Live C-SPAN program to interview GATA chairman on Wednesday


12:40p ET Saturday, July 20, 2002

Dear Friend of GATA and Gold:

Here's the English translation of the story
about GATA and the interview with GATA Chairman
Bill Murphy published Friday by the international
Arabic newspaper Al-Hayat, which is based in
London and read throughout the Arab world and
Israel. Al-Hayat was mentioned in U.S. news
reports just a few weeks ago when, recognizing
the newspaper's great influence, U.S. Secretary
of State Colin Powell gave it an exclusive
interview and made important comments about U.S.
foreign policy.

GATA has high hopes that Al-Hayat's work will
have a huge impact on the gold market, and we are
deeply grateful to the newspaper for its interest.

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

* * *

From Al-Hayat, London
Friday, July 19, 2002

A Gold Cartel Aims at Destroying
the Economies of Developing Countries

Economic Factors or "International
Conspiracy" Behind
the Depressed Price of Gold?

There is a storm in the money markets caused
by the distribution of a report prepared by
John Embry, a senior analyst with the Royal
Bank of Canada, the largest bank in Canada.

The storm, which spread rapidly south to the
United States and as far as China, stemmed
from the fact that Embry, in his report,
supported the basic assumptions that have
been promoted by a group known as GATA, short
for the Gold Anti-Trust Action Committee. In
essence, GATA has been promoting the notion
that there is an international conspiracy to
suppress the price of gold through dumping it
in large quantities on world markets, and
that this conspiracy is managed by a number
of central and commercial banks.

Although GATA, which was founded by Bill
Murphy, has a large following, it has been
depicted by its opponents as a marginal group
promoting conspiracy theories -- until
Embry's report, that is. For as soon as the
report, which was made public by Murphy, came
to light, the Royal Bank of Canada claimed
that it was only an internal working
document, and not the official position of
the bank.

However, Murphy was quick to point out
publicly that the report was published on the
official stationery of one of the bank's
subsidiaries and was distributed to a number
of its select clients.

Embry himself declined to comment.

So what's happening in the world of gold?

Gold has soared by 20 percent since January
this year, while the shares of some gold
companies have more than doubled. Gold, which
until recently had been ruled out by many as
a hedge against inflation and political
uncertainty, is roaring right back. Is this
the result of natural economic trends at
play, or is there a much more sinister and
darker side about to be exposed, as some

Among those of the second opinion is Murphy,
chairman of GATA. This is a group of
financial advisers and gold market
participants who have waged a three-year
legal battle to prove that the unusually low
gold prices since 1995 were not the result of
market forces but instead the product of
price rigging that included governments and
big commercial banks. Al-Hayat had this
interview with Murphy.

* * *

Al-Hayat: Give us an idea about GATA and its
lawsuit: Whom is it against, and why?

Murphy: GATA was established to expose the
manipulation of the gold market by a gold
cartel consisting of Goldman Sachs, J.P.
Morgan Chase, Deutsche Bank, the Bank for
International Settlements, and the U.S.
Treasury Department and the Federal Reserve
Bank of the United States. It appears that
the manipulation of the gold price began in
earnest under the guidance of then-U.S.
Treasury Secretary Robert Rubin, who came to
that position from Goldman Sachs.

The GATA-type lawsuit was brought against
them in federal court in Boston by GATA
supporter Reg Howe, a former trial lawyer in
Boston. Much of the evidence used in his case
was uncovered by the "GATA army." Judge
Reginald Lindsay dismissed the lawsuit,
stating that, in his opinion, Howe did not
have legal standing to continue with the
suit. The stated that if a gold company
brought the suit, it might be a different
story. At no time in his legal opinion did
Judge Lindsay disparage Howe or dispute his
claims. Howe and GATA may have lost in court,
but we won in the court of public opinion.

Al-Hayat: What are the purposes of the gold
price suppression scheme?

Murphy: We believe there are several:

1) To keep interest rates down by deceiving
the bond markets about the rate of inflation,
inflation historically being gauged in large
part by the price of gold. You may remember
the famous comments about the bond market
that were attributed to President Clinton not
long after he took office. He was frustrated
with having to take the advice of his
economic advisers that the approval of the
bond market was crucial to his
administration's political success. Clinton
said he resented having to make his
administration one of "Eisenhower
Republicans." GATA thinks that the gold price
suppression scheme -- the massive deception
of the bond market -- was Clinton's revenge.

2) To strengthen the U.S. dollar in relation
to other curencies.

3) To suppress commodity prices generally,
since commodity prices take their cues from
the gold price.

4) By extension, to raise living standards in
the United States by expropriating the
developing world, which makes its living
largely from producing and exporting

5) To enrich through inside information about
U.S. government policy the Wall Street
investment houses that have helped implement
the gold price suppression scheme and that
long have staffed the Treasury Department and
Federal Reserve.

But the results of the gold price suppression
scheme have been far greater than all this.
The results include the devastation of the
economies of the developing world,
particularly sub-Sarahan Africa, and the vast
misallocation of capital throughout the world
in the last decade. That is, with the bond
market deceived about inflation, the dollar,
and the strength of the U.S. economy, most
economic decisions around the world for the
last decade have been based on horribly
mistaken premises. The U.S. stock market
bubble, now bursting, is evidence of this.

Al-Hayat: Are you saying then that the recent
increase in the price of gold could be partly
attributed to this lawsuit?

