The Manipulators Will Lose Their Gold War: GATA's Bill Murphy (Exclusive Interview)

lemetropole's picture


Bill Murphy

The Inteligencia Financiera Global blog (Global Financial Intelligence Blog) is honored to present another exclusive interview now with GATA’s Bill Murphy.

Thanks Bill for accepting this interview.

-Maybe most of people in the gold world know about you and GATA. Nevertheless, for those who don’t know: Who is Bill Murphy? Where do you come from a financial point of view and what did motivate you to found the Gold Anti- Trust Action Committee (GATA)?

Hello Memo.

Thanks so much for your interest in what GATA has to say. I have a Wall Street background and worked for Shearson Hayden Stone and Drexel Burnham Lambert in Manhattan in the late 1970’s and early 80’s. At one point I became a limit position trader in the copper market after forming my own company, so I am very versed in how the futures market works in the US. In 1998 I realized the Internet was going to be a big deal and opened up as a subscription website which would focus on the gold/silver markets, as well as provide coverage of the US and world economies. Soon after opening up for business, the famed hedge fund Long Term Capital Management blew up. They were known to be short hundreds of tonnes of gold and that would have to be covered. However, it was clear that bullion banks such as Goldman Sachs, JP Morgan, and Deutsche Bank were capping the price around $300 in a collusive manner. My future colleague Chris Powell had anti-trust experience via his newspaper business. He suggested we try and stop it, so GATA was formed.

-In our last interview, Hugo Salinas Price told us that only a blind or a Harvard economist with a doctorate would not see the gold market is being manipulated. Do you agree? As I understand it, one of the main purposes of GATA is to communicate this fact to as many people as possible,  and end this manipulation, but, Bill, isn´t it a lost war? Aren’t the manipulators “too strong to be stopped”?

Yes, Hugo is right on the money. It could not be more obvious. So much so that James McShirley, a speaker at GATA’s London conference in 2011, has written in advance at times what the gold will do on a given day. From a bigger picture someone only need to appreciate what the price of gold did last year compared to the DOW on the same quantitative easing news. The DOW went up 3,000 points and the gold price went down $600. That would have made no sense to anyone ahead of time. Gold went lower as it did because “The Gold Cartel” forced the price down with massive raids in the derivatives paper market, often when few traders were around.

Yes, this Gold Cartel is extremely powerful. But, they have an Achilles heel, and that is the physical gold market. The Chinese demand for physical gold is so massive, it is eating up the available central bank gold supply needed to suppress the price. The Gold Cartel’s raids haven’t gained any traction on the downside this year. Thus, the manipulators are being forced to retreat again as they did for 12 years in a row. They won the battle for 2013, but will lose their Gold War in the years ahead.

-As you know, many pundits like CPM Group’s Jeff Christian and famous investors like Jim Rogers say that they ignore allegations on gold market manipulation because those are mere “conspiracy theories”, what would you answer to them?
Hugo already said it best. Those who deny the manipulation are either working for the other side, suffer from cognitive dissonance, or have a “not invented here syndrome complex.”  Three points to make:

*The Gold price was rigged for many years in times past, in the open, as in the London Gold Pool in the 1960’s. Why should now be any different? It is just surreptitious intervention this time around.

*It is recognized these days that most financial markets are manipulated. What, so gold and silver are two of the only markets not manipulated these days. JP Morgan alone was just fined some $20 billion dollars for rigging, or interfering, in eight different markets.

*As my colleague Chris Powell says, “GATA is a fact finding organization,” and we have 15 years worth of documentation to back that up. Here is just one of them which confirms what GATA has known all along: Secret IMF report: Hide gold loans and swaps for market manipulation ( 

-Bill, could you explain who does this manipulation? Why and more important how do they do it?  What’s the ultimate purpose of the manipulators?

The Gold Cartel, as we call it, has the BIS, The Fed, The US Treasury, The Exchange Stabilization Fund, and various bullion banks such as JP Morgan Chase, as its main operators. Other central banks are called upon to supply physical gold into the marketplace from time to time. They conduct their operations by feeding central bank gold into the market in surreptitious fashion and using derivatives to bomb the paper price. For the time being the paper price greatly influences the physical market and the PM Fix in London, the price at which 90% of the physical deals of any given day is used to conduct business. The good news is Chinese demand is so immense, the physical market is beginning to take over in terms of determining the physical price. This is a main reason The Gold Cartel has been so ineffective this year … and they have tried to keep the price down, believe me.

