Barron''s article is favorable to gold


Copyright 2000,
Not to be reproduced without permission

By Bill Murphy
June 24, 2000

Spot Gold $283, down $2.40
Spot Silver $4.94, down 2 cents

The technicals -- from the best to the worst, what does
it matter? Another gold spike has been stomped by the
manipulation crowd. The culprits midweek were AIG, the
big insurance conglomerate, and yesterday it was Credit
Suisse, both mentioned in the past as part of the "gold

The Australian gold producers are almost always blamed
when the price of gold is set back. But yesterday
morning I learned it was an Australian producer BUYBACK
that caused the early Thursday price spike in the
United States. Thus the anti-gold cabal could not even
use that lame excuse this time for gold's poor

The impressive looking gold chart now looks very
unimpressive, as the recent consolidation looks like a
heavy brick on a flag poll. But is that any reason to
be bummed out? NO! Because more and more gold market
participants are finally getting the picture that the
gold price has been rigged for some time. More and more
of these participants are learning who is doing the

As this learning grows, so does the understanding that
the price of gold can explode at any time because of
the incredibly bullish natural supply/demand
fundamentals. Critical (understanding) mass of all of
this cannot be too far off. When that happens, rocket
ship ride we go. Charts won't mean a thing.

So I don't just repeat just my own sentiments to you,
here is an excerpt from and one of the
most respected gold analysts in South Africa:

* * *

MONEYWEB: So if you were Bernard Swanepoel of Harmony
Gold Mine, or if you were Mike Prinsloo of Durban Deep,
would you be looking for international partners at this
stage, or perhaps the two of them getting together?

NICK GOODWIN: Yes, I think so. Look, also the gold
price has been low for a very long time and more and
more people internationally are starting to speak about
the fact that it's going up, and they're looking at the
dollar and saying the dollar has had a major run for a
long period of time, and it looks like it's now
vulnerable to start weakening. And if you look at the
correlation historically between the gold price and the
dollar, there's quite a close correlation. When the
dollar is very strong, gold tends to be weak, and when
the dollar is weak, gold tends to pick up. So we're
starting to think that maybe the U.S. economy is
starting to slow down, and, in fact, it might not be a
soft landing, it might be a hard landing, because it's
a really difficult thing to time. And the dollar could
start weakening and gold could start picking up,
because intrinsically at this point gold should be at
least about $320 per ounce. And I'm getting more and
more convinced that somebody is trying to control it,
because there is so much at stake in terms of the
positions that are held by various mines. And I think
the biggest one is Ashanti where, last time the gold
price ran, they lost $300 million within days. It can
happen again, and you've got an intermediary there.
You've got the gold broker, which sits between the mine
and the central bank, and he's got to settle the gold.
Now if that mine would effectively go bankrupt, then
there's no way they are going to be able to mine the
gold to settle with the bank, and the gold broker is
going to be short of gold. So it's just strange,
whenever the gold price gets to $290, it looks like
someone is hitting it on the head.

MONEYWEB: But surely, if the natural supply and demand
situation is such, you can't hold it down forever?

NICK GOODWIN: You can't, exactly. And I think, as I've
explained to you before on the show, that this year is
the first year that we are going to start getting a
shortage of gold developing, even with the sales from
central banks and hedging equal to what people have
hedged in the past. We're looking at about 200 tons
shortage, and this will grow to about 700 tons over
three years, which is an unsustainable situation. This
gold price just can't stay here. And to open new mines
now, you need at least $350 an ounce and this is why
these companies are so desperate to merge, because in
fact they can't expand their production any more.

* * *

To understand how bullish this comment is, note that
Nick Goodwin is using the supply demand numbers of Gold
Field Mineral Services, the apologist for the bullion
dealers. Goodwin understands the gold shortage to be
200 tonnes this year growing to 700 tonnes in three
years. We believe Veneroso Associates to be correct and
they say the deficit is 1,500 tonnes per year ALREADY.

