You are here

Treasury secretary starts feeling the heat about gold

Section: Daily Dispatches

12:30p EST Friday, January 7, 2000

Dear Friend of GATA and Gold:

Yesterday I received a letter from the international
financial adviser Martin A. Armstrong, who is under
federal indictment on securities fraud charges and
who, you may remember, had some interesting
and cordial exchanges with me here last year. With
his permission, I share his letter with you below,
because it illustrates the difficulty of fighting both
the U.S. government and international financial
interests that don't necessarily want the truth

I'm sure that the government and those interests
want to silence Armstrong because he knows too
much about how the markets are manipulated. Here,
Armstrong cites some of those manipulations.

So please post this as seems useful, stay tuned,
and pray that Armstrong lives long enough to tell
what he knows.

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

* * *

Thursday, January 6, 2000

Dear Chris:

Obviously the latest bit of news posted by GATA
Chairman Bill Murphy at has
caused the usual blacklash of inquiries and emails
headed my way. Bill's posting is interesting and
while I would love to be free to comment on it, I am
restricted by law. The receiver appointed by the
court in my case has banned me from writing about
it, and the U.S. government now seems to claim that
it controls my First Amendment rights as well.
Sometimes I think things would be fairer if we
didn't have a Constitution.

But I AM at liberty to speak about subjects other
than my own case.

To set the record straight, while I have disagreed
with GATA that the depression in the gold price has
been an organized manipulation on the part of
central banks, I have never denied that there is a
cartel of private groups, funds, and individuals who
do herd togther to manipulate as many markets as
they can.

At the start of the silver manipulation I was flat.
I had taken all profits and closed out all short
positions. Silver was trading around $4.29 when
PhiBro walked across the ring and handed to my
broker an order to buy 1,000 lots of silver every
penny down for as far as you could see. They
intentionally showed me the Buffet order. Later Bob
Gotlieb from Republic Bank call me and tried to get
me to join the manipulation. He said, quot;Something big
is coming down in silver,quot; and when I asked who was
behind it, he said, quot;Your friends in Connecticut.quot;

After being approached several times to join the
manipulation, I reported to my clients that quot;theyquot;
were back. I would not have used the term quot;theyquot; if
it had been someone other than the same crew as in

I was told that the silver price target was $7. I
reported that information on our website. I was NOT
short. I knew what they were capable of doing. Then
I left the country for my usual fall tour.

I was invited by the government of China to discuss
the Asian crisis. I visited the government there in
December 1997. Upon my return silver was at $6.40
and everyone indeed had been led to believe that it
was me because the orders were routed through
Republic to give the market the impression that I
was the one buying the silver. In fact, it was
Republic buying the silver itself and moving it to

It is true that I was very mad. I did not like being
accused of doing something I did not do. I would
have to have been crazy to be short silver after
reporting to the world that a manipulation was under
way and that the target was $7 and then leave town
for three months.

I was not short 700 tons of gold and never was. My
own forecast called for a June low and a rally into
October. I made forecasts for hundreds of markets.
This does not mean that I also must have had a
position in those markets.

I have been bullish on stocks since the turn in
1994, but by law I am prohibited from owning any
stock and have not owned anything since 1980.

Just because someone has a long-term forecast that
disagrees with your own does not mean that I must
have been short. I view the world from a global
correlation perspective and it just doesn't seem
possible to achieve a raging bull market in metals
when stocks are the flavor of the month.
Historically, bull markets are created when capital
concentrates, and that focus is in the stock market
for now. When that concentration breaks, capital
will look around for the next great investment. That
should be the commodity cycle between 2002-2007 and
perhaps extend out as late as 2012.

For now, the metals should make their final lows by
2002. Either way, they should be contrasted by a
bubble top in stocks.

As it stands now, the government intends to put me
in jail tomorrow because I am taking the 5th
Amendment. I must do so to protect my defense until
trial. They are using a civil action of contempt,
arguing that I have no Fifth Amendment rights. I
will go to jail tomorrow willingly before I bend
before this corrupt thing we call government.

Keep in mind one thing. If the government is intent
upon silencing you, you suddenly find that it is no
better than Russia. It needs no proof. They strip
you of your assets to prevent you from defending
yourself. They attack and threaten your attorneys
with jail for contempt and try to take back any
money the lawyers have already spent even though it
was unfrozen by a judge. In other words, the United
States has become no better than Russia. They even
threaten your family, your employees, and your
friends. This is what America is all about now.

They know my life has been threatened, and the
government most likely cheerishes the thought of my
being killed while in prison. That way everybody
wins. The truth will never come out and my name will
be forever tarnished as that of some two-bit crook
who defrauded clients but strangely never diverted a
single wire out of $3.1 billion.