Introduction: Bill Murphy grew up in Glen Ridge, New Jersey and graduated from the School of Hotel Administration at Cornell University in 1968. His senior year he broke all single season Ivy League pass receiving records and was Honorable Mention on the All-America Football team. He went on to become the starting wide receiver for the Boston Patriots in 1968. Bill went on to a career in the futures industry as a commodities broker. Early on he worked for Shearson Hayden Stone and Drexel Burnham before starting up his own introducing brokerage on 5th Avenue in New York. In 1998 he opened up LeMetropoleCafe.com, a financial market website geared to the gold market. In January 1999 Bill became chairman of the Gold Anti-Trust Action Committee (GATA) to expose the manipulation of the gold price by the gold cartel.
Daily Bell: You have long held that silver and gold are manipulated by the elite powers-that-be. Can you explain what the current CFTC hearings are about – run through a bit of history?
Bill Murphy: The nation's commodities regulator, the CFTC, is proposing to limit the vast amounts of oil, natural gas and other vital goods the world's biggest investment firms can buy and sell. A CFTC commissioner, Bart Chilton – in response to a zillion emails, Ted Butler's superb efforts regarding the ridiculous over concentration of the short positions in silver, and the GATA camp's tireless exposes on gold manipulation – proposed to do the same in the precious metals. The CFTC, at Bart's urging, held hearings on March 25. FIFTEEN individuals were invited to make presentations regarding position limits and related precious metals matters.
In December of 2008 I went to Washington to meet with Bart, the CFTC senior council, and two staffers. I was very impressed with the intensity of the questions that Bart asked following my presentation about the market manipulation of the gold and silver markets. Bart is unique in that he is very accessible, even answering most of his emails, which are considerable. Unfortunately, Bart is the only Commissioner in favor of precious metals position limits – which would dampen the manipulations that are evidently taking place.
Daily Bell: Please be more specific about GATA's role in all this.
Bill Murphy: On behalf of GATA I gave a super-speed five-minute presentation. Had to rush the commentary to get it all in. My presentation began like this:
"The Gold Anti-Trust Action Committee (GATA) was formed in January 1999 to expose and oppose the manipulation and suppression of the price of gold. What we have learned over the past 11 years is of great importance in regard to this hearing on position limits in the precious metals futures markets. Our efforts to expose manipulation in the gold market parallel those of Harry Markopolos to expose the Madoff Ponzi scheme to the Securities and Exchange Commission.
"Initially we thought that the manipulation of the gold market was undertaken as a coordinated profit scheme by certain bullion banks, like JPMorgan, Chase Bank, and Goldman Sachs, and that it violated federal and state anti-trust laws. But we soon discerned that the bullion banks were working closely with the U.S. Treasury Department and Federal Reserve in a gold cartel, part of a broad scheme of manipulation of the currency, precious metals, and bond markets."
My testimony may be viewed by clicking here: Bill Murphy Testimony at CFTC Hearings
The presentations were webcast all over the world. But, for some reason the main TV feed failed just when I was making my presentation and then came back on when I was done … yet another GATA coincidence.
In my question and answer period I was then able to make the following statement due to Bart Chilton asking me a question about some of the evidence GATA has about the manipulation of the gold and silver markets:
ADDITIONAL STATEMENT BY BILL MURPHY, CHAIRMAN OF THE GOLD ANTI-TRUST ACTION COMMITTEE HEARINGS ON THE METALS MARKETS, MARCH 25, 2010
On March 23, 2010 GATA Director Adrian Douglas was contacted by a whistleblower by the name of Andrew Maguire. Mr. Maguire, formerly of Goldman Sachs, is a metals trader in London. He has been told first hand by traders working for JPMorganChase that JPMorganChase manipulates the precious metals markets and they bragged how they make money doing so.
