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Tide is turning for gold, Mining Web says
quot;MIDASquot; COMMENTARY FOR MAY 16, 2001
DUPLICATION PROHIBITED WITHOUT PERMISSION
By Bill Murphy
May 16, 2001
Gold $272.10 up $4.30
Silver $4.45 up 15 cents
Mega-commodity fund John Henry was a huge buyer
today with Goldman Sachs executing the trades for
them. It must have been a most unwelcome big order
for Goldman Sachs, a grin-and-bear-it type.
I cannot stress enough how important the news out
of South Africa was today. We have turned the tide
and mission accomplished for GATA's Operation
South Africa. I say that because I know from
summit feedback that many in the South African
political world were nervous about GATA because of
whom we are taking on -- the most powerful
government in the world and the biggest money in
The African politicians are little different from
those in the United States. Campaign contributions
rule when it comes to politics and political
contributions. GATA is taking on some of their
potential warchests. Those in political office and
in positions of influence had the most to lose if
GATA turned out to be a balloon of hot air that
Well, we didn't pop in Durban. Reg Howe, James
Turk, and Frank Veneroso were very convincing. As
I have related to you, the press coverage was
massive. The material and action plan we gave to
the Africans spoke for itself. It is wonderful to
have the truth going for you.
No one in the gold industry or anyone who reports
on the gold market has been able to show GATA
where our evidence of gold market manipulation is
wrong. That includes AngloGold.
James Stock sent the following today to various
press in Africa from our South African
headquarters in Durban:
quot;Today in South African Parliament the minister of
economics, the Hon. Trevor Manuel, and members of
Parliament discussed GATA and the manipulation of
the gold price to the detriment of Africa. The
Bank of England's gold sale was discussed and the
government was asked why it was not financing
GATA's court action against the U.S.
administration. The minister of mining replied
that she had not been approached.quot;
This means that the cat is out of the bag
regarding our allegations. The finance minister
had plenty of time to review GATA's evidence and
allegations. There never would have been this kind
of talk in the South African Parliament unless our
charges were very credible.
Remember, the South African Reserve Bank quietly
attended the Durban conference.
This means that from here on in the powers in
South Africa will no longer be afraid to get
behind GATA's action plan. Just the reverse. Many
are now going to be afraid not to get behind GATA
and will not want the GATA train to leave the
station without them.
This is just the beginning. I understand that
Secretary of State Colin Powell is headed to
Africa soon on a trade mission. He is most likely
going to hear about some gold trading during that
There are other positive developments from Africa.
One of the sharpest attendees at the Durban
conference was Voltaire Kegode of Kenya. I told
him I thought he could lead his country someday.
He is well-connected with government officials in
Kenya, and GATA's South African publicist, Rhoda
Fowler, called from Durban today to say that he
has given 10 packets of our informational material
to key politicians in that country and has
explained GATA's charges to them. He is going to
follow up and give a report to Rhoda in Durban.
Kenya wants to be kept fully informed.
Kegode is most perceptive and joined Reg Howe,
James Turk, and me, among others, for dinner after
This too just in, sent from GATA's Durban
headquarters to our secretary/treasurer, Chris
quot;The Embassy of Sudan requested information on
GATA to be e-mailed to them. Please put them on
* * *
From Cafe member John Brimelow:
quot;Indian ex duty premiums: AM $5.08 PM $4.43, with
world gold at $268 and $268.90. Legal imports
clearly possible this morning at least. The CRU
Precious Metals Monitor, which arrived yesterday,
remarks that Indian buying has changed its
character somewhat. In a section entitled
'Physical market booming in India,' they clumsily
observe that quot;current buying is being carried out
at each differing level that the gold price moves
to.quot; They speculate this follows the recent
dealing scandals. What this means for the world
market is that the respite for the shorts provided
by weakening Indian demand on a price rise will be
diminished. (It appears the importing merchants
would borrow gold rather than buy to satisfy
domestic demand: the credit lines that enabled
them to do this have been curtailed.)
quot;Technical types are getting excited by the action
in both gold and shares. An unusually useful
Bloomberg story today quotes a European source
suggesting that the action and remarks of the Fed
yesterday have alarmed observers overseas. It was
certainly true that gold moved decisively when the
Continent opened this morning.quot;
* * *
Gold has now rallied $17 and the dollar has barely
budged, as it remains above the 116 level. As I
have stressed for a couple of years now, the real
gold move will have little to do with the dollar.
Certainly a weaker dollar is beneficial for the
price of gold, but the real story is the Gold
Cartel and their massive short position. When they
lose control of their manipulation or are
defeated: checkmate, gold soars. Simple as that.
That is why recent GATA developments are so
exciting. For years we had to use the Mohammed Ali
rope-a-dope strategy. They punched us over and
over. We took it in the hopes that they would
punch themselves out. Maybe they have.
