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A Call to Arms - Ed Steer
"Cautious, careful people, always casting about to preserve their reputation and social standing, never can bring about a reform. Those who are really in earnest must be willing to be anything or nothing in the world's estimation, and publicly and privately, in season and out, avow their sympathy with despised and persecuted ideas and their advocates, and bear the consequences."
Susan B Anthony
I was invited to join the board of directors of GATA -- the Gold Anti-Trust Action Committee -- a little over a year ago, and it has been a privilege for me to work shoulder to shoulder with people of such good character.
What started out as a whim and a small donation more than five years ago has turned into a virtual life pursuit. That wasn't the plan back then, but that's what it has become. I'm fifty-six years old and I've done a lot of things in my time and been a lot of places around the world, but at the end of it all, my life's work will be defined by my efforts on behalf of GATA and its ongoing struggle against all the power and all the money in the world. Except for my family and my means of making a living, this battle has become all-consuming. I'm not the only person associated with GATA who thinks that way. It reminds of an old expression: To love what you do, and know that it matters -- How can anyone ask for more out of life than that?
That's basically where I and many others associated with this undertaking stand.
As you are aware, the prices of gold and silver are managed by the bullion banks and the central banks of the world, and most of the market rigging is occurring on the COMEX, where, as silver expert Ted Butler says, "eight or less traders" pretty well run both the gold and silver price show.
However, in the last year, the "money trusts," as William Jennings Bryan called them, are starting to have a few problems, the biggest one is that world-wide physical demand for both gold and silver is eating them alive. Adding to their woes have been national and international reports from highly credible individuals and groups outlining how the Western banking system in general and the United States financial system in particular have been intervening against the free-market prices of gold and silver.
For gold, they've been doing it off and on since the 1960s. Their latest efforts have been going on covertly for more than fifteen years; and, for silver, far longer than that. It can be flatly stated that no one knows what the free-market price of either silver or gold would be if they were allowed to seek a price that was unhindered by (quoting GATA consultant Reg Howe) "malignant government intervention."
However the reasons why the central banks and bullion banks are doing it should be obvious to anyone with more than a room-temperature I.Q. in degrees Fahrenheit.
One reason that this market manipulation has gone on as long as it has, is, first, the influence of the World Gold Council and Gold Fields Mineral Services. As GATA Chairman Bill Murphy...over at LeMetropoleCafe...and others have stated, these two organizations are controlled by "The Empire"-- my name for today's powers that be.
The second reason is the gold and silver mining industry itself. Most top gold and silver mining companies in the United States are either directly or indirectly under the influence of The Empire, most of them for many many decades. These companies include Newmont, Freeport-McMoran, Coeur d'Alene, and Hecla. In South Africa both AngloGold Ashanti and Gold Fields would be included, and in Canada, Barrick is the Darth Vader of gold companies. I have my suspicions about two other Canadian-based companies as well -- one gold and one silver, but at the moment they are just suspicions.
I must admit that I have little knowledge of what's happening in the Australian gold mining industry, but if their collective hedge books are any indication, The Empire has been busy there as well.
There is no company on the above list that will help its shareholders end the manipulation because they are all part and parcel of it.
The other gold and silver companies all know (or have reason to suspect) what's going on, though they plead ignorance. Virtually all these companies fall outside the direct clutches of The Empire. But if converted to the ranks of The Rebellion, they would become powerful allies that would break the backs of those in The Empire that have a stranglehold on gold and silver prices.
It may seem incongruous to many of you, including yours truly, that an organization such as GATA and its supporters should have to fight this battle at all. "What," you may rightfully ask, "are the executives and board members of these mining companies, whom we elect by proxy every year, doing for us? This is their job."
You are, of course, within your rights to ask this question. Here's the problem that executives and board members of publicly traded companies have: They're called shareholders. They would infinitely prefer that you buy their stock and just shut up. The last thing they either collectively or individually want to do is to deal with legitimate shareholder grievances, even though we, the shareholders, own the companies. The companies are ours, not theirs.
Now, to be fair, there are some gold and silver companies that are really looking out after their shareholders by finding more ounces ... and they are happy to tell you all about it in their press releases and annual reports. But where the rubber really meets the road, the manipulation of the gold and silver price is the one issue that they just don't want to face. Not one of them has sent a letter off to the CFTC, the COMEX or NYMEX to complain -- not one.
(On a very personal note: I no longer give a rip about how many ounces of anything they find at current prices when I know perfectly well (as do they) that shareholder value would be far more enhanced if these companies spent their time ending the rigging of the precious metals markets rather than running all over hell's half-acre with a diamond drill in tow. Right now gold should be north of $700 and silver north of $30. And that, my friends, would really be adding to shareholder value.)
