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Hello everyone. I would like to extend a
special greeting to those Gold Anti-Trust Action Committee supporters who
have come from all over the world to attend this conference.
Two years ago from this very podium, I
presented evidence the gold market was manipulated by a cartel of bullion
banks. Since then, GATA has secured massive amounts of additional evidence
that confirms our original assessment.
For those of you still not familiar with
the staggering amount of price-fixing proof GATA has on the Gold Cartel, I
suggest you go to http://www.gata.org/. GATA
has laid out more evidence of a concerted effort to manipulate the gold price
than the United States Government has publicly produced on Bin Laden's direct responsibility for the Terrorist attacks
against America.
America
rightly declared WAR on the Muslim Terrorists.
GATA rightly declared a war of our own against the Gold Terrorists.
Three years ago my colleague, GATA
Treasurer/Secretary Chris
Powell, suggested we do something about the obvious price
capping activities of the bullion banks.
That is how The Gold Anti-Trust Action
Committee came into being. Nothing we have discovered the past 3 years has
contradicted our initial assertion. Over these ensuing years, not one person
in the gold industry has told us where we are wrong or why our sobering
evidence is faulty. NO ONE!
That is not to say that there have not
been highly visible individuals in the gold industry casting aspersions our
way. For the first couple of years the executives of heavily hedged gold
producers, Barrick and AngloGold, initiated some of
their highly attended presentations by chortling at the "conspiracy
nuts" - to elicit some "yucks" from
the many sycophants in their audience.
I don't think they will use that tactic
anymore. If a bunch of crazed madmen living in the caves of Afghanistan can pull off a successful
conspiracy via those awful Terrorist attacks on the U.S., do you
not think it conceivable that the richest and most powerful people in the
world could effectively conspire to manipulate the price of gold?
Mocking the concept of conspiracies is
all of sudden "out." The truth of the matter is corporate
price-fixing conspiracies are very common. What is most uncommon with the
gold conspiracy is the magnitude of this price-fixing case, the parties
involved and the devastation it has wrought on so many unsuspecting victims.
It was clear to GATA from the very
beginning that bullion banks such as Goldman Sachs and Chase Bank were
capping all gold price rallies. Every single gold spike, whether a minor or
major one, has been simultaneously stuffed by these two banking institutions.
I think it fair to say no market has
ever traded like gold. Spike, smash. Spike smash. This occurs when a vigilant
Gold Cartel is surprised by some announcement, or event, which brings on a
surge of physical gold buying, leaving the cabal without enough physical on
hand to slow down the price pops. However, calls go out, physical is
mobilized, and before you know it, the price of gold is trashed right back
down to where the spike began in the first place.
This cartel is extremely well organized.
What do you think the odds are the "official" price of gold would
close out 1997, 1998 AND 1999 at EXACTLY $289 per ounce? I doubt the odds
makers in Las Vegas
would even touch that one. But, that is exactly what happened and will give
you some idea how precise the cabal's work has been over the years.
When Chris and I formed GATA, our goal
was to expose this manipulation, fight for a free gold market and to win the
day for so many GATA contributors who believed we could get the job done. We
have given our best effort to do just that, as have so many in GATA's Army of supporters.
The revelations of our findings present
a most troubling picture:
FIRST. The manipulation of the gold
price goes way beyond certain bullion banks. It includes the controversial
$40 billion Exchange Stabilization Fund (which operates solely under the
auspices of the President and Treasury Secretary); the IMF, The Bank For
International Settlements and our Federal Reserve Bank.
SECOND. This manipulation has made a
mockery of the notion that American financial markets are free trading. While
government spokesmen preach that concept to an unsuspecting world, the
banking and political elitists rig a market when it is in their best interest
to do so. It is very sad to think of how many lives were lost fighting
Communism, only to learn that our
Government has stooped to its OWN Orwellian approach to the markets.
THIRD. Fair play in America is
slowly fading into oblivion. Many of us here to today have seen the
decimation of our gold investments over the past half-decade. All the while,
The Gold Cartel and their favored clients have
borrowed gold at 1% interest rates, sold it in the physical market, and
invested the proceeds at 6% U.S. Treasury rates.
