Price of gold is rising fast as people realize not much is left

Section:

By James Sinclair
CEO and Chairman
Tan Range Exploration

Bill Murphy
Chairman, Gold Anti-Trust Action Committee

Harry Schultz, Publisher
The International Harry Schultz Letter

December 16, 2002

The gold futures trading action seen in
December 2002 is a perfect example of the
machinations of the Exchange Stabilization
Fund, The Gold Cartel and the common interest
trading of the Gold Carry Trade. Aren't you
just fed up with "The Bullies" manipulating
your gains away? You complain, lament, and
write letters to us in the hope that we can
do something to protect you from these
manipulators who daily offend the positive
gold interest. We can. Read on.

Gold traded above $336 early in the US
this morning, Friday December 13, 2002, when,
of course, the Blue Coat Cavalry rode in on
their shiny horses. Blam! Slam! Wham! was the
sound of their selling. Selling that seeks to
move volume is real selling that never
announces its presence. This Blam-Slam-
Wham type of selling has only one
purpose. That purpose is to sell the least
amount of gold with the most negative
price impact on the gold market.

The Gold Community,of course,chokesat the
sight of the Blue Coats coming. Away the
gold community runs like the Knights ofNi in
the Monty Python movie, Monty Python and the
Holy Grail. Run Away - Run Away" is the cry
of "Our Crowd." "Sell, sell!" is their
lament, and they are chased back toward $330
by the smallest amount of gold being sold to
make the biggest impact on the community
that cries "foul-foul-foul," yet does
absolutely nothing about it, with the
exception ofthe Gold Anti-Trust Action
Committee (GATA).

GATA has mobilized the gold community-at-
large for one of the most serious offensives
in the history of gold. With their BIS/Fed
suit, they took on the establishment elite
in an effort to make the fact of manipulation
known to the public. What do they receive for
their efforts? The mainline press has
ignoredit, andfromwithin the gold
community acompeting metals/mining site
gleefully calls them "trailer trash."

THE TIME HAS COME TO ACT!

The time has come for the gold community to
shake off the non-gold yellows.

The time has come to say NO to manipulators!

The time has come to free the gold market
from manipulators!

The Time has Come for You to Stand up. (But
not be known or counted.)

Buying of gold shares or options or futures
does nothing for gold bullion or the gold
price. Buying of gold coins does very
little other than re-circulate the
storehouse of already-minted gold coins.
Writing about gold informs, but does
little for the gold price. Complaining
about manipulators' presence in the gold
market on a daily basis does as much as
screaming at the dark, because it lacks
action.

The time has come for you to stop the
manipulators dead in their tracks. It is
quite simple, but falls primarily to those
who can afford it, but the cost is not
large.

Every gold trader who has invested in the
gold market should act to help gold by
ridding the paper gold market of the
manipulative presence. Here is how you,
acting alone and by your own direction and
decision, can turn the tide against the
illegal co-conspirators who are depressing
the price of gold on a daily basis in hopes
of breaking the back of the gold market. If
any entity had acted with similar tactics
in the equities markets or an index,
creating a pattern of constant bearish
intervention while holding short positions
that benefited them, we believe they
would be facing regulators for violating
administrative law for having acting in
concert to manipulate markets for personal
benefit.

WE HAVE THE MEANS TO COUNTERATTACK

The Asymmetrical Tactic

The means to rid the marketplace of these
manipulators is to use one of their own
tools.

Ninety-five percent of the manipulation of
the gold market is accomplished in the paper
gold market of the COMEX

The Defense

We therefore proposethefollowingindividual
action.Thoseinthe International and U.S.
Gold Investment Community, who are
financially able, would purchase one COMEX
gold contract and take delivery of that
contract. By taking delivery of the actual
bullion gold in an individual, orderly,
constant and thereforenon-distruptive
mannertheCOMEXwill be transformed. Over
time, this individual, orderly, non-
distruptive action upon the Comex gold
futures market will accomplish several goals.

1. Physical (rather than paper) ownership
would move the COMEX towards becoming as
much a cash and paper gold market in
reality not just as a contract potential.

2. It would serve to improve the viability of
the COMEX marketplace

3. This action would make it infinitely more
costly and difficult for the obvious
execution of orders to effect price as a
primary goal.

4. It would alter the COMEX's present purpose
for being.

5. It would put pressure on the
mechanism for those that wish more to
affect price than execute legitimate buy and
sell interest depend on.

It is a sad fact that the Comex gold
exchange is, in our opinion, not a free
market, but the world's forum to
manipulate the international cash gold price
via paper gold to the clear detriment of
every gold investor internationally.

