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Murphy speech to Alaska Miners Association
1:30a EST Thursday, March 16, 2000
Dear Friend of GATA and Gold:
Here's GATA Chairman Bill Murphy's quot;Midasquot; commentary
at www.LeMetropoleCafe.com for Tuesday, March 14. I'm
sorry to be a little late distributing this. I wish I could tell
you that I was sabotaged by Goldman Sachs, but my
computer wasn't operating for a few days because its
modem was fried by a nearby lightning strike while I was
online. As powerful as those guys are, even us gold nuts
don't yet think that they've gotten control of the weather too.
We're just think that they're working on it.
Please post this as seems useful.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
MIDAS COMMENTARY FOR MARCH 14, 2000
By Bill Murphy
Spot Gold $288.50 down $1.60
Spot Silver $5.12 up 2 cents
Statistical probabilities! I wonder what they are that
the price of gold should remain so static around $290?
Same goes for the fact that we go higher overseas due
to strong gold demand and then get trashed in New York
due to the efforts of the collusion crowd.
The morning line: Hong Kong, March 14 (Reuters) - quot;Asia
spot gold rose on Tuesday in quiet trading. Gold may
try and break $292 today.quot;
New York closing line: Dallas, March 14
(www.LeMetropoleCafe.com) - quot;While the CRB made new
highs today as result of surging corn, wheat and
soybean prices, gold closed lower because the biotechs
were routed, the Nasdaq was down 200, the Samp; P closed
24 points lower and an inflationary PPI will probably
be announced tomorrow morning, therefore the traders
for the Exchange Stabilization Fund and the U.S.
Treasury made sure that the bullion dealers leaned on
the gold price to make sure it closed poorly! Those
bullion dealers include Goldman Sachs, Morgan Stanley
and Morgan Bank.quot;
The United States Treasury, and or Fed, is achieving
its goal of reducing gold to a mundane, non-entity
market. No Matter what happens, the price of gold
cannot sustain an advance or rarely even mount one of
any significance. The goldilocks economy crowd likes to
point to the subdued price of gold as proof that all is
well in U.S. financial land. The Fed and Treasury have
their apologist economists lined up from time, trotting
them out on the tube to point out that fact on CNBC.
The problem with this gold market ploy is that all is
NOT WELL and that is becoming more apparent by the day
as is the manipulation of the gold market.
The gold market is truly an aggravating bore at the
moment. However, I am out with my megaphone now stating
that the recent two spikes up over the past 4 months
are just the tip of the volcano of what is to come.
When a dormant volcano begins to come alive, it starts
smoldering and there are usually small eruptions that
portend future eruptions - often major volcanic
That is what we have with our gold market. We have had
two recent small eruptions that have been WARNINGS to
the shorts. The next spike up, or VOLCANIC LIKE PRICE
EXPLOSION, is liable to be very swift, violent and come
out of nowhere, just like the last two did. That is why
it is important to take certain gold positions and hold
on, or build on them when the gold price or gold share
That is what I am doing anyway.
Got to be in it to win it as they say. While the wait
has been extremely tedious, I could not be more
confident of a big pay off down the road and that road
is shortening rather dramatically behind the scenes.
The 200 day gold moving average is $287.25 which brings
in buying support on dips.
Silver is holding the fort very well as the funds
continue to sell while the commercials continue to buy.
Moore Capital sold yesterday with Richard Dennis as a
featured seller today. Goldman Sachs has been a buyer.
No surprise that GS is a buyer. Same old, same old.
They cap rallies and buy dips, thereby producing a
stalemate. They have made a fortune trading this way
over the past years. Of course, they have had a little
help from their friends. Who could not trade well and
make money given the heads up their traders have. It
would be like owning a casino, rigging the card games
or roulette wheel, then raking in the dough from
unsuspecting gamblers that make the mistake of
Warren Buffet made no mention of silver in his report
to shareholders, but James Turk has insightfully
deduced from his previous annual reports that he must
still be holding his entire silver position.
A big disappointment to the bears who wanted to crow
that even Warren Buffet could not stand staying long
the precious metals any longer.
Looks to me like a very healthy pop in the silver price
is right around the corner as the two week silver
liquidation time limit has now passed. Year in, year
out that indicator has been reliable - meaning silver
rarely goes right back up after a liquidation like we
just had. It has to do some work - usually two weeks or
more - before it composes itself to advance once again.