As a group, the precious metals companies we own shares in are just hoping that this situation will resolve itself without them having to get involved. Well, that isn't going to happen. Another question worth asking of these companies is: What happened to their fiduciary responsibilities to us, their shareholders? Just because they want to bury their collective heads in the sand on this issue, why should we, the true owners of these companies, have to put up with it?
I now refer back to the title of this essay: "A Call to Arms." The following is what this essay is all about.
One of the major initiatives that GATA has undertaken is a gold conference that is to be held in Dawson City, Yukon...in northern Canada...the jumping-off point for the Klondike gold rush of the late 19th century. The conference is called Gold Rush 21 and will be held on August 8th and 9th this year. The Internet site for this conference is hyperlinked here.
The main purpose of this conference is to form a NEW precious metals organization that will really look after the best interests of all gold and silver companies -- and by extension, us, the shareholders.
Now you can take the word about this conference to the executives of these gold and silver companies, with virtually no effort on your part, as all the heavy lifting has been done in advance. The letter below is self-explanatory. All you have to do is cut and paste the letter into a word-processing program on your computer (such as Microsoft Word), add the addresses and the names from the "Key Personnel" list to the top of the letter, add your name and address at the bottom, and press "send." Once you have the letter set up with your name at the bottom, it will take no more than a couple of minutes to send a letter to each gold and silver company whose shares you own. You'll be able to go through all the companies on your stock list in no time flat, including the companies you might own that are controlled by The Empire.
There are TWO separate mailing lists ... both of which appear at the end of this essay. The first one includes all the gold and silver companies that comprise the HUI, XAU, and the TSX Gold Index. The second and smaller list is comprised of other fairly major mining (or resource) companies that should also receive copies of the letter/invitation.
Of course, some of the companies you own shares in may not appear on this list, so if you feel inclined to send this invitation to them, you will have to do the necessary spade-work on their respective websites. But the names that appear on these two lists comprise the vast majority of the participants in the gold and silver industry in North America and South Africa.
Here's my letter to Eldorado Gold, the first company name (on the first list) that I own shares in. You are more than welcome to customize each letter to each of your companies as you see fit, and remember: They are YOUR companies, not theirs!
10 March 2005
To: Hugh C. Morris, Chairman of the Board
Paul Wright, President & C.E.O.
Earl Price, C.F.O.
Nancy Woo, Investor Relations
Eldorado Gold Corporation
#1188, 550 Burrard Street
Vancouver, B.C. V6C 2B5
From: Ed Steer
Subject: Gold Rush 21 - Dawson City, Y.T. - August 8th and 9th 2005
Greetings to all,
Before I get to the topic of this memorandum, I would be grateful if you would forward copies to all company personnel whose names appear on the list above. I would also request that you would forward a copy to the legal firm that represents your company, as there are questions in this memo regarding fiduciary duties of management and directors as they pertain to all of your shareholders. Thank you.
I have been a shareholder in your company for three years.
For that length of time (and longer) I have been aware of the fact that the prices for both gold and silver have been actively managed by the Federal Reserve of the United States and other central banks, the most notable of which is the Bank of England. Also involved in association with these and other central banks are bullion banks such as J.P. Morgan/Chase, Citigroup, Goldman Sachs, HSBC, and Deutsche Bank.
In April of 2004, the Deputy Chairman of the Russian Central Bank, Oleg V. Mozhaiskov, had the following to say at the London Bullion Market Association meeting in Moscow.... "This dualism in gold price formation distinguishes it from other commodities and makes the movements in the price sometimes so enigmatic that market analysts need to invent fantastic intrigues to explain price dynamics. Many have heard of the group of economists who came together in the society known as the Gold Anti-Trust Action Committee and started a number of lawsuits against the U.S. government, accusing it of organizing an anti-gold conspiracy. They believe that with the assistance of a number of major financial institutions (they mention in particular the Bank for International Settlements, J.P. Morgan Chase, Citigroup, Deutsche Bank, and others), some senior officials have been manipulating the market since 1994. As a result, the price dropped below US$300 an ounce at a time when it should, if it had kept pace with inflation, have reached US$740-760." His entire speech is hyperlinked here.
Canada's foremost precious metals analyst, John Embry of Sprott Asset Management in Toronto, is the co-author of a report that describes this manipulation in detail. The report is entitled "Not Free, Not Fair: The Long-Term Manipulation of the Gold Price." The entire report is hyperlinked here.
And in a March 2005 report entitled "The Role of Gold in the Unified Gulf Co-operation Council Currency" published by the Gulf Research Center in Dubai, U.A.E., author Eckart Woertz endorses the findings of the Gold Anti-Trust Action Committee that Western central and commercial banks have rigged the gold market and have much less gold than they claim to have, and so are vulnerable to rising demand for gold. The study recommends that the oil-producing countries of the Middle East diversify their ever-depreciating U.S. dollar holdings into gold. To order a copy of this report, please follow this hyperlink.
