|
-- Posted Sunday, 12 October 2003 | Digg This Article
October 10 - Gold $373.20 up $4.40 - Silver $4.89 up 7 cents Commodity Prices On A Roll/Gold Storms Back "The last three or four reps is what makes the muscle grow. This area of pain divides the champion from someone else who is not a champion."
-- California Gov. Arnold Schwarzenegger
GO GATA!!! Once again gold strengthened during the Asian trading hours last evening, rising $2+ from the Comex close. Once again gold shot up right off the bat ($5) in New York and was capped for the rest of the trading session. Watching gold and silver trade at these ridiculously low levels with commodity prices soaring is an outrage for many reasons, some of which I will get into below. The most obvious outrage is the manipulated gold/silver action versus that of many other commodities. Take a look at the scorecard: OCT PLATINUM – closed at 23-yr highs at $733.10, up $7.70
http://futures.tradingcharts.com/chart/PL/A3 NOV SOYBEANS – closed at $7.13, up 21 cents, a 7-year high (weekly chart)
http://futures.tradingcharts.com/chart/SB/W DEC CATTLE – closed limit up at 92.25 cents per pound – an all-time high
http://futures.tradingcharts.com/chart/LC/C3 NOV FEEDER CATTLE - closed at 107.15 cents pound, up 1.325 cents per pound, an all-time high
http://futures.tradingcharts.com/chart/FC/B3
NOV CRUDE OIL – is roaring right back up, finishing at $31.97 per barrel, up .96 cents
http://futures.tradingcharts.com/chart/CO/WDEC COTTON – made 5-yr highs, closing at 71.54 cents, up 1.74
http://futures.tradingcharts.com/chart/CT/C3Three-month NICKEL – closed at $10,900 per tonne, up $80, a 13-yr high
DEC COPPER- closed at 86.35 cents per pound, a 2/12 year high Then you have the dollar breaking key support and moving into new low ground: Dollar Falls to Three-Year Low Against Yen, Drops Versus Euro Oct. 10 (Bloomberg) -- The dollar fell to its lowest in almost three years against the yen and declined versus the euro on speculation policy makers are permitting a weaker currency. THE DOLLAR – closed at 91.79, down .54, breaking critical 92 technical support
EURO – rose .69 to 117.88
YEN – made a new 3-yr low against the dollar at 108.51 So we have commodity prices on fire, the dollar falling rapidly, negative interest rates in the US (see below), producers covering hedges, the physical market on fire, etc., and gold and silver are diddling around at these rinky-dink prices because a group of Western central bankers are petrified of letting the gold price rise. They have rigged the market for so long their short positions have risen to dangerous levels which, if exposed, could threaten the financial markets. These nitwits are trapped. The jewelry-wearing women of the world have them cornered. All they are doing by selling more of their gold supply, and keeping the price at such abnormally low levels, is to further strain the situation. It is only a matter of time before the gold price explodes and all heck breaks loose. Rising commodity prices and a falling dollar are going to make The Gold Cartel’s life miserable. Can’t be miserable enough as far as I am concerned. According to the gold press, yesterday’s gold tanking was due to fund liquidation. Horse manure. It was due to the relentless selling of Goldman Sachs, which then precipitated fund selling, but who knows how much? The open interest went up 454 contracts to 255,221, not down. Somebody out there was loading up on the break, which countered any spec liquidation. Smells like The Stalker and friends to me. With the cash market smoking, this would be the sort of time this "gold buying group" would step up to the plate. It is also a likely reason Goldman Sach’s assault on gold failed yesterday. For the week, gold tested last Friday’s lows and did so successfully, closing above the technically significant $370/$372 area. The set up for the gold price to move SHARPLY higher could not be better. We ought to be off to the races again at any time. The floor has turned very silver bullish. With commodity prices doing what they are, it is hard visualizing silver staying at these orchestrated low prices. The silver open interest contracted again to 87,617, down 599 contracts. The John Brimelow Report Friday, October 10, 2003 Indian ex-duty premiums: AM $8.98, PM $8.67, with world gold at $371.50 and $371. Lavish for legal imports. All Indian centers tracked by Reuters are deep into legal import territory. The Bombay Stock Exchange closed at a 39 month high today: India is prosperous. For what it is worth, the Shanghai Gold Exchange, open for three days now after a week-long break, is reporting modest premiums over world gold too. As is usual after a big move in NY, TOCOM reported a heavier day: volume jumped 80% to the equivalent of 53,312 Comex lots. The active contract dropped 19 yen, the third life-of-contract low in a row, reportedly an unusual event. As also seems now to be usual, $US gold firmed up during Japanese hours, going out at $370.75, which was $1.95 above the NY close. Since open interest dropped the equivalent of 2,817 Comex contracts, this was not obviously caused by Japanese accumulation. (NY yesterday traded 70,650 contracts; open interest rose 464: what happened to the long