They do what they do because gold is viewed as a barometer of US financial market health. Think of what the media says whenever the gold price is screaming higher. This Gold Cartel wants the gold price as subdued as possible so that it does not effect the US dollar and our interest rates negatively.

-By the way, China is now the largest consumer of gold by any measure. Do you think China has any interest on ending the dollar supremacy anytime soon? Or, do you think China and Asia in general would prefer to wait more time to keep buying bullion at today’s depressed prices?

The Chinese know what GATA knows about gold being suppressed. We know this because of communiqués made public and I have had three conference calls with the Chinese Investment Corporation, one of their Sovereign Wealth Funds. They are buying all they can at these artificially low prices. There are reports they have bought most of the gold mined over the last year. This gold is being bought by their public and the government.

The Chinese know gold ownership is going to be a big deal in the years ahead, as many of the world’s currencies come under pressure. Everyone knows the Chinese are exposed to a serious dollar devaluation because of all the US Treasuries they own. It makes sense they would be buying so much gold at these incredibly low prices. They know the gold price won’t be staying down here too much longer.

-Bill, Banco de México (Bank of Mexico or Banxico) claims to have 120 tons of gold stored at the Bank of England (BoE). Nevertheless, on December last year Banxico told me that the BIS said a physical inspection of its gold at the BoE was “not possible”. Should this be seen as an alert sign for investors and other central banks? In your opinion should Mexico repatriate its gold and buy more?

On the other hand, Comex registered gold inventories are at historic lows; the Germans got only five tones from the Fed last year and most of gold reserves at the Bank of England seem to be an illusion. It looks that most of the gold is gone. Bill, is there any real risk of a default on the gold market in the coming years? If so, what would be the consequences for the common people?

Let me answer both of those questions at the same time, if I may. The fact that Germany only received 5 tonnes of gold last year out of the 300 tonnes of gold they are supposed to get back by 2020 is most telling and is lighting up the scoreboard regarding GATA’s claims that much of the central bank gold has been used up to suppress the price and is no longer there. It is ludicrous that Germany couldn’t get all its gold back in a year, much less a pitiful five tonnes. They are not getting their gold back because it is not there. It is GONE, at least much of it.

There is a strong likelihood there will be gold defaults in the years ahead … whether that be an inability of central banks to get back what they have “swapped” or “lent out,” or from unallocated accounts … the same gold sold by institutions to numerous owners who think it is theirs. All of this is going to lead to the greatest financial market scandal in US history. So yes, Mexico should get its gold back as soon as possible and follow the Chinese example … and buy more.

-Is the silver market manipulated too or only the gold market is? Is there a risk of default on silver too?

When the gold price suppression scheme went into high gear under Treasury Secretary Robert Rubin, a decision was made that the price of silver had to be manipulated also because a dichotomy of a gold price going one way and silver going the other might make the suppression of the gold price too obvious. Thus, they have traded in tandem over the years … ridiculously so at times. 

The past many months the silver open interest on the Comex has surged, up nearly 50% off its lows of last year, while the gold open interest remains very low. We don’t know why but it surely has to do with JP Morgan (the major futures short) and The Gold Cartel. Silver completed a major base on Friday and exploded to the upside. The odds are that these massive short positions are in trouble and will have to be covered in the near future. If not, it could lead to some kind of default down the road.

-Much people invest on physical gold and silver as safe havens. Do you think it is a good idea to keep accumulating those metals? Why?

The answer is yes and never more so. Just think of what has transpired in the US over the last years regarding QE and putting money into our financial system.  And yet, our economy remains on very shaky ground. The odds are decent we are going to do more of the same for some time to come, with talk of tapering taking a back seat for a while. This money is eventually going to make its way into our economy and put upward pressure on prices. Artificially cheap gold and silver are going to the moon as this all kicks in. They will be the “GO TO” investments over the next few years and provide great financial comfort for those who own them.

-Is the gold bull market over, Bill?

