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GATA chairman assaulted in Dallas

Section: Daily Dispatches

11:25p EST Saturday, April 1, 2000

Dear Friend of GATA and Gold:

Reginald H. Howe, proprietor of
and the analyst on whom GATA has relied so much to
explain government's likely relation to gold trading and the
details of gold banking, provides below elaboration on
exactly how the U.S. Treasury Department's Exchange
Stabilization Fund may be suppressing the price of gold
by selling calls.

Howe's scenario fits everything GATA has seen in the
last year, and if it is correct, it also explains how certain
bullion banks always seem to know exactly where the
gold price is going to go and where it will stop and
reverse. They know because they are handling the U.S.
government's own orders to sell calls, and, knowing that,
they have, in effect, a license to print money -- or, rather,
to steal it.

What Howe writes below is the ball game, people. This
is very likely exactly how the grand scheme against
gold has been working. So please keep this on hand for
future reference and publicize it all you can.

U.S. members, please send this to your congressmen as
well and ask them to determine for you authoritatively
whether what Howe describes is happening. And everyone,
please post this as seems useful.

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

* * *


By Reginald H. Howe
April 1, 2000

While it is possible that the Exchange Stabilization
Fund has sold gold calls on the COMEX, I would expect
that to be a relatively minor activity. The calls to
focus on are over-the-counter calls written to bullion
banks to facilitate their gold loans or other gold
products designed to pressure the gold price.

Of course it is possible that the ESF has borrowed gold
for direct sale or to make gold loans to others. But
far more likely, in my view, the bullion bank borrows
the gold from a central bank, sells or loans it to a
client (for sale), and simultaneously hedges the
repayment obligation -- its own, its client's, or both
-- by purchasing calls.

As outstanding gold loans expand, the risk of selling
protective calls increases, and the ESF must step in as
others withdraw from this market.

Or, to take another example, while Barrick Gold said
recently that it had purchased its gold calls from
bullion banks, the bullion banks must have hedged their
exposure somehow. Under the circumstances, it is hard
to see how they could do this other than by purchasing
calls from a motivated seller with deep pockets and
high tolerance for risk.

I doubt that the ESF would risk having much in the way
of direct relationships with outsiders, even other
central banks, so I would expect its activities to be
camouflage through one or a very few big bullion banks.

Writing calls is an efficient way to underwrite all
manner of short-selling activities by bullion banks,
leaving them free to handle the details.

Turning to the questions that should now be asked of
the government, I was trying in my March 28 commentary
to keep them short and simple. To my mind, quot;trading,
directly or indirectly ... in gold or gold derivativesquot;
includes borrowing gold and selling or relending it.
However, one certainly could add to the quot;including but
not limited toquot; clause: quot;or participating in any way in
making gold loans.quot;