liquidation widely reported?) Yesterday the Employment data triggered a binge of Dollar- and US-Financial Asset euphoria, which opened up scope for a major assault on gold during the NY day. "…funds were seen as aggressive sellers. The metal fell to the 371.00 area in a matter of minutes…Scattered bargain hunters appeared around this level…However, a stronger US dollar against the EURO encouraged further gold selling from overseas sources. Resting stop loss orders were triggered once 370.00 was broken, pushing gold to a low of 368.10/368.50 .",in ScotiaMocatta’s words. UBS echoes: "In what appears to becoming a habit, gold came under selling pressure immediately after the open in New York yesterday, apparently further speculative long liquidation." adding, however, in an observation cheering to those who believe physical buyers are a separate community to US funds; "One US bank sold gold aggressively in the last half hour of trade but gold rallied a dollar into the close and was marked higher in the after-market." MarketVane’s Bullish Consensus for gold fell 4 points yesterday to 66%, the lowest since August 1. Coincidently, August 1 was the low of a sudden, $15 fall in gold, which abruptly terminated a promising rally in July. This drop also stemmed from massive selling on Comex, and triggered powerful physical offtake. Also, no doubt coincidentally, another, major, market was experiencing an inflection: in the summer, the Bond market, this time, the dollar. Bullion dealer commentators appear genuinely puzzled as to the degree of long liquidation caused this week, and are preparing to be swayed by today’s CTFC data. UBS remarks: "The COTR report, to be released tonight a few hours after the Comex close, will be much more important than normal. Usually, the report merely confirms the flows that we have estimated during the preceding week; this time there is considerable uncertainly about just how much long liquidation took place on Friday, Monday and Tuesday. We estimate that the COTR report will show a fall in the net long position of between 2.5 and 4.0 million ounces to about 12.3 to 14.8 million ounces." While NY-centric operators will unquestionably be influenced by this data, the physical markets as demonstrated by the premiums seem to me more important. Part of the reason for Platinum’s rise to 23 year highs this week has been the increasing recognition that most of the planned growth in supply has to come from South Africa, where the authorities are making it increasingly obvious they cannot comprehend the economic and political requirements of capital- intensive large scale mining. In the light of President Mbeki’s stupid remarks about the South African exchange rate today (see http://www.mg.co.za/Content/l3.asp?ao=21756 ), those inclined to consider the long term for gold have include the fact that the largest producer, which is also, (often forgotten) the most prospective area for major new finds of gold, is gradually becoming less viable. Those interested in the reasons should consult http://www.vdare.com/misc/rushton_iq.htm . JB CARTEL CAPITULATION WATCH GE, the largest market cap stock in the US, issued a 4th quarter warning and fell 81 cents to $29.32, but it had little effect on the rest of the stock market. The DOW closed slightly lower and the DOG slightly higher. What is out there to derail this levitating affair? The producer price index was higher than expected for September, which does not include the recent price hikes. This is part of my aggravation today. We continue to have negative interest rates in the US with inflation far higher than the Fed Funds rate or money market rates. It has been this way for some time and is a very bullish factor for gold. Savers in the US continue to fall further and further behind in terms of their own wealth. This is just one of many items that give gold's fundamentals their "10+" rating. U.S. Sept. Producer Prices Rise 0.3%; Core Unchanged
Oct. 10 (Bloomberg) -- U.S. wholesale prices rose in September, reflecting the biggest increase in costs of vegetables, beef and other foods since January, a government report showed. Excluding food and energy, a measure of producer inflation was unchanged.
Prices paid to factories, farmers and other producers, increased 0.3 percent after August's 0.4 percent rise, the Labor Department said in Washington. No change in the September index excluding volatile food and energy followed a rise of 0.1 percent a month earlier. Core prices are up 0.1 percent over the last 12 months, down from a 0.4 percent gain in the year ended in August –END- The trade deficit is another very bullish plus for gold. For it to be $39.2 billion is terrible. I can recall five years ago when a Goldman Sachs analyst predicted the trade deficit was going to soar to $19 billion from the current $12 billion at the time. The investment community was aghast at even the suggestion it would go that high. Now they yawn when it comes out less than $40 billion. Oct. 10 (Bloomberg) -- The U.S. trade deficit unexpectedly narrowed to less than $40 billion in August for only the second time this year as the dollar's decline contributed to the biggest drop in imports since December 2001, the government reported.
