Gold Fields'' Chris Thompson succeeds Anglo''s Bobby Godsell at World Gold Council


Courtesy of

By Bill Murphy

Gold $301.90, up $3.30
Silver $4.43, up 4 cents

Today was no surprise to Midas. The Gold
Cartel has huffed and puffed, trying to take
gold well below $300. They have failed thus
far and appear to be running out of time and
bullets. Perhaps, as in the days of yore,
Chief Sitting Bull does have the cabal by the
proverbials. It is looking more and more
likely as if we have a stunning upset in the

Gold was firm right from the get-go with the
cabal aggressively capping the first price
surge higher. After that they tapered off,
while gold remained steady the rest of the
trading session.

The setup for a gold price explosion does not
get much better:

* The Fed is loathe to raise U.S. interest
rates and squash whatever recovery is feebly
working its way through the economy.

* The dollar is tottering on the brink of a
tanking, as the fundamentals are
overwhelmingly bearish. It does not help that
other English-speaking nations are raising
their interest rates. The dollar closed at
116.86, down .87, breaking 117 support.
Another lower close puts a conclusive short-
term top in place technically, setting up a
move to 113. A move below that critical level
would complete a massive longer-term top in
the dollar.

* The war on Terrorism is going to drain the
U.S. financially.

* The Middle East situation is awful. It
would not take much to send the price of oil
spiraling higher as supply concerns re-
emerge. As is, oil finished out the day over
$26 per barrel.

* Commodity prices are on the rise again. The
CRB closed at 200.87 up 2.82, with soybeans
surging to $4.76.

* The bond market smells that this entire
package is VERY inflationary, contrary to
Alan Greenspan and the Wall Street pundits.
The bond vigilantes did their thing today
sending the long rates sharply higher to 5.73
percent. ALL interest rate maturities rose,
even as the stock market took it on the chin.

* One stock market rally after another fails.
The P/E ratios of U.S. corporations are still
triple the historic norm. TRIPLE!

* The Gold Cartel, United States, Germany,
and Switzerland are all running out of ways
to lie about the gold fraud. They are being
found out and are boxed into a corner. They
will reap what they have sown.

Getting back to the dollar....

A few years ago I reported that Goldman Sachs
was going around telling clients that the
U.S. trade deficit would balloon to $19
billion, a huge potential increase at the
time. Few believed it grow that large, and
those who did were horrified about the
ramifications for the dollar.

Here we are years later and that trade
deficit has skyrocketed way beyond what
anyone could have imagined. The implications
are even more ominous these days as a result
of the rigging of the U.S. financial markets.
If you want to dance, you have to pay the
fiddler. The fiddler now has come round to
collect. The dollar swooned today and ought
to swoon for years to come.

* * *

U.S. February Trade Deficit
Widens to $31.5 Billion

Washington, April 17 (Bloomberg) -- The U.S.
trade deficit in February was the widest in
10 months as imports of automobiles, other
consumer goods, and business equipment
increased, government figures showed.

The $31.5 billion trade gap was larger than
expected and the biggest since $31.9 billion
in April 2001, the Commerce Department said.
The deficit was 11.6 percent larger than the
$28.2 billion gap in January. A 4 percent
jump in imports exceeded a 1.2 percent rise
in exports of goods and services.

* * *

Fed Chairman Alan Greenspan spoke before the
House Joint Economic Committee today and
delivered more of his mumbo-jumbo, which is
wearing thin. As mentioned above, the bond
market responded by diving as long yields
rose sharply. Meanwhile, Greenspan
reiterates that there is no inflation in
sight. How and what will he say to Congress
when gold goes $400 bid?

J.P. Morgan Chase today reported earnings,
which stunk, and then their share price
rallied sharply.

New York, April 17 (Bloomberg) -- J.P.
Morgan Chase & Co. said first-quarter
profit fell 18 percent as stock holdings
and revenue from investment banking
tumbled. The second-biggest U.S. bank's
earnings have dropped for eight straight

Net income fell to $982 million, or 48
cents a share, from $1.2 billion, or 58
cents, in the same quarter a year earlier,
the bank's spokesman said.

J.P. Morgan Chase, led by Chief Executive
Officer William Harrison, has suffered as
clients such as Enron Corp., Kmart Corp.
and Global Crossing Ltd. filed for
bankruptcy protection and venture
investments lost money in a falling stock
market. Investment banking fees fell 21
percent in the quarter.

