In a stunning development, two JP Morgan whistleblowers have confessed that the bank manipulates the gold and silver markets. This is truly a shocking admission by the courageous JP Morgan whistleblowers. In a blockbuster King World News interview, London metals trader Andrew Maguire told KWN that the two JP Morgan employees came directly to him with hard evidence that the bank was actively manipulating the gold and silver markets.

This is a truly catastrophic event for JP Morgan, which up to now has denied manipulating these markets. Maguire takes KWN readers around the world on a trip down the rabbit hole as he discusses how he led the two JP Morgan employees to turn over the evidence to a law firm which specializes in high profile whistleblowers, and also to the CFTC [Commodity Futures Trading Commission]. According to Maguire, the CFTC has virtually buried this information. Is this a cover up, or the next LIBOR scandal about to be exposed? Below is what Maguire had to say in this blockbuster interview.

Maguire: “You recall our King World News interview in March, 2010, which was directly after the public CFTC Commission Meeting ... And as you know, at the last minute I was suddenly uninvited to that meeting. But luckily we had one commissioner ... who was willing to provide a forum for my evidence to be submitted

... Thanks to King World News for taking up this story, this news went mainstream. But most importantly, Eric, it caught the attention of some serious Eastern hemisphere buyers who moved in (to these markets) from the sidelines. They were buying it (gold and silver) aggressively. Now, in this case the bullion banks were exposed to be naked short (gold and silver in 2010).”

Eric King: “Andrew, I don’t have to tell you that the price of gold and silver exploded after that (March, 2010 King World News interview) interview.”

Maguire: “Absolutely. And I’m going to go into that in a minute, Eric, because it is quite astounding what happened after that. A lot of people are really concerned about the upcoming 5-year anniversary, and the possibility of the statute of limitations bringing this all-important (CFTC) investigation to a close this month.

Very recently Commissioner Chilton assured me, and I’m going to quote him exactly, “I can’t appropriately express my frustration and disappointment with how we’ve handled the silver investigation....

Bart Chilton continues: “And, as you know, I’m prohibited from actually saying much. That said, I will not let September go by without speaking out if the agency doesn’t do so.”

Now, since the original CFTC Meeting, I’ve provided a very large amount of detailed evidence to the agency. And what isn’t known, however, up until now, is during that time I was also contacted by two JP Morgan employees who told me they had a large amount of documented evidence of market trading abuses in gold and silver by their bank (JP Morgan).

Now, it was my understanding that this covered the same time period of metals abuses that I had prepared in my submissions. And for their own protection I directed them to a law firm specializing in whistle blowers so they could formally provide this evidence under the Dodd-Frank Whistleblower Provision directly to the CFTC.

This would provide them the necessary protections which they would need if they were going to make such a submission. Now, this was actually done in early June, 2012. Not June, 2013, but June of 2012, which is staggering. Now, I didn’t want to hinder any investigation, so I kept this information ‘under wraps,’ until now.

To date, as far as I’m aware, these JP Morgan whistleblowers have not received any meaningful response to their evidence (from the CFTC), nor have we seen any formal charges laid against this bank. But needless to say, there is a lot of evidence on the table. And you cannot have a multi-year investigation relating to abuses in the metals markets without there being an obvious and evermore embarrassing problem for this agency (the CFTC).

Eric, we now know the LIBOR scandal flew under the radar for 15 to 20 years, and it was only when the famous Bollinger email was leaked and published that a formal investigation and charges were laid against these banks. This (LIBOR) investigation has resulted in some charges and it’s actually still going on today.

The point I am trying to make, Eric, is it amazes me what a little publicity will do to get some action. Now, we as traders all knew the bullion banks’ manipulations were going on, but they were never reported by the mainstream media. So obviously many people were skeptical, and once the evidence became mainstream, and especially after our King World News interview, all hell broke loose.

Directly after the meeting I was approached by some very large, well-connected Asian buyers who wanted to find out more about the level of leverage employed in the metals markets ... And once establishing there was a massive disconnect between the paper markets and the enormous unbacked, synthetic supply (of shorts) distorting these markets, I know they moved in to buy in size.

It was no coincidence gold didn’t look back from that day and it moved up over $800, from under $1,100, to (over) $1,900. And silver moved up (an astonishing) $33, from under $17, to almost $50 in the same (time) period. And that was despite strong bullion bank short selling opposition at the time.

This bullion bank opposition created such a mismatch between synthetic paper market supply and the actual immediately available physical inventories that were being drawn down, that it threatened to collapse at least two naked short bullion banks. And it brought us full circle back to 2001, where Gordon Brown intervened to bail out Goldman Sachs, and a whole daisy chain of bullion banks who were in a similar position at that time.

Having no physical to bail out the banks with, this brought about a series of Fed-sanctioned paper market interventions, and it was to avoid an imminent default. Now, the reason I bring this all up is, fast-forward to today, and ironically, this is precisely where we are now (once) again. Since then, the bullion banks have managed to cover huge swaths of naked short positions in the COMEX paper markets, and are now net long, and I emphasize, ‘paper’ gold.

What is missed, however, by many, is that they are in fact still grossly mismatched to immediately available deliverable physical supplies in the real global market. This is a huge disconnect, and it really explains so much of the action (in the gold and silver markets). And, Eric, we all know this is going to end badly for the banks.”

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The Consequences of this Incredible Expose

Egon von Greyerz - Gold Matterhorn Asset Management

Eric King’s interview with Andrew Maguire about JP Morgan’s manipulation of the gold market is probably the most important confirmation of what gold market participants have known for years. This is not just a validation of the most blatant rigging of the only market in “real money” but also an extremely important market moving event.

Since KWN published this interview on Friday afternoon, New York time, gold has moved up $20 in after hours....

“This is at a time when Europe is closed and the Far East is closed. I cannot remember the last time the market moved up this much in after hours on a Friday evening.

KWN and Andrew Maguire have given us the confirmation of what we have known for years, namely that the gold market is not a free market but totally manipulated by governments and central banks through their favorite conduits in the guise of the bullion banks.

For a very long time governments and central banks have covertly sold and leased their gold holdings to the bullion banks in order to suppress the price of gold. But they have not just intervened in the physical market but also manipulated the paper gold market which is roughly 100 times greater than the physical market.

This suppression of gold is Western governments’ desperate attempt to conceal the destruction of the value of paper money by unlimited printing and credit. Most currencies have declined 97-99% in value since the creation of the Fed in 1913. And since 1999, money is down around 80% in real terms, which of course is gold.

Debt worldwide is now expanding exponentially. With absolutely no possibility of stopping this debt explosion, we will soon enter a period of unlimited money printing leading to a total destruction of paper currencies. The consequence will be a hyperinflationary depression in most major economies.

The interesting point is that this extremely important and historic KWN interview took place at a time when technical indicators were giving clear indications that gold was in a position to make a major move. The Fed announcement next week will most certainly lead to further gains in the gold price. My forecast of roughly $2,500 in gold and $70 in silver, within 12 months, still stands. In fact, the JP Morgan news just reinforces it.

Courtesy www.futurefastforward.com