In Part 1, we were introduced to Andrew Maguire – a veteran metals-trader, and genuine whistle blower. We had our suspicions about the precious metals market confirmed: that the anti-gold cabal engages in regular, ruthless take-downs of the precious metals market, and prefers to whip saw investors in the process, whenever possible, as part of a ground-breaking interview on the King World News program, which also featured GATA director, Adrian Douglas.
We learned that he (Maguire) had handed the CFTC an open and shut case of market manipulation, through two detailed anecdotes, including a play-by-play of a current manipulation operation – and that the CFTC refused to give Mr. Maguire the opportunity to expose the evil deeds of the bullion banks, most notably the manipulation of the silver market by JP Morgan traders.
As an amusing aside, a Bullion Bulls reader located (and passed along) a New York Post article that discusses Andrew Maguire in detail. The Post article also quoted JP Morgan spokesman Brian Marchiony as saying, “No one at JP Morgan is familiar with Andrew Maguire,” a gesture much akin to an ostrich burying its head in the sand. What makes the JP Morgan denial so hilarious is that Mr. Maguire is, in fact, an ex-Goldman Sachs trader. Thus, JP Morgan's denial is much like Tweedle-dum pretending he had never heard of Tweedle-dee.
In Part II, we will learn the implications of what Andrew Maguire revealed, along with bombshells from the CFTC pretendhearings with respect to gold and silver manipulation. A good place to start Part II would be to quote Adrian Douglas after observing that the gold market was greater than $5 trillion in size:
“This will be the biggest scam in financial history.”
At this point, we need to back up, a bit. I'm sure that there are many precious metals bulls out there who pulled out their calculators and said “whoa, how can the gold market be over $5 trillion in size?” Total global inventories are only a tiny fraction of that amount.
For clarification here, we can thank Jeffrey Christian of the CPM Group (and formerly of Goldman Sachs). Under questioning at the CFTC hearings, Christian blurted-out that the gold market was “a hundred times the size” of the amount of physical bullion in global inventories, in other words, the banksters have leveraged their meager hoard of bullion by (at least) 100:1. This was news which even shocked the whistle-blower Maguire.
Mr. Maguire said that “never in [his] wildest dreams” did he imagine 100:1 leverage. Even his own most extreme estimate was that leverage might be “ten to one, or twenty to one.” In that respect, we all shared Andrew Maguire's shock. This statement has the greatest impact for holders of the massive stacks of paper which go by the symbols GLD the SPDR Gold Trust ETF and SLVthe iShares Silver Trust ETF, but I'll have much more to say about that issue in an upcoming commentary, as well as much more to say about the concept of 100:1 leverage in the bullion market.
For now, I'll leave readers with an astute observation by Mr. Maguire, himself: namely that leverage always cuts both ways. Every ounce of gold (or silver) taken in delivery from global warehouses must destroy 100 ounces of paper gold. Thus, all that needs to be done to permanently destroy the bullion banks is for people to simply take their own gold and remove it from the banksters' crooked casino (the Comex). This makes every investor who purchases a Comex contract (for gold or silver) and then demands delivery, a hero for gold and silver bulls, everywhere. About the only bulls who would be unhappy to see demands for delivery increase are the world's central bankers – who bought more gold (on a net basis) than at any time in nearly 50 years during 2009.
These other bankers may not be rooting for the Comex criminals, but at worst they are relatively agnostic toward those crimes. On the one hand, there is massive buying support each-and-every time gold is pushed down toward the critical, 200 DMA. On the other hand, allowing the banksters to continue to crush one rally after another before gold (and silver) go totally parabolic means that they can continue to buy cheap bullion.
Getting back to the King broadcast, Eric King then revealed to listeners that all of the interviews which had been scheduled with various GATA directors (in conjunction with the CFTC hearings) by mainstream, corporate media outlets were immediately canceled, without explanation – as soon as GATA announced Andrew Maguire's news.
As a follow-up to that point, when this same mainstream media tries to explain the sudden, bullish reversal in the gold and silver markets, they manage to come up with all sorts of answers, such as inflation (which supposedly doesn't exist in the U.S.), or the Greek crisis (which itself, is nothing but the product of three months of around-the-clock propaganda and U.S. economic “terrorism”). The one explanation which the mainstream media can never manage to remember when they are reporting their news is that word of the banksters' massive fraud, and 100:1 leverage is starting to spread, despite their efforts at censorship.
Adrian Douglas summarized the new paradigm perfectly. He pointed out that the justification for the massive short positions of a handful of bullion-banks (the largest concentrations in the history of commodity markets) was that they were hedging real physical bullion. We now know, from a precious metals insider (Jeffrey Christian) that this claim is false. The banksters' entire, multi-trillion bullion empire is nothing but paper piled atop paper: they are naked longs, and (more importantly) naked shorts – meaning that their bets in the Comex (and derivatives) markets are now openly fraudulent.
