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GATA press release to expose ESF/Bundesbank gold swap
By Bill Murphy
April 22, 2001
A brand new day is coming.
It is Sunday morning and I am reflecting a bit over the
past 27 months that Chris Powell and I, as well as so
many other stout GATA supporters, have been trying to
wake up the gold and investment world to realize that
the gold market has been manipulated by certain bullion
banks and a faction of the U.S. government.
It could not be more clear that we have reached an
inflexion point. One can compare Reg Howe's discovery
of the Federal Open Market Committee minutes to the
discovery of quot;The Dressquot; in the Clinton/Lewinsky
scandal or to John Dean's testimony in the Watergate
The difference is that Howe's revelations are far more
consequential than the revelations in those two
scandals. As the news and the facts spread, and this
time they will, the ramifications will be felt around
the world. Think about these things:
* Federal Reserve Chairman Alan Greenspan has been
caught deceiving Sen. Joseph I. Leiberman, who is
already campaigning to run for president in 2004.
* U.S. Treasury Department officials have
misrepresented to members of Congress and people all
over the world that the Exchange Stabilization Fund has
not been involved in the gold market.
* The black-led government of South Africa took over in
1994 -- just when the Bank for International
Settlements and the ESF put their gold price
suppression scheme into high gear. The suppression of
the gold price has been devastating to the economy of
South Africa and for other poor African gold-producing
countries. So the South African government has not had
the funds it should have had to work on its terrible
unemployment, crime, and disease problems. The South
African government has been called ineffective -- but
it had been secretly hobbled by U.S. Treasury Secretary
Robert Rubin, Fed Chairman Greenspan, the BIS, and
Goldman Sachs, J.P. Morgan/Chase, amp; Co.
* One would think that the opposition party in Britain
would roast Prime Minister Tony Blair for selling half
of Britain's gold to perpetuate the gold fraud scheme.
* How do you think Germans will react when they realize
that most of their gold is gone? Inflation is on its
way back and they have no gold -- or will have none if
the United States decides not give it back to them. No
one dreads inflation more than the Germans and their
gold is missing. One would think that whoever is
responsible for emptying Germany's gold vault is in big
trouble. Somebody over there is going to have a field
day with this.
* And who suckered the Swiss to dump 1,000 tonnes of
gold at these rock-bottom prices to perpetuate the
scheme? As the investment world realizes that 5,000 to
11,000 more tonnes of gold has left central bank vaults
than recognized by the gold industry, the gold price is
going to soar. The brilliant and lonely voice of Frank
Veneroso is going to be proved correct. The reputation
of the Swiss as being so bright and clever is headed
for the toilet.
* What do you think the reaction is going to be from
the prime ministers of the gold-producing countries in
Africa and the other Third World nations?
As Howe said in his recent court filing: quot;Defendants
Summers, Greenspan, and McDonough knew or should have
known that suppressing gold prices through the BIS or
otherwise is contrary to U.S. foreign policy toward
How do you think the Third World leaders will reflect
on the International Monetary Fund's proposed gold
sales in 1999, which failed to secure approval by
Congress? That would have allowed 3,000 tonnes of IMF
gold to be injected in the physical gold market over
time to keep the price of gold depressed even longer
than it already has been. Clinton and Rubin urged that
the IMF gold sales be allowed to go through to help the
poor. What hypocrites!
* Can you imagine what the Russians will do with this?
America preaches the importance of free markets to the
rest of the world while we are doing the opposite in
the gold market by suppressing the price. What was the
Cold War all about anyway? What we have here is nothing
less than Big Brother doing his thing. The Communists
would be proud. The State rules. Down with freedom, the
truth, competition, and anti-trust laws. Hail to order,
the government, and insider bullion banks.
* Fair play is down the drain in the United States. How
would you have like to have practically interest-free
money at your disposal the past seven years?
I could go on and on. I am sure you get the picture,
and it is not a pretty one.
The good news is that the price of gold is going to
roar. The gold time bomb I have talked about so long is
going to go off any time. Even the ticking noise is now
Junior gold companies such as Golden Star Resources
(GSC in Toronto) are truly the bargain buys of a
lifetime. I speak often of GSR because that is where my
money is, and I know the company well. It is also Frank
Veneroso's No. 1 pick. CEO Peter Bradford will be
attending the GATA African Gold Summit in Durban on May
The investment world is finally going to realize that
Frank Veneroso is correct and that up to 11,000 tonnes
of gold that was supposed to be in central bank coffers
is gone. Demand for gold has been that much greater
than the investing public has been led to believe. The
investing world will realize the shorts are trapped and
cannot get out. The sharks will begin to circle the
vulnerable Gold Cartel.
Many of these junior exploration companies are priced
at near-bankruptcy levels. It is the outhouse-to-the-
penthouse story coming. Gold companies that can deliver
new gold supply in the next 10 years are going to go to
astronomical premiums. The ones that have gold
production now will go first -- companies like High
River Gold in Toronto. The exploration companies, like
Samex in Vancouver, will be next.
