RBC Report drama continues ...
mips1.net
Uproar over RBC gold conspiracy report
By: Tim Wood
Posted: 2002/06/24 Mon 17:50 | © Miningweb 1997-2002
PRINCETON, New Jersey A bullish report on gold has been strongly disavowed by Royal Bank of Canada, which is now saying it was for internal consumption only. Prior to repudiation, the report marked the first formal acknowledgement by an investment institution of an American led conspiracy to suppress the price of gold.
The report, which was littered with permabull talk, like "gold exploding to the upside", spread like digital wildfire after the Gold Anti-Trust Action Committee got hold of it and mailed it to subscribers. Now knives are out for Murphy who was fined fifteen years ago by the Commodity & Futures Trading Commission for trading violations.
Insiders say the report was never meant to reach the outside world and that Gata chairman Bill Murphy stepped over the line in not seeking permission. One investment professional fumed: "The damage done to the gold market by these clowns' antics [Gata] is difficult to measure."
Canada's Globe & Mail confirmed on Saturday that RBC was officially distancing itself from the report, which was authored by its top professional gold investor, John Embry. Embry could not be reached for comment.
Murphy remains unrepentant and stoic: "Would the professional who called Gata 'clowns' like to review the evidence and debate it all with us?" The professional is actually sympathetic to allegations of gold price manipulation, but hates the way Gata conducts itself and believes it is responsible for creating an environment in which it is impossible to talk rationally about the topic – the UFO syndrome.
"The report was send to me by one of the Gata Army, who received it from one of the private clients of the Royal Bank. I was told it went to their biggest and best clients. It was dated March 2002. Since I saw Gata's evidence of why gold was going to explode, I saw no reason not to put it out, Murphy says.
"I never mentioned John Embry's name, nor requested anyone's permission. As far as I was concerned, it was a public document that drew largely from specifics in Gata's own published research."
Murphy's claim that the report was first distributed to select clients is serious because it contradicts assertions that it was a working document rather than an official opinion. RBC securities clients told Gata that instead of getting the bullish report, they are being offered a "bearish" report that punts Barrick and Placer Dome, both hedgers, while lowering the price target for gold bug favourite GoldCorp.
Murphy has never been enamoured of the institutions and the feeling is clearly mutual. But the antagonism is building to a new level after information was distributed about a CFTC sanction on Murphy for exceeding position levels during a stint in the copper pits.
Murphy shrugs it off: "I have been waiting for that to show up for years. They must be desperate now.
"In 1987 copper was 59 cents. I studied a Frank Veneroso copper study he did for the World Bank in which he felt the price of copper was going to explode. It did, to $1.46 by the end of the year. I made a fortune and then lost it. I made enemies then too.
"A group of bullion banks went after me and got the copper market down to 88 cents. I got killed. After they got me out, copper went right back up again. I swore that if I ever got a chance again, I would make them pay for ganging up on me. I had to pay the second biggest Comex fine ever (Bunker Hunt paid the highest at the time).
"I was also thrown out of the industry without admitting guilt, etc (for unspecified trading violations); that drill. I had no money left to fight the charges. I was a broker for many years in the futures industry and only had one complaint with all that happened in copper. My only other complaint involved a customer tax straddle. I made enemies then too."
Nevertheless, the fine will harm Murphy's image as gold's knight with no interest above truth, honesty and fair play.
Murphy supporters are hardly defecting though. One high profile figure said RBC must rebut rather than just disclaim the Embry report. "If we're wrong, why don't they just provide us with some evidence demonstrating that we are wrong - instead of just making unsubstantiated statements," he said.
The RBC flap coincides with another gold bug dust-up. Embry's keenest competitor, Eric Sprott, on Friday retracted statements about Barrick's vulnerability to rising gold prices because of its hedge book. It was an unusually fulsome apology that endorsed Barrick's own sense of invincibility about its premium gold sales programme. |
