Court ruling strips lawyers from Armstrong


1:15a EST Saturday, January 22, 2000

Dear Friend of GATA and Gold:

I'm stealing GATA Chairman Bill Murphy's "Midas"
commentary of a few hours ago at
and sending it along to you here because it contains important
news of GATA's campaign to get answers from the U.S. Federal
Reserve System and U.S. Treasury Department.

Please post this as seems useful.

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

* * *

By Bill "Midas" Murphy
January 21, 2000

Spot Gold $288.90 up 50 cents
Spot Silver $5.21 up one cent


Brick wall hit again. The gang does not want spot gold
much above $290. Any time it approaches that price
level, they put up a "Do Not Pass Go" sign and gold

Ironically, the floor remains more bullish than usual.
The gold spreads continue to widen (back months gaining
on nearby months) and our floor sources think that is a
bullish signal. As covered in this commentary for weeks
now, the open interest continues to shrink (down
another 2,973 contracts yesterday to 145,564 contracts
outstanding) and continues to tell us the specs have
little interest in the gold market while the trade does
not want to be so short anymore. Every week there is
talk of a producer buyback of some sort.

That gold is still below $300 with commodities surging
and bond yields sharply higher is mind-boggling. At
least it would be if we didn't think that U.S.
officialdom is sitting on the gold price. For that
reason I sent the following today to my staff contacts
at the Senate Banking Committee as they are preparing
for Fed Chairman Alan Greenspan's confirmation hearings
next Thursday:

"Fed Chairman Alan Greenspan made the following comment
on July 24, 1998, before the House Banking Committee
and on July 30, 1998, before the Senate Agricultural
Committee: 'Central banks stand ready to lease gold in
increasing quantities should the price rise.'

"Does that statement reflect the policy of the Federal
Reserve Bank or U.S. Treasury?

"Was that statement a suggestion that the gold price
will not be allowed to rise?"

U.S. Sen. Phil Gramm's Dallas office just telephoned,
as I called yesterday to try and get an appointment to
see the him, since he is chairman of the Senate Banking
Committee. They told me that the senator's Washington
office was reviewing the letter I sent with the GATA ad
published in Roll Call, which contained the questions
GATA is posing to Greenspan and Treasury Secretary
Lawrence Summers. Sen. Joseph I. Lieberman is helping
us get answers to these questions. The Gramm staff
member who called me said the senator didn't have any
immediate appointment time available but wanted to know
if I wanted him to request answers to the same
questions that Senator Lieberman was helping us pose.
Naturally, I said yes.

Hard to say what will come of all of this, but you can
be sure that Greenspan and Summers know that GATA is
out there and that we will come at them from many
directions and that we will be relentless until we get
to the bottom of the manipulation of the gold market.
Their worst nightmare, as you might say.

Silver is trying to take out $5.30. Over recent months
silver has actually taken out $5.50 four times, only to
be thrown back. It seems that $5.30 has been the most
recent resistance level.

The Comex silver stocks, at 73,761,202 million ounces,
remain extremely low. One day, out of nowhere, silver
will just shoot for the moon.


Many LeMetropole Cafe numbers noticed the commentary
about gold exports that surfaced in the latest U.S.
trade data for November released Thursday.

"Jan. 20. U.S. Economy: Import Surge Leads to Record
Trade Gap. Washington -- The U.S. trade deficit grew to
an all-time high in November as businesses relied on
record imports to meet rising consumer demand. The
deficit widened to $26.5 billion for November from
$25.6 billion in October, the Commerce Department said
today. Exports also set a record in November, rising
0.7 percent to a record $82.9 billion, led by gold,
industrial supplies, and consumer and capital goods."

Another recap of same info:

"U.S. International Trade in Goods and Services
Highlights The October-to-November change in exports of
goods reflected increases in industrial supplies and
materials of $0.5 billion (primarily non-monetary

I spoke with Frank Veneroso about the gold data. He
said most of that figure is gold that has been sold or
lent out of the New York Federal Reserve -- even though
the report says "non-monetary." The gold is for the
accounts of foreign central banks.

If it is true that this foreign gold data is used as
part of our export data, it would seem a bit daft. All
that does is make our trade deficit look less worse
than it really was. That would be very misleading and
more bearish for the dollar down the road.

Greg Pickup had a little different take on the gold
outflow from the United States. The gold was recorded
as an export. Greg feels that many people around the
world realize the price of gold is just too low and
they want this undervalued commodity and are taking the
U.S. gold just as the French did when the United States
pegged the price at $35 per ounce. It was too cheap
then and it is too cheap now, Greg says. Gold supply in
size is becoming harder to come buy around the world,
so foreigners are coming here.

The one-month gold lease rate has really dropped. Today
the bid stood at .25 to .55. That is the lowest I can
recall. It is more evidence that the gold market is
being flooded with gold for lease and that there are
few takers. Who wants to be short gold in this
commodity-rising environment?

The fourth Bank of England gold auction will be held on
Jan. 25 -- Tuesday. Canada has not sold any gold in a
few months now, breaking a string of monthly small gold

Gold demand out of India picks up rather dramatically
on any price dips below $287 and cushions any price
drops. Orders pour in to the bullion dealers.

