Thom Calandra still likes gold


By Bill Murphy, Chairman
Gold Anti-Trust Action Committee Inc.
August 6, 2000

The siege of the gold market has intensified. Every day
in the United States gold rallies are either sold,
sending gold off daily price highs, or gold closes

Meanwhile commodity prices have risen all year, with
crude oil leading the way. Even with all the strongarm
tactics being used on OPEC and oil producers to
increase production, WTI crude oil is back up to $30
per barrel once again. Wage pressures are mounting in
the United States too, rising to levels not seen in a very
long time.

Gold demand is very strong, will increase percentage-
wise year over year, and is probably at or near record
levels as incomes rise all over the world.

Meanwhile gold supply is contracting. Companies such as
Placer Dome, Durban Deep, and Normandy Mining are
delivering into forward sales rather than rolling over
hedges. Hedged mines such as those of Newcrest in
Australia are shutting down for years to come. That
gold supply of Newcrest is gone for almost
half a decade; so are their future forward sales. The
year 2000 gold mine supply will most likely be lower
than that of 1999.

Fifteen European banks have further put clamps on gold
supply by limiting their combined gold sales to 400
tonnes per year and capped gold lending to levels
attained as of the September 26, 1999, Washington
Agreement. This capping has led the "gold pool" to
request (in unprecedented fashion) gold powerhouses
Kuwait (79 tonnes), Jordan (12 tonnes), and Uruguay
(56.5 tonnes) to send their gold to England for lending

All this and the price of gold is only $6 higher than
the day the Washington Agreement was announced, which
resulted in a gold upward price spiral to $337 per

How can this be -- gold all the way down to $272 once
again? The price of gold should be trending higher, not

There is only one answer, and GATA has been pointing it
out to the gold world for 18 months now. Sinister
forces continue to conspire to force the gold price
lower. GATA has explained the motive for the
manipulation of the price of gold over and over, and it
need not be done again here.

Meanwhile, the silence about all of this from the gold
"industry" is deafening. It has been 18 months since I
labeled this nightmare as "Silence of the Lambs," the
gold producers being the lambs. All these months have
gone by and they say nothing, and do little about this
outrage. While some may decry comparing Goldman Sachs
to "Dr. Hannibal Lecter" and labeling other bullion
dealers as "Hannibal Cannibals," what could be a more
apt metaphor for the gold world?

The gold producers are cowed by their bankers and are
afraid of government retaliation. How else can one
explain the silence of U.S. mining companies Newmont
Mining and Homestake Mining? They are losing money hand
over fist. Their share prices are making 52-week lows,
while the gold fundamentals improve by the month.

Ironically, many of you ARE speaking out and querying
public officials about the important issues involving
gold. My guess is that more than two-thirds of the
members of the U.S. Senate have been contacted by GATA
supporters. You can be sure they are aware of the gold
problem. As we all also know, the gold issue is a
complicated one and requires a good amount of scrutiny
to understand. If only the U.S. gold producers would
speak up, we could have a free gold market. But make no
mistake about it, in spite of the U.S. gold producers,
there is a quiet buzz about gold circulating in the
right places at the U.S. Capitol.

GATA Secretary/Treasurer Chris Powell recently
received this letter from Ralph Adkins in West
Virginia, indicating that two more senators may be on
the case:

"Per your request of July 20, 2000, I forwarded to
Senator Byrd, Senator Rockefeller, and Representative
Rahall your request for information concerning the use
of the Exchange Stabilization Fund and the indifference
of the Commodities Futures Trading Commission
to the manipulation of the gold price.

"On the two prior occasions I wrote Senator Byrd
concerning the gold market manipulation, he has
referred my request to the CFTC and I received what
appears to be something of a form letter stating,
"Based on this routine review of activity in the gold
and silver markets, we are not aware of any evidence to
conclude that the gold and silver price is being

"I received a letter today from Senator Byrd dated July
21 stating, `I have contacted the appropriate officials
of the U.S. Department of the Treasury (DOT) in your
behalf. I will write to you again when I have something
to report.'

"Hopefully, if enough senators requested this same
information from the the Treasury Department, it
will force them into a response of some sort."

