Miners seek answers from Bank of England

Section:

1:30a EDT Monday, November 1, 1999

Dear Friend of GATA and Gold:

Bill Murphy, GATA's chairman, dispatched the following
to his subscribers at www.LeMetropoleCafe.com a few
hours ago and asked that I send it to you too. It describes
GATA's purposes and tactics, as well as Bill's own very
colorful background. I think you'll enjoy it. Please post it
as seems useful.

CHRIS POWELL, Secretary
Gold Anti-Trust Action Committee Inc.

* * *

By Bill "Midas" Murphy
www.LeMetropoleCafe.com

Chris Powell, GATA's secretary/treasurer, and I
received the following email from Cafe member and GATA
supporter Ken Reser the other day.

"Bill and Chris: First to you, Bill -- Since I received
no personal reprimand for my inexcusable method of
criticism of your Shaka Zulu and the Hannibal
approaches in my recent Internet posts, I cannot in
good conscience hold back the apology you are so much
overdue. There are no excuses but only my sincere
regrets. As you may have guessed, I have always hated
the Shaka Zulu and Hannibal things because I felt they
denigrated the seriousness of our cause. It seems
ridiculous that I, who have fought and roasted every
critic GATA had on Kitco, Gold Eagle, and USA Gold with
a vengeance that was almost embarrassing, should be
here hat in hand asking to be forgiven for a lapse of
sanity and loss of temper. I must say in all sincerity
that the comments I posted that day were not and never
meant to be a slam on your integrity, knowledge, and
hard work for GATA and your members.

"I did try damage control after my post, as one or two
others fell in with further negative comments, and then
I just felt like it should be dropped and we should
move on. For me that meant only that I would have to be
here like this saying my piece and carrying on with 150
percent support for GATA. You will never have to waste
a second convincing me of your selfless labors. Believe
me, I've laid awake many a night since GATA's inception
thinking of how connected you are to the world of gold
outside my realm of a simple Yukon gold miner.

"If you would like, I'd gladly write some form of
retraction and show my total support for you. Or should
I let a sleeping dog lie?

"I am going to show a renewed support for GATA,
nonetheless, and challenge some of the posters and
lurkers by pledging another $500 to the GATA war chest
if and when the first court action is filed, no matter
how minor the manipulator may be. Somehow I will
correct my indiscretion and I hope you can relate to
this bad-tempered miner's mistake.

"Chris: I meant what I said in my reply to your post
wherein you recognized my right to be a critic. You
have class, and the class and understanding you showed
gave me hope and made me feel like a heel at the same
time. I hope you can also understand that my comments
were made in the heat of the moment and I was so angry
because I let my wishes (for the big announcement of a
blow against the manipulators) overpower my
sensibilities. I'll never be a sophisticate of gold,
but always an advocate. (I'll just try to put my brain
in gear before my mouth from here on in.)

"I hope you all, especially Bill, will be able to
understand why your best supporter from the start (now
that there are so many!) became a critic if only for a
moment.

"By the way, can you believe that Gold-Eagle's I.M.
Vronsky, who used to email me once a week to quit
advertising for GATA, actually pulled my password at GE
for the GATA row I caused? Anyway I'm still standing in
the GATA corner with my gloves off and my money where
my mouth is. (And my mouth now has its brain back).

"Very sincerely, Ken Reser."

Ken Reser is a genuine Yukon gold miner who has been a
big GATA supporter from the beginning. Not only has he
been one of our most vociferous supporters on the
Internet, but he has made a substantial financial
contribution to help us achieve our objectives.

The criticism Ken referred to involved his initial
reaction to our "Tora! Tora! Tora!" announcement a few
weeks ago, in which GATA called on gold's friends on
the Internet to send faxes to the gold producers
attending the Denver Gold Group Conference. GATA
suggested that gold family people encourage the
producers that were unhedged and to let the big hedgers
know that they were getting out of favor and that they
should begin to cover their forward sales.

It turns out that many GATA supporters on the Internet
anticipated a different dramatic announcement --
something like a formal production cutback by some big
gold producers. While I believe that the many
individual actions such as the one taken by the great
novelist, Arthur Hailey, in announcing that he had sold
his Barrick Gold stock could be just as productive,
some people (like Ken) were disappointed.

If the rest of the Internet crowd was as active and
diligent as Reser, the price of gold would probably be
about $400 right now. I will get into that, but first
let me say that GATA is proud of Reser. Last week Rich
Hughes, co-chairman of the Alaskan Miners Association,
asked me if I would speak to the group's 17th Biennial
Convention in Fairbanks next March. Hughes noted that
Ken is on the GATA Honor Board at the www.gata.org web
site.

Fairbanks may be a long way to go for lunch, but going
there is a small way for me to thank Ken Reser for the
support he gave GATA when there were not too many
others like him.