The import of goods and services exceeded exports by $39.2 billion, compared with a revised July shortfall of $40 billion, the Commerce Department said in Washington. Economists had forecast a $41.5 billion gap, based on the median of 67 estimates. While exports in August fell for the first time since April as aircraft deliveries declined, shipments so far this year are up 3 percent from a year ago. –END- Bill,
Good thing Cullinane got this article on comparisons between '29 Depression and current credit expansion excesses (BIS Working Paper) on the GATA record. I looked on the BIS site and the article has been removed. Its the only Working Paper NOT available on the site!
Phil A daring forecast from one of The Gold Cartel: Citigroup Global Markets analyst John H. Hill said in the report the firm hiked its average price forecasts for copper, nickel and gold into 2005…..
"We are raising gold from $360 per ounce to $380 for 2004, and from $365 to $400 for 2005, believing that reflationary themes and investment demand can propel gold in a recovering economy," Citigroup said.
"We believe that this is the first time in at least 15 years where a case can be made for gold to perform in a recovering economy." -END- Citi got it wrong this year and they will get it wrong the next few years too. God forbid a bullion dealer puts out a serious bullish forecast. George Ure onThose Employment Numbers: The market got a real kick in the butt yesterday with the reported improvement in jobless numbers. But was it real or sleight of hand? We can see from reading the reports that at least 20,000 worth of "job creation" is really nothing more than the Pentagon calling up national Guard members do do some desert time. For example, check out the CBS News report at http://www.cbsnews.com/stories/2003/09/27/iraq/main575441.shtml. When you start adding up all the soldiers, it more than accounts for the job "improvement". Then there's the multiplier effect where for each solider fielded you get about one domestic job created to support them...First time filings fell almost exactly the size of the Guard call up of 20,000: http://www.nytimes.com/2003/10/10/business/10econ.html?ex=1381204800&en=ca8077f3776e78d7&ei=5007&partner=USERLAND and no, it's not precise, but you got the drift. –END-GATA’s Mike Bolser: Hi Bill:
The Federal Reserve today added another $9 Billion to its repo pool level. This action caused the pool total to regain its 30-day moving average, which still moves in a slight down slope. The pool stands at $32.99 Billion.
The new New York Fed web site is much faster than the old one. However, it was easy to overlook the second page as I did yesterday. The numbers have been corrected, thanks to an observant reader's assistance.
The DOW may keep rising (as it is this morning) in spite of the change in repo pool moving average. The repo metric just hasn't been as good predicting a sharp down move in the DOW so exercise caution if attempting to short the indexes.
Mike Brother Tim on an article by Cliff Droke: Hey Bill, As I mentioned on the phone, since Cliff Drake's article "The Coming Currency Devaluation" was printed, I have had a number of calls regarding the issue of gold confiscation. Our company policy has been to suggest non-confiscatable double eagles in lieu of bullion purchases. Swiss America has not been suggesting that there will be gold bullion confiscation. We have maintained that in a rising gold market the extrinsic values of the investment grade double eagles move up dramatically more than the intrinsic or bullion value in the coin.
Utilizing a mathematical ratio trade strategy we believe we can maximize the number of ounces acquired. While holding the numismatic double eagles one would be protected against the possibility of confiscation.
If anyone would like to see the article they can contact me. As far as gold in general, it has clearly broken out on a long term basis and barring a big rally in the dollar, which is highly unlikely, gold looks like it wants to go right back up again and make new highs. We are all anxious to see gold make the big move. It WILL happen, and when it does, it will have been well worth the wait. Brother Tim.
Tim Murphy
Swiss America Trading Corp
800-289-2646 ext 1019
trmurphy@swissamerica.com Richard Russell last evening:
There's nothing like buying great values in stocks, real estate or a business or anything else. As far as buying values in stocks or real estate today, the values just aren't there.
By the way and before I forget, some of the commodities are literally flying higher. Copper, cotton, beans, cattle, platinum, These commodities are responding to the massive infusions of liquidity that the Fed and world central banks have been injecting into their respective economies…..
