A great day for GATA and the cause of a free gold market


DALLAS--(BUSINESS WIRE)--July 24, 2001--Federal Reserve Chairman
Alan Greenspan and U.S. Treasury Secretary O'Neill continue to
evade questions asked of them by members of Congress, according
to Gold Anti-Trust Action Committee (GATA) Chairman Bill Murphy.
The questions include:

1) What are the "gold swaps" cited in the minutes of the January
31, 1995, meeting of the Federal Open Market Committee?


2) What "gold swaps" have been made by the ESF, the Treasury
Department, or the Federal Reserve in the last 10 years? Whose
gold was involved? What other parties were involved? What is
the status of these "gold swaps"?

Sen. Jim Bunning, R-Kentucky, recently requested the answers to
such questions from Fed Chairman Alan Greenspan. Chairman Greenspan
responded to the senator by producing a memo from Fed General Counsel
J. Virgil Mattingly. Joseph Rebello of Dow Jones Newswires quoted
from Mattingly's memo in a Dow Jones Newswire story yesterday, July
23, headlined "Top Fed Lawyer Says '95 FOMC Transcript Misquoted Him":

At the FOMC meeting, Fed Gov. Lawrence Lindsey, who is now
President Bush's top economic adviser, asked Mattingly whether the
use of the ESF to aid Mexico was unprecedented. According to the
transcript, Mattingly said:

"It's pretty clear that these ESF operations are authorized. I
don't think there is a legal problem in terms of the authority.
The statue is very broadly worded in terms of words like 'credit'
-- it has covered things like the gold swaps -- and it confers
broad authority."

In his memo to Greenspan, Mattingly said he had "no clear
recollection" that he had referred to gold swaps. "I believe that
my remarks, which were intended as a general description of the
authority possessed by the secretary of the Treasury to utilize
the ESF, were inaccurately transcribed or garbled," Mattingly

"That is just not a credible response to a very serious inquiry,"
says Bill Murphy, GATA chairman, from the organization's
headquarters in Dallas. "It is very reminiscent of the 18 minutes
of erased tape in the Watergate cover-up."

GATA has claimed for two years that the when all is known about
the manipulation of the gold market by a cartel of bullion banks
and a faction of the U.S. government, the ramifications will dwarf
the Watergate scandal. GATA cites the low gold price's devastation
of the economies of many poor gold-producing countries, especially
in sub-Saharan Africa.

Calling Mattingly's response implausible, Murphy cites FOMC
Secretariat procedures, what the Federal Reserve itself says about
the FOMC transcripts:



"The Secretariat lightly edited the speakers' original words to
facilitate the reader's understanding. This editing involved some
rewording, primarily for syntax purposes, or in some instances to
complete or clarify a speaker's thoughts or to correct an obvious
misstatement. But in no case did this editing alter the substance
of the comments made. Meeting participants were then given an
opportunity to review the transcripts for accuracy."

For the meetings preceding 1994, the transcripts were produced
from the original, raw transcripts in the FOMC Secretariat's files.

In other words, beginning with the 1994 meetings, the FOMC
Secretariat produced the transcripts shortly after each meeting from
an audio recording of the proceedings, lightly editing the speakers'
original words, where necessary, to facilitate the reader's
understanding. Meeting participants were then given an opportunity
within the next several weeks "to review the transcripts for

Virgil Mattingly was the general counsel for the Fed and he did
not object to the January 31, 1995, transcript when it was produced.
Neither did Greenspan. Neither did Lindsey. Why is Mattingly
objecting now and why is Greenspan unwilling to deal with this
issue truthfully with members of Congress?

If that is not bad enough, the Gold Anti-Trust Action Committee
has disclosed that the U.S. Treasury in September 2000 reclassified
more than 54 million ounces of gold, reportedly held at the U.S. Mint
at West Point, N.Y., from the "Gold Bullion Reserve" category to
"Custodial Gold Bullion" (according to the report of the Financial
Management Service/Department of the Treasury Web site) without
footnote or explanation.

This amounts to the apparent loss of gold ownership of more than
20 percent of the total U.S. gold reserves. The term "reserves"
obviously connotes ownership, while the connotation "custodial"
refers to taking care of another's property. The 48-million-plus
ounces at the U.S. Mint at Denver, Colo., continued to be reported
as "Gold Bullion Reserve." This reporting was both before and after
the September reclassification of gold at the U.S. Mint at West
Point, and no other "custodial" positions for any other location
have ever been reported.

To further confuse the issue, the categories of "reserve" and
"custodial" gold have both been eliminated as of the May 2001 report.
Both categories were consolidated and are now labeled "Deep Storage

Murphy laments: "Deep storage? Garbled? What is this, some kind of
B movie-like charade on the American public?"

"Treasury Secretary O'Neill is being queried by members of
Congress from all over the United States on these but so far has
declined to respond to any of them," Murphy says.

CONTACT: Gold Anti-Trust Action Committee
Bill Murphy, 214/522-3411
Fax 214/522-4432