As a result of Ken's email, I thought it might be
helpful to tell you a bit more about myself and the
purpose of my constant mention of the "enveloping horn"
strategy and the "Hannibal Cannibals."

I look at GATA as a sort of political party. One does
not have to agree with the party leader, his ways, or
all the party's tenets but, as a generalization, one
supports a particular party for bigger purposes. So it
might be helpful now to go into my past and why I think
as I do, and then articulate some future courses of
action for our team.

I grew up in Glen Ridge, New Jersey, a small suburb
near New York City. Although I was small and slow, I
always wanted to be a football player, and eventually I
made my high school varsity team. We had a great coach,
Bill Horey, who taught his players how to win the game
mentally. He was the Vince Lombardi of high school
coaches. Becauase of him we never lost a game while I
was there. The team mascot was a "Ridger," a two-headed
zebra. Coach told us this zebra was so mean because he
had no rear end to go to the bathroom with. Tom Cruise
was a "Ridger" too.

As for me, it was on to the School of Hotel
Administration at Cornell University. I started out at
the bottom of the freshman football team as a defensive
back but, by the time I graduated, I had broken all the
single-season Ivy League pass-receiving records as a
wide receiver.

My college coaches thought I could make it as a pro, so
I gave it a whirl and talked my way into a tryout with
the Patriots of the old American Football League.
Things were going OK, and then the Pats brought in this
wild man quarterback, Jim "The King" Corcoran. The King
had just been cut by the Denver Broncos and the New
York Jets. Word was that the Denver coach, Lou Saban,
kicked The King out of the Denver camp because they
found six girls in his room one night. The King was the
best ladies' man I ever ran across. He used to ride
around in one of those big old Lincoln Continentals
with a bullhorn. He would see a nice babe walking down
the street and just start talking to her. Next thing
you know....

Anyway, The King kept telling me I was better than
George Sauer, the All-Pro split end for the Jets and
one of Joe Namath's favorite targets. The King told me
every day that I was better than Sauer. It did not
matter whether it was true or not; I believed him.
After all, The King had a cannon arm, was smart, and
used to have a midget following him around with a cape
when he quarterbacked the Maryland Terrapins in
college.

The King Corcoran stories could go on forever. There
was the time Alex Karras, Detroit Lions Hall of Famer
and actor, interviewed him as he was leaving the field
after the first half quarterbacking the Montreal
Alouettes of the Canadian Football League. The King was
wearing shades and badmouthed the fans. They ended up
booing him out of Canada. There was the time CBS did a
15-minute TV special on him on a Sunday right before
the Super Bowl 5. It was called "The King Wore
Alligator Shoes." Or that time when I came home late
after Patriost practice one day and found that most of
my clothes had vanished from my closet. I told The King
we were robbed. He calmly replied, "No, I burned them.
You cannot hang around The King looking so shabby. Time
to buy new clothes."

Bottom line was the The King was another figure in my
past who taught me to believe in myself and that
anything was possible -- anything. Later that year I
came running through the goal posts and was introduced
to the crowds in the Orange Bowl in Miami and the
Astrodome in Houston as No. 7, the starting wide
receiver for the Patriots.

Such memories last forever. With all our ups and downs
in life, that is something that can never be taken
away.

While it may seem trivial, it explains where I am going
with all of this. I used to listen to music all the
time (rhythmic soul music) and constantly envisioned
scoring touchdowns and catching every pass. The music
put powerful energy behind my daydreaming and
strengthened the visualization process.

I ended up in New York City joining Dr. Norman Vincent
Peale's Marble Collegiate Church. Of course Peale wrote
"The Power of Positive Thinking." His is a great church
with very special church members. My sponsor gave me a
book to read -- "The Path of Least Resistance" by
Robert Fritz, a former music composer. This book
further enhanced my use of the visualization process.

Fritz believed that the best way to achieve success was
to create a structural tension between current reality
and a vision of what one wants to have happen --
somewhat as an artist or musician uses inner vision to
crystalize what he wants to create. Without getting
into too much, the essence of his teaching was to
concentrate on the vision as a reality and not the
process of getting there. That would come as the law of
energy attraction came into play. Whatever tools one
could use to inject energy into a vision would
facilitate the probability that one's vision would come
true.

They were certainly enjoyable times, those New York
City days. I became friends with Rod Gilbert, the great
New York Ranger Hall of Fame hockey player, and we
often hit the town for some lively fun. His friend,
Bobby Hull, a Hall of Famer for the Chicago Black
Hawks, came into town once and we all went out to
dinner. The next night I offered Bobby the use of my
Queen Elizabeth-type limo so he could get around New
York. That night he went to Mickey Mantle's restaurant
and somebody swiped his wife's purse, which carried his
plane tickets and their excess cash. The next day I had
to courier money speedily to Bobby Hull so he could buy
tickets to get back to Canada.

