Report on the FT conference: The emperor has no gold

Thursday, June 39, 2000

Dear Friend of GATA and Gold:

It was a long trip back today to Dallas from Paris and
the Financial Times gold conference, and it is 2 in the
morning France time, so this will be short and sweet.
Tomorrow I will begin to cover the conference for you.
I think it was a big plus for GATA in all respects.

Reg Howe of www.GoldenSextant.com attended the
conference on GATA's behalf, and www.LeMetropoleCafe.
com member Mark Gunn flew in from the United States as
a delegate at large.

The first session was titled quot;Gold In The Official
Sectorquot; and was chaired by former Bank of England
No. 2 man Terry Smeeton. Herve Ferhani Head, of the
Foreign Exchange Division of the Banque de France,
spoke next. Then Dr.Peter Zoellner Executive Director
of the Oesterreichische Natrionalbank (Austria);
Fazliddin Urunbaev, executive director of the treasury,
National Bank for Foreign Economic Activity of the
Republic of Uzbekistan; and finally Jonathan Spall,
global head of central bank marketing (commodities) fo
Deutsche Bank.

After lunch and before the second session began, Mark
and I began to distribute handbills describing GATA's
challenge to Gold Fields Mineral Services to the
delegates as they re-entered the speakers hall. We
managed to give out about a hundred copies (including
copies to Ferhani and Urunbaev) when we were stopped by
the staff of the conference.

There was no point in creating a stink, as our goal was
to get the attendees to hear our message, not to
antagonize or be known as troublemakers. Word got
around about what we were doing anyway.

Since we were not able to pass out all our handbills, I
felt it was time to pop the debate challenge to GFMS.
In the afternoon session, Alan Fleming, chairman of
Harmony, asked Dr. Paul Walker, a director of Gold
Fields Mineral Services, a question about the gold
loans. I followed that with a question to Walker, in
front of the attendees at that session, with GATA's
offer to pay for a debate on the gold loans, gold
derivatives, and GATA's quot;Gold Derivative Banking
Crisisquot; report, all in the spirit of transparency, etc.

Walker's answer was swift, blunt, and predictable. He
said that they had been collecting data for 31 years,
and when we have done as much, he would debate us.
Again, not wanting to create hostility, I let it go.

This may not sound like much, but now the industry
knows GFMS is not willing to defend its own numbers
and debate GATA in a challenge that WE are willing to
pay for. Why not? You would think that with their 31
years of experience they would like to destroy our
challenge in public and make a mockery of our claims. I
kept thinking to myself: And if you have been WRONG
for 31 years, no wonder there are such discrepancies
between what claim is the state of the gold market.

This is important because the next day in the question-
and-answer period, I asked Kevin Crisp of Credit Suisse
First Boston, formerly of J.P. Morgan, what he thought
the incredible gold derivative buildup over the past
year on the books of Chase, Deutsche Bank, and Morgan
was all about.

Kevin, whom I liked very much personally, came back
with a wrong answer. At least that is what two other
bank representatives told Reg Howe and me later.
Those banks shall remain anonymous. It is not the end
of our discussion with them, while Howe will deal
with this topic in future commentary.

What is clear is that we KNOW that we have stirred the
pot. While at the conference I did several interviews
and found more press calls on my return about GATA's
challenge to GFMS, which had been distributed
worldwide by Business Wire and which drew more response
than all our previous press releases put together.

There is much at stake. If the buildup in derivatives
is as significant as we think it is and the gold loans are
as large as we think they are, the gold price will
soar. GFMS is hoodwinking the producers and many of the
bankers with the misinformation. Almost everyone at the
conference used GFMS numbers for analysis -- but
out of nowhere, and unexplained, several of the
speakers used 5,000 tonnes as the new official gold
loan number.

The gold loan number keeps on growing and GFMS offers
no explanation.

The stakes are massive. If we succeed and just a couple
of the bullion dealers outside the cabal become
convinced we are right, then they surely will advise
their clients to cover their gold shorts.

It will be a career maker for the banking executives
who cover short gold positions before panic buying is
the order of the day. That could set off a chain
reaction.

There is much much more to bring to your attention and
I will do so tomorrow. It was a great trip.

BILL MURPHY, Chairman