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XMFSinchiruna (26.56)

Breaking News: Gold Connection in the Russian Spy Ring Case



June 28, 2010 – Comments (9) | RELATED TICKERS: JPM

This is no rumor.

This comes straight from the complaint filed by the FBI in the unfolding case of the alleged embedded Russian spies operating on long-term assignment in the U.S.

For those who haven't yet caught wind of the story, let's get you caught up on the news a little before moving on.

FBI Breaks Up Alleged Russian Spy Ring in Deep Cover

The FBI has arrested 10 alleged Russian spies and broken up a "long term, deep cover" network of agents that spent years adopting American identities and gathering an array of intelligence, from information about nuclear weapons to the gold market and personnel changes at the CIA.

In an indictment that might have been taken from the plot of a cold war thriller, the FBI alleges that the Russian intelligence service, the SVR, sent spies to live in the US under false names with the intent of becoming so Americanised they could build relationships with sources and gather information without raising suspicion. Some of the agents lived as married couples and had children who have grown up as Americans unaware that their parents are Russian.

The FBI alleges that the accused spies were able to get close to a scientist working with "bunker-buster" nuclear bombs and a New York financier with powerful political ties.

10 Alleged Russian Secret Agents Arrested in U.S.

WASHINGTON – The FBI has arrested 10 people for allegedly serving for years as secret agents of Russia's intelligence organ, the SVR, with the goal of penetrating U.S. government policymaking circles.

According to court papers unsealed Monday, the FBI intercepted a message from SVR headquarters, Moscow Center, to two of the defendants describing their main mission as "to search and develop ties in policymaking circles in US." Intercepted messages showed they were asked to learn about a broad swath of topics including nuclear weapons, U.S. arms control positions, Iran, White House rumors, CIA leadership turnover, the last presidential election, the Congress and political parties.

After a secret multiyear investigation, the Justice Department announced the arrests Monday in a blockbuster spy case that could rival the capture of Soviet Col. Rudolf Abel in 1957 in New York.


Now ... that's the coverage thus far. But one editor at the Financial Times in London has blogged about some very interesting excerpts from the complaint filed by the Justice Department with the District Court in New York. You can find the entire 37-page complaint filed here.

According to the report, one of the alleged spies, identified as Cynthia Murphy, made a connection with a financier in New York with some high-level friends and connections.  The document states:

"In a message dated "Feb 3 09", the New Jersey Conspirators reported that, through her work, Cynthis Murphy, the defendant, "had several work-related personal meetings with [a priminent New York financier, name omitted], and a personal friend of [a current Cabinet official, name omitted].

A response from Moscow Center indicated that the financier "is checked in C's database - he is clean. Of course he is a very interesting 'target'. Try to build up little by little relations with him moving beyond just [work] framework. Maybe he can provide [Murphy] with remarks re U.S. foreign policy, 'roumors' [sic] about White House internal 'kitchen', invite her to venues (to [major political party HQ in NYC], for instance, etc. In short, consider carefully all options in regard to [financier].


That's the set-up, but now look at the one mention of gold (that I am aware of thus far) with respect to the defendant's 'target':

On a number of other occasions, the SVR specifically indicated that information collected and conveyed by the New Jersey Conspirators was especially valuable. Thus, for example, during the summer and fall of 2009, Cynthia Murphy, the defendant, using contacts she had met in New York, conveyed a number of reports to Center about prospects for the global gold market. In October of 2009, the SVR responded: "Info: on gold - v. usefull [sic]. It was sent directly (after due adaptation) to Min[.] of Fin[ance], Min[.] of Ec[onomic] Devel[opment].


Just the very thought that a Russian spy program would find information on "prospects for the global gold market" a "very useful" intelligence stream is enough to make this story a fascinating development for those who have been tracking the myriad questions and allegations surrounding price suppression and coordinated manipulation of the gold market. I fully expect GATA to have a field day with this one, and well they are warranted in doing so. 

I will share more information, thoughts, and analysis in due course, but I wanted to get the meat of this story out to my community in a timely fashion for your own consideration. Stay tuned ... you haven't heard the last of the relevance of this case to the gold market.


9 Comments – Post Your Own

#1) On June 28, 2010 at 11:14 PM, XMFSinchiruna (26.56) wrote:

Think about it ... this is further corroboration of the systemic opacity in the gold market ... such that a G8 member might consider intelligence on the gold market "very useful". We didn't see copper or oil mentioned in a similar context.

For those who still think gold is just a silly shiny metal with no strategic significance ... think again. If you think it "serves no purpose" ... think again. If you think it is a free and transparent market, think again. If you think you understand the gold market better than a Russian intelligence agency, think again. If you think GATA is grasping at straws with its allegations of a conspiracy to defraud and deceive the public through gold price suppression, think again.

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#2) On June 28, 2010 at 11:58 PM, jesusfreakinco (28.15) wrote:

Good find.  Thanks for the comments.  Looking forward to more of your thoughts...


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#3) On June 29, 2010 at 7:28 AM, XMFSinchiruna (26.56) wrote:

And speaking of GATA:

Thanks to our friend W.G. for pointing out a fascinating article written for Harper's magazine in November 1983 about the Bank for International Settlements by the veteran journalist Edward Jay Epstein, who seems to have been given unusual access to top BIS officials. Epstein's article shows the BIS running the world financial system almost entirely in secret and, in the process, frequently intervening in the gold market or making gold available to arbitrageurs as part of a general system of currency market regulation -- and swapping gold particularly as part of a policy of supporting the U.S. dollar.

