Suspicions growing about surreptitious government intervention in markets

Section:

11:50a ET Thursday, June 27, 2002

Dear Friend of GATA and Gold:

Yesterday's market action seems to have converted a
few people to a belief in what GATA has been saying for
years: that governments are surreptitiously intervening
all over the place. Here's a good summary from Peter
Brimelow at CBS.MarketWatch.com that cites, among
others, GATA Chairman Bill Murphy, whom the financial
establish seems to find a bit less nutty almost every
day now.

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

* * *

LATE RALLIES ROUSE SUSPICIONS

By Peter Brimelow
CBS.MarketWatch.com
Thursday, June 27, 2002

http://cbs.marketwatch.com/news/story.asp?print=1&guid=6EE00F38-947F-
4E26-9E05-CB452F73582A&siteid=mktw

NEW YORK -- These days, violent market reversals are
really making everyone queasy -- even when they finish
with a closing rally, like Wednesday and Monday.

Tuesday's closing triple-digit Dow loss, coming after a
triple-digit gain earlier in the day, claimed a notable victim
in investment letterland: TheDowTheory.com's Jack
Schanepp, who announced that the action constituted a
Dow Theory sell signal.

By Schanepp's count, this means he lost 4.8 percent on
his bold bullish call last November.

Just last week, I noted that Schanepp was one of two Dow
Theory letters maintaining that the bull market was still intact.

Now there is one: Dow Theory Forecasts http://www.dowtheory.com

It says it's still bullish. But it's sounding, well, queasy.

But even days that end with a rally make some letters unhappy.
This is because the pattern of sudden last-hour buying feeds
the suspicions of those who believe that the authorities have
been systematically intervening in the stock market, trying to
manage the bursting of the Great Bubble of the 1990s.

It's a hairy theory, typical of letterland's willingness to think
what Wall Street thinks is unthinkable.

Most letters post their market comments too late for us to
check what they were saying about this issue by press time. But
On The Money's Dennis Slothower (http://www.onthemoney.com)
had this intriguing comment last Friday about a market in which
everyone accepts there is official intervention -- foreign exchange.

"I can't help but wonder when the Euro was falling out of bed a
year ago if some sort of agreement was reached between the
central bankers to bring the Euro up and the dollar down in order
to reach a parity between the two currencies. Certainly trade
balances had grown all out of whack as we saw even with
yesterday's trade report. We are now reaching this parity...

"The dollar is plunging fast and panic selling is overtaking the
markets. When fear and pain get too severe as we are seeing
now, the central bankers are more likely to take some action to
stabilize things. This isn't because they care about how much pain
you are suffering, but rather plunging markets become far more
unruly to manage and more expensive to stabilize, the more
panicky it becomes....

"We are beginning to feel an ominous threat to the markets (and
I believe world markets too) if these critical supports are violated
at the September lows. You can be sure the central bankers are
very aware of this threat."

And one letter who does post his daily comments immediately
-- Dow Theory Letter's Richard Russell
(http://www.dowtheoryletters.com) -- included a long attachment
about a leaked Royal Bank of Canada report which appears to
be the first financial establishment endorsement of the thesis,
long and vigorously argued by Bill Murphy's LeMetropole Caf
(http://www.lemetropolecafe.com) website, that the gold price is
being held down to mask gathering financial instability.

Gold's early rally certainly got squashed Wednesday --
paradoxically in view of the weak dollar.

Russell isn't worried -- he expects gold to trade some multiples
higher eventually. He has speculated about stock market
manipulation in the past. But yesterday, as the leading bearish
Dow Theorists at the age of 78, he was savoring what looks like
the rout of his younger rivals.