The Bank of England will conduct the fifth British gold
auction on March 21 as part of its plan to reduce
official gold holdings to 300 tonnes from 715 tonnes.
The Comex gold stocks are rising sharply too, taking a
cue from silver. They now stand at 1,588,364 ounces, up
151,360 ounces today. Why is this occurring? No clue!
Perhaps, someone is afraid of a big stopper - meaning
someone is going to take delivery of the April gold
Soros rumor. Word from a Caf source is that George
Soros did jump into the gold market after the
Washington agreement was announced late last September,
but was told this was a NO NO by U.S. administration
officials. How come we are not surprised?
This would not be the first time this happened as
Warren Buffet (then Chairman of Salomon Brothers) told
his Phibro traders to bail out of their massive silver
position in the mid 90's. Andy Hecht and Jimmy DePiazza
were going to try and corner the silver market and were
in the process of doing so when Buffet got the word to
not press the case. The bottom line was that Phibro
might have won the quot;silver battle,quot; but Buffet feared
that Salomon might lose the war in the financial arena
by courting administration disfavor.
However, word to us is that Soros told administration
officials: OK, but you have 6 months to get your act
together, then I may come back in again.
The six months is almost up!
Back to silver:
quot;The federal government has only a two-year supply of
silver left in the National Defense Stockpile, the
Silver Institute, a worldwide association of miners,
refiners, fabricators and manufacturers, reports.
quot;Only 21.2 million troy ounces remained in the
stockpile at the end of 1999.
quot;About 9.5 million ounces of silver were consumed by
the Mint striking American Eagle silver bullion coins
and proofs in 1999; 460,000 ounces were used in
commemorative coins, 300,000 ounces of which were used
for the 1999 silver proof coin sets.
quot;Some 139.5 million troy ounces were held in the
stockpile when it was declared surplus. The Mint gets
its silver from it. The Mint will have to enter the
market when it is gone.quot; End.
I still say that when the manipulation game ends,
silver is a quot;moonshot.quot;
Regarding the recent liberalization of the Chinese gold
market from a top notch Caf source:
quot;I don' t know, but I assume the china gold market
should be at least as big as India - and since India
liberalized its gold market, gold consumption leaped to
839 tons from 240 tons from 1990 until 1997.quot;
A very well connected Caf follower sent me the
following regarding oil, gold, Middle East politics,
etc. I found it most intriguing as well as eye opening:
quot;I have been lately in contact with some very
knowledgeable persons who have both a deep
understanding and degree of involvement in the Middle
East peace process. They say the recent oil strength
has quite a strong geopolitical flavour to it and that
it is here to stay for a while. It is no secret to
anyone that Israel has unofficially claimed it needed
about $65 bln (some even mutter $100 bln) in order to
abandon the Golan Heights and withdraw from South
Lebanon within the scope of a global peace treaty. One
might ask quot;Where will the money come from?quot; Certainly
not the US, not directly at least.
quot;According to these sources, while there is no denial
that oil firms are experiencing some pumping amp; delivery
problems (e.g. Venezuela amp; gasoline), there undoubtedly
is another agenda aiming at raising the necessary funds
for a long awaited peace deal. In fact, it is the Arabs
(again) who will be providing the bulk of the funds,
certainly quot;helpedquot; by the surge in oil prices, which
should still range between $28 amp; $40 in the coming 6
months until some positive developments unfold in the
region. I guess none of the players would oppose such
an orderly rise as long as it doesn't create any energy
panic or wreak havoc in the US. It might even cool off
a tad an overheating economy .
quot;Anyhow, the story goes even further. I am told that
one of the main and biggest Republican (read Bush Jr.)
party donors is billionaire Rafic Hariri, Lebanon's
former Prime Minister with extremely strong ties with
the Arabs, mainly the Saudis with whom he made his
fortune during the 70s. Wouldn't be surprised to see
Arab money indirectly rerouted towards Texas via local
oil corps. As an aside, you might recall that President
Chirac of France owes Hariri a large part of his
presidential victory and their strong friendship is
notorious. Hariri, if elected and parliament
permitting, would be quick to consider selling
Lebanon's 9 million ounces (roughly 300 tonnes) of gold
in order to restructure and repay its heavy debt. In
fact, Central Bank's governor, Riad Salame (ex Merrill
amp; given the post by Hariri himself) has already often
alluded to quot;effectively managingquot; the country's gold
quot;It all seems very foggy at the present time, the
whereabouts are still largely unknown, but one thing is
certain: the oil price strength is here to stay and it
has deeper implications than most of us can imagine.
quot;Take it for what it's worth.quot; End.
