Gold Bugs Index reaches highest point in 2 years


1:37a ET Thursday, March 21, 2002

Dear Friend of GATA and Gold:

This Reuters story is a few days old but it indicates that
a big fight is brewing in Congress over regulation of
derivatives in the over-the-counter metals markets. How
fascinating that Fed Chairman Alan Greenspan, Treasury
Secretary Paul O'Neill, Senate Banking Committee
ranking member Phil Gramm, and Gramm's wife, Wendy,
former chairman of the Commodities Futures Trading
Commission and a member of the board of directors of
Enron, don't want a public examination of the metals
derivatives markets. And how fun that a liberal Democrat,
California Sen. Dianne Feinstein, should want just the
sort of greater transparency already advocated by Texas
Rep. Ron Paul with his legislation to bring the Exchange
Stabilization Fund to heel before Congress.

Something big may be going on here.

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

* * *

Feinstein rejects changes to energy derivatives bill

WASHINGTON, March 18 (Reuters) -- California Sen. Dianne
Feinstein said Monday she would push ahead with legislation
to regulate energy and metals derivatives like those traded
by Enron Corp in the multi-billion dollar over-the-counter

Feinstein, a Democrat, said she rejected a request from
Texas Sen. Phil Gramm, the top Republican on the
Senate Banking Committee, to exempt metals derivatives
and to drop price-transparency requirements from the
measure. The proposed legislation would give the U.S.
Commodity Futures Trading Commission regulatory
oversight of all energy and metals derivatives to better
track large trades in the highly secret over-the-counter
market and to respond faster to any illegal activity in the

The measure, which Feinstein will try to add to a broad
energy policy bill before the Senate, was delayed for
several days while she unsuccessfully negotiated with

Gramm's wife, Wendy, is the former chairman of the
CFTC and a member of Enron's board of directors.
Under Feinstein's plan, the Senate would repeal a
congressional exemption that allows firms to buy and
sell electricity, natural gas, oil, gasoline, and metals
in the OTC market without disclosing information on such
deals to the Commodity Futures Trading Commission.

The energy OTC market is traded privately among
companies and other institutional investors, not on
regulated exchanges such as the New York Mercantile
Exchange. The trades that Enron carried out in the OTC
market have been blamed for pushing up electricity and
natural gas prices in the West last year.

The Feinstein proposal is opposed by Federal Reserve
Chairman Alan Greenspan and U.S. Treasury Secretary
Paul O'Neill, who have expressed "serious concerns"
about it. Greenspan and O'Neill said putting the OTC
market under government oversight would cause legal
uncertainties over the transactions entered into by the
market participants.

Feinstein said she rejected Gramm's request to exempt
energy swaps from CFTC anti-fraud authority, to delete
all public price transparency requirements, and to drop
metals derivatives from the bill. She also refused to
exempt all electronic exchanges from requirements that
they maintain sufficient capital to carry out their