Chaos for anyone short or near a short


12:05a Friday, October 8, 1999

Dear Friend of GATA and Gold:

GATA Chairman Bill Murphy sent these comments
Thursday night to his subscribers at as a preface to the essay
by John Hathaway that I sent you a few minutes ago.
It's a reminder that GATA's forecasts from the spring
and summer are coming true.

Gold Anti-Trust Action Committee Inc.

* * *


By Bill "Midas" Murphy

October 7, 1999

What John Hathaway is telling you now is what GATA
told Congress this summer. Our language is a little
different but the conclusion is the same for the same

John is being very conservative in his piece, and even
then it will scare gold shorts half to death John uses
a gold loan estimate of 6,000 tonnes. I KNOW that the
loans are substantially greater than that -- as much as
70 greater.

As you read John's enthralling essay, think what is
going to happen if the gold loans are really 10,000
tonnes plus.

On top of all this I received information today from my
most reliable London sources. They report that the
European Central Bank announcement was orchestrated by
the French, Germans, and Italians. All were upset over
the Bank of England's gold sale. They were very aware
of the shenanigans going on over here in the United
States with the bullion dealers. They had had enough
and changed the rules of the game, catching the
Hannibal Cannibals by surprise.

Word is that Gordon Brown, British chancellor of the
exchequer, had the door locked on him for the serious
meetings among the French, Italians, and Germans. This
is not surprising, since Brown was partly responsible
for devaluing their considerable gold assets.

The United States was left out of the European central
banks' maneuver to do whatever it wanted after their
declaration in favor of gold.

The Europeans still could provide gold liquidity via
gold loans or selling of calls, etc. More on this in
the next "Midas." But the bottom line is that the
European central banks are sticking to their guns.

Yes, if things get too crazy, they might calm things
down. But my sources are the best and their info must
be taken seriously.

There's one more zinger for the bullion dealers.
Richard "The General" Harmon dug it up. As part of
their pillaging of the gold miners, the bullion dealers
pushed a bad S&P rating on them. Right Newmont?

Certain bullion dealers must be held accountable for
what they have wrought. They have deceived many to
serve their own greedy interests. Now they must pay the

"Gold Companies That Don't Hedge Could Have S&P
Ratings Reduced.

"NEW YORK, July 15 (Bloomberg) -- Gold producers that
don't take steps to lock in prices with hedging
programs may have their credit ratings cut by Standard
& Poor's Corp., the credit-rating company said. Gold
prices have shed 12 percent this year to reach 20-year
lows, after several central banks including the U.K.'s
announced plans to sell reserves. Gold recently traded
at US$254.40 an ounce, down from about US$310 a year
ago. S&P said it will wait a 'quarter or two' to see
where gold prices head and evaluate companies on a
'case-by-case basis' before cutting any ratings....

"Low gold prices 'could lead to ratings downgrades for
those gold producers who do not have a significant
hedging program in place," said Thomas Watters, an
analyst at the credit rating agency, on a conference

"The agency said its not considering a downgrade of
Barrick Gold Corp., the world's fourth-largest gold
producer and the biggest user of hedging, in which
miners agreed to sell current production at a fixed
price in the future."

This has become the theater of the absurd. Having
threatened to downgrade mining companies for not
hedging enough, now Standard & Poors is going to be
downgrading them for hedging TOO MUCH!

The bullion dealers have created a financial nightmare
for many people. The inmates are running the asylum.

The gold market is EXPLOSIVE. Sly and the Family
Stone are "Gonna Take You Higher."