That deficit is being met by gold lending and gold
derivative contracts. Consequently, the danger of a
gold price explosion is greater than nearly everyone in
the gold industry understands. That is why we keep
getting these price spikes. I don't believe that any
other market in history has traded like the gold market
has over the past year.

It is also why the gold cabal keeps beating the price
of gold back below $290. They are petrified of losing
control of the beast they have created to feed their
greed. Many, many times over I have explained that the
gold loans over the past years have been rolled over at
or just below $290. If the price of gold moves higher
than that, these gold loans go under water. Since that
is how the gold pool is holding down the price, they
cannot allow that to happen. No matter how high the
inflation, no matter how high the oil price.

Nick Goodwin is not the only one to suggest recently
that something is amiss in the gold market:

* * *

From Bloomberg, New York, June 23.

For Jack Thompson, chairman of Homestake Mining Co.,
the second-largest U.S. gold mining company, the gold
market is in the late stages of a marathon run, and
prices are bound to start climbing.

"You're staggering to get to that finish line, and yet
you know it's not too far off into the distant future,"
Thompson said. Even so, "It is very difficult to make
sense out of this market."

* * *

This is an election year in the U.S. The last thing the
present administration wants is the price of gold
soaring $100 per ounce. What will that say about their
inflation efforts? Their monetary policies, etc?
Motive, motive, motive.

This cannot go on much longer. They are being found
out. And maybe found out after a VERY long run of
manipulation. How long? Hard to say, but longtime Cafe
members know that the name that crops up everywhere I
have turned over the past 21 months in investigating
the manipulation is Goldman Sachs.

This article is 9 years old and was sent to me this
week by Cafe member, Nick F. I thought it might be
informative for and perspective purposes.

* * *

Newsday, October 7, 1992

Goldman Is Bullish On Giving To Clinton

By Brett D. Fromson and Charles R. Babcock. THE

Goldman, Sachs & Co. is the most profitable privately
held investment bank in the world and its partners keep
a low profile. But they are putting themselves in the
spotlight this year as the leading financial backers of
Arkansas Gov. Bill Clinton and as major supporters of
President George Bush as well.

Led by partner Kenneth D. Brody, Goldman, Sachs
employees and their spouses donated about $100,000 to
the Clinton campaign, more than any other group in the
country, and have raised at least $1 million more from
others for the Democratic presidential nominee, said a
Clinton aide.

Much of the help came early in the primary season, when
Clinton was battling negative publicity. A key event
was a successful February fund raiser that showed "some
very smart money" was behind him, a Clinton aide said.

Goldman, Sachs co-chairman Robert E. Rubin, who has
been mentioned as a potential secretary of the treasury
in a Clinton administration, raised millions to help
finance the party convention in July. He and other
partners also helped raise $4.2 million for a
Democratic fund raiser on Sept. 24.

Other employees have given at least $37,500 to Bush's
reelection effort -- making the firm fifth on the list
of biggest contributors. Three partners have given at
least $100,000 to the Republican Party. Goldman, Sachs
also sponsored a reception at the Republican convention
in Houston.

Wall Street always has been a rich vein for politicians
to mine because investment banks and securities firms
pay some of the highest salaries in the country. An
analysis of political donations by the National Library
of Money and Politics showed that individuals in the
investment and securities business have provided at
least $775,000 to Bush and $558,000 to Clinton. And
Goldman, Sachs has Wall Street's largest collection of
high-paid executives.

Goldman, Sachs is a global investment bank that is
dominant in virtually every part of the securities
business -- trading stocks and bonds, helping companies
raise money by selling securities to investors,
advising corporations and governments in their
financial dealings, and investing funds for some of the
world's richest families and most powerful
institutional investors. Government tax and regulatory
policy directly affects the firm's profits. For
example, Goldman, Sachs has done billions of dollars in
business with the Resolution Trust Corp., the federal
agency that is disposing of failed thrifts. Last year,
Goldman, Sachs' 142 general partners shared about $900
million in profit. The typical general partner earns $2
million to $4 million a year, according to sources at
the firm. And the co-chairmen, Rubin and Stephen
Friedman, earn about $30 million a year, the sources
said. The compensation is high because, unlike most big
firms that are publicly held, Goldman, Sachs is owned
by its managers.

