By Bill Murphy
Chairman, Gold Anti-Trust Action Committee
May 22, 2000
I had not intended to put this out today but I am so
ticked off that I decided a change in the game plan was
in order.
We are truly in a WAR of sorts. As we all know, the
collusion crowd has the money and power. We have the
truth and the Internet.
So I plan to use the Internet to get our side of the
story out to combat the stifling tactics of certain
bullion dealers, the mainstream press, and certain U.S.
government officials.
After 15 months of trying to interest a mainstream U.S
news publication to do a story on GATA, we finally
achieved a breakthrough as the Dallas Morning News is
coming out with one this week. Today I went to the Arts
District Gallery at the Fairmount Hotel to have my
picture taken alongside a GATA limited-edition print
with GATA's French artist, Alain Despert.
The Dallas Morning News should at least give GATA a
fair shot in our first real mainstream U.S. newspaper
story. The only hitch is that the House Banking
Committee aide I told you about in recent commentary
refuses to return calls from the Dallas Morning News.
This is what I wrote last week about this staff aide:
"Allow me to let you in on some of the inside scoop
going on here. Over the past year, the name Ted Truman
has popped up in our circles as a CIA snoop. That is
also the word around certain politicos in Washington.
He used to work for the Federal Reserve but he had a
falling out with Alan Greenspan. Al Gore picked him to
go work at the Treasury, which is where he is employed
at the moment. After one of our meetings in Washington,
we met with one of GATA's support contacts and told him
the names of the people we met with. Immediately he
told us to be careful with one of them 'because he has
a direct line to Ted Truman.' What I didn't tell you
was that I set up this staffer with the direct line to
Truman to find out if he would be fair with us or
report information to the enemy camp; that is, the U.S.
Treasury and his CIA snoop contact, Truman."
In that commentary, I revealed that the committee
staffer did certain things that gave away that he was
indeed feeding what GATA told him to the Treasury. His
refusal to talk to the Dallas Morning News, which wants
only to confirm that our meeting took place, is
additional evidence that we have a problem here.
Late last week a wealthy GATA supporter who was
thoroughly annoyed about this apparent Treasury/CIA
intrusion and obstruction into our search for the truth
told me that he telephoned Sen. Jon Kyl, a member of
the Select Committee On Intelligence Committee. It is
being arranged for me to talk with Senator Kyl to tell
him of my frustrations and alert him as to what has
happened in my personal life these past two months.
It cannot help but be beneficial that I have been to
the home of Senator Warner of Virginia, who is also on
the Select Committee On Intelligence.
That is for me to work on tomorrow.
Tomorrow I am also to have lunch with this New York
GATA supporter, who is in town with a governor of the
New York Stock Exchange. They both want to hear of
GATA's findings.
Today I met with a friend of U.S. Rep. Dick Armey of
Texas, the House majority leader. This was arranged by
another GATA supporter. This Texan, who also has
contributed to GATA, was fascinated, took the "Gold
Derivative Banking Crisis" report, and GATA's open
letter in Roll Call and said he was going to bring it
all to Armey's attention immediately.
Meanwhile I received the following email over the
weekend from yet another GATA supporter in regard to
Barrick Gold. (During a subsequent phone call, I
learned that Barrick CEO Randall Oliphant was at the
head table with Barrick board members Howard Baker (the
former Senate minority leader and presidential aide),
and former Canadian Prime Minister Brian Mulroney:
"Dear Bill:
"On Tuesday at 9:50 a.m. about 10 minutes prior to the
shareholders meetings of Barrick, Randy Oliphant, who
had already took his seat at the head table, got up and
proceeded down the aisle and he stopped in front of me.
He said, 'Hi, I'm Randy Oliphant.' I replied that I
knew who he is. Then I gave my name. He replied, 'I
have been trying to meet with you. You are part of the
GATA organization, are you not?' I said I was.
