Dallas Morning News story features GATA


By Bill Murphy, Chairman
Gold Anti-Trust Action Committee Inc.
May 29, 2000

Word is finally getting out that something is very
wrong with the gold market. As a result, it is going to
be scrutinized much more closely, and as the facts are
understood, there is going to be a gold price explosion
that few are prepared for or expect.

I thought you might like to know what the Gold Anti-
Trust Action Committeeis planning for the next couple
of months to advance this process.

Our present focus remains Washington. The following
letter was just received by GATA supporter Ed Stuart of

* * *

U.S. Commodity Futures Trading Commission
Three Lafayette Center
1155 21st St. NW
Washington, DC 20581
Telephone 202 418 5280
Facsimile 202 418 5527

Division of Economic Analysis

May 22, 2000

Dear Mr. Stuart:

This letter is in response to your e-mail of April 27,
2000, to the Commodity Futures Exchange Commission in
which you expressed your concern that the gold market
was manipulated.

The CFTC monitors trading activity in commodity markets
in order to detect and prevent market manipulation and
other forms of market abuse. Although our surveillance
is primarily focused on futures market trading
activity, we also are aware of activity in the
underlying physical market. The Commodity Exchange Act
makes it unlawful to manipulate or attempt to
manipulate the market price of any commodity in
interstate commerce, or for future delivery on or
subject to the rules of any contract market. In order
to prove a manipulation, it must be shown that a trader
intentionally caused the price of a commodity to become
artificial or, in other words, intentionally moved the
price of a commodity away from a level reflecting the
legitimate forces of supply and demand.

The CFTC is not aware of any evidence to conclude that
the gold market's price is being manipulated. We have
been in contact with British regulators at the
Financial Services Authority in London regarding
activities on the world's largest market for
transactions in physical gold. We do not agree that
leasing activity and gold sales by central banks is
evidence of manipulation. While these activities may
have an effect on gold prices, they are among many
factors that affect prices, and there is no reason to
believe that they are being engaged in by an
individual, entity, or conspiring group of individuals
and/or entities for the purpose of causing an
artificial price. I hope this information has been
helpful to you.


John Mielke, Director
Market Surveillance Section

* * *

This would be what to expect of the CFTC's initial
reaction to a gold market manipulation query. That is
probably what they said about the Hamanaka copper
market manipulation scandal too. In addition, no one in
the GATA camp has ever suggested that central bank
sales of gold or gold leasing is "evidence of

But I found it of special note the CFTC has been in
contact with the Financial Services Authority in
London. I spoke to Malcolm Peters at the FSA some time
ago and told him what was really going on in the gold
market and suggested that the FSA review and monitor
the activities of Goldman Sachs.

Mielke has already been sent by express mail a package
of material that includes the "Gold Deriviative Banking
Crisis" report that GATA presented to all banking
committee members of Congress, Dr. John Silvia (chief
economist of the Senate Banking Committee); Rep.
Spencer Bachus, chairman of the House Subcommittee on
Domestic and International Monetary Policy (the
subcommittee with oversight of gold and silver); and to
one of the most powerful congressional leaders.
Included in the package was Reg Howe's latest expose of
gold derivatives and a copy of GATA's most recent
advertisement in the congressional newspaper, Roll

I will be calling Mielke on Tuesday morning to let him
know what is coming and ask him to review the evidence
we have gathered about the gold market. If he wishes to
ignore an obvious manipulation, that is his business,
but I will ask that he at least review what we have
presented about the buildup in gold loans and gold
derivatives, which we believe are a banking time bomb
that could go off at any moment.

The Comex is in danger of defaulting someday. Recently
the TOCOM defaulted in a sense, with its response to
the explosion of the price of palladium. The TOCOM
prevented new buy orders, tainting the exchange.

I will ask Mielke if he would at least have someone
review what we have sent him and will ask that he
respond to the GATA delegation about what he thinks of
our evidence. We will gladly go to Washington to
explain in greater detail if he invites us to do so.

