GATA sweeps South Africa on eve of Durban conference

Section:

8:38a ET Wednesday, May 9, 2001

Dear Friend of GATA and Gold:

Monday the Financial Times wrote about us, and
today the London Evening Standard did. Both stories
are in the context of the report out of the London
Business School dismissing the impact of derivatives
on the gold market and purporting to "refute" GATA's
complaint. (If only the big papers remembered their
Journalism 101 -- off the opinion page, it's "rebut,"
not "refute.") But no matter. The important thing
here is that word is getting out enough that the
other side has had to start acknowledging us.

You can help by contacting these and other news
organizations to call attention to the reference to
"gold swaps" by the U.S. Treasury Department's
Exchange Stabilization Fund in the recently
declassified minutes of the January 31, 1995, meeting
of the Federal Reserve Board's Federal Open Market
Committee. The U.S. government's surreptitious
manipulation of the gold market is now a matter of
public record. Eventually we're going to find a news
organization and a reporter who are interested in
doing more than rewriting the handouts of the other
side.

The Evening Standard story and its Internet site link
are below.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

http://www.thisislondon.co.uk/dynamic/news/top_story.html?
in_review_id=389336&in_review_text_id=335500

Evening Standard, London
May 9, 2001

By Lauren Chambliss
in Washington

American investment banks and government officials are hoping
for a speedy end to a trial that accuses them of manipulating
the gold market, following a report from the London Business
School. The report has refuted the idea that US officials and
Wall Street bankers have conspired to keep down the price of
gold.

As the gold price slumped in the past several years, conspiracy
theories have risen in inverse proportion. The most popular is
that US and European governments have manipulated the market to
keep the price down for the benefit of the wealthier gold-holding
nations, at the expense of the poorer gold-producing nations.

Late last year, a group of gold investors backed by the Gold Anti-
Trust Action Committee filed suit in the District Court in Boston
against Federal Reserve and Treasury officials and five top
investment banks, including Goldman Sachs, Citigroup, JP Morgan,
and Chase Manhattan.

The suit alleges US government, the Bank for International
Settlements and big investment banks 'co-ordi-nated the sale and
leasing of gold and the sale of gold derivatives' to keep the price
low as part of a long-term strategy to stem institutional losses,
prop up the dollar and minimise inflation in the US and Europe.

Associate Professor Anthony Neuberger of the London Business School,
however, reviewed gold market data over the past decade and found no
unusual activity that would point to market manipulation.

The report debunking the conspiracy theory coincides with a high-
profile gathering of gold industry leaders in Durban, South Africa,
this week at which members of the Texas-based Gold Anti-Trust
Action Committee say they will reveal new evidence to support
their allegation the Federal Reserve and US Treasury have
intervened in the gold market.

GATA chairman Bill Murphy has been quoted as saying he thinks the
gold market manipulation will "turn out to be one of the biggest
financial scandals in US history."

Its suit charges that several major investment houses have appeared
as heavy sellers of gold on the New York Commodities Exchange
whenever necessary to kill any significant rally.

Whether the case goes to trial will depend on a judge agreeing there
is enough initial evidence to warrant a trial. A motion to dismiss
the suit has been filed by Lawrence Summers, Alan Greenspan and other
current and former government officials named as defendants. Summers
was Treasury Secretary when the suit was filed late last year. The
Department of Justice's memorandum asking the court to dismiss the
case reasserts the US Treasury's claim it has not traded in gold or
gold derivatives since 1978.

"The GATA people are out of their minds and the London Business
School report shows it," said a spokesperson for a major US
investment bank, who asked not to be named. "A conspiracy between
the German Bundesbank, the BIS, the Treasury, the Fed, and five
big Wall Street banks? Come on. We hope for a speedy dismissal."