"Just about everything that could go wrong
at J.P. Morgan has gone wrong," said James
Ellman, portfolio manager for Merrill Lynch
Global Financial Services Fund, which
manages $100 million and owns J.P. Morgan

Not everything yet, Mr. Ellman. Give JP a
jingle and query them about their interest
rate and gold derivative positions. Murphy's
Law has a lot more to send these gold crooks.
You have another few surprises coming your

* * *

From World Net Daily, courtesy of Dennis

Possible Fed rate hikes could jump gold

It's happened six times in the past 20 years.
According to research conducted by Morgan
Stanley, when the Fed first decides to raise
rates after a period of easing, some
predictable consequences follow. Most
notably, stocks lost 13.8 percent on the
average during the three months that followed
a first interest rate hike. This slump
persisted after six months (-4.5 percent) and
even after twelve months (-3.5 percent).
Rising interest rates are simply bad for
stocks because the net value of a company's
expected future earnings declines as against
a backdrop of higher rates.

On the other hand, the price of an ounce of
gold rose, both preceding (and, therefore,
predicting) the rate hike as well as
following it. After six such rate hike
instances, gold had the greatest
predictability of profitability of any

The Wall Street Journal has said that, if
history is any indicator, gold is set to
increase 30 to 400 percent following a first-
time interest rate hike. In 1986, 1993, 1995,
and 1999, higher gold prices accurately
forecasted higher interest rates by about a
year. Then, following the rate increase, gold
did, indeed, have "the greatest
predictability of profitability of any

Be Ready When the Next "First Hike" Hits

Now, with the American economy ostensibly
emerging from recession, the stage is again
set for the Fed to raise interest rates after
11 rate cuts in 2001. This "First Hike" may
occur at the Fed's upcoming May 7th meeting.

If you heed Morgan Stanley and the Wall
Street Journal, you'll be prepared with an
appropriate gold allocation. To find out just
what constitutes a fair proportion of gold in
your portfolio today, contact Lear Financial
now. Get your FREE "Why the Experts pick Gold
in 2002" audio seminar detailing why experts
believe gold will end this year between $350
and $400 or more an ounce.

You'll also get the invaluable Gold
Diversification Guide. Rarely does history so
underline an investment opportunity as when
interest rates first jump. This time, you
could be in the right place, at the right
time...with precisely the right investment.

* * *

The above sort of commentary, which is on the
increase all over the world, is helping to
build gold demand.

Are you as sick and tired of reading the kind
of garbage put out by the Gold Cartel, which
the press feels obliged to print?....

* * *

Goldman Sachs sees gold at US$325/oz by 2003

Goldman Sachs said it was bullish on the gold
price yesterday, predicting the yellow metal
would remain at the US$300 per ounce
psychological barrier for the remainder of
2002 and rise to US$325 in 2003.

"I do believe we are going higher beyond
2003, simply because your supply is going to
come down," Goldman Sachs vice president
Daniel McCovney said at the Australian Gold

* * *

McConvey is one big stiff! The bullion dealer
gold analysts are like a bunch of penguins
whose idols are the Enron analysts.

The following is from another good article at This kind of information
has been sent the Cafe way for months and

* * *

MELBOURNE -- Rapid consolidation of global
gold production had diverted attention away
from massive structural problems looming on
the supply side of the gold industry, said
Gold Fields chief executive Chris Thompson.

"Simply by buying assets, the major gold
producers are camouflaging the fact that
there is a shortage of reserves," said
Thompson. "Existing gold reserves are simply
being shifted from one pocket to another and
it's really a case of shuffling the deck
chairs on the Titanic." He said the top 10
gold producers had reserves of between 10,000
and 12,000 tons, which were "being burned up
at an enormous rate". To highlight the
dwindling production, Thompson said South
African new mine production had peaked at
1,000 tons a year in 1970, fallen back to 428
tons in 2000 and dropped again to 393.5 tons
last year. "It will probably go down again
from here; in South Africa its almost all a
question of declining grades," he said.

* * *

Central bankers selling incredibly cheap gold
today are a bunch of dummies! History will
prove that. I am not the only one who thinks
that way....

* * *

From the bulletin board at

Timbervision (4/17/02; 14:24:53MT - msg#: 73633)

I heard today, but didn't see it myself, on
ROB-TV, Canada's national business news
channel, a guest financial expert extolling
the virtues of gold. He also mentioned
several times that gold has been suppressed
in a rigged market. He predicted that gold
could rise to $500 or more within two years
or earlier. That said, if the current unhedged
mines are priced at a forward-looking price
of gold of, say, $325 an ounce, what is the
tripwire point at which a rising gold price
causes the short squeeze on the cabalistical
fiat banker types (of course, provided you
believe this linkage)? If this price is
somewhere in the next $25 to $50 worth of
gold's rise, then should we not all be making
our leisurely shift into physical now?

