Spooky Economy

   Transparency and Knowledge Dispel Fear

Rather fail with honor than succeed by fraud.—Sophocles

Andrew Maguire is a private gold and silver trader based in London. [2@0:19] He had at one time worked for Goldman Sachs [11].

In the course of doing his work, some metals traders who worked for JPMorgan Chase told Maguire to look for certain price patterns in the metals' price charts. Hidden in the prices were signals that gave knowledgeable insiders a “heads up” that a play was about to unfold that would make a lot of money. [2@0:40][8b@0:32].

As a group, when the informed players spotted the signals they would start shorting the metal. This coordinated action caused the metal price to drop, resulting in huge profits at the expense of traders who didn't know this was going on. [2@0:49] The trading in the market for metals is $5.4 trillion per year. [1@12:33]

At first, Maguire took advantage of the signals and became one of the regular players. After a while, though, he felt uncomfortable contributing to what he knew was fraudulent manipulation and profiteering. [1@3:14] He saw it as dirty business and wanted the unfair advantage removed.

He decided to contact Bart Chilton of the U.S. Commodities Futures Trade Commission (CFTC) in November 2009. Chilton expressed interest and arranged for Maguire to speak with a senior CFTC enforcement officer. [1@3:57]

Later, Maguire explained the process to the enforcement officer. He followed up with slides, screen shots and other detailed explanations. [1@4:15] He expressed amazement that he had to explain things as much as he did. [1@5:55]

In early February of 2010, Maguire contacted Eliud Ramirez of the CFTC's Enforcement Division and gave him a “heads up” that another round of manipulative shorting was about to happen. As the manipulation played out, Maguire gave Ramirez a predictive, step-by-step narration of the events in real time. [3][1@6:41] [1@7:40][2@1:00][7]

On February 5, 2010, just as the manipulation was finishing, Maguire sent one more email: “A final e-mail to confirm that the silver manipulation was a great success and played out EXACTLY to plan as predicted yesterday. How would this be possible if the silver market was not in the full control of the parties we discussed in our phone interview? I have honored my commitment not to publicize our discussions.” [3][1@5:16]

Maguire was sure that he had given the CFTC definitive proof that could be acted on. [1@9:04]. In his email he wrote, “I feel sorry for all those not in the loop. A serious amount of money was made and lost today...” [2@1:30] [3]

To his surprise and dismay, the only response he received was an email saying “I have received and reviewed your email communications. Thank you so very much for your observations.” [3] [2@1:42]

After some additional follow-ups, Maguire became convinced that nothing was going to be done. He felt that he had been betrayed by the CFTC and became angry when he was removed from the list of those who were scheduled to testify at a CFTC hearing on the issue [5]. He decided at that point to contact GATA, an organization dedicated to monitoring precious metals manipulations [1@9:19].

In March 2010, Maguire gave GATA the same information that he had given Ramirez at the CFTC along with copies of the emails communications he had had with him. GATA immediately published the information. [4]

Shortly after, GATA spokesman Bill Murphy testified at the CFTC hearing about Maguire's findings but had to do so in limited time [8]. His testimony attracted media interest. Murphy was scheduled to appear on network news programs, but the appearances were abruptly canceled after Maguire's car was rammed in London. [2@3:00] [1@17:50] (See Personal Concerns, below)

In April 2010, Maguire decided to go public himself with his assertions that the gold and silver markets were being manipulated by J.P. Morgan and HSBC [5]. His assertions were reported by the New York Post which resulted in the launching of civil and criminal probes by the U.S. Justice Department's Antitrust Division and the Commodities Futures Trade Commission (CFTC). [6]

