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Huge success for GATA African Gold Summit
Remarks by GATA Chairman Bill Murphy, introducing
speakers at the GATA African Gold Summit in Durban,
South Africa, on May 10, 2001.
* * *
I thought it might be best to begin our meeting by
explaining to you how the Gold Anti-Trust Action
Committee came into existence and what we are all
I was writing gold market commentary for my financial
web site in the fall of 1998 when I noticed that the
gold market was trading like no other in my 25 years of
closely watching futures markets. It was clear to me
that something was very wrong. It would be like a heart
doctor who has listened to thousands of hearts through
his stethoscope and hears a bad ticker. With his years
of experience, a good doctor would know the rhythm of a
diseased heart when he heard one.
Many other unusual happenings were reported my way at
the time and I began to write vociferously about the
manipulation of the gold market by certain bullion
banks that always seemed to sell at the same time. One
of my subscribers, the editor of a daily newspaper in
the United States, Chris Powell, said it appeared to
him that what I was reporting was a violation of the
anti-trust laws in the United States and we should stop
talking and do something about it.
So we formed the Gold Anti-Trust Action Committee in
January 1999. I was on the popular CNBC business TV
show in America; we quietly received backing from a
South African gold producing group and various
concerned citizens around the world; we then began to
validate what we initially saw by gathering confirming
evidence -- and here we are today. Chris Powell and
I have been at this for 29 months working many nights,
weekends, and vacations without pay -- and I must say
that having so many prominent people here at this
summit in Durban has made it well worth that effort.
What you are going to here today will be most
troubling. The economies of the gold-producing
countries in sub-Saharan Africa have been severely and
unnecessarily affected by the orchestration of a lower
and lower gold price over the past six or seven years
by a group of bullion banks and a small faction of the
United States Government. If it were not for this gold
market collusion, the gold price would have attained an
equilibrium price that is hundreds of dollars higher
than where it is now.
What would that mean for the economies of the sub-
Saharan gold-producing countries in Africa? For the
hundreds of thousands out of work miners in those
countries -- and for the 11 to 12 people who count on
each of those miners for financial support? Think of
the money that could have been available to fight the
terrible disease problems that afflict so many in
The Economist in England called Africa quot;the hopeless
continent.quot; Were the gold market allowed to trade
freely, it could just as easily have been called the
quot;natural resource boom continent.quot;
As I traveled around South Africa three months ago,
what struck me the most was the emphasis on a few words
about the mental state of many of black youth. I
listened to what the cab drivers had to say as well as
the high-powered executives. The oft-repeated phrase
was quot;no hopequot; or quot;little hope.quot; I was told that as a
result of the hopelessness, too many black youth in
Africa are engaging in activities that are anything but
Many of you know this only too well.
That is the bad news. The good news is something can be
done to begin to turn things around, and that is what
you are here to learn about in Durban.
At the end of this summit, we will suggest an action
plan -- if what you hear today makes an impact -- that
many of you and your colleagues all over sub-Saharan
Africa can undertake to bring about constructive
changes in a short time. The negative psychological
momentum that is too prevalent in Africa today can
become some positive psychological momentum of
tomorrow. It is time for positive expectations to
replace negative ones.
A small part of that plan will be to bring this matter
to the attention of various politicians in the United
States. It will not be the first time that many of them
will be made aware of the issue.
In the spring of 1999 I met with U.S. Rep. James
Saxton, chairman of the House Joint Economic Committee.
Later that year GATA took out full a full-page ad in
Roll Call, the popular Washington newspaper closely
followed by the U.S. politicians. It was an open letter
to Treasury Secretary Lawrence Summers and Federal
Reserve Bank Chairman Alan Greenspan. The Gold Anti-
Trust Action Committee asked them to respond to our
queries about the manipulation of the gold market. Many
hundreds of concerned citizens all over the world also
requested that they do so.
Greenspan eventually responded through Sen. Joseph I.
Lieberman, who shortly afterward became the Democratic
nominee for vice president and who asked Greenspan our
questions. Then-Treasury Secretary Summers declined to
respond, but no less than five of his Treasury
subordinates have written denials of any involvement by
the Treasury in the gold market.
Exactly one year ago today, May 10, 2000, a GATA
delegation met with the speaker of the House, Dennis
Hastert, who recently visited South Africa. Our meeting
was three times longer than expected and the speaker
arranged for us to meet with Rep. Spencer Bachus,
chairman of the House Committee on Domestic and
International Monetary Policy, on just two hours'
notice. Bachus brought seven members of his staff with
him. We then met with the chief economist of the Senate
The next day I dropped this quot;Gold Derivative Banking
Crisisquot; document off with the staff of every House and
Senate member of the banking committees.
When the GATA delegation met with the speaker, we
explained that we were like cancer doctors who had
found a virulent malignancy. It could be cured by
chemotherapy-type treatments even though the side-
effects might be unpleasant. But, we said, to do
nothing and go into denial would be sure death.
This is a subject that I will touch on later as
Hastert's Republican Party has inherited this problem
caused by the Clinton Administration. If nothing is
done soon, they will inherit the blame. Let us hope
that the Republicans have learned their lessons from
the Watergate scandal of the early 1970s -- a cover-up
can do more damage than the initial provocation.
As the speaker's Republican Party is in the White House
now, you can be sure that President Bush is now aware
of the manipulation of the gold market and the massive
problem he has inherited. Much of the information you
will receive today was sent to Secretary of State Colin
Powell, Treasury Secretary Paul O'Neill, and the
economic advisor to the president, Lawrence Lindsey.
This letter I have from Lindsey attests that they have
been made fully aware of the issue.
And who created the problem?
The most well-connected, most powerful people, and the
biggest money in the world -- that is who!
A member of that GATA delegation that met with the
speaker of the House is one of your speakers today:
Reginald Howe, a Harvard Law School graduate and former
trial lawyer for one of the most prestigious law firms
On December 7, 2000, Reg filed a complaint in U.S.
District Court in Boston against group of participants
in the gold scheme -- a group I call the Gold Cartel.
The defendants are the who's who of the who's who. They
include: the Bank for International Settlements; Alan
Greenspan, chairman of the Board of Governors of the
U.S. Federal Reserve System and a director of the BIS;
William J. McDonough, president of the Federal Reserve
Bank of New York and a director of the BIS; five major
bullion banks, J.P. Morgan amp; Co., Chase Manhattan
Corp., Citigroup Inc., Goldman Sachs Group Inc., and
Deutsche Bank; and Lawrence H. Summers, former
secretary of the treasury, who by law exercised control
of the U.S. Exchange Stabilization Fund (ESF), subject
only to approval by the president of the United States.
Not exactly a bunch of lightweights.
In fact, it is because these prestigious institutions
and individuals are such heavyweights that they have
been able to pull off their collusion for so long. They
had to think: Who in his right mind could, or would,
take them on?
And when the gold scheme was first put into play, that
was probably true. It was virtually impossible then.
But that was before the Internet changed the world by
allowing instant exchange of information outside the
That is how I was introduced to GATA's Chris Powell and
two of your speakers. Without the Internet, it would
have been impossible to accumulate the evidence that
GATA has collected and to attract the extraordinary
talent that gravitated to our initial outcry that the
gold market was manipulated.
The Internet changed everything. It is a brand new day!