New York Post columnist reports GATA lawsuit

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By Reginald H. Howe
www.goldensextant.com
May 28, 2001

Because Rick made the last train out of Paris, he lived
to fight another day, and in the interim provided grist
for a great movie, "Casablanca." Those were years when
prescient men and women all over Europe were running
for the proverbial last train out, sometimes just a few
steps ahead of the Gestapo.

Some made it, as in "The Sound of Music." Some did not,
among them Natalie Jastram Henry in Herman Wouk's "The
Winds of War."

Some chose to stay in place and await their fate. But
most only dimly understood, if at all, the historic
currents about to redirect their lives. Only later did
they appreciate that of all the trains then chugging
over the Continent, some were vehicles of escape to
freedom and life while others bore their passengers to
unbelievable depravity and death.

It is human nature to think that tomorrow will be much
like today, that history progresses in a more or less
linear fashion. Great discontinuities boggle the mind.
My friend Adam Hamilton has just written an essay,
"Gold Prepares to Erupt," comparing the current
monetary and investment climate to ancient Pompeii just
before its immolation by the eruption of Mount
Vesuvius. Adam concludes: "We are now observing initial
pressure-blowoff warning signs in gold, and the great
financial lessons of history coupled with the immutable
laws of free-market economics ensure gold is preparing
for a spectacular price eruption."

Market or volcanic eruptions are notoriously difficult
to predict. But the forces that lead to them are
somewhat easier to observe. Anyone interested in gold
who has not yet read Frank Veneroso's presentation at
the GATA conference in Durban on May 10, 2001, should
do so at once.

Gold speaks primarily through flows of physical metal,
gold prices in various world markets, lease rates, and
general conditions in the gold mining industry. Frank
is almost certainly the world's leading authority on
gold flows, including the huge amount of gold that
central banks have recklessly loaned out over the past
decade and that now represents an alarmingly large
short physical position overhanging the world financial
system.

In recent months my commentaries have been limited by
the demands of my litigation against the gold price-
fixing cabal. Last Friday government lawyers for Paul
O'Neill, U.S. treasury secretary, and Alan Greenspan,
chairman of the Federal Reserve, dropped on me some
weekend reading consisting of reply briefs they want to
file in response to the opposition that I filed to
their motions to dismiss. I understand that the Bank
for International Settlements may also move for leave
to file a reply brief.

These reply briefs, which are not allowed as of right,
come more than five weeks after I filed my opposition.
In the appellate courts, reply briefs that are allowed
as of right must usually be filed within two weeks of
the principal brief to which they respond.

So I ask myself: What has suddenly prompted this urge
to file reply briefs? Is it just the government moving
at its typical glacial pace, or is something else going
on?

On Saturday, May 26, GATA chairman Bill Murphy received
a second letter from Lawrence B. Lindsay, assistant to
the president for economic policy and generally
regarded as President Bush's top economic adviser.
While Bill has not revealed the exact contents of the
letter, he has revealed its date: May 30, 2001. A
postdated letter from the White House strikes me as a
bit unusual.

These strange emanations from Washington may be nothing
more than government doing what it does best: chasing
its own tail. But they could reflect some more rational
purpose that cannot yet be fully discerned.

Over the past few weeks, amid talk of a Gold Syndicate
taking on the Gold Cabal, the gold market has displayed
a decidedly different and more bullish tone. Rumor has
it that the Gold Syndicate includes the Chinese, Middle
Eastern interests, and George Soros, who apparently
plans to make another billion dollars at the expense of
the Bank of England. Certainly there has been increased
media coverage of GATA, much but not all of it
generated by the conference in Durban. Lease rates have
displayed unusual volatility and inversions. The
possibility of a delivery squeeze on the COMEX June
gold contract looms ever larger.

Given the fundamentals of the current international
financial picture, gold looks ready to resume its
historic role as the financial asset of last resort,
the only financial asset that is not another's
liability. All these recent straws in the wind sound
like the gold train blowing its whistle and preparing
to leave the station. When it does, the dollar-
dominated financial world we have come to assume will
change forever. Its great hero, Alan Greenspan, will
take his rightful place in history alongside John Law.

Don't miss the gold train. It is one train that even my
FJ1200 superbike can't catch.