(GATA News) A Momentous Live Event - Thurs, Dec 16 at 10:00 pm est.
Precious Metals News from Kitco Inc. kitco.com
kitco.com
We are pleased to announce that on Thursday, December 16 1999
at 10:00 PM eastern time, GATA chairman and co-founder Bill Murphy
will be joining us on the Kitco Discussion Group for a one-hour period.
Mr. Murphy will be available to respond to your comments and questions
about GATA's open letter to Capitol Hill published in Roll Call this week.
Amongst many other issues in the letter, GATA is demanding an official
independent audit of U.S. gold reserves.
If you would like to post questions or messages for Mr. Murphy you will
need a password specifically for this event. Please register in advance
to have it sent by email.
Find out more about Kitco at info@kitco.com, or call 1-877-775-4826.
Copyright 1996 Kitco Minerals & Metals Inc.
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Introduction to the Prelude of the Open Letter - a request
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GATA Press Release / Request for Internet Email Action to Congress
GATA's Left Flank goes into an all out attack mode with guns blazing
tomorrow against the forces that have been holding down the gold price.
The following Business Wire press release goes out tomorrow at 5 AM:
Gold Anti-Trust Action Committee Sends Open Letter
to Alan Greenspan and Lawrence Summers in Roll Call Magazine.
What Are You Doing With America's Gold?
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Preface to the Prelude of the Open Letter - purpose
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Dallas, Texas - December 9, 1999
Bill Murphy, Chairman of The Gold Anti-Trust Action
Committee announced today from his Dallas, Texas
headquarters that GATA sent a center spread, open
letter to Alan Greenspan, Chairman of the Federal
Reserve System and to Lawrence Summers, Secretary
of the Treasury, in today's Roll Call Magazine.
Roll Call is widely regarded as the leading publication
for Congressional news and information and is the hometown
paper for the most powerful readership in the world.
Roll Call is hand delivered to each office in the House
and Senate and a White House courier is sent to retrieve
400 copies for top administration officials.
The entire open letter may be read at gata.org under "What's New."
Murphy remarked, "Ever since Chairman Greenspan made
the following statement before the House Banking Committee
on July 24, 1998:"Central banks stand ready to lease gold
in increasing quantities should the price rise,"
there has been a growing controversy about whether
the Federal Reserve and or the Treasury Department
have been actively involved in the gold market."
"The Federal Reserve Bank's Open Market Committee
may have the authority to deal in gold coin and bullion,
but all purchases and sales, according to 12 USC 263-359,
"shall be governed with a view to accommodating commerce
and business." If, rather, the Federal Reserve Bank or the
Treasury Department is depressing the gold price in order
to help various and numerous gold short sellers, it is a
clear and illegal violation of the bank's purpose clause,"
Murphy claims.
Chris Powell, GATA Secretary/Treasurer added,
"If the Federal Reserve intervened in the gold market after
the October price rise as Chairman Greenspan said central
banks were prepared to do, it was not to accommodate
commerce and business, but to accommodate one half
of the parties to a private contract who had shorted gold.
For the U.S. central bank to use its powers to benefit one
class of citizens to the harm of another class of Americans
is a gross violation of the Constitution's equal protection clause."
Former Treasury/Justice Department Attorney and GATA Committee
member, Ethan Stroud, also states," If the Federal Reserve Bank
or the Treasury Department is in fact selling gold,
lending gold or writing gold calls to rescue the folly
of the gold shorts, such action is contrary to their statutory clause,
illegal, despicable public policy and contrary to the national interest.
The manipulation of the gold market has caused irreparable harm to gold
owners, gold companies and gold miners as well as all Americans."
To clear up this matter, The Gold-Anti Trust Action
Committee asked for the answers to 11 specific questions
from the U.S. Federal Reserve and U.S. Treasury pertaining
to the orchestration of the gold market. The questions are
along the line of, "Have the Fed, the Treasury, or any other
government agency, either directly or through their
management of foreign custody accounts, collaborated with
the Bank for International Settlements, the Bank of England,
or any other central bank with a view to managing, smoothing,
or otherwise affecting the market price of gold?"
