The CFTC and the sad joke of "Regulation"

Mon, Sep 16, 2013 - 3:05pm

By now, everyone in the precious metals investing arena has read the confirmation of what we have known for years. On Friday, September 13th 2013, well-known metals trader Andrew Maguire went public with knowledge he had held closely for over a year- that the Commodities Futures Trading Commission had been informed more than a year earlier, by two separate inside whistleblowers directly involved in the operation, that J P Morgan has been deliberately manipulating precious metals markets. The whistleblowers gave the CFTC direct confirmation of these illegal activities, including account numbers in foreign countries, records of transfers of funds, and records of specific trades.

What is particularly telling is that these whistleblowers provided this information to the CFTC more than one year ago, yet the CFTC has seemingly done nothing to either call JPM to account, or to even curtail these activities on the part of J P Morgan. If the allegations are true, there are millions of victims of this ongoing fraud. Any person whose retirement account includes an index fund owning gold or silver mining companies has been defrauded as a result of these actions. Any investor who owns gold or silver has been defrauded by these actions. Any person who, in desperate times, has had to sell gold or silver at a “cash for gold” shop has been defrauded by these actions. Though the CFTC will undoubtedly attempt to defend themselves by claiming that the investigation is “ongoing”, the fact remains that nothing has been done to curtail this fraudulent trading activity in the twelve long months since they first received this information. Indeed, highly questionable market action strongly suggests that it is still being done today.

At what point does the continued inaction of the CFTC indicate that they are acting less as the regulator in this case, and more as an enabler of an ongoing fraud? At what point should the CFTC, having full knowledge of what is being done and in possession of sworn testimony indicating the extent of the fraud being committed yet failing to act, be considered a co-conspirator to this ongoing criminal activity? At what point should the CFTC be considered nothing more than a bad joke? Well, they already are, and have been for some time.

People on the outside of the precious metals investing world might be amazed that this information was such common knowledge, shared so widely for such a long time by so many people, that the “JPM fraudulently manipulates the metals AND the CFTC knows and does nothing” meme has been a long-running joke on this site. Please note that for humor to work, the audience must understand the underlying premises of the joke and believe me- the audience understood these jokes, and the situation, all too well.

The Criminal Fraudsters:

J P Morgan CEO Jaime Dimon and former head of commodities trading Blythe Masters are the two figures most closely associated, whether rightly or wrongly, with the general knowledge that JPM was routinely manipulating commodities. The current whistleblower revelations appear to corroborate small investors views of these two individuals, and they were given a central role in my joke photoshop assemblage over time.

Here’s Jaime Dimon as a “Bill Lumberg from Office Space” character, blandly requesting market manipulations as easily as TPQ reports.

On a particularly bad day for the metals, I envisioned Dimon as ‘Buffalo Bill’ from Silence of the Lambs, ritually abusing investors. “It sells its shares so I can win, or else it gets the hose again”.

Very rarely, I would use these photoshops as a bit of fantasy wish-fulfillment, day-dreaming that someone, somewhere, would actually enforce the law and see that justice was done to right the wrongs perpetrated on small investors by these people. Hey, I did acknowledge that this was pure fantasy, didn’t I? We have a better chance of seeing moonwalking leprechauns throwing Skittles at the Loch Ness monster than seeing this:

Still, the idea of Jaime going out all Scar-face style in a cocaine-fuelled blaze of destruction was more than a little enjoyable to imagine. Look at the newspaper headlines I placed on his desk, and think about the whistleblower revelations from this weekend… this was made six months ago.

Blythe Master, former head of Commodities trading, has also been quite prominently features in my joke photoshops. Here is Blythe as “Honey Bunny” in Pulp Fiction, done during a particularly brutal beatdown to keep my mind off of my trading account:

People generally knew, or at the very least had a strong suspicion, who was largely behind the blatantly manipulative selling that occurred at specific points in the chart- people joked “Here comes Blythe” when large numbers of contracts were dumped to drive price down.

