The War on Gold (and Silver)

Last Friday, three luminaries of the precious metals sector stayed in Munich: Bill Murphy, James Turk and Egon von Greyerz. Reason enough for me to travel to the capital of Bavaria in order to conduct some interviews with them.

By Lars Schall

„An Evening with Bill Murphy“ – that was the motto of an event of the Munich-based “Deutsche Edelmetall Gesellschaft” (German Precious Metals Society), which took place on Friday evening in the “Wappensaal” (hall of emblems) of the world-famous Hofbrauhaus in Munich in front of 200 interested listeners.

Before that, I met Bill Murphy, chairman of the Gold Anti-Trust Action Committee, GATA, James Turk, founder of GoldMoney, and Egon von Greyerz, Managing Partner of Matterhorn Asset MGMT, in a hotel in Munich.

BILL MURPHY: “The notion that America has a free press is false“

I met with Bill Murphy in the lobby of the hotel. He grew up in Glen Ridge, New Jersey and graduated from the School of Hotel Administration at Cornell University in 1968. During his senior year he broke all single season Ivy League pass receiving records and was Honorable Mention on the All-America Football team. He went on to become the starting wide receiver for the Boston Patriots (now New England Patriots) in 1968. Later Murphy went on to a career in the futures industry as a commodities broker. Early on he worked for Shearson Hayden Stone and Drexel Burnham before starting up his own introducing brokerage on 5th Avenue in New York. In 1998 he opened up, a financial market website geared to the gold market. In January 1999 Murphy became chairman of the Gold Anti-Trust Action Committee, GATA (, which is dedicated to expose the manipulation of the gold and silver price by The Gold Cartel.

In addition to the following interview, I want to recommend also two other interviews that I have conducted with Mr. Murphy in the past:

They are about to hit the wall, and: Ultimately, Don Quixote will Triumph.

Mr. Murphy, what is the relationship of the financial mainstream press towards the Gold Anti-Trust Action Committee?

Bill Murphy: In general, we don’t get any coverage in the mainstream press. For example, I was on CNBC over twelve years ago and never been invited back ever since. The mainstream media doesn’t wanted to report what we had to say at the CFTC hearing. We had emails of what JP Morgan was doing in the silver market. The press wouldn’t even mention our name following the presentation of this blatant discovery of this manipulation. They don’t have to say that we’re right, but they ought to report it.

So, we haven’t come close yet of exposing to the American people and the world what’s really going on. We had a $264.000 dollar ad in the Wall Street Journal, in which we talked about catastrophic excesses leading to disaster. What happened? In 2008, the financial market collapsed, gold was less than $ 1000 then, we said it would go to $ 3000 – 5000, now it’s already above $ 1.500. We said all of these things and did so in the most obvious mainstream way possible, and still we’re not allowed to be discussed. So we have a long way to go.

What would be the measure of achievement?

Bill Murphy: Coverage and acknowlegement of what we had to say in the mainstream press around the world.

But wouldn’t that also imply that the mainstream press has to acknowledge that they had it wrong?

Bill Murphy: It’s funny, do you know anybody who ever admits they’re wrong? (laughs.) No, they just go right by it. Moreover, there is no free press in America. I think we’ve proved it for the lack of coverage we’ve got after being so right for over a decade.

As yo know, Bloomberg was successful with their Freedom of Information Act lawsuit against the Fed. What does this mean for your lawsuit?

Bill Murphy: Well, we suit the Fed like Bloomberg and the Judge ruled partially in our favor, but in general went with the Fed in terms of keeping secrets about the gold market. Well, if the United States has done nothing with our gold, what is there to keep secret? By definition it says that there’s something very wrong. At the same time, we did have some satisfaction with the Fed, they will even send us a cheque to cover some of our legal expenses. We are still waiting for it to post it on our website: “GATA has received a cheque from the Fed!“ So we made our efforts. Ben Bernanke is talking about transparency. Bullcrap. What transperancy? Why can’t people ask questions about the gold market and receive honest answers? Like my colleague Chris Powell says: “The United States would rather have our nuclear secrets revealed than what they did with their gold operations.“

If there was an independent audit of the gold reserve of the U.S., what do you think would be the most likely outcome?