In November 2009 he contacted the CFTC enforcement division to report this criminal activity. He described in detail the way in which JPM signals to the market its intention to take down the precious metals. Traders recognize these signals and make money shorting the metals along side JPM. He explained how there are routine market manipulations at the time of option expiry, Non-farm payroll data releases, and Comex contract rollover as well as other adhoc events. On February 3 he gave two days advance warning by email to Mr. Eliud Ramirez, a senior investigator of the Enforcement Division, that the precious metals would be attacked upon the release of the non-farm payroll data on February 5. Then on February 5 as it played out exactly as predicted further emails were sent to Mr. Ramirez in real time while the manipulation was in progress.
It would not be possible to predict such a market move in advance unless the market was manipulated.
In an email on that day Mr. Maguire said "It is 'common knowledge' here in London amongst the metals traders it is JPM's intent to flush out and cover as many shorts as possible prior to any discussion in March about position limits. I feel sorry for all those not in this loop. A serious amount of money was made and lost today and in my opinion as a result of the CFTC allowing by your own definition an illegal concentrated and manipulative position to continue."
Expiry of the COMEX APRIL call options is today. There was large open interest in strikes from $1100 to $1150 in gold. As always happens month after month HSBC and JPM sell short in large quantities to overwhelm all bids and make unsuspecting option holders lose their money. As predicted in advance by GATA the manipulation started on March 19th when gold was trading at $1126. By last night it traded at $1085.
This is how much the gold cartel fears the enforcement division. They thumb their noses at you because in over a decade of complaints and 18 months of a silver market manipulation investigation nothing has been done to stop them. And this is why JPM's cocky and arrogant traders in London are able to brag that they manipulate the market.
It is an outrage and we are making available the emails from our whistleblower, Andrew Maguire available to the Press wherein he warns in advance of a manipulative event.
Additionally Mr. Maguire informed us that he has taped recordings of his telephone communications with the CFTC for which we are taking the appropriate legal steps to acquire.
That statement may be viewed by clicking here: Andrew Maguire Tape Recordings
Daily Bell: Who is Andrew Maguire and how has he been helpful?
Bill Murphy: His emails between CFTC counsel Eliud Ramirez and himself are electric and are already reverberating all over the place. Andrews told him when JP Morgan Chase was going to bomb the market and why. Then it happened just like Andrew told Ramirez that it would. Andrew Maguire confided in Adrian because the CFTC refused to let him appear at the hearing. How bad is that!
Can you imagine the police getting information about a rapist, who then should be under surveillance, but does not do anything about it when an informer confirms who the rapist is and says exactly how the rapist will commit a rape in advance. The rape occurs, and STILL the police do nothing? Then there is an investigation into rapes and the police do whatever they can do to squash the inquiries. You have to be kidding me!
Daily Bell: Can you give us more details about his perspectives and why they were important?
Bill Murphy: Andrew has known the JP Morgan trader for years and got fed up with his boasting … saying this is just very wrong. This is truly epic whistleblower stuff. These things take time to have their effect.
Daily Bell: Why didn't the CFTC take Maguire serious when he contacted the CFTC enforcement division to report the criminal activity he observed?
Bill Murphy: Why didn't the SEC take Harry Markopolis seriously? What government agency takes anyone seriously when people like us go against the rich and powerful like JP Morgan Chase? Heck, Morgan is the Fed's bank.
Daily Bell: How common is the knowledge that Maguire imparted to the CFTC?
Bill Murphy: Having a whistleblower show up is a rare event. GATA has been pounding away to wake up people about the manipulation in the gold and silver markets, and we have 11 years of evidence, which hangs together. Some of our evidence is in the public record. What was that great line by Jack Nicholson in A Few Good Men? "YOU CAN'T HANDLE THE TRUTH." The CFTC, US financial market press, mainstream gold world, and Wall Street, can't handle the gold truth.
Daily Bell: Can you give us a concrete example of how a manipulation works?