The Result or Call to Action

For those who believe in gold's
discipline and have invested in it or
gold-related investments, buy 1 Comex gold
contract and take delivery. You then have
done something very important for gold
because you are buying gold bullion and not
simply playing a paper game called gold
that settles in cash. One COMEX gold future
contract represents 100 ounces of gold and
is valued presently at US $33,250 at
delivery.

THE REWARDS OF ACTION

We propose Gold Members (Associated not
with each other but with the discipline
of gold) who agree to participate in
this movement toward returning gold to
the heart of the monetary system with
backing for currencies, must now act to
establish the US gold market as a level
playing field for all participants free of
concentrated & conspiring interest
attempting to create prices positively or
negatively. The membership would have
designated levels, rights and privileges
concurrent with their level of financial
commitment. We plan three levels in this
informal gathering of common interest as
follows:

The Gold Member Card

Immediate Access

We will produce a special gold card, which
will carry a number, not a name. This card
will be protected against counterfeit. It
will entitle the holder to contact anyone of
us by a direct fax number to ask questions
concerning the market with an immediate same-
day answer.

Annual Gold Round Table Meeting

Once a year we hope to host an exclusive
meeting where the attendance would be
limited to members holding Gold Member cards.
The purpose of this Round Table Meeting will
be two-fold: (1) An exclusive presentation by
the hosts limited to forty minutes or less,
and (2) An open forum exchange where the
attendees will have the opportunity to
present questions to the hosts (those
present or by telecast).

You will receive strategic and expert
information concerning your investment in
gold and related markets. Whatever we may be
able to provide, will be provided without
cost to you.

Heart of Gold

Harry, Bill, and Jim will be the heart of
this anonymous movement. The Heart will
entertain placement of three additional
individuals to take a seat at the table.
These three seats will be offered to the
top three physical gold owners as a result
of taking physical delivery of gold from the
COMEX gold exchange. These three
individuals will also have personal access
to us.

The Gold Community Card

We offer a secondary level of
participation. For those with under $50,000
(USD) to invest, they should apply 1/3 of
their investment to the next best (but really
not that effective) gold investment, which
are one-ounce newly minted gold coins. They
will receive, by proof of the coin purchase,
a Gold Community Card. Their membership will
entitle them to ask one question per month to
be answered on a two-day return basis.

Are you willing to do something for gold
bullion that really counts or just carp about
being run ragged by the manipulators?

If you do not do something for gold,you have
no right at all to expect gold to do
something for you. Thus you are not a gold
community member in the sense of
cooperation with purpose of gold's
discipline and currency utilization,
therefore undeserving of rewards.

How to select an International Bank or
Broker to initiate the transaction to take
delivery of Gold Bullion

1. Select an international bank or broker
that has the capacity to execute order on
the Comex Exchange directly or through a
correspondent broker. (See Appendix)

2. Inform your selected international bank
or broker, both verbally and in writing,
that you intend to take delivery of
the underlying gold represented by the
Comex future you have purchased. (See
Appendix for Sample Letter)

3. Make your purchase of a Comex gold
contract with a financially comfortable
delivery date.

4. Your international bank or broker will
contact you on or just before first
notice date.

5. Again inform your international bank or
broker that you intend to take delivery.

6. Be sure that your account at the
international bank or broker has a credit
slightly more that the difference between
your credit/debit balance in your account
and the price of gold you purchase the
future at. For instance, if you had
purchased gold for December delivery when
it was trading at $300, you would have a
credit balance per contract of at least
$3300. In order to take delivery of 100
ounces, you would have to have an additional
$26,700 plus expenses in your account with
your international bank or broker in order
to effect delivery.

How to Take Delivery
of Gold Futures Contracts

The Commodities Exchange (COMEX), a
division of the New York Mercantile
Exchange (NYMEX), provides a forum for the
trading of gold futures and options (as
opposed to the "traditional" means of
investing in gold, such as bullion, coins,
and mining stocks). In addition to
trading futures ("contracts with firm
commitments to make or accept delivery of a
specified quantity and quality of a
commodity during a specific month in the
future at a price agreed upon at the time
the commitment is made"), investors can
actually take possession or "delivery" of
their gold futures contracts if they wish.
It is rare that a trader ever takes
possession of the physical commodity he/she
trades, but not impossible. Presently, less
than 1% of all gold futures contract trades
result in delivery.

Taking delivery of gold is also referred to
as "exchange of futures for, on in
connection with, physicals" or EFP.
Deliveries of gold bullion against futures
contracts traded on COMEX are available to
an investor during any business day within
the month specified in the contract. The
first day a seller can give delivery
notice to the buyer is the next to the
last business day of the month prior to a
maturing delivery month. The last day a
seller can give delivery notice is the second
to the last business day of a maturing
delivery month (the day after the last
trading day). The last trading day is the
third to the last business day of a
maturing delivery month. So, if an investor
buys a December 2002 gold contract, the
first notice day would be November 27, 2002.