Bill Murphy: We think – and that is the reason why they don’t want to discuss it – that a lot of the U.S. gold reserve of officially 8.134 tonnes has been compromised via swap operations with other countries. This is what we have asked the Fed about, but they don’t want the American people to know. We believe the same is true with Germany and other places, that a lot of the central bank gold is gone and was swapped. It’s going to be a big deal some day, because some day it will come out.

In March I have sent an email to the New York Fed and the Federal Reserve in Washington DC, in order to ask them if there were swap arrangements existing between the NY Fed / Federal Reserve and the German Bundesbank. But they didn’t react to this request of mine in any way.i What is your comment?

Bill Murphy: I think their lack of response and lack of denial – I mean, that’s pretty simple to deny, really simple – this fact that they haven’t come back to you at all is indicative of the answer.

GATA had an impact in silver with the CFTC hearing, insofar there was some exposure for JPM and its short position in that market. What do you think will happen? Do you think, as Chris Powell stated, that they will be bailed out at the end?ii

Bil Murphy: I think that Chris is right that in some way the Fed and the Government are partially behind the silver market manipulation. They really care about gold, but you couldn’t manipulate gold without manipulating also silver because otherwise you would have had a big discrepancy that would have made the gold manipulation obvious. So they’ve decided to do both. The problem is they ran out of silver. They still have some gold, although much less than the central banks say they have. They say they have 30.000 tonnes of gold – they will be lucky if they have 12.000 tonnes left. But in silver they’re out. As you have said, we were pounding the table on this at the CFTC hearing and exposed the JP Morgan short position. Silver has gone viral since then in the past year. We think the smart money has get the message.

The mainstream media system and The Powers That Be have one thing in common that they often label their critics as “conspiracy theorists“ dealing in “conspiracy theories.“iii What do you think about that?

That’s exactly what they do. They try to marginalize people that take on the establishment, take on the rich and powerful as conspiracy nuts, when in reality all we’ve done was documenting their actions and statements. It’s pathetic, but that is how they operate. Just look at the CFTC investigation of the Madoff scandal. There was a guy named Markopolos, who said for ten years that this whole thing was a big fraud, he laid it all out in great detail. For ten years. Then it became one of the biggest frauds in American history. And what happened? Business as usual. Everything is back the same, people forget about it, people get wiped out. It’s a terrible situation and it is not what America is supposed to be about, but that is what we have become.

Is it just a myth when politicians, leaders of big corporations and so on talk in your country so much about the free market?

I think the U.S. is probably less free market than China right now. We certainly don’t have a free press. I mean, how can GATA have done all of this for twelve years and not get any mention in our press? It reveals that the notion that America has a free press is false. This is very disturbing, and that is how things can get out of control and lead to excesses. It’s got to be changed, and this is part of GATA’s mission and role.

Thank you very much!

JAMES TURK: “Get out of the paper stuff and get into things that are real“

After the interview with Bill Murphy, I’ve met James Turk, who has grown up in the “Buckeye State” of Ohio. He graduated with a B.A. degree in International Economics at George Washington University in 1969. Afterwards he worked eleven years for Chase Manhattan Bank, with assignments for the International Department in Thailand, the Philippines and Hong-Kong. From 1980 – 1983, Mr. Turk was with RTB, Inc., a private investment and trading company. He subsequently served the next four years as the head of the Commodity Department of the Abu Dhabi Investment Authority in the United Arab Emirates. In 1987 he began the “Freemarket Gold & Money Report” ( Until 1995 he was the Chief Executive of Greenfield Associates, which specialized in investment research and trading advice for hedge funds, commodity traders and investment managers. From 1995 – 1999, Mr. Turk was a Director of Lion Resource Management Ltd., a London-based firm which advised funds that invested in the equities of companies involved in the mining and exploration of precious metals. In 2001, he launched GoldMoney, a patented digital gold currency that allows the instant transfer of gold, silver and platinum between user holdings. GoldMoney is the largest digital gold currency in the world. For more information on this visit: Moreover, Mr. Turk is the author of “The Illusions of Prosperity” (1985), “Social Security: Lies, Myths and Reality” (1992), several monographs on money and banking, and the co-author of a book which has attracted considerable international attention: “The Coming Collapse of the Dollar and How to Profit from It: Make a Fortune by Investing in Gold and Other Hard Assets”, published by Doubleday and in December 2004 updated in a paperback version entitled “The Collapse of the Dollar” (visit: He frequently speaks at investment conferences on gold, money, and the international banking system.