-- Joanne

(4/17/02; 15:18:03MT - msg#:

Timbervision, that was John Embry on ROB-TV.
He is the manager of Royal Bank's Precious
Metal Fund. He and Ross Healy are the only
ones I watch on that show. About a month ago,
someone called in and asked which is better,
gold stocks or metal, and Ross Healy said
that until gold reaches $600, the stocks are
better, and after that get, the metal.
(Unfortunately the metal will be a little
pricey at that stage.)

* * *

John Embry is one of the shrewdest and most
highly regarded fund managers anywhere.

* * *

Some of you may have read the following in
Barron's this weekend. I bring it to your
attention because it is exactly the kind of
shoddy work by the bullion dealers and their
analysts that has given us the gold fraud. It
is my hope they are tarred and feathered by
Congress after the gold scandal breaks. Throw
the bums out!

* * *

Brokerage analysts: Who needs them?

Some of you may be shocked at what you are
about to read. And others have assumed as
much all along. Following is a capsulation of
an article from Barron's on 4/15/02.

After a 10-month investigation of Merrill
Lynch's research analysts/investment banking
relationship, New York State's attorney
general has found "the firm's stock ratings
were biased and distorted" and "often
disseminated misleading information."
Merrill's response was that its emails were
"taken out of context" and do "not add up to
evidence of wrongdoing." You decide....

One Merrill analyst wrote the following about
Internet Capital Group (a one-time e-commerce
high-flyer) in October 2000: "We see nothing
that will turn this around near-term." The
stock was rated by Merrill at 2 on a scale of
1-5, 1 being a buy.

InfoSpace was dubbed "a powder keg" and "a
piece of junk" while it received Merrill's
highest "Buy" rating of 1.

Excite@Home (given a 2 "buy" rating by
Merrill) was called "a piece of crap." 24/7
Media and Lifeminders, both rated at a 2
"buy," received the ultimate accolade: "POS,"
or piece-of-you-know-what.

* * *

I'm sorry, Merrill, but I do not buy your
"taken out of context" defense.

The author of the above article, Howard Gold,
states: "It's a pervasive corruption that
taints the entire 'sell side'"; "the culture
of corruption at the heart of the big
investment banks has made all too many sell-
side analyst whores for management"; and he
sums things up with the statement, "I believe
this will shake Wall Street to its roots."

I beg to differ. In my opinion this is the
type of corruption that has been going on for
decades. And, partly because these
institutions are so well-connected, they
will, to a large extent, continue to get away
with this type of behavior. However, now you
have peeked inside the curtain of corruption
of these institutions. Merrill's statement
that their emails "do not add up to evidence
of wrongdoing" reminds me of Dorothy and Toto
peeking behind the curtain of the Great
Wizard, and the Great Wizard saying, "Pay no
attention to the man behind the curtain."

Too late, Uncle Merrill.

* * *

The following news is huge.

The GATA Army has struck again.

So far, no news reporter or member of
Congress has been able to confront Treasury
Secretary Paul O'Neill on the gold question.
But LeMetropole Cafe member Bob Schellenberg
succeeded Monday night, and sent us the
following report....

* * *


The speech I attended was in Grand Rapids,
Mich., on April 15, Tax Day." It is
traditional for the Economics Club of Grand
Rapids to bring a speaker appropriate for
this event. This year it was Secretary
O'Neill. Seven hundred people were in
attendance. The local and national media were
there, as well as C-SPAN. The other reason
O'Neill was there is that he is good friends
with a local influential political supporter
who was having a birthday party. Vice
President Dick Cheney also attended that

The reason for the speech was to make a case
for simplifying the tax code and impress on
everyone what a waste of resources our
current tax system is. As a certified public
accountant, I couldn't agree with him more.
For the most part O'Neill's, speech was
refreshing, though it is doubtful that any
real tax solutions will be implemented.

After the speech there is always time made
available for questions. I was first to raise
my hand, and I was acknowledged. I inquired
as to what U.S. policy is as to our gold
reserves and whether would he comment on
whether we were engaged in lending our gold
or using it for other financial means.

The moderator was quite taken aback by the
question, as it did not fit the theme.

Secretary O'Neill took his time and remarked
that the United States had gone off the gold
standard in 1971. He went on to emphasize
that our real reserves or currency strength
are based on our intellectual capabilities.

He never did address the question any
further. There was more talk about our
economy, etc.

I do not believe the government has any
intention to answer questions like mine. The
response was to ignore or marginalize the
questioner. This is the same way the shorts
were treated in the Enron fiasco.

It was clear that O'Neill did not appreciate
the question. You could tell by the way he
looked at me. It was also clear that the
audience had no idea of the relevance of the
question. Everyone was more comfortable
moving on to something more familiar.