Potpourri and the Gold Shares
The CRB closed at 216.26 - another new high for the
The XAU muled it, closing only .07 lower at 60.38.
A market mover?:
Oil Prices to Push Inflation Gauges Up: U.S. Economy
Washington, March 12 (Bloomberg) -- Economic figures to
be released this week probably will show that the
recent surge in oil prices brought on a rise in the
inflation rate last month, analysts said.
The first of the two monthly inflation reports -- the
producer price index -- will probably show that prices
paid to U.S. factories, farmers, and other producers
rose 0.6 percent in February after showing no change in
January, according to a Bloomberg News survey.
Excluding food and energy costs, the core index
probably rose 0.3 percent last month following a
decline of 0.2 percent.
The February consumer price index probably increased
0.4 percent last month after a 0.2 percent gain in
January, while the core rate rose 0.2 percent, the same
as the previous month.
Both government reports, the PPI on Thursday and the
CPI on Friday, ``will reflect higher energy costs,'
said Scott Brown, an economist at Raymond James amp;
Associates in St. Petersburg, Florida. So, ``The
markets should be especially sensitive to bad inflation
Crude oil prices have more than tripled in the past 15
months, as production cuts drained inventories. Last
week, crude oil reached a nine-year high of $34.37 a
The government's inflation numbers, even if they show
lower inflation than expected ``won't take the Federal
Reserve off the hook' for further action to fight
rising prices, Brown said. Fed officials must still
consider the outlook for inflation for the next several
months beyond February. End.
The following Bridge News headliners received little
* Atlanta Fed: Price paid index highest since April 1995
* Atlanta Fed Feb prices-paid index 31.5 vs Jan revised
* Richmond Fed: Producers see faster price hikes in
* Richmond Fed: February expected wages index rises to
* Richmond Fed: Feb new orders index at 31 vs 19 in Jan
quot;But there is no inflation, that is why the price of
gold does not rallyquot; - huh?
My last Midas was entitled, quot;The Sky is Falling.quot;
Chicken Little may have it right after all as all the
equity markets were trashed today. The rats have been
running from one part of the ship to another looking
for the next quot;hotquot; momentum sector to place equity
money - or at least one sector that is going to stop
retreating. That is fine if the ship does not sink; if
that happens, the rats are in deep trouble. Nowhere to
go. Time to bail out altogether and just jump
Speaking of trouble for the Nasdaq crowd. The cover
story of the new issue of Fortune Magazine deals with
fraud, corruption and madness in the internet sector.
Our camp's issues are now a bit mainstream.
If the very negative Fortune internet story was not bad
enough for stock bulls, there was this classic, front
page anecdotal beauty in Monday's Wall Street Journal:
At Bill's Barber Shop, quot;In Like Flynnquot; Is A Cut Above
the Rest *** Owner's Tech-Stock Chit-Chat Enriches Cape
Cod Locals; The Maytag Dealer is Wary
I have put the complete story aside for future
A blow to quot;Hannibal Lecterquot; and his quot;Cannibalsquot; ?????
Rumors were circulating on the Comex floor that
apparently Goldman Sachs, Chase, Deutsche Bank, Morgan
Bank and Morgan Stanley were making a stand to buy the
rights for electronic trading on the Comex.
Word late today was that this quot;Hannibal Cannibalquot; ploy
was defeated. Word also is that Goldman Sachs is as
arrogant as ever in their dealings with other Comex and
Let GS continue to make enemies. All GATA needs is ONE
mole to give us a bit of quot;down and dirtyquot; a la Jon Dean
and the voices of the GS prima donnas will all of a
sudden have a much higher pitch!