Bill Murphy: The bullion banks work with the Fed/Treasury to keep gold and silver excitement to a minimum. Gold has been up 10 years in a row because The Gold Cartel has orchestrated a managed retreat. For example the cabal traders have their 2% Rule, which is the maximum they have allowed gold to up this year during a Comex trading session. This has occurred 7 times already since January 1.
On a day-to-day basis, The Gold Cartel uses physical gold supply, fed into physical market via surreptitious swap or lending operations, and then uses their concentrated power in the derivatives markets to cap the price and then to terrorize the longs and flush them out when they are ready to attack.
A perfect example is the recent April option expiry. The price of gold collapsed before the April option expiry from $1126 to $1085. Now that the expiry is over and the April call options expired worthless, the price is back to $1126 again. It was a two week round turn.
Daily Bell: Have you acquired Mr. Maguire's taped recordings of his telephone communications with the CFTC?
Bill Murphy: We hope to get the tape, but have to clear it through legal channels first. It is legal to tape another person in England without their knowledge, but illegal to give it to a third party. We are looking into mitigating circumstances like exposing a crime. I would think the fact that Andy M. and his wife were almost killed the next day following GATA revealing those damning emails to the world is a mitigating circumstance if their ever was one.
Daily Bell: Why did you testify?
Bill Murphy: To get the GATA story out there. I was on CNBC 11 years ago. Once they heard what we had to say, the US financial market press blackballed us. How bizarre, Russia's Channel One is doing a documentary on gold and the dollar. They sent a reporter and cameraman to where I live in Dallas and interviewed me for hours. Yet, not even the name GATA is mentioned in the United States. There is no such thing as free press in America for certain people who take on the rich and powerful.
Daily Bell: How was your testimony received?
Bill Murphy: Before I made my GATA presentation, the guy next to me called GATA a bunch of charlatans. Another panelist also disparaged GATA by name. We never have been very popular with the mainstream gold world. Nothing has changed. Bart Chilton is the only CFTC person willing to do homework on the manipulation issue.
As dramatic as Maguire's revelation was at the CFTC hearing, there was another "bombshell" exposure during the hearing. This was the testimony that GATA Board member, Adrian Douglas, was able to deliver during the hearing while assisting Harvey Organ with his testimony. Adrian was able to introduce arguments that the London Bullion Market Association (LBMA) OTC gold market is nothing but a massive "paper gold," Ponzi scheme.
What was then astonishing is that the bullion bank apologist, Jeffery Christian of CPM Group who has always been staunchly against GATA, endorsed Adrian's comments as being "exactly right." He went on to confirm that the LBMA trades over 100 times the amount of gold it actually has to back the trades.
There is no way Christian, who was speaking from a remote location, knew that Adrian was a GATA guy. How funny that Adrian's comments were received well by one of our biggest critics. He must be horrified.
Daily Bell: Are you afraid for your personal safety?
Bill Murphy: Well, the day after GATA dropped the bombshell about the Maguire emails between him and Ramirez, GATA's Adrian Douglas sent me the following:
GATA Whistleblower Andrew Maguire Injured in Hit and Run Car Accident
On March 25th at the CFTC Public Hearing on Precious Metals GATA made a dramatic revelation of a whistleblower source, Andrew Maguire, who has first hand evidence of gold and silver market manipulation by JPMorganChase, and who has even tipped off the CFTC in advance of manipulative attacks on gold and silver. Just as in the Madoff case the regulator has done nothing to stop such manipulation.
On March 26th while out shopping with his wife, Mr. Maguire's car was hit by a car careening out of a side road. The driver of the vehicle then tried to escape. When a pedestrian eyewitness attempted to block the driver's escape, he accelerated and would have hit him had the pedestrian not jumped out of the way. The car then hit two other cars in escaping. The driver was apprehended by the police after police helicopters were called in and following a high speed chase.
Andrew and his wife were hospitalized with minor injuries. They were discharged from hospital today and should make a full recovery.