Just the opposite. The prices of gold and silver have just broken out of massive bases. They were forced down to artificially low levels by The Gold Cartel … levels which cannot be sustained.  How cheap is gold? A couple of years ago a number of folks said that if the gold price had kept up with inflation, the price would be $2500 an ounce. That is how cheap gold is today and it is all due to the price suppression scheme, which is in the process of unravelling. As far as silver goes, I am a big Eric Sprott fan of Sprott Asset Management in Toronto. He has been pounding the table that silver is going to $100 an ounce, or more. He has made a fortune by being so right with calls like this over his career. He will be right again.

-What’s your forecast for the price of gold in 2014? And what would be gold’s “fair value”?

GATA held a conference in August of 2005 in the Yukon’s Dawson City. The price of gold then was $436. My take back then was that a gold price of $3,000 to $5,000 an ounce would be needed to clear the market. I will stay with that one, with gold making all-time highs above $1900 an ounce within a year. Interesting enough, one of President Putin’s top economic advisors, Andrey Bykov, attended our conference. A quite gold price shot up $12 two days after the conference and hundreds of dollars in the ensuing nine months. Russia has been increasing its gold reserves ever since.

-Bill, is gold money?

Sure it is. It has been that way for 5,000 years or so. Silver is money too. They have been regarded as true stores of value for a very long time, and will only be more so in the years ahead.

Thank you very much again for your time, Bill. We look forward to having you again soon on this blog

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NOTfromSanFrancisco's picture


Everyone in the world knows what China is doing with gold and to a lesser extent, silver. We know the U.S. is not going to go away quietly. The U.S. will be kicking and screaming and killing and attacking and overthrowing and manipulating to the bitter end of the dollar as the world's reserve currency.

I believe that we have not even begun to imagine what cards the U.S. has up its sleeve in order to stay at the top. We have the resources and the will to make life miserable to as many people as we deem necessary to remain king of the hill and we have and will continue to pull out all the stops to remain on top.

I know we will eventually fall, but that will not stop us from doing unimaginable things to stay on top. IMO...


BellyBrain's picture

What is this "we" business?  The deranged psychopaths who are running the US war / banking / political machine do NOT represent me, and I do not support their disguisting agendas.



ItsDanger's picture

Great article.  Was hoping it would touch on the impact of higher gold prices as a result of any eliminated manipulation.  I would assume higher interest rates across the board would be at the top of the list.

DaveyJones's picture

when and what happens when a critical mass realizes the gold ain't in the vault.

I apologize in advance for the ignorant question

but I presume countries like Germany are told their gold is allocated. What does it mean when it can't be delivered?     

WmMcK's picture

I only keep a % of my savings in PM's, the % I want to keep.

KingdomKum's picture

we few,  we happy few,  we band of silver holders  .  .  . 

SAT 800's picture

Yes; brother. Silver has been performing very well over the weekend and is quite strong now in Hong Kong, (monday morning there).

Dr. Gonzo's picture

Last week I paid a buddy of mine 50 oz of silver to help me do a bunch of dirty jobs and back breaking work around my house I couldn't do by myself including skilled finish carpentry. He worked like a dog for that money and was gratful for the work but more grateful for the pay in hard currency. His family is having a hard time as of late and he has to work his ass off to feed them but he told me mine was the sweetest paying gig he's had in a long time. It's called barter for your labor. The concept has been around for a few years. I need real money to trade for things I'll need in the future so thank God I've got some barter money saved.

datapanik's picture

FDR and Nixon will be chuckling in their graves over all this price manipulation. Who needs enemies when the State commits treason against it's own citizens.

Keyser's picture

"We have met the enemy and he is us."


MaxThrust's picture

I have about 30% of my holdings in gold and silver. I am considering a large purchase of silver to balance my gold stack. I worry though, when a recession occurs, industrial activity will decline an adversely impact the silver price


MeelionDollerBogus's picture

not to worry: antibiotics will fail at the same time (not precisely) as currency fails, so silver can serve both the role as monetary unit and antibiotic.

