Gold company merger speculation grows


By Bill Murphy, Chairman
Gold Anti-Trust Action Committee Inc.
May 30, 2000

Spot gold $272.70, up 60 cents
Spot silver $4.90, down 1 cent

Today I had a conversation with John Mielke, director
of the Market Surveillance Section of the Commodities
Futures Trading Commission, and told him of GATA's Gold
Derivative Banking Crisis report and other material
that was coming his way via overnight mail.

He told me that he knew about GATA, and we had a very
pleasant chat, covering many interesting topics that
need not be dealt with here. What most caught his
attention was GATA's assertion that the Comex could be
looking at a default similar to what the TOCOM in Japan
experienced when the price of palladium soared to $800
per ounce. (The TOCOM prohibited new buy orders).

As Mielke said in his own letter recently to
LeMetropole Cafe member Ed Stuart of Columbus, Ind.,
the CFTC has to be "aware of activity in the underlying
physical market." I said the evidence collected by
GATA strongly suggests that gold loans and gold
derivative markets have grown so much as to threaten
the Comex and that GATA would like him to have one of
his expert staff members review the documents sent to
his office.

I concluded by saying that so far no one has refuted
GATA's contentions based on the facts. No one seriously
debates Reg Howe or Frank Veneroso as to the numbers.
Some people just say we are wrong but give no reasons.

Mielke said he was looking forward to reviewing the
material and thanked me for sending it.

Regarding the story about GATA in today's Dallas
Morning News and this comment from that story: "A
spokesman for the subcommittee, who asked not to be
identified, confirmed that Mr. Murphy had met with the
committee. 'If there is a way we can play an
appropriate role in answering their unresolved
questions, I am sure we will,' the spokesman said. He
indicated, however, that the subcommittee members don't
consider the matter a high priority and met with Mr.
Murphy more out of courtesy than anything else."

This is no surprise, as you may recall my writing on
May 17 that I had learned that this staff member was
most likely reporting directly to the U.S. Treasury and
CIA on what we were up to and would most likely be of
no help.

This was my comment on May 17:

"Allow me to let you in on some of the inside scoop
going on here. Over the past year the name Ted Truman
has popped up in our circles as a CIA snoop. That is
also the word around certain politicos in Washington.
He used to work for the Federal Reserve, but he had a
falling out with Alan Greenspan. Al Gore picked him to
go to work at the Treasury, which is where he is
employed at the moment. After one of our meetings in
Washington, we met with one of GATA's support contacts
and told him the names of all the people we met with.
Immediately he told us to be careful with one of them
because he has a direct line to Ted Truman.

"What I didn't tell you was that I set up this staffer
with the direct line to the CIA snoop, Ted Truman, to
find out if he would be fair with us or report
information to the enemy camp; that is, the U.S.
Treasury and his CIA snoop contact, Ted Truman.

"I fed him information Sunday night, only part of which
I can reveal. I figured that if he was in the
Treasury/CIA camp, I would receive some sort of
feedback soon. Little did I know then that, within
hours, GATA's Chris Powell would actually receive a
letter from Ted Truman."

Well, that was the same staffer who spoke with Bill
Deener of the Dallas Morning News and gave him that

So, no surprise.

The good news is that if this guy wants to zig, GATA
will zag. There are different ways to skin a cat.

First, Frank Veneroso is preparing a special report for
the powerful politician (and his staff) we first met
with on our trip to Washington. We will bypass the
staffer quoted in the Dallas Morning News and include a
"conflict of interest alert" about him in our report.
In time you will learn the identity of the powerful
politician we met. There are few lobbyists in
Washington who would not want him on their side.

By the way, Frank has accepted GATA's invitation to
join Reg Howe as part of the GATA delegation at the
Financial Times Gold Conference in Paris on June 26 and

Second, there are other congressional committees that
can help us get to the truth about the gold market.
Today I received a call from a committee staff director
who has been assigned to learn all he can about what
GATA has to say and the evidence we have collected
about the manipulation of the gold market. The staff
director works for the Senate Subcommittee on
Technology, Terrorism, and Government Information,
which falls under the Select Committee on Intelligence.

The staff director asked for and will receive all our
evidence and copies of letters from and to GATA by
government officials. He asked many questions about the
gold market and was a very quick learner. He was also
aware that I have met several times Sen. John Warner of
Virginia, who is on the Intelligence Committee.

This came about, I am sure, because one of the most
successful men on Wall Street is a Cafe member and GATA
supporter and knows Sen. John Kyl of Arizona, a member
of the Intelligence Committee.

Why this committee? Simple. If GATA is right, then a
subversive foreign power could muck up our banks and
financial system by buying goldand squeezing the
market. The Intelligence Committee needs to understand
what we have learned to determine for itself if our
revelations are of strategic importance. Senator Kyl is
chairman of this Subcommittee.