I followed that up with this note in my daily, LeMetropoleCafe.com commentary:
It's something like out of a James Bond movie. What are the odds that my testimony gets blotted out from live coverage and then our whistleblower and wife get hit by a car the next day? … The gold scandal story is larger than life to begin with. Now throw this spooky stuff on top of it. Veteran Cafe members will recall that in the early part of this century what happened to me during a six week period …
My car was stolen and then found on a nearby highway one day after the insurance company paid me off. There was no damage to the car, money left in the console, and a cashmere sweater in the back seat.
My web site was hacked and somebody sent out a very goofy email supposedly from me, but it was not me.
Coming out of a restaurant/night spot less than two blocks from where I live, somebody jumped out from behind a wall and sucker-punched me with brass knuckles. I was out cold and thought my jaw was broken.
Nothing like this has happened before or since.
Daily Bell: Do you think, this time, that the CFTC must take all this seriously.
Bill Murphy: Outside of Bart, it appears none of them want to go there. GATA is like their worst nightmare because they are like everyone else … kowtowing to the rich and powerful. However, a firestorm is growing about what GATA has to say, partially ignited by the Andrew Maguire revelations. I suspect we are finally going to receive some mainstream press in the months ahead, which will be like shining a light on Dracula.
Daily Bell: Why hasn't it already?
Bill Murphy: The relationship between a government agency like the SEC and the CFTC is insidious. Nobody wants to rock the boat. Heck a number of these people at these agencies end up working on Wall Street, or interact business-wise in some other manner. The Chairman of the CFTC is a Goldman Sachs alumni. That about says it all.
Daily Bell: What's changed at the CFTC if anything?
Bill Murphy: Bart Chilton. He is a bit like Elliott Ness … and a very rare government bird. Neat guy too.
Daily Bell: If nothing happens, is it important to build a historical document, anyway?
Bill Murphy: You nailed it with that question. My initial presentation was 6 ½ minutes. After three edits, I got it down to 5 minutes and chump change, and I still got gaveled by Chairman Gensler. It's hard to put 11 years worth of market manipulation evidence into five minutes. But we got the essence of what we wanted out there in the public domain via the official CFTC public record.
Daily Bell: Where does the CFTC go after the hearings?
Bill Murphy: Our best bet is that manipulation revelations continue to gain the attention of the press and the pressure grows on the CFTC to get off their duffs and eventually do something about it. The problem is how do they tell the Fed and Treasury their heinous activities have to come to and end?
Daily Bell: Are you hopeful that the manipulation will be exposed?
Bill Murphy: Yes, of course. My initial reaction following the CFTC hearing was that what GATA was able to get out there, in that very visible and "official" forum will be a slow burn. Then, at some point, the story will be everywhere.
Daily Bell: What will Wall Street try to do?
Bill Murphy: Wall Street loathes gold because when the price is soaring, it is bad for business. Every time the gold price explodes, the press/analysts explain the rise due to inflation, crisis of sorts, terrible dollar action, rising interest rates, etc … so it's not good for their stock and bond markets. If you look at their price forecasts the past decade, most of the Wall Street firms have been neutral to bearish all the way up, and still are.
However, the only firms that will face some heavy angst are those doing the manipulation like JPM and HSBC. Goldman Sachs used to be the ringleader of the gold price suppression scheme. However, they are nowhere to be found these days and are actually one of the few Wall Street firms which has a bullish price forecast for gold. Just a few years ago they were short as much as 50,000 contracts on the TOCOM (Tokyo futures market).
Daily Bell: Will the manipulation – exposed – be in some sense stopped? Can it be stopped?
Bill Murphy: There is a zero chance it will not be stopped because The Gold Cartel will run out of enough ammunition (available central bank gold) to meet the annual supply/demand deficit. For the last 15 years they have required an average of an extra 1,000 tons per year to keep the price under control. It is commonly said by the mainstream gold world that the central banks have 30,000 tons of gold. The work of GATA consultants Reg Howe, James Turk and Frank Veneroso suggest that central banks actually have fewer than 15,000 tons. This is why The Gold Cartel is running out of ammunition.
