The invention is a converter for converting thermal energy into electrical energy. The energy conversion takes place by causing magnetic particles that are initially suspended in ferrofluid to circulate in the converter and to induce electric currents when they pass through one or more coils of electric wires that are coiled around parts of the conduits of the converter. The particles are caused to circulate around the main circuit of the converter by controlling the local temperature and pressure at different locations in the main circuit. The invention also is a method of using the converter to produce electricity.