Gold''s suspicion shifts to the Treasury Dept.


11:25p EST Monday, January 24, 2000

Dear Friend of GATA and Gold:

Here's the Dow Jones Newswires story distributed today
about Fed Chairman Alan Greenspan's reply to GATA's
open letter in Roll Call last month.

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

* * *

Greenspan Endeavors to End
Rumors of Gold Conspiracy

By Alan Yonan Jr.

WASHINGTON, Jan. 24 (Dow Jones) -- Federal Reserve
Board Chairman Alan Greenspan is trying to end once and
for all rumors that the central bank is somehow
involved in an international conspiracy to drive down
the price of gold.

Internet-spread theories regarding gold manipulation
began gaining currency in some quarters last spring
when prices for the precious metal slumped to 20-year

Fanning the flames were announcements by government
institutions, such as the International Monetary Fund
and the Bank of England, that they were planning on
selling a portion of their gold reserves.

A key participant in the rumor mill was the Gold Anti-
Trust Action Committee, a private group that claims
that it has evidence that the price and supply of gold
are being controlled by a cartel of Wall Street firms
and bullion banks with the possible encouragement of
the Federal Reserve and the U.S Treasury Department.

Greenspan himself inadvertently provided fodder for the
rumors when he mentioned gold while testifying on the
subject of derivatives before the House Banking
Committee on July 24, 1998.

One of Greenspan's quotes, taken out of context, was
picked up by GATA and used in its literature to fuel
the conspiracy theories.

The latest attempt to get the rumors to stick came
recently when the GATA published an open letter in the
Capitol Hill newspaper Roll Call, asking Greenspan and
Treasury Secretary Lawrence Summers to respond to a
list of questions dealing with the handling of U.S.
gold reserves.

When the group didn't get an answer, it asked a number
of lawmakers to send letters to the Fed and Treasury
chiefs on its behalf.

The group got a shot with Sen. Joseph Lieberman, D-
Conn. Group member Chris Powell, managing editor of the
Journal Inquirer in Manchester, Conn., submitted a
letter and list of questions to Lieberman, who
forwarded them to Greenspan and Summers.

The Fed chairman was the first to respond in a letter
dated Jan. 19.

"The letter asserts that the Federal Reserve has been
seeking to manipulate the price of gold by in
intervening in or otherwise interfering with the free
market in gold. This is not true," Greenspan wrote.

"The Federal Reserve owns no gold and therefore could
not sell or lease gold to influence its price.
Likewise, the Federal Reserve does not engage in
financial transactions related to gold, such as trading
in gold options or other derivatives," the central bank
chief continued.

He added that the Federal Reserve was in complete
agreement with the view that any such transaction aimed
at manipulating the price of gold "would be wholly

Greenspan also noted that GATA plucked only one
sentence from the 2,500 words or testimony he delivered
to the House Banking Committee.

"In their original context, these words obviously do
not assert that the Federal Reserve itself participates
in the gold market in any way," Greenspan wrote in the