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Globe and Mail comments on Sprott report on gold price suppression
10:57a ET Wednesday, August 25, 2004
Dear Friend of GATA and Gold:
GATA today distributed worldwide via Business
Wire the press release appended here about
the Sprott Asset Management study on
suppression of the gold price.
We plan to make a lot more use of this study,
but gold and silver advocates should
recognize that THEY can and should do
something with it too -- print a copy of it
and mail it to the chief executive officer
or investor relations officer at every mining
company in which they are invested. Ask the
mining companies what they're doing in
response to the Sprott report.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
Sprott Report on Gold Price Suppression
Vindicates Gold Anti-Trust Action Committee
Press Release via Business Wire
Wednesday, August 25, 2004
DALLAS -- Sprott Asset Management's study confirming
manipulation of the price of gold, "Not Free, Not Fair,"
published August 24, vindicates the Gold Anti-Trust
Action Committee, GATA Chairman Bill Murphy said
today.
"To believe that central banks and bullion banks
have worked together for years to keep the gold
price down no longer puts you on the fringe in
the investment world," Murphy said. "The Sprott
study reflects the growing conviction among
mainstream investment professionals that the
banks have been playing with the gold market
to mask their recklessness with the world
economy."
The Sprott study, written by Sprott chief
investment strategist John Embry and his
assistant, Andrew Hepburn, admits drawing
heavily on GATA's work generally and
particularly on the work of GATA statistician
Michael Bolser and GATA consultants
Frank Veneroso of Allianz Dresdner Asset
Management, Reginald H. Howe of Golden
Sextant Advisors, and James Turk of the
Freemarket Gold & Money Report and
GoldMoney.com.
The Sprott study says of GATA: "We
consider their work to be excellent in scope
yet chronically under-appreciated by gold
market observers. Disdain for GATA's
allegations is not justified, in our opinion.
Quite the opposite: More than all others,
GATA displays an appreciation and
understanding of the gold market's structure
and dynamics. Whereas consensus
forecasters see a free market roughly in
equilibrium, GATA has amply shown
that the gold market is both controlled and
seriously distorted with respect to gold's
fundamentals."
The Sprott study's major conclusions:
* Central banks intervened surreptitiously in
the gold market in the late 1990s to prevent
a gold derivatives crisis that threatened the
global financial system. This appears to have
started around the time of the Long-Term
Capital Management crisis and commenced
in earnest after the post-Washington
Agreement gold price explosion in 1999.
* At the root of this crisis was the speculative
gold carry trade. So much gold was borrowed
from central banks at low interest rates and
sold into the market that an uncoverable gold
short position developed.
* Long-Term Capital Management was short
approximately 300-400 tonnes of gold when
it collapsed in 1998 and this position appears
to have been assumed either by a counterparty
bullion bank or a central bank.
* The Bank of England's well-publicized gold
sales that began in 1999 were the result of a
political decision designed to manage the price
of gold.
* The U.S. Exchange Stabilization Fund and
the Federal Reserve have been active in the
scheme to depress gold prices. Information
in the public domain suggests that such
intervention started between 1994 and 1996. A
1995 Federal Open Market Committee transcript
reveals that the ESF conducted multiple,
undisclosed gold swaps. The unwillingness of
the U.S. government to reveal the details of these
transactions indicates that their purpose was
nefarious.
* The gold market supply and demand model
of GATA consultant Veneroso is far superior to
the consensus supply estimates of GFMS Ltd.
* Central bank gold loans probably total far
more than the consensus estimates of
4,000 tonnes -- more likely 10,000-16,000
tonnes and as much as half the nominal
gold reserves of central banks.
* International Monetary Fund accounting
regulations have obscured central bank
gold loans and make it impossible to
discern exactly how much gold remains
in central bank vaults.
* Gold industry executives are far more
inclined to believe that the gold market is
being manipulated than most market
observers think.
* The gold price falls so much more often
in the New York market than in other
markets as to defy all probabilities.
* Most gold market statisticians have
misinterpreted data on gold derivatives,
and those derivatives have committed
far more gold to the market than is
generally acknowledged.
* Gold derivatives are increasing even as
gold producers are reducing their forward
sales, indicating that official-sector selling
remains a major source of gold in the
market and a restraint on the price.
