Newmont raises Normandy offer; Anglo won''t keep bidding

'MIDAS' COMMENTARY FOR DECEMBER 27, 2001

By Bill Murphy
www.LeMetropoleCafe.com
December 27, 2001

Gold $277, down $2.10
Silver $4.45, down 9 cents

Thirty-three months after the opening of
www.LeMetropoleCafe.com, the Gold Cartel is still
banging away at the gold price. Back then their quot;Guns
of Navaronequot; began blazing with selling barrages around
$290. Afraid of allowing gold to trade anywhere near
$300 per ounce, the cabal moved those big guns down to
$280.

Until the quot;Guns of Navaronequot; are silenced -- blown up
-- gold is going nowhere.

After five splendid days of invigoration in the
Colorado Rocky Mountains, I am back to do whatever I
can as chairman of the Gold Anti-Trust Action Committee
to assist in that certain eventuality.

That might not take all that much, as it feels like the
U.S. financial markets are under great stress and are
in far worse shape than anyone in officialdom and Wall
Street is letting on. I say that because of the
seemingly growing disconnect between Main Street and
the financial community.

The $132 billion Argentina default is treated as a non-
event. The worse-than-expected retail business during
the Christmas season is already old news, so that is
not supposed to matter. That the Federal Reserve has
been cutting interest rates for a year without any
discernable help to the U.S. economy is ho-hummed.
Bankruptcies continue to rise, the savings level of the
American consumer remains at historic lows, while
price/earnings ratios are higher now than they were at
the 2000 stock market peak.

One could go on and on about many other warning signs
of some pretty tough financial times ahead, but the
Wall Street economic pundits suggest they are of little
importance. What does count to them is that we have
been in a recession for almost a year, which means (to
them) that it has to be over soon.

It seems nuts to me. I remember the same kind of
disconnect in 1987 in the months leading up to the
stock market bust that year. The difference between now
and then is that, 14 years ago, there were FAR more
Wall Street types willing to sound warnings to stock
market participants. Today, John Q. and Jane Public are
so invested in the market that a stock market debacle
could cause an economic debacle that could last for
some time. That was not the case in 1987. Thus, Wall
Street has become a bull market propaganda machine that
has the blessings of the present U.S. administration.

It is most eerie and I am not buying it. Look for
another Enron type of development in January. Could it
be J.P. Morgan/Chase? Hard to know, but this interest
rate derivative-laden bullion bank is laboring to stay
above critical $36 per share support. JPM is bucking
the stock market rally and was last seen at $36.02,
down 29 cents on the day.

Is the U.S. holding the East financial hostage to some
degree, or is vice-versa the case? From The Privateer:

* * *

At the end of November, Japan's foreign exchange
reserves stood at US$403.88 billion. Seven years ago
they were only one quarter of that. The difference
was lent to the U.S. Treasury, with Japan, in its
turn, now holding U.S. Treasury debt paper. In
September 2001 alone, Japan took up US$26 billion in
U.S. Treasuries. China holds just over US$200
billion, and the two strategic dependencies of Taiwan
and South Korea hold about US$100 billion each. Add
the rest of Southeast Asia, and total Asian LOANS to
the U.S. Treasury come in at around US$1 TRILLION.
Asia, including China, has been good to the U.S.
Treasury, which otherwise would have had to place its
US$1 TRILLION in debts either inside the United
States itself or in Western Europe, which certainly
has enough U.S. Treasuries already.

* * *

No surprise in J.P. Morgan/Chase's near-term gold price
outlook here:

quot;Resistance for February gold was seen at $278.50 an
ounce and then between $279 and $279.50. J.P.
Morgan/Chase anticipated a decline targeting $273
initially and then the low $260s in the coming weeks.quot;

The one-month silver lease rate dropped to 23 percent
this morning. How the cabal can prevent the silver
price from soaring is beyond me.

Comments by AngloGold in today's press release were
most disturbing. Barrick is the most anti-gold company
in history. For AngloGold to cuddle up to Barrick at
this point and openly talk of quot;synergiesquot; can only stir
up the GATA camp and our greatest short-term fears.
That would be a hunkering down of these two gold-
producing giants with the International Monetary Fund,
the Bank for International Settlements, and the
Exchange Stabilization Fund to do whatever they can to
prevent the price of gold from rising, even after all
these years.

When speaking of synergy in referring to AngloGold and
Barrick, one immediately thinks of their onerous
hedging programs. That is one synergy the gold market
does not need.

From one of the press reports:

quot;'The South African company argued in its announcement
that its takeover bid for Normandy offered greater
synergies for the future than its rival bidders.
AngloGold has co-operated with Barrick in the past and
is engaged in discussions with Barrick aimed at
identifying synergies that the two companies can
realise in regard to their mining operations globally,
but specifically in Australia and Tanzania,' AngloGold
said in the statement.