FOURTH. And, this one ought to shock you! More people have died because
of the heinous activity of The Gold Cartel than have been killed by the
Muslim Terrorists. On behalf of GATA, I have been to Vancouver and Toronto in
Canada: New York twice, Washington, D.C. 3 times, New Orleans twice, Denver,
Austin, Texas and Fairbanks, Alaska in the U.S.; Paris; and to Johannesburg
twice, Durban twice, Cape Town and Pretoria in South Africa.
It was on my two trips to South Africa that I saw first hand the
economic devastation of the Blacks in sub-Saharan Africa.
There is just no money to combat their terrible disease, crime and
unemployment problems. Aids and cholera epidemics are out of control. It is
just awful.
If it were not for The Gold Cartel and
their sinister operations, the price of gold today would be well north of
$600 per ounce, which would set off a natural resource boom. Money would be
freed up to deal with these plagues that are killing off so many.
How does the U.S. address this issue? With
pompous deceit! A few years ago, the IMF proposed to sell 3000 tonnes of its
gold to help the poor African countries via a debt relief program. President
Clinton, Robert Rubin and Lawrence Summers went to great lengths to influence
the passage of such a proposal. What hypocrisy! They did not care about the
Blacks as they proudly proclaimed. They wanted the 3,000 tonnes of physical
gold to flood the market to perpetuate the gold fraud.
Fortunately, they fooled almost no one. Thirty-six
out of 41 poor African gold producing countries voted against it; as did the
Congressional Black Caucus; as did the leadership of the Democratic and
Republican parties in the U.S.
The IMF, banking and political elitists
were rebuffed... but not to be denied.
In October 1999 the IMF held a meeting
for its member countries in Santiago,
Chile, only a
couple of weeks after a lightening $84 run-up in the price of gold. GATA's Mike Bolser found the
IMF manual distributed to the attendees, which explains how member central
banks are to account for something called gold swaps - gold that leaves the
vaults of the central banks. In effect, Bolser came
across the IMF's gold "play book."
As you will learn shortly, it appears
the gold swap issue is at the heart of the manipulation of the gold price.
Bolser's
discovery led GATA's Andrew Hepburn to query the
IMF with the following:
Why does the IMF insist that members record swapped gold as an asset when a legal
change in ownership has occurred?
The IMF answered:
"This is
not correct: the IMF in fact recommends that swapped gold be
excluded from reserve assets. (see Data Template on International Reserves
and Foreign Currency Liquidity, Operational Guidelines, para.
72,"
Over the years the GATA camp has
received nothing but denials from the U.S. Treasury, Alan Greenspan, BIS,
bullion banks and the IMF. In essence, their responses have been
well-couched, disingenuous and difficult to disprove. THIS response was NOT
because of the sleuthing of Canada's
Hepburn. Their constant lying finally caught up with them. The central bank
of the Philippines
responded to Hepburn as follows:
"Beginning
January 2000, in
compliance with the requirements of the IMF's
reserves and foreign currency liquidity template under the Special Data
Dissemination Standard (SDDS), gold swaps undertaken by the BSP with
non-central banks shall be treated as collateralized loan. Thus, gold under the swap arrangement remains to
be part of reserves and a liability is deemed incurred
corresponding to the proceeds of the swap."
In other words, the IMF instructed the
central banks that even though the gold was gone, it should still be counted
as part of their reserves. The central banks of Portugal,
Finland
and the ECB itself all confirmed the
Philippine's response to Hepburn.
The GATA camp caught the IMF flagrantly
deceiving the public. Since then, the IMF has refused to answer all follow-up
questions from GATA supporters.
This is no insignificant issue.
On May 10th of this year The
Gold Anti-Trust Action Committee held the GATA African Gold Summit in Durban, South
Africa. Leading South African gold
producers; the National Union of Mineworkers; the largest S.A. trade union (Cosatu); The Ministry of Minerals and Energy; the South
African Reserve Bank; and representatives from 5 sub-Saharan African
Governments attended. The all day affair was widely covered by the South
African press, including two days of television coverage by the South African
Broadcasting Company.
