U.S. accounts reveal $20 billion liability in gold

Section:

12:39p ET Saturday, January 5, 2002

Dear Friend of GATA and Gold:

Ralph Nader's latest newspaper column, appended
here, describes the conference he has called for
Monday in Washington about the work of the Federal
Reserve. GATA Chairman Bill Murphy will attend and
call attention to the Fed's role in surreptitiously
suppressing the gold price.

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

* * *

By Ralph Nader

The Federal Reserve wields enormous power over the
national economy. Its decisions have a major impact on
every citizen. Jobs, shelter, and the quality of life are
greatly affected by what the Federal Reserve decides
on monetary policy.

Yet the Federal Reserve is allowed to make its decisions
in secret. The transcripts and minutes of the meetings are
carefully "sanitized" before they are released. For example,
when the Federal Reserve voted to lend money to Mexico,
the Fed's records were carefully redacted to keep the
details of the transactions secret.

In a recent article in Barron's Magazine, Dr. Robert
Auerbach, who investigated the Federal Reserve as staff
economist for the Banking Committee of the House of
Representatives, recounts numerous incidents in which
Fed minutes were destroyed or heavily edited when the
Fed made critical decisions.

Auerbach, other economists, and long-time observers of the
Federal Reserve will be gathering at the National Press Club
in Washington on Monday to discuss what goes on behind those
tightly-locked doors at the Federal Reserve.

In sponsoring this conference, it is my hope that we can place a
spotlight on this dark corner of our democracy and begin a
campaign for a more open process in establishing economic
policies that affect the daily lives of working families and
well-being of the entire economy.

The kind of secrecy and closed-door government carried out
by the Federal Reserve has no place in a democratic system. In
addition to exemptions from open government requirements such
as the "Sunshine Act, " the Federal Reserve does not face the
normal checks and balances of the congressional appropriations
and budget process. It drafts its own budgets and spends
whatever it desires without seeking permission from Congress. It
is little wonder that the Federal Reserve feels free to operate
as virtually a separate government.

One of the experts who will appear at our conference is William
Greider, a long-time journalist, who wrote the book "Secrets of
the Temple," a carefully researched tome which has become a
must-read for students of the Federal Reserve.

Keynote speaker for the conference will be James Galbraith,
Ph.D at the LBJ School of Government at the University of Texas,
who has written and lectured extensively on the Federal Reserve
and who is rapidly becoming the nation's most outspoken and
best informed critic of the the Federal Reserve and monetary policy.

In addition to setting interest rates in carrying out monetary
policy, the Federal Reserve has wide-ranging regulatory power for
consumer protection over the financial community. It is strange
indeed that this power would be exercised by the current chairman
of the Federal Reserve, Alan Greenspan, whose past would give
little comfort to anyone who believes in regulatory protections.

Greenspan was an early follower of Ayn Rand, the leader of the
Objectivists, an anti-government collective. Greenspan
collaborated with Rand in writing "Capitalism: the Unknown Ideal,"
in which he denounced regulation, particularly consumer protections
and anti-trust laws, which he described as "cardinal ingredients of
welfare statism."

Later Greenspan became a lobbyist for the financial industry
against regulation and represented some of the high flyers-like
Charlie Keating of Lincoln Savings, who plundered the savings and
loan industry.

So we plan for our conference to take a deep look at how well this
former foe of regulation is representing the public in his current
position as chief government regulator of banks, big financial
services corporations, and the economy.

The conference is titled "The Federal Reserve-Reality versus
Myth." We hope that our panel of experts will be able to unravel
some of the myths that have allowed the Federal Reserve to
escape accountability for so long to the detriment of the vast
number of working Americans and our democratic system of
government.