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South Africa, COSATU, and Shaka

Section: Daily Dispatches

11:35a EDT Saturday, December 16, 2000

Dear Friend of GATA and Gold:

Thanks so much to GATA member Alex Wallenwein for
sending along this English translation of an article
about GATA's lawsuit in the German financial newsletter,

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

* * *

Gold Price Manipulation?

Serious accusations against
the Bank for International Settlements.

The Basel, Switzerland,-based bank is accused
of nothing less than a massive manipulation
of the gold price.

By Ernst Soler, Editor
December 15, 2000

It is not clear yet how serious the accusations of the
American gold market specialist Reginald Howe should be

Fact is that Reginald Howe has filed a lawsuit in
Boston alleging fraudulent manipulation of the gold
price. The heavy allegations are primarily directed
against the BIS. But aside from the BIS, the lawsuit
is also directed against the U.S. Treasury Department,
the Fed, and banks such as J.P. Morgan, Chase Manhattan,
and Deutsche Bank. There are no other Swiss banks
among the defendants.

The lawsuit is supported by the Gold Anti-Trust Action
Committee (GATA). Its president, Bill Murphy, said
today in a radio interview in South Africa that
evidence of the defendants' artificial and fraudulent
suppression of the gold price is oppressive. During
the interview, Murphy did not shy away from using such
words as quot;fraudquot; and quot;criminal machinations.quot; In his
opinion, the gold price should naturally be close to
$600/oz., instead of near $270/oz. as is currently the

BIS spokeswoman Margaret Critchlow characterized the
allegations as meritless, but refused any further

The BIS was founded in 1930 to facilitate the making of
German reparations payments. By now, however, it
functions as a sort of quot;central bank of central banks.quot;
49 separate central banks today own at least 86 percent
of the stock. The official unit for calculations is the
gold frank. The private stockholders do not enjoy any
voting rights. The BIS was the agent through which the
recent gold sales of the Swiss National Bank and the
Dutch central bank were conducted. According to the
latest yearly report, it owns 192 tons of gold itself.

Howe and GATA maintain that the gold price was
manipulated to prevent central banks from accruing
large losses. Those central banks, in turn, are alleged
to have loaned gold to other banks at diminutive
interest rates in order to insulate them from their own
failed speculations.

The BIS is further accused of attempting to buy back
its own stock during a stock repurchase program at
prices that are far too low. In doing so, the BIS
allegedly ignores a study performed by J.P. Morgan that
assigned a fair market value of more than $19,000 while
offering only about $9,000.