or a CYA move.

    Here's MSNBC calling the FED a con job and even comparing them to the mob. That is a fact we here have known for a long time.

    Joe M.

  2. Wow. Thanks for the link Joe. I'm going to pass this on to Murphy and maybe he can work on getting the GATA story to MSNBC

  3. How exactly is maguire a whistle blower??? just because he knew how the price would behave on the jobs report does not make him a whistle blower. trader dan and ed steer have frequently mentioned how gold and silver get trashed on every job report. does this make them also whistle blowers?!

    if maguire had damning email exchanges between him and some trader from gs about how they were going to manipulate gold prices on job reports day then we have something to talk about. but this is a complete straw man exposure and with time will likely be forgotten.

  4. Dude are you serious? Maybe you should go to and read the whole testimony and all of the emails.

    Of course everyone knows that the manipulation occurs but no one has been able to present bona fide insider proof. The best part of it is that Gensler was cc'd on most of the emails, so he knew all this and tried to have the CFTC sit on it.

    He had no idea that Murphy was going to read those emails as part of his testimony. Neither did Chilton for that matter.

    Goldman is a non-event in gold compared to JPM in silver. JPM itself is short something like 200% of the deliverable physical silver JUST ON THE COMEX.

    HSBC is thought to be the 600 lb. gorilla manipulating the gold market.

    Please go back and review everything posted on related this whole situation. It should be crystal clear to you by then.

    And for the record, I know from an inside source that JP Morgan pulled out all stops to try and prevent this story from being published. If they are not guilty then what do they have to hide?

  5. Now...I'm not saying OJ killed her; but I understand.

  6. haha great stuff....a story like this is just what can start the 2nd dip in the markets and a gold rush the world has never seen before. all those trillions in paper promises must now find a physical home.

  7. It may trigger a big cleansing of the system and systemic reform that would have never been necessary had we been operating on a true gold standard all along

  8. it can trigger a spike up in the gold commodity price, maybe 5x current levels but what we wait for is a revaluation of gold as money, hopefully sooner then we think. that will fix all the debt problems in the world for those that hold a healthy amount of real gold on forex reserves and the ones that dont, Ay, caramba!
    canada, us, england..

    you gotta wonder why an entity like JPM can be short so much silver, is it because at some point the government can just take over all the mines in the country and pay them with that.

    i remember a quote from ANOTHER from USAGOLD archives...

    There are only two threats to the world fiat currency system at present. The oil states could stop buying US$ for oil and drop all paper gold for real bullion. Or, the masses could buy up all the physical supplies thereby breaking the OIL/GOLD/US$ bond.

  9. Two reasons JPM can do what they are doing with paper gold - and don't forget we only know about their Comex positions, they are also the largest issue of gold and silver OTC derivatives as per the quarterly BIS report:

    1) JPM likely has control of a substantial amount of silver - don't forget they are the custodian of SLV and we KNOW what that means.

    2) The Comex will eventually likely be forced to change the rules and allow cash settlement or tweak the exchange for physicals rule (which allows both sides of a contract to settle with SLV or GLD) and allow the delivering entity to settle with SLV or GLD whether or not the deliveree wants it.

    Because the world is so much larger and economic activity so much greater than it was before Bretton Woods, I think silver will have to be included in a gold/silver backing of trade currency. I would bet that's why China make public ownership of silver legal and is encouraging the purchase of silver.

    I completely agree on the OPEC scenario and I see that happening sooner than anyone realizes.

  10. scenario 2 would also cause physical shortage and the paper price of gold/silver being worth less and less. a dealer can only sell you at a price that his supplier sells to him at, not the paper spot price. miners are forced to sell at paper prices.
    i mentioned before when physical shortages were everywhere 2 years ago and prices were much higher for physical then paper...this was the first opportunity for lessons to be learned for the future in this gold bull market.

    yes you might get a 25% premium for cash settlment but in that market 25% might be chump change when the real moves start happening.
    you will then see less and less traders wanting huge premiums because they realize the value will be quickly diminished.

    jim sinclair once said when he was trading in the 70's, once an entity knows your position they will attack it.
    traders are now realizing the naked short position as Andrew M said, they can easily break the market now with billions. as if they didn't know already but now EVERYONE knows about it.

    they will probably force the paper market to stop and revalue gold and recreate the rules. and if the gold market breaks, then every market there follows.
    in the end of our fundamental game, paper can only go on for so long but the real stuff lasts forever and with gold being the biggest commodity market and most important money in the world, grave dangers are coming to every market if this breaks.
    gold bugs will be the last ones left when the derivatives blow up all the markets.

    but unlike many here, i too dont think the mining shares will reak the benefit as much as the physical..i think you should own some but i would make sure most of your assets are in physical.