An irony: Candor about gold operations coming out of
Russia versus the lies sent our way by the deceptive
IMF crowd:

* * *

Sunday, December 23, 2001 9:32 PM EST

ST.PETERSBURG, RUSSIA, Dec. 23, 2001 (Aamp;G News via
COMTEX) -- By December 2001 Russian state gold reserves
amounted to 413.4 tons (excluding gold involved in swap
operations), which is 19.2 tons or 4.9 percent more
than in September. According to experts of the World
Gold Council, the share of gold in the total amount of
gold and currency reserves of Russia (present volume
about $36.1 billion) is 9.8 percent.

* * *

The IMF instructs its central banking members to
include as part of their official gold reserves gold
that is quot;swapped out.quot; That has about as much integrity
as Arthur Anderson's accounting relationship with
Enron.

How about that Enron? While it was planning to declare
bankruptcy and preventing dedicated employees from
selling Enron stock, senior management contributed
$100,000 to the Democratic Party. Nothing more need be
said on that one.

Most Cafe members and GATA supporters know of the
yeoman effort of Andrew Hepburn in exposing the
unethical maneuvering of the Gold Cartel. He is still
at it. Some of his latest:

* * *

I just stumbled across something on the Treasury's
website that very strongly implies that the ESF was
indeed used to manipulate the gold market. The link to
the following is:

a href=http://www.ustreas.gov/regs/td27-04.htmhttp://www.ustreas.gov/regs/td27-...

The piece is titled quot;TD 27-04 Organization and
Functions of the Office of the Under Secretary
(International Affairs). Under the heading quot;5. The
Deputy Assistant Secretary (International Monetary
and Financial Policy), many responsibilities are
listed. The following is one of them:

quot;h. Provides direction to the Federal Reserve Bank of
New York concerning Exchange Stabilization Fund (ESF)
operations under the authority of the Secretary of
the Treasury and other Treasury officials who are
delegated such authority to assure that operations of
the Federal Reserve System concerning the ESF are
coordinated. In this regard, the incumbent
intensively monitors foreign exchange markets and
maintains continuing monitoring of gold markets and
related developments.quot;

It is my opinion that this essentially proves that
the ESF was at least used to quot;monitorquot; the gold
market. Thus, we know that Fed lawyer Virgil
Mattingly most definitely was lying when he denied
making his comment about quot;gold swaps.quot;

-- Andrew

* * *

This is bad news for those GATA antagonists who love to
mock us as quot;conspiracyquot; kooks. Three years of evidence
developed by the GATA camp clearly reveals that the New
York Fed (formerly under the direction of Peter
Fisher), and the ESF, under the guidance of the
treasury secretary, have conspired to rig the gold
market. Now, Andrew locates acknowledgement from the
U.S. Treasury's own web site that the New York Fed and
ESF coordinate their activity in the gold market.

Andrew has some more. quot;Officialdomquot; will talk the talk
until we in the GATA camp zero in on the defining
questions. Then they go silent. It is always the same
drill -- whether it is the IMF, U.S. Treasury, BIS, or
the U.S. Mint. The latest stonewall emanates from
Italy's central bank, again courtesy of Andrew Hepburn:

* * *

To: Francesco Columba, Bank of Italy, December 21

Subject: Italian Gold Reserves

Mr. Columba:

Thank you very much for your reply. Having read the
publications you cited, I could not find an explanation
of how much gold remains in the Bank of Italy's vaults
and how much is out on swap, loan, or deposit. Can you
provide me with that information, or does the Bank of
Italy have a policy of not disclosing the amount of
gold receivables?

On another note, on Page 51 of quot;Money and Credit
Aggregates of the Euro Area: the Italian Components,quot;
an explanation of an account code reads as follows:

quot;S003675M -- AVERAGE LIQUIDITY DATA -- NET ASSETS IN
GOLD AND FOREIGN CURRENCY

Net gold and foreign currency claims on non-euro-area
residents.

First of all, on what countries or foreign
institutions does the Bank of Italy have gold
claims? Secondly, how much of the aforementioned
claims are on gold, and how much relates to foreign
exchange?

Thank you very much for your continued assistance.

Most sincerely,
Andrew Hepburn

Mr. Hepburn:

The publicly available data on gold are the one you
cite.

For the second question, you can look at Table 1,
ETAM0050 of the same supplement.

