Silver price manipulation protested in letter to Comex


By Bill Murphy, Chairman
Gold Anti-Trust Action Committee Inc.
October 13, 2001

The International Monetary Fund responded yesterday to
questions asked of them by GATA supporters all over the
world. It was no surprise to GATA that the brilliant
Andrew Hepburn caught the IMF in a bald-faced lie
within hours of the IMF's responding to the questions.

The Gold Cartel has been lying to GATA, the investment
world, and the press about the gold market for many
years. It is beginning to catch up on them.

As GATA's chairman, I thank so many of you who wrote to
the IMF. It must have shaken them up.

For your review below:

* A sample of the letters sent to the IMF.

* The IMF's canned response to the letters.

* Andrew Hepburn's analysis of the IMF response.

* * *


I was surprised to receive this response from the IMF
so quickly.

What is even more interesting, I sent them only two of
the questions from Hepburn's list, Nos. 3 and 5, two
days apart. They responded with the answers to all six
questions, obviously recognizing that my two where
among several identical questions from inquiring minds
that want to know.

I suspect that they are aware they are being watched
and have provided identical answers to other GATA

Please see how these answers fit into Hepburn's theory.


From: EXR, Public Affairs []
Sent: Friday, October 12, 2001 12:49 PM

Dear Sir:

In response to your e-mail regarding the IMF and gold,
please see the following information. Included with the
response are additional facts that we hope you will
find useful.

1. Has the IMF had any gold-related transactions
(recorded or otherwise) with the Bank for International
Settlements since 1996, and if so, specifically what
transactions occurred and how much gold was involved?
Has IMF gold been deposited with the BIS?

No, the IMF has not had any gold-related transactions
with the BIS since 1996. No IMF gold has been deposited
with the BIS; the IMF Articles of Agreement do not
allow the IMF to deposit its gold with counter parties,
including the BIS. Since 1996, the only gold
transactions that the Fund has carried out were the
off-market gold transactions in 1999-2000, which were
to help finance IMF participation in the Highly
Indebted Poor Country Initiative (HIPC). (see IMF
factsheet "Gold in the IMF:"

2. Does the IMF deposit its gold with other official
monetary institutions or investment banks, and if so,
what is the size of such deposits and who are the
counter parties?

The IMF's gold is physically held at depositories in
the United States, the United Kingdom, France, and
India. It does not earn interest, and these holdings
would not in this sense be considered "deposits" with
counterparties. Information on the size of the IMF's
gold holdings is givenin the IMF factsheet on Gold. The
IMF's Articles of Agreement do not allow the IMF to
deposit its gold with counter parties, as is done by
some central banks.

3. Why have the SDR certificate accounts for the U.S.
Federal Reserve and the Exchange Stabilization Fund
plummeted since 1998? Is the IMF aware of any
transaction or agreement that has caused this
depletion? Is it possible that the SDR Certificates
could have been swapped with another IMF member for
gold? Hypothetically would such a transaction be
permitted under all pertinent IMF regulations?

SDR certificates are held by the U.S. Federal Reserve
but issued by the U.S. Treasury. The IMF is not
involved in any transactions with this type of
instrument. Questions on SDR certificates should be
addressed to either the Federal Reserve or the Treasury

The IMF uses only SDRs in its transactions with members
and prescribed holders of SDRs (see Annual Report 2001,
Page 67:

SDR holdings of the United States have risen slightly
over the last several years, according to the IMF's
International Financial Statistics.

4. Why does the IMF insist that members record swapped
gold as an asset when a legal change in ownership has

This is not correct: the IMF in fact recommends that
swapped gold be excluded from reserve assets. (See Data
Template on International Reserves and Foreign Currency
Liquidity, Operational Guidelines, para. 72:

5. Since 1994 what dealings has the IMF had with the
U.S. Exchange Stabilization Fund?

Since 1994 the IMF has not had any dealings with the
U.S. Exchange Stabilization Fund.

6. Since September 2000, approximately 40 tonnes of
gold have left the vaults of the New York Federal
Reserve each month. Is this gold IMF gold, and if not,
is the IMF aware of the country that is responsible for
these outflows?

No, inflows or outflows of gold at the New York Fed are
not related to IMF gold. The only gold transactions
that the IMF has carried out in recent years were the
off-market transactions for the HIPC, referenced in
question 1. For further information on the question
raised, please contact the New York Federal Reserve.

Public Affairs Division
External Relations Department
International Monetary Fund

* * *


My immediate impression of the gold swaps issue is the

I went to the IMF's discussion of the International
Reserves Template and they state in Paragraph 72 (which
is mentioned in the e-mails you forwarded) that "Assets
pledged are typically not readily available. If clearly
not readily available, pledged assets should be
excluded from reserves." They go on to say, "Pledged
assets are separately identified from securities lent
or repoed and gold swapped in Section IV memo items of
the template."