Ralph, I believe it will force them to some sort of
response. That is part of the "Blueprint for a GATA
Victory," and I will get into that, but first some more

It is GATA's contention that the U.S. government and
certain bullion dealers are manipulating the gold
market. This past year, the derivatives on the books of
certain bullion banks such as J.P. Morgan, Chase Bank,
and Deutsche bank have exploded while the derivatives
on the books of the biggest gold derivative player, UBS
Warburg, has remained static. The secretive Exchange
Stabilization Fund (ESF), which reports only to the
president and the secretary of the treasury, had
massive quarterly trading gains and losses this past
year, yet reported to Congress that it did not
intervene in the foreign currency markets. While
Federal Reserve Chairman Alan Greenspan responded to
Sen. Joseph I. Leiberman of Connecticut about GATA's
questions in Roll Call, Treasury Secretary Lawrence
Summers has refused to respond to anyone about Treasury
Department and ESF involvement in gold. He has let four
underlings respond. None may have any knowledge of ESF
activity and none will say anything about ESF activity.

That is why this letter from Texas Rep. Turner may be
so revealing:

* * *

Congress of the United States
House of Representatives
Washington, DC 20515-4302

July 7, 2000

Jay Tolbert
Lufkin, Texas

Dear Jay,

Thank you for you letter regarding the Exchange
Stabilization Fund (ESF). I appreciate hearing from you
on this issue.

After contacting the Federal Reserve Bank and the
Treasury Department, I have been advised that the
Federal Reserve Bank owns no gold and does not engage
in financial transactions related to gold, such as
trading in gold options or other derivatives. The
Federal Reserve is in complete agreement with the
proposition that any such transaction aimed at
manipulating the price of gold or otherwise interfering
in the free trade of gold would be wholly
inappropriate. Additionally, I have enclosed a copy of
a Federal Reserve Staff Memorandum which should be
helpful in addressing any further questions that you
have regarding this issue.

Again, thank you for contacting me. Please feel free to
call on me whenever I can be of assistance to you.


Jim Turner, M.C.

* * *

Can it be any more obvious that no one wants to talk
about the ESF?

As far as the "gold cabal" bullion dealers go and their
complicit activity in this gold fraud, note these
recent commentaries:

* * *

New York, Aug. 4 (Bloomberg) Comment from Donald
Eckert, head of precious metals trading at Chase
Manhattan Bank in New York:

"I see nothing to make the price go higher. No one is
paying attention, and no one is likely to pay attention
to this market until we go below $255, last year's low,
which I would say we'll see toward the end of the

There won't be any seasonal increase in gold prices,
"even if jewelry demand picks up at the end of they
year," Eckert said. "Gold is still in a downtrend, and
I see nothing to make the price go higher."

* * *

From a July 27 Bloomberg story:

"The House Banking Committee plans to vote today on
a bill to keep commodities regulators from overseeing
over-the-counter derivatives, lift a ban on single-
stock futures, and reduce futures rules.

Committee Chairman James A. Leach is considering
changing the legislation to keep commodities law from
applying to banking products, including OTC

Futures exchanges and Wall Street firms say Congress
must reduce government's role in the multi trillion-
dollar futures business and derivatives markets to keep
them from moving overseas....

OTC derivatives are private contracts whose value rests
on an underlying commodity, security, bond, or other
asset. Though similar to regulated futures contracts,
they aren't governed directly by any U.S. rules.

"Regulators and companies differ on what types of OTC
derivatives should be exempt from commodities law. The
Commodities Futures Trading Commission wants only
financial OTC derivatives to be legally outside its
oversight, while J.P. Morgan & Co., Enron Corp., and
other companies active in derivatives markets would
prefer a broader exemption including, for instance,
energy and metal-based OTC derivatives.

* * *

This is contrary to a telephone comment to me by John
Mielke, Director of Enforcement by the CFTC, that there
has been no pressure by anyone to include OTC gold
derivatives as an exemption from commodities law.

And this recent quote about Deutsche Bank last week
from Dow Jones:

* * *

Analysts say Deutsche has already reached its ambition
to become an international heavy hitter and may speed
up plans to list its shares in New York to fortify its
position in the United States, with J.P. Morgan
seen as a suitable target.