Best regards,

Francesco Columba
Bank of Italy

Mr. Columba:

Thank you once again for answering my questions in a
prompt manner. I do have one last question for the
time being that I was wondering if you could answer.
Can the Bank of Italy confirm or deny that it has
engaged in a gold swap (or any gold transactions,
for that matter) with either the U.S. Exchange
Stabilization Fund, the Federal Reserve, or the U.S.
Treasury?

Best regards,
Andrew Hepburn

Mr. Hepburn:

I have nothing to say about it and I invite you to
look at Bank of Italy's web site for any other
question.

Best regards,
Francesco Columba

* * *

GATA is going to make a concerted effort to garner more
support from Germany, Austria, and Switzerland. Cafe
member Bob List would like to help and sent the
following prior to my leaving for the Christmas
holiday:

* * *

Bill,

I know your time to handle inmails is valuable. Yet
if you can dedicate a minute or two on the
following, it might serve our common purpose.

I keep trying to spread the GATA's gold message on
various message boards. (For example, Clearstation:
if you find time to look up today's Clearstation
Community messages from quot;TUBAMETquot; and from
quot;montagnequot; under the Durban Deep symbol DROOY, you
will notice the shortcomings of my quot;Austrian
English.quot;)

I would like to do much more postings for mining
companies of our camp and postings aimed at
unveiling the effects of cannibalism by the likes of
ABX. In order to this with a view to serve the aims
of GATA in the best way possible, I would need a
mother tongue Cafe or GATA member (or any competent
gold bug of your choice) who would be ready to help
me beating the drum in communities a la
Clearstation, if possible with a selection of
messages you want me to propagate in a suitable way.
I would also take the time to translate some of
these postings into German and see to it that they
leak into Austrian/German/Swiss community boards,
newsletters, and wherever they promise the desirable
impact.

Any idea ?

Regards,
Bob List
bob@list.priv.at

* * *

Please contact Bob if you would like to be of
assistance.

From a U.S. Cafe member who sees it this way:

* * *

At this time of year its appropriate to take stock
of one's life and acknowledge how much suffering is
a part of the daily routine of so many souls. It is
a time when one may choose to make financial
contributions to help others and as well, take
advantage of year-end tax deductions available by so
doing.

It is in this spirit that I've chosen to make an
additional $250 contribution to GATA.

While this decision is certainly driven to a large
degree by self-interest, I must say that I can't
think of an organization whose success will help
more of the world's downtrodden than GATA's. I
regularly see photographs of elitists in the society
pages (many of them members/associates of the gold
cabal) turning up at swanky black-tie benefits for
politically correct charities (no disrespect meant
to the victims thereof). At the same time, the
starving and disease-ravaged victims of the cabal
are swept under the rug. No swanky benefits for
them. They are a continent away, of dark skin, and
most importantly, are the necessary consequence of a
highly profitable business enterprise that furthers
the interests of these elitists, who can then take a
minuscule portion of their evil enterprise and play
philanthropist at home.

I'd like to appeal to all other past GATA
contributors and Cafe members to consider that in
addition to the obvious financial benefits that
GATA's success will create for them, a contribution
to GATA is arguably one of the most efficient
humanitarian gestures one can make with their funds
that are earmarked for charitable causes at this
time of year.

Sincerely,
Jeff

* * *

Thanks, Jeff. In addition to some efforts to be made in
Germany and while we wait for a ruling from Judge
Lindsay in Reg Howe's lawsuit, my goal is to find
someone in the mainstream U.S. press who will be
willing to write about all that GATA has uncovered
about the manipulation of the gold price.

It is both absurd and mindboggling with all we have
(enough to send a murderer to the electric chair) that
there is not yet one courageous reporter in the entire
U.S. mainstream press who will even present the story
to the American public.

To try to break the logjam, I am returning to
Washington on January 7 to attend an all-day conference
at the Washington Press Club. The conference is
sponsored by Ralph Nader and titled, quot;Federal Reserve:
Myth vs. Reality.quot; Speakers include Professor Robert
Auerbach, who will talk on waste and abuse in the
Federal Reserve; Ralph Nader, who will open the
conference; William Grieder, a writer for Rolling Stone
magazine and former Washington Post reporter who wrote
a book on the Federal Reserve titled quot;Secrets of the
Templequot;; Walter Charlton, a lawyer who represented
plaintiffs in a class-action discrimination suit
against the Federal Reserve; Tom Schlessinger, the
director of the Financial Market Center; and Jim
McTague, Washington editor of Barron's magazine.

I will introduce myself to them and make their
acquaintance if possible. A Qamp;A session is scheduled,
and it could be most valuable, as might be the lunch
period.

Tuesday, January 8, has been set aside to meet with any
of the Washington press people who might want to get
the straight scoop on a story of a lifetime. If any
Cafe or GATA member can set an appointment for me with
the right kind of writer in Washington, please go for
it.