Blythe’s ability to stop a rally in the metals dead in its tracks (usually capped at 1%, and never EVER allowed to rise more than 2% in a single trading day) was legendary, proving her complete control over the matrix, errrr, I mean the “free market”. It’s funny because it’s true.

The CFTC- Bumbling imbeciles or just plain crooked?

If we in the general public were aware of what was going on for such a long time, then it was almost incomprehensible that the regulators at the CFTC didn’t know. In fact, well before the recent information came to light we all assumed that since everyone could see how blatantly the metals were manipulated, then the CFTC surely knew it too. The fact that they continued to do nothing while investors were defrauded time and again left us with only two options: either the CFTC was the biggest group of incompetent morons since the Three Stooges, or they were simply on the take. Rightly or wrongly, when making my joke photoshops I generally placed Bart Chilton in the former category, and Chairman Gary Gensler in the latter. Here’s one of Chilton as the bumbling Inspector Clouseau, earnest but utterly clueless:

And here is a silly one illustrating the suspicion that Gary Gensler, a TBTF bankster man to the core, was aware of what the JPM “desk monkeys” were doing, but chose to look the other way because of, well, let’s call it “self interest”. And if you think this is a bit harsh, let me ask you two questions- 1. Why has Gensler stonewalled the 5+ year investigation into silver manipulation and ignored the whistleblower information serving up JPM on a platter, and 2. What do you think the odds are that Gensler, when his chairmanship is up in the next few months, will be rewarded for his ‘fine public service’ with a really fat multi-million dollar salary from one of the TBTF banks whose trading desks he was supposed to have been regulating? Anyone want to bet me on that? (crickets chirping) That’s what I thought.

The spectacle of market regulators being so deliberately obtuse in the face of obvious manipulation inspired me to create this one, picked up by several PM websites:

This picture more or less illustrates the core of our situation today: CFTC commissioners speak no evil, see no evil, and hear no evil… while JPM chief Jaime Dimon pulls the strings for yet another manipulated take-down in the metals, and (former) JPM Commodities chief Blythe Masters sees to the, uh, details of the operation. Kinda funny, right?

Well, please note that this humorous ‘spoof photoshop’ was posted 18 months ago in March of 2012. That is half a year BEFORE the two whistleblowers stepped forward, and 18 months before their allegations and the CFTC inaction were made public by Maguire. Yet even back then people thought this was really funny and hat-tipped the hell out of it. You know why? Because we fucking knew. Everyone knew. This spoof was funny because it was true- I just had the poor taste to render, in visible form, what everyone already knew was going on. Speak no evil, see no evil, hear no evil… Public serpents indeed.

. . .

I’m going to tell you two things; one impossibly cynical, the other irrationally hopeful. The impossibly cynical thing is this- we already know that in the “too big to jail” economy, nobody is going to do time for defrauding investors of millions (and possibly billions) of dollars. This is the reality of our pathetic situation, so deal with it.

But here’s the thing: we also have an exceptional opportunity here! We have a brief, fleeting chance to actually do something other than bitch and moan ineffectually (or make silly photoshops to make ourselves feel better about our helplessness). There is a very small window of opportunity associated with an event like this, so we better make the most of it because they do not come around very often.

WE HAVE A CHANCE TO EMBARRASS THE HELL OUT OF THESE PEOPLE. We have a chance to make their dishonesty, their stonewalling, their perfidy a matter of public knowledge and maybe... just maybe... the light will shine bright enough to stop them from doing it. Wanna see freely traded markets? It's not going to happen while this stuff remains insider knowledge and on the fringes of public consciousness. But we can change that.

Each and every one of you needs to get up off your lazy whining ass and take five minutes of your time to do something to publicize these revelations and try to shine as much light on these insectile vermin as we possibly can. I have written a generic draft of a letter below, and I would like to ask every one of you to copy it, modify it, or write your own, and email it to both Senators of your State, your District member in the House of Representatives, and/or to any media personality whose show you listen to.