  11. Since this Scotia news came out, i would think Canada is definitely involved with the Fed and BOE in surpressing Gold. As i have said before 99.5% of its forex reserves are gone since 1980, 635 tonnes to 3.4 today.
    As JPM works for the Fed in the game, does Scotia work in surpressing Gold with the BOC?
    From what the Organ's said, it defintely looks like a great factional gold game there.

    Why would a country like Canada sell pratically all of its Gold and yet somehow Canada think its economic situation is fundametnally sound. Of all the G20 nations, Canada comes no where near having as much Gold as everyone else, only 0.2% of its reserves are in Gold meanwhile 44% of there reserves is in US securties

    something smells fishy with Scotia.....but no one here in the media really cares or questions BOC Gold reserves, just in mining companies and Gold funds.

  12. What will happen to the bond market if all this stuff is true?

  13. Mike, Scotia is guilty as charged. It's common industry practice to sell a lot more certs than you have gold/silver to back them. See the Morgan Stanley silver storage settlement case.

    If Scotia were not guilty, wouldn't it make sense that they would issue a press release vigorously defending themselves and perhaps file some kind of defamation suit against the Organs and King World? At the very least?

    Rob Kirby knows of an entity in Europe - a big Eurasian financial entity, that bid HSBC for 1 million ozs of silver after the HSBC guy said at the CFTC hearing that his firm could deliver 1 million ozs of silver in 24 hours. HSBC couldn't deliver and is apparently being fined big time by the LBMA.

  14. @Anonymous: With or without rampant, widespread discovery of precious metals fraud, the bond market is going a lower in price/higher in yields. This will turbo-charge the move and the money that flows out of the bond market will flow in metals.

  15. David Rosenberg (chief economist for Gluskin Sheff & Associates) recently made these comments about bonds: "In other words, when the quarterly peak in growth happens this early — the second quarter of expansion this time around — then it usually signals a high chance of this being a truncated expansion; and we are seeing signs of this in the ECRI leading index too. This all augurs quite well for defensive, not cyclical strategies and buying insurance right now to protect any long portfolios is dirt cheap with the VIX index sitting at 17."

    Apparently you disagree friend. Why?

  16. RE: the David Rosenberg inquiry. Not sure why the comment hasn't posted yet. I think Rosenberg, although most realistic of the Wall Street shills, offers up analysis that is somewhat superficial and pedestrian. Maybe because if he tells the real story, his firm will lose clients. I dunno.

    Anyway, his argument as you presented it, outlines the case for lower rates based on a tanking economy. Yes, the economy will tank, but unless the Fed hyperinflates the currency and buys more Treasuries, which they will do to some extent, foreigners are going to require MUCH higher rates of compensation to buy our ballooning Treasury issuance. Thus, we'll have higher rates of interest at the longer end of the curve irrespective of the strength or lack of strength of the economy.

    As the Fed continues to print money, we'll eventually experience price inflation in necessities. That will fuel rates even higher. It's very easy to have rising long term rates in a declining economy. Has happened several times in the last 100 years.

    All of the above will be absolutely fabulous for the price of gold and silver. Hell, I bet the stock market rises too, just like in Germany 1914-1923.

    I don't know whether or not Rosie understands the above dynamic, but you can see why he might scare off fee-paying clients if he were to present that scenario.

  17. So in the SHORT run, you seem to agree that NOW is a good time to buy bonds ... and then sell them when the market begins to rebound again after the next decline, right?

    Regarding gold and silver's valuation during the coming market decline, what exempts them -- especially silver -- from the same fate as other commodities? I see them pulling back along with equities, while bond prices appreciate! Where's the error in my logic?

  18. Of all the trading maxims, there's only one I know of that works everytime -- and Rosie touched on it in his quote (above).