"Today had to be one of the strangest days for gold that I've seen in quite a while. The gold stocks gave ground very grudgingly, despite the 6.20 drop in Dec. gold. Which makes me think that the price of gold is being manipulated, and the gold stocks just don't believe the lower gold price.
Of course you can also say that it's easy to manipulate gold, the metal, but how do you manipulate dozens of gold shares? Hanky-panky going on in gold, but in the end gold and gold shares will do what they are supposed to do. Which is what? Answer -- go up, because it's a gold bull market, and it's fated to last a long time -- perhaps many years. But yes, today was a doozy, a very strange day for gold and gold shares. -END- It’s one thing for me to be aggravated about the rigging of the gold price. What the United States is purposely doing to the blacks in sub-Saharan Africa is quite another. The gold price should have been hundreds of dollars higher for years now. There would have been more money to fight their terrible disease problems and by now there would be an economic boom. There CERTAINLY wouldn’t be this sort of problem: 10 Oct 10:00
SOUTH AFRICA - Crisis threatens 70 000 mine jobs
BUSINESS REPORT - The mining industry might lay off as many as 70 000 mine workers and halt up to R100 billion worth of capital investment as it struggled to avoid being pushed over the cliff edge by the stronger rand and the higher cost of production, the Chamber of Mines warned yesterday. "At the current rand price of gold, seven of South Africa's 12 gold mines are lossmakers ... >>>>
Mbeki sees no reason for S.African mining job cuts
Fri October 10, 2003 09:18 AM ET
JOHANNESBURG, Oct 10 (Reuters) - President Thabo Mbeki criticised South Africa's gold mining companies on Friday for threatening to cut jobs in response to the strong rand, saying they were benefiting from higher dollar-based gold prices. Gold producer Durban RoodepOort Deep DURJ.J has so far been the only firm to retrench workers, but Harmony Gold HARJ.J said on Wednesday it would follow suit, while other miners have warned the currency's gains are eroding profits. Mbeki noted in a weekly on-line newsletter that gold prices were nearly $100 higher at $370/ounce than in 2000. "With this gap between costs and gross revenues, in dollar terms, the gold mining companies will have to explain more clearly and convincingly why the stronger rand obliges them to retrench workers," he said. "In this situation it is quite possible that the issue of the strengthening of the rand is being used to hide other problems that have arisen because of bad management," he said. The rand has rocketed by 26 percent against the broadly weaker dollar so far this year, building on gains of around 40 percent in 2002 which took it well off a record low of 13.85/dollar late in 2001. This has prompted a sharp fall in the rand-denominated price of gold. But although it has shed 15 percent so far this year, the rand gold price is still 65 percent up on late 1999. Mbeki said that he was disappointed that the mining firms had not consulted the government before deciding on retrenchments attributed to the strength of the rand. "Apart from anything else, this would have demonstrated that they too have joined the people's contract to build a better future for all our people, black and white, to help move our country away from its terrible past," he said. Unemployment and poverty are pressing concerns in South Africa where the jobless rate stands at over 30 percent. Mining is the country's main employer. -END- Mbeki ought to get off his butt and go after the real problem. It’s not the gold producers, it’s The Gold Cartel. It’s certain bullion banks and the United States Government who are suppressing his nation and his people. Of course it would mean seriously taking on the establishment which a guy like Mbeki won’t do. He would rather go around kissing the likes of President Clinton, who is the biggest phony in the world when it comes to caring for blacks. It was he and Robert Rubin who set the gold rigging operation on steroids mode and engineered a $100 drop in the price in 1997. This is what I said in my presentation at The GATA African Gold Summit in Durban, South Africa on May 10, 2001: Recently, former President Clinton was visiting this special country of South Africa. It struck me when I read the following from the Mercury: "Former U.S. President Bill Clinton said yesterday that the South African government was not spending enough money on medication for HIV/AIDS sufferers. "Speaking to a small group of youths at a conference on civil society in Sandton, he said the government could slice the AIDS mortality rate in half within three years if sufficient funds were channeled into medication." This is unmitigated gall, an outrage and an affront to the sick in South Africa. If not for the former president's gold policy, there probably would have been enough money to have already cut the mortality rate in half. Maybe as an eventual result of this summit meeting, the HIV/AIDS mortality rate CAN be cut in half with reparations sent to Africa courtesy of President Bill Clinton and his former administration. -END- For newer Café members, our summit went very well. Five nations attended as did the National Union of Mineworkers, Cosatu (major trade union), the South African Reserve Bank, the major gold producers, South African Broadcasting Company, other members of the press, etc. It received prime time coverage one night. I have included my Durban presentation in the Appendix for those interested. Gold was more than $110 per ounce lower than it is now. The gold shares sold off again late. They have been making a habit of that lately. The HUI could not break through tough resistance at 200, rising to 199.80 before falling back to 197.57, up .58. The XAU closed unchanged.
