Gold Fields closes hedge positions


By Bill Murphy, Chairman
Gold Anti-Trust Action Committee Inc.
February 15, 2001

There is no way I can do justice to my trip to South
Africa, but I will cover it here as best I can. While
it would have been better to write details down as the
days went by, there was little time to do so. It is
from fond memory alone that I now relate my hectic

The South African countryside is very beautiful and I
was fortunate to meet many wonderful people, but of
most importance that GATA's revelations of the
manipulation of the gold market were publicized by the
South African press and were personally presented to
important South African officials.

My first meeting was an enjoyable one with Gold Fields
Chairman Chris Thompson, who listened attentively. That
was followed by a lunch with newsletter writer Aida
Parker, who had just written a piece called "Gold Price
Manipulation." Aida is quite the character and one
tough babe, as she was a correspondent during the
Arab/Israeli war. Reg Howe was very impressed with her
insightful coverage of our lawsuit.

That afternoon I met with Nick Goodwin, South African
gold analyst, and Johann Blersch, managing director of
Ings Barings Bank. That meeting went well and Nick
arranged a meeting with 10 of senior gold analysts in
Johannesburg the next day in his office for a GATA
presentation. It amazed me that Nick could corral so
many of them on such short notice.

Tuesday started out with an interview with David McKay

Late Tuesday afternoon I headed to the airport for a
trip to Durban, which is on the Indian Ocean. GATA's
publicist, Rhoda Fowler of Media-Link, did a marvelous
job scheduling a Wednesday morning breakfast meeting
with the Durban press and business leaders. After the
meeting, there was a 3 1/2-minute television interview
that was aired all over South Africa.

While waiting for a scheduled meeting with the king of
the Zulu tribue, Goodwin Zwelithini, I went with Rhoda
and her helpful brother, James Stock, up the Indian
Ocean coast to Umhlanga for a relaxed seaside lunch.
The king was delayed, but eventually we had a very
special two-hour meeting over dinner that lasted until
10:30 in the evening. That meant another sleepover in
Durban ahead of a press interview back in Johannesburg
the next morning.

The king was sharp, lamenting that the Rand had
weakened ever since the new government came into power
and that the price of gold had not rallied at all with
the price of oil. Many of his Zulu subjects are gold
miners and have been harmed by the suppression of the
gold price. At the end of the meeting the king asked
his aide to call Deputy-President Jacob G. Zuma, who is
also a Zulu, on our behalf. The Zulus are one of the
many tribes in South Africa.

A bit bleary-eyed, I just made it on time for a meeting
with Curt Von Keyserlingk, business editor of Rapport,
the well-read Afrikaner newspaper. Also attending was
superb technical analyst Daan Joubert, who often
presents his work at

That conversation presaged a trip to Lordium in the
South African countryside for a Moslem radio station
interview. When I walked into the radio station, the
interviewer said that had seen me on television the day
before. I though: Now we are getting someplace!

Listening to the show in Cape Town was Professor Umar
Ibrahim Vadillo, founder of E-Dinar, who is urging that
Muslims all over the world buy dinar gold coins. We
later met in Cape Town and I learned a good deal about
the movement of this worldly Spanish professor who
resides in Scotland.

Early on Friday I met with the South African Chamber of
Commerce and then with Bheki L. Sibiya, executive
director of Transnet and chairman of South African
Airways. Bheki is a leader in the South African
business community and grasped GATA's findings quickly.

That afternoon was spent on the telephone talking to
prominent South Africans, and then I set out for
downtown Johannesburg to do Alec Hogg's "Classic
Business" radio show. That was almost a disaster, as my
driver's car broke down a half mile from the studio,
and I had to run the rest of the way -- right through
an area one is not supposed to be as evening sets in.
But I made it with seven minutes to spare.

By that evening and week's end, I was ready to relax
and did so with two friends of Daan Joubert. Both are
successful businessmen who know the gold market well.
One of them owns the last private elephant farm in
South Africa. They took me to Baccarat, a restaurant
extraordinaire, for some crocodile and ostrich. We had
much fun and plan to meet again.

On Saturday it was time to set off for Cape Town and
the Indaba 2001 mining conference. Soon after my
arrival, Peter George, who is well known in South
African gold circles, came by to take me for a climb up
Judas Peak -- high above geographically spectacular
Cape Town.