The Gold-Anti Trust Action Committee also says that there
is also growing concern that U.S. gold reserves have been
lent or sold. Those gold reserves are a great national
financial asset, yet they have not been audited officially
since the Eisenhower Administration. So in addition to
answering the 11 questions, GATA is asking for an
independent audit so that the country may be assured
that its gold remains in public hands.
End.
Contact: BILL MURPHY, CHAIRMAN, GOLD
ANTI-TRUST ACTION COMMITTEE,
LePatron@LeMetropoleCafe.com
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Prelude of the Open Letter - people, start your engines
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GATA hopes that all those interested in free markets will alert
their Congressmen and Senators to the open letter to Greenspan
and Summers in Roll Call.
It will be on their desks in the morning.
Here are the web sites to email the House and Senate:
Congress e-mail directory:
webslingerz.com
Senate:
earthlaw.org
To find the addresses and phones for Congressmen by typing in a zip
code:
vote-smart.org
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Dear Friends of GATA and Gold:
++++++++++++++++++++++++++++++++
Here's the text of GATA's two-page advertisement to be published
Thursday, December 9, in Roll Call, the weekly newspaper that covers the
Congress of the United States and is considered the best-read
publication at the U.S. Capitol.
We're very excited about this, hopeful of making a big impact and
mobilizing the gold industry and gold's friends, and deeply grateful to
those whose financial contributions have helped to make this possible.
Once the ad is published, we will call on gold's friends everywhere to
ask members of Congress to ensure that GATA's questions are answered.
GATA is fighting for the gold cause. If you haven't joined us yet,
please do. Gold's enemies won't stop until gold fights back, and they
are confident that they have intimidated the whole industry and even the
countries whose livelihoods depend on gold.
Let's prove them wrong.
Chris Powell, Secretary
Gold Anti-Trust Action Committee Inc.
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Open Letter to Allan Greenspan and Lawrence Summers
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Dear Chairman Greenspan and Secretary Summers:
On July 24, 1998, before the House Banking Committee, and six days later
before the Senate Agricultural Committee, Chairman Greenspan made the
following statement: "Central banks stand ready to lease gold in
increasing quantities should the price rise."
Ever since that comment was made, there has been a growing controversy
about whether the Federal Reserve and the Treasury Department have been
actively involved in the gold market. There has been speculation that
the U.S. government, through your agencies, has been seeking to lower
the gold price to rescue certain financial interests, much as the Fed
orchestrated the rescue of Long-Term Capital Management last year.
Aggressive bullion dealers, hedge funds doing the gold "carry trade,"
and unwise price speculation disguised as hedging by gold mining
companies are most frequently cited as the beneficiaries of this
government intervention in the gold price. As with LTCM, there is
concern about severe risk to the world financial system, this time
because of irresponsible gold lending policies of central banks.
The gold controversy reached the floor of the British Parliament last
June 16, after the Bank of England announced plans to sell 415 tons of
its gold:
"We cannot allow these rumors to grow, because they are extremely
dangerous to public confidence. It has been suggested that the market is
very short of gold, that the short positions may be a substantial
multiple of the total amount of gold currently held by the Bank of
England, and that the bank's real motive is to save the bacon of firms
that are running those short positions. If such a suggestion is being
made seriously, it must be dealt with authoritatively and definitively,
and we want an answer from the government now. — Quentin Davies, Member
of Parliament"
The Bank of England's announcement collapsed the price of gold from $290
to $252 per ounce. But when, on September 26, fifteen European central
banks announced that they would restrict their gold sales and gold
lending for the next five years, the gold price soared to $337. Word
spread that the bullion banks were panicking again.
As if right on cue but in uncharacteristic fashion, the government of
Kuwait then announced it was depositing its 79 tons of gold with the
Bank of England for lending purposes. There was speculation that the New
York Federal Reserve Bank was using all means at its disposal to push
the gold price down to accommodate the financial interests that were
short gold.
The Question Demands An Answer: Is the government of the United States
intervening in the gold market and, if so, why? Chairman Greenspan, we
will take you at your own word that you are intervening in the gold
market as you said you would if the price rose.
The Federal Reserve Bank's Open Market Committee may have the authority
to deal in gold coin and bullion, but all purchases and sales, according
to 12 USC 263-359, "shall be governed with a view to accommodating
commerce and business."