Any gold delivered against a futures contract
must bear a serial number and identifying
stamp of a refiner approved and listed
by the Exchange. Delivery must be made
from a depository located in the
Borough of Manhattan, New York City,
licensed by the Exchange (listed below or
See Appendix)

The Procedure

Checklist to take delivery of gold futures
contracts:

1. Establish a long position in gold by
ordering a purchase via a broker or
international bank with a correspondent able
to execute an order on the COMEX.

2. Wait for the account to clear through a
COMEX clearinghouse.

3. Hold the contract to the delivery month.

4. The clearinghouse will settle accounts and
allocate the percentage equal to their
percentage holding of open interest.
Typically it is allocated through the first
in, first out method.

5. Pay for the gold position in full.

6. Receive the warehouse receipt from the
clearinghouse.

7. Contact the depository.

8. For delivery, a person in the US can
either pick up the gold yourself, depending
on the quantity (though, if it is a large
amount, this is not advised for
insurance/security reasons) or have an
armored car deliver it to your bank.

i. According to Brink's (one of the
armored transportation services recommended
by the COMEX), the maximum charge for
domestic gold delivery is .27 per ounce
(with a minimum charge total of $135) plus a
$20 security charge. The more gold shipped,
the less the cost per ounce will be. ii.
Other charges associated with delivery
include the warehouse fee for taking the
gold out of the warehouse (things such as
labor costs, etc.) -typically this costs
approximately $15 per bar.

iii. The delivery services carry their own
insurance (i.e. IBI Armored Car has $100
million insurance for all their
transportation services) but you may choose
to take out additional insurance.

9. Safety deposit boxes can be as
large as 55" by 54" and cost
approximately $2800 a year (quote from Bank
One in Chicago).

For international delivery, there are a few
more steps.

According to Brinks, the shipping company
will need specific mailing and packing
information for each shipment:

a. How much it weighs (by kilos for
international shipments)?

b. How it is packaged? The gold bars must be
packed correctly for shipping. Either the
Depository or the shipper can do.
Typically, the Depository delivers gold on
a palette. It must then be transferred into
pails (which fit 8 bars) or into tubs (which
fit 160 bars) for international shipping.
The shipper must be able to see and count
all bars. Brinks will transfer the goldon
the palette to their Brooklynvaultandthen
package it themselves.

The base rate for international shipping
100,000 ounces would be .12 per ounce
(approximately $12,250, or .04% of the
total cost - quoted by Brinks). This
includes the charges for pick up, packing
the bullion (by Brinks), the air freight
rate flight, having the shipment met by a
local branch representative, customs entry,
and a $25 airport security. All other fees,
such as duties and all other customs are
not included in price estimate. The
shipment must be from a bank to a bank; they
will not pick up at a residence. Brinks
will deliver to England, France,
Germany, Switzerland, India, Hong Kong,
Australia, Russia, etc.

To ship one 100-ounce bar, Federal Express
will ship precious metals. The cost to ship
a 7-lb. package (one 100-ounce bar of gold)
from New York to Zurich would be $100. There
are no duties or taxes to pay for delivery
gold to Switzerland. The bottom line
estimate for delivering one 100-ounce bar of
gold from New York to Zurich will be around
$100.

An important note: any gold that is signed
out of a COMEX depository and shipped
internationally must be assayed before it is
brought back to the COMEX for resale, at a
cost ($138 per bar - the cost descends as the
volume increases).

COMEX Depositories:

Brink's, Inc. 580 Fifth Avenue, Suite 400 New
York, New York 10036 USA phone: 212-558-6267

HSBC Bank USA 1 West 39th Street, SC 2 Level
New York, New York 10018 USA phone: 212-525-
5000

Scotia/Mocatta Depository, (Scotia/Mocatta
is the global bullion banking division of
the Bank of Nova Scotia, formed in
1997 by the bank's acquisition of Mocatta
Bullion from Standard Chartered Bank in
London.) 26 Broadway New York, New York 10004
USA phone: 212-912-8530

Resources
http://209.67.30.245/jsp/markets/gol_pre_agree.jsp
http://www.chdwk.com/gold.cfm
http://www.toerien.com/advice_column/securities/gold_futures.htm
Brink's (http://www.brinksinc.com/)

To contact the authors:

James E. Sinclair, Chairman and CEO
Tan Range Exploration
Tnxinvestor@zoolink.com

Bill Murphy, Chairman
Gold Anti-Trust Action Committee
LePatron@LeMetropoleCafe.com

Harry D. Schultz, Publisher
The International Harry Schultz Letter
hslmentor@racsa.co.cr