In a very related development, Blanchard Coin & Bullion of New Orleans has sued Barrick Gold and its bullion bank, JPMorgan, for gold price manipulation. There is an interview with Don Doyle, the president of Blanchard Coin regarding this lawsuit, which I believe you would find of interest. It is hyperlinked here. The actual legal documents filed by Blanchard Coin at the United States District Court of Louisiana may be of interest to your legal counsel, and the pdf file is hyperlinked here.
And as mentioned in a prior paragraph, the Gold Anti-Trust Action Committee has been attempting to expose this gold and silver price manipulation for more than six years. The organization's Internet site is at http://www.gata.org/index.html.
Two silver analysts in particular, Ted Butler and Dave Morgan, have collectively done decades worth of research into the manipulation of the silver price. Their websites are located at http://www.butlerresearch.com/archive_free.html and http://www.silver-investor.com/index.html respectively. In his weekly commentary of March 1, 2005...Ted Butler had this to say..."It is important to remember that the past reliability of price movements of gold and silver dictated by extreme readings in the COT (Commitment of Traders report), is another proof of manipulation in these markets. There is nothing random, free market, legal or economically legitimate about the price-setting tango between the tech funds and the dealers. In fact, it is as far removed from what is mandated by commodity law as is possible. How the producers of real silver (and gold) tolerate this activity is beyond me."
The point that I'm making is that it is common knowledge (and has been for some time) that the price of your main product (gold or silver or both) is managed, and it would appear that most of the people concerned about it are the shareholders of precious metals companies, not the management of the companies themselves.
The organization that is supposed to be representing all gold producers is the World Gold Council. If you've checked their membership list, you will notice that most of their largest members are heavily hedged gold companies that have little interest in higher gold prices. Except to promote gold as jewellery and to sponsor a gold exchange-traded fund that can never be physically audited...so its gold may exist only in paper form, the WGC has never touched the issue of gold as money or as a vehicle for investment purposes. Did you ever wonder why? The Silver Institute fits into the same category.
As Chris Powell, the Secretary-Treasurer of GATA said recently: "The World Gold Council exists to ensure that there NEVER IS a REAL world gold council." That commentary would apply to The Silver Institute equally as well.
Can you imagine the problems that would surface for the central banks and bullion banks if there were a true advocate for the gold and silver industry really trying to promote gold and silver as investments? A real precious metals advocate would be pounding the table at all times on every issue that concerned its members (you, the producers) and, by extension, your stockholders...the real owners of the company. Of course the top issue that a real world gold council would be working on would be ending the manipulation of the gold and silver price.
Well, such an organization is currently in the planning stages. So, if your company would be interested in higher gold and silver prices and increased shareholder value, you would be more than welcome to participate in this historic event.
Here is the announcement...
The Gold Anti-Trust Action Committee is pleased to announce that we will be hosting an international conference on August 8 and 9 in Dawson City in Canada's Yukon, the center of the Klondike Gold Rush at the turn of the 19th century.
Since it represents the golden excitement of the past, this historic location is just the place for our conference as we enter a new time of excitement for gold. So we will call our gathering GOLD RUSH 21 and here's what we aim to do there:
***Expand GATA's role as an advocate for the precious metals industry.
***Offer the mining industry and precious metals investors an alternative to the World Gold Council, which represents no more than 20 gold companies and has done so little for those it purports to represent. GATA will seek to include more of the industry, and we will not align ourselves with the bullion banks and jewellery interests, which want precious metals prices suppressed. More than 40 mining and precious metals-related companies have supported GATA in recent years. We believe we can raise that total to 200.
***Spread GATA's message that the gold and silver markets are not free and not fair, and develop ways to change that. Renowned gold experts from five continents will explain and discuss the price manipulation committed by the gold and silver cartels. We will cover who has done it, why they did it, and what can be done about it.
***Give conference participants a memorable trip to Klondike Gold Rush country so they can see what a gold rush was and what one might be again. We expect that conference participants will forge some memorable relationships.
***Receive suggestions from conference participants about how GATA can best build long-term support from the precious metals industry.
The speakers at GOLD RUSH 21 will include:
- Ferdinand Lips of Zurich, Switzerland: He has been managing director of Rothschild Bank AG in Zurich, CEO of his own private bank (Bank Lips), and a director of Randgold Resources, Durban Roodeport Deep, and Aflease. Currently he is chairman and manager of the Top-Gold Fund, based in Liechtenstein. He has written four books on the gold market, his latest being "Gold Wars."
- Peter George of Cape Town, South Africa: A graduate of Oxford University in England and the University of Cape Town, where he received his MBA, George was a member of the Johannesburg Stock Exchange from 1969-1981 and was senior partner of the Johannesburg stockbrokerage Saunders & Taylor. He became known as South Africa's "Mister Gold," during that period. Peter helped organize the GATA African Gold Summit in Durban, South Africa, in May 2001. Five sub-Saharan African nations attended that conference; along with representatives of major South African gold producers and the South African mine workers union. The summit was heavily reported by the South African Broadcasting Co.