In Paragraph 100 the IMF states: "Accounting practices
for gold swaps vary among countries. Some countries
record transactions in gold, in which the gold and cash
exchanged are reflected as offsetting asset entries on
the balance sheet. Others treat gold swaps as
collateralized loans, leaving the gold claim on the
balance sheet and recording the cash exchanged as two
offsetting asset and liability entries on the balance

As a footnote to the second example, the IMF states:
"This treatment applies only when an exchange of gold
and cash occurs, the commitment to buy back the gold is
legally binding, and the repurchase price is fixed at
the time of the spot transaction. The logic is that in
a gold swap the 'economic ownership' of the gold
remains with the monetary authorities, even though the
authorities have temporarily handed over the 'legal
ownership.' The commitment to repurchase the quantity
of gold exchanged is firm (the repurchase price is
fixed in advance), and any movement in gold prices
after the swap affects the wealth of the monetary
authorities. Under this treatment, gold swapped remains
as a reserve asset and the cash received is a repo

The last sentence is very important. Basically it is
the method that most central banks would probably
choose, as it hides the amount of gold that has left
the vaults. It is crucial that the IMF does not require
a specific treatment of gold swaps to be used; more
than one method is apparently acceptable.

I think you're right about the Philippines story. As
far as I'm concerned it stated that the IMF wanted
members to record swapped gold as an asset.

As I look over the IMF answers and find loopholes and
interesting excerpts I will e-mail you my thoughts.

Best regards,

Andrew Hepburn

* * *


The IMF answers are pretty thorough, which means that
either they're telling the truth or they're outright
lying. I'm not completely sure which one it is. As much
as I doubt that they would blatantly mislead the
public, I don't believe any legal repercussions exist
if they did. Besides, if the IMF is deeply involved in
this whole manipulation thing, they might have decided
that lying was their only course of action.

The possibility does exist that the IMF has swapped its
gold for its members' gold and sold the members' gold
using the BIS as an intermediary. I'm not certain if
this would be permitted under pertinent IMF
regulations, but it would have the same effect as
selling IMF gold and would allow the IMF to honestly
say that its own gold is safe and sound.

Let's assume for a moment that the New York Fed's gold
outflows are not IMF gold. The question becomes: Whose
is it then? And why haven't any countries reported
large sales that would account for the drop in
earmarked gold? As I've stated before, the consistency
of the outflows leads me to believe that one country or
institution is doing all the selling.

Reg Howe mentioned in his lawsuit that reliable reports
indicated that the IMF has been leasing gold through
the BIS. It might be a good idea to reconnect with the
source and confirm that indeed the IMF has been
engaging in gold loans. We really need a good source on
this one. The IMF is not simply going to hand over the
smoking gun.

Best regards,

Andrew Hepburn

* * *


I don't think we need to email the Philippine central
bank after all. I was on their website and found
confirmation of the Manila article. They state:

"Beginning January 2000, in compliance with the
requirements of the IMF's reserves and foreign currency
liquidity template under the Special Data Dissemination
Standard (SDDS), gold swaps undertaken by the BSP with
non-central banks shall be treated as collateralized
loans. Thus, gold under the swap arrangement remains to
be part of reserves and a liability is deemed incurred
corresponding to the proceeds of the swap."

The link is:

Basically this just confirms the Manila story, but the
importance is that it is from an official source.

So when the IMF answers Question 4, "Why does the IMF
insist that members record swapped gold as an asset
when a legal change in ownership has occurred?," in the
following manner....

"This is not correct: The IMF in fact recommends that
swapped gold be excluded from reserve assets. (See Data
Template on International Reserves and Foreign Currency
Liquidity, Operational Guidelines, para. 72," ....

.... We can state with certainty that the IMF is
intentionally misleading the public -- otherwise known
as lying.

Best regards,

Andrew Hepburn

* * *


Just found this on the Phiippine central bank website.
The most interesting comment has to be: "In fact,
numerous countries also ship their gold reserves to a
bank account located outside their respective country
-- for example, an account with the Bank of England or
Federal Reserve Bank of New York -- so that the gold can
be used for international financial transactions." The
link for the piece, entitled "Shipment of Gold
Reserves," is:

Andrew Hepburn

* * *

Nice work, Andrew. You have them nailed.

I suggest that GATA supporters take this discovery to
news organizations all over the world and inform them
that their not disclosing what GATA and its supporters
have discovered is inexcusable.

GATA has been on a roll lately. We might as well pour
it on the Gold Cartel while things are going our way.