GATA was fortunate to have James Turk, Reg Howe and Frank Veneroso take time
from their very busy schedules to go all that way and give evidentiary
presentations in support of GATA's allegations.
It has been Frank's contention for years
that the so-called gold loans of the central banks are far greater than the
5,000 tonnes acknowledged by the gold industry. At the summit, Frank
explained how he came up with numbers of 10,000 to 16,000 tonnes of gold
loans, or two to three times the amount acknowledged by The Gold Cartel.
Why is this so important? It's very
simple. Mine supply is only 2500 hundred tonnes per year. The annual
supply/demand deficit is running around 1600 tonnes per year. The only way
the Gold Cartel can keep the gold price from rising and to ration the limited
mine and scrap supply is to feed central bank gold into the physical market.
The difference between Frank's numbers
and those used by the gold industry are extraordinary, for if Frank is
correct, which I am sure he is, The Gold Cartel will begin to run out of
ammunition in a few years. Their gold hoax has to crumble.
It is very ironic that in harming so
many innocents, the blundering bankers have set the stage for the detonation
of a gold derivative neutron bomb that is going to rock the financial
markets, one that could even threaten their own viability. That is because
there is no way they can get their gold back short of a rise in the price of
many hundreds of dollars per ounce, perhaps even $1,000 per ounce. I will
leave that topic for Frank and return to the critical gold swap issue.
At a January 1995 Federal Open Market
Committee meeting, Virgil Mattingly, the general counsel to that committee
made the following statement:
"It's pretty clear that these ESF
operations are authorized. I don't think there is a legal
problem in terms of the authority. The statute [31 U.S.C. s. 5302] is very
broadly worded in terms of words like 'credit' -- it has covered things like the gold swaps -- and it
confers broad authority."
The GATA Army bombarded Senators,
Congressmen, the U.S. Treasury and Alan Greenspan asking for an explanation
of this stated reference to ESF gold swaps. This was pursuant to our Army
receiving HUNDREDS of letters from Senators and Congressmen via the U.S.
Treasury that the ESF "has not held any positions in gold since
1978."
The heat became so intense that
Greenspan felt compelled to respond to Kentucky Senator Jim Bunning by
forwarding a memo to him that Mattingly had written Greenspan. Mattingly stated
the following:
"Given the passage of time, some
six years, I have no clear recollection of exactly what I said that day but I
can confirm that I have no knowledge of any "gold swaps" by either
the Federal Reserve or the ESF. I believe that my remarks, which were
intended as a general description of the authority possessed by the Secretary
of the Treasury to utilize the ESF, were
transcribed inaccurately or otherwise became garbled."
That answer just does not pass any kind
of smell test. Not only were his comments recorded, all the Fed Governors
present signed off on the final transcript. Clearly, this was a pitiful
cover-up attempt reminiscent of the missing 18 minutes of Watergate Tapes.
Think about this. To accept Mattingly's
answer, in a precedent setting sense, ought to be able to give defense attorneys the right to throw out recorded and
transcribed confessions by using the "garbled defense"!
What the IMF, BIS, ESF, The Fed and the
bullion banks don't want you to know is that a big percentage of the central
bank gold has been swapped out. It is GONE. They are petrified they will be
found out and will go to any lengths to conceal the real gold truth. GATA's gold swap revelations make it way more than likely that Frank Veneroso's
central bank gold numbers are the correct ones, not the ludicrous ones
postured by the gold industry.
By only
focusing on this one GATA issue, it is easy to understand the magnitude of
the gold problem, unnecessarily created by greedy elitists.
This problem is most scary. While the
West dumps its gold to perpetuate the strong dollar gold scheme set in
steroid-like motion by Clinton,
Rubin, and Summers, the East is scoffing up cheap gold. The Russians, Chinese and Muslims/Arabs are hoarding
physical gold, for they realize a price explosion is coming.
The Russians have now have
a gold coin as currency, the Chevronet, and are
building their gold reserves, not reducing them. The Muslims are beginning to
run with a gold coin called the Islamic Dinar,
while other Arabs are loading up on gold via purchases out of Turkey and Switzerland. Meanwhile, the
Chinese have been scouring all over South Africa, quietly buying
physical gold. AND, this January the Chinese officially open up their gold
market to their public.
