Dave, the following is latest Gold Anti Trust Action (GATA) news.
This release also includes mention of silver along with gold.
As President of this company Tyhee could you itemize which of the
following precious metals this company may search for on the
present land areas it has access to. Thanks, Doug.
precious metal quotes from 10/2/99
305.30 Gold - Bumbat in Mongolia
383.50 Palladium -
404.50 Platinum -
005.13 Silver -
Subj: Midas - "BOMBSHELL !"
Date: 10/1/99 3:33:50 PM EST
From: LePatron@LeMetropoleCafe.com
To: dougak
Le Metropole members,
Midas du Metropole served commentary at James Joyce Table, "Bombshell !"
I just recieved this wonderful letter from Ron Manners,
Chairman of Croesus Mining NL in Australia...
I have heard of "Croesus" for some time now and as colleague,
Marshall Auerbauk of London says, "Ron is a great guy."
Dear Bill,
I am Chairman of an Australian listed gold miner, Croesus Mining NL,
and have been watching your group's activities for some time.
Congratulations on being about the only informed group to "get it right"
with respect to the gold price surge.
I had the good fortune to refer to your comments in my Chairman's address,
released to our shareholders used as a reference....
I included the following comments as a links page for my own private
Foundation web site which should be up and running by mid next week.
"The only 'gold site' to have correctly predicted the September 1999
gold price upturn..."
Please keep up the good work.
I can tell that we both look forward to an enjoyable gold season.
Sincere regards, Ron Manners.
P.S. Our Foundation web site is about 50% loaded, so please check it out!
mannkal.org Telephone: (08) 9322 6777 Facsimile: (08) 9322 6788
Mannwest Group and Mannkal Economic Education Foundation
Email: mannwest@ibm.net
All the best, Bill Murphy
Chairman, Gold Anti-Trust Action Committee, gata.org
Le Patron, Le Metropole Cafe, lemetropolecafe.com
"BOMBSHELL !"
In the last Midas, I reported to you that several sources told me that
the Federal Reserve was "jawboning" futures commission merchants not to
pressure firms to "deliver gold." In other words, they know that the
gold is not there for the shorts to deliver and, as I have long suspected,
it appears that they are protecting the positions of certain bullion dealers
and of other financial institutions that are short gold.
This corroborative information is clear evidence that the gold market
has been manipulated as the Gold Anti-Trust Action Committee has alleged.
Two days ago, I received information that a futures commission merchant
was told by another futures commission merchant that it was not prepared
to deliver gold on its " gold forward or futures contract" obligations
that were expected by a client of the firm who was standing for delivery.
In essence, the shorts were declaring "force majeure" - WE CANNOT DELIVER.
This is not a Comex problem as far as I know. From what I am hearing,
it is an OTC problem, where few people really know what is really going
on behind the scenes. The firm that expected delivery was stunned. It was
about to be "floored." According to our sources, this firm then got a
phone call from the Federal Reserve requesting that they do not pressure
the shorts into making delivery and that they would make sure that the
longs received their gold. I am not privy to exactly how that would happen.
According to another source, there were actually a couple of firms that
told the longs that they were not prepared to deliver "forward" contract
gold in the size expected. Goldman Sachs is one of the firms mentioned
to me that is not prepared to fulfill its obligations. That is what my
sources in the market place are telling me.
It should be of no surprise to any of you that Counterparty Risk
Management Group Co-Chair's, Goldman Sachs and J.P. Morgan were all over
London CNBC this morning talking down the gold market. Sources tell me
that Goldman suggested on the tube that the big gold shorts covered on
the run up while Morgan's Kevin Crisp was calling for $275 to $280 gold
when this blip was sorted out. Whose risk are they both concerned about?
Strange. Today, Goldman Sachs and Chase banks were big buyers of gold
options on Comex. Why buy options if you are not bullish or you believe
the gold market has topped out for the time being. Yes, the buying can
be for clients. Are their clients not listening to them? On that note,
for maybe the first time in Comex history, the gold option volatility
is higher than that for the silver contract.
There are other Goldman Sachs stories out there, but I want more confirmation
of them before I present them to you.
Last night, I received a phone from a "very plugged in hedge fund manager"
who confirmed to me that George Soros is long "forward" gold, NOT COMEX GOLD.