Of course this was 27 years ago and the BIS couldn't possibly be part of such things anymore, could it? After all, Kitco senior market analyst Jon Nadler says central banks have no motive to manipulate the gold market, and CPM Group executive Jeff Christian says central bankers hardly ever think about gold. (That would explain why they have chosen him as their gold consultant.)

Epstein's article is headlined "Ruling the World of Money" and you can find it in the archive of his Internet site here:

The article is a great read, with copious discussion of the banks dealings in gold swaps as an instrument of curreny intervention.

Here it is from the Hapers archives in its original format:

The non-gold-related content is fascinating as well, including passages like this one describing the HQ:

Despite its irksome visibility, the new headquarters does have the advantages of luxurious space and Swiss efficiency. The building is completely air-conditioned and self-contained, with its own nuclear-bomb shelter in the sub-basement, a triply redundant fire-extinguishing system (so outside firemen never have to be called in), a private hospital, and some twenty miles of subterranean archives. "We try to provide a complete clubhouse for central bankers ... a home away from home," said Gunther Schleiminger, the supercompetent general manager, as he arranged a rare tour of the headquarters for me. The top floor, with a panoramic view of three countries, Germany, France, and Switzerland, is a deluxe restaurant, used only to serve the members a buffet dinner when they arrive on Sunday evenings to begin the "Basel weekends." Aside from those ten occasions, this floor remains ghostly empty.


Here is a golden nugget:

"On yet another floor, gold traders are constantly on the telephone arranging loans of the bank's gold to international arbitragers, thus allowing central banks to make interest on gold deposits."

Who says gold doesn't pay interest? It does when a supposedly passive hoard is actually anything other than passive ... being exchanged instead via ledger entries to arbitragers (i.e. bullion banks) to meet the banking industry's longstanding agenda to manipulate the value of paper currencies by manipulating the price of gold.

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#4) On June 29, 2010 at 9:53 AM, workfor (< 20) wrote:

Very interesting. Thanks Sinch.

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#5) On June 29, 2010 at 12:29 PM, leohaas (30.07) wrote:

It is always exciting to read about conspiracies. Keep it up!

But isn't there an easy explanation for the Russia's alleged behavior? For instance: maybe Russia has significant gold mining prospects, and therefore wants to keep informed about the "prospects for the global gold market". After all, where the global gold market is going will determine whether or not mining projects will be profitable, and whether it makes sense to mine today like there is no tomorrow (if we are approaching a gold bubble) or to leave the gold in the ground until prices reach 5 digits per ounce...

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#6) On June 29, 2010 at 4:35 PM, silverminer (30.05) wrote:


Russia has plenty of access to financial expertise and data at its disposal to make well informed decisions regarding any transparent market in the world. Nations don't utilize intelligence apparati to gather financial intelligence that is freely available through less risk-intensive means. The fact that these alleged spies were congratulated for providing very useful information on the gold market is all the indication you need to know that the information thus gathered was not exactly something you will find in an issue of Barron's or even an interview with Jim Sinclair. :)

This was high-level access to a "prominent financier" who in turn is a friend of a present member of the President's cabinet. 

The point is, what do these financiers and cabinet members know about the "prospects for the global gold market" that we mere mortals are not privy to? Why is there anything classified or secretive about a market for a metal that critics are so fond of suggesting has no strategic significance nor enduring monetary utility.

If you're looking to spies for information, it's because you can not gather that information through alternate avenues. What are Wall Street insiders and cabinet members hiding from the world with respect to gold? I will resist speculation on an answer to that question for the time being, but for now it's the question that I want people to be thinking about.

And for pete's sake, now that the market for equities has grown so gruesome once again that it's heard to keep your eyes open, take a couple of days away from your trading stations and delve into GATA's archives so you can begin to answer these questions for yourselves.

Fool on!

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#7) On June 29, 2010 at 4:37 PM, XMFSinchiruna (26.56) wrote:


Here is my article out today about the market action, gold, and the gold angle within the espionage case.


silverminer = TMFSinchiruna


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#8) On June 29, 2010 at 5:37 PM, leohaas (30.07) wrote:

"And for pete's sake, now that the market for equities has grown so gruesome once again that it's heard to keep your eyes open, take a couple of days away from your trading stations and delve into GATA's archives so you can begin to answer these questions for yourselves"

I have done so, and it is an interesting theory, but I remain a skeptic. It is in the same category as "Obama was born in Indonesia", "The aliens landed in New  Mexico", and "The moon landing is a hoax". I will remain glued to my trading station because I am short the market and a long a significant number of puts in various companies...

By the way, if this is all true, you should be delighted. After all, it gives you a chance to buy gold at the manipulated low price. This manipulation cannot go on forever, right? And knowing you, you have stashes of physical gold, so you don't need to worry about gold ETFs. Keep on warning the public!

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#9) On June 29, 2010 at 6:08 PM, XMFSinchiruna (26.56) wrote:


Sorry ... that last comment of mine was not directed at you in any way, though now looking back I can see how it might be construed that way.

The "for pete's sake" part was directed to the community at large, not you in particular. Sorry again for miscommunicating if that was misconstrued! 

Anyway, glad you've taken the time to review the documents. Few have. I agree that elements of the evidence do not make a clean slam dunk case, but rather weave together in a tapestry of what I consider very compelling circumstantal evidence.

Fool on!


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