    When the VIX index is low, watch out below.
    When the VIX is high, it's time to buy.

    Allow me to assign meaningful numbers to it.

    Experience has taught me that when the VIX index approaches or reaches 30, it's usually a good time to buy equities and commodities and sell bonds. Conversely, when the VIX is at or below 17 -- just as Rosie recommends -- it's usually time to sell equities and commodities and buy bonds.

    As a former trader yourself, I'm certain you are familiar with this approach, although I don't know if you use it in practice. But for those 'listening in' right now, perhaps studying this chart at the following Website link will prove instructive:$VIX

    All the best!!

  19. Agree in general of the VIX. But I think the extreme Fed intervention has had a "prozac" effect on the markets.

    I don't really play the stock market anymore other than mining stocks. The intervention and manipulation have made the market impossible to game. On one hand, stocks are absurdly overvalued, especially if you apply GAAP accounting standards that were enforced 30 years ago. But the Fed money printing could drive stocks a whole helluva lot higher.

  20. re: bonds. I wouldn't go near the bond market. Ya maybe you can buy some TLT calls make a little money. But there is just way too much risk with yields near all-time lows.

    re: gold/silver if the market gets clobbered. I think they'll get hit too, especially silver, but if you look at 1987, gold bounced back quickly and smartly. I think that's what we might see IF the market does a cliff-dive. Silver will eventually outperform gold as the "poor man's gold" effect kicks in and people en masse come to understand they need gold or silver, but can't afford much gold, so they buy silver.

    Watch the gold/silver ratio. If it breaks below 62, we'll see a quick spike in silver. I believe eventually we'll see a gold/silver ratio below 20 again. In 1980 it got down to 17. In Roman times it was set at 8.

  21. Here's the view on interest rates from someone who puts money where their mouth is, unlike Rosie:

  22. I agree. The dollar carry trade will continue to drive equities higher -- provided the FED continues to backstop the big-player speculators, which it will! So why wouldn't you take advantage of a major pull back in the market?

    Also, where are you parking your money these days? People near or in retirement can't afford to wait for the conditions you predict to materialize. With money markets parked at 0.01%, those on fixed incomes are screwed.

    It's obvious Bernanke wants people to speculate ... to take on risks they are not willing or cannot afford to take on, because the FED isn't backstopping them! Sooo I repeat. What, pray tell, can they do?

    Furthermore, if I already own gold or silver, it's certainly not something I want to be selling to supplement my income -- especially given its high volatility.

  23. LOL. I wouldn't park money in anything fiat/paper related. Maybe short term bank CD's for now (i.e. less than a year) because for now, anyway, the FDIC is providing immediate liquidity for failed banks.

    Back when the SnL crisis happened, people had to wait up to 18 months to get repaid by the FDIC.

    The problem with "money market" accounts is that anything paying more than .1% has a lot of risk in it. And even money market accts now have risk now that the SEC passed a ruling that allows money market funds to shut down and stop withdrawals in the event of ugly markets.

    I think you have to keep your monthly budgetary needs in a demand deposit account at a solid regional bank (I know, there are very few) and keep the rest in gold and silver.

  24. For what it may be worth, I have 20% of my retirement invested in an actively-managed bond fund through my company savings 401(K) plan. Here is a description of it:

    "The fund invests in high-quality bonds, which includes U.S. Treasury (including inflation protected securities), federal agency, corporate, mortgage-backed and asset-backed securities and cash equivalents. The fund allows for opportunistic investments in non-U.S. dollar securities, high-yield and emerging market securities to enhance returns and lower volatility. A majority (85%) of the fund will be invested in strategies that employ active duration management, sector rotation and relative value strategies within and between the various sectors of the bond market. The remaining 15% of the fund will invest in TIPs to provide inflation protection and liquidity. The fund will have an intermediate duration, similar to the Bond Index Fund, resulting in a sensitivity to changes in interest rates that is less volatile than long duration funds, but greater than short duration funds. The fund managers are Western Asset Management Company (42.5%), ING (42.5%), and Northern Trust (15%)."

    Given your experience in trading bonds, do you think this fund might be profitable in the SHORT term -- say over the next three to six months?

  25. I don't want to forecast interest rates over the next 3-6 months. But interest rates are still at the low end of 30 yr interest rate cycle that started in 1980. Rates can only go up from here or stay where they are, at best.