- John Embry of Toronto. Just as George is known as "Mister Gold" in South Africa, Embry is becoming known as "Mister Gold" in Canada. After an illustrious career at the Royal Bank of Canada, where he oversaw $5 billion in mutual fund assets and recorded an astounding return of 153 percent in 2002, in 2003 Embry became chief investment strategist at Sprott Asset Management. He was co-author of Sprott's important research study, "Not Free, Not Fair: The Long-Term Manipulation of the Gold Price," which validated GATA's work. There is no more admired figure in the mining industry.
- Hugo Salinas Price, who may be regarded as Mexico's "Mister Silver." Salinas Price is leading the campaign to remonetize silver in his country, the world's foremost producer of silver. Last November governors of all 31 Mexican states sent a letter to the Ways and Means Committee of the Mexican House of Representatives to urge approval of legislation to remonetize silver. Nearly 200 Mexican journalists signed a declaration in support of the legislation. A poll by the Mexican television network TV Azteca found that 96 percent of viewers approved the remonetization of silver ounce. It seems that the only major opponent of the silver legislation in Mexico is Mexico's central bank.
- Reginald H. Howe of Massachusetts. A successful trial lawyer in Boston and proprietor of the GoldenSextant.com Internet site, Howe took on the entire Gold Cartel in U.S. District Court in Boston in 2001 by suing the Bank for International Settlements, the U.S. Federal Reserve Board, the U.S. Treasury Department, J.P. Morgan & Co., Chase Manhattan Corp., Citigroup, Goldman Sachs Group, and Deutsche Bank AG. Howe stood against more than a dozen of the highest-powered lawyers in the world. His lawsuit has been renewed by Blanchard Coin & Bullion's suit against J.P. Morgan Case and Barrick Gold in U.S. District Court in New Orleans.
- James Turk of New Hampshire. Turk, a former banker and manager of the commodity department of the Abu Dhabi Investment Authority, is editor of the Freemarket Gold & Money Report and founder of GoldMoney.com. He is also the co-author of "The Coming Collapse of the Dollar," just published by Doubleday
Facilities in Dawson City are very limited, so we will have to restrict invitations to mining company executives and investment fund managers, the people who are in the best position to help us push the industry forward. Mining company executives and fund managers who would like to attend GOLD RUSH 21 should write to us by e-mail at GATAComm@GOLDRUSH21.com and we'll send confirmations soon after that. More information about the conference can be found at its Internet site: http://www.goldrush21.com/index.html
GATA extends its profound gratitude to Samex Mining and Klondike Star for their exceptional efforts to make this international conference a huge success.
* * * *
As part owner of our company, which you are just managing on behalf of all stockholders, I respectfully request that you send a delegate to this conference to learn more about how you can help end the manipulation of the gold and silver price, and start a NEW World Precious Metals Council that will have all our best interests at heart.
And once again, I would be grateful if a copy of this was sent to your legal counsel, plus all the persons listed at the top of this memo. Thank you in advance and I look forward to hearing from you on this matter at your earliest possible convenience.
With best wishes,
Ed Steer, Shareholder
Canada T6K 2H4
So there it is; and there's not a lot to it. The letter covers all the bases, and as I said previously, you can customize this letter any way you see fit.
In closing, let me cut right to the chase: It is now entirely up to us to do battle with our own companies in which we are shareholders. Without a doubt, this is a despicable state of affairs for all of us to find ourselves in. The decision NOT TO ACT on this issue by the management and directors of all these companies (our companies!) is, in my opinion, a tacit admission of total failure in their fiduciary responsibilities not only to their shareholders...but to themselves as responsible managers and adults...not to mention their responsibility to the entire human race that is currently being held hostage by The Empire.
They should be ashamed of themselves both individually and collectively. I don't know how they can look themselves in the mirror in the morning. And I just wonder if their hands don't shake a little when the reach for their paycheques.
So this is where we find ourselves. It's up to you and me to get this job done. There's a lot to do...but not a lot of time has to be spent on it, as the really tough work has already been done in advance. Through our combined efforts, we only need to convert a handful of companies to The Rebellion, and the rest of them will follow in due course.
So, on behalf of GATA, I respectfully request that you heed this "Call to Arms" and do battle with our foes. We must be successful in this fight against the dark side of The Force; because over the last number of years, it has become crystal clear (at least to me) that absolutely everything on this little blue-green planet of ours depends upon it.
Thank you in advance for your efforts...and good luck.
Ed Steer, Director
Gold Anti-Trust Action Committee
Canada T6K 2H4