Rubin, 54, has long been an active Democratic fund
raiser. He has close ties with former Democratic
National Committee chairman and lobbyist Robert
Strauss, now U.S. ambassador to Russia. Strauss and
Rubin have been friends since 1972 when Strauss
enlisted him to raise money for the Democratic Party
after the defeat of George McGovern. "Strauss has made
lots of money investing with Goldman, and in turn he
has introduced the firm to a lot of bigwigs with money
to invest and deals to do," one partner said.

The firm, the nation's leading underwriter of tax-
exempt municipal bonds, also has been active for years
in New York politics, raising large sums for Gov. Mario
Cuomo, former New York City Mayor Ed Koch and others.
"Our business is to be involved with movers and
shakers, the key decision makers, wherever they may
be," one partner said.

For instance, the firm and its partners donated about
$130,000 to Koch in 1989 and another $56,000 to David
Dinkins, much of it after he beat Koch in the mayoral
primary, according to city campaign records. Goldman,
Sachs also donates about $600,000 to candidates on the
federal, state and local levels through political
action committees (PACs) in each two-year election
cycle, a company official said. "It is pretty clear in
our society that if you or your firm plays a major role
in business, then you are expected to be a giver," a
Goldman, Sachs partner said. "It is not so much that
you are buying access or influence, but that your
competitors are givers and you are concerned that you
will be in the penalty box if you don't give, too."

Like other major financial firms, Goldman, Sachs has an
agenda, be it in Washington, in Albany, or in
Manhattan. A perennial issue has been preserving the
Glass-Steagall Act, which keeps banks from underwriting
securities. Goldman, Sachs and Morgan Stanley & Co. are
known on Capitol Hill as the hold outs among securities
firms trying to block reform of the law. And along with
other securities firms, Goldman, Sachs is lobbying to
soften the impact of a provision in the pending tax
bill that affects the amount it would pay on its
securities inventory. While the PAC donations represent
the institutional preference of the firm, the giving in
the presidential races seems driven more by the
personal convictions of the partners.

The partners most responsible for Goldman, Sachs giving
to Clinton, according to a Clinton fund raiser, were
Brody and Barrie A. Wigmore, two recently retired
partners, and Frank P. Brosens, who is in charge of the
firm's stock arbitrage desk.

According to a source close to Rubin, Brody and Wigmore
received Rubin's "blessing" before beginning their
telephone blitz. Rubin does not recall any discussions
on the subject. The pitch went something like this,
according to one who heard it:

"Joe. Is your hand on your wallet? No. Well, maybe you
ought to put it there. And maybe you ought to sit down,
too. I have been spending a lot of time trying to help
get someone elected president. His name is Bill
Clinton. Governor of Arkansas. Yeah, the guy who gave
that terrible speech at the [1988] convention. But that
is not the real guy. ... I'm asking for $1,000, and I
want you to get your wife on board for another $1,000."
($1,000 is the legal limit an individual can give in a
primary to one candidate.)

Brody and Wigmore also recruited dozens of other
financiers who in turn established associated fund-
raising networks. Allies included Roger C. Altman of
the New York-based investment firm the Blackstone Group
and Roy L. Furman, head of the brokerage firm Furman
Selz Inc. of New York. On Feb. 10, just before the New
Hampshire primary, Brody, Wigmore and Rubin were among
the sponsors of a Manhattan dinner that raised $750,000
for Clinton. At the time, Clinton was reeling from
charges of marital infidelity and fresh allegations
that he tried to evade the military draft.

Paul Carey, who headed Clinton's fund-raising in New
York, added: "That dinner signaled to a lot of people
that some very smart money was behind him. It was
critical to Clinton's campaign."