From a fellow Cafe member:
quot;Just saw a Bloomberg story today: Trizec Hahn, more
problems. Moody looking to downgrade. They cite poor
stock performance and sale of properties could lead
company to risky strategy.quot;
Barrick Gold's Chairman, Peter Munk, is the Trizec
On another Barrick Gold note: from a Caf follower
regarding the contributors to Nevada Senator Reid:
quot;The Las Vegas Review Journal published the list
yesterday and it includes the usual gaming companies
(such as Caesars, Boyd Group, etc.) but here is the
whopper: the only notable mining contribution Reid
received came from.....(drum roll) BARRICK GOLD.quot;
Senator Reid from the great mining state of Nevada has
not responded to GATA's overtures for some reason!
The gold industry is not only being decimated in
Alaska. From one of your Idaho Caf members:
quot;I live in the Northwest, where mining is a large part
of most economies. Unfortunately, the Hannibal
Cannibals are winning the battle and this area is
suffering. With the announcement that Meridian Gold is
closing their Beartrack mine this year, the state of
Idaho will no longer have an active gold mine. That's a
drop from the 1995 record of 300,000 ounces of gold
produced in Idaho, to today's gold production of
basically nil. I can assure you that there is not one
tax payer in Idaho, that is willing to sit back and let
the government destroy their economies without a fight.
With that said, I would like to say GO GATA! Keep up
the good work and let's expose the colluders and get
these economies back on their feet again.quot;
More on my trip to Fairbanks, Alaska, to speak in
behalf of GATA at the Alaska Miners Association
It was no walk in the park to get there. Fairbanks is
the Northern most city in North America. To put
Fairbanks in perspective, Winnipeg, Canada is so far
down on the map from Fairbanks, it is like Caracas,
Venezuela to Boston, Massachusetts. After arrival, I
was treated to temperatures of 18 below zero the first
Actually, when there is no wind, it is not at cold as
it sounds as it is a dry cold. When that wind blows
though (and it does not often do so in the winter
because of the extreme cold), it is very numbing.
The miners convention is held in Fairbanks every other
year as this quot;show and tellquot; started out in the early
80's being a placer mining show, but has gradually
succumbed to the decline of the placer industry and
increase in the hard rock exploration to become more of
a hard rock, mostly gold, exploration convention. Most
of the officers and directors of the organization are
volunteers, while members of the organization are
associated with the industry in one form or another -
miners, suppliers, government workers, professors,
teachers, students and the list goes on.
I was struck by the fact how many of the businesses of
the attendees were negatively effected by the
orchestration of the low gold price. Fairbanks will
become a boom town again when the stranglehold of the
collusion crowd is broken. Fairbanks is the 2nd most
significant placer gold producer of the north country,
just after the Klondike and it has a recorded
production of placer gold in the order of 8 million
ounces. It will significantly top the Klondike because
it has very significant hard rock sources of gold as
the Fort Knox deposit, located just north of town,
contains a reserve of over 6 million ounces of gold and
is being mined at present by Kinross.
Many of you might like to know that the Alaska Mining
Association is working side by side with the
The speaker at Friday night closing banquet was Craig
Gardner of the Alaska Fish and Game Commission who
spoke about the 40-Mile Caribou herd; 40-mile refers to
a geographic area of Alaska in east central portion of
the state on the Yukon border. The area is drained by
the 40-mile river which is a tributary of the Yukon
River while the 40-mile is a significant placer gold
district. It was discovered before the Klondike which,
in turn, became a prominent placer gold attraction
around 1898 - the Klondike produced about 10 million
ounces of placer gold and has no known significant hard
rock source. Craig Gardner spends much of his time
caring for the Caribou herds.
I was very impressed at this healthy interaction
between the mining and environmental crowd. Why is
there not more publicity about such common
practicality, decency and common sense?
Before I left Fairbanks, Rich Hughes, a Cafe member and
the convention co-chairman, took me to see the World
Championship Ice Carvings competition which was ongoing
that weekend. The ice carvings were spectacular and a
treat to appreciate. On Saturday night, a group of us
took off for the Alaskan countryside and the Turtle
Club in Fox, Alaska; a restaurant that features
scrumptious mega portions of prime rib. On our way home
we gazed up to the heavens to see the aurora borealis
(the northern lights) which are a product of solar
radiation passing through the magnetic field above the
earth's surface; the effect is to produce a multi-
colored light show, mostly green, but in many shades of
color, including yellow, red, pink, blue, etc., which
can be spectacular.
I thoroughly enjoyed being in Fairbanks and meeting so
many nice people, some of whom may be very helpful in
bringing the manipulation of the gold market to the
attention of the political powerhouses in Alaska.