What would happen if the staffs of House members started contacting the CFTC asking what the hell is going on? What would happen if a Sean Hannity, Andrew Wilcow, or Mark Levin (all of whom have sold physical gold to their listeners over the years, so they should be damn well concerned with this issue) started making noise about this on their shows? It would make things damn uncomfortable for the people involved, that’s what. In fact, it would be the first time that I can remember where the people who do these things with impunity might actually start sweating over their crimes/inaction/fraud/complicity.

I am going to repost this letter into a Forum in the Everything Else forum under “JPM / CFTC”. If you receive any reply from a representative, a media personality, etc., I would ask you to copy and post it to that forum. Let’s see if we can make some noise, folks. If you don’t do it then nobody else will. If you sit back and let this chance to tall them out slide, then there won't be another.


Senator XXXXXX:

I wish to call to your attention recent public revelations that J P Morgan Chase has been fraudulently manipulating the price of Gold and Silver. This information was provided to the Commodities Futures Trading Commission, which deposed two separate whistleblowers from within J P Morgan, both of whom provided detailed and specific testimony regarding these criminal trading activities. The account of these facts can be found here:

In particular, I wish to inform you of the fact that these whistleblowers provided this information to the CFTC more than one year ago, yet the CFTC has seemingly done nothing to curtail this activity on the part of J P Morgan. Though I am sure the CFTC will attempt to tell you that the investigation is ongoing, the fact remains that nothing has been done to curtail this fraudulent trading activity. Indeed, highly questionable market action suggests that it is still being done today. At what point does the continued inaction of the CFTC (in full knowledge of what is being done and in possession of sworn testimony indicating the extent of the fraud being committed) indicate that they are acting less as the regulator in this case, and more as an enabler of an ongoing fraud? At what point does the CFTC become a co-conspirator?

There are millions of victims of this fraud, including millions of investors in your own state. Any person whose retirement account includes an index fund which includes gold or silver mining companies has been defrauded as a result of these actions. Any investor who owns gold or silver has been defrauded by these actions. Any person who, in desperate times, has had to sell gold or silver at a “cash for gold” shop has been defrauded by these actions.

I would like to request that your office contact the CFTC and question them closely regarding the details of this case and their continued inaction on this matter. I am particularly interested to see if you are concerned that your constituents are being defrauded. The actions you and your office choose to take in this matter will certainly answer that question.



About the Author


Sep 16, 2013 - 3:07pm

How the heck did I get number 1

must be my lucky day


edit:now I can read the article

Sep 16, 2013 - 3:08pm

Could it be .... ? first. Now

Could it be .... ? first. Now to read the post... ;)

Edit... ... second !! I'll take it !

Sep 16, 2013 - 3:12pm

Liking it!

Love the visual interaction above.

As for your question...."What are you going to do about it?"

I'm going to stack more gold and silver asap when possible and become very patient.

Sep 16, 2013 - 3:24pm
Sep 16, 2013 - 3:26pm

A friend...

may have gotten himself into something he didn't understand. I did a little research and it seems legit but I figure they probably run it like a pyramid scheme. Does anyone know about the Proof of Funds business? He sent in $60K and has been receiving a 10% MONTHLY dividend, so he's received his principle back already. But, when I asked him if he could get his 60K back he said, he thinks so.....I said nothing on the market today is paying 10% annually that is publicly traded, let alone monthly....which is 120% annualized.

I'd really like some input if anyone knows anything.

The business is about arranging for corporations and trusts to have enough "funds" (assets) on their books to arrange for favorable financing, etc. Seems sketchy to me.

Thanks in advance...


Sep 16, 2013 - 3:30pm

What a great post

I don't know whether to laugh or cry. The family feud picture has always been my favorite. I still LMAO everytime I see it.

"Ongoing Investigation" kind of like Jimmy Hoffa?

Thank you for the letter Pining, as I had requested someone do this for me a couple of days ago. I am on it right now.

6th Amendment

In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defence.

Sep 16, 2013 - 3:38pm


Sounds like a Ponzi scheme. I would tell your friend to request his principal immediately. If it is a Ponzi scheme and it's uncovered by the authorities, your friend will probably have to deal with clawbacks at a later date. That is, your friend will likely have to give back those monthly "dividends."