* Central banks are manipulating the gold
price because a rising price would expose
their loose monetary policies.
Sprott Asset Management is based in
Toronto, Canada, and manages more than
$1.6 billion in assets.
Report co-author Embry appeared on ROB-TV
in Canada on Tuesday morning to introduce
the gold price suppression report. The Embry
interview can be viewed on the ROB-TV Internet
site through Monday, Aug. 30, here:
http://www.robtv.com/shows/past_archive.tv
Information about GATA can be found on the
Internet here:
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RECOMMENDED INTERNET SITES
FOR DAILY MONITORING OF GOLD
AND PRECIOUS METALS
NEWS AND ANALYSIS
Free sites:
http://www.cbs.marketwatch.com
http://www.capitalupdates.com/
http://www.silver-investor.com
http://www.thebulliondesk.com/
http://www.goldismoney.info/index.html
http://www.minersmanual.com/minernews.html
http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html
http://www.freemarketnews.com/
http://www.investmentrarities.com/
http://www.kuik.com/KH/KH.html
(Korelin Business Report -- audio)
http://www.plata.com.mx/plata/home.htm
(In Spanish)
http://www.plata.com.mx/plata/plata/english.htm
(In English)
Subscription site:
http://www.lemetropolecafe.com/
Eagle Ranch discussion site:
http://os2eagle.net/checksum.htm
Ted Butler silver commentary archive:
http://www.investmentrarities.com/
----------------------------------------------------
COIN AND PRECIOUS METALS DEALERS
WHO HAVE SUPPORTED GATA
AND BEEN RECOMMENDED
BY OUR MEMBERS
Blanchard & Co. Inc.
909 Poydras St., Suite 1900
New Orleans, Louisiana 70112
888-413-4653
http://www.blanchardonline.com/
Centennial Precious Metals
3033 East 1st Ave., Suite 403
Denver, Colorado 80206
www.USAGold.com
Michael Kosares, Proprietor
US (800) 869-5115
Canada 1-800-294-9462
European Union 00-800-2760-2760
Australia 0011-800-2760-2760
cpm@usagold.com
Colorado Gold
222 South 5th St.
Montrose, Colorado 81401
www.ColoradoGold.com
Don Stott, Proprietor
1-888-786-8822
Gold@gwe.net
El Dorado Discount Gold
Box 11296
Glendale, Arizona 85316
http://www.eldoradogold.net
Harvey Gordin, President
Office: 623-434-3322
Mobile: 602-228-8203
harvey@eldoradogold.net
Investment Rarities Inc.
7850 Metro Parkway
Minneapolis, Minnesota 55425
http://www.gloomdoom.com
Greg Westgaard, Sales Manager
1-800-328-1860, Ext. 8889
gwestgaard@investmentrarities.com
Kitco
178 West Service Road
Champlain, N.Y. 12919
Toll Free:1-877-775-4826
Fax: 518-298-3457
and
620 Cathcart, Suite 900
Montreal, Quebec H3B 1M1
Canada
Toll-free:1-800-363-7053
Fax: 514-875-6484
http://www.kitco.com
Lee Certified Coins
P.O. Box 1045
454 Daniel Webster Highway
Merrimack, New Hampshire 03054
www.certifiedcoins.com
Ed Lee, Proprietor
1-800-835-6000
leecoins@aol.com
Miles Franklin Ltd.
3015 Ottawa Ave. South
St. Louis Park, Minn. 55416
1-800-822-8080 / 952-929-1129
fax: 952-925-0143
http://www.milesfranklin.com
Contacts: David Schectman,
Andy Schectman, and Bob Sichel
Missouri Coin Co.
11742 Manchester Road
St. Louis, MO 63131-4614
info@mocoin.com
314-965-9797
1-800-280-9797
http://www.mocoin.com/
Resource Consultants Inc.
6139 South Rural Road
Suite 103
Tempe, Arizona 85283-2929
Pat Gorman, Proprietor
1-800-494-4149, 480-820-5877
Metalguys@aol.com
Swiss America Trading Corp.
15018 North Tatum Blvd.
Phoenix, Arizona 85032
http://www.swissamerica.com
Dr. Fred I. Goldstein, Senior Broker
1-800-BUY-COIN
FiGoldstein@swissamerica.com
----------------------------------------------------
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