I have been so involved with GATA that I have little
time to check out other wonderful junior/exploration
companies, many of which are LeMetropole Cafe members.
That is what the likes of Bob Bishop, Bob Chapman, Jay
Taylor, and Sir Harry Schultz do so well. They are all
Cafe members too.
It is time to do your gold company homework. Whether
the gold bomb goes off next week or next month, it is
coming. The truth is going to prevail against the evil
* * *
Just in: Another bombshell from Cafe member Tom
Childers in Japan:
quot;I posted the James Turk essay at a longwaves economic
chat site, and a translator in Europe, Hugh Winfrey, took
the time to investigate at the Bundesbank web site. His
findings are interesting, and I have included them in
this message. I hope this is of some use to you:
Thought I'd check this stuff out at the
Bundesbank's site, a href=http://www.bundesbank.de.http://www.bundesbank.de./a
They have a good search engine at the site.
Here are three interesting things that seem
to support what Turk is saying:
Entitled quot;Statistical treatment of the Eurosystem
Bs international reserves October 2000
On Page 37 on the PDF file, some numerical examples of
how the accounting for gold reserves is done are given.
Example 3 states:
quot;3. 20 Dec. 1999: A undertakes a gold swap with the
United States Federal Reserve in which A provides
the Federal Reserve with 1,000 ounces of gold in
exchange for USD 300,000 in currency. The transaction
will be reversed on 20 January 1999, at the spot
price of the gold prevailing in the market at that
Note also that pages 19 and 20 in this document are
interesting as per the accounting rules they are using
for gold swaps.
Entitled quot;Auslandsposition der Deutschen Bundesbank im
ESZB / Gold und Goldforderungenquot;
My German is on the amateur level, and I don't translate
it professionally, but I understand this to be referring
to 'foreign positions' of the Bundesbank in gold and gold
The numbers given here correspond more or less precisely
with those listed in
on page 16, showing the consolidated assets of the
Eurosystem, under the entry quot;Gold and gold receivablesquot;
for the itemized entries for the Bundesbank alone.
That might indeed suggest that the vault is empty,
although I'm extremely hesitant to jump to that conclusion
without a native speaker of German examining whether I'm
understanding both the German and the accounting rules for
the quot;Auslandspositionquot; properly.
This gives the quot;Auslandsposition der Bundesbank --
Bestand-- / Goldquot; which I understand to be quot;Foreign
position of the Bundesbank -- Assets -- Goldquot;. Again,
I'd prefer a second opinion by a native German speaker
to be sure I'm grasping the language properly.
Note that this is in deutsche marks whereas the other
file with similar data after January 1999 is in Euros,
which is probably why there are two files instead of one.
What is interesting here is the jump in the position
between November and December 1998.
The jump is 25 percent, which, conjecturing that this
had anything to do with Turk's allegations, would
suggest that perhaps not only the Bundesbank may be
involved. A natural candidate for anything left over
might be the Bank of England.
* * *
Can any German-speaking GATA supporters be of any help
Certainly German news organizations should be alerted.
Turk's latest essay and Howe's lawsuit and responses in
U.S District Court in Boston can now be read at:
For starters, The following Reuters offices may be
contacted in Germany:
Fon: (0 69) 75 65 10 00
Fax: (0 69) 75 65 15 55Frankfurt Zentralredaktion
Fon: (0 69) 75 65 12 22
Fax: (0 69) 75 28 40Berlin Zentralredaktion und
Fon: (0 30) 28 88 50 00
Fax: (0 30) 28 88 50 08Berlin Vertriebsbro
Nurnburger Strasse 67
Fon: (0 30) 2 13 06 13
Fax: (0 30) 2 13 06 21Dsseldorf
Fon: (02 11) 3 88 20
Fax: (02 11) 3 88 23 30Hamburg
Fon: (0 40) 41 90 30
Fax: (0 40) 41 90 32 49
Fon: (05 11) 3 65 98 0
Fax: (05 11) 3 65 98 98Kln
Fon: (02 21) 9 12 71 20
Fax: (02 21) 13 18 71Mnchen
Fon: (0 89) 29 01 90
Fax: (0 89) 29 01 92 20Stuttgart
Fon: (07 11) 61 97 3
Fax: (07 11) 6 19 73 60
The letters that many of you received from the Treasury
denying any ESF involvement in the gold market are a
disgrace to the U.S. Government. You have been
deceived. GATA hopes that you are as outraged as we are
and will take action. GATA Secretary/Treasurer Chris
Powell sent the following to a friend at a major U.S.
* * *
Saturday, April 21, 2001
As secretary/treasurer of a 2-year-old non-profit
organization, the Gold Anti-Trust Action Committee
Inc., I have been part of an effort to expose the
manipulation and suppression of the price of gold by
governments and investment banking houses. Their
actions have brought untold misery to developing
nations, particularly South Africa, which are dependent
on gold mining and export of other commodities.
With the help of certain members of Congress, we have
prodded the Federal Reserve and the U.S. Treasury
Department to answer whether they have been involved in
the gold market, and we repeatedly have gotten denials.