O'Neill's speech received wide coverage in
the media, but nothing was mentioned about my
question. I am not surprised by that. I do
not know when C-SPAN will be airing the

Upon reflection, it is sad how irrelevant
gold and other tangible assets are viewed in
today's economy. Apparently the current view
is that intangible "assets" constitute the
real value. I find this especially
interesting in light of Enron and all the
other accounting scandals. High-level policy
makers like intangible assets, be they
intellectual capabilities or financial
instruments, because they can control them --
at least for a while.

Do I think gold is being used in a variety of
financial arrangements by our government? Yes
-- I could see it in the glare of O'Neill's
eyes. It's too bad, because in a lot of other
respects I admire him and the job he is
trying to do. If he and all the capable
business people in the room don't even
register this as a relevant issue, we have a
long way to go.

-- Bob Schellenberg
Grand Rapids, Mich.

* * *

GATA's secretary/treasurer, Chris Powell,
sends his congratulations Bob's way, as Bob's
direct question to O'Neill reveals that the
treasury secretary cannot answer honestly
without acknowledging the U.S. gold deception
to the world. Chris has spent his working
life in the newspaper business and knows a
walkaway from a question when he sees one.
Chris believes that O'Neill's non-answer to a
direct question about gold is virtually a
proclamation that GATA is correct.

It gives me great pleasure to inform you that
U.S. Rep. John B. Larson, a Connecticut
Democrat, has crossed the aisle to co-sponsor
Rep. Ron Paul's "Monetary Reform and
Accountability Act." Paul is a Republican and
cites GATA's work as an essential reason for
his bill to be enacted.

It is amazing in this post-Enron age that
Paul's bill should even be needed. Paul asks
only that the president and Treasury
Department get the permission of Congress if
they wish to deal in America's gold.
Secretary O'Neill, who won't even answer a
simple question about gold, is on the record
in opposition to Paul's bill. How odd, since
the Treasury Department says it has not dealt
in gold since 1978.

Three cheers for Chris, who turned
Representative Larson on to the shenanigans
in the gold market. Perhaps having a Democrat
on board will help bring in some of the
Congressional Black Caucus and their friends.
They are natural allies as the United States,
by suppressing the gold price, is doing all
it can to smother the economies of sub-
Saharan Africa.

* * *

An old friend, Jim Sinclair, nicknamed "Mr.
Gold" by The New York Times and Wall Street
Journal in 1979, is taking over as chairman
of Tan Range Exploration, TNX on the Toronto
Stock Exchange. Knowing Jim's history of
success in both gold and gold shares, I asked
him why he was merging his private
exploration and development company into Tan
Range and becoming its chairman and the
largest shareholder in the company.

Jim called our attention to the December 10,
2001, Forbes review of his career in gold,
which said that his private company was the
largest gold play he has ever made. I recall
he was long 22,000 Comex gold contracts in
1979, so it must be in Jim's mind a
significant situation. He has put many
personal millions into his private company
(no investors), Tanzanian American
Development, having explored with the latest
technology 52 concessions in the Tanzanian
Greenstone Gold Belt. The area is the home of
Barrick's keynote Bulyanhulu mine. Jim's
concessions cover an area approximately the
size of Connecticut. Jim has already dealt 13
of his private company's concessions to a
major mining company.

He gave Midas many reasons why he believes
so strongly in the new situation of the
merged entity, Tan Range, which motivated him
to deal his entire private gold company into
TNX. He writes:

"1) TNX has substantive and experienced
people in management. Myself as chairman,
Hardie as CEO, Kreczmer as president, and a
good board of directors handling matters
technical and financial.

"2) TNX now has a total of 71 mining
concessions in Tanzania, with the majority of
them representing the bulk of the Archean
Tanzanian Greenstone Gold Belt not already in
the hands of majors.

"3) Now a number of TNX's concessions are
directly on border with and strike line with
the Bulyanhulu, which is Barrick's keynote
new property.

"4) A significant amount of TNX's concessions
have meaningful artisan gold mining
activities already taking place.

"5) TNX now has 14 concessions already dealt
to majors.

"6) TNX has an advanced concession with a
major showing the signs of being on its way
to development into a mine.

"7) Now the combined present cap value of TNX
is only $25 million, which is in line with
the costs of the present properties.

"8) Now TNX has the potential of more deals
with majors in the near term."

I recall that when Jim was chairman of Sutton
Resources, there was an up move from C$0.19
to C$56. So I asked him what the chances of a
replay are. He said he and his new associates
would do their absolute best.

Good luck, Jim. I am a buyer!

Who knows where the gold price might be in
late May? $350? $400? $450? Anything can
happen when gold takes out $325.

The gold shares are hopping and rarin' to
soar, as today the HUI rose 5 to 101.72,
while the XAU finished the day at 72.32, up

Spread the word: Got to be in it to win it!