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GATA Urges Congressional Support for Monetary Reform and Accountability Act on Gold

Section: Press Releases

DALLAS--(BUSINESS WIRE)--July 8, 2002--The Gold Anti-Trust Action Committee (GATA) urges House Representatives on the Financial Services Committee to join Congressmen Ron Paul (R-Texas) and John Larson (D-Conn.) as co-sponsors of the Monetary Reform and Accountability Act (H.R. 3732).

The bill simply requires the president and Treasury secretary to get the approval of Congress before intervening in the gold market.

Treasury Secretary Paul O'Neill is on the record as being against the bill, which seeks only transparency. GATA chairman Bill Murphy points out, "Secretary O'Neill's response to the proposal is contrary to the cries of an American public who are outraged over one corporate financial scandal after another."

GATA has begun a grassroots information campaign tapping its vast army of supporters. These supporters will make an effort to inform the following Financial Services Committee members of the importance of this issue:

Doug Bereuter (Nebraska), chairman
Doug Ose (California), vice chairman
Marge Roukema (New Jersey)
Richard H. Baker (Louisiana)
Michael N. Castle (Delaware)
Jim Ryun (Kansas)
Donald A. Manzullo (Illinois)
Judy Biggert (Illinois)
Mark Green (Wisconsin)
Patrick J. Toomey (Pennsylvania)
Christopher Shays (Connecticut)
Gary G. Miller (California)
Shelley Moore Capito (West Virginia)
Mike Ferguson (New Jersey)
Bernard Sanders (Vermont)
Maxine Waters (California),
Barney Frank (Massachusetts)
Melvin L. Watt (North Carolina)
Julia Carson (Indiana)
Barbara Lee (California)
Paul E. Kanjorski (Pennsylvania)
Brad Sherman (California)
Jan D. Schakowsky (Illinois)
Carolyn B. Maloney (New York)
Luis V. Gutierrez (Illinois)
Ken E. Bentsen Jr. (Texas)
On February 14, 2002 Congressman Ron Paul issued a press release that included the following:

"The private Gold Antitrust Action Committee held a press conference this week to discuss federal manipulation of gold markets. The group has uncovered evidence suggesting that the Federal Reserve and the Treasury department, operating through the Exchange-Stabilization fund and in cooperation with the International Monetary Fund, have been systematically working to deflate the price of gold. Because rising gold prices are seen by investors as a barometer of inflation, the Fed has purportedly suppressed prices to disguise the true nature of the financial bubble of the 1990s."

RBC Global Investment Management Inc., a division of Royal Bank of Canada, whose gold mutual fund is among the best performing in the world, has also issued a report that was circulated throughout Europe to clients and prospective clients that fully endorses the analysis of the gold market done by the Anti-Trust Action Committee's (GATA). It concludes that the price of gold is being manipulated.

The RBC report says the price of gold is going to explode and cites "Increasing Evidence of Unsustainable Gold Price Manipulation" as one of its reasons. The RBC report points to 11 "factors" of evidence regarding the gold price manipulation:

1) Aggressive gold lending, which from an economic perspective is indefensible, has filled the supply/demand gap.

2) New York Fed gold has been mobilized when the gold price is rising.

3) Timing of Exchange Stabilization Fund gains/losses corresponds to gold price movements.

4) Audited reports of U.S. gold reserves show unexplained

5) Minutes of Fed meetings confirm officially denied gold swaps.

6) Rules on gold swaps have been revised and then denied.

However, individual central banks have repudiated the denial.

7) U.S. gold reserves have recently been re-designated twice,

initially to "custodial gold" and latterly to "deep storage

8) Statistical analysis of unusual gold price movements since
1994 indicate high probability of price suppression. The
invalidation since 1995 of Gibson's Paradox -- that gold
prices rise when real interest rates fall -- suggests that the
real manipulation began then.

9) New York gold price movements versus London prices trading
defy odds.

10) Timing of huge increases in bullion bank gold derivatives is
consistent with gold price declines.

11) A rapid decline in U.S. Treasury holdings of gold-backed SDR
certificates is not explained.

The RBC report goes on to say: "One or two of these factors could be viewed as random, but the full body of evidence is overwhelming."

The Gold Anti-Trust Action Committee has fully documented all 11 points cited by the RBC Global Investment Management Inc. regarding the manipulation of the price of gold. To date, no one in the gold industry has refuted any of GATA's specific assertions.

"The American public and Congress are demanding truth, full disclosure and fairness in U.S. financial markets. In that light, all of these Congressmen and Congresswomen on the Financial Service Committee ought to sign on to this Bill as co-sponsors," says GATA's Bill Murphy.