Published on Gold Anti-Trust Action Committee (http://www.gata.org)

Fed knows more about gold manipulation than it admits

By cpowell
Created 2000-05-14 07:00


By Bill Murphy, Chairman
Gold Anti-Trust Action Committee
and proprietor, www.LeMetropoleCafe.com [1]

May 14, 2000

Many battles have been won throughout history using the
element of surprise. As members of www.LeMetropoleCafe.com [2]
and GATA know, the Gold Anti-Trust Action Committee has
employed the "enveloping horn" battle tactic of the great South
African Zulu chieftain and warrior, Shaka.

Tonight the "Allied" (pro-gold) forces will be on the
move and will strike at the very heart of our
adversaries, those malign "Axis" forces that have been
manipulating the gold market and not allowing gold to
rise in price no matter how much wages and commodity
prices rise in the United States and around the world,
and regardless of the fact that the natural
supply/demand gold deficit exceeds 1,500 tonnes per

Tomorrow our centerspread, two-page, full-color open
letter to the U.S. Senate and House banking committee
members will appear in Roll Call, the most widely read
newspaper of the Washington political elite. The ad
explains why the banking committee members last week
were handed GATA's 90-page document, "Gold Derivatives
Banking Crisis.

GATA's research strongly suggests the machinations of
certain government officials and bullion banks have
caused a gold derivative problem that could cause an
international banking crisis at any time.

The "Gold Derivative Banking Crisis" document is filled
with evidence that supports GATA's case. We ask the
banking committee members in Congress to ask certain
questions of the bullion bankers. Congress can have its
answers in weeks, and those answers will determine if
we are correct or not.

Getting answers should not be a big deal. These same
banks report their consumer loan books, their mortgage
loan books, and their corporate loan books. They brag
about the growth of these loans. Yet they say nothing
about their gold loan books or the growth of their gold
loans. That is what Frank Veneroso explained to the
officials and economists who met the GATA delegation in

All the Senate and House banking committee members are
mentioned in our open letter by name and state. Our
delegation delivered an incendiary document with
specific questions they can ask the bullion bankers to
find out if we are right. If they do not get some
answers to those questions, and GATA is correct about a
serious international banking crisis, then their
political lives could be at peril.

How many times do we have to experience a crisis first
and then learn of political committees being formed to
investigate who is at fault? We have suggested to
Congress that this time it should do its homework
before a crisis develops.

Congressional staffers are underpaid and overworked.
That is why we have and will continue to provide an
exact road map of whom to talk to and what to ask, so
that they do not get bamboozled by the bullion banking
crowd. GATA's delegation is working on these questions
for the banking committees.

The final three paragraphs in our open letter
advertisement in Roll Call to the banking committee
congressmen reads:

"Too much gold is being consumed at too cheap a price.
Massive amounts of derivatives are being used to
suppress the gold price. If this situation is not
corrected soon, there will be a gold derivative credit
and default crisis of epic proportions that will
threaten the solvency of the largest international
banks and the world standing of the dollar.

"As you are aware, a 90-page document of our
extraordinary findings was personally delivered to your
offices last Thursday.

"The Gold Anti-Trust Action Committee requests that a
full and complete investigation be launched into this
matter as soon as possible. The longer the gold price
is artificially held down, the bigger the eventual
banking crisis."

Since I personally dropped off copies of the document
to the staff of all of the banking committee members,
they cannot say that they did not receive notice of our
claims. All Washington will know that the banking
committee members have been presented with overwhelming
evidence of a gold derivative problem. If they do not
at least make the effort to follow up on our
allegations and a crisis does develop, they will have
no one to blame but themselves. You can be sure that is
the message that their future political opponents will
send to their constituents if nothing is done.

So why the announcement that "Allied" GATA forces are
on the move?