In addition to the following interview, I want to recommend also a previous interview that I have conducted with Mr. Turk:

Gold is not an ‘investment’. It is money.

Where do you see the biggest growth potential in precious metals from a regional point of view?

James Turk: The strongest growth is still coming from Europe, and it’s been that way since May of last year, when the various European politicians came together and had a conference concerning the Greek crisis that became quite severe back then. They came up with a solution, and the solution was that Mr. Trichet was required to break his pledge to not buy government bonds, instead after that meeting he had to begin buying government bonds. That was sort of a wake-up call throughout Europe, but especially in Northern Europe, that the ECB is not independent and outside of political control. As a consequence the Euro is not managed like the Deutsch Mark was managed.

And as a result of that move there has been a tremendous interest in precious metals, both in gold and silver because the people are looking for a safe haven, they want to preserve their purchasing power. And as we have seen since last May prices are going up, they are rising in Germany, where we are speaking, and they are rising throughout Europe. Energy is going up, the oil price is going up. People are starting to understand that there is a rapid inflation building, and a way to protect themselves during a period of a rapid inflation is to buy gold and silver.

If you had a Euro bank deposit and would earn something like 8 per cent interest income, that’s one thing – but you can’t earn interest income today on the Euro or any currency for that matter to offset the risks of owning those currencies. So Europe by far is still the strongest region at the moment, but it is pretty much global. When a crisis comes, then the people move to precious metals, and with the U.S. dollar starting to slip again and heading towards new lows on the Dollar-Index that will create global demand for precious metals.

In recent months there was a lot of talk about the “currency war.“ Is there really a “currency war“ or am I right that there is only one true “currency war“ worth talking about – and that is the war of gold versus all other currencies?

James Turk: That is indeed the key issue. Ferdinand Lips, who was a Swiss money manager, wrote several years ago a book called “The War on Gold.“iv


James Turk: The reason why there is a war on gold is because it is the only true form of money, it is the only competitor to this fiat currency that central banks are issuing. There is a war against gold, yes. Central banks want to keep the gold price from rising to make their own currencies look better. Rather than taking sound policies like the Bundesbank used to do to preserve the purchasing power of the Deutsch Mark, central banks today are fighting that war by trying to cap the gold price.

But it is a losing battle because where they debase their currency they can’t stop people from buying gold as a way to protect themselves. In fact, it has been a losing battle all decade long. I used the term that central banks are engaged in a “managed retreat.“ On average gold has risen 18 percent per annum for the past ten years against the U.S. dollar, for example. It is really a managed retreat in that sense that they try to control the pressure for buying in the gold market, so that gold doesn’t run away from them. But in fact, I think gold is indeed running away from them, just like silver is running away as well.

What’s your opinion on silver right now?

James Turk: Well, I’ve been talking about $50 silver since December of 2009. When I did my forecast for 2010, I said that if we would not see $50 silver in 2010 – and I said there was a 20 percent probability -, we’re going to see it in 2011. Now that $50 silver target has been reached. But a lot has changed since December 2009 that I couldn’t foresee or even anticipate.

My thinking had originally been that once we’ve reached $50, silver was going to go sideways for several months on a trading range between $50 and $45, and then in 2012 start to climbing again into new highs. I’m not so sure now. I want to see how silver trades over the next few weeks. It is very possible that the price of silver will just continue climbing. What the rising price of silver has done, it has attracted a lot of people into the market and attracted a lot of attention. And because the supply and demand fundamentals are so bullish, people continue to buy it.

