Hedge book closed, Durban now is fully exposed to spot price


10:26p ET Sunday, July 7, 2002

Dear Friend of GATA and Gold:

Our dispatch Friday of GATA Chairman Bill Murphy's
appeal for support for U.S. Rep. Ron Paul's
Monetary Reform and Accountability Act should
have included the file number of the legislation:
H.R. 3732. Bill's appeal is appended here.

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

* * *

By Bill Murphy, Chairman
Gold Anti-Trust Action Committee Inc.
Friday, July 5, 2002

I spoke this week with Norman Singleton,
U.S. Rep. Ron Paul's legislative aide, about what the
GATA Army could do to assist the congressman
with his Monetary Reform and Accountability
Act. The bill simply requires the president and
Treasury secretary to get the approval of Congress
before intervening in the gold market.

Treasury Secretary Paul O'Neill is on the record
as being against the bill, which seeks only
transparency. O'Neill's response here is contrary to
the cries of the American public these
scandalous days.

Singleton said the first thing that needs
to be done is to get more sponsors for the
bill. So far only Rep. John B. Larson of
Connecticut has signed on.

You can either sit there and stew about what
the Gold Cartel is doing to your gold
investments or do something about it now. One
need not contribute financially to GATA to be
a part of the army, although contributions are
much appreciated. Everyone can make a phone
call and write a letter. There are enough of
us now that we CAN make a difference.

GATA has made it easy for you.

Here are the congressmen who are members
of the House International Monetary
Policy Subcommittee, which has jurisdiction
over the bill. All numbers should be preceeded
by the 202 area code for Washington.

Doug Bereuter (Nebraska), chairman, 225-4806

Doug Ose (California), vice chairman, 225-5716

Marge Roukema (New Jersey), 225-4372

Richard H. Baker (Louisiana), 225-3901

Michael N. Castle (Delaware), 225-4165

Jim Ryun (Kansas), 225-6601

Donald A. Manzullo (Illinois), 225-5676

Judy Biggert (Illinois), 225-3515

Mark Green (Wisconsin), 225-5665

Patrick J. Toomey (Pennsylvania), 225-6411

Christopher Shays (Connecticut), 225-5541

Gary G. Miller (California), 225-3201

Shelley Moore Capito (West Virginia), 225-2711

Mike Ferguson (New Jersey), 225- 5931

Bernard Sanders (Vermont), 225-4115

Maxine Waters (California), 225-2201

Barney Frank (Massachusetts), 225-5931

Melvin L. Watt (North Carolina), 225 1510

Julia Carson (Indiana), 225-4011

Barbara Lee (California), 225-2661

Paul E. Kanjorski (Pennsylvania), 225-6511

Brad Sherman (California), 225-5911

Jan D. Schakowsky (lllinois), 225-2111

Carolyn B. Maloney (New York), 225-7944

Luis V. Gutierrez (Illinois), 225-8203

Ken E. Bentsen Jr. (Texas), 225-7508

House Committee on Financial Services
2129 Rayburn House Office Building
Washington, D.C. 20515

* * *

Those are the congressmen who need be
informed about the importtance of The
Monetary Reform and Accountability Act. I
suggest phoning some of them and speaking to
the appropriate congressional staff member.
Then follow the phone call up with a letter
to the congressman.

You might want to use the following in your

* * *

RBC Global Investment Management Inc., a
division of Royal Bank of Canada, whose gold
mutual fund is among the best performing in
the world, has issued a report that was
circulated throughout Europe to clients and
prospective clients that fully endorses the
analysis of the gold market done by the Gold
Anti-Trust Action Committee's (GATA), which
concludes that the price of gold is being

The RBC report says the price of
gold is going to explode for the following

1)Unsustainable Supply/Demand Imbalance

2) Unsustainable Short Position

3) Unsustainable Low Inflation

4) Unsustainable U.S. Dollar

5) Unsustainable Prices for Financial Assets

6) Increasing Evidence of Unsustainable Gold
Price Manipulation

Point 6 is most significant as it
echoes what GATA has discovered and revealed
over the past 42 months. The RBC report cites
11 reasons behind gold price manipulation:

1) Aggressive gold lending, which from an
economic perspective is indefensible, has
filled the supply/demand gap.

2) New York Fed gold has been mobilized when the
gold price is rising.

3) Timing of Exchange Stabilization Fund
gains/losses corresponds to gold price

4) Audited reports of U.S. gold reserves show
unexplained variances.

5) Minutes of Fed meetings confirm officially
denied gold swaps.

6) Rules on gold swaps have been revised
and then denied. However, individual
central banks have repudiated the denial.

7) U.S. gold reserves have recently been
re-designated twice, initially to "custodial
gold" and latterly to "deep storage gold."

8) Statistical analysis of unusual gold price
movements since 1994 indicate high
probability of price suppression. The
invalidation since 1995 of Gibson's
Paradox -- that gold prices rise when real
interest rates fall -- suggests that the real
manipulation began then.

9) New York gold price movements versus
London prices trading defy odds.

10). Timing of huge increases in bullion bank
gold derivatives is consistent with gold
price declines.

11) A rapid decline in U.S. Treasury holdings of
gold-backed SDR certificates is not explained.

The RBC report goes on to say: "One or two of
these factors could be viewed as random, but
the full body of evidence is overwhelming."

The Gold Anti-Trust Action Committee has fully
documented all 11 points cited by the
Royal Bank of Canada regarding the
manipulation of the price of gold. To date,
no one in the gold industry has refuted any of
GATA assertions.

The chairman of GATA (Bill Murphy) will be
more than happy to speak with you on this
matter and then, upon request, forward
specific evidence of each of the citations