First, the Roll Call ad hits Washington tomorrow
morning. We hope to have some sort of presentation of
the open letter for you at www.GATA.org [3] on Monday. It
is a powerful presentation and highlights the
burgeoning gold derivative positions of JUST the
commercial banks. Hello, investment bank Goldman Sachs!

Second, a well-known reporter from one of the most
respected newspapers in the world just emailed a GATA
supporter to ask if I would immediately send him a copy
of the ad in Roll Call. I have no clue if anything will
come out of it. In case nothing does, GATA will issue a
press release about our recent activities.

Mysteriously third, John Hathaway's brilliant
commentary, "J.P. Morgan To The Rescue," which was
posted last week, has suddenly disappeared from his own
www.tocqueville.com [4] web site and that of www.gold- [5]
eagle.com. GATA has long decried that the big money
powers in the United States are trying to silence the
facts about the gold market and any written commentary
of worth that goes against their propaganda. Is this
just one more example that we are right?

GATA has been told by informed sources that J.P. Morgan
had no idea until Friday that its derivative book was
in the public domain and that it had been uncovered by
GATA's investigator. It seems that Morgan was very
upset to learn about this and got to Tocqueville.

This is further evidence that GATA's contentions are
correct. Otherwise, Morgan would have just ho-hummed
the news of its $38 billion derivative gold
position at the end of last year.

John Hathaway's "piece de resistance" now can be read
only at the Dos Passos Table at
www.LeMetropoleCafe.com [6]. or the GATA e-group site

http://www.egroups.com/message/gata/453? [7]

I don't care who calls; this insightful commentary will
not be politically corrected and taken down from the
Caf or the GATA site for any reason. Besides, I have
already forwarded Hathaway's commentary to two banking
committee staff members who have acknowledged receipt
of it. Whoever wants to silence this wonderful
commentary is too late. The enveloping horn is way
ahead of them.

Finally, we have all of you to help our army advance
with unprecedented speed and precision. Roll Call is
published on Mondays and Thursdays. That means it will
be on the desks of the congressmen for several days.

If you like what you read in our open letter, we urge
you and every American who believes in free markets to
contact your congressmen about the Roll Call open
letter. Just ask them to read it and consider what we
have to say.

Email is great, but a phone call and, even better, a
fax will do the trick more effectively. That is what
our allies in Washington told the GATA delegation this
past week.

The GATA delegation was received in Washington with
more courtesy and attention than any of us believed
possible. Some of the most influential men in Congress
had read our biographies. We were all stunned. Tomorrow
morning the essence of what our team conveyed to those
same members of the United States Congress will be
revealed to the Washington political world.

The signatures of the Gold Anti-Trust Action Committee
on the open letter to the banking committee members

Bill Murphy, Chairman

Chris Powell, Secretary/Treasurer

Ethan B. Stroud, Attorney at law, formerly Justice
Department, Treasury Department

John R. Feather, Attorney at law, formerly legal staff,
Federal Reserve Bank

Ethan and John are two highly respected lawyers in
Texas and stoutly stand behind what the GATA has to

Now for the kicker. GATA is not a political
organization. We have just as many Democratic
supporters as Republicans. GATA's goal is to find out
the truth about the gold market and expose the reckless
manipulation that we believe is occurring. Keep that in
mind as you proceed.

At the same time, we know we are in a war. To win that
war one must understand and appreciate certain
dynamics. We have no power and little money, much as
the colonists in 1776 must have felt versus the
overbearing British tyrants. The manipulators of the
gold market have almost all the money, power and
influence. We have only the truth, the Internet, and
many of you inspired supporters.

So it might surprise you that on our visit to
Washington we learned that Democratic U.S. Rep. has
launched a racketeering lawsuit against one of the
highest Republican leaders in Congress, Rep. Tom DeLay
of Texas. From what the GATA delegation could
ascertain, this political assault is one of extreme
provocation. Why?