Potpourri and the Gold Shares

The XAU continues to act poorly and finished the day at
63.36. Word is that a couple of gold funds have thrown
in the towel and will go out of business. The gold fund
of Morgan Stanley Dean Witter in Canada is mentioned.
That is one reason the XAU has been so weak. The kaput
gold funds are dumping their gold shares, as big blocks
have been crossing the tape. The good news is that
there are buyers out there swooping up these distress

There is a highly regarded technical commodity trader
who is a friend of a cafe member. His technical trading
system works so well that he has made a great deal of
money over an 18-year span. But over the past couple of
years his gold buy signals keep failing. This was his
comment today: "If we do not break 290 in February gold
today, then I can tell you that this market is being
manipulated. You can quote me on that!"

Gold comment from the venerable Richard Russell today:

"February gold up .40 to 289.70. XAU down 1.26 to
63.36. Dear old Homestake down to 6 5/8. Never thought
I'd see it this low. NEM hanging just above 21 and
closing at 21 1/16ths. ABX at 17 1/8. So far this year
nobody has made a killing in gold. With the money
supply surging and oil doubling, it's incredible that
gold has done so poorly. Maybe next week."

I am going to have to give Mr. Russell a call on Monday
and explain the gold facts of life.

Some other interesting wire service stories sent to me
by two cafe members:

"What is this all about?

"'Zurich, Jan. 20 -- Swiss National Bank Vice President
Jean-Pierre Roth said Thursday the National Bank only
had a small window of opportunity for the planned sale
of 1,300 tonnes of gold reserves, and couldn't afford
to wait too long. Roth wouldn't say when the planned
sales would begin, but said the legal framework
allowing the sales would be in place by end-March....'

"Bill, 'a small window of opportunity to sell their
nation's wealth at bargain-basement prices.' What an
absurdity! I am mad as hell and I won't take it
anymore! But I just get poorer and poorer every day and
have hope that GATA succeeds."

Why do the Swiss continue to put out this sort of
press? Do they have a problem with having lent too much
gold? I am told that this Roth fellow was corrupted
into an anti-gold man by Paul Volker.

Here's another interesting news story:

"Colluding banks fined.

"ROME, Jan. 20 (AP) -- Thirteen Italian banks have been
fined a total of $17.2 million for allegedly forming a
cartel to set interest rates and swap strategic

"The fines were levied by Italy's central bank, the
Bank of Italy, which is the antitrust regulator for
banking. In a statement, the Bank of Italy said the 13
private, commercial banks formed an association that
had met periodically since 1998. The group made
agreements on retail interest rates, what to charge for
banking services and other matters, it said.

"The 13 banks, some of Italy's largest, represent 55
percent of the nation's bank deposits and 60 percent of
its loans, the central bank said. They include Banca di
Roma, Banca Commerciale Italiana, Banca Nazionale di
Lavoro and Deutsche Bank. None of the banks commented
on the fines, which were disclosed Wednesday."

Another banking manipulation scam. The mainstream U.S.
press reports on these banking scams all the time. The
Cafe has been bringing them to you over the past 17
months. Yet the U.S. mainstream press scoffs at the
idea that the gold market is being manipulated by
bankers. None are so blind as those who will not see.

The Cafe's John Brimelow has a platinum and palladium
update for you. John has reported his bullish views on
these white metals for some time now and his analysis
has been correct.

He is still very bullish. The auto sector has the trade
buzzing as demand is very strong. The price of rhodium
has especially been affected as its price has jumped
from $970 per ounce to $1,400 per ounce in just the
first three weeks of this year.

As for palladium, 90,000 ounces were sold out of the
United States strategic stockpile in December and
palladium still closed at $455 today. There is some
question as to whether the Russians have been able to
put some supply into the market, but it has not stopped
the price advance.

Platinum: no Russian supply seen yet and the platinum
price continues to inch up. The lease rates are still
running as high as 40 percent, which is very
formidable. Jewelry demand is also very strong, which
is very price supportive. Many dealers are nervous
about future supply.

The share price of Impala has jumped 18 percent since
Jan. 13. John Brimelow feels that Stillwater and Anglo-
American Platinum remain good buys.

Reuters announced the results of a poll of 22 analysts
in London, New York, Sydney, Johannesburg and Tokyo
found that gold will average at $297.64 this year. The
silver average price was predicted to be $5.38. Very
inspiring numbers!

Last year I said I thought that the gold price would
reach $400 by the end of 1999 and that silver would go
to $9.78.

That won't win me any awards for prognostication, but I
honestly thought the manipulation of these two markets
would have ended by now. We know it has not and there
are still no signs of a letup. But that will not stop
me from predicting a gold and silver price explosion by
the end of this year. The odds are growing in our
favor. Besides, you know the story about the blind
squirrel and the acorn.

The gold price move in late September and early October
of 1999 was dramatic and came out of nowhere. That was
but a blip of what is to come when the manipulating
gold market clowns are found out and are forced to
cover their short positions. It could happen at any
time and come about for a myriad of reasons.

It is clear to even those that know nothing about the
gold market that something is not right. Actually, it
is a step beyond that now; they smell something very
wrong. That sort of feeling is making it easier for
GATA to do our thing.

$600 gold and $12 silver are ahead of us, and far
sooner than all those bigshot mainstream analysts can
conceive. Big bucks are coming our way.

Keep the faith.