We have a good number of Canadian members of
LeMetropole Cafe, many of whom love hockey. My New York
hockey connection is still on. Just the other day Ken
Daneko, star defenseman for the New Jersey Devils, was
in town for a game against the Dallas Stars. The Devils
were staying at the Fairmount Hotel, which now houses
the Arts District Gallery and GATA artist Alain
Despert, My former wife and best friend, Karen, runs
the gallery. Ken Daneko popped in looking for paintings
to decorate his new home, which is under construction.
Karen and Ken stared at each other a bit. Karen
recognized the scar on Ken's face. Ken thought Karen
looked very familiar too. Karen then realized who Ken
was. We used to party it up with Rod Gilbert and Ken in
the late '80s in New York. Karen could not believe he
was still playing hockey. Not only is he playing, he is
starring.

Yes, good ol' "Yoot."

One year I took a suite at the Beverly Hills Hotel in
California and commuted back and forth to New York when
I felt like it. My good friend out there was Ed
Marinaro, a former New York roommate and fellow
Cornellian who, after playing in two Super Bowls for
the Minnesota Vikings, went on to Hollywood to become
an actor and has starred in "Hill Street Blues,"
"Sisters," etc.

One weekend Ed and I took two girlfriends to Hawaii for
a little R&R. My date was Linda Thompson, who lived
with Elvis Presley for five years. I am constantly
asked if I am intimidated by the likes of Goldman
Sachs, the federal government, etc. That is nothing
compared to walking into a Maui nightclub with Linda
Thompson as a date when they are playing Elvis music.

While in Beverly Hills I attempted to write a book for
kids about how people used energy flows and thought
processes to get where they wanted to go. This was
before visualization and celebrity "when they were
young" shows became popular. The would-be book was a
Don Quixote-like journey through the minds of the likes
of football great Frank Gifford; the actor High
O'Brien, who played Wyatt Earp, who has a special youth
program for high school sophomores; Cosmopolitan
magazine founder Helen Gurley Brown; the great actress
Susan Sarandon; and Pete Rose, one of the great
baseball players of all time. I had terrific interviews
with all of them.

I never quite pulled the book off, instead heading back
to New York and a continuation of my turbulent career.
My friend Linda Thompson ended up marrying U.S. Olympic
Decathlon gold medal winner Bruce Jenner and then won a
Grammy Award for her song writing. One day she and
Bruce came to New York. Her nickname for me was "Chief
Inspector," so she gave me a giant pink panther to
stick in the front seat of my limousine. That is how my
friends could find me around town in New York. Now I
guess I am a "chief inspector" of sorts once again --
this time for the gold market. Surely Peter Sellers
might come to mind to some when thinking of our GATA
tactics.

I am now full circle back to GATA's "enveloping horn"
action plan that was fashioned after the ferocious Zulu
Chieftain, Shaka, and the naming of the gold cabal
bullion dealers the Hannibal Cannibals. These images
are branded in my mind. It was the best way I could
think of to put images in the minds of millions of
people around the Internet. They are clear, specific,
and have great emotion attached to them. As GATA took
action, I felt I could always keep on the message by
referring back to the plan and image (for example, the
diamond formation, the left flank/right flank
enveloping horn, and our adversaries, "Hannibal Lecter"
equals Goldman Sachs and the others).

When I attended a dinner for Wayne Murdy, Newmont
Mining CEO, in Denver a few weeks ago, the first thing
a Newmont executive said was, "Bill, you should know
you are in the presence of one of the Hannibals."

My purpose in constantly referring to "the enveloping
horn" and "the Hannibals" is to bring as much
visualized energy as I can from the Internet to focus
on a mission. Music, vivid imagines, repetition, the
laws of attraction (when referring to energy) -- this
is what I know how to do. At least that has what has
worked for me in the past. Besides, you know what they
say about old dogs. It's too late for me to learn many
new tricks.

There is much that we all can do right now. That is why
I thought our "Tora! Tora! Tora!" campaign was so
important. It is something that YOU can help us do,
just as Arthur Hailey did. While I was in Denver, one
of GATA's supporters told me about a gold company
executive who muttered that he had received more than
35 faxes while at the conference. But it could have
been 3,000 if everyone had done the drill!

I can promise you that those of you who acted made a
mark. We will win the day by incremental actions such
as that. Actions like these embolden others to speak
up. It is like a pebble being dropped in a pond. The
wave-like circles fan out and reach greater territory.

For example, I listened to a tape of the AngloGold
conference call late last week. Anglogold is a terrific
company and the world's leading gold producer. The
conference call is for the in crowd only. Bobby
Godsell, AngloGold CEO, is not used to being gently
blasted. But that is just what happened as three money
managers zinged him about his company's hedging
strategy.

