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Case Closed - Craig Hemke

Neatly stacked rows of gold and silver bullion side by side.

With the indictments released Monday, we can officially close the case on the question of gold and silver price manipulation. This "conspiracy theory" has now proven again to be historical and current fact.

Let's start by asking you to review this post from back in May. At the time, the technical analysts and subscription newsletter writers were still clinging to the notion that this conspiracy was just a one-off perpetrated by a few rogue traders. It was not. https://www.sprottmoney.com/Blog/the-question-of-g...

If you've not had a chance to read the official indictment from the U.S. Department of Justice, you can do so here: https://www.justice.gov/opa/pr/current-and-former-...

The individuals charged with price manipulation this time are listed below. For clarity, "Bank A" is J.P. Morgan.

Note that I've highlighted the person listed second. Why? Michael Nowak is a Managing Director at JP Morgan, and he was the manager of the bank's global precious metals desk. This alone demonstrates that this is not a "one-off rogue operation" and that the crime/conspiracy goes all the way to the top.

It's also important to note that Nowak is a board member of the LBMA. Thus not only is this a crime in New York, JP Morgan's crimes also likely extend to London as well. Perhaps the UK authorities will soon begin their own investigation? http://www.lbma.org.uk/committees

Additionally, as the time period detailed in the indictment stretches from 2008-2016, an unlisted co-conspirator is quite obviously Blythe Masters, who ran JPM's global commodities division during that time. Below is Masters clearly lying and obfuscating during a rare television interview in 2012. The lead-in to the interview heaps praise on Masters and JPM for beating their longtime rivals in 2011. Gee, I wonder how they accomplished that? CHEATING!!! https://www.youtube.com/watch?v=gc9Me4qFZYo

So what does all this mean to the regular investor/stacker of physical precious metal?

First of all, you've been defrauded by JP Morgan and the other bullion banks, and you will likely soon have an opportunity at recourse. The U.S. Department of Justice wants to hear from you, and so do the attorneys who have filed civil cases. This from the indictment:

Individuals who believe that they may be a victim in these cases should visit the Fraud Section’s Victim Witness website for more information at https://www.justice.gov/criminal-fraud/victim-witness-program.

But it's more than that. What you need to recognize is that the entire Bank-driven, fractional reserve and derivative pricing scheme is a FRAUD. The precious metals are priced via the trading of futures contracts that have ZERO connection to physical supply and demand. And now we KNOW that The Bullion Banks—which "make the markets" for these contracts—are actively conspiring to rig and manipulate prices in their favor and against everyone else. This system MUST change and it WILL change. Yesterday's news accelerates the process.

Since the collapse of the London Gold Pool in 1968, Bullion Banks and Central Banks have conspired to offer gold alternatives as substitutes for the real thing. This alchemy dilutes the supply of "gold" and helps to manage the price, thereby promoting confidence in central banks and their policies. This alchemy also provides an opportunity for tremendous profit for the greedy, manipulative bullion banks. If this system is now forced to unwind, the revelation that there are as many as 100 digital ounces for every actual physical ounce should eventually spark a run on The Banks and drive physical price higher.

And in the end, that's what matters most to physical metal investors. We all want a true, free, and fair system of price discovery that is based not upon the Bank-manipulated futures contracts but instead the exchange of actual, physical metal. WHEN that day comes, you can be assured that price will not be $1500 per ounce of gold nor will it be $18 per ounce of silver.


The news of these indictments yesterday is thus another step toward actual price discovery, and all precious metals investors should welcome the disclosures and consequences that come with it.

Don’t miss a golden opportunity.

Now that you’ve gained a deeper understanding about gold, it’s time to browse our selection of gold bars, coins, or exclusive Sprott Gold wafers.

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Head shot of Craig Hemke

About the Author

Our Ask The Expert interviewer Craig Hemke began his career in financial services in 1990 but retired in 2008 to focus on family and entrepreneurial opportunities.

Since 2010, he has been the editor and publisher of the TF Metals Report found at TFMetalsReport.com, an online community for precious metal investors.

*The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.


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