HUI – looks like it will run when it takes out 200
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=hui&sid=0&o_symb=hui&freq=1&time=8 Rarely have there been stronger reasons for the gold price to move much higher, which is, of course, the reason The Gold Cartel bombed it last Friday. The stronger the reasons, the more aggressive they are. It was only normal for gold to do some "work" after such an annihilation. Two weeks is par for the course when it comes to gold composing itself after a bashing. Hard for me to imagine gold staying down here too much longer. GOT TO BE IN IT TO WIN IT! MIDAS Appendix 5/10 Bill Murphy - GATA African Gold Summit Speech
GATA Chairman Bill Murphy's Address
GATA African Gold Summit in Durban, South Africa
Thursday, May 10, 2001
Two and one half years ago it was clear to me that the gold market was rigged. I could see that just by the way the market was trading after the Long Term Capital Management hedge fund blow up and bail out by New York and Federal Reserve Banks. Every time gold poked its head up and began to rally, the same sellers showed up at the same time, usually at critical technical levels. What is amazing to me is that since those days of 30 months ago, all the evidence that the GATA camp has amassed has supported that initial supposition. It has been like pieces of a giant puzzle coming together with each additional piece of evidence fitting in perfectly with what was previously discovered. At no point in time these past years have we uncovered any information that contradicts our initial analysis. What is most disturbing about our discoveries is the realization that the manipulation of the gold market was set in motion to benefit so few at the expense of so many -- especially to the detriment of the people and economies of the African gold producing countries. What I am about to present to you will be even more disturbing. The Gold Anti-Trust Action Committee is an apolitical organization -- that is to say we espouse no political views, nor advocate any political philosophy or party in the United States. However, we do not hesitate to put the blame for the orchestration of the gold market manipulation squarely where it should be and that is on the Clinton Administration. What makes our findings so outrageous is that President Clinton and Treasury Secretary's Rubin and Summers publicly declared their intentions to help the poor African countries, while behind the scenes, and in the most un-American of fashions, they were doing just the opposite. To put this all in perspective, I have some handouts for you that includes our GATA African Gold Summit Action Plan. The other is from the Congressional Record Copy of the Congressional Black Caucus regarding the International Monetary Fund's gold sale proposal of two years ago: It is a letter to President Clinton signed by members of the Black Caucus with additional remarks by Congressman Bennie Thompson. The following is a quote from your handout by Congressman Thompson to the Speaker of House, Dennis Hastert, who subsequently met with the GATA delegation: "Mr. Speaker, we here in Congress do not have the ability to stop the sale of gold from other central banks, although we can make our disapproval manifest. However, we can stop the sale of IMF gold, and we need to do it now. Our disapproval of the gold sale is not an obstacle to debt relief -- there are many ways to deal with debt relief without IMF gold sales. "Mr. Speaker, Members of the House on both sides of the aisle have written to the Treasury Department and to President Clinton stating our unequivocal opposition to gold sales by the IMF, and without objection, I would like to enter into the record copies of those letters. "Before the South Africans begin their march on Saturday, I urge the President to respond to this crisis by withdrawing his support for IMF gold sales, and withdrawing Treasury's request for authorization to support it. The countries we are pledging to help should not be cursed by our misguided generosity." Some generosity by the United States! I think you can see where I am coming from based on what the GATA camp experts have presented here to you today. The Clinton Administration's goal was not to help the poor, but to find a way to get 3,000 tonnes of IMF gold into the physical market to keep the gold price from rising. Ironically, not only were the National Union of Mineworkers, the South African gold producers and the Black Caucus against the IMF gold sales, but the following in the U.S. Congress wrote that letter to Treasury Secretary Rubin stating that they would oppose the IMF gold sale proposal: 1) Republican Jim Saxton, chairman of the Joint Economic Committee. 2) Republican Jesse Helms, chairman of the Senate Foreign Relations Committee. 3) Democrat Tom Daschel, Senate Minority Leader. 4) Republican Dick Armey, House Majority Leader. 