Goldman, Sachs partners said they kicked in money to
Clinton for two reasons. Many said they agreed that
Bush's policies had failed. Others said they
contributed because they were being asked by partners
whose business judgments had generally been on target.
"Ken [Brody] made the case that Clinton was one of the
few presidential candidates who could have become a
Goldman partner," one said.

* * *

I realize that this is only an anecdotal story, but it
all fits. Rubin ends up as treasury secretary and it
goes on from there. As the article relates, these big
financial firms have an agenda. Anyone who has borrowed
gold these past years and reinvested the proceeds in
other markets has made a fortune many times over.

In time, when all this comes out, the public will
realize we have a financial scandal of epic proportions
right in front of us. Why? Because many people around
the world have suffered greatly to satisfy the greed of
these bums. Anyone can make money in the money game if
there is no risk to investing. In addition, we now have
a gold price explosion coming that could jeopardize
certain gold producers (the overly hedged ones) and
certain financial institutions, as there will surely be
physical gold defaults. The fallout could be so great
that the financial havoc could even be systemic in

Someone is going to have to pay for the sad debacle
that is coming. Might as well start with the Goldman
Sachs crowd.

I am leaving in a couple of hours for Paris to attend
the 23rd Financial Times Gold Conference and will join
Reg Howe there as part of a GATA delegation. Gold cabal
spokesman Andy Smith of Mitsui had this to say
yesterday in his daily commentary yesterday about our

"Gay Paris? With conspiracy theorists promising to
hijack next Monday-Tuesday's FT conference, all the
proceedings may lack as a media circus will be a Gay
Pride march through the lobby of the Intercontinental.
The combination of cuckoos, of miners bonding and
saying communal prayers, and of the echo in the room in
the worst attended event for years should see a post-
conference selloff. Five gold miner speakers is trying
a little too hard. Your correspondent shall be there.
In the pink tutu, in the lobby."

Perhaps what this conference needs IS a media circus
instead of the drivel of the "gold pool" crowd that
Smith crows for. His latest diatribe calling for the
death of gold because demand was going to shrivel up
was more than "cuckoo"; it showed signs of desperation
from his fellow bullion dealers. Since physical gold
supply is harder and harder to come by, the bullion
boys are now are trying to knock the demand story, even
as gold continues to flow at record demand pace levels!

Fortunately, there will be more interesting specimens
in the lobby than Andy Smith. Yours truly and Reg Howe
have meetings set with some esteemed Europeans, and we
are looking forward to making their acquaintance. We
also have meetings scheduled with the press.

On that note, Operation Paris commences on G Day in
France. G Day (or Gold Day), not D Day. G Day is this
Monday, June 26.

Phase 1 begins Monday morning Paris time.

Phase 2 at 7:30 p.m. U.S. Central Daylight Time.

Phase 3 between 7:45 and 8:30 p.m. U.S. Central
Daylight Time.

Phase 4 is up to you.

An email from a friend of GATA:

"A short note to encourage you all. Today I was
speaking with a colleague working for a Canadian junior
who commented on his conversations with friends at
Barrick. The comment was that he simply cannot bring up
the issue of hedging with these people or the
conversation becomes very defensive and
confrontational. This is an obvious indication that
many in the ranks of Barrick are acutely aware of the
hedging controversy that GATA has brought to the
forefront. One has to wonder what the response of
employees working for an unhedged producer would be ...
I doubt that it would be defensive. Your efforts are
appreciated. The day is not far off"

If you can read Portuguese: Jorge Nascimento Rogrigues
has published a story about GATA and his interview with
me at his web site. It was also
published in Expresso, a reference newspaper for
businessman and politicians in Portugal.

Thanks to so many of you who sent me copies of the
Dallas Morning News story about GATA that was
republished in papers all over the U.S., including the
Reno Gazette.

