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Merrill Lynch buys a tonne of gold; and Jay Taylor''s latest commentary

Section: Daily Dispatches

11:21p ET Friday, June 13, 2003

Dear Friend of GATA and Gold:

A couple of things possibly of interest....

Chris Temple, editor of The National Investor, has a new
essay arguing that the central banks are liquefying the
gold market to get the quot;too big to failquot; shorts out of the
way and arrange an orderly rise of the gold price:

a href=

And South Africa's 1.5 percent cut in interest rates
may help explain the superior performance of the South
African gold shares today. A news story about that is

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

* * *

South Africa cuts interest rates by 1.5%

a href=,,2-8-25_1372898,00.htmlht...

PRETORIA -- South Africa's central bank cut its key
interest rate by 1.5 percent on Thursday, saying the high
rate of inflation in the past 12 months was under control.

The governor of the South African Reserve Bank, Tito
Mboweni, said the inflation measure the bank uses
when deciding its lending rate -- consumer inflation
excluding the interest cost of mortgage bonds or
CPIX -- had improved significantly and had moved
closer to the central bank's target of between 3 and
6 percent.

quot;The year-on-year rate of increase in the CPIX decelerated
from a peak of 11.3 percent in November 2002 to 8.5
percent in April,quot; he said in a televised address.

quot;The Monetary Policy Committee has decided to reduce the
repo rate by 150 basis points to a level of 12 percent per year
effective from 13 June 2003.quot;

South African retail banks cut their lending rates from 17 to
15.5 percent after Mobweni's announcement.

The rand was stable after announcement, trading at 7.94 to
the dollar and 9.31 to the euro in late afternoon trade.

Mboweni said a number of developments favoured a further
reduction in South African inflation, including low inflation
in the rest of the world, the appreciation of the South African
rand -- the nominal value of the currency increased by 26.9
percent in the past 17 months -- and the end of the Iraqi war.

quot;The end of the war in Iraq and the fact that oil supplies were
not materially affected, has removed some of the uncertainties
about the international economic environment,quot; Mboweni said.

He warned however that certain factors, such as large pay
increases, still posed a risk to inflation.

quot;Large pay increases continue to be a major risk factor for
the containment of inflation. In 2002 the average nominal
remuneration per worker in the formal non-agricultural
sectors of the economy amounted to 9.9 percent, compared
with an already high 9.1 percent in 2001.quot;

Economists welcomed the rate cut.

Credit Suisse First Boston economist Marie Myer said
the cut would help South Africa's economy to grow.

quot;We were hoping for a 2 percent, but we are happy with
the 1.5 percent,quot; she said.

She said South Africa's interest rates were likely to fall
by 3 to 3.5 percent in the next 12 months.

Rudolf Gouws, an economist with Rand Merchant Bank,
said the cut would stem the slowing down of economic
growth that South Africa had experienced recently.

quot;We will not suddenly see massive growth, but it will
stem the slowing down of the economy to some extent,quot;
he said.


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