* * *

The Deutsche Bank story over the past year is most
interesting. Their forays into U.S. markets are
becoming well publicized, such as Deutsche-Telecom's
search for a U.S. phone company takeover.

Sources from Germany tell me that Deutsche Bank has
become a great deal more independent from the
Bundesbank. That is a result of the new formation of
the European Central Bank. The central bank in Bonn
does not have the clout it used to.

Germany was always staunchly pro-gold. They may still
be, but the $15 billion to $50 billion gold derivative
buildup this past year on its books suggests that
Deutsche Bank has allied itself with U.S. banking and
U.S. government interests. The public comments of
Deutsche Bank's Charles Spall at the Financial Times
Gold Conference in Paris confirm this.

Deutsche Bank was the bank that told its clients on May
6, 1999, the day before the May 7, 1999, Bank of
England gold sales announcement, that gold would
not go above $290. Gold closed at $289 that day.

The gold derivatives on the books of J.P. Morgan this
past year have gone from $18.4 billion to $36.5
billion. J.P. Morgan is against the CFTC having any
regulatory role when it comes to OTC gold derivatives.
Now there are rumors that Deutsche Bank wants to
acquire J.P. Morgan. Very interesting.

Well, what about that blueprint for a GATA victory?

A magic wand GATA does not have. But we can present a
wonderful opportunity for action for all those seeking
a free gold market.

It has to do with the coming presidential election in
the United States. If GATA's suspicions are correct,
the scheme to manipulate the gold market was set in
motion by Robert Rubin, former U.S. treasury secretary
and former CEO of Goldman Sachs. My guess is that it
began in 1995. It became noticeable in the fall of 1998
when Long-Term Capital Management was bailed out by
certain bullion banks and the New York Fed.

The manipulation crowd has had their way for a long
time now -- very long when speaking of investment
horizons. These certain bullion banks have become very
complacent and arrogant. Confidential relationships are
in place after years of these winning ways and making
of fortunes.

But now, with the impressive Republican National
Convention, the performances of George Bush and Dick
Cheney, and their big early lead in the polls, the
gold cabal has to be a bit concerned about a possible
change of leadership in the White House. That is
where the gold scheme was hatched and that is where it
can be uncovered. The activity of the ESF, for example,
is as good a place as any for a new administration to
ask: What is going on here?

Time may be running out on the gold cabal, and maybe
that is why we are seeing this furor to push down the
price of gold -- one last effort to push down the price
of gold so low that they can give themselves enough
room to get out.

When Uruguay is called to send all its gold to England,
we can suspect that the bullion bullies are really
scraping the bottom of the barrel to effect some kind
of exit strategy. There is no way they can know what
will come of their scheme if Bush wins the election.
None of us know. That uncertainty, with the risks so
high, has to be breeding great concern.

What must be conveyed to the Bush campaign group and to
the Republican leadership is that a gold time bomb is
ticking. As previously reported, Nobel Prize winner
Myron Scholes told a source that the essence of the
LTCM bailout was the off-market rigged transaction to
cancel their gold short position. Maybe they were short
a great deal more than 300 tonnes of gold. I find it
ironic that never has gold become more important in
financial history than it is today. That is in complete
contrast to what the financial and mainstream press
reports. If it were not so important, there would not
be this incredible collusive and fraudulent effort to
hold the price down.

GATA's main focus in the next few months will be to
bring the gold issue to the fore with the Republicans.
We will continue to present the evidence of the gold
time bomb to them and make them aware that if they win
the election and do not expose the scandal before
Inauguration Day in January 2001, then they will be
stuck with a financial nightmare when the gold price
explodes sometime during their administration. If they
do not seriously investigate what is going on now, they
will have no one to blame but themselves.

This approach is not a new one for GATA, but the
political events of recent days give it significant
impetus. On May 10, 2000, a GATA delegation met with
House Speaker Denny Hastert and conveyed this
message to him and his staff. The House and Senate
banking committees are aware of what GATA has to say.
Politics is timing. Now is the time for us and the
Republicans. If they do win, do they want to address
this issue in February in 2001? I think not.