At GATA's May 2001 GATA African Gold Summit in Durban, South Africa Frank Veneroso said that the central banks would run out of enough central bank gold to dump on the market in 7 to 10 years. The European central banks were selling 400 to 500 tons per year for the last decade … until a few months ago. The last few months they haven't sold an ounce. The tide is turning.
Daily Bell: Where will gold and silver go if the manipulation ceases?
Bill Murphy: Numerous commentators state that if gold had kept up with the price of inflation, the gold price would be around US$2300 per ounce. That is how much damage The Gold Cartel has inflicted on countries that produce gold, which are getting nowhere near its real value.
At our historic Gold Rush 21 conference in the Yukon in August 2005, we predicted that gold would need to rise to $3,000 to $5,000 per ounce to clear the price. We said the same thing on January 31, 2008 in our $264,400 full-page color ad in the Wall Street Journal titled, "Anybody Seen Our Gold?"
Daily Bell: Where will the dollar go?
Bill Murphy: With the fiscal problems facing the US in the years ahead, it is very difficult imagining the dollar not taking a big swoon. However, because of the currency problems elsewhere, there is no reason the price of gold can't fly no matter what the dollar does. After Gold Rush 21, which was attended by Andrey Bykov, a key economic consultant to Russia's President Putin, the price of gold rallied from $436 to $730 in seven months, while the dollar only dropped to 87 from 89.
Daily Bell: Has the Internet helped make all this possible?
Bill Murphy: The Internet made it all possible. That is how I met everyone associated with GATA. It is also the mechanism by which we can all share information. It is no friend to The Gold Cartel.
Daily Bell: Is the Internet like the Gutenberg press? Will we see an era unfolding? A kind of modern-day Reformation?
Bill Murphy: I think that is happening now. Your forum, among others, is a perfect example of the way people are receiving information these days.
Daily Bell: Does history repeat in some sense when these massive communication revolutions take place?
Bill Murphy: This certainly is the information age. If GATA is instrumental in exposing, and ending, the gold price suppression scheme, it will be some testimony to the power and value of the Internet.
Daily Bell: How do you see your role and GATA's within this context?
Bill Murphy: For the most part, the mainstream financial press, outside of certain countries like Russia, wants nothing to do with GATA. Years ago I spoke at a conference in Washington, which featured Ralph Nader. The Washington Editor of Barron's was there and he told a story how he really took Alan Greenspan to task a number of years ago, soon after he took the job. It wasn't long before he was taken off the A-party list, he said. That puts in perspective how the mainstream press and Wall Street folks view GATA.
Daily Bell: Would you do anything differently or are you satisfied with your participation thus far?
Bill Murphy: I don't think any of us will be satisfied until the gold price suppression scheme is exposed all over the world and the bad guys are taken to task.
Daily Bell: Thanks for the information and your courageous work.
When we came to the conclusion around 2000 that – with the Internet – the West was living through a replay of the Gutenberg press communication revolution, we figured the results would start showing up in about 20-40 years. Things seem to be moving more quickly, however, or at least that's our impression.
Technology is more powerful today than in the era of Gutenberg. But nonetheless, it took almost 100 years from the time of the invention of the press to the beginning of the Reformation, etc. Still, the Internet has only been around (seriously) for maybe 25 years. How is it we see evidence of its impact?
Yet, we think we do. The CFTC hearings that have taken place are a direct result, in our estimation, of the work done by such Internet-oriented efforts as Bill Murphy's GATA.