That is not a rumor anymore; that is a fact, according to my source.
Soros is also long aluminum and silver according to that same source.
This source also tells me that George Soros most likely does Comex business
with Refco as do many of the big hedge funds. I do not know about who he does
his OTC business with or who he trades with in London. However, according to
this hedge fund manager, one should start at Refco as a starting place in
tying this altogether. Is that the firm who is being denied delivery?
This extraordinary development, an affront to all who believe in free markets.
There has been an orchestration by some bullion dealers and some of our own
"officialdom" to hold down the gold price so that their own selfish interests
can be served. In the meantime, gold miners are out of work, gold companies
are going bankrupt, gold stock shareholders have been decimated, etc.
This is an outrage of highest order, and it has been going on for some time.
The following letter was sent to the Chairman of the Joint Economic Committee,
James Saxton, to prepare him for our meeting way back on April 27.
Honorable James Saxton
Chairman Joint Economic Committee
339 Cannon House Office Building
Washington, D.C. 20515-3003
April 26, 1999
Dear Congressman Saxton,
The purpose of my visit is to try and be of some assistance to you and
your committee regarding the issue of the proposed IMF gold sale. It is
the opinion of the Gold Anti Trust Action Committee that the real reason
for the intense lobbying and orchestrated PR barrage about selling IMF
gold by the White House and the Treasury is not being revealed to
Congress. We believe that the real reason to promote the IMF sales has
to do with a concerted manipulation of the gold market to keep the price
down in order to bail out the gold shorts of Wall Street (i.e., bullion
banks, hedge funds, and other financial institutions).
That has been going on for some time but began in earnest when Alan
Greenspan made this statement before a Senate Agriculture Committee on
July 30, 1998, "central banks stand ready to lease gold in increasing
quantities should the price rise". We would like someone in Congress to
ask Mr.Greenspan exactly what he meant by that comment when he is
testifying again before committee.
It is important to understand that there is a natural supply/demand
deficit in the gold market, meaning that demand for gold far outstrips
natural mine supply. Our associates figure that deficit is around 1200
to 1600 tonnes and that deficit has been met by gold producer forward
selling, some central bank sales, scrap supply and gold lending. We
think that the gold lending is now so large that it has created a
potential "systemic risk" problem. Bullion dealers have been lending out
central bank gold to financial institutions at 1% interest rates. The
gold is sold into the physical market (depressing the price) and the
proceeds are then invested elsewhere. This is called the "gold carry
trade" which operates under the same principle as the "yen carry trade"
which blew up late last summer when the yen rallied strongly against the
dollar. The short term demise of the yen carry trade caused great
financial consternation.
The "carry trades" only represent cheap sources of capital if the price
of the entity borrowed stays the same, or decreases. When the price of
the yen suddenly rose sharply late last summer, it caused great
financial distress as what had been very inexpensive loans suddenly
became onerous. But, at least they could get out of the loan via
liquidating the yen; in essence giving it back.
We believe that the speculative gold loans are now as high as 3,000
tonnes of gold and that the total gold loans (producer forward sales,
etc.) have reached 8,000 to 10,000 tonnes. If we are correct and, at
some future date, the price of gold rallies like the yen did, there will
be financial turmoil. As yearly mine supply in 1998 was only 2529
tonnes, the borrowers will not be able to lay their hands on that much
gold very quickly. Inevitably, there will be defaults and many financial
institutions here and abroad will go bust. Many of the banks are getting
in this too deeply and are at risk of becoming "Long Term Capital
Managements." Panic is definitely not too strong a word to be used here.
This appears to us that the current administration and the NY investment
houses are in cahoots and what we may have here is one of the great
financial scandals in US history. Financial commentators often point to
the muddling, low gold price as to how all is well in the economy and
administration officials point to a low gold price with pride, almost
using it as a report card on the great job they have done. The bullion
banks and investment houses have picked up on this and are making sure
that the price does not go up by supplying gold to the market place.
They feel they can borrow gold with impunity, even at these low prices,
as a result of Mr. Greenspan's comments. And, of course, there is the
connection of Wall Street to Secretary of the Treasury, Robert Rubin.
Everywhere we turn in our investigation, we find Goldman Sachs, his
former firm, involved in gold bashing efforts.