If, rather, the Federal Reserve Bank or the Treasury Department is
depressing the gold price in order to help various and numerous gold
short sellers, it is a clear and illegal violation of the bank's purpose
clause. The government's intervening to help one side over another in a
private contract is illegal, fraudulent and unconstitutional. For the
U.S. central bank to use its powers to benefit one class of citizens to
the harm of another class of Americans is a gross violation of the
Constitution's equal protection clause.
If the Federal Reserve intervened in the gold market after the October
price rise as you said you were prepared to do, it was not to
accommodate commerce and business, but to accommodate one half of the
parties to a private contract who had shorted gold. The other half of
the parties to this same contract who bought gold were cheated and
deprived of a fair market price, denied the equal protection of the law
and cheated of profit potential. It would be an illegal and fraudulent
act that was perpetrated by bankers who are unelected bureaucrats
reigning like tyrants without legal or political supervision.
The manipulation of the gold market has caused irreparable harm to gold
owners, gold companies and gold miners as well as all Americans. It
destroyed a free market, depressed the fair value for an important
financial asset, distorted the value of gold companies on the New York
and American Stock Exchanges and decreased the value of its own and
America's gold assets. The Fed's price fixing action should be
investigated by the Securities and Exchange Commission and the Commodity
Futures Trading Commission. Indeed, the SEC should be concerned that
both the gold market and the stock market generally may be constantly
manipulated now by surreptitious government intervention. Whatever the
policy and practices of the Fed and the Treasury Department are in these
respects, this is a matter of the most profound public policy and it
should be a matter of public record.
TO CLEAR UP THIS MATTER, THE GOLD ANTI-TRUST ACTION COMMITTEE WANTS THE
ANSWERS TO THE FOLLOWING QUESTIONS:
1. Does the Federal Reserve or the Treasury Department, either on their
own behalf or on behalf of others, including other government agencies,
such as the Exchange Stabilization Fund, lend gold or silver, facilitate
the lending of gold and silver, or trade in any securities, such as
futures contracts and call and put options, involving gold and silver?
2. If the Fed or the Treasury Department do lend these precious metals,
do they do so only on a swap or repurchase arrangement basis, or do they
also lend unsecured?
3. What are the credit criteria that a potential borrower needs to
establish with the Fed or the Treasury?
4. What credit limits are applied to borrowers? How do they vary between
secured/swap lending and unsecured lending?
5. How often are counterparty positions marked to market in these
transactions?
6. What happens if market price movements cause the credit limits to be
exceeded?
7. Does the Fed or the Treasury have any counterparty credit
utilizations in excess of 90 percent of the limit?
8. Have any precious metal-related credit limits been amended other than
in credit limit reviews in the normal course of business?
9. Do the Fed or the Treasury Department or any other government agency
ever own or deal in derivatives that are connected with precious metals?
Do any of these agencies write call options against the Treasury's or
Federal Reserve's gold holdings, or write naked call options?
10. Do the above-mentioned credit limits and mark-to-market provisions
apply to derivatives as well?
11. Have the Fed, the Treasury, or any other government agency, either
directly or through their management of foreign custody accounts,
collaborated with the Bank for International Settlements, the Bank of
England, or any other central bank with a view to managing, smoothing,
or otherwise affecting the market price of gold?
There is also great concern that U.S. gold reserves have been lent or
sold. Those gold reserves are a great national financial asset, yet they
have not been audited officially since the Eisenhower Administration. So
in addition to answering the above questions, we ask you to arrange an
independent audit so that the country may be assured that its gold
remains in public hands.
Bill Murphy, CHAIRMAN, LePatron@LeMetropoleCafe.com
Chris Powell, SECRETARY/TREASURER, GATAComm@aol.com
Ethan B. Stroud, Attorney at law,
formerly Justice Department, Treasury Department
John R. Feather, Attorney at law,
formerly legal staff, Federal Reserve Bank
GOLD ANTI-TRUST ACTION COMMITTEE, INC.
Suite 1203, 4718 Cole Avenue,
Dallas, Texas 75205
www.gata.org
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