I left a message on the answering machine of the
staffer of the banking committee that if he was only
giving GATA "a courtesy," I did not want to waste more
time with him and that he should expect another call
from me tomorrow.

Many of us get hung up on the words "conspiracy" or
"manipulation," as if only nut cases deal with those

Cafe member Ken Hoffman just sent me a wonderful book,
"Rule by Secrecy." To quote the Introduction:

"The world is governed by very different personages
from what is imagined by those who are not behind the
scenes." -- Benjamin Disraeli

From "Rule by Secrecy":

"The concept of conspiracy has long been anathema to
most Americans, who have been conditioned by the mass
media to believe that conspiracies against the public
only exist in banana republics or communist nations.

"This simplistic view, encouraged by a media devoted to
maintaining a squeaky-clean image of the status quo,
fails to take into account human history or the
subtleties of the word 'conspiracy.'

"The word is derived from the Latin 'conspirare,'
literally meaning to breathe together, to act or think
in harmony. Most dictionaries now offer two definitions
of the word: 1) To plan together secretly, especially
to commit an illegal or evil act, or 2) To plan or plot
secretly. One definition is vile. The other less so.

"Secrecy is the connecting tissue found in man's past.
There are secrets between individuals and groups as
well as secrets to be kept by both church and
government authorities. There are political secrets,
even secrets of finance and commerce.

"Obviously, a conspiracy among co-workers to buy the
boss a present is not the same level of conspiracy as
bank robbers scheming their next job. Likewise, the
small merchant who keeps his business plan secret from
his competitors is not participating in a conspiracy
equal to corporate leaders plotting to fix prices.

"While some secrets may be benign -- why spoil the
surprise birthday party by telling? -- other secrets,
such as suppressing cures for cancer or AIDS or
fomenting war, would be considered despicable by people
of conscience. Those secrets that cost or ruin lives,
that prevent people from living together in harmony,
and are used for control or undue profit are
unacceptable to most people. Therefore, whoever
conspires to keep such secrets must be carefully
scrutinized by everyone concerned with individual

GATA maintains that the Bank of England's gold sale,
the unprecedented announcement by Kuwait that it was
sending its gold to the Bank of England, the incredible
gold derivative buildup on the books of J.P. Morgan,
Deutsche Bank, et al., the incredibly timed trading
activities of Goldman Sachs, and the apparent meddling
in the gold market by either the Exchange Stabilization
Fund of the New York Federal Reserve Bank is a

The lives of many all over the world are harmed for the
benefit of a few privileged insiders, and certainly
this sort of scandalous and fraudulent trading activity
needs to be scrutinized by all concerned with
individual freedom and free markets.

A recent Internet post:

* * *


May 26, 17:03 The Goldman Sachs Commodity Index is yet
another measure of inflation. Year to date it is up a
whopping 22 percent -- that's 4.3 percent PER MONTH. On
an annual basis that is 52 percent inflation, yearly!

Obviously, I have no proof that the Fed or the U.S.
Treasury are using covert means to keep the price of
gold down, but they damn well have MOTIVE. Everyone
knows the most universally accepted barometer of
inflation is the price of gold. So I submit that some
agency of the U.S. government has been using
clandestine means to manipulate the price. Otherwise, a
rising gold price would telegragh to the investing
public that we are drowning in an ocean of inflation.

The dam of menadacity will soon burst. The torrential
flood waters of stock and bond sales will sweep Wall
Street Pollyannas into an ocean of inflation, where
gold soars to the moon -- and the greenback sinks to
Davey Jones' Locker.

* * *

I thought you might like this scary one about the gold
industry from a Cafe friend:

* * *

I have just finished about three weeks of such intense
involvement in legal matters, property investigation,
report writing, boning for testimony, etc. that I've
completely lost track of the real world. The trial for
the Kantishna miners whose mining property was taken by
the U.S. Park Service in 1986 has begun. All this last
week has been devoted to testimony of the plaintiffs. I
was an expert witness for them and gave testimony one
full day; what a tension-filled day. That was completed
last Wednesday, giving me time to immerse in a second
lengthy report on another lawsuit, this one a divorce
case. I just finished that report today and am playing

Back to the Kantishna case: the Park Service took the
mining property and has offered to pay the plaintiffs
$98,000; we have calculated that the property is worth
$7.9 million. Quite a difference.

The testimony by the Park Service is so poorly founded
that it's scary. The government would have saved
several million dollars simply by settling. The problem
is the precedent. This is a landmark case and will pave
the way for many cases to follow. I am appalled by the
arrogance, the manipulation, and the insensitivity that
the government displays in this case, and I suppose
others. It's like a completely different world ... one
dedicated to government, not a government devoted to
the people its supposed to serve.