Quotes

"We're all profiting from this and it's become such a regular, manipulative event that we, as locals, we knew exactly what's going to happen, when it's going to happen. It's obvious and we can profit from it." [1@3:33]
On the 2008 drop in silver prices from $20 to $9, Maguire stated "We saw a massive take-down and it really was time to say 'look, we're witnessing a crime in progress here'. So I though it my duty to contact the CFTC to investigate." [1@3:13]
"This was a process where I was trying to educate, because it seemed to me (from when I spoke to the CFTC enforcement) that they didn't even know what to look for. And I was somewhat amazed by that." [1@5:56]
"The reason I'm doing this because.. this is my industry... and I don't want it to be, basically, ruined... by a couple of large parties here who are in absolute, full control who can run the market up and down at will." [1@10:14]
"Every single ounce of silver and gold that actually leaves the LBMA and actually exits the country... leverage works in two ways! Now you're looking at 100 ounces of paper gold that has to be somehow accounted for every ounce of gold that disappears." [1@15:32]
"The pay day is coming. The accountability day is here. You cannot keep doing that. And once physical disappears, this game is over." [1@16:04]
“JPMorgan acts as an agent for the Federal Reserve; they act to halt the rise of gold and silver against the U.S. Dollar. JPMorgan is insulated from potential losses [on their short positions] by the Fed and/or the U.S. Taxpayers” [6]

Personal Concerns

On March 26, 2010, the day after his information was made public by GATA, Maguire and his wife were hospitalized for injuries received after a person in another vehicle rammed their car. [2@2:15][3][7] The driver was apprehended after attempting to flee. The name of the driver has not be released by London authorities. [7] The Maguires have recovered.

Proposed Solutions

Maguire did not mention any specific solutions. He only asked that the ability to manipulate be stopped.

Must-see Resources

  1. Audio: Interview of Andrew Maguire and Adrian Douglass
    URL: http://kingworldnews.com/kingworldnews/Broadcast/Entries/2010/3/30_Andrew_Maguire_%26_Adrian_Douglass.html
  2. Video: Andrew Maguire finally exposes systemic fraud by CFTC & JP Morgan
    URL: http://www.youtube.com/watch?v=yLxoeLqQMlw
  3. Document: Andrew Maguire, Whistle-blower on Market Manipulation... Injured...
    URL: http://www.sott.net/articles/show/205674-Andrew-McGuire-whistle-blower-on-market-manipulation-injured-in-hit-and-run-accident
  4. Document: A London trader walks the CFTC through a silver manipulation in advance
    URL: http://www.gata.org/node/8466
  5. Document: Ex-Goldman trader blows whistle on silver and gold manipulation by JPMorgan Chase
    URL: http://www.nypost.com/p/news/business/metal_are_in_the_pits_2arTlGNbMK7mb1uJeVHb0O/0#ixzz0nZh8WLBC
  6. Document: Silver Price Manipulation Investigation Focused On JPMorgan Chase
    URL: http://www.thestreet.com/story/10753883/2/silver-price-manipulation-investigation-focused-on-jpmorgan-chase.html
  7. Document: Metals Trader Blows Whistle on Gold & Silver Price Manipulations
    URL: http://www.icmj.com/article.php?id=832&keywords=Metals_Trader_Blows_the_Whistle_on_Gold_&_Silver_Price_Manipulation
  8. Video: GATA Chairman Bill Murphy's testimony before the U.S. Commodity Futures Trading Commission
    8a: URL: http://www.youtube.com/watch?v=9wIMpe9SjfQ [General statement]
    8b: URL: http://www.youtube.com/watch?v=e9bU0r6JP4s [Response, specific examples]
  9. Document: Feds launch criminal probe of alleged JPMorgan silver market manipulation
    URL: http://www.mineweb.co.za/mineweb/view/mineweb/en/page32?oid=104604&sn=Detail&pid=102055
  10. Document: Wikipedia entry on Andrew Maguire
    URL: http://en.wikipedia.org/wiki/Andrew_Maguire_%28whistleblower%29

Added July 26, 2010 Posted January 18, 2011 Revised (n/a)

This is my opinion. It's a work in progress. I hope it's helpful.

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