Just my two cents.

Sep 16, 2013 - 3:43pm

@Pining this is a funny, and all-too-true depiction . . .

But as you say, we've all known it for a very long time. I don't think it can hurt to send the letter you drafted to Congresscritters, but they're in on it already. The whole government is nothing but a gigantic, scummy Ponzi-fraud of epic proportion. The best we can hope for is for China and Russia to be nice to us, and hopefully not nuke us when our a-hole leaders decide to push the neo-con, banker-owned envelope to the cutting edge of war. They might spare us if we can take back our government from the psychos now in charge, but that will take an insurrection, for which they have already prepared. We can hope that the nation's militarized police and armed forces will side with the people when push comes to shove. After all, their dollars will be useless when all this comes to be. In short, the CFTC, Congress, even the leprechauns throwing skittles at Loch Ness Monster (I loved that one) won't save us. We must do it. But how do we start?

Sep 16, 2013 - 3:52pm


I sent the letter to Senators Shaheen and Ayotte, US Rep. Kuster, The WMUR News Department and the Governor of NH. Now I want some skittles for my efforts.

Sep 16, 2013 - 3:53pm

Thank you, Pining...

I intend to send that letter to just one of my Senators and the Representative for my congressional district. Please understand that I live in South Carolina, and Lindsey Graham is one of the U.S. Senators for this state. There is NO WAY I'm going to contact that lunatic. My Representative--Trey Gowdy--seems like a good guy.

Sep 16, 2013 - 4:00pm

Great Post and letter

I'll be sending a few copies of that letter. thanks Pining.

Sep 16, 2013 - 4:01pm

Like the song says:

Been down so long, it looks like up to me...

And the hits just keep on coming. The beats will likely continue until morale improves. I'm not even sure who in Canada I could write a letter to.....sheeit.

Sep 16, 2013 - 4:02pm


here you go:

Sep 16, 2013 - 4:05pm


Thanks, but I really need someone who knows about this to speak about it because if you search for Proof of Funds, you get a ton of companies doing this. Seems like another monster born of another crisis (08/09) but he's been making enormous money from it. I didn't know if those corps or trusts pay a massive amount for the short term funds to beef up the balance sheet. I figured someone here might know.


Sep 16, 2013 - 4:06pm

Nothing will change until.......


Please read the above line again and again until it sinks in. No amount of manipulation stories will influence anyone to take actions cause they control everything except supply/demand for physical precious metals. All all of our demands for fair market valuation will fall into deaf ears like it has been for decades!

There is but only one solution for all of us earthly peons:

Silver is more than 50 times cheaper than gold. It is easier to corner the smaller silver market than gold as history has shown in the past. And since gold is mostly hoarded while silver is being used up, it is silver that we need to concentrate on. Silver supplies are constantly being slurped up year after year. Now if we can only bring to attention to others and increase this demand, it is only natural that silver will be the first commodity to break the chains of manipulation.

Folks, this is our only weapon! We need to not only inform the public about this manipulations but show them steps on how to overcome it.

On a side note, Timothy has credentials to make a good Fed Chairman:

Sep 16, 2013 - 4:10pm

Sent to Feindstein...

I added "Think of how this has adversely affected all the children of these investors..." to get her attention! ;-)

Sep 16, 2013 - 4:11pm


My brother in law and a few friends lost a bunch of money on a very similar scheme. I'll try to get the name of it. They got shut down in the US and moved operations to Europe, promising all investors they would still get their money back. He was totally suckered--sold 5K of silver to get in.

Sep 16, 2013 - 4:18pm

How can we act on the legal field with this case?

All metal investors need to create a huge class action suit against JPM.

I this story has some legs, I can see 10 000+ people getting together on a trial, period.

And what about China an Russia? Their monetary base has been whipped out by the complicity of the US government? And you think these people will sit and do nothing?

Sep 16, 2013 - 4:18pm
Sep 16, 2013 - 4:20pm


Great idea. I'm in.


