Bundesbank shoots down talk of more gold sales

Section:

11:47p ET Tuesday, March 5, 2002

Dear Friend of GATA and Gold:

GATA distributed yesterday the press release below in
the hope of persuading Americans to contact their
members of Congress about U.S. Rep. Ron Paul's
legislation to impose some accountability on the
Exchange Stabilization Fund's activity in the gold
market.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

DALLAS, March 4, 2002 (Business Wire) --Research by
the Gold Anti-Trust Action Committee Inc. has been cited
by U.S. Rep. Ron Paul, R-Texas, in support of his
legislative proposal to prevent the U.S. government from
intervening in the gold market without authorization from
Congress.

Paul's Monetary Freedom and Accountability Act, H.R.
3732, originates in concerns that the U.S. government,
acting through the Federal Reserve Board, the Treasury
Department, and the Exchange Stabilization Fund, has
been surreptitiously suppressing the gold price in order
to distort general measures of the U.S. and world
economies.

GATA, an international civil rights and educational
organization, was cited by Paul both in a statement in
the Congressional Record and in a letter to all members
of the House of Representatives soliciting support for
his bill.

Paul's office says the Monetary Freedom and
Accountability act needs support from all members of
Congress but particularly from these members:

-- Rep. Michael Oxley, chairman of the House
Financial Services Committee.

-- Rep. John LaFalce, the committee's ranking
Democratic member.

-- Rep. Peter King, chairman of the Subcommittee
on Domestic Monetary Policy

-- Rep. Carolyn Maloney, the subcommittee's ranking
Democrat.

-- House Speaker Dennis Hastert.

-- House Republican Majority Leader Dick Armey.

-- House Democratic Minority Leader Richard Gephardt.

All members of the House can be reached by mail
at U.S. House of Representatives, Washington, D.C.
20515.

Paul's statement in the Congressional Record and
his letter to his colleagues follow:

Congressional Record, February 14, 2002
Statement by U.S. Rep. Ron Paul of Texas

Mr. Speaker, I rise to introduce the Monetary
Freedom and Accountability Act. This simple bill takes
a step toward restoring Congress' constitutional
authority over U.S. monetary policy by requiring
congressional approval before the president or the
treasury secretary buys or sells gold.

Federal dealings in the gold market have the potential
to seriously disrupt the free market by either
artificially inflating or deflating the price of gold.
Given gold's importance to America's (and the world's)
monetary system, any federal interference in the gold
market will have ripple effects through the entire economy.

For example, if the government were to intervene to
artificially lower the price of gold, the result would
be to hide the true effects of an inflationary policy
until the damage was too severe to remain out of the
public eye. By artificially deflating the price of gold,
federal intervention in the gold market can reduce the
values of private gold holdings, adversely affecting
millions of investors. These investors rely on their gold
holdings to protect them from the effects of our
misguided fiat currency system.

Federal dealings in gold can also adversely affect
those countries with large gold mines, many of which
are currently ravished by extreme poverty.

Mr. Speaker, restoring a vibrant gold market could
do more than any foreign aid program to restore
economic rowth to those areas.

While the Treasury Department denies that it is
dealing in gold, the Gold Anti-Trust Action Committee
(GATA) has uncovered evidence suggesting that the
Federal Reserve and the Treasury, operating through
the Exchange Stabilization Fund and in cooperation
with major banks and the International Monetary Fund,
have been interfering in the gold market with the goal
of lowering the price of gold. The purpose of this policy
has been to disguise the true effects of the monetary
bubble responsible for the artificial prosperity of the
1990s, and to protect the politically powerful banks
that are heavy invested in gold derivatives.

GATA believes that federal actions to drive down
the price of gold help protect the profits of these banks
at the expense of investors, consumers, and taxpayers
around the world.

GATA has also produced evidence that American
officials are involved in gold transactions.

Alan Greenspan himself referred to the federal
government's power to manipulate the price of gold at
hearings before the House Banking Committee and the
Senate Agricultural Committee in July 1998: "Nor can
private counterparts restrict supplies of gold, another
commodity whose derivatives are often traded over-
the-counter, where central banks stand ready to lease
gold in increasing quantities should the price rise."

Mr. Speaker, in order to allow my colleagues to learn
more about this issue, I am enclosing "All that Glitters
is Not Gold" by Kelly Patricia O'Meara, an investigative
reporter from Insight magazine. This article explains in
detail GATA's allegations of federal involvement in the
gold market.

Mr. Speaker, while I certainly share GATA's concerns
over the effects of federal dealings in the gold market,
my bill in no way interferes with the ability of the
federal government to buy or sell gold. It simply requires
that before the executive branch engages in such
transactions, Congress has the chance to review it,
debate it, and approve it.

Given the tremendous effects on the American economy
from federal dealings in the gold market, it certainly is
reasonable that the people's representatives have a role
in approving these transactions, especially since Congress
has a neglected but vital constitutional role in overseeing
monetary policy. Therefore, I urge all my colleagues to
stand up for sound economics, open government, and
Congress' constitutional role in monetary policy by
co-sponsoring the Monetary Freedom and Accountability Act.

* * *

Rep. Ron Paul's letter to other U.S. representatives.

March 2002

Dear Colleague:

Please help restore Congress' constitutional role in
overseeing monetary policy by cosponsoring the Monetary
Freedom and Accountability Act (HR 3732).

This simple act takes a step toward restoring Congress'
constitutional authority over the monetary policy of
the United States by requiring congressional approval
before the federal government buys or sells gold.

Federal dealings in gold can distort the gold market.
Given gold's importance as a barometer of the health of
our monetary system, this can have ripple effects across
the entire economy.

The Gold Anti-Trust Action Committee (GATA) has
raised serious allegations that the Treasury and the
Federal Reserve, acting through the Exchange Stabilization
Fund, have been interfering in the gold market with the
goal of lowering the price of gold to disguise the
true nature of the financial bubble of the 1990s.

According to GATA, these actions made it impossible to
know the true state of the economy, and thus may have
worsened the impact of the recession on investors,
consumers, and workers around the world.

While I share the concerns raised by GATA regarding
the effects of federal interference in the gold market.
HR 3732 in no way interferes with the federal government's
ability to buy or sell gold. Instead, HR 3732 simply
restores Congress' much-neglected role in monetary policy
by ensuring Congress can debate and approve any federal
dealings in gold. HR 3732 also ensures that the American
public is fully informed of their government's dealings
in the gold market.

Please stand up for sound economics, open government,
and Congress' constitutional authority. Co-sponsor
the Monetary Freedom and Accountability Act today.

Sincerely,
U.S. Rep. Ron Paul