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Bankers face legal threat over BIS buy-back offer

Section: Daily Dispatches

By Bill Murphy, Chairman
Gold Anti-Trust Action Committee Inc.
December 17, 2000

It was not long after the Gold Anti-Trust Action
Committee was formed almost two years ago that I sent
out a missive elucidating GATA's strategy to defeat the
gold cartel:

quot;The Gold Anti-Trust Action Committee has devised a
strategy to take on and defeat those who are colluding
to suppress the price of gold....

quot;GATA's strategy is patterned after that of the great
South African Zulu chieftain warrior, Shaka. As a youth
he was shunned by his own people and went into exile.
But he returned to become a leader of the Zulus and
devised a plan to conquer their adversaries.
Previously, wars between tribes were more for show;
there was no real fight. It reminds us of what is going
on in the gold industry today. There is a lot of
complaining but no one is acting against those who are
helping to ruin it.

quot;We are going to change that.

quot;Shaka devised a strategy called 'the enveloping horn.'
His attacking Zulu warriors massed in a diamond-like
formation. The piercing point of the diamond struck
first. While the enemy engaged in battling the Zulu
warriors at the point of the diamond, the diamond's
left and right flanks bolted out to the sides and
enveloped the enemy in the shape of a horn. Before the
enemy knew it, he was flanked, surrounded, confused,
and beaten.quot;

GATA's original version of this quot;enveloping hornquot;
strategy was first to face the gold cartel head-on with
legal firepower. Our left flank was to expose the gold
scandal via the press, and our right flank was to
encourage the gold producers to support us and cut back
on excessive hedging that was putting pressure on the
gold price.

It is now time to turn up the heat on the gold cabal by
implementing GATA's latest version of quot;the enveloping
hornquot; battle tactic by moving against the gold market
manipulators where they are most vulnerable:

South Africa.

The economy in South Africa has been badly damaged by
the low gold price. Not only are more than 100,000
miners out of work, but the low price has affected
hundreds of auxiliary industries that are not needed at
the moment. It is a daisy chain of misery.

Worse, the HIV/AIDS problem is worsening terribly among
the black population in South Africa as well as in
other poor gold-producing counties. There is just not
enough money to deal with this problem.

The tragedy, and it is a scandal, is that this should
not be. If it were not for the gold cartel, the gold
price would be above $600 per ounce. And South Africa
and the other gold-producing countries in Africa would
be enjoying a boom.

Zulu warrior Shaka was brutal because he needlessly
killed so many innocent people. Yet, indirectly, the
sanctimonious bullion banker butchers are responsible
for far more deaths than Shaka. That will become clear
when the gold cartel is defeated and the gold price
explodes. Blacks in African countries and their
brothers and sisters in the United States will become
enraged that the present U.S. administration and New
York bullion banks made billions when many black
Africans died for lack of funds for medical care.

It was not that long ago that I met in Washington with
New Jersey U.S. Rep. James Saxton, chairman of the
Joint Economic Committee in Congress, to encourage him
to do what he could to defeat the proposal of the
International Monetary Fund, backed by President
Clinton and his treasury secretaries, Robert Rubin and
Lawrence Summers, to sell its gold to fund debt relief
for poor countries.

As Deutsche Bundesbank President Ernst Welke said in
Central Banking magazine recently:

quot;It is somewhat disturbing that, on the one hand, we
have the poverty-reduction plans of the World Bank and
the IMF and yet, on the other hand, we damage poor
gold-producing countries by selling gold and reducing
the price.quot;

There was vast criticism of the IMF gold sale proposal.

quot;We are unalterably persuaded that selling IMF gold
reserves would adversely affect the very countries the
(Clinton) administration intends to assist and further
damage the U.S. domestic gold industry,quot; Sen. Jesse
Helms, a North Carolina Republican, and Sen. Chuck
Hagel, a Nebraska Republican, said in a letter to then
Deputy Treasury Secretary Summers.

They were not alone. In one of the most unusual
alliances in congressional history, Sen. Tom Daschel,
the Senate Democratic minority leader; Rep. Dick Armey,
the House Republican majority leader; Rep. Tom DeLay,
the Republican majority whip; and Democratic senators
such as Richard Bryan, Tim Johnson, and Harry Reid all
warned outgoing Treasury Secretary Robert Rubin in a
letter that they would oppose the proposal.