What I have been focused on for a quite some time is the backwardation in silver, where the spot price is higher than the future price, and since January this has been the case. This is very, very rare to have any backwardation in precious metals, and to have it going on as long as it has been, three months by now, that is unprecedented, I have never seen this before. You have to take notice when something like that is happening. The bottomline is: as long as silver remains in backwardation, I don’t see any major price correction in silver. Forget about $40, maybe even forget about $42 or $45.

One part of the story are the shorts in the silver market. Do you think that some real big money boys smell blood?

James Turk: That’s a good way of putting it. (laughs.) There are a lot of hedgefunds out there with a lot of hot money, they are momentum players, who go where they think that they can make a quick buck or two. There is no doubt about it that a lot of the hedgefunds have come in and bought silver. But the blood may be their own if they own paper silver instead of physical silver.

What you really want to do is to own physical silver to protect yourself, you don’t want just paper silver, which only gives you exposure to changes in the silver price and is based on someone’s promise, which means you have counterparty risks. And I personally think that these hedgefunds are playing more in the paper market than they are in the physical market. In part, because the physical market is so tight, they can’t find the physical silver that they need to put some of these big amounts of money that they are playing around with.

Recently, in the United States the University of Texas announced that it had bought $1 billion worth of gold in order to protect its liquidity as part of its portfolio. There is no way you can buy $1 billion worth of silver, it just doesn’t exist anywhere near to current prices. That’s the dilemma that the hedgefunds have. The hedgefunds have to be careful. They can play around in the paper market, but the big gains that they think they might make could end up being delivered to them in terms of paper dollars that have been totally depreciated – or even worse: Congress or Exchanges might actually say that you’ve only been involved in silver not because of commercial reasons, but because of specualative reasons, therefore we are going to break this trade, let the shorts off the hook and the walk longs walk away with nothing.

The most interesting story in the future for me is the point in time when the Middle East countries will no longer sell their oil for paper money. When do think will they be paid for it with precious metals?

James Turk: That is a really good question, and it doesn’t involve economics, it involves politics. Given the American influence in that part of the world from a military support point of view, something dramatic has to happen with the dollar before these countries were to abandon the dollar and go to gold. They should go to gold, because the link between gold and oil is quite clear: an ounce of gold buys the same amount of oil it did 50 years ago. But the political issues are clouding the economic and monetary issues. If the dollar collapses, then you are going to see not just the countries in the Middle East, but people around the world moving to gold and out of the dollar.

Given where the dollar is at the moment, given the fact that the Federal Reserve will continue to finance these U.S. government deficits in my view, even though they said that quantative easing is going to end, I just don’t believe them. As an example: since August of 2010, when QE2 began, to the present, the U.S. government debt has gone up about $ 900 billion. Over $ 500 billion of that has been aquired by the Federal Reserve. If the Federal Reserve stops on June 30, and given the fact that politicians in Washington will continue to spend huge amounts of money and creating these huge deficits, who will buy the government debt after June 30 if the Fed won’t buy it? As a consequence of the Federal Reserve buying it, that is what is going to lead to the collapse of the dollar. I think this is what the market tells us right now with higher metals prices and a lower dollar, that the dollar is going to be destroyed. We’re on the path to what I call “the fiat currency graveyard.“ The dollar is very close to it.

How do you compare this to what the Chinese are doing?

James Turk: Well, the Chinese are very clever. They take these dollars that they are accumulating through their trade surpluses with the U.S., and they are not sitting on U.S. government paper, they are actually out there trying to spend those dollars. As an example, I go to South Africa four times a year, and every time I’m down there, somewhere in Southern Africa there are armies of Chinese officials writing multi-million dollar cheques, buying up resources. They are buying hard assets, and that is what individuals should be doing. We should be taking a message from that: Get out of the paper stuff and get into things that are real, things that make sense, things that can produce wealth – be it a copper mine, a gold mine, timberland, oil wells whatever, and get away from the sovereign debt, which traditionally is been considered as safe haven, but no longer is a safe haven because of the financial problems that governments have worked themselves into.