Get the picture? The banks in the West
are going deeper and deeper into gold hock with their lending and swapping
while the East is saying "thank you very much" and raking it in.
On May 10, 2000 Frank, Reg, Chris and I met with the Speaker of the House Dennis
Hastert and presented this "Gold Derivative Banking Crisis"
document to him. We explained to The Speaker that if the U.S. bullion
banks continued their gold price-capping follies, our financial system could
be held hostage by a foreign power that threatened to buy up the physical
gold market.
Gold has now become a national security
issue. Like it or not, the gold problem for the U.S. worsens every day like a
malignant cancer. The choice is to deal with the gold problem now, which will
require painful chemotherapy-like treatments, or stay
in denial - which could be fatal.
The press in the United States
has chosen denial and total suppression of the subject. I was on CNBC 34
months ago. That was the last major coverage
GATA received by the American free press. A disturbing revelation for me has
been to realize there is NO SUCH THING in America as a FREE PRESS when it
comes to opposing the "big money" interests. It is a disgrace and
makes a mockery of our chastising the press of other countries over
censorship.
On December 7, 2000 our colleague, Reg Howe, filed a Complaint in Massachusetts Federal
Court against 5 bullion banks, the BIS, Treasury Secretary Summers and Alan
Greenspan/William McDonough of the Federal Reserve System. On November 5,
2001 Reg survived a motion to dismiss by these most
formidable of opponents. Only one paper in the U.S.,
the New York Post, has even mentioned this case, which may be one of the most
important in U.S.
history.
I have had 3 lunches with some very
sharp Wall Street Journal reporters. The result: nada. Reuters and Bloomberg
will not carry GATA releases and refuse to mention our existence. The right
and left wing investigative TV/newspaper reporters, that say they will take
on all comers, REFUSE to take on the big money Wall Street crowd on the gold
issue. This lack of journalistic integrity will eventually take its toll.
This is of concern to ALL U.S. citizens.
Thomas Jefferson warned Americans to be very wary of the devious New York banks over
two hundred years ago. For these bullying banks to have so much power over
the U.S.
press is frightening. The Gold Cartel maneuvers are
most un-American and diametrically opposed to what our country stands for.
That is what the Gold Anti-Trust Action
Committee and our Army of supporters have worked so diligently to expose.
We are not going to let them get away
with it. They are going to pay for the harm they have done. GATA will not
rest until this rotten cabal goes down - until WE prevail and WE win the day.
My colleague Chris Powell described
best what the GATA effort is all about in his coverage of Reg
Howe's day in court against 14 hotshot Gold Cartel lawyers:
"When it
was over, the courtroom cleared out quickly, and Howe was left alone at the
counsel table packing his books and papers into his briefcases. Forgive the
editorializing, but I couldn't help but think of the scene at the end of the
trial in that wonderful movie, "To Kill a Mockingbird," when
Gregory Peck, playing the quietly heroic defense
lawyer, Atticus Finch, does the same thing, seemingly alone -- and yet he is
not alone, but rather watched by the oppressed people in the gallery with
awe, admiration, and respect for standing up against the most hateful and
vicious power.
"What I
saw today was really not so different."
Chris went on:
"Enough of
the cursed cynicism that the courts are as rigged as the markets, that there
is no fighting the power. We know some things about market rigging but there
is no evidence that anything in court today was rigged. We got a day in court
if not quite yet OUR day in court. And for all its faults this remains a
country where one brave man pleading his own case can summon the
representatives of all the money in the world and put the bastards in danger
of having to answer for themselves."
That, my friends, is what GATA is all
about (pointing to GATA painting).
Thank you.
Bill Murphy, at the New Orleans Conference
Lemetropolecafe.com
Le Metropole
Café is a Membership site. Visit and Experience a 2 week Free Trial !
Bill Murphy is chairman of the Gold Anti-Trust Action Committee
and proprietor of www.LeMetropoleCafe.com, an Internet site devoted to financial commentary
with emphasis on the precious metals.
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