Follow Up on the Silver Market Manipulations

On March 27^th and March 29^th I presented materials concerning evidence that was presented to the CFTC concerning whistle-blower and London trader Andrew Maguire and his various emails to Eliud Ramirez, a senior investigator for the CFTC‘s Enforcement Division.  These emails contained evidence that reported the illegal manipulation of the silver market by traders at JP Morgan Chase. Maguire told the CFTC how silver traders at JP Morgan Chase openly bragged about their exploits – including how they sent a signal to the market in advance so that other traders could make a profit during price suppression episodes. Traders would recognize these signals and would make money shorting precious metals alongside JP Morgan Chase.  Maguire explained to the CFTC how there would routinely be market manipulations at the time of option expires, during non-farm payroll data releases, during commodities exchange contract rollovers, as well as at other times if it was deemed necessary.

The video of the hearing in which this evidence was presented clearly demonstrates that the CFTC had no interest in pursuing this issue.  We were outraged when we learned a few days later Maguire and his wife were run down by an automobile shortly after Maguire’s return to London.  They are fine now. While it seems the CFTC is not going to pursue these allegations of racketeering, several investors are pursuing lawsuits to uncover the evidence.

According to  Bloomberg News, HSBC Holdings Plc and JPMorgan Chase & Co. were accused in an investor’s lawsuit of placing “spoof” trading orders to manipulate silver futures and options prices in violation of U.S. antitrust law.

The investor, Peter Laskaris, alleges that starting in March 2008, the banks colluded to suppress silver futures so that call options, or the right to buy, would decline, and put options for the right to sell would increase, according to the complaint filed yesterday in federal court in Manhattan. The collusion was also intended to maintain prices at levels at which some options would expire as worthless, Laskaris claims.

The banks placed so-called spoof trading orders, or the “submission of a large order which is not executed but influences prices and is then withdrawn before it reasonably can be executed,” according to the complaint.

The Commodity Futures Trading Commission began probing allegations of price manipulation in the silver futures market in September 2008. At a hearing in Washington on Oct. 27, CFTC Commissioner Bart Chilton said there have been “fraudulent efforts to persuade and deviously control” silver prices and that violators should be prosecuted.  Joseph Evangelisti, a spokesman for New York-based JPMorgan, declined to comment. Juanita Gutierrez, a spokeswoman for London-based HSBC, also declined to comment.

A separate, similar complaint filed yesterday on behalf of investor Brian Beatty, and naming the same banks as defendants, claims a whistleblower contacted the CFTC last year and reported the banks’ conspiracy to suppress prices of silver futures to profit from “enormous” short positions in silver futures.

The banks reduced their collusive trading and their holdings in the futures market after a government investigation of silver futures manipulation began in March, according to the complaint filed by Laskaris, which seeks class-action status. Since the banks cut back on their silver futures trading, prices have increased about 50 percent, the suit alleges.

“These price changes directly result, at least in one substantial part, from defendants’ reduction in their concentration and other reductions of their unlawful activities in the silver markets since the government investigation,” according to the Laskaris complaint.

What is truly sad here is that the CFTC has utterly failed to act, even when the evidence was overwhelming as to what banks were conducting the fraudulent trading practices, down to the specific employee names.  Even when Maguire even in one email predicted what was GOING to happen on the next trading cycle and exactly what he said happened.  Even when pressured, the banks pulled back and the price of silver found it true value by 50%!

Our economic reality is still tied to these banksters and their unabashed audacious belief they are in charge.  Real global financial reform is the ONLY action that is going to be effective.  Our political involvement should extend well beyond the mid-term elections in the US and the recent elections in the UK and the EU.

Every one of these governments is or will soon ask us all to suck up it one more time.  Our collective response should be sure, just as soon as you reign in the bankers and fix the causes of the whole damn thing in the first place.  I just think nothing less will have a chance of working within the next few years.