We are not approaching Mielke with blinders on. His
response to Stuart makes no mention of derivatives.
Former CFTC Chairwoman Brooksley Born was, in essence,
fired for pushing for greater CFTC scrutiny over
derivatives. The new commissioner of the CFTC, William
J Rainer, was appointed by President Clinton last

In the meantime Howe's latest two derivative exposes
have been sent to the Senate and House banking
committees. Frank Veneroso is preparing a special
follow-up report to the officials we met in Washington
on May 10.

The coming focus for GATA is the 23rd annual Financial
Times Gold Conference in Paris on June 26 and 27. I
will be leaving for the conference along with Howe on
June 24. Frank Veneroso also has been invited to attend
the conference as a guest of GATA. Our mission will be
to introduce GATA's findings to as many attendees as
possible and to the world press.

To say that we are headed into the "belly of the beast"
might be an understatement.

The speakers at the FT gold conference:

* Terry Smeeton -- New Executive Director, Standard
Bank London Limited. Smeeton was formerly the No. 2 man
at the Bank of England. In 1993 he openly spoke to
Frank Veneroso about the gold loans. Before he left the
bank last year, he would not speak to Frank over the
phone once he realized that Frank was seeking to show
that the gold loans are much larger than acknowledged.

* Dr. Peter Zoeilner -- Executive Director and Member
of the Governing Board of Osterreichische National

* Fazzliddlin Urunbaev -- Executive Director, National
Bank for Foreign Economic Activity of the Republic of

* A speaker to be announced from the Banque de France.

* Jonathan Spell -- Head of Central Bank Sales
(Commodities) for Deutsche Bank. This ought to be fun.
If I meet Spell, I will ask him what the buildup of $50
billion of gold derivatives on his books in only four
years is all about.

* Chris Thompson -- Chairman and Chief Executive
Officer, Gold Fields Limited, a good man and one of the
true leaders in the gold industry.

* Paul Bateman -- President who the Gold Institute, who
has done nothing but badmouth GATA.

* Robert Ellis -- Managing Director of Tiger Management
LLC. (Since www.LeMetropoleCafe.com all but predicted
their demise and foretold their heavy redemptions, I am
probably personna non grata here too.)

* Dr. Paul Walker -- Director, Gold Fields Mineral
Services Ltd. What can I say? This one is the apologist
for all the "Hannibal Cannibals," the one who puts out
all the gold disinformation. He has refused to debate
Veneroso. If we meet, I again will put that challenge
to him.

* Vincent Chow -- Group General Manager, Chow Sang Sang
Holdings International Limited.

* Bryan Parker -- General Manager for International
Services, World Gold Council.

* Wayne Murdy -- President, Newmont Mining Corp. I
attended a small dinner party for Murdy at the Denver
Gold Group Conference as an impromptu guest. He could
not have been nicer. I will ask him if he read the Gold
Derivative Banking Crisis report we sent him and what
he thinks about it.

* Jay K. Taylor -- President and Chief Executive
Officer, Placer Dome Inc.

* Terry Burgess -- Managing Director and Chief
Executive Officer, Delta Gold.

* Bernard Swanepoel -- Chief Executive, Harmony Gold
Mining Co. Ltd. We spoke at the Blanchard conference in
November and he mentioned supporting GATA. So far,
nothing from this unhedged South African gold producer.

* Daniel R. McConvey -- Vice President for Investment
Research, Goldman Sachs and Co. This ought to be worth
a few smiles.

* Martin Fraenkel -- Managing Director for Global
Commodities, Chase Manhattan International. GATA
research suggests that Chase is not part of the gold
suppression cabal.

* Erhard Oberli -- Chief Executive Officer and Vice
Chairman, Argor-Heraeus SA.

* Philip Klapwijk -- Managing Director, Gold Fields
Mineral Services Limited.

* Egizio Bianchini -- Managing Director for Precious
Metals, BMO Nesbitt Burns. I met him in Denver and
thought he was a good guy. He reminds me of many hockey
players I know.