When I moved to Dallas in May 1999 I suggested that
Texas would be a more effective place for me to be as
far as GATA was concerned. That seems to be panning
out. George Bush is from Texas. Dick Cheney lives in
Dallas. And an associate of GATA committee member and
former Federal Reserve lawyer John Feather may become
the next attorney general if Bush wins the presidential

GATA and its supporters need to focus on the Republican
leadership and the Bush campaign groups and let them
know why it is in their interest to have the gold issue
become a more public one soon.

We can take it a step further. "Inclusion" was the word
du jour at the Republican convention in Philadelphia.
"It is a known fact that black politicians are
sensitive to events in Africa," Bobby Godsell, CEO of
South Africa's Anglogold, the world's largest gold
producer, said last Friday. "Could Africa not take the
lead in convening a gathering of governments and social
partners to consider what is needed to ensure both a
level playing field and a sound future for this metal,
now so much an engine of developing nation prosperity?"

The annihilation of the gold price is devastating the
economies of poor developing countries. Most of
these countries are black-led and populated. The
leadership of these countries and the mining unions
must be made aware of the gold market scandal, and they
must go to Congress for some answers. The Black Caucus
is mostly Democratic, so one cannot expect help from
that group until after the congressional elections are
over in November. But a black Republican such as U.S.
Rep. J.C. Watts, who spoke at the Republican
convention, is a perfect man for us to target as
someone who might want to look into the gold issue. He
would make quite a name for himself in the black
political world if he helped uncover a scandal that
resulted in the price of gold rising hundreds of
dollars, which would invigorate the economies of the
black-led gold producing countries.

But it is more than just about economies. The hot issue
in Africa is HIV/AIDS. Thousands of people are being
infected every day. Money is just not there to deal
with the problem. If the price of gold were allowed to
rise to its proper equilibrium level, there would be
plenty of funds available. This must be made known to
the black politicians and black leaders in the United

This is all doable. It just takes time, effort, money,
and commitment. There are people out there who do not
think that it is worth it. Take excerpts from the
following emails I received this week:

"No, Midas has become a gold joke. Give it up, boys,
why be losers any longer? Yes, I'm one of you. But it's
time to go....

"Your response has confirmed my view that you have
become obsessed with a fight that cannot be won, only
lost. Fighting against an enemy that has knowledge,
networking, quickness, power, and enormous financial
backing is like fighting against the Mafia or Hell's
Angels. You may be able to win but the fight will
consume your days on this planet, to say nothing of the
wastage of money, effort, emotion. Oh, by the way, I am
the farthest thing from a coward, but I will die for
another cause.... I was a huge believer in gold, but I
am done with this war. There are other wars."

"You are correct, I am not and never have been a Cafe
member other than the short trial, nor contributed to
GATA, nor read the Gold Derivative Banking Crisis
report. I have given nothing, but I have asked for
nothing, but kept receiving your inane and endless
gang-mails which at best were amusing and at worst
dangerous, such as your alerts to imply that the
markets must drop or that gold should be going up
because of your subjective interpretation of some
event, such as oil inventories, etc. In every alert
case we would have been far better off to fade your
view. You and your evangelical ilk deserve your
fate ... ignominy and ridicule. You are the real
gold joke."

This is what makes America. Everyone is entitled to
his pinion and is free to express it -- the
exception being the mainstream press reporting on a
potential scandal in gold.

Call it obsessive, committed, etc -- whatever word one
thinks is most suitable. It is all semantics. Many of
you out there have given GATA contributions to get the
job done. To take on the financial powers and get that
job done, requires more than a weekend token effort or
a haphazard "throw something against the wall once in a
while" approach.

What is going on here is far more sinister
than just the suppressing the price of gold. It is
about a tyranny of sorts, and poses potential losses of
certain individual freedoms. If certain banks and
governments will persist in what GATA has exposed and
are willing to hurt so many peoples and countries, what
might they do next? The ramifications of "big brother
knows best" are staggering and have been written about
by noted authors such as George Orwell.

What they are doing to gold has been wearying on all of
us, especially this past month. But how one can say it
is not worth the effort to put a stop to this horror
show is beyond me. In the end, what is life worth, not
to fight the good fight from time to time?

