One more analyst acknowledges manipulation


By Bill Murphy, Chairman
Gold Anti-Trust Action Committee Inc.
Wednesday, June 7, 2000

Deutsche Bank, along with some help from Goldman Sachs,
bashed gold early today, taking it down almost $6, but
the funds came in as buyers, taking it back up late in
the day. August gold finished at $290, down only $1.80.

Good ol' $290 again. That is the price the manipulators
have been defending for a couple of years now. They are
at it again.

Word to me was that some hedge funds were buying. This
is very important news. I received a call today from
Europe that GATA's "Gold Derivative Banking Crisis"
document is being distributed around the world at a
furious pace and is going to the highest levels of the
banking world. This is not supposition. One of the most
prominent bankers in Europe has already received four
copies, and the report was made public only five days

A futures broker was called by a well-known futures
trader and asked him, "Have you seen the report that is
so bullish for the gold price?"

If the GATA document (which can be obtained for free at is circulating to this degree and to the
right people, it is only a matter of time before the
big-money crowd starts buying gold in earnest.

The report is a lot to digest. But once the investment
community realizes that the bullion banks are in a bind
-- big-time -- investors will buy gold. Historically,
when banks, central or otherwise, have screwed up to
this degree, the George Soroses of the world have taken
them on.

They will most likely do so again. After all, the
downside in gold is $20 to $30. The upside on this
trade is $300 to $600. For that matter, just pick a

The gold derivative numbers of the Office of the
Controller of the Currency for the first quarter were
released yesterday. They show another big derivative
buildup, as the new total of notional off-balance-sheet
gold derivative contracts has risen to $95.5 billion
from $87.6 billion. The big increase came at Chase
Bank. I am sure Reg Howe, Mr. Derivative Expert, is
doing a report on this, so I will leave the details for
him to present to you.

What does this all mean?

It is simple. There is too much gold being consumed at
too cheap a price. There is a dearth of physical gold.
Only PAPER gold is holding down the price. The bullion
banks, their clients, and heavily hedged gold producers
have an exposure that is frightening. Once that
exposure is understood by serious money people, they
will buy gold. CHECKMATE for the shorts.

On a less dramatic note, crude oil roared back today
after being down $1 to close up 20 cents on the day at
$29.95 per barrel. The price of oil is headed up, as is
the price of gold.

The dollar was weak all day as it sank to 106.16. Firm
oil price, a soft dollar, and little physical gold
around to meet demand. What a combination!

Thanks so much to so many of you out there who have
been behind GATA, spreading the word on the building
crisis in the gold market and sending the GATA report
all all over the world.

The Gold Anti-Trust Action Committee is trying to find
out what the gold leaving the New York Fed is all about
and why it is being categorized in the trade data.

A GATA Committee member is doing yeoman work contacting
the Customs people, the Commerce Department, the Census
Bureau, and the New York Fed. I thought you might like
to see some of the kind of repartee going on behind the

* * *

Bill, Reg, Chris: I just talked to a John Kohler at the
Foreign Fiduciary and Financial Service Staff of the
New York Fed. This is the gist of our conversation:

"Do you not handle the paperwork for the gold
transactions in and out of the vault?"

"I can't answer everything for reasons of security."

"Can't you tell me your own responsibilities or the
responsibilities of your office? Do you not handle the
paperwork when a foreign government instructs the Fed
to physically transfer its gold to a dealer?"


"What Customs paperwork do you fill out?"


"Are you aware that, once demonetized, this is an
import and should be declared as such?"

Long silence.

"Or if it is not demonetized, it should be debited
against current account?"

"I can't tell you about our accounts for reasons of

"I'm not asking about accounts. I'm asking about
accounting! That's not security! Aren't you aware that
there is a separate category in Customs for monetary

Pause. "Yes."

"And are you declaring such to Customs?"



At which point Mr. Kohler excused himself, said other
personnel were involved, and referred me to Susan
McLaughlin, the staff director.

A report on my phone conversation Susan McLaughlin:

She knows of no Customs forms that need be filed when
the Fed transfers gold. She thinks it is the
responsibility of someone else, either someone at the
Fed or else the recipient's responsibility. She has
been on the job less than two years and has no idea who
at the Fed would be responsible and did not want to
help me further.

I had to pull my trump card that I am having dinner
with my ex-professor, the Fed governor, next week.

Ms. McLaughlin has now received a written inquiry
similar to the one I sent Ms. Boney yesterday and I
think she will pursue the matter now in a timely


* * *

It ought to be quite the summer for gold!