The influential Dick Pomboy of Greenwich, Connecticut,
pointed out that the stocks of many gold producers have
gone nowhere after the $50 rally in the price of gold
because the generalist fund managers have the money
today and they don't know if they should invest in gold
companies right now after what happened to Ashanti and
Cambior. These generalists don't want to know about
this hedge strategy or that hedge strategy, knock-up
puts, knockdown calls, structured deals, and so on.
They want to invest in prudent, sound gold companies
and realize good returns for investors because the gold
price goes up. The generalist money managers are scared
away right now and all gold producers are being
affected. Dick was very eloquent about this and scored
solid points while AngloGold's management stuttered.

Another money manager chastised them for not being able
to articulate any coherent strategy for covering more
of their forward sales. All AngloGold came back with
was the word "incremental." This one money manager
pointed out that if gold goes to $600, as many of us
believe it will, AngloGold will have a $4.5 billion
unrealized loss on its books. How do they explain that
to shareholders? AngloGold had little to say to this
money manager.

The bottom line from all three money managers to
AngloGold was: Stand up for your own product; announce
to the world you that are accelerating the covering of
your forward sales down here at these low prices. Stand
up and be counted, like Chris Thompson, chairman of
South Africa's second largest gold producer, Gold
Fields Ltd. If you don't, then be prepared to face the
wrath of gold shareholders around the world.

That is GATA's message too, and has been part of our
"right flank" plan from the gitgo. Get that same
message to the CEOs of the very hedged gold companies.
Prudently, cover your forward sales now, while you have
the chance. Get the message to money managers that
heavily hedged companies like Barrick Gold should be
shunned until they act responsibly, support the gold
market, and start covering their forward sale
positions. If institutional gold money managers know
that the big hedgers are going to underperform their
peers, they will start dumping the big hedgers. That
will create a self-fullfilling happening and force
managements to pull the trigger.

All of us can make that happen. Call up the
institutional gold money managers. Sell the shares of
big hedgers like Barrick Gold. Call up Barrick CEO
Randall Oliphant at 416-307-7427 and tell him you are
fed up with Barrick's anti-gold stance. Cambior just
covered 1.3 million ounces of gold as part of a
restructuring of its hedge book. Some Australian
producers are beginning to cover. Barrick is short more
than 13 million ounces of gold with another 3 to 4
million ounces of written call exposure. Don't they
believe enough in their own market to cover at least 25
percent of that amount down at these ridiculously low
price levels? Why invest in Barrick if they do not even
believe in their own product after all that has
happened recently? I can see no reason to own Barrick
Gold; it's an investment trip to nowhere. They are like
a football team playing for a tie. What a waste of time
and money!

What is worse, Barrick is supposed to be an industry
leader like AngloGold. By not covering hedges here and
making a statement to that effect to the investment
world, they are hurting the entire industry.

Many in the industry cannot survive at these
extraordinarily low gold price levels. GATA has pledged
to do what we can about this state of affairs to 20,000
out-of-work Australian gold miners, almost bankrupt
junior gold exploration companies, and to gold company
shareholders who have lost 60 to 90 percent of the
value of their investments as a result of the
manipulation of the gold market. It will take $350 to
$385 gold to start the healing process. Responsible
covering action by the large and intermediate hedgers
will speed up that process. So will pressure from all
of us. Let's keep the heat on them to do the right
thing.

I am a very lucky man. I come from a great family, have
great friends, and (knock on wood) have my health. Yes,
I lost my little fortune ($27 million) as a result of
nincompoop thinking, but that will come again. That is
a given. Ironically, if I had not lost all that money,
I might never have had the opportunity to try and help
so many others out.

When I had my big bucks I went to the inspirational Dr.
Arthur Caliandro (who took over the helm at Marble from
Dr. Norman Vincent Peale) and asked him what could I to
help out kids who were less fortunate than I was. We
came up with the idea of starting a "I Have a Dream
Program" for a sixth-grade class in Harlem. That meant
that any kid who wanted to get a college education from
that grammar school would have the opportunity to get
one. That program is thriving today and I feel very
lucky to have helped get it going.

There is much more I would like to do in that area. But
first we have to get the gold price up to a reasonable
level so that all of us involved in the gold industry
can flourish again. GATA asks for your help. Take
action. Do something. No step is too small.

One more note on this relaxing Sunday afternoon in the
United States. On Friday night I met with a
distinguished Dallas lawyer and his wife for dinner. He
used to work for the Justice Department. He had not
read much about GATA but felt that the bullion dealers
and possibly our own government had been manipulating
the gold market. He offered to help us too.

So expect GATA's legal machine (the point of our
attacking diamond) to step into the gold market fray in
the near future. I better not say much more here right
now. But let me say this: Washington will be hearing
from us soon.

All the best,

BILL MURPHY, Chairman
Gold Anti-Trust Action Committee
Le Patron, www.LeMetropoleCafe.com