Sep 16, 2013 - 4:22pm


That was mental.

Sep 16, 2013 - 4:23pm

% return is a function of risk

If a firm needs to pay a return of 10%/month to get folk to lend them money. That is way too risky for my liking.

One must ask the very simple question: Why can they not borrow at a whopping 30% per year? What would these guys need to be returning 150% /year? Nope - run away, quickly.

Howard Roark
Sep 16, 2013 - 4:38pm


Post and (WB7) like pics! Nice!

I´m searching something about Finland that will have a referendum on the return of their gold from the UK.

More information, anyone? It would be a nice event wouldn´t???



Sep 16, 2013 - 4:38pm

It's very simple

JPM stole my money. I need it back. Andrew, let's get the proof NOW and let's start putting names on paper.

Is there a lawyer in the room. Good money to be made in this case. People have lost huge in this fraud.

Hard money investors want true justice. NOW.

Sep 16, 2013 - 4:43pm


you can always go to the official web page.

don't forget to click on "translate" ;-)

Dyna mo hum
Sep 16, 2013 - 4:44pm


This is priceless!

Sep 16, 2013 - 5:03pm

CFTC co-conspirators

I think not. I decided a long time ago that gold manipulation (and secondarily silver manipulation) is government policy. The CFTC is between a rock and a hard place and can do nothing but delay.

transplanted baby ancientmoney
Sep 16, 2013 - 5:11pm

I'm with ancientmoney

Veteran politicians (most) are in on the take.

They have to get funding for their constituents to get votes.

The younger ones might be nice, idealistic, (clueless?) but if they get re-elected they will be veterans and in on the take as well.

The current system of money is to blame. No change in this and no change possible. To change that you're going to have to scrap the current system- ain't gonna happen without a war or revolution or something of that scale. (not saying I want that, just seems that the can will be kicked down the road as far as and for as long as it can) (look at japan. Debt at 200%+ of GDP(meaning that the can can be kicked further down the road in the US), and they get the Olympics for 2020. When things have gotten really, really, really bad, revolution or war will be brought about. 'Tis a shame. No, 'tis a crime.

Sep 16, 2013 - 5:21pm

One more thing

Great job Turd. Lets not forget to mention that the CFTC's silence on this matter is taking place within a five year silver price manipulation investigation that has done nothing to stop the market corner on the gold and silver Comex markets.

Sep 16, 2013 - 5:22pm

Speaking of lemonade stands, scarecrows, farming and fraud

...this is such a neat little video that I am willing to overlook it being commissioned by a fast-food chain masquerading as a slow-food chain, and advertising more iCrap...

Video unavailable

Good work Pining. I am afraid that the immediate outcome will be more of what we have seen thus far. This is one of the central cogs in the machine, it can't just be taken out and 'made example of' to even pretend that there is legitimacy to the system, as it is one of the lynchpins. The TBTJ entities are thus exactly BECAUSE they know the .gov has no recourse. If anything, this will make it plainly obvious that a) they are operating in plain sight with complete immunity and impunity, b) resistance is futile. I would be mildly surprised to see even fines and 'no admission or denial of wrongdoing'. I would NOT be surprised to see a NatSec gag order and secret proceedings, should anything come within shouting distance of an actual courtroom, regardless of who may bring suit. More likely suits will simply continue to be dismissed for lack of standing, lack of 'court-approved' proof or simply on the grounds of frivolity.

Where I am hoping recent developments may make a difference is that in exposing the farce for what it is, it reduces the amount of time willing buyers will have to secure actual physical metal, and the cascade of inability to deliver brings about the eventual end of the fraud. In the meantime, if you don't hold physical, you don't own it -- and the paper payout will be exactly that -- paper. You and I won't have the option of converting said paper to meaningful assets like those sitting with their gaping jaws open at the outflow of the printing press.

Whereafter the select few 'custodians' may be given exclusive monopoly rights to trade/sell the output of the newly nationalized metal mines and refineries. BP/ExxonMobil/Shell and thei peers turn their deep-sea mining expertise to a new good use. And perhaps we will be informed of a deep and imminently threating-to-national-security-interests humanitarian crisis and militant conspiracy in S. Africa, requiring immediate dispatch of additional troops and equipment. Or will it be Papua New Guinea?