It was an hour trek to reach our elevated destination
and some flowing water to drink. "Be careful," Peter
warned. "It is slippery." About 20 seconds later I fell
anyway and started to go down the mountain but managed
to grab on to a thorny bush. In a bit of a dither, I
tried to pull myself up, but fell back and further
down. This was becoming rather scary and I looked up
for Peter's help. Instead, he looked down at me and
blurted, "I told you it was slippery."

If that was not bad enough, I could not bear to tell
him I am afraid of heights. So I was relieved to make
it back safe and sound to Peter's wonderful home
overlooking the Atlantic Ocean. Peter was a most
gracious host and became a new friend for life.

Sunday we took a drive to vineyard country, called
Franschoek. It is spectacular countryside. A vineyard
owner organized a luncheon at his vineyard restaurant
to hear about the gold market. When people at the lunch
heard that press coverage of my trip was going well
except for the mainstream newspaper Business Day, the
Wall Street Journal of South Africa, they said, "We
will fix that." Within 20 seconds the attendees at the
lunch pledged $50,000 to underwrite a full-page
advertisement in Business Day. They said, "You write
it; we will pay for it." On the spot they formed South
Africans for a Free Gold Market. The money was
collected by Monday noon.

Stunned and delighted, Peter and I sped back to Cape
Town and I began writing. Peter's input was invaluable
as we spent the next two days editing and re-editing.
Peter was still calling in word changes at the deadline
hour late Tuesday afternoon. More on the ad later.

Reg Howe and I hooked up on Monday and met that
afternoon with Mark Wellesley-Wood, chairman of Durban
Roodeport Deep. He was most impressive, and Reg and I
could see why Durban Deep has been turned around and is
a gold bull's delight. As most of you know, Durban is
very leveraged to the gold price with substantial gold
reserves and resources.

That evening Reg, Peter, his son Quentin, and I had
dinner with Brett Kebble at the "Nellie," the Lord
Nelson. Brett, CEO of Western Areas, and his father
Roger, chairman of Western Areas, are legends of the
South African gold industry and not afraid to stand up
for their beliefs. Brett will go down as a hero one
day. This will be revealed in time.

The Indaba 2001 Conference kicked off on Tuesday
morning with Anglogold's Kelvin Williams one of the
early speakers. It did not take Kelvin long to make a
mocking statement about the "conspiracy crowd," which
drew chuckles from the attendees. Later, Kelvin told
the press that GATA was full of "adult fantasies." I
thought to myself: You punch today, Kelvin, but GATA
counter-punches tomorrow, and we'll see who gets the
last laugh when the gold price manipulation ad is
published the next morning.

Late that morning Reg and I met with Ian Davidson, a
member of Parliament from the Democratic Party. Ian, a
former mayor of Johannesburg, has a legal background
and is a former stockbroker, so he quickly grasped what
we were saying. As we left he told us he would bring
the GATA issue up in Parliament, which was to begin a
new session that coming Friday.

On Wednesday, Peter George threw a Christian fellowship
breakfast meeting for Reg and me. One hundred and
thirty people, many of them prominent Cape Town
citizens, attended. Peter runs this Christian
fellowship breakfast meeting every week, often bringing
in guest speakers. It was very well organized. GATA
raised some money and we raised a few eyebrows about
the gold market.

When we returned to Indaba conference there was a buzz
about the ad. Someone told me, "That is just not done
around here. One does not take on the establishment in
that way."

Later that day Reg and I met with Bernard Swanepoel,
Harmony Gold CEO, and Ferdi Dippenauer, a senior
executive at Harmony. That meeting also went well, with
our dialogue to continue in the near future.

The rest of the day was spent networking and
socializing. It was good to see Peter Bradford,
president and CEO of Golden Star Resources, once again.
All is going very well with GSR, as Peter was on his
way to Ghana to continue to build Golden Star's gold
production in that nation.

Cape Talk radio kicked off Thursday morning. The DJ
knew more about what was going on in gold than most
gold analysts here in the United States. Also joining
in was the top money manager in South Africa, who had
attended Peter George's breakfast for us. On the air he
stated that he felt that the Howe/GATA complaint has a
better than 50/50 chance of succeeding.

Between press interviews during the day I listened to
David Hale, keynote speaker for the Indaba conference.
It was a very provocative presentation as he related
why Zimbabwe is falling apart and will run very short
of food in the months to come, and that only "political
revolution" can prevent disaster.

David, who was also the keynote speaker at the
Australian Gold Conference, told me after his speech
that he had read GATA's ad and would like to talk to me
about it in the near future. He was not unaware of the
issue, as he is a long time acquaintance of Frank
Veneroso, a member of the GATA delegation that met with
U.S. House Speaker Denny Hastert on May 10, 2000.