"He replied that Barrick would like to meet with GATA
to hear their views. I responded that I would contact
you and they said that would be great. After the
meeting I was introduced to the director of investor
relations, Richard S. Young, and we had quite a
conversation about hedging. It was there that I learned
that Barrick hedged not only gold but also lease rates
for two years hence. They have covered their position
mathematically such that they would never suffer if
gold skyrocketed.
"Then, I mentioned their 6.8 million call options and
told him I knew who Barrick's counterparty is --
Morgan. He didn't blink an eyelash. He wanted to know
how we knew. I told him Morgan had derivatives
outstanding of $38 billion and was the only bank with
great exposure beyond one year. He was quite surprised
that we knew this. He asked me why I thought the price
of gold is down. He thought that I was going to say
'central bank sales,' but no, I told him that it was
the derivative market that is drowning gold. He then
invited me and GATA to discuss the above with them.
"That is the sequence of events."
This is getting stranger and stranger. Why did CEO
Oliphant track this GATA member down? This GATA member
told me that the room was set up for 2,000 people and
he was halfway back in this big room. I have sent
Randall Oliphant material over time and he has never
responded. How hard would it be to get hold of me?
On Reg Howe's masterpiece, "Deutsche Bank: Sabotaging
the Washington Agreement?"....
Reg wrote:
"This table portrays a very disturbing picture.
Deutsche Bank, the largest German bank, which had
precious metals derivatives at the end of 1996 with a
total notional value under US$5 billion, by the end of
1999 had grown this business to a total notional value
in excess of $50 billion, or by more than 10 times in
three years. What is more, a huge amount of this growth
came in 1999, especially in the last half, as can be
seen by comparing the average notional value for 1999
($37.7 billion) with the year-end notional value ($51.2
billion). Note also that this growth was almost all in
the longer maturities, shorter to longer maturities,
mostly from under three months to over a year."
This is staggering. We know the bullion dealer
apologists will say there is double accounting involved
and fluff so as to demean Reg's discovery. Serious
derivative specialists will know better when they look
at the fine print about these derivative numbers. Both
Reg and Frank Veneroso know they are for real and mean
a great deal.
Why that is so is being explained to people who can do
something about it when they realize that we now have a
"Gold Derivative Banking Crisis" that builds in
explosiveness every day.
Old members of www.LeMetropoleCafe.com will remember
when Charles von Arenschildt mocked GATA because we
called him a "Hannibal Cannibal." But that is just what
he is. You see, the bullion dealers, like Charlie here,
make money by leasing cheap gold from central banks and
short-selling the gold to create cheap dollars. They
also make money by selling all these exotic hedge
strategies to gold producers. They take the gold
producer out to lunch and then eat him for lunch by
feeding him all this bearish propaganda and scaring him
half to death about the consequences of not hedging.
Just ask Newmont why they hedged at the bottom of the
market last year.
It is easy to understand. Take gold at $275. If the
"Hannibal Cannibal" bullion dealer told the producer
tomorrow that gold was going to $600 to reach its
proper equilibrium price, the dealer would have no
business until gold reached $600. The producer would
just cover its hedges and make money on its gold
production, which is how the business used to be anyway
before certain bullion dealers screwed it up.
Oh yes, Charlie von A. came to Deutsche Bank from
Morgan Stanley in 1996 to take over from the retiring
Deutsche Bank bullion honcho. Charlie must have been
paid megabucks and it is clear he is the one who
started Deutsche Bank on its aggressive precious metals
derivative programs. Charlie is the man who has taken
them to $50 billion in derivatives. GATA operatives
will have a few questions to throw his way during the
next Deutsche Bank conference call.
The gold derivative situation is out of control and a
danger to the banking system. We now believe that the
gold loans exceed 11,000 tonnes. Gold mine supply is
only 2,579 tonnes per year. That is a recipe for a
banking disaster. It is only a matter of time now
before big private money realizes the extraordinary
money to be made by going long gold and taking on the
bullion banks and central banks. The bank's greed has
put them in a position where there is no way out. |