* Kevin A. Crisp -- Director and Precious Metals
Strategist, Credit Suisse First Boston International.
Until recently he was Morgan Bank's shill, a hopeless
bear on gold.

The last three gentlemen are to be part of a discussion
called "The Golden Debate" on "What is the outlook for
the price?" This will be like going to a Republican
convention and having a debate about who likes Al Gore.
I hope they will open the debate to the floor for

After Paris GATA will start focusing attention on a
natural constituency to support our efforts: black

Thirty-six of 41 poor gold-producing countries publicly
opposed the gold sales plan of the International
Monetary Fund last year. It was defeated in large part
because of the Congressional Black Caucus (most of
whose members are Democrats). Rep. Charles B. Rangel
was among the most vocal opponents of the IMF plan,
even thought it had been endorsed by the Clinton
administration. Rangel is the ranking member of the
Committee on Ways and Means and deputy Democratic whip
of the House of Representatives. He is also a founding
member of the Black Caucus and its former chairman.

GATA is headed straight to South African contacts on
this one. Veneroso and another very plugged-in member
of www.LeMetropoleCafe.com know the former president of
the National Union of Mineworkers in South Africa,
Marcel Goldin. We hope to contact him soon to find out
if he can get us a proper introduction to the union's
current president, Thokoana James Motlasi.

Motlasi is also a Director of Anglogold Ltd. Perhaps
Anglogold President Bobby Godsell can be of some help
in this matter.

If that is successful, we will make sure Motlasi is
aware of whom we have met with in Congress and of the
evidence we have that many South African blacks are
suffering unnecessary hardship as a result of the
manipulation of the gold market. If he would like to
meet with GATA, I am prepared to go to South Africa. An
alternative is for GATA to invite Moltasi to Washington
to meet with members of Congress.

That is pretty simple; the exact agenda will be very
complex and will be developed in the weeks to come.

Depending on certain events, our next open letter in
Roll Call may be addressed to the black politicians in

One of them, U.S. Rep. J.C. Watts, a Republican from
Oklahoma, is a former Oklahoma University quarterback
and football hero. I am a former pro football wide
receiver with the Boston Patriots. Maybe we can reverse
roles. I will throw J.C. the pass and he can take the
gold issue, as it relates to blacks, for a touchdown.

I hope that this will make it clear that GATA is not
playing favorites with Republicans. We have a war to
win and a job to do. It is not realistic to think that
white Democrats will get behind this issue in an
election year. Black Democrats may be a different story
once they realize what is going on in the gold market
and how it is hurting Africans.

Finally, there is the "Gold Derivative Banking Crisis"
report as it relates to the financial system. Many of
you have expressed concern that once the truth is
understood about the explosiveness of the gold market,
responsible people might walk away from the problem,
fearing that a booming gold price will harm the
financial system.

That is an understandable concern and one that can be
discussed ad nauseam.

The bottom line is this: GATA is like a doctor who has
found a cancer. It is malignant, spreading, and
threatening the life of the world financial system.

We are telling the patient about this cancer. The
patient can go into denial or can start treatment. The
treatment will probably not be pleasant for some. The
side-effects might be nauseating for some. But treated
in time, the patient most likely will see a healthy

The alternative is to ignore the doctor's findings. The
most likely result will be death. And if the
Republicans win the White House in the coming election,
they will most likely be blamed when the gold debacle
hits, because they did nothing about the problem when
they had a chance to.

In the coming days the "Gold Derivative Banking Crisis"
report, along with Reg Howe's two latest essays, will
be posted in a file form at the www.gata.org web site.
We are hoping that it will be sent to money mangers and
members of the press all over the world.

When institutional money managers realize the
risk/reward ratio for buying gold today is one of the
most favorable investment opportunities of all time,
they will start accumulating physical gold. The West
buys price strength, not weakness. An increase of
buying of this sort could start an avalanche. That is
coming anyway.

The CFTC's Mielke wants evidence of an "out-of-kilter"
gold market. We shall present it to him and anyone else
who will take the time to look at it.