What if central banks have dumped their gold already?

Section:

12:10a EDT Monday, June 19, 2000

Dear Friend of GATA and Gold:

GATA gets many suggestions, and some were offered to
us publicly the other day by Ted Butler, who frequently
has written about the precious metals markets and
particularly about silver.

Butler's essay is posted at:

http://www.gold-eagle.com/gold_digest_00/butler061100.html

I'll summarize Butler's suggestions here and reply to
them briefly.

1) GATA should focus on the unnaturally low central
bank lease rates for gold.

Response: We indeed have focused on this issue many
times. A search of the GATA archive at
www.egroups.com/group/gata shows that 72 of GATA's 488
dispatches have mentioned lease rates. Many of these
dispatches have complained about their facilitation of
the gold carry trade.

2) GATA should complain more about gold-mining companies
that sell more than a year's worth of their production in
advance.

Response: A search of the GATA archive shows that 104
of our 488 dispatches have mentioned Barrick Gold, the
leading short seller. I haven't bothered to review them
all, but I think I'd remember even one favorable
mention of the company, and I don't remember any.
GATA's most damaging criticism of Barrick may have come
with the help of the internationally known novelist,
Arthur Hailey, who, at GATA's urging, last year
publicized his selling his substantial holdings of
Barrick because of the company's hedging policy. Even
Barrick has taken note of GATA's criticism and has
returned a few choice comments.

3) GATA should make an issue of the New York Mercantile
Exchange rules that allow people to sell precious
metals without actually having possession.

Response: This situation may be worth GATA's getting
involved with, but it is a symptom, not the cause, of
the collusion that is holding the gold price down and
that is GATA's main target.

4) GATA should pursue Butler's favorite issue, the
shorting of silver and the manipulation of that market.

Response: We do follow silver closely too, and maybe in
time we will make more of what happens in that market.

But in response to Butler's last two suggestions, and
to all suggestions we receive, we must stress that even
though GATA has achieved much in its first year and a
half, we remain a relatively small organization with
limited finances even as we are up against all the
power and money in the world. Thus we can't be
everywhere and on top of every issue all the time,
even as it increasingly seems that, amid the industry's
timidity, advocates of gold's traditional monetary
function look to GATA for leadership and action.

We DO have a war plan, articulated many times by
GATA Chairman Bill Murphy, and we're following it.
We COULD do a LOT more, faster, pursue more people's
suggestions, and even bring some lawsuits -- IF we
had more help, particularly financial help and
volunteer staff. As Murphy says, we need "more money
and Wayne Wagners." Suggestions alone are,
unfortunately, not even a dime a dozen.

That's why we continue to try to mobilize the mining
industry in its own behalf. We're starting to have
more success in that too.

Butler also argues that it's futile for GATA to bring
the gold manipulation problem to Congress, because the
manipulators have more political influence than we can
ever hope to gain. We disagree. There are many people
in Congress who cannot be bought, and the gold
manipulation problem has been assisted largely by the
executive branch, which is under the control of the
party that doesn't control Congress, so politics may
work in our favor there. Further, government is where
the power to stop the manipulation resides, so we have
to be there.

Please post this as seems useful.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.