Follow-up on the Fox in the Henhouse. The CFTC and Andrew Maguire

On March 27, I did an article concerning  “More on the Fox…” and followed that story with an update on March 29th ” Short Bulletin…”. To me, this is one of the really big stories that is getting no coverage in MSM.  In fact, this story really demonstrates the, in my mind, criminal like activities of the banksters and traders, and clearly demonstrates how these guys have completely usurped both global financial institutions, and more seriously governments and the agencies that are supposed to protect and preserve the integrity of global trading systems.  With the help of  Michael Snyder – BLN Contributing Writer and to recap:

Back in November 2009, Andrew Maguire, a former Goldman Sachs silver trader in Goldman’s London office, contacted the Commodity Futures Trading Commission’s (CFTC) Enforcement Division and reported the illegal manipulation of the silver market by traders at JP Morgan Chase. Maguire told the CFTC how silver traders at JP Morgan Chase openly bragged about their exploits – including how they sent a signal to the market in advance so that other traders could make a profit during price suppression episodes. Traders would recognize these signals and would make money shorting precious metals alongside JP Morgan Chase.  Maguire explained to the CFTC how there would routinely be market manipulations at the time of option expires, during non-farm payroll data releases, during commodities exchange contract rollovers, as well as at other times if it was deemed necessary.

On February 3rd, Maguire gave the CFTC a two-day warning of a market manipulation event by email to Eliud Ramirez, who is a senior investigator for the CFTC’s Enforcement Division. Maguire warned Ramirez that the price of precious metals would be suppressed upon the release of non-farm payroll data on February 5th.  As the manipulation of the precious metals markets was unfolding on February 5th, Maguire sent additional emails to Ramirez explaining exactly what was going on.

And it wasn’t just that Maguire predicted that the price would be forced down.  It was the level of precision that he was able to communicate to the CFTC that was the most stunning.  He warned the CFTC that the price of silver was to be taken down regardless of what happened to the employment numbers and that the price of silver would end up below $15 per ounce. Over the next couple of days, the price of silver was indeed taken down from $16.17 per ounce down to a low of $14.62 per ounce. Because of Maguire’s warning, the CFTC was able to watch a crime unfold, right in front of their eyes, in real-time. So what did the CFTC do about it? Nothing. Absolutely nothing.

Which is extremely alarming, because the size of this fraud absolutely dwarfs the Madoff or Enron scandals.  In fact, this fraud is so gigantic that it is not even worth comparing to any of the other major financial scandals of recent times. But Maguire did not give up.  He sent several more emails to the CFTC detailing the open manipulation of the gold and silver markets. The CFTC did not reply.

Finally he sent them a final email: “I have honored my commitment to assist you and keep any information we discuss private, however if you are going to ignore my information I will deem that commitment to have expired.” The reply by the CFTC? “I have received and reviewed your email communications. Thank you so very much for your observations.” No action. No acknowledgement that anything was wrong. No recognition that a massive crime had been committed.

Fortunately, that was not the end of it. On March 25th, the CFTC held a hearing on alleged manipulation in the gold market by the major banking powers. Maguire wanted to testify during that hearing but he was not invited. But William Murphy, chairman of Gold Anti-Trust Action (GATA), was invited to testify.  GATA has been compiling data on the manipulation of the gold and silver markets for quite a long time now. Murphy was only given five minutes to deliver his testimony.  He raced through his presentation so that he could get as much information on the record as possible. Very curiously, the live television broadcast of the CFTC hearing suffered a technical failure the minute before Murphy began his testimony. The technical failure was corrected the minute after Murphy was finished.

When Murphy finished his statement, the panel asked him for some hard proof of market manipulation.  Murphy shocked the panel by revealing the name of Maguire and explaining how Maguire had informed the CFTC Enforcement Division of the market manipulation that was taking place by JP Morgan Chase.  The CFTC panel seemed stunned by the revelation and seemed reluctant to learn any further and asked nothing else about it.

In another “coincidence”, Maguire and his wife were subsequently injured and hospitalized when their car was struck by a hit-and-run driver in the London suburbs. When a bystander who saw the “accident” tried to block the other driver from getting away, the other driver accelerated directly towards the witness, forcing him to leap out-of-the-way to avoid being hit.  The hit-and-run driver’s car then hit two additional cars as he left the area. But Maguire and his wife were fortunate. In the past, other would-be whistle blowers that had evidence regarding the manipulation in the gold and silver markets died in “unusual accidents” before they were able to bring their evidence to light.

But there were even more “coincidences” surrounding this hearing.  A week before the hearing, the CFTC announced that they had a fire in the room where its gold and silver records are held. Isn’t that convenient? In addition, after the hearing was over, Murphy was contacted by a number of major media outlets for interviews. Within 24 hours, every single interview was cancelled. Every single one. Is that a coincidence too?