Reg then took off back to Boston to work on the

On Friday gears were shifted, as I had breakfast with
Ms. Phumzile Mlambo Ngcuka, minister of minerals and
energy, at "The Nelly." Also at the breakfast was Thabo
Mafoko of the international relations office of the
Department of Minerals and Energy. The meeting went
very well. Thabo conferred with Ms. Ngcuka and before I
knew it another meeting was set up in Pretoria for me
to meet with senior officials of the South African
Reserve Bank and other officials of the Department of
Minerals and Energy.

Friday night there was a farewell dinner with Peter
George and his charming wife, Allison, and then a lunch
on Saturday with another South African firebrand,
Margaret Legum, board member of South Africa's New
Economics Foundation. Margaret has her economics degree
from Cambridge and wanted to help any way she can. Not
afraid to take on the establishment, Margaret and her
husband were exiled from South Africa for 30 years for
fighting apartheid.

Back to Johannesburg I went for an early Monday morning
meeting with the leaders of the National Union of
Mineworkers. Attending were Mr. S. Zokwana, president:
Mr. G. Mantashe, general secretarly; Mr. A. Palane,
deputy general secretary; and Gino Govender, co-
ordinator of the union's strategy unit.

No one is more directly effected by the manipulation of
the gold market than the South African miners, as
170,000 have been laid off. Each miner supports 11 to
12 others, according to Bheki Sibiya, president of the
Black Managment Forum.

Of course the mining union leaders could not know
whether GATA's claims are correct, but I stressed that
the new U.S. treasury secretary, Paul O'Neill, has to
make a decision either to remain a defendant in the
lawsuit or conduct a gold market inquiry of his own. Of
all the defendants, only the new treasury secretary was
not party to the actions alleged in the lawsuit when it
was filed. The Bush administration must decide whether
to continue the fraud or let the gold cartel fend for
itself. Like the other defendants, the Treasury
Department must make a written response to the charges
in U.S. District Court in Boston by March 15.

GATA believes that the new U.S. treasury secretary
knows the score. Pressure from aggrieved South
Africans, especially black South Africans, can only
help guide the U.S. administration in the right
direction. The new president, George W. Bush, won only
10 percent of the black vote in the presidential
election, the lowest for a Republican since the days of
Barry Goldwater.

If the Republicans could expose what the Clinton
Administration was really doing to the black-majority
governments and people of southern Africa, it could
dramatically change perceptions of who the real friends
of Africa really are.

By protesting, the National Union of Mineworkers in
South Africa helped to block the proposed International
Monetary Fund gold sales. In this the mine workers
joined the Republican and Democratic leadership of the
U.S. Congress, the Congressional Black Caucus, and 36
out of 41 poor gold-producing countries. Only President
Clinton, Treasury Secretaries Robert Rubin and Lawrence
Summers, the IMF itself, and the bullion banks were for
it. I explained to the mining union that it was not
debt relief for the poor they were after; it was the
3,000 tonnes of IMF gold they wanted to flood the gold
market with to keep prices low for years to come. When
that attempt failed, they called on Britain to auction
half of their gold reserves.

President Zokwana told me that he and other union
officials would study the matter.

From there my waiting driver sped off to Pretoria, the
country's capital. There I met with Lambertus Van Zyl,
general manager (Hoofbestuurder) of the South African
Reserve Bank's International Banking Department, and
Alan R.H. Colburn, his assistant, and seven staff
members and executives of the Minerals and Energy
Department in the Reserve Bank's board room.

The room was something else -- large with a huge oval
desk, comfortable chairs, and a microphone for each
attendee. Then there were all these screens at the end
of the desk for presenting visual material. The Reserve
Bank officials said little but took copious notes.

I reiterated my theme with the union executives, except
with a twist. I told them that they could find out
themselves about our claims by asking the right
questions of the right people. I suggested that after
reading the GATA/Howe complaint, GATA's "Gold
Derivatives Banking Crisis" report, and James Turk's
essay, "Smoking Gun," they quietly attempt to get
answers to the following questions:

1. For the IMF: Is it possible that IMF gold is
reaching the physical gold market in any way? Does the
IMF have gold on deposit at the Bank for International
Settlements? If so, how much? Is any IMF gold deposited
at the BIS or IMF "earmarked gold" at the New York Fed
entering the physical gold market?

