More publicity for market analysis confirming GATA''s work

By Thom Calandra, Editor
CBS.MarketWatch.com
Friday, June 21, 2002

Give the gold bugs credit: They know a theme when
they see one.

Gold's believers, some of them held in high regard
in financial circles, this week are waging all-out war
against the dollar, which they sense is close to a
decline of epic proportions.

RBC Global Investment Management Inc., a division
of Royal Bank of Canada, said in a research report,
quot;The U.S. dollar has been levitating for a long time,
but the underlying fundamentals continue to erode.
The U.S. current-account deficit exceeds $400 billion
annually, and the continuation of this chronic deficit
has turned the U.S. into the world's largest debtor as
most of these deficits are being recycled into U.S.
debt instruments. Gold is already in a bull market in
U.S. dollars, and an established bull market in every
other currency. If the reserve currency, the U.S. dollar,
falters, gold could well be launched on the upside as
people recognize its status as the only true currency.quot;

Others are seizing on news of a record high U.S. trade
gap and a decline in overseas buying of American
securities as powerful ammunition for this year's gold
rally. The euro is at a two-year high vs. the dollar,
fetching more than 96 cents and up 10 percent so far
this year. Gold's price is up 19 percent since Jan. 2.

quot;Borrowing U.S. dollars and investing in foreign assets
must be the next big play. Some of them will even figure
that the big winner in this whole situation will be gold, as
it is the ultimate money, the final store of value,quot; observes
Alf Field at 321gold.com, one of many pro-bullion news
services promoting the current gold rally. quot;Most other
currencies are suspect because they are all worthless
paper.quot;

Barry Cooper, a gold equities analyst at CIBC World
Markets in Toronto, says each 1 percent move higher
for the euro against the dollar will translate into a 1
percent gain for gold. If the euro reaches $1, then gold,
reflecting a worldwide retreat from American assets,
will move to $345 an ounce, Cooper says. That will lead
to a 25 percent gain in the prices of gold mining stocks,
the strongest gainers in the U.S., Canadian, Australian,
and South African stock market this year.

The fix is in

The folks at Gold Anti-Trust Action Committee Inc. say
investment banks are starting to understand the panel's
sole complaint: that central banks have employed a
strong dollar and rigged gold sales to depress the price
of bullion -- all in an effort to moderate inflation and keep
worldwide fiscal turmoil at bay.

quot;The establishment in the gold world is coming around to
our central premise: that central banks and particularly
the U.S. Treasury Department have been colluding
surreptitiously and desperately to suppress the gold price
and manipulate the gold market,quot; Chris Powell,
secretary/treasurer of GATA, told his members.

Also taking it on the chin is the U.S. stock market, seen
as past its prime and the subject of scorn from
once-adoring overseas investors. Overseas investors
rang up a mere net $17.6 billion of U.S. stock-market
purchases in the first quarter vs. $41.7 billion in
first-quarter 2001.

William Rees-Mogg, editor of the forthcoming book
quot;The Case for Gold,quot; recently wrote in The Times of
London, quot;The price rise in gold is telling us the truth,
not about gold, but about the U.S. dollar. The U.S.
external deficit has to be reduced. That means the
dollar has to fall further. There is no early prospect of a
return to confidence in the U.S. stock market. There is
no point in the U.S. raising interest rates, which would
weaken the U.S. economy and only postpone the
necessary realignment of dollar exchange rates. Gold
will continue to outperform stock markets, as it has for
the past two years. Pension funds are going to be in
serious difficulties.quot;

Rees-Mogg, a successful British investor, newsletter
editor and prolific financial author, went on to say, quot;All
of this does not look like a short-term adjustment. We
may find the decline of the dollar is the most important
global movement of the decade.quot;