It appears that some very powerful people do not want this information to get out. It also shows how corrupt the mainstream media has become. This is a story that is so much bigger than the Madoff scandal or the Enron scandal that it is not even funny. And yet the mainstream media is avoiding it like the plague. But there were additional bombshells that came out during the hearing as well. During the hearing it was revealed that the gold manipulators have accumulated a huge short position in gold and that these huge short positions are “naked”, which means that these positions are not hedged. These massive short positions have put some of the largest financial institutions in the world in an extremely vulnerable position.

In addition, it has now come out that most “gold” that is traded is not backed by the actual metal itself.  For years, most people have assumed that the London Bullion Market Association (LBMA), the world’s largest gold market, had actual gold to back up the massive “gold deposits” at the major LBMA banks. But that is not the case. People are now realizing that there is very little actual gold in the LBMA system. When people think they are buying “gold”, they are actually just buying pieces of paper that say they own gold. In fact, during the CFTC hearings, Jeffrey Christian of CPM Group confirmed that the LBMA banks actually have approximately a hundred times more gold deposits than actual gold bullion.

So what happens if everyone decides that they want actual physical delivery of their gold? It would be such a mess that it is painful even to think about it. The truth is that right now most of the trading activities on the London exchange are just paper for paper. But people get into gold because they want to be in a real commodity. In fact, there are thousands of clients around the globe who think they own huge deposits of gold bullion, and are being charged large storage fees on that imaginary bullion, but what they really own are a bunch of pieces of paper. If there comes a time when everyone starts asking for their gold it is going to create a squeeze of unimaginable proportions.

Maguire explains this situation this way: “for 100 customers who show up there is only one guy who is going to get his gold or silver and there’s 99 who will be disappointed, so without any new money coming into the market, just asking for that gold and silver will create a default.”  The truth is that it is absolutely impossible for the LBMA to ever deliver all the gold and silver owed to the owners of contracts.

Yes, it is a gigantic mess. But this type of things is not entirely unprecedented.  For example, Morgan Stanley paid out several million dollars back in 2007 to settle claims that it had charged 22,000 clients storage fees on silver bullion that did not exist.  But the scale of the fraud going on now is absolutely mind-blowing.  But what is criminal is that the CFTC and the Department of the Treasury and many other so-called “regulatory agencies are fully informed and absolutely complicit in this gigantic fraud.  Members of CONgress and specifically members of the oversight committees are also complicit in this crime. It is really past the time when we should be demanding a full investigation of these facts by the Department of Justice.  It is time to expose, indict, and convict the criminals involved in these massive deception schemes.

Here is Uncle Willy’s Thought for the Day:

Short Bulletin..This is Important to Understand

Two days ago in my article about the Fox in The Henhouse, I presented the material concerning how the PTB were manipulating the Gold and Silver markets.  Within that article, I presented the material that was presented to the CFTC concerning whistle-blower and London trader Andrew Maguire and his various emails to Eliud Ramirez, a senior investigator for the CFTC’s Enforcement Division, warning that the precious metals would be attacked upon the release of the non-farm payroll data on February 5. On February 5, as market events played out exactly as predicted, further e-mails were sent to Ramirez while the manipulation was in progress.

I want to put into perspective the reality of how important this information was in context to the amount of wealth that is at stake and how that wealth is being taken from all of us.  I do run the risk of retaliation, but I am hoping that so few people read my blog it would not gather that much notice, but there are my readers and their interest I value.  Currently 165 central banks in the world, that are all privately held by the Rothschild family, are collecting massive amounts of gold and they are manipulating the market to get it.  Last year alone they bought up nearly 450 metric tons of gold and now hold nearly 32,000 metric tons of gold valued at nearly $1 trillion dollars.  Put another way, they now possess 18% of all the gold ever mined in the world.

This must be a very sensitive issue because London metals trader Andrew Maguire, who warned an investigator for the U.S. Commodity Futures Trading Commission in advance about a gold and silver market manipulation to be undertaken by traders for JP Morgan Chase in February and whose whistleblowing was publicized by GATA at the CFTC hearing on metals futures trading was injured along with his wife the next day when their car was struck by a hit-and-run driver in the London area. According to GATA’s contact with Maguire, board member Adrian Douglas, Maguire and his wife were admitted to a hospital overnight and released today(March 28) and are expected to recover fully. Maguire told Douglas by telephone today that his car was struck by a car careening out of a side road. When a pedestrian who witnessed the crash tried to block the other driver’s escape, the other driver accelerated at the pedestrian, causing him to jump out of the way to avoid being hit. The other driver’s car then struck two other cars in escaping. But the other driver was caught by police after a chase in which police helicopters were summoned.

And you wonder why I call them banksters!