2. For the BIS: Are you lending gold on behalf of the
IMF in any way?

3. For the bullion banks: According to the statistics
of the BIS and the U.S. Office of the Controller of the
Currency., the notional value of gold derivatives
exploded on the books of Chase Manhattan Corp., J.P.
Morgan & Co. Inc., Citigroup Inc., and Deutsche Bank
from June 1999 through January 2000, while remaining
steady at other bullion banks. How do these defendants
in the Howe/GATA Complaint account for this gold
derivative buildup, which is quite large in relation to
their capital?

4. For Treasury Secretary O'Neill: Various Treasury
officials have denied any involvement in the gold
market by the Exchange Stabilization Fund. However,
beginning in 1996 there is a pattern of discrepancies
between the Fed's gold certificate account and the
quarterly U.S. Treasury statements, which include the
ESF gold figures. These figures should be the same. At
the end of 1999, the ESF showed a record $41 million,
or approximately 30 tonnes, excess over the gold
certificate account. Could you please reconcile the
discrepancy, since the Clinton administration reported
to Congress that it did not engage in any currency
interventions from 1998 through March 2000? Can you
explain how during this period the ESF reported profits
that generally coincided with falling gold prices and
losses that generally coincided with rising gold

5. For Bank of England Governor Edward George: Did you
make a statement to Nicholas J. Morrell, chief
executive of Lonmin Plc, following the gold price rise
after the Washington Agreement, more or less to the
following effect? "We looked into the abyss if the gold
price rose further. A further rise would have taken
down one or several trading houses, which might have
taken down all the rest in their wake. Therefore, at
any price, at any cost, the central banks had to quell
the gold price, to manage it. It was very difficult to
get the gold price under control but we have now
succeeded. The U.S. Fed was very active in getting the
gold price down. So was the U.K."

U.S. Federal Reserve Board Chairman Alan Greenspan and
Treasury Secretary O'Neill should be asked whether the
United States intervened in the gold market in any way
following the sharp price rise after the Washington

6. For J.P. Morgan, Chase, and Citibank: Has any facet
of the U.S Treasury or U.S. Fed guaranteed any gold
derivative positions on your books against a loss?

7. For Randall Oliphant, CEO of Barrick Gold: Are you
restricted in any way from covering certain derivative
positions as a result of any agreements with any
bullion banks such as J.P. Morgan?

At the end of my 75-minute presentation at the South
African Reserve Bank, the officials convened privately
and then came back to tell me that they would take the
matter seriously and wanted to know what would be the
latest date by which they should be in touch with the
U.S. Treasury Department, should they decide to do so.

It was a big plus to distribute copies of the many
letters from members of Congress who raised the gold
market manipulation issue with the Clinton
administration. Having them with me bolstered GATA's
credibility with the people I met with. All GATA
supporters should know that your efforts are paying
off. GATA Treasurer/Secretary Chris Powell and I thank
you all.

From Pretoria I went back to Johannesburg for an
interview with the South African Broadcasting Co. for a
story on the GATA trip. The camera was rolling, so we
will have to see if the story shows up on their nightly
news TV broadcast.

As far as I can tell, GATA's journey to South Africa
was a winner. GATA received 10 times as much press
coverage in two weeks as we have received the last two
years combined. Many eyes were opened about today's
real gold market. It does not mean that we will win the
day overnight, but a solid foundation has been built.

The trip was the most satisfying experience of my life.
Yes, all of us would like the gold price to go up so
that we can prosper. But of greater significance is
that we all have an opportunity to help the economy of
half a continent. Our work can determine the fate of
millions of people. It is no less than a life-and-death
situation for many poor Africans. They desperately need
money to combat disease and crime.

Over and over I was told that many young blacks commit
crime and have indiscriminate sex, contributing to an
AIDS epidemic, because there is no hope. A soaring gold
price would mean that many people all over southern
Africa would have jobs again. Hope would return. Africa
could become the natural resource boom continent, not
the "hopeless continent" as Britain's Economist called

When GATA was formed I chuckled when Chris Powell said,
"Let's change the world." Amazingly, Chris was right;
it is really possible to a certain degree. All that
need be done for that to happen is to have Reg Howe's
complaint reach the discovery stage. At that point we
can ask the defendants to answer our questions under
oath. When that happens, the huge short position in
gold will become known, the market will realize that
GATA is right, savvy major investment players will
start buying physical gold, the price will soar, and it
will be a brand-new day.