Toronto Globe and Mail has brief profiles of Casey, North, Turk, and Doyle


As Gold Rallies, a Fringe Claims Victory

By Gordon Pitts
The Globe and Mail, Toronto
Friday, December 16, 2005

Bill Murphy believes the forces of darkness are finally on the run.

The U.S. gold bug is claiming victory over the central bankers, the
political heavies, and the conspiracy of silence that has kept his
message of gold market manipulation out of the U.S. media.

"We're characterized as these helicopter loonies -- and that's
crazy," says Mr. Murphy, 59, shouting into the telephone yesterday
as he prepared to board a plane.

The source of his exaltation is gold at more than $500 (U.S.) an
ounce, and, despite recent softness, being up 17 per cent this year.

In the view of Mr. Murphy and his followers, this is powerful
evidence that the "gold cartel," which has denied the yellow stuff
its rightful place as a reserve currency, has lost control of its
once-rigged market.

It means gold should top $1,000 within two years on its way to
between $3,000 and $5,000, the Dallas-based Mr. Murphy proclaimed.

The propagation of conspiracy theories around the manipulation of
precious metals has a long and rather dubious history.

But over the past decade, Mr. Murphy, a former pro football receiver
and Wall Street futures trader, has lent an intellectual patina to
the cause by assembling a loyal core of consultants and academics
around his Gold Anti-Trust Action Committee, or GATA.

Mr. Murphy argues the current gold surge began with a GATA meeting
of about 100 true believers in the summer in, appropriately enough,
Dawson City, centre of the 1898 Klondike gold rush.

The Dawson City meeting was attended by a key Russian official,
lending credibility to the cause, he said. Russia, along with China
and Saudi Arabia, have led the upsurge in demand for gold that has
overwhelmed the U.S.-based cartel, he observed.

At the heart of his worldview is that the U.S. Federal Reserve Board
for years leased out large amounts of gold in paper certificates to
suppress the price, thus bolstering the U.S. dollar as a reserve
currency. The masterminds were Alan Greenspan, outgoing Fed
chairman, and major U.S. financial institutions, GATA alleged.

The theory is that the U.S. Gold Reserve in Fort Knox does not have
enough bullion on hand to meet its paper obligations. With the price
rising and supply squeezed, the need to cover short positions with
real gold will create a giant price increase -- and a potential

Evidence that the tide is turning, Mr. Murphy said, can be seen in
the relative strength of the U.S. dollar against major currencies at
the same time gold is climbing. Hence, proof that gold and the
greenback are not joined at the hip, Mr. Murphy said.

GATA has some high-powered allies, including Eric Sprott, the
Toronto investment manager, and his precious metals guru John Embry,
both of whom attended the Dawson City meeting, Mr. Murphy said.

In his commentaries, Mr. Sprott has lent credibility to Mr. Murphy's
views by citing them as possible theories behind market moves.

Mr. Murphy is "a tenacious, very tough guy," said Nick Barisheff,
president of Bullion Management Group Inc., a Toronto-area fund
company that invests in gold. Asked if the conspiracy view was
accurate, he said: "It's something we will never know. It's like the
assassination of Kennedy."

It sounds unpatriotic for an American to endorse gold at the expense
of the dollar, but Mr. Murphy argues that the alleged market fixers
were un-American in their manipulation.

"I think it is going to lead to a disaster," he cautioned. "What it
did was take away the barometer from the little guy in America,
which was wrong. In 1776 America became our country because we
railed against the inequities of what the big boys were doing in
England. This is what America is all about."

It's not the first time Mr. Murphy has cast himself as a patriot --
he was a Boston Patriot back in the American Football League of the
1960s. He had taken hotel management at Cornell University, where he
played football.

After catching on with the Pats, he caught about 20 passes in his
only season before he blew his knee out. He moved into futures
trading on Wall Street.

His moment of decision came with the collapse of Long-Term Capital
Management in 1998, when powerful financial institutions bailed out
the U.S. hedge fund, preventing financial chaos.

Mr. Murphy expected the gold price would soar as institutions
scrambled to cover the hedge fund's large short position. Instead,
some major banks were selling every time gold rallied, and the
collusion theory gained a convert.

Mr. Murphy said that, since he founded GATA, he has been effectively
silenced in mainstream U.S. TV and newspapers. "The media have not
allowed our story to be told. We are taking on the richest and most
powerful people in the world."

But he has kept expounding his theories, shrugging off jeers from
the sidelines. That wouldn't surprise Mike Holovak, his former coach
with the Patriots. He once told The Wall Street Journal that Mr.
Murphy "wasn't big in muscles and he wasn't particularly fast. But
he always managed to get open and catch the passes. He took some
awful licks but always came back."


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