You are here

An audit of U.S. gold wanted

Section: Daily Dispatches

Dear GATA Member,

I strongly recommend you go to In
doing so, I am following the recommendation of Orlin Grebbe at The website is that of Princeton Economic

About a thousand words down you will read, under charts I cannot
reproduce here:

"Illustrated above, you will find the Dow Jones Industrials plotted
according to 8.6-month intervals beginning with June 4th, 1929 in
accordance with our Economic Confidence Model. The current high is the
period beginning July 20th, 1998 and ending April 8th, 1999. According
to our timing models the next major directional change should take place
at this time. This trend, when analyzed in dollars exclusively, would
imply that the high has perhaps just been established as of March 19th,
1999. A closing on April 8th BELOW 9,337.9 would technically confirm
such a possibility. Again, when viewed from a pure dollar perspective,
it would appear that a decline of six (6) subsequent 8.6-month timing
periods would fulfill an ideal cyclical perspective. This suggests that
a high at this time should be followed by a decline into the 8.6-month
period beginning November 14th, 2002. . ."

Before dismissing the April 8 into 9 dateline for the coming major
reversal into year 2002, go back a few hundred words and read how this
same Princeton Economic Institute, using the same models, "successfully
predicted the crash and the magnitude right down to the precise day of
October 19th."

The analysis continues: "The question of whether we will see a major
crash of significant proportion that would take the Dow Jones back to
3700 by 2002-2003 or a moderate correction of 6000-5000 will be
determined exclusively by the international reaction within net capital
flow movement. A strong dollar that continues to rise dramatically into
2002-2003 would not merely cause a similar recession in the U.S. such as
that of 1980-1985, but it could very well impact commodity prices
thereby perpetuating the deflationary trend into 2002-2003

There is no mention of gold in the several thousand word Princeton
analysis and forecast. So I have asked the authors about that, and hope
some of you will, too, through e-mailing them at

This is how I put it:
Dear friends,

I have just read The Next Crash Beware the Ides of March. I am very
impressed. Being on the Committee of the Gold Anti-Trust Action (see and Moderator of the GATA E-mail Group
(, I was naturally interested to see that the
word gold doesn't come up once. Of course, your focus is on the DOW.
Would you have kept records, nevertheless, on gold prices relative to
the DOW since 1929? and worked these into models? If so, the GATA
Committee and Members would very much like to know about it. We would
particuarly like to know if you have records that show what was
happening from October to December 1987?

GATA is a team of several hundred members now, who firmly believe that
the Wall Street Investment Houses are colluding to suppress the price of
gold, with the active encouragement of Treasury and Federal Reserve
Board officials? Would your records support that belief? And would they
show a similar carry on in 1987?

Just this evening the GATA Chairman, Bill Murphy, wearing his other hat
as Midas at the financial website, which he owns
and edits, made some startling revelations about FED gold sales around
December 1987. You might like to read the full text, at the James Joyce
Table, under the Cafe's trial membership offer, if one or other of you,
or the PEI as a whole is not a member yet.

Here is a tidbit, to entice you to the original perhaps.

Midas quotes from the unknown author of an article in a prominent
newspaper 11 years ago:

"WHO'S CALLING THE SHOTS? I recently had dinner with former Fed Governor
Wayne Angell, and asked him several questions about gold. Of particular
interest to me was the disposal of 548,000 ounces from the Fed's stock
in the period immediately following the October 1987 stock market crash.

"For those readers not familiar with the details, 190,000 ounces of gold
were sold from the US Gold Reserve during the 10 week period immediately
following the crash, and a further 358,000 ounces were sold in January
and February 1988. The size of this transaction and its eye-catching
timing have always in my mind warranted further inspection ( i.e., the
dishoarding occurred when everyone was nervous whether the financial
system was about to disintegrate because of the stock market crash and
the big drop in the Dollar to new record lows; you will recall that the
gold price was inching over $500 per ounce in December 1987, which was
being regarded as a harbinger of more trouble ).

"Will a similar huge dispersal occur if the Dollar goes into another
tail-spin?or if stocks start heading south at the rate of 100 or more
Dow points per day? Will more gold be dishoarded in an attempt to keep
it price below $500 per ounce?.or below $400 per ounce.

"Mr. Angell's response was that the Fed does not intervene in the gold
market, whether, spot, futures, forwards, or options. He was unyielding
on this point. However, he never did answer why 548,000 ounces of gold
were dishoarded. It seemed to me that either he was not aware of this
dishoarding, or if he was, he wasn't saying."

The author went on to describe how the transcripts of the Federal Open
Market Committee had had bits removed and apparently made illegible. He
also throws light on the relationship between the Treasury and Fed, and

"I found the absence of the word gold particularly interesting since the
gold price was rising to $500 per ounce, and the mention of gold in the
August 18th meeting showed that the FOMC members were sensitive to its
changes in price. In other words, the silence after October 1987 was

Midas writes: "By allowing price fixing shenanigans to occur and by
manipulating markets so that real problems are not faced squarely in the
eye for all to see, some very important people and some very highly
regarded financial institutions, may be fostering UNFORESEEN FINANCIAL
DISASTERS that will also suddenly appear on the radar screen from out of
nowhere (as happened with the LTMC)."

Because of the enormity of their gold shorts, we believe that the big
players will face double troubles if, as the DOW crashes gold is freed
to find its rightful price at at least $350.

Boudewijn Wegerif

Here signing off as moderator of the GATA E-mail Group also, with the
usual GO GATA, Go Gold.