Thursday 24th May 2018

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When the mighty fall

The gold cartel’s a scandal in waiting, says GATA’s Bill Murphy

by Greg Klein

Don Quixote comes in two guises. Bill Murphy of the Gold Anti-Trust Action Committee associates his group with neither.

Cervantes wrote of a delusional character convinced he was protecting the local peasantry from horrific monsters as the wannabe knight charged on horseback at a windmill. The words “Quixotic” and “tilting at windmills,” however, later came to describe not delusions but the pursuit of a real and noble campaign that’s also a lost cause.

The gold cartel’s a scandal in waiting, says GATA’s Bill Murphy

Bill Murphy

Understandably, Murphy would reject any comparison with the original Quixote. He also rejects the second interpretation because, while firmly believing in GATA’s legitimacy, he sees it as anything but an exercise in futility. Especially now. That’s the message he’ll bring to the Vancouver Resource Investment Conference with his January 22 presentation, The Gold Cartel, Sex Scandals and GATA.

The recent wave of scandals has taken down some rich and previously powerful people, showing limitations to their supposed invincibility. But to Murphy, there’s an additional lesson to be learned. Disturbing conditions of injustice or corruption can fester for decades, known only to a few. They become scandals only with widespread public awareness—and the ensuing outrage.

Murphy’s concern with market machinations began as he worked for a brokerage in the 1980s. Recognizing the burgeoning Internet’s potential, he began LeMetropoleCafe.com to express his views and those of others. An epiphany of sorts came in 1998 with the collapse of Long Term Capital Management.

“I realized something was wrong when gold was capped at $300 an ounce. We knew that LTCM had to get out of all their positions and they were heavily short the gold market. They couldn’t let the price go up because it would affect the positions of the bullion banks. They got together and stopped it and I realized the price was being rigged.

“At the time I thought it was just the bullion banks. Then I realized it was much bigger and included the Fed, the Treasury, the Bank for International Settlements and other central banks. It was much bigger than we realized. I started GATA with my colleague Chris Powell, who was a daily newspaper editor. That was around the end of 1998 and the beginning of 1999, when we realized the market was rigged. We decided to expose it and try to do something about it.”

The gold cartel’s a scandal in waiting, says GATA’s Bill Murphy

Nearly 20 full years have seen lots of GATA writing and presentations, along with some GATA conferences. But no big breakthrough. Undeterred, Murphy sees a parallel in current high-profile scandals taking down the likes of CBS News host Charlie Rose, NBC News host Matt Lauer, U.S. senator Al Franken and Hollywood bigshot Harvey Weinstein.

When allegations first surfaced against Bernie Madoff, “the authorities did nothing,” Murphy points out. Enron’s accolades included America’s Most Innovative Company, bestowed by Fortune for six years straight. “The people who tried to expose the company were fired.” But eventually widespread public awareness brought widespread public outrage.

“When you take on the rich and powerful, it can go on for decades,” he says. “Then all of a sudden the dam breaks. We now have mega-scandals with a senator and major media people having to resign. It’s going to be a major financial scandal in the U.S. when gold and silver prices finally blow up.”

Newton’s law of equal and opposite reaction is going to take hold. As the cartel loses control, prices are going to explode.—Bill Murphy

The markets face other serious issues too, he acknowledges. “But in my opinion, number one is how artificially low these prices are because of what this gold cartel has done. Newton’s law of equal and opposite reaction is going to take hold. As the cartel loses control, prices are going to explode.

“It’s going to happen and it’ll probably happen when many of us least expect it. But it’s coming because they’ve gone through too much physical gold and silver at too-cheap prices over the years. Eventually, when the horde moves in to buy, they won’t be able to stop it. Gold and silver are so cheap they’re the most under-valued assets on the planet. And they’re going to explode.”

Bill Murphy speaks on The Gold Cartel, Sex Scandals and GATA at the Vancouver Resource Investment Conference 2018 on January 22 at 11 a.m. GATA’s Ed Steer gives a presentation called JPMorgan and Scotiabank: Still Rigging the Silver Price on January 21 at 1:40 p.m. Click here for more VRIC 2018 information and complimentary registration.


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