Perhaps the most amusing moment of the interview occurred when Adrian Douglas addressed another part of Jeffrey Christian's blunder-ridden testimony at the CFTC hearings. When Christian was pressed to explain how the LBMA and other major (Western) gold repositories could function with such limited (real) bullion, versus the endless claims made against it by all the “paper gold”, Christian responded that a cash settlement mechanism existed to deal with such situations. As the GATA director then pointed out, that is by definition a default in the bullion market.
What is utterly amazing about Christian's testimony is that he and his bankster-buddies have become so divorced from the real world that they could blithely discuss a formal, bullion default at a formal hearing for the U.S.'s primary regulator of the bullion market – and consider that they had dealt with the issue of putting position limits on what we now know are large, naked positions. Again, I'll have more to say about this in an upcoming commentary.
We now get to what I'm sure most precious metals bulls will consider to be Eric King's climactic question: Will this “hasten the meteoric rise in the price of gold and silver?”
Andrew Maguire: “An automatic yes.”
Adrian Douglas was more circumspect in his own reply, presumably for the same reason that I am similarly non-committal when I answer such a question. Absent a crystal ball, no one can predict an exact when for the final implosion of the bullion-banks multi-trillion fraud.
My answer has always been “the longer that suppression continues, the more explosive the consequent move in gold and silver will be”. We now have that concept absolutely confirmed by the one of the banksters' own henchmen: Jeffrey Christian. The bullion-banks have not always leveraged their bullion 100:1. Rather, this is what their leverage has been forced to rise to – in order to prevent their bullion-suppression scheme from imploding upon them already.
Numerically, 100:1 leverage implies a rise in the price of real gold of a similar magnitude when the banksters' fraud detonates. Am I thus predicting a rise in the price of gold to $100,000/oz? No (emphatically). I am merely pointing out that if we look at the pressure building in the gold market due to the price being so severely suppressed, for so many years as a physics equation, when the paper gold implodes, the upward force that will be released would be equivalent to what was necessary to catapult gold to $100,000/oz.
Obviously, such a mind-numbing bounce in the price of precious metals would be enormously disruptive – especially with respect to silver, given its large and growing “industrial” importance. Thus, global regulators would intervene to ensure that such a precipitous explosion could not occur. Most likely, prices would increase by only single-digit multiples (i.e. between 100% and 1000%), which is still not exactly chump change to those investors who already have their own bullion holdings.
However, any intervention to create an orderly rise in the price of precious metals would not remove that underlying, upward pressure on the price of gold and silver. In other words, by not getting our 100:1 pay-off now (or in the immediate future) we also avoided the horrific crash that would occur immediately after such an event. No (sober) precious metals bull would put the fair market value of an ounce of gold at $100,000.
Thus, in maintaining an orderly rise in precious metals prices (and thus maintaining all that untapped, upward pressure), this will ensure (at the very least) many years of steadily rising prices – until supply and demand are finally able to reach a true equilibrium price – and more likely several decades.
It also introduces a new reality, which Andrew Maguire and Adrian Douglas discuss toward the end of the interview. In 2008, when gold and silver prices were attacked in the most brutal act of market-manipulation in the history of commodity markets, the secret of the banksters' paper sham was still intact. That world no longer exists.
Should there be another episode of market-panic, or simply a massive surge in the gold and/or silver markets; if the bullion-banks were to attempt a similar assassination of this market, there could only be one of two results: either legitimate investors would simply take their money off the table (by demanding delivery in the bullion fraud markets of London and New York); or (if U.S./UK authorities provided their criminals with regulatory protection) the bullion market would simply divide in two.
There would be a gold (and silver) market, located in Asia, and based in cities like Shanghai, Hong Kong, Dubai, and Singapore. Then there would be the paper-fraud markets of the West. This would likely soon be followed by the re-establishment of a new “gold standard”. This is the only way Asian nations would and could protect their own currencies (and economies) from the Ponzi schemes, hyperinflation, and currency destruction which will inevitably ravage most Western economies – as the banksters' psychopathic greed will cause them to literally choose destroying everyone/everything, rather than going down alone.
GATA was deprived of the formal victory which it had earned through the years of efforts of its directors, notably Bill Murphy, Chris Powell, and Adrian Douglas, when the CFTC once again demonstrated that it is nothing but a corrupt stooge, totally enslaved by the bullion banks. However, while not getting a formal victory in that battle, they (along with Andrew Maguire) have clearly produced a turning point in this war.
With not only a true smoking gun (in the person of Andrew Maguire), but also a firm idea of the amount of leverage propping-up the multi-trillion dollar bullion-fraud of the anti-gold cabal, we are now closer than ever to a return to fair, and open markets for precious metals – and a fair return on the investments of precious metals holders all over the world, who have been literally and figuratively cheated by the bullion bank criminals for many years. Thank you GATA!