There will be no paper price in the future because paper won't continue as money.

manofthenorth's picture

If industrial activity declines so will base metal demand. Base metal production accounts for 70% of Silver production. Silver production is very inelastic. The sleeper is monetary demand. If every man woman and child i n China wanted just ONE ounce this year global production would not fill the order. Just think about that. The above ground Silver hoard is much smaller than the above ground Gold hoard. When Gold to Silver is 1 to 10 you will be very happy that you chose to hedge with Silver. I just ordered a monster box thinking that the odds are very good that Silver will NEVER be this cheap again.


lasvegaspersona's picture

Paper gold can be printed as easily as paper money. The only thing required is that physical gold be available at this price too. When there is not physical available it is over for the derivative market in gold and soon for the rest of the derivative market.

Rob Kirby is correct I believe when he says: 'this ends when the Chinese do not get their gold.'

Watch the GLD inventory.

Notice the loss of 40% of their physical in 2013. Notice that even in this rally in POG they continue to loose inventory.

This is the last, biggest and onlyest hoard left on the planet except for the central banks. The rest of the gold is held by small persons, savers the world over, Indian brides, Thais, Chinese and folks all over the Orient. These are people with experience in seeing paper money go bad. They are not sellers at anywhere near these prices.

I doubt GLD inventory goes to zero. I think as those who know the value of gold see it drop there will be a sudden move to physical. Any single big player could close GLD down in a millisecond. If China spent 1/40th of it's USTreasury reserves it could buy it all...30 billion or so is all it would take. What is lacking here is the will to shut down our current system (at least to be blamed for it's failure). It will happen, there is no rush...until someone panics.

TheAnswerIs42's picture


If you're counting pennies (ie trading), then look for a retrace at 1330 (based on the weekly).

Else just buy the sh*t.


Fix It Again Timmy's picture

I don't put much faith in gold and silver price predicitions; the fact that it will always be worth something is enough for me..........

Sufiy's picture

The best medicine for any manipulations:

Koos Jansen: January Chinese Gold Demand All-Time Record, 247 Tons 

Koos Jansen reports on continued unprecedented appetite from China for Gold, according to his information, after  the unprecedented demand of 2,181 tons of Gold from China in 2013 Chinese Gold demand hits All-Time record of 247 tons in January. Now Gold today's breakout above $1,322 level can be put in another perspective. Gold Breaks 1,320: The Mother Of Short Squeeze Has Arrived TNR.v MUX GDX GLD SLV RGLD ABX GG

  "Gold is sending its Happy Valentines to all Gold Bugs today and breaks $1320 on the massive short squeeze. Gold shorts will have their Blood Friday now. The real reason for this move is the realisation of the groundbreaking shift in the structure of the Gold market with the unprecedented demand of 2,181 tons of Gold from China in 2013. Janet Yellen testimony has opened the possibility To Taper The Taper andJames Rickards is calling for the Taper Pause in June. US dollar is going down very close to 80.00 level again. This level will be protected, but should the US Dollar break down below 80.00 Gold and Silver will go vertical towards $1,500 and $25 respectively.

Chupacabra-322's picture

-Bill, is gold money?

Sure it is. It has been that way for 5,000 years or so. Silver is money too. They have been regarded as true stores of value for a very long time, and will only be more so in the years ahead.

Chupacabra, is Fiat currency money?

Absolutely not! But you can wipe your ass with it.

whoknoz's picture

here is an allocation theory: what are the odds that the US$ depreciates significantly, even goes to 0? Whatever your answer to that question equals your proper allocation of the situation worsens, the % increase, but of couse so does the cost to keep find your level of comfort in living today--and what you think life will be like in 3, 6, 12, months...

qazwsx's picture

China has much more experience with this stuff than most. The U.S. Is what... 220 years old or so? Sure, China will have their problems in the comming years, but I'm sure they'll handle it.
Just keep buying PM's!!! And know how to grow your own food!

lasvegaspersona's picture

Tell good news. I plant this year garden and find last year much rejoice...all Russian friend is come to see.

monopoly's picture

You have more cheap gold. Right now.

cristo's picture

let the 'gold cartel" manipulate the price of gold down . I wish tey would crush it some more, i need more cheap gold .GATA should stay quiet about the manipulation . they're not helping the little guy accumulating .

MeelionDollerBogus's picture

agreed.I think it may be too late. I have got into agq & hvu and plan to get into uslv but I also have one last slv call sitting there which will not do much but will eventually go into profit, and some coins & bars.