5) Republican Tom Delay, House Majority Whip. 6) And Democratic senators such as Richard Bryan, Tim Johnson, and Harry Reid. All of them warned outgoing Treasury Secretary Robert Rubin that they would oppose the proposal. All told, this may have been the most unusual political alliance in U.S. political history. On top of all of this, 36 out of the 41 poor gold- producing countries registered their disapproval of the proposed IMF gold sales! If all these disparate individuals and groups were against the IMF gold sales, one has to ask why the Clinton administration was so strongly for them in the first place? I think you have clearly received that answer today and can begin to understand the hypocrisy and immorality of it all. There is something else. The evidence you have heard during this summit cites the 1994/95 time frame when the orchestration of the manipulation of the gold price was set in motion in earnest. That was the time frame that Alan Greenspan, chairman of The Federal Reserve Bank in the U.S., abruptly took his seat on the Board of Directors of the Bank of International Settlements in Switzerland. To give you greater insight into how much Clinton Administration effort was put into the planned IMF gold sales and of their understanding of the need to get the IMF gold into the physical market place for The Gold Cartel to perpetuate the gold scheme, I read the following from the Federal Reserve Bank meeting of April 28, 1995: "CHAIRMAN GREENSPAN. We had the Russians in who gave a somewhat upbeat view of where they were. We had technical discussions on GATT and potential sales of gold by the IMF for the purpose of using the interest on the sale proceeds to finance various programs in the IMF. "MR. MOSKOW. Mr. Chairman, just by coincidence, is visiting Chicago now and will be in our Bank this afternoon: I'll be meeting with him later. I was just wondering if he had any views that would be helpful for us to be aware of. "CHAIRMAN GREENSPAN. Remember that the sale of gold for purposes of financing certain IMF programs." All of this focused effort for a program that virtually nobody wanted, except for the insistent Clinton Administration. Why was an IMF program so important to the chairman of the Federal Reserve Bank of the United States anyway? One can now grasp the importance of Alan Greenspan's TWICE-made comment on July 24, 1998, before a House Banking Committee and on July 30 before the Senate Agriculture Committee, "Central banks stand ready to lease gold in increasing quantities should the price rise." The obvious question is what did he know and who was he talking about because that is EXACTLY what has happened every time the price of gold has rallied the past three years -- to the detriment of all the African gold- producing countries! I am bringing this all up for a reason and will get back to it in a bit. When GATA invited the summit attendees, we stated that we would present an action plan to end this gold market manipulation. It is my opinion that if this plan is implemented, it will result in that tremendous rise in the price of gold and stimulation of the economies of the African gold producing countries that GATA speaks of. Now, what you have heard today is a mouthful; a great deal of information to comprehend. Many of you have heard what the GATA camp has had to say for the first time, so while are evidence is extraordinarily compelling and we have no doubt we are correct, it has to be difficult for you to know if that is the case for certain. Therefore, we are suggesting an action plan that is very straightforward and one that few in the world could disagree with; that is to search out the TRUTH by having the leadership in each gold producing African country ask specific questions to various individuals and institutions about the allegations we are making. Perhaps it should be the mining or trade unions that should ask the questions or maybe it should be the mining ministers. That is a protocol that must be decided on an individual basis. Regardless of who asks the questions, there is no reason that these various governments, institutions and individuals should not willingly answer them, as it is these same financial institutions, or individuals, that are clamoring for greater financial market transparency so that there is less chance of financial market calamities in the future due to unsafe business practices. All you will be doing is "calling them" on their own exhortations. Therefore, I suggest these questions be asked. I also see no reason why an inquiring and disinterested media cannot also ask the same questions in a search for truth and transparency, especially when the answers to the questions might have such an impact on so many countries in the African continent. Here are some of the GATA camp suggestions: 1. To the IMF: Is it possible that IMF gold is reaching the physical gold market in any way shape, form or fashion? Does the IMF have gold on deposit at the Bank for International Settlements? If so, how much? Is any IMF gold deposited at the BIS or IMF "earmarked gold" at the New York Fed entering the physical gold market at this point in time?
2. To the Bank for International Settlements: Are you lending gold on behalf of the IMF in any way?
3. To the bullion banks: According to the statistics of the BIS and the Office of the Controller of the Currency in the United States, the notional value of gold derivatives exploded on the books of Chase Manhattan Corp., J.P. Morgan & Co. Inc., Citigroup Inc and Deutsche Bank from June 1999 through January 2000, while remaining steady at other bullion banks. How do these defendants in the Howe/GATA complaint account for this gold derivative buildup, which is quite large in relation to their capital?
