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Ted Butler: This looks like the setup for a rally in silver
7:50p ET Monday, September 20, 2004
Dear Friend of GATA and Gold:
Blanchard & Co., the New Orleans coin and bullion
dealer, says it file tomorrow another anti-trust
lawsuit against Barrick Gold and J.P. Morgan Chase
over their alleged manipulation of the gold market.
The new lawsuit will be a federal class action that
intends to build on the first Blanchard suit so that
all gold investors in the United States since 1998
might recover losses caused by the Barrick-Morgan
Chase conspiracy.
Blanchard CEO Donald W. Doyle Jr. made the
announcement today in an interview with GATA.
Blanchard's first lawsuit, which has entered the
evidence-gathering "discovery" phase in U.S.
District Court in New Orleans, is expected to go
to trial in April 2005, Doyle said. He added that
Barrick and Morgan Chase are not being forthcoming
in discovery and that Blanchard has filed a motion
asking the court to compel them to produce certain
evidence. Still, Doyle said, he is confident that
evidence already obtained has given Blanchard a
strong case.
The current lawsuit seeks only injunctive relief
-- a court order prohibiting Barrick and Morgan
Chase from continuing to manipulate the gold
market. The class-action lawsuit to be filed
tomorrow, Doyle said, will attempt to quantify
the financial harm done by Barrick and Morgan
Chase to gold investors and devise a remedy for
their restitution.
The named plaintiffs in the class-action suit
will be Greg McKenzie and A.J. Miller, Doyle said,
and Blanchard & Co. will bear all the expenses of
the litigation.
"We expect to obtain compensation for all gold
owners, not only for their losses from their gold
investments but also for the profits they should
have realized," Doyle said.
"The exact number of gold owners who are members
of the class is unknown at this time and can be
determined only through appropriate discovery
and expert testimony. But we allege, on
information and belief, that the members of the
class owned, during the period at issue, about
96.5 million ounces of gold having a market value
of $38.58 billion at $400 per ounce. Once a
judgment is obtained and the amount of damages
suffered by the class members is determined, those
damages will automatically be tripled under the
mandatory provisions of the federal anti-trust
laws.
"In 1983 Barrick Gold Corp. was a start-up
company with a single mine in Canada and a
founder with no experience in the gold business.
By 2001 Barrick had amassed off-balance-sheet
assets that were worth more than the market
capitalization of the next five biggest gold-
mining companies in the world combined.
Barrick made $2.3 billion on its short sales
of gold and made a profit on those short sales
for 62 consecutive quarters. A short sale is
inherently a high-risk speculation. How many
true speculations have ever been profitable
for 62 consecutive quarters?"
Blanchard's original lawsuit charges essentially
that Morgan Chase provided Barrick with so much
borrowed gold -- presumably obtained from central
banks -- on such favorable terms that Barrick
could overwhelm the market and move prices up
or down at will and not have to repay the
borrowed gold for many years if at all. In some
years, Blanchard maintains, Barrick was able to
supply to the market more gold than was supplied
by all the bullion banks combined.
In an attempt to have Blanchard's lawsuit
dismissed, Barrick seemed to acknowledge the
plaintiff's premises. Barrick submitted a motion
arguing that in borrowing gold and selling it
into the market, the company was acting as the
agent of central banks and carrying out their
policies in the gold market and thus should share
their immunity from lawsuits.
Judge Helen Berrigan rejected Barrick's motion
and sent the case on for discovery and trial.
"While the price of gold fell by more than 25
percent," Doyle said, "Barrick was able to
increase its annual operating cash flow by
more than 400 percent. Barrick became the
dominant gold mining company in the world
through acquisitions made with the profits from
its short sales of gold. By suppressing and
depressing gold prices, Barrick forced its
competitors to sell gold assets and companies
at fire-sale prices.
"The measures that Blanchard has taken have
already been good for the gold industry and our
clients. Since we began discussions with Barrick
in this lawsuit, the company has reduced its
hedging position by 10 million ounces, adding
gold demand and subtracting gold supply. On
December 2, 2003, Barrick's president and chief
operating officer announced that Barrick had
given up hedging for good. By consenting to the
termination of its short sales of gold --
assuming that Barrick honors its commitment --
the company took a major remedial step sought
by Blanchard's original complaint.
"I believe that the class action will be
successful in recovering damages and putting a
stop to practices that have suppressed and
depressed the price of gold and all tangible
assets," Doyle concluded.
Blanchard's Internet site with information about
its litigation is:
GATA hopes to provide you with more information
about Blanchard's lawsuits as it becomes
available.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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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.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:
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Eagle Ranch discussion site:
http://os2eagle.net/checksum.htm
Ted Butler silver commentary archive:
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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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