And how ironic is it that the Chinese have accumulated those dollars by selling Americans plastic items with little or no value at all, and now they’re buying hard assets!

James Turk. Yes, you’re right, it is somewhat ironic, but the Americans have done it to themselves. They did it to themselves by creating a dollar standard rather than a gold standard. The sovereign wealth funds that we see around the world could never occurred under the classical gold standard because of the way it worked. If you followed the rules of the classical gold standard, these huge imbalances in world trade would last for a very short period of time and would be very small compared in size to what they have become today because of “the automaticity,“ as Greenspan used to call it, of capital flows back and forth under the classical gold standard. So by removing the gold standard the U.S. government shot itself in the foot, and they live with the consequences of it now.

In these times of war: if there was a gold standard, would it actually prevent wars?

James Turk: That’s really a good question and is really quite profound. Ron Paul has been very vocal on this point and I agree with him on that. When people interact with one another in society, we want to do it on a basis where we are interacting on a level playing field. When you have a currency that creates an advantage of one person over another person that creates animosity and ultimately could lead to war. Monetary turmoil itself could lead to war, as we’ve seen in history, or it could lead to totalitarianism, as we’ve seen also many times in history, because when a currency collapse a demagogue might come along and make all kind of promises, and those promises might seem appealing to solve difficult issues, but in fact turn to totalitarian government.

So what we really need is ultimately freedom of currencies or competitive currencies, as Ron Paul describes it. Let the market choose what currencies to use and let private currencies operate in competition with government currencies. My view is that you then see the reverse of Gresham’s law, which says that bad money drives out good money. I think that technology today creates all types of new opportunities for money and currency for people to interact with one another and that ultimately the good currencies will drive out the bad currencies, which are basically the currencies run by central banks and politicians.

So you would also be an advocate for regional currencies?

James Turk: I’m an advocate for people to choose whatever they want to do with their lives and however they want to organize themselves in society. Of course, they should use regional currencies, city currencies, global currencies. And we do have a global currency – it’s called gold. Everyone around the world knows how to value it. That is the world’s common currency. Governments should recognize that fact. And they should step out totally of the money business and just focus on what they should focus on, and that is: follow the rule of law and maintain a level playing field for everyone in society.

Thank you very much!

EGON VON GREYERZ: “Gold will probably stay high“

Following the two previous interviews, I met with Egon von Greyerz and drove together with him by a taxi cap to the Hofbräuhaus. Mr. von Greyerz, former Deputy Chairman of Dixons, is the Founder and Managing Partner of Matterhorn Asset Management AG in Zurich, Switzerland ( Matterhorn and its gold investment division GoldSwitzerland are part of the Aquila Group, which is the largest independent asset management group in Switzerland. Mr. von Greyerz, born and educated in Sweden, started his career as a banker in Geneva, lived and worked for 17 years in London, and has been actively involved with financial investment activities including Mergers and Acquisitions and Asset allocation consultancy since the 1990’s. Every month, he publishes a Gold Market and World Economy Newsletter at Matterhorn’s website to share his views on current fnancial, economic and political developments. GoldSwitzerland’s website is:

In addition to the following interview, that took place while the streets of Munich passed by, I want to recommend also a comprehensive interview that I have conducted with Mr. von Greyerz in the past:

Gold vs. Paper Money.

What do you consider as more thrilling right now to observe and to participate in: the gold or the silver market?

Egon von Greyerz: People like being thrilled and they like buying high, and silver is now going up a lot faster than gold, which we have expected for a long time. The gold-silver ratio will go down even further, probably somewhere between 1:15 or 1:20. Currently it is roughly at 1:32. So we’re not surprised that it is happening. We see tremendous interest in silver right now. I think people should be careful, because although I believe that silver will go up more than gold in the next few months and years it it’s so much more volatile.