At the prompting of Senator Lieberman, who was
responding to my request, Fed Chairman Alan Greenspan
last year wrote a letter not only denying that the Fed
was manipulating the gold price but also asserting that
such action would be unethical.
We have just discovered minutes of the Fed's own
Federal Open Market Committee that record this very
sort of intervention in the gold market by the Treasury
Department's Exchange Stabilization Fund, with help
from the Fed. Further, from Fed and Treasury records
and the records of European Central Banks, we have
determined that U.S. gold reserves have surreptitiously
been traded for German gold reserves and that the
latter reserves have been lent into the gold market to
keep the price down. Thus the real lender of gold here
is the U.S. government, even as the U.S. government
denies lending gold, and the U.S. gold reserves have
been put at risk for the profit of private interests.
The purpose of all this activity by the government is a
great deception -- to make the U.S. dollar seem
stronger than it otherwise would be, and to protect the
investment houses that have shorted more gold than they
could ever recover. The victims of this are the
developing countries and shareholders in gold mining
The U.S. government well may have the power to do all
this under the Gold Reserve Act of 1934. Certainly the
Exchange Stabilization Fund has been set up without any
accountability to Congress. But doing it
surreptitiously while denying it publicly distorts the
markets and plays favorites, giving huge insider
trading advantages to the investment houses whose
shorting of gold is essentially being underwritten
secretly by the U.S. government.
We think this is a huge story, and while we have gotten
some attention in the European and South African press,
it has been almost impossible to get attention in the
U.S. press, probably because of the influence of Wall
Street and the U.S. government.
We can document from public records now everything we
claim; we have just discovered exactly how the
suppression of the gold price and the defeat of the
gold market has been achieved. So I'm taking the
liberty of forwarding to you along with this two recent
dispatches to our members that provide the
documentation, in the hope that you might know someone
at your paper who would be interested in pursuing the
story. I could put him in touch with our principals,
who are very expert and responsible guys.
There is another news peg here: We have brought suit in
U.S. District Court in Boston against the Fed, the
Treasury Department, the Bank for International
Settlements, and several of the investment houses
involved, seeking relief from their surreptitious
suppression of the gold price.
All the court documents in that case are posted on the
Thanks for anything you can do to put this in the hands
of someone who might be interested. I think this story
is huge and would explain much about the Wall Street
bubble and the entire world economy.
With good wishes.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
Here is a real shock for you, sent from Mike M.:
quot;Sean O'---- wrote: 'Today, from the head of bond
syndication for a fairly sizable broker/dealer, I
learned the following: Goldman Sachs postponed a rather
sizable offering yesterday morning, calling syndicate
members just 13 minutes before the Fed rate cut to stop
the sale. Is that good timing or what?quot;
If people at Goldman Sachs knew in advance about the
Fed's interest rate cut, it begs the question of how
difficult (or easy) it was for a National Security
Agency, telephone company employee, or any other person
to have tipped them off that Greenspan had his
teleconference thing that morning. We have all seen
enough option and stock charts to know that insider
trading is a daily occurrence. If you ask me, it is
reason enough that inter-meeting cuts should not be
allowed. Perhaps they can be allowed someday when all
is encrypted. Now it is just putting more money into
the pockets of the powerful.
* * *
This gets more revolting by the day. Long live fair
play in America.
It certainly won't surprise any of us that Goldman
Sachs downgraded Newmont Mining after Thursday's big
runup. How desperately obvious and pathetic.
From Cafe member John M:
quot;As respects to Goldman, they are up to their usual
stuff. They knocked Newmont due to the price of gold
and Peru political risk but they failed to mention
Barrick. Gee, doesn't Barrick have a big mine or two in
quot;They never quit. I think their game is ending and they
have only now to knock gold stocks.
quot;Also, keep an eye on three stocks -- two credit
insurers -- MBI and ABK. I suspect that real reason
Greenspan dropped rates was due to a problem in the
financial system. Also, watch J.P. Morgan, king of
derivatives and Barrick's best friend.
* * *
The Gold Cartel has to take on not only the GATA camp;
they have the quot;caught in the middlequot; Fed to contend
with too, as suggested by the following news story:
* * *
Fed Focused on Combating Recession
DALLAS (Reuters) -- Federal Reserve Bank of Dallas
President Robert McTeer said on Friday the U.S. central
bank was focused mainly on beating back a recession
rather than combating inflation.
* * *
This is what South Africa and Russia should do to stick
it to the Gold Cartel. The timing would be perfect:
quot;The government of Zimbabwe announced Friday that it
would immediately start buying gold at a price fixed to
factor in production costs in a bid to support the
troubled mining industry, reported the Reuters news
agency. The report stated that the country's
information and publicity ministry said:
quot;The government of Zimbabwe through the ministry of
mines and energy and the Reserve Bank of Zimbabwe is,
with immediate effect, reintroducing the gold floor
price support scheme.quot;
It said the floor price would initially be pegged at
$343/ounce, equivalent to the current average estimated
production cost and compared to a current spot price of
about $264/ounce. The ministry says the price is
intended to align the industry cost structures with its
revenues and provide some relief to the gold sector.