I made a tough call. I held off on bullion and got paper but I also got lots of food & water storage. I could fail at this but with the math showing the payoffs even with hefty premiums if there's ANY to be delivered, more gold will come to my hand. Maybe there will be none at any price but the leverage I'm seeking should handle it IF there is any.

I'm concerned it will rise too fast, never come down, and I'll be glad to have food & water stores but I have moved them all recently and I'll tell you, it's damn heavy compared to my gold coins. Damn heavy.

kchrisc's picture

That they have to prosecute a "war" against gold/silver is an indication that they have already lost. They are now just trying to save their heads.


"One can spell guillotine ARTICLE 3, SECTION 3."

pitz's picture

Think of the gold and silver equities, as being Yahoo back in the early 1990s.  At $5,000-$10,000/ounce gold, most of the miners, like the tech stocks, could have 100-fold moves. 

Docnyc's picture

What do ZH stackers believe is the best % allocation of physical PM to their portfolio? 10-20-50%?

bilbert's picture

Again, tough call, but agree it depends on your situation.

10% of net worth in Phyz should be a minimum, IMO, and as another poster noted,  PM miners shares could be the Amazon or Netflix of tomorrow.

There are some quality miners, that have been positively FLATTENED, that have little debt, high-quality properties in safe (for now.........) countries, and are still profitable.  Some of these have lost 70 - 85% value since 2011, and are a low risk, high return play, again IMO.

These may also become the next stock bubble, so if you play in this space, consider taking profits at 100% return, 200% return, 300% return , etc.  I expect some 10 baggers, but if played correctly, you may be able to sell stock and buy physical metals at a discount as an arb play.

The market ALWAYS needs a winner, and if things go full-retard (as they seem to be heading), I'm betting PM miner equities are a strong candidate for leading the market out of its next "correction".

As far as Gold or Silver - I'm 95% Silver, 5% Au.  That's just me, but if Gold hits $5,000 an Oz, the Govt. may decide to to keep records of any transaction of more than 2 oz.  That, and the current 60 to 1 Gold/Silver ratio.

Back in the day, 20 Silver Dollars could be exchanged for one $20 Gold piece. 


Amagnonx's picture

Stocks, bonds, real estate - are all expensive, in bubble territory - cash is being threatened by excessive credit expansion and money printing - what else are you going to buy?

PM's are extremely cheap - unless you absolutely need to have cash flow, then there's not much reason not to be all in.  You probably want to have some real estate to live on, maybe a small business and some crypto - but I cant think of a more screaming buy than silver at the moment, and gold is excellent also.  Of course, make sure you have some supplies to get you through the next snow storm, hurricane or global economic collapse ..

StopIt.Now's picture

Yes, yes, and yes.  Consider this, the Dollar is the ONLY alternative, other than commodiites like food, oil, which you can't store conveniently or buy.  For me being unemployed, it utterly sucks.  NOW is the awesome time to keep buying. Silver is near the lows of 4 years ago, and I got in at $18 then.  It's been as high as $49, the realistic physical value.

Buy as you can budget, because like Italy, Greece, and others, the banks will 'bail-in' and take your paper money.  They already own the economy and your life. Metals are the ONLY hedge we have.  It took me a few years to research and learn this 'gold nugget' of info.

Tinky's picture

There is no single, "correct" answer. What is appropriate for a single person with X amount of capital is very different from one with several dependents with Y. Income stream is also an important variable.

As insurance, a minimum of 10% makes sense, though many choose to go higher.

dearth vader's picture

I agree, a percentage is not the way to look at it. Depending on how much you can spare, keep at least a year's worth of expenditures in cash and put the rest into PMs, preferably gold bullion outside the banking system, maybe some miner stocks, too, up to 10% of your stash, at the utmost. Once you're set up in gold, buy silver. Don't trade!

NoDebt's picture

"Once you're set up in gold, buy silver. Don't trade!"

More important than agonizing over the percentage, read, understand and let that quote sink into your brain DEEPLY.  Gold is, in my opinion, not to be traded unless trading gold is your job.  It is to be OWNED.

10% allocation is fine for openers.  If anyone can make a compelling case for LESS than 10%, I'd like to hear it.  When you start getting into the 30, 35, 40% or more range, there are other considerations that need to be taken into account, based on your particular circumstances, but 10% has never hurt anyone in any circumstance that I'm aware of.