Saturday's Chicago Tribune had a story might offer a

* * *


By William Neikirk
Washington Bureau
Chicago Tribune
May 13, 2000

WASHINGTON -- In an unexpected blow to Speaker Dennis
Hastert's daunting campaign to keep Republicans in
charge of the House of Representatives, Rep. Amo
Houghton stunned Hastert a little over a month ago with
the news he was going to retire.

At 73, Houghton said it was time for him to go.

"I'm the oldest Marine here," he said. "I'm cranky. I

But, he said, the Illinois Republican told him: "You
said that if you ever got out, you'd have someone in
the wings. You don't. Amo, you can't leave me hanging
here. There is too much at stake."

And so Houghton (R-N.Y.) said he reluctantly backed
down. "He was right," the congressman said. "If anyone
else had said that to me, including [former Speaker]
Newt Gingrich, I would not have stayed. He's so

With only a five-seat margin and 23 open seats to
defend as the result of other GOP members quitting
Congress, Hastert is leaving nothing to chance in a
campaign in which a single race could determine which
party controls the House next year and whether he keeps
his powerful position.

Hastert's job includes talking people like Houghton and
Rep. J.C. Watts (R-Okla.) out of retiring, or
persuading a former district attorney in Jackson,
Miss., Dunne Lampton, to jump into the race against
first-term Democratic Rep. Ronnie Shows. It has also
included traveling to 100 districts this year and
raising nearly $12 million for Republican candidates.

Hastert said that from now until November, he will
concentrate on the 40 to 50 truly competitive races.

Since taking control, Hastert has had to endure
characterizations such as "the accidental speaker" and
"caretaker of the House." Violently disagreeing with
depictions of him as weak, Hastert is also on a mission
in this race--establishing his own personal legitimacy
as Speaker.

Yet in this endeavor, Hastert inspires comparisons with
Gingrich, the man who engineered the GOP victory in
1994 and resigned after the 1998 elections narrowed his
party's majority. To many Republicans, Hastert's
strength is that he is nothing like the fiery visionary
Gingrich, who became a favorite target of Democrats.

"Denny doesn't think that fast," said Houghton. "It's
an asset. He doesn't dart around like a pea on a hot
griddle. He's a thinking politician, not one of those
Roman candles."

To Democrats, he is so plain vanilla that they are
looking past him and to the holdovers from Gingrich's
regime, Majority Leader Dick Armey and Majority Whip
Tom DeLay, both Texas Republicans, to brand the party
as being out of step with Americans.

Rep. Patrick Kennedy (D-R.I.), the Democrats' chief
fund raiser in the House, said Hastert is only in his
job at the sufferance of DeLay and Armey, and that
DeLay "is still the one running the show."

* * *

The Gold Anti-Trust Action Committee is not about a
political agenda. However, we firmly believe that it is
the current Democratic administration that has
buffaloed the gold price and engendered a life of
financial misery for so many of us. That will become
clear when the Roll Call ad is published. Patrick
Kennedy has taken the gloves off to belittle the
Republican opposition in an attempt to influence a few
influential political races in the coming election. We
are presenting only what is evident.

Something is clearly rotten in the state of Denmark
when it comes to the gold market and the fund-raising
activities of the present U.S. administration.

Johnny Chung, who was much a part of the Chinagate
Scandal and who visited the White House 57 times to
support Hillary and Bill Clinton's fund-raising
activities, responded to GATA's allegations over the
phone this past week with this comment: "That fits the
pattern of the present administration." By the way,
Johnny could not have been more classy on the phone.

This is a Democrat talking, not a right-wing

Perhaps that is why the GATA delegation was so
attentively listened to. We received feedback right
away that what we wanted to talk about was already
making the rounds in Washington financial circles in
a quiet way. But it is all so complicated. Then,
out of nowhere, we show up with a 90-page document of
evidence of serious manipulation of the gold market by
administration personnel and bullion banks. If what we
have to say has merit, Goldgate could rival Watergate.

Long live the enveloping horn.

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