4. To J.P. Morgan/Chase, Goldman Sachs, Deutsche Bank and Citibank: Has any facet of the U.S. Treasury or U.S. Fed guaranteed any gold derivative positions on your books against a loss?
5. To the treasury secretary of the United States, Paul O'Neill: Various Treasury officials have denied any involvement in the gold market by the Exchange Stabilization Fund. However, beginning in 1996 there is a pattern of discrepancies between the Fed’s gold certificate account and the quarterly U. S. Treasury statements (that include the ESF gold figures) which should be the same. At the end of 1999, the ESF record showed a $41 million, or approximately 30 tonnes, excess over the gold certificate account. Could you please reconcile the discrepancy since the Clinton Administration reported to Congress that it did not engage in any currency interventions from 1998 through March 2000?
Can you explain during this period how it is that the ESF reported profits that generally coincided with periods of falling gold prices while its losses generally coincided with rising gold prices?
Would you please explain the details of the ESF gold swaps mentioned by General Counsel Mattingly of the Federal Reserve in the January 31, 1995 FOMC meeting transcript? With whom were these swaps made? Were the U.S. gold reserves part of the swaps? What were the gold swaps Mattingly made reference to, and have there been others since?
6. To the central banks: Why do you book gold bullion and gold receivables as one line item, defying Generally Accepted Accounting Principles and making clear that you do not want transparency in the gold market? Are you unwilling to make public the size of your gold loans/deposits because you realize the total weight of these loans/deposits are so vast -- anywhere from four to six times total annual production -- that it is unlikely they can be repaid?
7. To Bank of England Governor Edward George: Did you make a statement to Nicholas J. Morrell, Chief Executive of Lonmin Plc following the price rise after the Washington Accord that essentially said the following? "We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake.... Therefore at any price, at any cost, the central banks had to quell the gold price, to manage it. It was very difficult to get the gold price under control but we have now succeeded. The U.S. Fed was very active in getting the gold price down. So was the U.K."
Alan Greenspan of the U.S. Fed and Paul O'Neill, new U.S. Treasury Secretary, should be asked whether the U.S intervened in the gold market in any way following the sharp price rise after the Washington Accord.
And finally, as per the previous Greenspan commentary:
8. To the U.S. Federal Reserve Bank Chairman: On July 24, 1998, before a House Banking Committee and on July 30 before the Senate Agriculture Committee, you stated, "Central banks stand ready to lease gold in increasing quantities should the price rise." Since then, that is exactly what happened every time there was a gold price rally -- to the detriment of the African gold-producing countries. How did you know that and what specific central banks were you referring to?
* * * The charges made by the Gold Anti-Trust Action Committee are very serious, and the implications for sub-Saharan Africa are dramatic. You deserve them to be answered. You deserve the truth, the answers to these questions, or ensuing silence instead of a response, will reveal that truth. To help you ferret out what has happened to gold, I strongly suggest you call on the Black Caucus in the United States and have them assist you, as they did in the African effort to defeat the IMF gold sales. You know who they are now and you can get to them very easily. While most of them are in the Democratic Party in the United States, whose administration orchestrated the gold scheme, I would think they would want to know if they were let down by their own leadership and if their brothers and sisters in Africa were betrayed. I think that they would like to find out for themselves before it is brought to their embarrassed attention by opposition parties. I urge you to give them that opportunity. Perhaps, it will be Republican Congressman Thompson who will run with the ball and assist us all in our fact- finding mission. Timing is critical at the moment. As far as I am concerned, this is a Clinton administration scandal. The Bush administration is new and they have to be trying to figure out how to handle this giant mess. However, the Republicans only have so much time to bring this out into the open, or allow the price of gold to rise sharply, before they become implicated themselves. The longer they are in control in Washington, the more the public will blame them when the gold market blows up, and it is surely going to. The Republican Party in the United States received the lowest black vote in the recent presidential election in 40 years. If there is enough rage from Africa about what the prior Democratic administration did to suppress the African economies and handicap the black leadership in this continent, I should think it can only accrue to the benefit of the Republican Party when it comes to greater black voter support in the future. If there is enough furor and commotion about this issue around the world and in the United States, it can't help but affect the decision of the very able federal court judge in Boston, Massachusetts, about whether to allow Reg Howe's