Murphy: GATA has been collecting evidence of
the manipulation of the gold price for 3 1/2
years. No one in the gold industry has ever
challenged that evidence. We know that the
GATA story is spreading throughout the
investment world, and that is accelerating
investment demand for gold. The gold price
did shoot up right after the judge issued his
ruling. It also shot up when Howe and I gave
presentations at the GATA African Gold Summit
in Durban, South Africa, on May 10, 2001, and
after we spoke at the Association of Mining
Analysts seminar in London on May 23 this
year. Five sub-Saharan gold producing
countries attended our summit to expose the
gold fraud to Africans, as did the South
African Reserve Bank, the leading South
African gold producers, the National Union of
Mineworkers, Cosatu (South Africa's largest
trade union), the South African Ministry of
Mines, the South African Chamber of Commerce,
and the press, including the South African
Broadcasting Co.

Al-Hayat: What are the other major factors
contributing to the increase in the price of

Murphy: Low interest rates make gold a very
compelling investment. Gold producers are
buying back their forward sales, or hedges.
There are concerns about terrorism and Middle
East tensions, and concerns that the dollar
will decline. There is a huge supply/demand
deficit. Mine supply is 2,500 tonnes per year
and going down. Annual demand exceeds supply by
about 1,700 tonnes per year. The central banks
have lent or swapped out 13,000 to 15,000 tonnes
of their gold. This gold is actually sold and
the banks cannot get it back. In essence,
they have trapped themselves.

Al-Hayat: Do you keep tabs on the movement of
gold in the Middle East and the Arab world in
particular? Where does the Middle East stand
in its gold holdings? Is this good or bad for
those Middle Eastern countries?

Murphy: Back in my futures industry days, I
dealt with a good number of Arabs, including
a distinguished Kuwaiti, Talib Al Nakib, who
lived in Geneva, Switzerland. These days I
only hear things here and there about Arab
gold buying. I do know that it has been
aggressive this year. A bullion dealer friend
of mine had his best day ever a few weeks
ago, selling 6 tonnes of gold to an Arab

Al-Hayat: Some are calling for a repricing of
gold and using it as the actual basis for
money. How feasible is this?

Murphy: In time gold will be used more and
more as money. Already the Moslems in
Malaysia have the dinar and the Russians have
the chevronet as gold coin money.

Al-Hayat: What in your opinion should the
actual price of gold be?

Murphy: My price target for gold is $800 to
$1,000 per ounce. Gold should explode when it
takes out $330 and go ballistic when it takes
out $355 or so. There is going to be a gold
derivative banking crisis because of the
reckless gold suppression activities over the
years at certain bullion banks. Gold will
melt up as Enron melted down. Some of the
same banks are involved with both scandals,
like Citibank and J.P. Morgan Chase.

Al-Hayat: Lebanon, whose currency was 100-
percent backed by gold before its civil war,
has been under tremendous pressure to sell or
lend its gold. Given Lebanon's debt and
devaluation of the currency -- 1 U.S. dollar
equaled 2.75 Lebanese pounds before the war,
while 1 U.S. dollar equals 1,500 Lebanese
pounds now -- there is talk now about using
this gold as a security for an upcoming
Eurobond issue. What is your best advice for
Lebanon on this matter?

Murphy: The Russians, Chinese, Arabs, savvy
hedge funds, and the Japanese public have
been buying up cheap gold while the foolish
Western central bankers have been dumping it,
in some cases to perpetuate the gold fraud.
The British chancellor of the exchequer is
already being vilified for dumping half of
Britain's gold at average price of $280. His
decision has cost Britain big-time already.
Lebanon should not make that mistake.
Lebanon's gold should not be lent out either.
Lebanon might not be able to get it back.

Al-Hayat: Dubai is promoting itself as the
city of gold. What do you think of that idea?
Will it succeed?

Murphy: Yes, it will. Arabs have always loved
to trade gold. Throughout the centuries this
has been so. The dollar is going to lose its
luster in the years to come. Gold will regain
its luster.

Al-Hayat: If the price of gold goes as high
up as you predict, with the value of the U.S.
dollar plummeting, what kind of impact will
that have on U.S. foreign policy in general,
and on its Middle East policy in particular?

Murphy: The Bush and Clinton administrations
have been very foolish. They have opened up
our country to the possibility of financial
blackmail by foreign powers because of their
gold-rigging activities. I met with two of
President Bush's boyhood friends in Austin,
Texas, at the Texas Capitol. One of them, a
state senator, sent that message along with
other GATA findings to the president on his
private fax the next day. The president's
friends believed GATA to be correct and did
not want him to be blind-sided. His economic
adviser, Lawrence Lindsay, sent me a letter
the same day after receiving the fax. GATA
wants to help America, not hurt it.

A GATA delegation met with the sSpeaker of
the U.S. House of Representatives Dennis
Hastert, on May 10, 2000. We gave him our
Gold Derivative Banking Crisis report and
strongly suggested that he do what he could
to end the gold price rigging.

Sub-saharan Africa is going to be very upset
when the gold price soars and the gold price
rigging is discovered. Gold should have been
well above $600 per ounce these past years.
The Economist called Africa "the hopeless
continent." If not for the gold fraud, Africa
could have been the "natural resource boom
continent." There would have been money freed
up to begin to deal with Africa's terrible
disease problems, etc.

Al-Hayat: Should that happen, what do you
estimate the impact will be on the economies
of Saudi Arabia, Egypt, Iraq, Israel, Syria,
and Lebanon?

Murphy: Hard to say. The U.S. stock market is
in deep trouble. The market could go into
crash mode at any time. That cannot be good
for any other nation's economy.



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