Easing the gold shorts out; and South Africa cuts interest rates 1.5%

Section:

Gold Bugs Get Their Answer

By Kelly Patricia O'Meara
Insight Magazine online
June 12, 2003

http://www.insightmag.com/news/439175.html

More than a year ago, Blanchard & Co. of New Orleans,
the nation's largest retailer of precious-metal coins, filed
a lawsuit against J.P. Morgan Chase & Co. and a
Canadian mining corporation, Barrick Gold Corp.,
alleging the companies had "manipulated the price of
gold," earning them more than $1.7 billion, putting them
in the dominant position in the market and keeping the
precious metal at abnormally low prices.

The contention of the lawsuit was denied by Barrick,
which claimed it was "ludicrous and totally without merit."

However, U.S. District Court Chief Judge Helen G.
Berrigan of the Eastern District of Louisiana recent
denied Barrick's motion to dismiss the case based
on the mining company's own admission that central
banks around the world are involved and therefore
out of the court's jurisdiction.

It appears from the transcript of the case that Berrigan
is unwilling to be intimidated by the big-money men.

* * *

Judge Berrigan: "How would those contracts be
challenged, under your theory that everybody [central
banks] has to be involved? Because, how do you get
jurisdiction over everybody?"

Wegener (attorney for Barrick): "You can't."

Judge Berrigan: So you all can just tallyho and do
anticompetitive stuff? So the idea is, if you get enough
people involved in the monopoly, then you're immune
from litigation?"

Wegener: "Well, I don't think it's quite that."

Judge Berrigan: "And you're saying it's not possible to
bring everybody [all the central banks] in?"

Wegener: "Yeah, I think you can't bring the central banks
in, because they're immune. You can't bring in all the
bullion banks because they're beyond the jurisdiction of
the court."

Judge Berrigan: "I mean, if what you say is correct, then it
sounds like the legal remedy is for individual plaintiffs,
like say Blanchard, to go to the United States court like
he's done here, and go after J.P. Morgan. And then
wherever these entities are, to go to those courts, in those
countries, in those locales, and try to seek the same relief.
But I'm very much troubled by the end result of your
argument, which is to the effect that if an outfit is large
enough and involves enough people, enough entities,
then they can kind of do what they want. But I just don't
find it possible to think that something could -- if, in fact,
there is an antitrust violation going on here -- that because
it involves so many powerful entities from all around the
world, therefore, it's going to be immune from being
challenged. That's, as we say, not acceptable."

* * *

Gold bugs have for years contended that the price of
gold has been manipulated by bullion banks in
cooperation with the central banks. Based on the
admission of Barrick's attorney, it appears the central
banks are indeed very much involved if only to assist
in Barrick's defense.

-----------------------

Kelly Patricia O'Meara is an investigative reporter for
Insight.