Subscribe or login to read all comments.


Donate Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events Week of 6/24

6/25 10:00 ET New Home Sales
6/25 1:00 pm ET Chief Goon Powell
6/25 5:30 pm ET Goon Bullard
6/26 8:30 ET Durable Goods
6/27 8:30 ET Q1 GDP final guess
6/28 8:30 ET Personal Income and Consumer Spending
6/28 8:30 ET Core Inflation
6/28 9:45 ET Chicago PMI

Key Economic Events Week of 6/17

6/18 8:30 ET Housing Starts and Building Permits
6/19 2:00 ET FOMC Fedlines
6/19 2:30 ET CGP presser
6/20 8:30 ET Philly Fed
6/21 9:45 ET Markit flash June PMIs

Key Economic Events Week of 6/10

6/11 8:30 ET Producer Price Index
6/12 8:30 ET Consumer Price Index
6/13 8:30 ET Import Price Index
6/14 8:30 ET Retail Sales
6/14 9:15 ET Cap Ute and Ind Prod
6/14 10:00 ET Business Inventories

Key Economic Events Week of 6/3

6/4 All day Fed conference in Chicago
6/4 10:00 ET Factory Order
6/5 9:45 ET Markit Services PMI
6/5 10:00 ET ISM Services PMI
6/6 8:30 ET US Trace Deficit
6/7 8:30 ET BLSBS
6/7 10:00 ET Wholesale Inventories

Key Economic Events Week of 5/28

5/28 10:00 ET Consumer Confidence
5/30 8:30 ET Q1 GDP 2nd guess
5/31 8:30 ET Personal Income and Consumer Spending
5/31 8:30 ET Core Inflation
5/31 9:45 ET Chicago PMI

Key Economic Events Week of 5/20

5/20 7:00 pm ET CGP speech
5/21 10:00 ET Existing Home Sales
5/22 2:00 ET FOMC minutes
5/23 9:45 ET Markit PMIs
5/24 8:30 ET Durable Goods

Key Economic Events Week of 5/13

TWELVE Goon speeches through the week
5/14 8:30 ET Import Price Index
5/15 8:30 ET Retail Sales and Empire State Manu. Idx.
5/15 9:15 ET Cap. Ute. and Ind. Prod.
5/15 10:00 ET Business Inventories
5/16 10:00 ET Housing Starts and Philly Fed
5/17 10:00 ET Consumer Sentiment

Key Economic Events Week of 5/6

5/9 8:30 ET US Trade Deficit
5/9 8:30 ET Producer Price Index (PPI)
5/9 10:00 ET Wholesale Inventories
5/10 8:30 ET Consumer Price Index (CPI)

Key Economic Events Week of 4/29

4/29 8:30 ET Pers Inc, Cons Spend, Core Infl
4/30 8:30 ET Employment Costs
4/30 9:45 ET Chicago PMI
5/1 8:15 ET ADP jobs report
5/1 9:45 & 10:00 ET Markit and ISM Manu PMIs
5/1 10:00 ET Construction Spending
5/1 2:00 ET FOMC Fedlines
5/1 2:30 ET CGP presser
5/2 8:30 ET Productivity and Unit Labor Costs
5/2 10:00 ET Factory Orders
5/3 8:30 ET BLSBS
5/3 9:45 & 10:00 ET Markit and ISMServices PMIs

Key Economic Events Week of 4/22

4/22 10:00 ET Existing Home Sales
4/23 10:00 ET New Home Sales
4/25 8:30 ET Durable Goods
4/26 8:30 ET Q1 GDP first guess

Forum Discussion

by argentus maximus, Jun 26, 2019 - 8:40pm
by sierra skier, Jun 26, 2019 - 7:00pm
by Green Lantern, Jun 26, 2019 - 4:40pm
by Solsson, Jun 26, 2019 - 3:07pm