What if there were no French freedom fighters in the
Nazi days, no one hiding the Jews from the Nazis, no
whites or blacks willing to fight for human rights in
the segregated South, no Nelson Mandelas in South
Africa, no Vietnam War protesters, no American
colonists to take on the British. History is replete
with examples of taking on very formidable foes that
had "knowledge, networking, quickness, power and
enormous financial backing."

GATA's fight and that of all you supporters out there
is nowhere near as dramatic as these examples (then
again, how many lives could be saved in Africa from
AIDS by a higher gold price?), but the long-range
significance of what we are taking on, and what we are
uncovering, could be. Our foe has succeeded with
hideous, secretive tactics and mobilized the biggest
money in the history of the world to try to defeat a
free gold market and to mask dangerous disequilibriums
in other financial markets (the dollar, stock market,

What we are confronting is not a new phenomena, just an
unchecked, escalating, and more scandalous one because
of the damage it is doing to so many innocents.
Talented author Anne Williamson had the following to
say in her recent acclaimed book, "Contagion: The
Betrayal of Liberty, Russia, and the United States in
the 1990s":

"Critical to Really Big Government and trade
imperialism are the collaborative roles of the Federal
Reserve and the Treasury Department. As the Decade of
Greed's leveraged buyouts gave way to the emerging
markets of the Decade of Deceit, the concerns and needs
of the Fed and the Treasury superseded those of the
State Department. Thanks to Fed Chairman Alan
Greenspan's nonstop expansion of credit and liquidity
and Treasury Secretary Robert Rubin's unrelenting
effort to make the world safe for Goldman Sachs, the
Wall Street investment bank he once co-headed, the
Clinton administration's dubious achievement has been
to corner the market in public bailouts of foreign
governments at the expense of U.S. taxpayers.

"The pilot project was the Mexican bailout of 1995,
which overrode the market's safety mechanism by
extending the first multilateral government protections
to private investors in the Mexican government's dollar
denominated tesobonos (treasury bond) market. The more
sensible approach would have been for the bondholders
and the Mexican government to have negotiated a
conversion of the short-term tesobonos into long-term
debt instruments, thereby saving the Mexican people
much unnecessary suffering, American taxpayers'
dollars, and everybody's time....

"People in the government, at the U.S. Treasury, knew
the score and were kept current until the very moment
of the peso's collapse. But wealthy Mexicans,
understanding their own economy's signals, had bailed
out of the tesobono market before the devaluation was
announced. The politically self-interested failure of
Treasury's watchdogs to bark left American bankers with
huge sums at risk.

"The imperiled banks demanded that something be done,
and it was; billions were confiscated from American
citizens in broad daylight and handed over to Wall
Street investment banks. The Clinton administration and
the Fed seized upon the anti-constitutional ploy of
raiding the Treasury Department's Exchange
Stabilization Fund (money devoted to the support of the
U.S. dollar), thereby relieving Congress of the need to
vote in the funds and of being held accountable by
voters. The IMF's Michel Camdessus, a man always eager
to spend other people's money so that he might ask for
yet more of it, was delighted to pitch in with $17.8
billion after having dragooned the other members of the
G-7 on the total $40 billion deal without consulting

"Former Cold Warrior and supply-side economist Jude
Wanninski charges, `They are all part of the same rat's
nest. It's a revolving door (Wall Street and
Washington). There was a big party at Morgan Stanley
after the Mexican peso devaluation, people from all
over Wall Street came, they drank champagne and smoked
cigars and congratulated themselves on how they pulled
it off and they made a fortune. These people are
pirates, international pirates. This is why so many
people in the world look with fear at the United States
as a great Satan. It is satanic.'"

It is only because of the Internet that the gold
cabal has been found out, as the rogue opposition
mustered by GATA came out of nowhere. All of us would
like a quick, blitzkrieg victory; the GATA camp more
than anyone. "Smelling the roses" is much more fun.
However, until we send these bums running for the
hills, there is work to be done.

That takes continued effort from all of us. Keep at it
out there; we ARE being heard.

These are my thoughts on what we all can work on and do
to win the day. It is hard to know whose letter, phone
call, or action will do the trick, but one of them
will. When that happens, victory will not be that far