Does this sound familiar? What the hell has happened to
this country?

The miners and the town are fully in back of the
lawsuit in favor of the plaintiffs. I expect that it
will be settled someplace in the middle of the two
values presented. We, the plaintiffs, have been very
conservative in our estimation of the value of the
claims. The government has been deliberate in
completely undervaluing the claims by a million miles.
The Clintonites have struck and, I'm sure, will have
some prevalence in the settlement, which, incidentally,
is being heard by a judge, not a jury.

Anyway, keep up the good work.

Regards, R.H.

* * *

About my recent comments on Normandy's Robert J. Champion de

* * *

Bill: Finally got some articles and information on
Robert Champion de Crespigny. Have forwarded them
from the sites, as they may be helpful to you in
getting a clearer sense of this fellow. Started 12
years ago with $500,000, is now worth more than $100
million. Interesting note in one of the articles about
his partnership with Joseph Gutnick that he "sees his
future in the North American markets." If this is the
case, it makes his behavior toward you even more odd.

Sounds as though RJCdeC and "odd couple" partner
Gutnick have big dreams. So why doesn't he embrace
GATA? Why would he run away from an initiative that
aspires to bust price manipulation, unless he has some
undisclosed interest in having prices languish for
awhile longer? Interesting questions.

Consider: He may not want to help solve the problem,
because he may, in ways we cannot know, BE part of the

* * *

More strange about J.P. Morgan:

Spraggs and Corky: two J.P. Morgan London old-timers are
leaving JPM London to join Credit Suisse First Boston.
Now Morgan has hardly anybody left in precious metals.

So why has there been such a buildup of gold
derivatives on the books of Morgan ($18 billion to $38
billion over the last six months of 1999)? That makes
no sense if Morgan planned practically to eliminate its
New York operation and now is whittling down its London

This does make sense if Morgan considers the gold
derivatives as posing no risk at all because it is some
kind of U.S.-government-backed position.

About GATA's intention to go to South Africa if it will
help win the day:

"In today's Topic du Jour dated 30/5/00 mention is made
of GATA's intention to contact Marcel Goldin, former
president of the National Union of Mineworkers, and the
current president, James Motlatsi. For your information
Motlatsi retired at the end of April and the new
President is Senzeni Zokwana."

Rumors continue to swirl about Gold Fields of South
Africa and its possible merger partner. Newmont,
Normandy, and Placer Dome are all names making the

From Cafe member Michael Reed in Australia:

"LeMetropole the horse (appropriately by the champion
sprinter Made of Gold) is coming along just fine. She
won't be running until the Aussie spring, as she is
only a 2-year-old. Hopefully her first winning print
will grace the Cafe web site."

Michael, I hope you have better luck with LeMetropole
than my brother and I had with a Chilean champion horse
we brought to the United States from Chile via a
friend, Manuel Rojas, a Washington polo player.

The horse cost a fortune to maintain and the trainers
finally had it ready to race at the Meadowlands (New
Jersey) at night. Naturally, we put together a big
party for the event. Our only pre-race concern was that
the horse was used to racing right to left (as they do
in Chile), not from left to right as here in the

Off they went. Pil Pil led all the way until he reached
the grandstand and the home stretch and he looked up
into the lights. The horse had never raced at night
before in Chile, so he panicked and slowed
considerably, enough to be passed by most the other
horses. What a bummer. It was downhill from there.

The good news is: What goes around comes around. I met
Senator Warner because he had a crush on Mary Muldoon,
who was dating Manuel Rojas. Manuel is a former
business partner of former California Gov. Pat Brown.
Mary is of the famous Muldoon polo family of
Poolesville, Maryland. It cost me a quick $100,000 to
sponsor "our" polo team one hot summer in 1988. Manuel
was a real character. He once dated Rita Hayworth and
Pamela Sue Martin of "Dynasty."

Good luck with Le Metropole. The Cafe will want to know
how its namesake does.

Many Cafe members have been so terrific sending off
email barbs to those who seem to hurt the gold cause.

Bill Deener is the first mainstream journalist in the
United States to give GATA a full story. I believe
"Goldgate" will rival Watergate someday because of its
international implications.

Compared to Watergate, we are at the discovery of the
break-in stage. There is a buzz going around, but few
know what it really means yet. And some kind of coverup
is under way.

The Dallas Morning News, which is known for breaking
stories, may have another one on its hands. If everyone
could take one minute and email Deener (copying his
editor, Marty Zimmerman) about how important their
story is, it might make a huge impact. I urge all
supporters of a free gold market to take that minute
and let both of them know how many people around the
world care about their efforts. It might encourage them
to do some serious follow-up.

Bill Deener's email is:

Marty Zimmerman's email is:

Your email might make the difference.