Midas commentary for April 29, 2000


Copyright 2000 / www.LeMetropoleCafe.com.
Not to be reproduced without the author's permission


By Bill Murphy

Gold and silver were both hit again today with Goldman
Sachs starting off the action to the downside.

Yesterday I was told by Cafe sources that Goldman Sachs
would probe that downside in the gold pits and if they
did not set them off yesterday, they would finish the
job today. Mission accomplished!

Now, at the same time, bullion dealers friendly to to
the GATA camp roar that physical demand for gold was
strong the past two days as any time in recent memory.
Orders were coming in from the Far East from many
buyers. That buying absorbed the punishing selling
coming from the funds. My guess is that the market is
pretty well sold out by now, and with physical demand
this strong, a good rally is right around the corner.

For a year and a half now you have heard me relate to
you how the manipulation crowd was yinning and yanging
the Technical Black Box crowd around. They would let
them get short, then the Black Knights would buy. The
TBB traders would cover and then go long. Then Goldman
Sachs and crew would sell and the TBB traders would
have to sell as their techncial systems turned
negative. Round and round they have gone.

Over and over we have witnessed the same pattern.

But in an extraordinary announcement today, John W.
Henry and Co., one of the legendary commodity trading
advisory firms, announced on its website (which was
picked up by Reuters) that it was cutting its usual
gold trading position to 60 percent of its normal size
and was cutting out trading in silver altogether
because of "liquidity concerns."

There has been a slowdown of activity in recent weeks,
but business in the over-the counter-market, which is
80 to 90 percent of the gold trade, has been active,
and liquidity has not deteriorated that badly. Comex
business can always be arbed to the over-the-counter
market, so there is no real loss there if Comex is slow
on a given day.

Therefore, my guess is that Henry is cutting way back
on metal trading because they KNOW that technical
trading systems do not work in a RIGGED market. Trading
signal after trading signal turns out to be a failure.
And that is what I have been reporting to you for 19
months now.

This too bad because Henry gave the floor crowd good
business and much to trade around. Henry is one of the
biggest players in the trading game and commonly took
5,000 lot positions (OTC included). This WILL reduce

Fact: Goldman Sachs has been a recent good seller of

Fact: The price of gold has been trashed, or not
allowed to rise, in recent years around economic
numbers that historically would have sent it higher.
Two significant U.S. economic numbers are coming out at
8:30 EST Friday.

Fact: The U.S. stock markets were hit hard today and
fears of strong economic numbers Friday were cited as
the reasons for the big declines.

Fact: The highly publicized and biggest initial public
offering ever goes into action tomorrow. This ATT IPO
has Goldman Sachs as one of the lead underwriters. If
this IPO goes poorly, it will set a negative tone for
others to come. That will hurt the profits of
investment firms like Goldman Sachs.

A Cafe member sent me this excerpt from John Kenneth
Galbraith's 'The Great Crash, 1929' (Houghton Mifflin
Co., Boston, 2nd Edition):

"More investment trust securities were offered in
September 1929 even than in August; the total was above
$600 million. However, the nearly simultaneous
promotion of Shenandoah and Blue Ridge was to stand as
the pinnacle of the era in finance. It is difficult not
to marvel at the imagination was implicit in this
gargantuan insanity. If there must be madness,
something may be said for having it on a heroic scale.

"Years later, on a gray dawn in Washington, the
following colloquy occurred before a committee of the
United States Senate.

"Senator Couzens: Did Goldman, Sachs and Co. organize
the Goldman Sachs Trading Corp.?

"Mr. Sachs: Yes, sir.

"Senator Couzens. And it sold its stock to the public?

"Mr. Sachs: A portion of it. The firms invested
originally in 10 percent of the entire issue for the
sum of $10 million.

"Senator Couzens. And the other 90 percent was sold to
the public?

"Mr. Sachs. Yes, sir.

"Senator Couzens. At what price?

"Mr. Sachs. At 104. That is the old stock.... The stock
was split two for one.

"Senator Couzens. And what is the price of the stock

"Mr. Sachs. Approximately 1 3/4."

There is much that the Gold Anti-Trust Action Committee
can do if a couple of the gold producers send us a bit
of funding. We have gone to most of them, and that
includes Gold Fields, Normandy, Newmont, and even
Barrick. We know that they might not agree with all we
say or do, but we hope they look at GATA like a
political party. They may not agree with all the party
platform, but we can be effective in working for their
interests. Besides, who else is out there fighting for
their shareholders?

GATA has a meeting at the Senate Banking Committee and
is scheduling other meetings in Washington. There will
be many more in the months to come.

In addition, we would like to put another open letter
in Roll Call like the one we published last December
and addressed to Federal Reserve Chairman Alan
Greenspan and Treasury Secretary Lawrence Summers. It
was very effective. This one will be to the members of
the congressional banking and economic committees and
will alert them to a developing gold derivative
disaster that needs their immediate attention.

There is much much more that can be done by GATA and
our supporters if just a couple of the gold producers
come through. I hope they are paying attention.