Our committee (GATA) has retained one of the premier anti-trust firms in
the United States, Berger & Montague of Philadelphia, to assist us in our
investigation into this matter. If further evidence corroborates what we
already have, we intend to sue some New York bullion dealer/investment
houses for violation of the Sherman and Clayton Acts.
These firms are making fortunes (while many associated with the gold
industry are being destroyed) through investments, after borrowing gold
at 1% interest rates. However, we think that some of them are making
these fortunes illegally as a result of collusive activities and, in the
process, have created a "ticking time bomb" that could blow up to be a
financial disaster in the future.
It is this cozy arrangement the administration has with these investment
houses that we believe is the real reason behind the constant calls to
sell the IMF gold. They both benefit from the sale of the IMF gold, but
the poor countries in South Africa and West Africa lose as their mining
industries deteriorate. I know you have had other experts testify on all
of this to you so I will not get into that. But the American public, as
well as this country's mining industry, could really lose, too. Our last
monthly trade deficit was $20 billion. At some point, there will be an
attack on our dollar. Our gold resources are one of our greatest assets.
Why sell any of them at these very, very low prices? We can point to our
gold stocks in defending our dollar in the future. There are many
financial analysts that think a financial bubble has been created. That
may or may not be the case, but to advocate gold sales at this point in
time will be looked on as great folly if there is a bubble, and it bursts.
Yes, the current administration and the greedy Wall Street houses are
winning the day today with this gold market manipulation. But, if this
charade about gold is not stopped now, someday the American public will
be big losers if a financial panic sets in. If someone had stopped the
Savings and Loans from their over-extensions a decade ago, we might not
have had that big a crisis. The potential gold loan crisis could dwarf
the Savings and Loan one if the orchestrated gold selling game is not
curtailed now. I have attached some material for your perusal which
elucidates much of what I have brought to your attention.
That material is:
1. An April 16 Reuters PRNewswire in which Chris Thompson, the Chairman
of one of the world's biggest gold producers, Gold Fields Limited,
decries the tactics of the New York based bullion dealers.
2. An essay by John Hathaway, the highly regarded senior portfolio
manager of The Tocqueville Fund in New York, entitled, " Bullion Dealer:
Spin Meisters of the Gold Market"
3. Commentary from Veneroso Associates entitled, "Gold Zaitech - A Bear
Bubble Driven By Cheap Credit." Frank Veneroso wrote the 1998 Gold Book
and is one of the leading authorities in the world on the gold market.
He has been economic policy advisor to the World Bank, the I.F.C. and
the O.A.S. as well as many countries.
Frank Veneroso is also one of the leading authorities on the gold loan
issue. I was with Frank when he determined out how large the gold loans
are and I saw how he figured it out by learning what the gold loans were
at individual bullion banks. In addition to that, I was there when he
spoke to Terry Smeeton, who just retired as England's Chancellor of the
Exchequer, about the gold loans last year. Five years ago, Mr. Smeeton
was very chatty with Frank about the loans. Last year, he would say
nothing and could not get off the phone fast enough when Frank told him
how large he now thought the gold loans had become.
4. Commentary from the highly regarded James Turk, who publishes the
Freemarket Gold & Money Report. James is one of the other leading
authorities in the world on the gold market and is known by all in the
industry. His April 26 piece is very timely and covers the problem of
the payback of the gold loans. His work shows that it could take a gold
price of $608 to $923 to solve this very sizable problem.
5. Brief commentary from the well established "International Harry
Schultz Letter." Harry Schultz also expounds on the nefarious tactics of
the bullion dealers.
I look forward to meeting you on Tuesday at 1:15 and hope that we may
be of help to you regarding this IMF gold sale issue.
Best regards, BILL MURPHY
I will elaborate on this new development this weekend. In the meantime,
I am taking this latest information and presenting it to the appropriate
Congressional Committees. In addition to the Joint Economic Committee,
GATA has established contacts with The Senate Banking Committee, The
House Committee on Banking and Financial Services, The Capital Markets
Committee and the staff of Congressman Ron Paul.
I am hoping these latest revelations will lead to a full scale investigation
of the "manipulation" of the gold market.
All the best, Bill Murphy
Chairman, Gold Anti-Trust Action Committee, gata.org
Le Patron, Le Metropole Cafe, lemetropolecafe.com
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