lawsuit to go forward. That is just the way it is in many cases such as this. If the judge allows the case to go to "discovery" -- or the pre-trial fact-finding process -- the defendants will have to answer Howe's questions under oath. Those answers to those questions will surely win the day. That process alone will give us the truth we are looking for. The gold price will then soar -- very quickly. African economic despair will turn to economic repair. And there is a caveat. Because what was carried out was so immoral, hypocritical, and deceptive by a tiny, but powerful, faction of the U.S. Government, it is my opinion that certain African countries should be entitled to reparations. Yes, reparations. That is for the many gold-producing African governments to decide at some time in the future. However, in contemplating such a course of action, it is important to remember that gold is a depleting resource. African gold-producing countries cannot get the money back that would have accrued to them from revenues received from a free market gold price that should have been hundreds of dollars higher, if not for the gold market manipulation of the Clinton administration. Worse, as a result of faltering economic growth, reputations of various black political leaders have been tarnished, unemployment has skyrocketed and infectious disease problems are at crisis levels. Recently, former President Clinton was visiting this special country of South Africa. It struck me when I read the following from the Mercury: "Former U.S. President Bill Clinton said yesterday that the South African government was not spending enough money on medication for HIV/AIDS sufferers. "Speaking to a small group of youths at a conference on civil society in Sandton, he said the government could slice the AIDS mortality rate in half within three years if sufficient funds were channeled into medication." This is unmitigated gall, an outrage and an affront to the sick in South Africa. If not for the former president's gold policy, there probably would have been enough money to have already cut the mortality rate in half. Maybe as an eventual result of this summit meeting, the HIV/AIDS mortality rate CAN be cut in half with reparations sent to Africa courtesy of President Bill Clinton and his former administration. There is one other MAJOR benefit to asking the GATA questions at this point. Because of the huge supply/demand deficit, the amount of central bank gold needed to hold the price down is increasing by more than 100 tonnes every month. That means that the Gold Cartel's gold problem is getting worse and worse -- by the week. The GATA camp has a hard time imagining what the Gold cartel's end game is and how they are going to explain it all in the future. One can be sure that the guilty perpetrators are going to try and come up with some phony pabulum type of excuse to talk their way out of what they have done. That is just what they must not be allowed to do. Think of it like a chess match. If the attendees at the summit ask the aforementioned questions and the press reports on the questions being asked, King Gold Cartel can be checkmated by us pawns and knights of this Round Table because of the resulting publicity and focus on the matter. If they then come out with some nonsensical, gobblygook of an explanation in the future, few will believe them. By asking the appropriate and fair questions NOW, future gold reparation claims will be strengthened. It will also enhance the possibility that the gold manipulation scheme ends earlier rather than later -- for all the reasons we have brought to your attention. It is time to fight back South Africa and sub-Saharan Africa, for what was rightfully yours in the first place. We have offered you a plan. GATA hopes you run with it. Allow the "enveloping horn," the famous battle tactic of the great African General Shaka, to win the day again. Reg Howe and his lawsuit in federal court are the point of the buffalo horn. He has the gold cartel's attention. The left flank of the horn is our effort to mobilize the press and politicians. An unbiased press can help us move on the gold cartel by just FACTUALLY reporting on what was presented here today, while the other summit attendees can go to various politicians in an effort to obtain answers to the action plan questions. All along it was GATA's intention for the right flank of the horn to be mobilized gold producers. We hope after what was presented today, attending gold producers will be encouraged to speak out and also try and get answers to the Action Plan questions. Meanwhile, the Gold Anti-Trust Action Committee will be on alert in the United States to help in anyway possible. We are just a phone call or email away. The "enveloping horn" is now in full battle formation. By acting decisively together we can close the back end of the "enveloping horn" on the gold cartel. These financially and politically powerful institutions are likely to be slightly bewildered. The truth will see the light of day and we will win. So will all of sub- Saharan Africa. Siyabonga kakhulu! Hambani kahle! (Go well.) Ukuthula kube nani! (Peace be with you.) -END-
===================================
Copyright (c) Le Metropole Cafe, Inc.
Le Metropole Cafe is a Membership site. Visit and experience a 2-week Free Trial!
-- Posted Sunday, 12 October 2003 | Digg This Article
Previous Articles by Bill Murphy, Le Metropole Cafe, Inc.
|