As I finished up with in my Durban action plan
quot;The Enveloping Hornquot; is now in full battle
formation. By acting decisively together we can
close the back end of the quot;enveloping hornquot; on the
Gold Cartel. These financially and politically
powerful institutions are likely to be slightly
bewildered. The truth will see the light of day
and we will win. So will all of sub-Saharan
The rope-a-dope is out. We are now punching the
Gold Cartel with all our fury. It is time for them
to be knocked out.
James Turk has told his followers for months that
gold's breaking $272 on the upside was very
important technically. He felt that if this level
was breached, which it was today by some counts,
gold could easily rally another $100 by the end of
this year. That is what James told the South
I called James this afternoon. The Comex has spot
at $272. Another 10 cents and a Friday close above
$272 and that is all she wrote, according to the
technically knowledgeable Turk.
GATA and the Cafe would like to thank Brien Lundin
of Gold Newsletter note for his kind words. The
theme for his most recent letter, the May edition,
was quot;Manipulations Everywhere.quot; He suggested that
his readers visit the GATA and Cafe websites.
Gold Newsletter was the creation of the legendary
Jim Blanchard. I had the pleasure of speaking at
Gold Newsletter's fall conference in New Orleans
18 months ago and plan to be there this year. Stay
tuned for a Cafe/GATA extravaganza at the
conference. Planning is in the works.
Gold stocks are raging around the world.
Australian gold stocks rose to a 14-month high and
the entire Johannesburg index went to all-time
highs. The XAU closed at 62, up 3.43, and looks
like a rocket ship. The precious metals sector is
the best-performing one in the United States over the
past six months. The mainstream investment world
finds that hard to believe. They ain't seen nothin yet.
This is an example of how GATA is winning the
* * *
quot;Thought I would briefly let you know that I drove
quite a ways tonight to attend a town meeting
being held by my U.S. representative, Brian Baird.
quot;In front of about 200 people I voiced my concern
about the ownership of the gold stored at West
Point and presented him with a binder that
quot;-- A cover letter reqesting he ask GATA's eight
questions to Fed Chairman Greenspan and
Treasury Secretary O'Neill.
quot;-- James Turk's article about the Exchange
Stabilization Fund's gold swaps, the reclassification
of the gold at the U.S. mint at West Point, and the
quot;-- The statistical articles about the manipulation by
Demitri Speck. I must say that Representative Baird
looked very much like a deer in the headlights when
asked about this issue. He did promise, I believe
sincerely, to review the information and forward the
quot;After listening to him for two hours, I believe
him to be honest and extremely hard-working. He
had a better command of the issues (for example,
the energy crisis) than I would expect from any
quot;A response that I had not expected was that about
10 people actually wanted to discuss the gold issue
with me after the meeting!
quot;I would suggest that you prepare an informational
packet to help others like me who want to approach
their congresspeople in person. I suspect that
others would be willing to confront their
congressmen with this, but they don't want to take
the time to prepare the materials.
quot;Any suggestions at how to get responses to letters
to my senators? Let me know what else I can do to
quot;Congratulations on your success in Durban.
quot;Carl Huster, Ph.D.quot;
Ask and ye shall receive. This morning Chris Powell sent
a dispatch to all of us this morning on how this could
easily be done.
The following is from Dave Walker, who has done yeoman
work for GATA with the Federal Reserve meeting minutes:
* * *
quot;The more I read, the more I think that you are right about
former Treasury Department official Ted Truman. Look who
breaks the Bank for International Settlements news!
(Truman was the Treasury guy who wrote to Chris Powell
on May 10, 2001 -- the day Frank Veneroso, Reg Howe,
Chris Powell, and I met at the U.S. Capitl with House
Speaker Denny Hastert. Truman wrote to no one else.)
CHAIRMAN GREENSPAN. Any further comments
on this? If not, let me turn to Ted again on another
matter with respect to the BIS.
MR. TRUMAN. Some of you are aware of this and
some of you are not. We have been entitled to such
seats (on the BIS board) since the bank was founded
in 1930. This matter has come up again in recent
months, and the board considered it a couple of
months ago after consulting within the Administration
and decided to go ahead. Next Monday the BIS will
be announcing that we have reached this decision,
that the (Fed) chairman would take up the ex-officio
seat and that (New York Fed) President McDonough
would take up the other appointed seat as the second
U.S. representative on the board.
quot;This is NO small-fry economist. I am thinking that he is
running the show, or running it for somebody. He knows
all the answers and knows everything inside and out.quot;
* * *
That was then, but now that the BIS bought out its U.S.
shareholders like Reg Howe at 40 cents on the dollar, what
right does the United States have now to be involved with
the BIS. That is one of the reasons Reg Howe is suing
Greenspan and McDonough in U.S. District Court in
Boston. What can they possibly come up with?