J S Bach's picture

50% or more PMs in this insane financial milieu is not imprudent.

Anton LaVey's picture

I tend to disagree. 10% is, for me, too small - for Pete sake, even some people in the mainstream media will tell you that 10% in Gold is a good idea to have!

I prefer to base my % on your average yearly revenue - in other words, you should have enough money invested in Gold & Silver to cover at least one full year of expenses. If you can invest more, then do so if you feel comfortable with a larger position.

Another thing to keep in mind is that Gold & Silver are volatile markets. When I started investing in Gold, it was around US$ 800 per ounce. I have seen it go all the way to US$ 1900 and drop all the way down to current (US$1290-1300) levels. Whatever amount you invest, keep this in mind and be ready for a wild ride, since manipulation is not over - not by a long shot. I was ready for volatility, so none of that even surprised me. Now, think about people buying Gold in 2000 - when it was around US$ 300 per ounce! To them, the recent drop in price is nothing but a small blip on the radar.

One last thing to keep in mind: at the height of the Weimar Republic hyper-inflation period, one (1) ounce of gold was enough to buy an entire block of prime real estate in a tony part of Berlin. If the absolute worst happens, and hyper-inflation (or hyper-deflation) rages all over the world, which is going to be more valuable? US$ (or any other currency) in cash or a couple of ounces of Gold? It all depends on your own personal scenario - for the time being, I'll stick with Gold.

XitSam's picture

Do you have a source for the claim "an entire block of prime real estate in a tony part of Berlin"?

I'm not saying it isn't true, but seems to be excessive.

Ironmaan's picture

I remember reading that an ounce of gold would buy "an entire block of prime real estate in a tony part of Berlin" also but I cant remember the source.

Oliver Jones's picture

When Money Dies - The Nightmare of the Weimar Collapse, by Adam Fergusson.

As I recall, it was 20 ounces of gold to buy a whole street, so one ounce to buy a block of flats in Berlin doesn't seem out of proportion.

Tinky's picture

Tony's Guide to Prime Berlin Properties, perhaps?

Soul Glow's picture

The question, "What is the proper position for a portfolio" depends on a few things.  First, can you trade?  And by that I mean, do you understand how the markets move?  Are you reading stock reports?  Are you keeping tabs on the debt market?  Do you follow currency trading?

If you do then by all means put some cash in those markets.  But if you don't, letting a financial advisor handle your account is likely suicide, as even he (or she but likely he) can't read the markets.

What of real estate?  Well, if you owned land, would you use it to produce a good?  Because if not, you are likely just sinking cash into a hole in the ground.

How about holding cash?  Well cash is only good for spending a few months out at best - there is no long term appreciation for the fiat currency market.

So if you have enough cash on hand for 3 to 6 months, and don't produce a capital good, and can't read the markets, then all of your investments should be in physical gold and silver.

pitz's picture

Whatever you would ordinarily have in fiat bonds, you should have in PM's. 

RaceToTheBottom's picture

I wish the article could have tied on a discussion about China more.

Once china has enough gold to be considered a valid world currency, will its motivations re gold change?  Would its responsibilities as a central bank be any different that the FED with respect to gold?  Why? 

Killing gold frees central banks up from certain responsibilities like aligning printing with the cost structure of the country.  China has this need as much or possibly more than the US.

I am overweight Gold/Silver, much of it outside the US but have never had this question answered to my satisfaction...

pitz's picture

China, like the US, will lose its way eventually.  As they have many times throughout history.  But many of us probably will be long dead before it happens. 

therevolutionwas's picture

China is yet to find their way.

Soul Glow's picture


All governments have joined in the ring around the rosie.

And all falls down.

DaddyO's picture

Sure it is. It has been that way for 5,000 years or so. Silver is money too. They have been regarded as true stores of value for a very long time, and will only be more so in the years ahead.

Woe to those who forget or don't believe this self evident truth!


silvermail's picture

NASA and alchemy – it’s the last two bullets Fed, against gold.
In the world media is already unfolding speculation that NASA will soon be mine gold in cosmic space. Smart people understand, that the price of this gold will be much higher, than the most expensive mining on our planet. But most of the fools believes in it blah blah blah of Fed.

FinalEvent's picture

NASA is the biggest propaganda machine ever built.

I woke up after viewing this