    I would be concerned about your fund's exposure to mortgage-backs and asset-backs. Those things have all been marked up to high heaven and have only downside now. Mortgage defaults continue to climb inexorably higher.

    I don't like any paper securities right now, except mining stocks. And if you buy good quality mining stocks with proved reserves, you're buying into paper backed by gold and silver.

    I was never impressed with Western Asset or ING as fixed income managers. Norhern Trust is good if you have a huge trust fund and you want really conservative management of your money. But even they don't understand the fiat vs. gold story.

    I think you're playing with fire by keeping your money in fixed income funds - in any paper funds for that matter.

  26. Dave,
    Thanks for posting. One thing bothers me though, how is a JPM/HSBC insulated from the alleged naked short positions that they hold? Just curious, trying to walk through this.

  27. i read andrew maguire's letter here

    and it seems that jpm and co have been doing this for some time, per ur article:

    assume they've been doing this since 09,
    that they make a couple of dollars on the employmt, expiration and rollover dates which gives them 48 trades (every month since jan 2009 to april 2010 = 16, times employmt, rollover, expiration), making $100 (48x $2 rounding).

    during the period, gold went from $850 to $1150, so they should have lost $300 on their core position.

    so that $100 doesnt offset a $300 loss.
    what am i missing here?

  28. JPM and the other big bullion banks have manipulating the metals market like this since at least the mid-1990's. GATA has extensive evidence compiled since about 1998

    The primary purpose of the manipulation is to keep a lid on the price of gold and silver. JPM and others do the Fed's bidding on this. It's about defense/support of fiat currency.

    If you look at the move in silver in July/Aug 2008, you'll see it dropped from like $18 down to $9. That's where JPM made a killing on its massive silver short.

    They make "big hit" profits occassionally, like today for instance, and "small hit" profits on days like the Maguire emails outline. If they can do better than breakeven, then they are ahead of the game considering that the ulitmate goal is to preserve fiat paper currency, which is where they brew up the really ponzi/fraud schemes to make 100's of billions.

    HOpe that helps. Please spend some time going thru the GATA website I linked above - that will get you up to speed.

  29. tk u dave,

    1- a shorting model that makes money on a huge uptrend, like that of gold, is possible, but difficult, and risky.
    2- if they r simply naked shorting on certain days, they r at a huge risk, and such short term "manipulations" happen in most mkts, all the time.
    3- if they are not naked, they should b losing a lot of money on their desks.
    4- if they r backed by the american govt then 1. they r doing a lousy job (gold has skyrocketed during the period, maybe not as much as GATA expects) but especially 2. it makes gold the best asset to hold ever, tho i suspect, that smarter people with more money would have caught on to that old news already, especially big hedge funds.
    after all: 20 yrs ago 1 hedge fund broke the pound sterling, which has a lot more liquidity than gold.
    5- if 4, and if the FED is behind this, it is no different than their controlling the dollar thru interest rates, monetary base and bank reserve levels, all more efficient, direct and broader than wasting their time w/ the price of gold to control the dollar.


  30. after reading more articles from GATA,
    i regret to inform i'll remain skeptical,
    the reasons being:
    2. price behavior in the period went against such claims,
    3. central banks hold 20% of all gold, it is not in their interest to see it go down.
    4. micro(intraday, at london fix) manipulation can be happening,
    just like in any other mkt i know,
    when the big guys get in,
    and it doesn't have to be in the interest of CBs necessarily, they have the order flow.
    5. overall, gold has kept with inflation in the period (, as we would expect (and not that of price indicators, but that of money supply expansion).

  31. Barry Soetoro Hussein, The Little Muslim, Non American Fraud and Little Timmy Guithner are two guys I'd like to be locked in an 8X8 room with for about 10 mins. It might not take that long. Since duelling is legal in the state of California I would challenge either to one of those. But, Timmy would "chicken out" and Barry would have an alternate. So, a good old fashioned fist fight would be better. That way they would just go to the hospital. MAYBE. Don't care for either one of the crooks. Timmy is a worm. Barry is a Fraud and a LIAR. Also, he is a very BAD person. I won't call him a man. Barry should be IMPEACHED NOW''' Concerned AMERICAN, LV