Yesterday (metaphorically speaking) GATA was a kind of punch-line, its story removed regularly from Wikipedia, its "conspiratorial" exposes ridiculed by the mainstream press when they were mentioned at all. Today, GATA testifies at CFTC hearings about an issue – gold and silver manipulation – that it has brought to the forefront of consciousness of traders and investors throughout the Western world. Tomorrow, there will be results – the fruit of years of courageous education.
It is not just market manipulation that the Internet has revealed. Courageous people like Bill Murphy and Ted Butler have brought out the crookedness of investing in the 21st century, but others have helped expose the fraud of global warming. And still others have been busy explaining the peak-oil fraud, and additional memes of scarcity (water, food, etc.). Brave individuals throughout Europe are leading the charge against America's endless, serial wars.
What is really happening, of course, is that the power elite's dominant social themes are foundering. The promotions that a handful of incredibly wealthy and powerful families and individuals rely upon to direct society are not working anymore. The Internet – and the bloggers who have used it – is exposing them.
When we think of what is going on today, we often think of the great Narnia tales written buy C.S. Lewis. Not the parts about royalty, kings and queens and the big battles. But the truly poetic ones featuring the return of the Christ-Lion and the thawing of the Ice Queen's realm.
We feel we are watching the thawing not just of an entire continent but an entire epoch. The mercantilist central banking/fiat money era which has lasted at least 100 years and spawned some of the most horrible violence humankind has ever encountered is, perhaps, losing its grip. The CFTC hearings are just one more sign, one more warming trend in an eventually-thawing wilderness.
We are not so naïve as to believe the Anglo-American power elite will let go of authority without a fight. But if history is any guide, the deep freeze of Western authoritarianism is gradually being warmed up by the attentions of the 'Net. The heat is on and it's difficult to see how the process can be arrested.
There are plenty of people, of course, who don't believe that anything out of the ordinary is occurring. They just haven't noticed yet. And within the audience that reads the alternative press, there is likely a sizeable majority that still believe the power elite is unstoppable. They are, in fact, the victims of yet another power elite promotion – the endlessly repeated meme that the power-elite is all-powerful. It hardly is. It is made up, we imagine, of a handful of (mostly) older men whose unbridled arrogance must gradually give way to disbelief and even astonishment.
One can see the desperation rising, or at least smell it. Gold and silver rise inexorably while paper currencies stumble. The EU dithers as Greece goes broke. The Anglo-American axis throws the cream of its youth into battle for nearly a decade against small states in and around the Middle East and, in the end, may have little to show for it.
The Anglo-American elite has apparently spent a century or more in a secret, intra-generational plot to create a kind of feudally-organized global government. But the word is out now. All of the tricks are being reported on the Internet, all the forbidden history has been explained over and over. This is no way to run a secret conspiracy – with thousands of bloggers speculating on your every move.
Is it like having cancer? You probably go through the stages. The first stage is disbelief, and the second stage is furious action. The third stage is violence – a determination to impose one's will on a recalcitrant population – and the fourth stage probably is resignation, at which point the power elite takes a step back and regroups as it did during the era of the Gutenberg press.
We figure the power elite is somewhere in between the furious action stage and the resort-to-violence stage. But it doesn't really matter where it is so much as where its most recent set of plans is headed. Which is into the dustbin of history. You see, the biggest secret of all is that there are billions of average people and only a few thousand of the elite. That's why planning was done in secret. That's why hundreds of millions had to be made to believe that all these dominant social themes of fear and control – leading to further wealth concentration – were THEIR idea.
You can't run a billion people down with cars. You can't just turn off a billion computers. You can't silence the rising tide of communication technology by shutting down factories. Certainly, you can pass the laws you want, but what use are the laws if fewer and fewer believe in them? What happens when more understand that laws are essentially an economically distortive price fix?
You can print money, but what use is it if enough understand its innate worthlessness and cease to believe in its value? You can promote authoritarian memes, and even totalitarian solutions, but of what use is it if fewer are frightened and more analyze them as a manipulation? The tree is green. The flower is white. The thaw arrives? Thanks, Bill.