Yes, it is very exciting when it is going up, but when it is going down some people are going to get very nervous. My view is that people who are only buying silver are doing the wrong thing. They should have a mix, and they should have more gold than silver. Sure, short-term you can make more profit on the silver, but remember that we’ve had the big move already, because the gold-silver ratio has gone down substancially, and therefore there is less profit to be made relatively now in silver.

My fear is that one day when this phase is over and gold will be in a few years from now most likely part of a reserve currency, silver is probably not in my view, because no central bank has any silver stock whatsoever. Silver will then be traded again more as a commodity and it will come down from the peak, where ever that will be (which will be a lot higher than now), significant faster than gold. Gold will probably stay high, because of the fact that it will be linked to a reserve currency. Therefore, if people don’t get out in time of their silver and they have bought it high, there could be a lot of money lost.

Do you think the United States really have the gold reserve in the vaults that the American politicians and central bankers say they have?

Egon von Greyerz: Nobody knows, but it is surprising that the gold there hasn’t been audited since the days of Eisenhower, which was in the early 1950’s. Some people say that actually there hasn’t been a proper audit even like for a hundred years. I don’t know if that is true or not, I haven’t looked into that thoroughly. But I know that from at least the days of Eisenhower there was no audit. To me this is a clear sign that the amount of gold isn’t there that they say is there. My own view is that a major part of that gold has been lent to bullion banks anyway to suppress the price over a long period of time. So how much of those 8.000 tonnes still exist in the possession of the U.S. government, I don’t know, but I would say that is a lot less in any case.

A large chunk of the official gold reserve of Germany is stored at the New York Fed. I have written them and the Federal Reserve in Washington DC an email to ask them if they have swap arrangements with the Bundesbank. They haven’t replied in any way. What is your comment?

Egon von Greyerz: Well, it doesn’t surprise me at all. (laughs.) They do not reply to you, because they are not telling anyone what they are doing with their gold. It is probably a similiar situation to the U.S. gold. All governments have been lending or selling gold covertly not just in the last ten years, but since the price started to go down in the 1980’s. I would be surprised if they have all the gold in their possession that they say they have. That’s why they don’t answer you or anybody else.

But let’s assume it is indeed still existing and that we are heading towards currencies that are backed by gold: would you recommend to the Germans that they should get their gold reserve away from New York?

Egon von Greyerz: I would recommend anyone who owns gold to have it in their own possession, in their own territory, under their own control. I would certainly not trust my gold to anyone else, whether it’s with the Americans or any other government. I would have it in my own vaults in Germany, of course.

And there is no reason for Germany to have its gold in New York or London just because these are major trading places for gold?

Egon von Greyerz: Makes no sense whatsoever, because if these are real reserves and they are not traded, they don’t need to have it there. But the most likely reason they have it there is because they have lent it out and they are trading it, otherwise they would not need it to have it there. It’s that simple.

Thank you very much!

As Bill Murphy pointed out later on in his speech at the Hofbräuhaus: “The key to really understanding what the prices of gold and silver have done, and are going to do, is to KNOW WHAT GATA KNOWS. And that is to understand the gold/silver price suppression scheme and its ramifications.“ Therefore, I want to recommend at the end to read the remarks by Chris Powell, the Secretary / Treasurer of the Gold Anti-Trust Action Committee, delivered at the “Cheviot Asset Management Sound Money Conference“ in London on January 27, 2011 under this link:

Furthermore, Bill Murphy posted a commentary on his presentation under the headline „Gold Rockets Higher While Munich Listens to GATA“ at GoldSeek here:


i Compare Lars Schall: “The Sound of Silence from the Fed“, published at on May 2, 2011 under:

ii See Chris Powell: “Morgan-crashing Max Keiser interviewed by Lars Schall“, published at on March 29, 2011 under:

iii Compare Lars Schall: “Meet the Press“, published at on October 13, 2010 under:

iv Ferdinand Lipps: “Gold Wars: The Battle Against Sound Money As Seen From A Swiss Perspective“, FAME, 2002.


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