Backtracking on Goldman Sachs. Former GS CEO Jon
Corzine just spent more money ($35 million) winning the
recent Democratic primary for the open New Jersey
Senate seat than any Senate candidate in history. Here
are some quotes from his Democrat opponent, Jim Florio,
in the Newark Star Ledger:

* * *

Florio condemns use of private investigators by rival's

Jim Florio yesterday accused Jon Corzine, his opponent
for the Democratic Senate nomination, of using private
investigators to uncover political dirt, a practice
Florio called despicable.

With one week to go until Tuesday's primary election,
the former governor invoked images of the Watergate-era
"plumbers" in condemning Corzine.

"He used spies to try and win an election. That is a
loss for the nation. That is a loss for democracy,"
said Florio at a Statehouse new conference."

* * *

So has Goldman Sach's involvement in the gold market
been a loss for the nation, fair play, and free

I have received three outstanding books from Cafe
members, which I am reading little by little. They are
"Rule by Secrecy" (Jim Marrs), "Sun Tzu -- The Art of
War" (Samuel B. Griffith), and "The Creature from
Jekyll Island" (S. Edward Griffin). All are fascinating
and I am learning a great deal.

It strikes me how little has changed over hundreds of
years. Marrs writes:

"The very idea of a central bank run by professional
bankers has been a contentious issue since the founding
of the United States. The arguments for and against a
central bank can be seen in the debates of Founding
Fathers Thomas Jefferson and Alexander Hamilton.

Hamilton believed in strong central government and a
central bank overseen by a wealthy elite. "No society
could succeed which did not unite the interest and
credit of rich individuals with those of the state, "
he wrote.

Jefferson wrote, "Banking establishments are more
dangerous than standing armies; ... the principle of
spending money to be paid by posterity, under the name
of funding, is but swindling futurity on a large

For that matter, this is what Founding Father John
Adams had to say in 1811 about the profit of banking:
"Every bank of discount, every bank by which interest
is paid or profit of any kind made by the (lender), is
downright corruption. It is taxation for the public for
the benefit and profit of individuals.

In essence, that is what the "gold pool" of bullion
bankers has done to the gold market of today.

This is hitting the nail on the head when it comes to
the gold market. The cabal of gold bankers is swindling
masses of folks around the world to feed their appetite
to accumulate wealth at any cost. Yes, a scandal of
epic proportions is coming.

It is too big a subject to deal in any detail at the
moment, but most Americans have no idea what the
Federal Reserve is all about. That has included myself
until recently. When pondering the obvious about the
gold cabal, it might be helpful to understand the
following, also from "Rule by Secrecy":

"An examination of the major stockholders of the New
York City banks shows clearly that a few families,
related by blood, marriage, or business interests,
still control the New York City banks that, in turn,
hold the controlling stock of the Federal Reserve Bank
of New York," reported Eustace Mullins in his 1983
book, 'The Secrets of the Federal Reserve."

"The private bank control of the Fed continues today.
"The Federal Reserve Bank of New York -- which
completely dominates the other 11 branches through
stock ownership, control, and influence, having the
only permanent voting seat on the Federal Open Market
Committee and handling all open market bond
transactions -- has 19,752,655 shares outstanding and
is majority-owned by two banks: Chase Manhattan Bank
(now merged with Chemical Bank) with 6,389,445 shares
or 32.35 percent; and Citibank, NA, with 4,051,851
shares or 20.51 percent. Together, those two banks own
10,441,295 shares or 52.86 percent -- which is majority
control," stated a 1997 report by researcher Eric

"It would appear that the warnings of Jefferson and
Lindbergh about private control over a central bank
have proven correct."

Robert Rubin has left the Treasury to run Citibank.
Since then and according to the Office of the
Controller of the Currency, the off-balance sheet gold
derivatives at Citibank have shot up 50 percent. GATA
has focused on the New York Fed for some time now as
being an instrumental culprit in holding down the gold
price. Fed Chairman Alan Greenspan has been his
disingenuous self with all of us when it comes to his
public statements about gold. The whole thing stinks.
Their days are numbered.

Off to Paris!