In addition, 36 of the 41 nations to receive debt
relief were gold producers themselves, and they urged
Congress not to approve the debt relief, fearing that
more gold selling would depress gold prices and do more
damage than the debt relief would provide help.

The IMF gold sale proposal was defeated, but GATA asks
whether, after all that hullabaloo, the IMF is not
pulling an end-run on Congress and lending gold via a
deposit with the Bank for International Settlements.

Enough is enough. It is time for GATA to go to South
Africa to gain the support from those harmed by the
collusion against gold.

So the quot;enveloping hornquot; goes to South Africa.

Phase 1) The point of the horn strikes.

Phase 2) The right and left flanks encircle the cabal.

Phase 3) The back end of the horn is sealed off and the
gold cartel is defeated.

Reg Howe and GATA made the first strike on December 7
by filing suit in U.S. District Court in Boston against
the Bank for International Settlements; Federal Reserve
Board Chairman Alan Greenspan; William J. McDonough,
president of the Federal Reserve Bank of New York; J.P.
Morgan amp; Co. Inc.; Chase Manhattan Corp.; Citigroup
Inc.; Goldman Sachs Group Inc.; Deutsche Bank AG; and
Treasury Secretary Lawrence H. Summers.

The right and left flanks are flaring out. GATA's
objective is to connect with concerned politicians in
the United States and with the mining companies and
unions and interested politicians in South Africa.

I have spoken with the following people and sent them a
copy of our lawsuit, James Turk's quot;Smoking Gunquot; essay,
and our press release about the lawsuit, all of which
may viewed at

* Ralph Nader's top staff aide, Jake Lewis, at the
Center for Responsive Law in Washington.

* Jack Horner and Elroy Saylor, senior staff members
for influential black Republican U.S. J.C. Watts of
Oklahoma. They are aware that on May 10, 2000, a GATA
delegation met with House Speaker Dennis Hastert;
Alabama U.S. Rep. Spencer Bachus, chairman of the House
Subcommittee on Domestic and International Monetary
Policy; and Dr. John Silvia, chief economist of the
Senate Banking Committee. They already had been
presented personalized copies of GATA's quot;Gold
Derivative Banking Crisisquot; report (quot;GDBC Reportquot; at

I soon will be in touch with Democratic leaders of the
Congressional Black Caucus.

All of them will know that I will leave for Capetown,
South Africa, in early February to attend the
quot;Investing in African Mining / Indaba 2001quot; conference
hosted by International Investment Conferences Inc. Not
only will most of the world's gold producers be in
attendance, but so will South African government

Prior to that, I hope to meet with Willy Madisha,
president of COSATU. The National Union of Mineworkers
is under COSATU's jurisdiction. We spoke recently and
he could not have been nicer or more receptive. GATA
informational material and a copy of our lawsuit were
also sent to Madisha.

Former mineworkers union president Marcel Golding is a
member of and a friend of
international governmental consultant Frank Veneroso of
Veneroso Associates. As Golding has a place in
Capetown, I hope to visit with him too.

My trip to South Africa will also take me to
Johannesburg, and I would like to meet members of the
South African press. A radio interview is already being
scheduled this coming week with Christopher Verrijgt of
567 MW Cape Talk in Cape Town.

And, of course, if at all possible, I would love to
meet one of the great heroes, Nelson Mandela, to let
him know how important this issue is to the welfare of
the people he sacrificed most of his life for.

One of GATA's original supporters, Boudewijn Wegerif,
was brought up in South Africa and in December 1997 he
completed a 2 1/2-year, 12,300-kilometer walk from
Kiruna in northern Sweden to Cape Town at the tip of
Africa. quot;The walk through 17 countries was undertaken
as 'a prayer for the earth' and to draw attention to
the suffering caused by the prevailing debt-based money
system,quot; Boudewijn explains.

Boudewijn is introducing me to Sheena Duncan, president
of the Black Sash, a leading opponent of apartheid. In
that era the members of Black Sash, women all, stood
outside the house of parliament at openings and at
other sessions in disciplined silence, wearing black
sashes. They also opened advice centers in the
townships, which are still going strong and helping the
poor in townships.

The gold cabal includes the richest and most powerful
people in the world, but we have the truth and the
Internet going for us. If anyone can assist GATA in
meeting any of the people mentioned here regarding our
South African trip, it would be greatly appreciated.

There is much we can all do. It is time for the gold
fraud to end.

Long Live the quot;enveloping hornquot;!